Recent Articles

Brent oil slides below $45 for first time this year

22 Jun 2017   Prices

Brent crude oil remained mired below $45 a barrel on Thursday leaving it further in a bear market as traders continue to lose faith in Opec’s ability to balance supplies.  Oil prices have now dropped by more than 20 per cent since the start of this year, with Brent on course to post its worst first half since 1997 and energy stocks getting hit. Brent fell under $45 on Wednesday for the first time in 2017. The sell-off has accelerated since late May when Opec extended a deal with Russia and other producers to cut supplies by 1.8m barrels a day.  US shale producers have increased the rate of drilling, stepping into the void and showing they can compete in a world of sub-$50 oil. Many traders believe the price slide will only be arrested when US shale drillers are either forced to slow their expansion plans or Opec kingpin Saudi Arabia agrees to lead the cartel in bigger supply cuts. Brent, the international benchmark, was down a further 0.2 per cent on Thursday at $44.73 a barrel, after finishing the previous session down 2.6 per cent at $44.82. US benchmark West Texas Intermediate fell 0.2 per cent to $42.44, extending Wednesday’s 2.3 per cent drop.

Oil prices climb off 10-month lows as U.S. stockpiles drop

22 Jun 2017   Prices

Oil prices rose on Thursday after U.S. crude and gasoline stockpiles fell, but worries over whether OPEC-led output cuts would be able to rein in a three-year glut continued to drag. The market largely shrugged off comments overnight from Iran’s oil minister that members of the Organization of Petroleum Exporting Countries (OPEC) are considering deeper cuts in production. Brent crude futures were 4 cents higher at $44.86 a barrel at 0219 GMT, after falling 2.6 percent in the previous session to their lowest since August last year. U.S. crude futures were up 6 cents at $42.59 a barrel. On Wednesday, they settled down at $42.53, after touching their lowest intraday level since August 2016. Since peaking in late February, crude has dropped around 20 percent, with only brief rallies, completely erasing gains at the end of the year in the wake of the initial OPEC-led production cut. OPEC and […]

Oil holds near multi-month lows as glut fears persist

22 Jun 2017   Prices

A worker fills a tank with subsidized fuel at a fuel station in Jakarta April 18, 2013. Oil prices held around multi-month lows in early Asian trading on Wednesday as investors discounted evidence of strong compliance by OPEC and non-OPEC oil producers with a deal to cut global output. Brent LCOc1 was down 6 cents at $45.96 barrel at 0035 GMT. The global benchmark ended down 89 cents, or 1.9 percent, on Tuesday at its lowest settlement since November. U.S. crude futures CLc1 for August were trading down 3 cents at $43.48. The July contract, which expired on Tuesday, settled down than 2 percent at its lowest since September. The Organization of the Petroleum Exporting Countries and other producers agreed to cut output by 1.8 million barrels per day (bpd) for six months from January and compliance with the agreement has reached more than 100 percent. “The lack of […]

Is There Still Hope For Higher Oil Prices?

22 Jun 2017   Prices

Oil prices have cratered in recent weeks, dipping to their lowest levels in more than seven months and any sense of optimism has almost entirely disappeared. All signs point to a period of “lower for longer” for oil prices, a refrain that is all too familiar to those in the industry. WTI dipped below $44 per barrel on Tuesday, and the bearish indicators are starting to pile up. Libya’s production just topped 900,000 bpd, a new multi-year high that is up sharply even from just a few weeks ago. Libyan officials are hoping that they will hit many more milestones in the coming months. Next stop is 1 million barrels per day (mb/d), which Libya hopes to breach by the end of July. U.S. shale is arguably the biggest reason why prices are floundering again. The rig count has increased for 22 consecutive weeks, rising to 747 as of […]

Can U.S. Shale Survive Below $40?

22 Jun 2017   Prices

Many U.S. shale drillers have said that they have full-proofed their operations for $40 oil, having lowered breakeven prices substantially over the last few years. They may soon have to prove it. Oil prices dropped to fresh seven-month lows on Tuesday, officially entering bear market territory, down more than 20 percent year-to-date. The declines have raised questions about the possibility of WTI hitting $40 soon. A rising U.S. rig count, multi-year record production levels from Libya, and a general mood of pessimism more than outweighed the positive news that OPEC and non-OPEC producers increased their compliance rate in May. There is now a growing consensus that the OPEC deal won’t be sufficient to bring down inventories at a fast enough pace to balance the market this year. Can U.S. shale survive in a world of $40 oil? There are very different answers out there depending on who you ask. […]

Can U.S. Shale Survive Below $40?

22 Jun 2017   Prices

Many U.S. shale drillers have said that they have full-proofed their operations for $40 oil, having lowered breakeven prices substantially over the last few years. They may soon have to prove it. Oil prices dropped to fresh seven-month lows on Tuesday, officially entering bear market territory, down more than 20 percent year-to-date. The declines have raised questions about the possibility of WTI hitting $40 soon. A rising U.S. rig count, multi-year record production levels from Libya, and a general mood of pessimism more than outweighed the positive news that OPEC and non-OPEC producers increased their compliance rate in May. There is now a growing consensus that the OPEC deal won’t be sufficient to bring down inventories at a fast enough pace to balance the market this year. Can U.S. shale survive in a world of $40 oil? There are very different answers out there depending on who you ask. […]

Day Of Reckoning in 2018? US Rig Count Poised For Loss

22 Jun 2017   Oil Supply, USA

E&Ps’ continued austerity, coupled with swelling oilfield service costs, will choke off the US rig count surge and bring down as many as 100 rigs by the end of 2017, analysts at Barclays say. Unless they’re missing something – and really, that’s pretty unlikely – analysts at Barclays believe U.S. oil and gas will lose as many as 100 onshore rigs by the end of the year. As of June 16, there were 933 rigs at work in the United States – that’s up 270 rigs since January. But as rigs efficiency reverses and oilfield service costs trend upward, fewer rigs will remain active during the remainder of the year, Barclays said in a June 20 note to investors. In fact, for the rig count to linger above 900, exploration and production (E&P) companies would have to increase spending by 70 percent this year and well costs would have […]

Oil bear market separates strong, weak U.S. shale producers

22 Jun 2017   Shale Oil

A service truck drives past an oil well on the Fort Berthold Indian Reservation in North Dakota, November 1, 2014. Crude oil’s bear market is highlighting the haves and have nots among U.S. shale producers, with the stronger promising to keep pumping even as prospects dim for some of their financially strapped peers. Crude prices have dropped more than 20 percent since late February, in part because of rising U.S. shale production that is offsetting OPEC’s efforts to tame global stockpiles. On Wednesday, prices fell more than 2 percent to $42.58 after touching a 10-month low during the day. The price tumble has dragged down shares of oil and natural gas producers and raised the specter of trims to drilling budgets set when oil was trading around $50 a barrel. Oil producers’ average capital spending was previously projected to rise by 50 percent this year over depressed levels of […]

World Energy 2017-2050: Annual Report

22 Jun 2017   Oil Supply

A Guest post by: Dr. Minqi Li, Professor Department of Economics, University of Utah E-mail: minqi.li@economics.utah.edu This Annual Report evaluates the future development of world energy supply and its impact on the global economy as well as climate change. The report projects the world energy supply and gross world product (global economic output) from 2017 to 2050. It also projects carbon dioxide emissions from fossil fuels burning and the implied global average surface temperature from 2017 to 2100. Figure 18 Sources: World historical oil, natural gas, and coal consumption from 1950 to 1964 is estimated from carbon dioxide emissions (Boden, Marland, and Andres 2017); world primary energy consumption and its composition from 1965 to 2016 is from BP (2017); world primary energy consumption and its composition from 2017 to 2050 is based on this report’s projections. To project the future oil and natural gas production, this report uses Hubbert […]

Iran starts gas exports to Iraq, Iranian official tells IRNA

22 Jun 2017   Iran, Iraq

Iran has begun exporting gas to Iraq, an Iranian official told the state-run Islamic Republic News Agency (IRNA) on Wednesday, after a several years of delays. The neighbors, both members of the Organization of the Petroleum Exporting Countries, initially signed a deal in 2013 for Iran to supply Iraqi power stations, but officials in the past blamed poor security in Iraq for hampering implementation. Exports had started at approximately 7 million cubic meters per day and would eventually reach up to 35 million cubic meters per day, Amir Hossein Zamaninia, the deputy oil minister for trade and international affairs, told IRNA. Iran signed two contracts to export gas, one for the Iraqi capital Baghdad and the other for southern Iraqi city of […]

Iran says OPEC considering deeper output cuts, delegates skeptical

22 Jun 2017   Iran, OPEC

Iran’s Oil Minister Bijan Zanganeh talks to journalists before the beginning of a meeting of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna, Austria, May 25, 2017. OPEC members are considering further oil output cuts but should wait until the effect of the current reduced level of production is made clear, Iran said on Wednesday, hinting at possible further OPEC action after oil sank to a seven-month low. OPEC and allied outside producers agreed on May 25 to extend an existing supply cut into 2018, but oil has declined sharply since on rising production from the United States and Nigeria and Libya, two OPEC members exempt from cutting output. “We are in discussions with OPEC members to prepare ourselves for a new decision,” Iranian oil minister Bijan Zanganeh said after a cabinet meeting, according to the website for the Islamic Republic of Iran Broadcasting (IRIB). “But making […]

Iran: Production cuts difficult for OPEC members

22 Jun 2017   Iran, OPEC

Cutting back on production levels is a difficult task for members of the Organization of Petroleum Exporting Countries, Iran’s oil minister said Wednesday. Iran ranks third among OPEC member states in terms of proven crude oil reserves. Production has been more or less steady since the fourth quarter of 2016 at 3.7 million barrels per day, though that’s up about 8 percent from 2016. While other OPEC members are cutting output in a coordinated effort to balance the market, Iran can increase production as it works to recapture a market share lost to global sanctions. Speaking from Tehran, Oil Minister Bijan Zanganeh said his country was in talks with other OPEC members on current market conditions. With a steady gain in […]

Kazakhstan ‘hugely’ important to oil and gas industry

22 Jun 2017   Kazakhstan

The head of the oil and gas division of GE says Kazakhstan has a significant role to play in global energy industries. Photo courtesy of the North Caspian Operating Company June 21 (UPI) — Kazakhstan, with its strategic trade position and strong energy portfolio, is “hugely” important to the global energy sector, a director at GE Oil & Gas said. General Electric hosted a forum in the Kazakh capital of Astana to focus on emerging regional trends in the transportation and energy industries. Lorenzo Simonelli, the head of the company’s oil and gas division, said Kazakhstan is the ideal place for a global discussion on those industries. “Rich in resources and a key trade corridor, Kazakhstan and the broader Central Asia region are hugely important to the global oil and gas industry,” he said in a statement . Oil is Kazakhstan’s primary export commodity and the country is party […]

Kemp: Saudi Arabia Eases Austerity Just As Oil Prices Decline

22 Jun 2017   Saudi Arabia

Saudi Arabia’s decision to reverse some of last year’s austerity measures coincides with a renewed decline in oil prices and complicates the financial and economic outlook. (John Kemp is a Reuters market analyst. The views expressed are his own) LONDON, June 21 (Reuters) – Saudi Arabia’s decision to reverse some of last year’s austerity measures coincides with a renewed decline in oil prices and complicates the financial and economic outlook for the kingdom. All allowances, bonuses and financial benefits for civil servants and military personnel cancelled, amended or suspended in September 2016 have been restored and backdated by a royal decree issued by King Salman (“Saudi Arabia slashes ministers’ pay, cuts public sector bonuses”, Reuters, Sept. 26, 2016). The decision coincides with the alteration of the succession in favour of the king’s son Mohammad bin Salman and relieves the previous crown prince of all his posts. The distribution of […]

Oil Market Sees Increased Conflict Risk in Saudi Power Shift

22 Jun 2017   Saudi Arabia

New Crown Prince has taken confrontational stance against Iran More aggressive foreign policy won’t change oil plans: Sen After Mohammed bin Salman’s appointment as crown prince, energy markets need to brace for an even more assertive Saudi Arabian foreign policy that could threaten regional stability in the heart of the global oil industry. The 31-year-old has already supported the kingdom’s involvement in a war in Yemen and broken diplomatic ties with fellow OPEC member Qatar. Both moves were driven by a confrontational stance toward Iran, and MbS, as the prince is known, has already let the intensifying regional rivalry spill into oil policy — last year, he intervened to sink a deal to freeze production because Iran refused to participate. Nonetheless, his government will need higher crude prices to push ahead with his plans to reform the kingdom’s economy, and that makes an immediate change in oil policy unlikely. […]

Q&A: Nasraddin Sayid Sindi, Kurdistan’s disputed territories chief

22 Jun 2017   Iraq

The chairman of the General Board of Kurdistan Areas outside the Kurdistan Region Administration discusses efforts to hold the referendum in areas outside formal KRG control, and expectations of Iraqi security forces afterward. Nasraddin Sayid Sindi, the chairman of the General Board of Kurdistan Areas outside the Kurdistan Region Administration, in his office in Erbil on June 19, 2017. (RAWAZ TAHIR/Iraq Oil Report) ERBIL – Kurdistan Regional Government (KRG) officials have never been shy about their claims to territory outside its formal borders recognized by the federal government and United Nations. The KRG has for years deployed Peshmerga and other security forces in territory that falls within the provincial boundaries of Salahaddin, Diyala, Kirkuk and Ninewa provinces. In some of these areas, the KRG provides services like fuel and electricity and other administrative functions. This content is for registered users. Please login to continue. If you are not a […]

Federal crude flows to two northern Iraq refineries

22 Jun 2017   Iraq

Iraq has unlocked about 20,000 barrels per day (bpd) of refining capacity – a relatively small amount with outsize economic and political implications. The restart of the Qayarah refinery, south of Mosul, brings a small measure of much-needed economic development to an area recently devastated by years of occupation by the self proclaimed Islamic State (IS) militant group.

Looming Chinese refinery cuts to hit oil demand

22 Jun 2017   China

 Some of China’s top oil refineries are having to take the highly unusual step of cutting operations during what is typically the peak demand summer season when hot weather drives up power usage and families take to the road during school holidays. Almost 10 percent of China’s refining capacity is set to be shut down during the third quarter, signaling that demand growth from the world’s top crude importer is stuttering further. West African and European suppliers are already feeling the chill from China’s reduced demand, and a global glut has dragged spot prices for crude this week to their lowest since November, 2016. Major Chinese oil refineries, including PetroChina’s Jinzhou will set their run rates around 6,500 […]

For thousands of U.S. auto workers, downturn is already here

22 Jun 2017   USA

Wall Street is fretting that the U.S. auto industry is heading for a downturn, but for thousands of workers at General Motors Co factories in the United States, the hard times are already here. Matt Streb, 36, was one of 1,200 workers laid off on Jan. 20 – inauguration day for Republican U.S. President Donald Trump – when GM canceled the third shift at its Lordstown small-car factory here. Sales of the Chevrolet Cruze sedan, the only vehicle the plant makes, have nosedived as U.S. consumers switch to SUVs and pickup trucks. Streb is looking for another job, but employers are wary because they assume he will quit whenever GM calls him back. “I get it,” said Streb, who has a degree in […]

Oil to keep flowing in Dakota line while legal battle continues

22 Jun 2017   Refining

Oil will continue to flow through the Dakota Access Pipeline through the summer while authorities conduct additional review of the environmental impact, after a judge on Wednesday ordered more hearings in coming months. Last week, U.S. District Court Judge James Boasberg in Washington ruled in favor of Standing Rock Sioux and Cheyenne River Sioux tribes, who said more environmental analysis of the Dakota Access line should have been carried out. The tribes had said the 1,170-mile (1,880 km) line violates their hunting, fishing and environmental rights. On Wednesday, Boasberg set out a schedule of hearings that will decide what will happen to the line while additional review is completed. A lawyer for the U.S. Army Corps of Engineers, which is […]

Norwegian oil production better than expected

22 Jun 2017   Norway

Crude oil production from Norway, the region’s top supplier, was better than expected, a national energy regulator said Wednesday. Norway is a main oil and natural gas supplier for the European economy, designating nearly all of its offshore production for exports. The Norwegian Petroleum Directorate, the nation’s energy regulator, said preliminary figures for May were lower than the previous month, but better than expected. Based on preliminary data, the average production for May was 1.98 million barrels per day for oil, natural gas liquids and condensate, an ultra light form of oil. That’s about 5 percent less than the previous month. About 80 percent of the total volume was oil and the NPD said the 1.61 million barrels per […]

Are Hedge Funds Expecting A Permian Bubble?

22 Jun 2017   Shale Oil

Last year’s OPEC deal to cut production managed to lift oil prices and stabilize them around US$50 for most of the first quarter this year. The higher price of oil led to quite the Permania, with a lot of the available capital and subsequent production focused on the most lucrative of the U.S. shale basins, but investors backing the Permian adventurers are threatening its top spot. The Permian continues to lead production gains of U.S. crude output, which is exceeding the wildest projections for recovery. However, a group of investors in Permian-focused drillers have reduced their positions in the largest U.S. oil field, in what could be a sign of concern that the unstoppable rise in production could sink oil prices and unravel the resurgence U.S. shale has been enjoying since OPEC decided to play the market-fixer again and collectively reduce output. These investors are some prominent hedge funds […]

Summary of Weekly Petroleum Data for the Week Ending June 16, 2017

22 Jun 2017   USA

U.S. crude oil refinery inputs averaged about 17.2 million barrels per day during the week ending June 16, 2017, 104,000 barrels per day less than the previous week’s average. Refineries operated at 94.0% of their operable capacity last week. Gasoline production increased last week, averaging about 10.2 million barrels per day. Distillate fuel production increased last week, averaging about 5.3 million barrels per day. U.S. crude oil imports averaged 7.9 million barrels per day last week, down by 149,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged about 8.1 million barrels per day, 2.0% above the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 909,000 barrels per day. Distillate fuel imports averaged 87,000 barrels per day last week. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum […]

USGC offshore producers brace for Tropical Storm Cindy

22 Jun 2017   Oil Supply

As the US Gulf Coast oil and gas industry prepares for the arrival of Tropical Storm Cindy late Wednesday, about 17.24% of current Gulf of Mexico oil production has been shut, according to the US Bureau of Safety and Environmental Enforcement’s Hurricane Response Team. That amounts to about 301,618 b/d of lost production. For natural gas, about 0.32% of production has been shut, representing lost volume of 10.089 MMcf/d, BSEE said. The shut-ins can usually be accomplished remotely, with personnel able to close subsurface safety valves from off-site. Once the storm has subsided, inspections will take place and undamaged facilities will be brought back online, the BSEE said. The loss of offshore domestic crude production had little effect on the assessed value of US Gulf Coast crude differentials Wednesday. Article continues below… Crude Oil Marketwire delivers vital intelligence to help you make critical decisions. Delivered daily direct to your […]

Forget Coal, Solar will Soon be Cheaper than Natural Gas Power

22 Jun 2017   Solar

The staggering drop in the cost of clean energy has already upended the global power market over the past two decades — and that trend will only continue for the next two decades, according to new analysis from Bloomberg New Energy Finance (BNEF). As a result, renewables will capture the lion’s share of the $10.2 trillion the world will invest in new power generation by 2040, BNEF projects in its annual New Energy Outlook 2017 report. CREDIT: BNEF New Energy Outlook 2017 Despite years of plummeting prices for renewables, BNEF projects that over the next two decades, the cost of solar power will still drop another two-thirds, onshore wind costs will be cut nearly in half, and offshore wind costs will drop a stunning 71 percent. Here’s how this will profoundly transform power markets in the years ahead: By 2028, solar will beat existing gas generation. Solar and wind […]

A First-of-Its-Kind Clean Coal Plant May Not Burn Coal at All

22 Jun 2017   Coal

Mississippi wants deal that’d have plant fueled by gas only Southern has spent years constructing the Kemper coal plant A first-of-its-kind “clean coal” power plant that utility owner Southern Co. spent years constructing in Mississippi may end up burning no coal at all — and instead just run like a natural gas generator. After years of delays and billions of dollars in cost overruns, Mississippi regulators on Wednesday called on Southern to work up a deal that would have the Kemper plant fueled only by gas. The state Public Service Commission said in a statement that it’s looking for a solution that eliminates the risk to ratepayers “for unproven technology,” which involved converting coal into gas that could then be used to generate electricity — all while capturing emissions. Settling for gas only at Southern’s Kemper plant threatens to undermine the business rationale for the kind of clean-coal technology […]

Trump Says ‘Solar Wall’ on Mexican Border Would Pay for Itself

22 Jun 2017   Solar

‘The higher it goes, the more valuable it is,’ president says U.S. ‘spending a lot’ on design and planning of wall, he says U.S. President Donald Trump said he’s proposed building a “solar wall” on the Mexican border that would pay for itself by generating electricity. “We’re thinking of something that’s unique, we’re talking about the southern border. Lots of sun, lots of heat,” Trump said at a campaign rally in Cedar Rapids, Iowa. “We’re thinking about building the wall as a solar wall, so it creates energy, and pays for itself. And this way Mexico will have to pay much less money, and that’s good. Is that good?” Donald Trump says “we will build a solar wall” along Mexico border https://t.co/598isRMkuF pic.twitter.com/Fa63a65tBj — Bloomberg (@business) June 22, 2017 Trump ran for the presidency on an oft-repeated promise to construct a wall across the 1,933-mile (3,207 kilometer) Mexican border […]

Oil holds near multi-month lows as glut fears persist

21 Jun 2017   Prices

Oil prices held around multi-month lows in early Asian trading on Wednesday as investors discounted evidence of strong compliance by OPEC and non-OPEC oil producers with a deal to cut global output. Brent LCOc1 was down 6 cents at $45.96 barrel at 0035 GMT. The global benchmark ended down 89 cents, or 1.9 percent, on Tuesday at its lowest settlement since November. U.S. crude futures CLc1 for August were trading down 3 cents at $43.48. The July contract, which expired on Tuesday, settled down than 2 percent at its lowest since September. The Organization of the Petroleum Exporting Countries and other producers agreed to cut output by 1.8 million barrels per day (bpd) for six months from January and compliance with the agreement has reached more than 100 percent. “The lack of […]

Oil Bears Are Back as Prices Fall and Driller Shares Take a Hit

21 Jun 2017   Prices

U.S. shale production has investors, traders pulling back Faith in OPEC’s ability to drain glut with cuts is receding Shale producers risk drowning in their own surplus — again. On Tuesday, oil slid into its first bear market in 10 months, falling 21 percent from its high for the year. The swoon dragged down driller shares amid concern that unceasing production from U.S. shale fields is overwhelming OPEC efforts to ease a global supply glut. Explorers who came of age at a time when ever-increasing production was rewarded with ever-higher prices are now having a bit of a déjà vu from their fall from grace in 2014. The S&P 500 Energy Index has lost 14 percent this year, while West Texas Intermediate crude, the U.S. benchmark, has fallen 19 percent. Buoyed by prices that hit $54.45 a barrel in February, U.S. explorers have boosted the number of rigs drilling […]

Oil Prices Get Tiny Reprieve As API Reports Modest Crude Draw

21 Jun 2017   Prices

The American Petroleum Institute (API) reported a draw of 2.72 million barrels in United States crude oil inventories, compared to analyst expectations that the EIA would report a 2.0-million barrel draw for the week ending June 16. This week’s inventory draw almost completely offsets last week’s API-reported crude inventory build of 2.75 million barrels. Oil prices started off the week with a rather poor showing, only worsening on Tuesday. As so often is the case, prices rallied on Tuesday—if you are inclined to call it a rally—from a low point of $42.94 to an unimpressive $43.49 by 3:44pm EST, still 2.14% down on the day. The falling prices, which are now at a seven-month low, are a clear indication that even record compliance from OPEC/non-OPEC is an insufficient bolsterer of prices. Both benchmarks are trading more than $3.00 lower than last week. This week’s build, according to the API, […]

Oil slides into bear market as supply angst persists

21 Jun 2017   Prices

Oil has entered a new bear market, with prices falling to their lowest level this year as rising supplies threaten to derail an effort by some of the world’s biggest producers to bring an end to a three-year glut.  Renewed trader concerns about growing production from within the Opec cartel and a reinvigorated US shale industry took global crude benchmarks on Tuesday to the lowest since mid-November with Brent crude sinking towards $45 a barrel.  Prices have fallen more than 20 per cent from their levels in early January, which they last touched in the summer of 2015. A decline of more than 20 per cent from a most recent high is typically considered a bear market.  Crude has now erased all its gains since late last year, when Opec and other producer countries, including Russia, agreed to cut output by 1.8m barrels a day for the first six months of 2017.  A decision in May to extend the original six-month deal for a further nine months has not helped lift sentiment as a growing chorus of traders and analysts question the effectiveness of the supply curbs.  Brent crude, the international benchmark, fell $1.28 cents, or almost 3 per cent, to $45.63 a barrel. West Texas Intermediate, the US marker, dropped by $1.31 to a low of $42.89 a barrel. Even as global oil demand is expected to rise in the coming months, traders have been focused on supply.  “The future might be bright for oil prices but the present is not,” said Tamas Varga at London-based broker PVM. Any immediate price recovery, he said, was “wishful thinking”.  Rising output in Libya and Nigeria, which were exempt from the supply deal because of conflict in both countries, have offset cutbacks from their Opec peers. Libya has said it is set to reach its 1m b/d target in the coming weeks after an interim agreement with an oil operator while Nigerian exports from the Forcados terminal are due to resume.

Oil Returns to Bear Market

21 Jun 2017   Prices

Oil prices are back in bear-market territory, frustrating OPEC members that cut production in an attempt to boost prices and renewing fears that falling prices could spill into stocks and other markets. A persistent glut has weighed on prices for most of the past three years, a blow to investors who believed that the Organization of the…

Bank Of America: Expect $30 Oil

21 Jun 2017   Prices

Oil prices hit on Tuesday their lowest levels since mid-November last year, with WTI entering a bear market , and analysts now see the price of oil sliding further down to below US$40 and even into the US$30s, as rising output from Libya and Nigeria adds to the persistent concerns over global oversupply. As of 2:21pm EDT, WTI Crude had tumbled 3.11 percent to US$43.05, while Brent Crude had plunged 2.79 percent at US$45.60. According to analysts, the slide will continue, and oil prices could drop to levels they hadn’t seen in more than a year. “ Oil is in a downtrend and risks trending into the $30’s, ” Paul Ciana, a technical strategist at Bank of America Merrill Lynch, said in a note on Tuesday, as quoted by Business Insider . Oil prices have now dropped to the levels they traded before OPEC and 11 non-OPEC producers agreed […]

Oil firms could waste trillions if climate targets reached: report

21 Jun 2017   Climate

An energy installation on a property leased to Devon Energy Production Company by the Catholic Archdiocese of Oklahoma City is seen near Guthrie, Oklahoma, September 15, 2015. Oil giants including Exxon Mobil and Royal Dutch Shell risk spending more than a third of their budgets by 2025 on oil and gas projects that will not be feasible if international climate targets are to be met, a thinktank says. More than $2 trillion of planned investments in oil and gas projects by 2025 risk becoming redundant if governments stick to targets to lower carbon emissions to limit global warming to 2 degrees celsius, according to a report by the Carbon Tracker thinktank and a group of institutional investors. The report analyzed the costs of oil and gas projects planned for approval by 69 companies into 2025. It then compared their carbon intensity to targets needed to meet the 2 degree […]

Have Natural Gas Prices Hit A Bottom?

21 Jun 2017   Prices

Natural gas prices are falling, and the speculators have cut their U.S. natural gas net long positions for the fourth straight week. Does this indicate further weakness, or is this a contrarian buy signal? Let’s analyze the fundamentals and the chart pattern of natural gas to arrive at an answer. Natural gas is mainly used for electricity generation. During summers and winters, the demand for electricity increases, hence, the demand for natural gas goes up. After all, about 50 percent of all U.S. households use natural gas for heating purposes. In pleasant weather conditions, the need for cooling or heating decreases; therefore, the need for electricity decreases. As a result, natural gas demand at the gas-fired plants also falls. Let’s look at the demand and supply metrics to analyze the prospects of natural gas. The Commodity Weather Group LLC expects temperature to be below normal in the central U.S. […]

Rampaging Oil Bears Are Missing Half the Picture

21 Jun 2017   Prices

It’s official—oil is in a bear market following Tuesday’s 2% fall, taking prices 21% below late-winter highs. The Organization of the Petroleum Exporting Countries’ high hopes for crude have been shredded by the sharp claws of resurgent U.S. shale. It’s been a nasty few weeks for oil investors. The International Energy Agency last week cast doubt on OPEC’s ability to do “whatever it takes” to drain massive global crude stocks,…

OPEC, non-OPEC compliance with oil cuts hits highest in May – source

21 Jun 2017   OPEC

OPEC and non-OPEC oil producers’ compliance with a deal to cut global output has reached its highest in May since they agreed on the curbs last year, reaching 106 percent last month, a source familiar with the matter said on Tuesday. OPEC compliance with the output curbs in May was 108 percent, while non-OPEC compliance was 100 percent, the source said. Another source confirmed compliance by all producers in May was 106 percent. “This is the highest compliance since the beginning of the deal,” one of the sources said. The Organization of the Petroleum Exporting Countries and allies agreed to cut supply by about 1.8 million barrels per day (bpd) starting in January to get rid of a supply glut. A technical committee of OPEC and non-OPEC producers met in Vienna on Tuesday to monitor compliance with the pact. The producers agreed at a May 25 meeting to extend […]

Libya reviews oil production stimulus with Norway’s Statoil

21 Jun 2017   Libya

After resolving issues with German energy company Wintershall, Libya’s state oil company said it reviewed raising production during talks with Norway’s Statoil. The Libyan National Oil Co. signed an agreement last week with Wintershall that outlines a resumption of oil production from some of its license areas on an interim basis. NOC Chairman Mustafa Sanalla said the agreement gives Wintershall enough of a production share to cover its costs and ends a costly shutdown. In a Tuesday statement , the NOC said Sanalla met in Tripoli with Fadel Hareeb, a regional manager for Norwegian energy company Statoil. The NOC said its chairman aims to attend a workshop in Norway in September on ways […]

Total Pledges $1 Billion Investment in Iran Gas Field

21 Jun 2017   France, Iran

France’s Total SA said Tuesday it would push forward with a $1 billion investment this summer in a giant Iranian gas field, the first commitment by a Western company to put real money into the Islamic Republic’s re-emerging energy industry. The Paris-based oil giant has been at the forefront of Western energy companies looking to return to Iran after sanctions on its energy industry were lifted in January 2016. Total reached a preliminary agreement late last year with China National Petroleum Corp. and an Iranian company…

Saudis Overtake U.S. In Recoverable Oil Resources

21 Jun 2017   Saudi Arabia

Saudi Arabia has regained its top position ahead of the U.S. and Russia as the holder of the world’s biggest recoverable oil resources, as reduced tax rates for state giant Saudi Aramco have added 73 billion barrels of recoverable oil, Norway-based consultancy Rystad Energy said on Tuesday in its annual review of global recoverable oil resources. Saudi Arabia’s recoverable oil resources are now estimated at 276 billion barrels, Rystad said, adding that the Kingdom’s “ revised fiscal regime should incentivize more aggressive exploration and development drilling in the country.” In March this year, Saudi Arabia cut the tax rate on Aramco to 50 percent from 85 percent. The high tax rate was one of the main reasons why international industry experts had not been valuing Aramco nearly as high as the US$2 trillion that Saudi officials have been claiming. Back then, Rystad Energy said that the tax rate cut […]

In Hawija, IS poses ongoing threat to oil assets

21 Jun 2017   Iraq

The self-proclaimed Islamic State’s (IS) longstanding hold over Hawija, west of Kirkuk, is posing an ongoing security threat to the Bai Hassan oil field. IS militants in Hawija have been responsible for several recent attempts to bomb the field, which produces 175,000 barrel per day (bpd), according to security and oil industry officials in the greater Kirkuk area. This content is for registered users. Please login to continue. If you are not a registered user, you may purchase a subscription or sign up for a free trial .

Saudi Arabia’s Mohammed bin Salman appointed Crown Prince: SPA

21 Jun 2017   Saudi Arabia

Saudi Crown Prince Mohammed bin Nayef has been relieved of his post and replaced by Deputy Crown Prince Mohammed bin Salman, a royal decree published by state news agency SPA reported. (Reporting by Stephen Kalin, Writing by William Maclean; Editing by Himani Sarkar)

Saudi King Salman Ousts Nephew as Crown Prince, Installs Son

21 Jun 2017   Saudi Arabia

Saudi Arabia’s King Salman named his son as the country’s new crown prince, the country’s state news agency said Wednesday, a move that carries far-reaching implications for the monarchy and the biggest economy in the Middle East. Saudi Arabia’s new crown prince, Mohammed bin Salman, known by his initials MbS, is seen as the architect of Saudi Arabia’s attempt to overhaul the kingdom’s oil-dependent economy and carve out a…

Why Is Saudi Arabia Desperate For Higher Oil Prices?

21 Jun 2017   Saudi Arabia

As OPEC’s most significant member and one of the largest crude oil producers in the world, Saudi Arabia typically exerts considerable power over global energy market trends. Yet for the last year, the oil giant has been largely reacting to events outside of its control: surging U.S. shale production, OPEC-member cheating and non-compliance, uncertain demand and a persistent supply glut that has kept prices at or below $50 a barrel. Now, questions are being raised over the state of Riyadh’s big next move: the IPO of Saudi Aramco, the world’s largest and most valuable oil company, which Crown Prince Mohammed bin Salman once projected as being worth $2 trillion. Analysts have doubted the veracity of the official Saudi estimate, with third-party valuations coming in much lower. The Financial Times has estimated the company to be worth between $880 billion and $1.1 trillion, while last March Bloomberg thought an IPO […]

Who Controls The Oil As Kurdish Independence Looms?

21 Jun 2017   Iraq

Kurdistan, the autonomous region of northern Iraq that is rich in oil resources and has proven an effective force against the spread of the Islamic State, has announced that it will hold an independence referendum on September 25 of this year, in order to determine whether the region will remain part of the Republic of Iraq or split off to form a new, independent state. Thus far, the official international support for the referendum has been minimal. On June 19, the European Union released a statement discouraging the Kurdish autonomous government from holding the referendum, joining the United Kingdom, United States, Turkey and Iraq in officially opposing the vote. But this hasn’t deterred Kurdish leaders, who say the vote will go forward no matter the resistance. The referendum will not declare an independent state, but rather determine whether Kurdistan will remain part of Iraq or eventually become independent, though […]

Venezuelan crisis takes center stage at OAS meeting in Mexico

21 Jun 2017   Venezuela

Governments from across the Americas on Tuesday chastised Venezuela’s socialist leadership for its handling of a political and economic crisis, prompting the OPEC nation’s foreign minister to brand the critics as the “lapdogs of imperialism.” The United States, Brazil and 10 other members of the 34-nation Organization of American States issued a letter accusing Venezuela of undermining democracy, failing to feed its people and violating rights. “Considering the interruption of the democratic process in the Bolivarian Republic of Venezuela, we believe that there should be a settled solution that includes all Venezuelan parties for the benefit of the people of that nation,” the letter said. It called for the release of political prisoners, respect for rights, an election timetable, a “humanitarian channel” to ship food and medicine, and the […]

Wind, solar energy have not harmed U.S. power grid: industry study

21 Jun 2017   Solar, Wind

With the Trump administration expected to publish an analysis that could undermine the U.S. wind and solar industries, two renewable energy lobbying groups on Tuesday released their own study saying new energy sources pose no threat to the country’s power grid. Wind and solar advocates have said the government study’s outcome appeared to be pre-determined to favor fossil fuel industries. The new report, commissioned by the American Wind Energy Association and Advanced Energy Economy, says cheap natural gas is behind most of the decline in the numbers of U.S. coal-fired power plants in recent years, not government subsidies that have bolstered the growth of wind and solar power. It also said there is no evidence to show that wind and solar energy are threatening the reliability of the electric grid. The groups commissioned the report shortly after […]

U.S. refineries are running at record-high levels

21 Jun 2017   Refining, USA

Refinery gross inputs include crude oil and other oils processed through crude distillation units. Gross inputs to U.S. petroleum refineries, also referred to as refinery runs, averaged a record high 17.7 million barrels per day (b/d) for the week ending May 26, before dropping slightly to 17.5 million b/d for the week ending June 2 and 17.6 million b/d for the week ending June 9. Product supplied to the U.S. market as well as inventories and exports are also at relatively high levels. Weekly U.S. refinery runs have exceeded 17 million b/d only 24 times since EIA began publishing the data series in 1990, and all of those instances have occurred since July 2015. Despite record-high inputs, refinery utilization did not reach a new record, because refinery capacity has increased in recent years. Refinery utilization reached 95% for the […]

Gulf of Mexico Storm Cindy Disrupts Shipping, Crude Imports

21 Jun 2017   Oil Supply, USA

Cindy could delay oil imports, exports through the week Storm to approach Louisiana, Texas coastline late Wednesday Tropical Storm Cindy has halted service at a major oil terminal in the Gulf of Mexico, prompted some evacuations at rigs and platforms and put states from Texas to Florida on notice for flooding rains. Cindy was 350 miles (560 kilometers) southeast of Galveston, Texas, with top winds of 45 miles an hour late Tuesday. It’s forecast to come ashore early Thursday somewhere near the Texas-Louisiana state line, according to a U.S. National Hurricane Center advisory issued at 8 p.m. New York time. The storm has triggered watches and warnings along the Texas-Louisiana coast including Galveston Bay, the entrance to the Houston Ship Channel and Sabine Pass, the site of the only active liquefied natural gas export terminal in the lower 48 states. Storms in the Gulf can often roil energy markets […]

America’s hungriest wind and solar power users: big companies

21 Jun 2017   Solar, Wind

FILE PHOTO: A man views solar panels on a roof at Google headquarters in Mountain View, California, U.S., on June 18, 2007. REUTERS/Kimberly White/File Photo Major U.S. corporations such as Wal-Mart Stores Inc and General Motors Co have become some of America’s biggest buyers of renewable energy, driving growth in an industry seen as key to helping the United States cut carbon emissions. Last year nearly 40 percent of U.S. wind contracts were signed by corporate power users, along with university and military customers. That’s up from just 5 percent in 2013, according to the American Wind Energy Association trade group. These users also accounted for an unprecedented 10% of the market for large-scale solar projects in 2016, figures from research firm GTM Research show. Just two years earlier there were none. The big reason: lower energy bills. GRAPHIC – Big companies are powering the U.S. clean energy push: […]