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Oil Drops as Prospects Fade for OPEC Deal

20 Sep 2016   Prices

Pipelines at the Zueitina oil terminal in Libya. OPEC members Nigeria, Libya and Venezuela want… Oil prices fell Tuesday as hopes for any deal between the Organization of the Petroleum Exporting Countries and Russia to freeze production continued to fade . The November contract for global crude benchmark Brent was down 0.3% at $45.80 a barrel while its U.S. counterpart West Texas Intermediate was down 0.55% at $43.62 for October deliveries. The latest news is that OPEC members Nigeria, Libya and Venezuela are eager to ramp up oil exports. Bjarne Schieldrop from Sweden’s SEB bank said that the moves from the three nations are a clear message that none would be interested in agreeing to cap production at current levels when they meet in Algeria on Sep. 28. He added that any deal would probably have a caveat allowing Nigeria, Libya and Venezuela as well as Iran to lift […]

Oil prices fall as Venezuela says market is 10 percent over supplied

20 Sep 2016   Prices

Oil prices fell on Tuesday after Venezuela said that global crude supplies needed to fall by 10 percent in order to bring production down to consumption levels, confirming analyst views that markets remain heavily over supplied. Global oil supply of 94 million barrels per day needs to fall by about a tenth if it is to match consumption, Venezuela’s Oil Minister Eulogio Del Pino said on Monday. International benchmark Brent crude oil futures LCOc1 were trading at $45.80 per barrel at 0048 GMT, down 15 cents from their last close. U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 25 cents at $43.05 a barrel. “Global production is at 94 million barrels per day, of which we need to go down 9 million barrels per day to sustain the level of consumption,” Del Pino […]

Oil Prices Rise on Libya Unrest

20 Sep 2016   Prices

Oil prices edged higher Monday after fighting engulfed Libya’s key Eastern crude-oil ports over the weekend. Brent crude for November delivery rose 1.14% to $46.28 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading 1.51% higher at $43.67 a barrel. “It slightly up because of the fighting in Libya,” said Paul Horsnell, head of commodities research at Standard Chartered STAN 4.12 % PLC. Libyan officials said a shipment of petroleum was delayed as a result of the hostilities. The Petroleum Facilities Guards, a militia that until this month had controlled Libya’s oil ports for years after the 2011 ouster and death of dictator Moammar Gadhafi, briefly retook two oil ports, Sidra and Ras Lanuf, in the country’s central coast on Saturday night, militia members said. The guards were forced out again on Sunday by the Libyan National Army, a […]

Shifting Strategies: Big Oil Looking At Low-Cost Fields

20 Sep 2016   Oil Supply

Oil workers Oil supermajors have come to realize that shrunk capex plans will make their exploration efforts profitable in lower-cost, lower-risk areas, and have changed drilling tactics to the ‘less is more’ philosophy, a Wood Mackenzie analyst told CNBC on Monday. “The new economics of exploration mean that rather than pursuing high-cost, high-risk exploration strategies – elephant hunting in the Arctic, for example – the majors have become more conscious of costs,” Andrew Latham, Vice President of exploration research at Wood Mackenzie, said, discussing the ‘Exploration Benchmarking – Majors 2006-2015’ report. According to the report, oil majors invested US$169 billion in exploration between 2006 and 2015, which resulted in additional 72 billion barrels of oil equivalent (boe) added to Big Oil’s resource base. As many as 25 billion barrels of those came from unconventional plays, which have become increasingly important for the majors’ exploration efforts. Unconventional resources accounted for […]

Venezuela says global oil supply exceeds demand by 10 percent

20 Sep 2016   Prices

Global oil supply of 94 million barrels per day needs to fall by about a tenth if it is to match consumption, Venezuela’s Oil Minister Eulogio Del Pino said on Monday. Del Pino, whose country is pressing for OPEC and non-OPEC producers to reach a deal to bolster crude prices, said a “fair price” would be around $70 per barrel. “Global production is at 94 million barrels per day, of which we need to go down 9 million barrels per day to sustain the level of consumption,” he said in an interview with state oil company PDVSA’s internal TV station. Del Pino is also president of PDVSA. Venezuela’s President Nicolas Maduro said on Sunday that OPEC and non-OPEC countries were close to reaching a deal to stabilize oil markets. OPEC members […]

Venezuela Crises Compound as Oil Industry Falls Into Disarray

20 Sep 2016   Venezuela

One oil rig was idle for weeks because a single piece of equipment was missing. Another was attacked by armed gangs who made off with all they could carry. Many oil workers say they are paid so little that they barely eat and have to keep watch over one another in case they faint while high up on the rigs. Venezuela ’s petroleum industry, whose vast revenues once fueled the country’s Socialist-inspired revolution, underwriting everything from housing to education, is spiraling into disarray . To add insult to injury, the Venezuelan government has been forced to turn to its nemesis, the United States, for help. “You call them the empire,” said Luis Centeno, a union leader for the oil workers, referring to what government officials call the United States, “and yet you’re buying their oil.” The declining oil industry is perhaps the most urgent chapter […]

North Dakota shale on slow recovery

20 Sep 2016   Shale Oil

North Dakota shale activity slowly increasing, though some players are still waiting around for oil to hit $60 per barrel, state official said. Photo by David Gaylor/Shutterstock BISMARCK, N.D., Sept. 19 (UPI) — Oil and natural gas activity in shale-rich North Dakota is on a steady increase, though operators are still cautious about recovery, state data show. State data show 32 rigs are actively exploring for or producing oil and natural gas in North Dakota, down one from last week but relatively in line with levels since July. Rig counts serve as a loose metric for investor confidence in the energy sector and a reflection of the appetite for spending from oil and gas companies. Crude oil prices rallied earlier this year above the $50 mark on suggestions the gap between supply and demand had narrowed to the point of balance. Monthly market reports from the Organization of Petroleum […]

Easy resolution unlikely for contentious Dakota pipeline

20 Sep 2016   Pipelines, Shale Oil

A potential rerouting of a long-anticipated pipeline at the center of a protest in North Dakota would be a laborious and costly task, possibly delaying a startup by months and provoking further opposition from Native American and environmental groups who were instrumental in halting construction. The 1,172-mile (1,886 km) Dakota Access pipeline was slated to start up by the end of the year, transporting more than 470,000 barrels per day of crude oil through four states into Illinois before it hooks up to another pipeline down to Texas. But in a stunning twist last week, the U.S. Justice Department and other federal agencies intervened to delay construction in what industry and labor representatives called an “unprecedented” move. The halt on the $3.7 billion project was […]

Texas economy still under pressure

20 Sep 2016   Oil Supply, USA

The number people in Texas who want to work full time but can’t find jobs in the oil-rich economy remains above recessionary levels, a report found. The Federal Reserve Bank of Dallas said a low relative minimum wage of $7.50 per hour,full-time regulatory burdens and a facilitating business climate meant the oil-rich state was less impacted by recent economic downturns than other states. “A less-severe recession in Texas and a stronger recovery, particularly in services and construction sectors, have contributed to Texas’ relatively good performance,” Anil Kumar, a senior economist at the bank, said in a statement. The bank said the number of involuntary part-time workers, those in the workforce who want full-time work […]

The United States is both a major importer and exporter of motor gasoline

20 Sep 2016   Oil Supply, USA

The United States simultaneously imports and exports gasoline because of regional differences in gasoline supply and demand balances. The two regions with the largest supply and demand imbalances are the East Coast, which imported 581,000 barrels per day (b/d) of gasoline in 2015, and the Gulf Coast, which exported 551,000 b/d of gasoline in 2015. Regional supply and demand balances in these two regions are described in detail in EIA’s recent PADD 1 and PADD 3 Transportation Fuels Markets report . East Coast (defined as Petroleum Administration for Defense District, or PADD, 1) refining capacity is below consumption, and to meet demand gasoline must be shipped in from other parts of the United States and from international sources. Refining capacity in the Gulf Coast (PADD 3), conversely, exceeds demand, allowing the region to send gasoline elsewhere in the United States and […]

Is U.S. Shale Nearing Collapse?

20 Sep 2016   Shale Oil

Oil Rig Crude oil production in the United States has decreased by more than 10 percent since the record high of 2015, from 9.6 million barrels per day (mmbpd) to less than 8.6 mmbpd. However, the drop in shale oil production has reached almost 20 percent. Moreover, if the increasing Permian Basin production were left out of the equation, the decrease in U.S. shale oil output would be about 33 percent! And this fall will deepen as the number of new wells is still not sufficient. The collapse of the shale oil production is related to the decline curve of tight oil, but shale oil well production starts to decline much faster than that from regular wells. (Click to enlarge) U.S. shale oil production has increased steadily as has the number of new wells in the last ten years. The 2015 drop in the number of new rigs by […]

U.S. motorists wasted billions on premium gasoline last year: AAA

20 Sep 2016   Transportation, USA

U.S. consumers wasted billions of dollars last year filling their cars with costly premium-grade gasoline for no tangible benefit, according to a study by the country’s leading motorist advocacy group. The report by Heathrow, Florida-based AAA comes as low pump prices and a growing economy enticed U.S. motorists to buy more premium-grade gasoline in June than in any month since 2003, according to the U.S. Energy Information Administration. While an overwhelming majority of cars on U.S. roadways are designed to consume regular gasoline, the study found that motorists still use premium-grade in the hopes of achieving more horsepower and better fuel economy. As a result, U.S. drivers spent an estimated $2.1 billion extra by using premium gasoline in vehicles designed for regular fuel. Premium provides little or no benefit to cars designed to run on lower octane, regular gasoline, the study said. “Drivers see the ‘premium’ name at the […]

Pipeline Break Lights a Fire Under Gasoline Prices Across Southeast

20 Sep 2016   Pipelines

Supply is crimped… Gasoline prices have surged across the Southeast, as the partial closure of a major pipeline has left some gas stations scrambling for fuel and many drivers stuck in lines to fill their tanks. The Colonial Pipeline—the most important shipping route for delivering gasoline, diesel and other fuel from refineries in the U.S. Gulf Coast to consumers along the Atlantic—closed part of its main gasoline-shipping route Sept. 9 following a leak in Alabama. The artery delivers about 40% of the gasoline consumed on the East Coast. Colonial Pipeline Co., the Alpharetta, Ga.-based operator, is working on an emergency section of pipeline to bypass the leak. The company has said it expects to restore service later this week. But those assurances haven’t kept prices from jumping. In Georgia, average gasoline prices as of late Monday had […]

Frack Sand: The Unsung Hero Of The OPEC Oil War

20 Sep 2016   Shale Oil

Fracking operations The late-2014, Saudi-initiated oil-price war may have taken the ‘boom’ out of the US shale industry as it seriously threatened OPEC market share, but Saudi victory has been elusive: US shale has proven amazingly resilient. The industry has adapted quickly to the new playing field, and the unsung hero of a new uptick in drilling and investment isn’t just true grit—it’s sand. The Saudi victory is equally dulled by the fact that it was not a decline in US shale production that rebalanced supply and demand; rather, it was chaos in Libya, militant attacks in Nigeria, massive fires in Canada and the destabilization of OPEC’s own Venezuela. US shale made good use of the down-time to regroup and innovate. And now, with the drilling rig count consistently rising, drilling activity coming back on track and new investment surfacing in our favorite shale patches, it is perhaps ironic […]

Oil Investment Crash Could Continue For Another Year

Offshore Oil Rig Investment in upstream operations in the oil and gas industry shrank by a quarter last year and is expected to continue shrinking this year by another 24 percent. Next year could see a continuation of the trend, which will represent the longest investment decline period in the history of the industry, says the International Energy Agency. In its latest World Energy Investment report, the IEA points out that most of the decline in upstream investment – a decline of over $300 billion – was a result of lowered costs. This could suggest quickly improving efficiency of exploration and production, but it’s far more likely that the lower costs are a direct result of rigorous cost-cutting by E&Ps across the board to weather the effects of the oil price rout. In absolute terms, investment in upstream oil and gas totaled $583 billion last year, representing the biggest […]

Oil Prices Rise on Libya Unrest

19 Sep 2016   Prices

Oil prices edged higher Monday after fighting engulfed Libya’s key Eastern crude-oil ports over the weekend. Brent crude for November delivery rose 1.14% to $46.28 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading 1.51% higher at $43.67 a barrel. “It slightly up because of the fighting in Libya,” said Paul Horsnell, head of commodities research at Standard Chartered STAN 4.12 % PLC. Libyan officials said a shipment of petroleum was delayed as a result of the hostilities. The Petroleum Facilities Guards, a militia that until this month had controlled Libya’s oil ports for years after the 2011 ouster and death of dictator Moammar Gadhafi, briefly retook two oil ports, Sidra and Ras Lanuf, in the country’s central coast on Saturday night, militia members said. The guards were forced out again on Sunday by the Libyan National Army, a […]

Oil up as Venezuela sees output deal, Libya suffers clashes

19 Sep 2016   Prices

Oil prices rose in Asian trade on Monday after Venezuela said that OPEC and non-OPEC countries were close to reaching an output stabilizing deal and as clashes in Libya raised concerns that efforts to restart crude exports could be disrupted. Brent crude futures LCOc1 were trading at $46.39 per barrel at 0046 GMT (08:46 p.m. EDT), up 62 cents, or 1.4 percent, from their last settlement. U.S. West Texas Intermediate futures CLc1 were up 63 cents, or 1.5 percent, at $43.66 a barrel. Venezuelan President Nicolas Maduro said on Sunday that a deal between OPEC and non-OPEC countries could be announced this month. OPEC members may call an extraordinary meeting to discuss oil prices if they reach consensus at an informal gathering in Algiers this month, OPEC […]

Oil Investors Flee as OPEC Freeze Hopes Face Supply Reality

19 Sep 2016   Prices

Speculators cut bets on both lower and higher WTI prices: CFTC OPEC, other crude exporters to meet in Algiers on Sept. 27 Oil speculators headed for the sidelines as OPEC members prepare to discuss freezing output in the face of signs the supply glut will linger. Money managers cut wagers on both falling and rising crude prices before talks between OPEC and other producers later this month. The meeting comes after the International Energy Agency said that the global oversupply will last longer than previously thought as demand growth slows and output proves resilient. “It’s a cliff trade right here,” said John Kilduff, partner at Again Capital LLC, a New York hedge fund focused on energy. “There’s more uncertainty than usual in the market because of the upcoming meeting. People are waiting for the outcome and a number think this is a good time to stand on the sidelines.” […]

Can OPEC Remain the Ultimate Energy Superpower?

19 Sep 2016   Prices

The 2016 OPEC (Organization of the Petroleum Exporting Countries) meeting in Algiers later this month has received undue importance from market analysts hoping that Kingdom of Saudi Arabia and non-OPEC producer Russia are seeking a freeze on production. Both have been fighting for market share in China, with Saudi Arabia unusually offering large volumes on the spot market as long-term contracts become more difficult to obtain from buyers. Iran, Iraq and Saudi Arabia have been undercutting each other for market share in India over the past six months. Given the scenario of OPEC members fighting each other for market share, it seems unlikely that an agreement will be reached, although mounting GCC fiscal deficits, which could reach $900 billion by 2021, may focus their attention, especially as rumors suggest that Saudi Arabia and other GCC members are now working near full production capacity. Excess supply has led to a […]

Iran supports any move to stabilize oil market: Rouhani

19 Sep 2016   Iran, Prices

Iranian flags are seen at a petrol station in Tehran, Iran, January 25, 2016. Iran’s President Hassan Rouhani said Tehran supports any move to stabilize the global oil market and lift prices, the Iranian oil ministry news agency SHANA quoted him as saying on Sunday. “Instability and falling oil prices are harmful to all countries, especially oil producers,” Rouhani was quoted as saying by SHANA. “Tehran welcomes any move aimed at market stability and improvement of oil prices based on justice, fairness and fair quota of all the oil producers,” the president said, referring to a meeting between OPEC and non-OPEC producers in Algeria next week, SHANA said. Rouhani was speaking to Ecuadorean President Rafael Correa on the sidelines of the Non-Aligned Movement (NAM) Summit in Venezuela on Saturday, SHANA reported. Iran, OPEC’s third-largest producer, has been boosting its oil output after the lifting of Western sanctions in January. […]

Big Oil Was Never That Big a Money-Maker, Goldman Sachs Says

Oil companies longing for the glory days of ultra-high crude prices might wish to think again. The rising oil prices that came to characterize energy markets in the mid-2000s, and which culminated in a record near-$150 a barrel in 2008, were not the windfall investors might have imagined, according to a new note from Goldman Sachs Group Inc. Instead, returns for major oil companies such as BP Plc, Royal Dutch Shell Plc, and Exxon Mobil Corp., actually declined between 2005 and 2014 as measured by cash return on capital invested. Source: Goldman Sachs The measure means that while the big three oil majors saw their total profits rise alongside higher oil prices, the amount of cash generated by their investments was declining, indicating higher costs of business. Returns per euro or dollar invested by capital-intensive Big Oil were hit with a triple whammy of higher taxes, more expensive service […]


19 Sep 2016   -

The Death of the Great Bakken Oil Field has begun and very few Americans understand the significance. Just a few years ago, the U.S. Energy Industry and Mainstream media were gloating that the United States was on its way to “Energy Independence.” Unfortunately for most Americans, they believed the hype and are now back to driving BIG SUV’s and trucks that get lousy fuel mileage. And why not? Americans now think the price of gasoline will continue to decline because the U.S. oil industry is able to produce its “supposed” massive shale oil reserves for a fraction of the cost, due to the new wonders of technological improvement. I actually hear this all the time when I travel and talk to family, friends and strangers. I gather they have no clue that the Great Bakken Oil Field is now down a stunning 25% from its peak in just a […]

Russia’s ruling party tightens its grip on lower house

19 Sep 2016   -

Russia’s ruling party has tightened its grip on the Duma after parliamentary elections on Sunday were marred by irregularities and the lowest turnout in president Vladimir Putin’s 17 years in power.  With more than 93 per cent of the vote counted, figures from the Central Election Commission on Monday showed that United Russia, the main pro-Kremlin party, had secured 54.1 per cent of votes for party lists and bagged 203 of the 255 seats allocated through single-member constituencies. That would give the party 76 per cent of the 450 seats in the lower house of parliament, up from the 53 per cent it holds now.  The results are a massive victory for Mr Putin and the Kremlin’s “political technologists”, the spin-doctors who tweaked the electoral system following street protests over fraud at the last Duma election five years ago.

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Oil Prices Drop as Attention Turns Toward Glut in Stocks

17 Sep 2016   Prices

Oil prices fell Friday as markets focused on the glut in oil stocks after the shutdown of the Colonial Pipeline, which transports 1.2 million barrels of gasoline a day in the U.S. The November contract for the global crude benchmark Brent was down 1.27% at $46.00 a barrel while its U.S. counterpart West Texas Intermediate fell 1.18% to $43.39 a barrel. Strong gasoline sales in the U.S. reported Thursday had rippled back and provided a slight tailwind for crude prices. However, the Colonial Pipeline, which transports gasoline from Texas to New Jersey, is expected to resume operations next week. The huge stockpile of refined products across the U.S. is cushioning the shortfall meanwhile, but that drawdown is expected to be brief. Colonial said it now anticipates fully restarting the pipeline next week. Above, a Colonial Pipeline… “As the refined product issue slowly moves into the background over the next […]

Oil prices drop as growing supplies stoke glut concerns

17 Sep 2016   Prices

A natural gas flare on an oil well pad burns as the sun sets outside Watford City, North Dakota January 21, 2016. Oil prices fell more than 1 percent on Friday as news of rising Iranian exports and returning supplies from Libya and Nigeria following interruptions fueled concerns that the global glut will persist. Benchmark Brent crude futures fell below the $46-a-barrel mark, trading down 1.4 percent at $45.95 a barrel, down 64 cents day on day, at 0825 GMT (05:25 a.m. EDT). U.S. West Texas Intermediate futures were down 55 cents, of 1.25 percent, at $43.36 a barrel. Both contracts have fallen 8-9 percent in just one week, underlining how volatile the oil market currently is. “We’ve seen a lot of bearish news this week: Libya, Nigeria, skeptical monthly reports from the IEA and OPEC and large stockbuilding in the U.S., so weak fundamentals are weighing on the […]

Oil Down As Glut Fears Return

17 Sep 2016   Prices

Oil prices fell on Friday as the IEA downgraded its projections for oil demand, dashing hopes that oil markets would rebalance this year.  Oil prices posted another down week after the IEA dashed hopes that the global supply and demand picture would come into balance this year. The Paris-based energy agency said demand is much slower than it previously expected, and supplies are also surprising on the upside, mostly due to record OPEC production. The end result? The supply surplus might not be worked through until the middle of next year. Oil prices plunged on the news earlier this week and have struggled to regain ground. Goldman pessimistic on oil prices. Jeff Currie, the head of commodities research at Goldman Sachs, sees low oil prices sticking around for […]

Why OPEC Will Put The Brakes On At $60 Oil

17 Sep 2016   Prices

OPEC says a price near $60 will avoid added shale production Recently renewed talks of a production freeze among OPEC and some non-OPEC producers including Russia have helped to bolster the price of oil in recent weeks, but the organization may not try to raise oil prices beyond $60 per barrel for fear of a renewed glut. On Monday, Russian Energy Minister Alexander Novak and his Saudi Arabian counterpart, Khalid al-Falih, met on the sidelines of the Group of 20 summit in China. A joint statement released by the ministers said “there is an imperative to mitigate excessive volatility harmful to global economic stability and growth.” To that end, the ministers agreed to “act jointly or with other producers,” to help stabilize the price, and have agreed to a Russian-Saudi task force on oil and gas, which will meet in October. Novak mentioned a production freeze was one possible […]

Coalition Air Strikes Wipe Out More ISIS Oil Assets In Syria

17 Sep 2016   Syria

Air Strike Coalition military forces have carried out 10 air strikes against ISIS targets in Syria, destroying five supply routes, oil well heads and oil tanker trucks, the Combined Joint Task Force – Operation Inherent Resolve (CJTF-OIR) said on Friday. The latest air strikes of the CJTF-OIR forces against the Islamic State come days after coalition strikes destroyed 55 ISIS oil tankers in Syria. The coalition comprises of forces from Australia, Bahrain, Belgium, Canada, Denmark, France, Jordan, Saudi Arabia, The Netherlands, Turkey, the United Arab Emirates, the United Kingdom, and the United States. In the latest air strikes, the combined task force also targeted ISIS in Iraq, coordinated with and in support of the Iraqi government, and destroyed tactical and logistic units of the Islamic militants. Back to Syria, earlier this month, U.S. and coalition military forces conducted air strikes and destroyed ISIS oil pump jacks and oil tanker […]

Oil Tanker Due to Load Crude at Key Libyan Port Has Small Delay – Bloomberg

17 Sep 2016   Libya

An oil tanker that’s supposed to collect crude from a key Libyan export terminal for the first time in almost two years is encountering a slight delay, an official said.  The Seadelta is having to wait longer than anticipated to load its cargo from the port of Ras Lanuf for unspecified “technical reasons”, Nasser Delaab, petroleum operations inspector at Harouge Oil Operations, said by phone Friday. The tanker should load today or Saturday at the latest, according to the official, who helps organize oil movements at the port. The tanker, meant to arrive last night, remains at sea, tracking data show.  The loading, assuming it proceeds, will mark a key milestone in Libya’s oil-market rehabilitation amid a conflict that’s crushed output to about a sixth of what it was four years ago. The state’s National Oil Corp. lifted export restrictions this week and said it has been handed control of the terminal by one of the nation’s military factions.

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S&P Downgrades Nigeria Further Into Junk as Oil Woes Worsen

17 Sep 2016   Nigeria

Rating lowered from B+ to B, outlook now stable from negative GDP seen contracting 1 percent in 2016, grow 2 percent in 2017 S&P Global Ratings downgraded Nigeria further into junk territory just as Africa’s most populous nation prepares to issue its first Eurobond since 2013, amid low oil prices and severe shortages of foreign-exchange. S&P lowered Nigeria’s rating one level to B, five levels below investment grade and in line with Kyrgyzstan and Angola. The outlook was changed from negative to stable. “Nigeria’s economy has weakened more than we expected owing to a marked contraction in oil production, a restrictive foreign exchange policy and delayed fiscal stimulus,” S&P said in an e-mailed statement after markets closed. While government debt remains low, “servicing costs as a percentage of government revenues are high and rising,” the company said. The rating cut comes as Nigeria prepares to issue a dollar bond […]

PDVSA Offers Citgo Backing to Sweeten $7 Billion Bond Swap

17 Sep 2016   Venezuela

Company wants to exchange bonds due in 2017 for 2020 debt PDVSA to offer new bonds at 1:1 ratio to old until Sept. 29 Venezuela’s state-owned oil company says it won’t pay bond investors any more than face value to exchange their debt for longer-maturity notes. Instead, it proposes offering half its U.S. refining arm as collateral. Petroleos de Venezuela SA will offer to swap $7 billion of bonds maturing in April and November next year for new 8.5 percent notes with payments staggered over the next four years. The new bonds will be backed by a 50.1 percent stake in Citgo Holding Inc., the unit that owns its U.S. refining arm. PDVSA is seeking to postpone debt payments after the collapse in oil prices and a decline in crude output hampered its ability to pay. Half of the $4.1 billion of bonds that mature November 2017 will be […]

N.Y. Probes Exxon’s Valuation of Oil Reserves

17 Sep 2016   USA

A.G. investigating whether Exxon hid risks of climate change Schneiderman focuses on period during global price collapse New York Attorney General Eric Schneiderman’s probe into Exxon Mobil Corp. includes scrutiny of why it didn’t write down the value of oil fields during a global collapse in prices that prompted billions in write-offs by rival drillers, according to a person familiar with the matter. The avenue of inquiry is related to larger questions of whether Exxon knew decades ago about the dangers of climate change and failed to alert investors to the financial risks it could pose to the world’s biggest oil explorer by market value, said the person, who asked not be named because the details aren’t public. The investigation began last year and other states including Massachusetts have joined. The worst oil crash in a generation spurred $1 trillion […]

Elon Musk Wanted a Race. Now He Has One

17 Sep 2016   Electric Cars

Two hundred thirty-eight. Not so long ago that number would have been unthinkable. When Tesla Motors Inc. rolled out its first electric car, the 2008 Roadster, it boasted what was then a jaw-dropping range of 244 miles on a single charge. It took $110,000 to get your hands on one, but Elon Musk promised that it would usher in an era of long-range affordable cars. This week a century-old Detroit automaker, General Motors Co., not Tesla, unveiled the latest breakthrough electric car. The 2017 Chevy Bolt and its 238 mile range rivals that of the Roadster and at a third of the price. The Bolt’s $37,500 sticker price isn’t exactly “affordable” for the average American buyer, but in terms of range per dollar spent, GM just bested every other electric vehicle on the market, including the full lineup of Teslas. The chart below breaks down the race for cheap […]

Pipeline shutdown in Alabama could send gas prices higher

17 Sep 2016   Oil Supply, USA

Motorists in parts of the country could pay a little more for gasoline in coming days because of the shutdown of a leaking pipeline in Alabama. Experts say that any spike in service-station prices will be felt most in the Southeast and should only be temporary. Colonial Pipeline Co. doesn’t expect to fully reopen its primary gasoline pipeline, which has spilled more than 250,000 gallons near Birmingham, until next week. The pipeline is used to send gasoline from refineries on the Texas Gulf coast to states in the Southeast and along the East Coast. Prices on futures contracts for wholesale gasoline rose about 2 percent in afternoon trading Friday to $1.46 a gallon after rising 5 percent on Thursday. Colonial said that supply disruptions would be felt first in Georgia, Alabama, Tennessee, North Carolina and South Carolina. Tom Kloza, an energy analyst with […]

Three new oil sands projects approved in Alberta

17 Sep 2016   Canada, Tar Sands

Three new oil developments in the Fort McMurray area could add up to 95,000 barrels of oil per day to current output, Alberta’s government said. The provincial government approved three oil sands developments , two of which involved the use of steam stimulation. Collectively, the government said the projects represent about $3 billion in investments into Alberta’s economy. They each fall under a new scheme aimed at limiting the amount of greenhouse gas emissions associated with oil sands developments. “The emissions limit is the first of its kind set by an energy-producing jurisdiction,” Environment Minister Shannon Phillips said in a statement. “It positions Alberta as an environmental leader while allowing room for development.” Alberta’s economy is recovering after around 1 […]

North Dakota Crude Oil Production Stabilizes in July

17 Sep 2016   Shale Oil

North Dakota oil production rose slightly in July, stabilizing after a drop in the previous month to more than two-year lows, according to the latest data from the state’s Department of Mineral Resources. Crude production increased 0.2% to 1.03 million barrels a day in July, the most recent month for which data is available, the state said. That keeps output largely on par with June, when production fell to its lowest level since April 2014. North Dakota’s production is centered on the Bakken Shale formation, one of the world’s highest-cost old fields. With crude-oil prices mired below $50 a barrel, operators there and in other shale-oil plays have focused drilling on their most productive areas. Total production in North Dakota was 31.9 million barrels of oil in July, up from 30.8 million barrels in June, the state said. North Dakota’s active rig count—a barometer of future production—stands at 33 […]

Bakken July Production Data

17 Sep 2016   Shale Oil

North Dakota has just come out with their oil production numbers for July 2016. Bakken production was up by 3,046 barrels per day while all North Dakota production was up 2,376 barrels per day. The EIA’s Drilling Productivity Report missed it for July. They will make the correction next month. Barrels per day per well held steady in July, 91 for the Bakken and 79 for all North Dakota. The trend is down in spite of the slight increase in July. From the Director’s Cut Oil Production June 30,813,924 barrels = 1,027,131 barrels/day July 31,914,711 barrels = 1,029,507 barrels/day (preliminary)(all time high was Dec 2014 at 1,227,483 barrels/day) 977,342 barrels per day or 95% from Bakken and Three Forks 52,165 barrels per day or 5% from legacy conventional pools Producing Wells June 13,248 July 13,255 (preliminary)(all time high) 11,168 wells or 84% are now unconventional Bakken Three forks wells […]

Exxon probe faces uphill climb amid ambiguous accounting rules

The logo of Exxon Mobil Corporation is shown on a monitor above the floor of the New York Stock Exchange in New York, New York, U.S. December 30, 2015. New York Attorney General Eric Schneiderman faces an uphill climb in building a case against Exxon Mobil Corp for not writing down assets amid the oil-price slump because of the broad leeway that energy companies have enjoyed reporting under U.S. rules, accounting experts said. Schneiderman is investigating Exxon’s accounting practices and why the oil giant has not taken writedowns even while oil prices have fallen, a person familiar with the matter told Reuters. The price drop of more than 60 percent since 2014 has forced many integrated oil producers around the world to write down the value of their wells, leases and equipment, and Exxon is the only major producer to hold off so far. Oil in many wells can […]

No-Name Gasoline No Longer a Bargain After Supply Dries Up

17 Sep 2016   USA

Unbranded prices soar over name brands in southeastern U.S. Safety agency corrective order issued on major gas pipeline Loyalty to your local mom-and-pop gas station may come at a price. Customers buying gasoline at grocery stores and other independent retailers may pay more than those shopping at name-brand outlets after the biggest gasoline pipeline in the U.S. sprang a leak Sept. 9. Colonial Pipeline’s proposed restart of its shuttered line next week is up in the air after a safety agency said the company can’t go ahead without its approval. When natural disaster strikes or supplies are suddenly cut off, refiners have to prioritize deliveries to wholesale terminals of name-brand gasoline for retailers like BP or Citgo, according to Patrick DeHaan, GasBuddy senior petroleum analyst. Whatever is left over trickles down to unbranded stations. “The leftovers that aren’t guaranteed, that’s the least focus of any oil company,” DeHaan said […]

When Should a Company Write Down Assets

New York Attorney General Eric Schneiderman is investigating why Exxon Mobil Corp. hasn’t written down… New York Attorney General Eric Schneiderman is investigating why the oil giant hasn’t written down the value of its assets even as others have done so due to plummeting crude prices. It is an issue that is particularly knotty in the energy industry, where the rules about valuing and writing down assets are complex. And a lot depends on what a company expects for the future: Will oil prices rebound, or stay mired below $50 a barrel? The answer can make a big difference for investors — if a company decides its assets have lost value and should be written down, it hurts earnings and book value, or a company’s net worth. And the leeway allowed in making that decision means there is always a motivation for a company to be overly optimistic about […]

Against All Odds, North Sea Proves Resilient to Oil-Price Slump

17 Sep 2016   United Kingdom

Output in U.K. North Sea will rise through 2018: WoodMac Region joins Russia, Norway in bringing down costs to survive Oil producers in the North Sea were supposed to be among the first victims of OPEC’s battle for market share. Instead their high-cost, decades-old facilities are proving surprisingly resilient to the price slump. Crude oil and condensate output is likely to continue rising in the U.K. North Sea until 2018 as projects that were sanctioned before crude’s plunge four years ago start up, according to estimates by industry consultant Wood Mackenzie Ltd. Even though production dips after that, output by the end of the decade will still be roughly equal to the 2015 level. Since 2014, the Organization of Petroleum Exporting Countries has pumped without limits and allowed prices to plunge to 12-year lows to squeeze higher-cost rivals. While the strategy is expected to reduce non-OPEC […]

Statoil completes sale of Marcellus acreage

17 Sep 2016   Shale Gas

Norwegian energy company Statoil said it retained some of its shale acreage in the United States, but completed a sale Friday of assets in West Virginia. Statoil said it closed Friday on the $96 million sale of 11,500 acres in the Marcellus shale natural gas basin in West Virginia to Antero Resources Corp. The Norwegian company retains about 350,000 net acres of the Marcellus shale natural gas basin in Ohio. The sale from the Marcellus shale, initialized in August, is the third for Statoil in the past two years. In December 2014, the company sold some of its interest in Marcellus for $394 million after suspending some rig work to save capital. […]

Russia bases economic forecast on $40 oil

17 Sep 2016   Russia

The Central Bank of Russia lowers rates and forecast for economic growth in 2017, basing its forecast on oil priced at $40 per barrel. Photo by DyMax/Shutterstock MOSCOW, Sept. 16 (UPI) — The Russian Central Bank said Friday it was lowering its key rate because of the potential for slow economic growth and oil priced around $40 per barrel. For the first time since June, the bank said it lowered its key rate by a half percent to 10 percent, saying it was forecasting “unstable economic activity.” It’s possible for the Russian economy to expand this year, but the bank said gross domestic product likely won’t increase by more than 1 percent next year. “This forecast is based on the conservative assumptions of sluggish growth in global economy, average annual oil price staying around $40 per barrel and persistent structural constraints for the Russian economic development,” the bank said […]

Oil Set for Weekly Drop as Resilient Supply Seen Sustaining Glut

16 Sep 2016   Prices

Libya, Nigeria plan higher output; IEA sees glut persisting All 14 OPEC members are said to be attending Algiers meeting Oil headed for a weekly loss on speculation a global crude glut will persist as disrupted supply returns and demand growth slows. Futures fell 1.3 percent in New York, extending a weekly decline to 5.5 percent. OPEC members Libya and Nigeria, whose supplies have been reduced by domestic conflicts, are preparing to boost exports within weeks. The oil surplus will last longer than previously thought as demand growth slumps and output proves resilient, the International Energy Agency said Tuesday. Oil has fluctuated since rallying in August amid speculation the Organization of Petroleum Exporting Countries and Russia would agree on measures to stabilize the market at a meeting in Algiers later this month. All 14 member countries will attend the Sept. 27 meeting, according to an official with knowledge of […]

Oil prices drop as growing supplies stoke glut concerns

16 Sep 2016   Prices

A natural gas flare on an oil well pad burns as the sun sets outside Watford City, North Dakota January 21, 2016. Oil prices fell more than 1 percent on Friday as news of rising Iranian exports and returning supplies from Libya and Nigeria following interruptions fueled concerns that the global glut will persist. Benchmark Brent crude futures fell below the $46-a-barrel mark, trading down 1.4 percent at $45.95 a barrel, down 64 cents day on day, at 0825 GMT (05:25 a.m. EDT). U.S. West Texas Intermediate futures were down 55 cents, of 1.25 percent, at $43.36 a barrel. Both contracts have fallen 8-9 percent in just one week, underlining how volatile the oil market currently is. “We’ve seen a lot of bearish news this week: Libya, Nigeria, skeptical monthly reports from the IEA and OPEC and large stockbuilding in the U.S., so weak fundamentals are weighing on the […]

Crude Rises In Spite Of Poor Economic Data

16 Sep 2016   Prices

Crude has just given up the ghost of a rally, as poor economic data weighs on broader market sentiment again. As the dollar rallies, despite waning rate hike hopes, crude is under pressure once more. Hark, here are five things to consider in oil markets today. 1) Today’s post out on RBN Energy is by the mighty Abudi Zein , discussing how net U.S. crude oil imports remain stubbornly high. The piece highlights how it wasn’t only Hurricane Hermine that contributed to last week’s humungous draw to crude inventories, but also the Labor Day holiday slowing operations, as well as reduced imports ahead of the ad valorem tax assessment on September 1. As the chart below illustrates, net imports since February have been up every month versus year-ago levels. Looking ahead, as Middle East producers continue to target the U.S. market, in combination with difficulty of selling U.S. crude […]

Oil Prices Rise with Gasoline, Diesel

16 Sep 2016   Prices

Gasoline made some of its biggest daily gains of the summer as pipeline and refinery outages had traders surging into fuels, eventually pulling crude prices up, too. Light, sweet crude for October delivery settled up 33 cents, or 0.8%, to $43.91 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, gained 74 cents, or 1.6%, to $46.59 a barrel. Oil has benefited from much larger gains in refined products, a trader, broker and analyst said. Gasoline futures settled up 6.87 cents, or 5%, at $1.4302 a gallon. It is only the third time since mid-May that gasoline futures gained more than 5% in one day. Diesel futures gained 3.45 cents, or 2.5%, to $1.4162 a gallon. OPEC said Monday that U.S. production is set to decline at a slower rate than… Colonial Pipeline Co. had partially closed the major artery shipping gasoline to eastern states from […]

Oil rises on draw in U.S. crude stocks, but supply worries remain

16 Sep 2016   Prices

Oil prices rebounded in early Asian trade on Thursday after falling around 3 percent in the previous session, supported by an unexpected fall in U.S. crude inventories. U.S. crude inventories dropped by 559,000 barrels in the week to Sept. 9, defying analysts expectations of a crude build of 3.8 million barrels. Brent crude futures were trading at $46.06 per barrel at 0051 GMT, up 21 cents, or 0.5 percent, from the last settlement. U.S. West Texas Intermediate futures were up 12 cents, or 0.3 percent, at $43.70 a barrel. Crude prices fell about 3 percent for a second straight day on Wednesday following a 4.6 million barrel build in U.S. distillates inventories. The jump was the biggest weekly build since January and put distillate stocks at six-year seasonal highs. “It’s good news at […]

Natural Gas Erases Losses After Stockpile Data

16 Sep 2016   Prices

Natural gas prices rose to a 2 1/2-month high Thursday, flipping up from losses after data showed a below-average storage addition last week. The U.S. Energy Information Administration said natural-gas stockpiles grew by 62 billion cubic feet last week. While that is more than the 60 bcf expected by forecasters surveyed by The Wall Street Journal, it is lower than both last year’s addition and the five-year average addition for this week of the year. That suggests smaller supply or greater demand compared with a year ago. While that might often be a secondary concern to how the weekly data compared with expectations, right now traders are eagerly looking for reasons to buy, said Teri Viswanath, managing director of natural gas at PIRA in New York. Many expect a drop in drilling work and growing demand for gas-fired power and heat to erase a long-standing glut in the market. […]

Offshore Drillers Brace for More Pain Even With Bottom in Sight

16 Sep 2016   Offshore

Transocean, Seadrill see utilization rates stabilizing in 2017 As many as 60 more floating rigs need to be scrapped Offshore oil-rig operators, grappling with the biggest industry downturn in a generation, say they finally have the bottom in sight. The problem is, they could be stuck there for a long time. Transocean Ltd., which owns the biggest offshore-rig fleet in the world, believes utilization for floating units will reach bottom toward the middle of next year, Chief Financial Officer Mark Mey said at a conference organized by Pareto Securities ASA in Oslo. Seadrill Ltd., which owns the third-largest fleet, said utilization could stabilize as soon as the beginning of next year, and that rental rates had already bottomed out. Still, it’s impossible to say when those rates, which have dropped to about $200,000 a day from highs of $650,000 in 2013 for the most sophisticated units, will recover, said […]