Recent Articles

Oil Prices Fall on Fed Rate Rise Jitters

29 Aug 2016   Prices

Oil prices were down Monday as worries over the U.S. raising interest rates as early as next month rippled through an already jittery market. The October contract of global benchmark Brent was down 1.49% at $49.44 a barrel, while its U.S. counterpart, West Texas Intermediate, was down 1.45% at $46.94. Prices fell after Federal Reserve Chairwoman Janet Yellen signaled growing conviction that the central bank would raise short-term interest rates in the weeks or months ahead. A rise in U.S. interest rates usually doesn’t bode well for oil prices, which are priced in dollars. Higher interest rates could push the dollar higher, making oil products more expensive for oil traders who hold a different currency. The WSJ Dollar Index was largely steady after rising 0.8% over the weekend. Meanwhile, as September approaches there is continued speculation over whether major oil producers, including Russia and members of the Organization of […]

Oil Resumes Drop Near $47 Amid Market-Stabilization Deal Doubts

29 Aug 2016   Prices

Oil declined amid doubts producers will agree on a deal to stabilize the market when suppliers meet next month for informal talks. Futures decreased as much as 1.8 percent in New York after rising the previous two sessions. Iran’s plan to continue boosting crude output until it regains its pre-sanctions OPEC market share is dimming prospects of collective action, according to Patrick Allman-Ward, chief executive officer of Dana Gas PJSC. United Arab Emirates Oil Minister Suhail Al Mazrouei said in a Twitter post that the oil market should achieve stability soon. Oil entered a bull market Aug. 18, less than three weeks after tumbling into a bear market, as prices surged partly on speculation that discussions among members of the Organization of Petroleum Exporting Countries may lead to action […]

Oil prices fall on rising Iraq output, doubt over producer talk prospects

29 Aug 2016   Prices

Oil prices fell early on Monday as output from Iraq rose and as Iran said it would only cooperate in upcoming producer talks to freeze output if fellow exporters recognized its right to fully regain market share. International Brent crude oil futures LCOc1 were trading at $49.54 per barrel at 0043 GMT (8.43 p.m. ET), down 38 cents from their previous close. U.S. West Texas Intermediate (WTI) crude futures were down 43 cents at $47.21 a barrel. Traders said the price falls were a result of climbing output from the Middle East, where oil exports from Iraq’s southern ports have averaged 3.205 million barrels per day (bpd) in August, exceeding the average level seen in July, according to two officials from state-run South Oil Company said. Exports in July averaged 3.202 million bpd. Also, Iran said […]

Oil Pessimists Exit as OPEC Cap Talk Spurs Bets Glut Easing

29 Aug 2016   Prices

Speculators cut wagers on lower WTI crude prices by 41%: CFTC OPEC, other producers to meet in Algiers on Sept. 26-28 Oil investors are turning the car around. For a second week, money managers slashed bets on falling prices by a record and boosted wagers on a rally. Futures have climbed 23 percent in less than three weeks as some OPEC members raised the possibility of an output freeze amid signs the global glut is easing. “This is a lot of running from one side of the boat to the other,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “Speculators were selling with both hands in July and buying with both hands this month.” Saudi Arabia will be willing to listen to other producers and what they have to offer when it comes to an output freeze, the kingdom’s Energy Minister Khalid Al-Falih said […]

Ignoring Fundamentals: Speculation Has Been Driving Oil Prices

29 Aug 2016   Prices

Crude Oil pipeline 2016 has been a roller coaster year for the oil traders. Markets had a near 100 percent rise from February lows, followed by a drop of more than 20 percent, which took the oil markets into a bear phase. However, the bear phase lasted only for a few days, as the markets again gained 20 percent. Though part of the price action is due to fundamentals, the rest can be attributed to speculation. The speculators in the oil markets feed on the rumors and fundamental news, and overshoot prices way above logical levels, trapping smaller investors. This is not the first time we have seen speculation in oil prices. Back in 2008, the vertical rise in crude oil was largely attributed to increased speculative activity. (Click to enlarge) The price of oil more than doubled from 2007 to 2008, when oil peaked at $147.27 a barrel […]

Iraq: Baghdad Threatens To Sell Oil Via Iran

29 Aug 2016   Iran, Iraq

The Iraqi government is considering a plan to market its crude oil through Iran if talks between the State Oil Marketing Organization and the Kurdistan Regional Government (KRG) fall through, Deputy Oil Minister Fayadh al-Nema said, Reuters reported. Negotiations between Baghdad and Arbil may begin as soon as next week and will center on crude oil that the KRG exports unilaterally through Turkey. Baghdad has been demanding that the Kurds export their oil through the State Oil Marketing Organization instead. If the talks fail, the Iraqi government would need to strike an oil swap deal with Iran because no pipelines run to Iranian refineries on the Persian Gulf, according to an anonymous official. If talks succeed, the Iraqi government may increase its own volumes of crude oil sent to Turkey via the Kurdish-controlled pipeline from Kirkuk. Last week, the government resumed 75,000 barrels per day in flows through this […]

Second boycotter says will rejoin Libya’s U.N.-backed government

29 Aug 2016   Libya

A member of the leadership of Libya’s U.N.-backed government who is close to powerful rival factions in the east of the country has said he will end his boycott of the Tripoli-based body. The decision by Ali Gatrani could strengthen the Government of National Accord (GNA), coming days after a second boycotting member of the government’s nine-member leadership, or Presidential Council, said he would resume his role. But in a statement late on Saturday, Gatrani referred anew to concerns around the continuing power of armed groups in the politics of the oil-producing North African state. Eastern factions have blocked the parliament based in the east from approving the GNA, saying they believe the U.N.-backed government is dependent on militias and is undermining eastern forces led by General Khalifa Haftar. Western states are counting on the GNA as the best option in tackling the political chaos, security vacuum and economic […]

High toll for Libyan troops battling Islamic State in Sirte

29 Aug 2016   Libya

Members of Libyan forces allied with the UN-backed government fire a weapon towards Islamic State militants in neighbourhood Number One in central Sirte, Libya August 28, 2016. At least 34 Libyan fighters were killed and more than 180 wounded on Sunday as they closed in on the last Islamic State militant holdouts in the coastal city of Sirte, according to field hospitals. Forces aligned with Libya’s U.N.-backed government, supported since Aug. 1 by U.S. air strikes, have pushed militants back into a small residential area in central Sirte in a three-month-old campaign. Heavy fighting resumed on Sunday after a one-week lull. The Libyan brigades, mostly from the city of Misrata, say they are close to victory in Sirte, but they have struggled to defend themselves against suicide bombings, sniper fire and landmines. On Sunday several brigades stationed close to Sirte’s seafront advanced several hundred meters eastwards through Sirte’s neighborhood […]

Turkey-backed Syrian rebels aim for Manbij city, commander says

29 Aug 2016   Syria, Turkey

A rebel fighter carries a boy as civilians and rebels who were evacuated from the besieged Damascus suburb of Daraya, after an agreement reached on Thursday between rebels and Syria’s army, arrive in the rebel-controlled city of Idlib August 27, 2016. A Syrian rebel commander said that Turkish-backed rebels aim to capture Manbij city from Kurdish-allied forces as conflict between the sides escalated in northern Syria on Sunday. Manbij on the west bank of the Euphrates River was captured this month from Islamic State by the Syrian Democratic Forces (SDF) alliance, including the powerful Kurdish YPG militia, in a United States-backed offensive. Colonel Ahmed Osman, head of the Sultan Murad rebel group, told Reuters that the Turkey-backed rebel force was “certainly heading in the direction Manbij” since YPG forces had fortified their positions rather than evacuate. The United States and Turkey have both demanded that the Kurdish forces withdraw […]

Iran’s Oil-Market Share Grab Seen Dimming Hopes for Freeze Talks

29 Aug 2016   Iran

OPEC output plans not conducive to freeze agreement: Dana CEO Iran sees need for other producers to limit supply: Mills Iran’s plan to keep boosting crude production until it regains its OPEC market share is dimming prospects of collective action by major producers to freeze output, according to Patrick Allman-Ward, chief executive officer of Dana Gas PJSC. “I’m not overly optimistic about an oil freeze being agreed,” Allman-Ward said in a Bloomberg Television interview in Dubai on Sunday. “There’s pressure with Iran working to increase production. The environment is not that conducive to a freeze.” Dana Gas produces hydrocarbons from Egypt to Iraq and sells condensate, a light oil. Iran lost its position as OPEC’s second-largest producer after the U.S. and European Union tightened sanctions on its economy in 2012. While the country supports action to stabilize the market, it won’t participate in a freeze in output before regaining […]

Turkish warplanes, artillery hit targets in north Syria: sources

29 Aug 2016   Syria, Turkey

Turkish warplanes and artillery struck targets held by the Kurdish YPG militia in north Syria on Sunday, security sources said, as Turkey pressed on with a cross-border campaign launched last week with its Syrian rebel allies. There was no immediate comment from the YPG militia, but forces aligned with the Kurdish group had said on Saturday that no Kurdish militia had been in areas being targeted by Turkish troops or its allies. Turkey has said its campaign is against Islamic State and also aims at stopping Kurdish forces extending territory they control. The Syrian Observatory for Human Rights said on Sunday Turkish warplanes had struck areas north of Manbij, a city south of Jarablus captured by Kurdish-aligned Syrian Democratic Forces this month in a U.S.-backed operation. (Reporting by Umit Bektas in Karkamis, Ece Toksabay in Ankara and Tom Perry in Beirut; Writing by Edmund Blair; Editing by Louise Ireland) […]

Oil Refining Empire Helps Sinopec Outshine Chinese Energy Rivals

29 Aug 2016   China

Net income at China’s refining giant beats PetroChina, Cnooc Crude crash drags down Sinopec earnings as output slides China Petroleum & Chemical Corp., the refining giant known as Sinopec, outshined its domestic state-run rivals in the first half of the year as its fuel-making business helped it weather the worst crude crash in a generation. The world’s biggest refiner reported 19.9 billion yuan ($3 billion) in profit for the first half of the year, according to a filing Sunday with the Hong Kong stock exchange. While that’s down 22 percent from the same period in 2015, it’s more than double it’s net income in the second half of last year, when it posted its weakest earnings since 2002. “Sinopec continues to be a defensive play among China’s Big Three oil companies as its huge refining exposure puts it in a good position to benefit from a low crude price […]

Beneath Yuan’s Quiet, China Worries Rise

29 Aug 2016   China

The calm in China’s currency is making some investors uneasy. Twice in the past year, sudden drops in the value of the yuan have rattled global markets, sparking concerns that a deeper decline was at hand as officials struggle to orchestrate an economic “soft landing” following years of debt-fueled growth. Since then, the People’s Bank of China has calmed the waters by improving communications and the government has increased stimulus in a bid to stabilize growth. The Federal Reserve’s decision to delay rate increases has kept a lid on the value of the U.S. dollar, relieving some of the pressure on the yuan. Yet in a refrain familiar by now to investors the world over, analysts are worrying that stimulus alone won’t be enough to get China’s growth back on track and support the yuan indefinitely. Fundamental indicators of Chinese economic health continue to deteriorate, a sign to skeptics […]

China faces massive closures of small thermal power plants: media

29 Aug 2016   China

 China’s power generation companies will have to contend with massive closures of their smaller coal-fired power plants as government plans to shut excessive coal and steel capacity deprives the plants of customers, local media reported. China Guodian Corp [CNGUO.UL], one of the country’s top five state-owned power companies, might stumble as less-efficient “zombie” power plants are no longer economically viable, said Zhang Shumin, Guodian’s chief economist, on Saturday, as cited by Chinese financial publication Lengjing on their website. “Thermal power plants will face difficulties in operating in the next three to five year, even edging to bankruptcy, especially for the small plants and those that fail to meet environmental standards,” said Zhang. To relocate employees from the small thermal power plants, Guodian plans to increase wind power in […]

Refinery wars: China, India win; South Korea, Japan, Singapore lose

29 Aug 2016   Refining

There is little doubt that China’s surging exports of refined fuels have cut profit margins for Asia’s refiners, but the pain is unlikely to be shared equally across all the region’s exporters of oil products. Given the scarcity of detailed official data on oil product imports and exports among many Asian countries, it’s nigh impossible to build a completely accurate picture of the likely winners and losers. However, detailed data is provided by China on the export destinations of its product exports, and Australia, the region’s biggest importer of refined fuels, also gives a country-by-country breakdown of its imports. The overall picture for Asia’s refiners is that profit margins appear to have shifted structurally lower as a result of China’s massive exports of diesel and gasoline. China’s exports of 370,000 barrels per day […]

As Beijing aims for blue skies over G20, China’s steel mills get unexpected boost

29 Aug 2016   China

An employee checks aluminium ingots for export at the Qingdao Port, Shandong province March 14, 2010. When Beijing ordered hundreds of industrial plants to close ahead of China’s first-ever G20 summit next week, the government wanted to spruce up the host city of Hangzhou and ensure world leaders would gather under clear blue skies. In doing so, China’s leaders may have given the nation’s stricken steel mills an inadvertent leg-up, helping to restore profitability after a years-long downturn caused by weak prices as a global glut swelled and demand slowed. Steel prices SRBcv1 have jumped as much as 42 percent since late May, with the unexpected turn in fortunes all the more striking as the health of the global steel industry is set to feature on the G20 agenda amid escalating tensions over Chinese exports. Some Chinese steel plants are turning in the best margins in at least three […]

Chinese banks braced over industrial restructuring

29 Aug 2016   China

China’s banks are set to be the biggest losers in the sweeping bailouts of the country’s steel and coal industries.  Local governments hoping to save their steel mills and coal miners have announced a series of restructuring plans, enlisting the banks to take the hit by improving the terms of the loans or swapping them for bonds or equity in the struggling groups.  The reliance on the banking system to shoulder the burden comes at an inopportune moment, with China’s banks already mired in bad debt — about Rmb15tn ($2.25tn), or 19 percent of total commercial lending by some accounts.  Profit growth at the banks has also fallen over the past two years and could deteriorate further as many of the country’s largest industrial players renege on loans for better state-brokered deals.

China’s Oil Production Peaks, Increased Foreign Oil Dependency On The Horizon

29 Aug 2016   China

From searching the globe in search of oil deals with intense geopolitical ramifications like Sudan, Niger, Iraq and Venezuela, to cutting a controversial multi-billion dollar oil deal in Canada’s oil sands play, China has become all things to all people in the global oil industry in an effort to satisfy its massive and growing oil thirst. China’s largest African suppliers of oil are Angola, Equatorial Guinea, Nigeria, the Republic of Congo, and Sudan. Smaller exporters include Algeria, Chad, Gabon, Kenya, Liberia, and Libya. China has also recently cut major energy deals with Russia, as Moscow and Beijing unfreeze decades of mutual suspicion and mistrust in a growing geopolitical alliance also aimed at reducing U.S. regional and global hegemony. Russia recently replaced Saudi Arabia as China’s largest oil importer. However, Middle Eastern oil still represents over 50% of China’s oil needs. In efforts to offset China’s growing foreign oil dependence […]

Has The Gulf Of Mexico Fallen Out Of Favor With The Oil Majors?

29 Aug 2016   Offshore, USA

A glitch interrupted the first-ever U.S. livestream of an oil lease sale on Wednesday, and although it didn’t affect the bidding, this epic fail provided just the right metaphor to describe the flop of the latest auction in the Gulf of Mexico, which saw a record low number of companies offering record-low money for leases in the western parts of the Gulf. Upon announcing in July the first-ever federal livestream of a lease sale , the U.S. Bureau of Ocean Energy Management (BOEM) had said that the 23.8-million-acre area offshore Texas was estimated to have economically recoverable hydrocarbons of between 116 million and 200 million barrels of oil and between 538 billion and 938 billion cubic feet of natural gas. So far, so good. This week’s lease sale, however, showed the dismal stark reality: just three companies bid for 24 tracts covering 138,240 acres, with all bids […]

Why Electric Cars Will Be Here Sooner Than You Think

29 Aug 2016   Electric Cars

In 2015, about one in every 150 cars sold in the U.S. had a plug and a battery. But mass adoption of electric vehicles is coming, and much sooner than most people realize. In part, this is because electric cars are gadgets, and technological change in gadgets is rapid. One big leap is in batteries. A typical electric vehicle today costs $30,000 and will go about 100 miles on a charge, if that. Within a year, you’ll be able to get double that range for just a little more money. Tesla Motors Inc. TSLA -0.44 % is the standard-bearer, promising a Model 3 vehicle meant to appeal to the masses at $35,000 without incentives and more than 200 miles of range. By comparison, the average new car in the U.S. today sells for about $33,000 . But Tesla is hardly alone. Later this year, Chevrolet will roll out its […]

Forget Driverless Cars – Driverless Air Taxis Are The Future

29 Aug 2016   Transportation

Ford is the latest major company to jump on the driverless vehicles bandwagon announcing that it intends to develop fully autonomous vehicles. That announcement is just the latest in the long string of big companies interested in driverless tech from Tesla and Google to Uber and (rumored) Apple. In that context Ford’s announcement is not much of a surprise and was largely greeted with a collective yawn by Wall Street. To really get investors’ attention these days you need to do something truly revolutionary – perhaps something like what Airbus is proposing. European aviation giant Airbus is Boeing’s biggest competitor and a major manufacturer of planes. Now the aerospace giant is reportedly working on a flying driverless taxi that you can summon via an app on your smartphone. The concept itself is extraordinary enough – but Airbus’ equally extraordinary timeline shows that it’s serious. The company expects […]

Dakota Access Pipeline Is Set To Become The Second Keystone XL

29 Aug 2016   Pipelines

Several dozen environmental groups are once again working together to stop a major oil pipeline, hoping to bring back the magic of the fight against the Keystone XL Pipeline. A group of 31 environmental organizations sent a joint letter to the White House asking President Obama to halt construction of the Dakota Access Pipeline, a 1,168-mile oil pipeline that would connect Bakken oil to refineries in Illinois. The $3.7 billion project would carry 470,000 to 570,000 barrels per day of light sweet crude from North Dakota to be moved out of the region for processing, and it would also allow oil companies to avoid paying to ship crude by rail, a more expensive option. But there are several problems with the route, which have raised the ire of environmentalists, local communities, and native tribes. Dakota Access moves through the ancestral land of the Standing Rock Sioux Tribe, and the […]

Wind Power Finally Getting Out From Solar’s Shadow

29 Aug 2016   Wind

Wind power Solar power has been getting all of the proverbial sunlight for the last few years. Most of the focus and attention from environmentalists, regulators, and others has been on solar. There are numerous pure-play solar companies from SolarCity to First Solar. Solar is commonly used in residential applications today, and economic pundits fall all over themselves to talk about the falling cost of solar panels and the changing economics that entails. All of that attention has probably left wind power advocates feeling a little steamed. While there are many pure-play public solar companies, there are few publicly-traded firms investing directly in wind farms or producing wind turbine equipment. Yet wind power is every bit as viable a technology as solar, and in some respects is a natural complement to solar – wind often blows hardest at night and on stormy days – exactly when solar is the […]

Ruble Falls as Oil Reasserts Dominance, Carry Trade Loses Allure

29 Aug 2016   Russia

Hawkish Fed hints seen limiting yield-maximizing strategy Traders seek cues from crude with link strongest since May The ruble weakened for a second day as speculation the dollar will strengthen under tighter Federal Reserve policy dimmed its carry-trade appeal and it came under the influence of weaker oil prices. Russia’s currency weakened 0.3 percent to 65.065 against the dollar by 11:54 a.m. in Moscow. The Micex index of major stocks dropped 0.8 percent after closing at new record high of 1,993.35 on August 26. Crude oil fell 1.4 percent in London to $49.20. Indications by Federal Reserve Chair in a speech at an annual symposium in Jackson Hole, Wyoming on Friday that the U.S. recovery is gathering steam were interpreted by traders as a hint of higher rates later this year. That would wipe out profits from buying higher-yielding rubles with borrowed dollars, known as the carry trade. “The […]

Oil Prices Post Slight Gains After Janet Yellen Speaks

27 Aug 2016   Prices

Oil prices eked out a gain Friday but settled lower for the week after the U.S. Federal Reserve chairwoman left the door open for a sooner-than-later rate increase . U.S. crude for October delivery settled up 31 cents, or 0.7%, to $47.64 a barrel on the New York Mercantile Exchange. Prices fell 3% this week. Brent, the global benchmark, rose 25 cents, or 0.5%, to $49.92 a barrel on ICE Futures Europe. Prices fell 1.9% on the week. Oil prices have wavered this week as investors weighed continued concerns that the global market remains oversupplied against new indications that the Organization of the Petroleum Exporting Countries could agree to a production freeze in September. U.S. commercial inventories of crude oil and refined products rose to a record high, a sign that the global glut […]

Oil Trades Near $47 as Saudis See Freeze as Positive for Market

27 Aug 2016   Prices

Saudi Arabia’s Khalid Al-Falih doesn’t advocate production cut Iran’s oil minister to attend producer talks in Algiers: Shana Oil traded near $47 a barrel as Saudi Arabia’s energy minister said an output freeze would be positive for the market and after a report that Iran will attend informal talks next month. Futures lost 0.7 percent in New York after rising 1.2 percent Thursday. A freeze will signify that producers are content with the current market situation, Saudi Arabian Energy Minister Khalid Al-Falih said, ruling out an output cut. Iran will participate in the discussions in Algiers, a state news service reported. Oil suppliers want a deal to manage production, OPEC’s Secretary General Mohammed Barkindo told Arabic-language newspaper Al-Hayat. Oil entered a bull market Aug. 18, less than three weeks after tumbling into a bear market. Prices surged partly on speculation that informal discussions among members of the Organization of […]

Oil prices dip as Saudi Arabia dampens prospects of output freeze

27 Aug 2016   Prices

Oil prices dipped in early trading on Friday after the Saudi energy minister tempered expectations of strong market intervention by producers during talks next month. International benchmark Brent crude oil prices LCOc1 were trading at $49.55 per barrel at 2114 ET, down 12 cents from their previous close. U.S. West Texas Intermediate (WTI) crude CLc1 was down 7 cents at $47.26 a barrel. Saudi Arabian Energy Minister Khalid Al-Falih told Reuters late on Thursday that “we don’t believe any significant intervention in the market is necessary other than to allow the forces of supply and demand to do the work for us,” adding that the “market is moving in the […]

Oil Under Pressure As Saudi Arabia Downplays OPEC Deal

27 Aug 2016   Prices, Saudi Arabia

We begin by taking a quick look at some of the critical figures and data in the energy markets this week, which show that oil prices have bounced up and dow as a result of continued OPEC output freeze rumors. (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) Friday, August 26, 2016 Oil prices faced some downward pressure at the end of this week as Saudi Arabia seemed to downplay the chances of an OPEC deal in Algeria (see below). But oil prices moved back up during midday trading on Friday as reports surfaced that Yemeni missiles hit Saudi oil facilities. Meanwhile, Fed Chair Janet Yellen said that the U.S. Federal Reserve’s case to raise interest rates “has strengthened in recent months,” a sign that rate hikes could resume in the relatively near future. Ultimately the […]

Oil Stabilizes On Falling Dollar

27 Aug 2016   Prices

As financial markets are distracted once more by Federal Reserve Chair Janet Yellen, crude is not immune to this influence, making moves in response to the U.S. dollar’s gyrations (crude up, dollar down). We’ll choose to ignore this hullabaloo, and hark, consider six things specifically relating to oil markets today: 1) Even the world’s smaller oil producers and exporters play a key role in the global oil market. Even though we consume some ~96 million barrels per day of crude, the market remains at the mercy of incremental daily swings in supply and demand. The North African nation of Chad exports the majority of its oil production, with an average of ~130,000 barrels per day of its heavy sweet Doba grade making its way into the international market. In the last year and a half, Doba exports have made it to thirteen different countries across various […]

Expert Commentary: Is Crude Set To Drop?

27 Aug 2016   Prices

Prompt WTI traded in a $48.40/$46.42 range through Thursday morning as bearish inputs included additional exports from Iraq following a completion of a deal between the Iraqi government and Kurds to reopen a 150k bpd Turkey-bound pipeline, increased refined product exports from Chinese refiners, bearish DOE stats which showed poor refiner and end-user demand and a (shaky) ceasefire between the Niger Delta Avengers and Nigerian government. On the bullish side, headlines that Iran was open to discussion about production ceilings in Algeria this September sent oil higher by about $1.40 on Tuesday and was revealing of the market’s continued fear of an unlikely OPEC deal. Going forward, we continue to see a choppy, range bound market with WTI between $42-$50.We still feel slightly more bearish than bullish however and would look to fade news items such as Tuesday’s bullish Iran headline run via $5 wide […]

2017 will be clearer, offshore drilling company says

27 Aug 2016   Prices

There are signs of stability in offshore exploration and production, but it may be next year before any real indications surface, a London-managed driller said. Seadrill Ltd., a deep-water driller with offices in London, reported a $260 million decline in net profits for the second quarter and a 24 percent decline in revenue to $868 million year-on-year. The company attributed the loss to the expiration of rig contracts and reduced day rates paid for its drillers. Offshore drillers have taken a hit in the era of lower crude oil prices, which are about 50 percent below levels common two years ago. Rig company Transocean, one of the largest companies in the field, said it expected few contracts to emerge in 2016 and smaller industry […]

EIA: OPEC oil revenue down nearly 50 percent

27 Aug 2016   OPEC, Prices

Net revenue for members of the Organization of Petroleum Exporting Countries from oil dropped nearly 50 percent year-on-year, U.S. analysis found. Crude oil prices began their descent from $100 per barrel in 2014 as the increase in U.S. crude oil production helped push markets heavily toward the supply side. Output for members of OPEC remains robust, however, as ministers there said they expect a rebound in demand in the latter quarters of 2016. A report from the U.S. Energy Information Administration found oil export revenue for OPEC members in 2015 was a collective $404 billion, 46 percent lower than the previous year. “OPEC members’ 2015 net oil export revenue was at the lowest level since 2004, with significant […]

Oil exports from Iraq’s southern ports up from July

27 Aug 2016   Iraq

Oil exports from Iraq’s southern ports have averaged 3.205 million barrels per day (bpd) so far in August, exceeding the average level seen in July, two officials from state-run South Oil Company said on Friday. Exports in July averaged 3.202 million bpd. With five days of exports remaining this month, the average for August could change, the officials said. The southern region produces most of the OPEC member’s crude oil, with an output of 4.6 million bpd last month. Independent of the central government in Baghdad, Iraq’s northern Kurdish regional government exports about 500,000 bpd through a pipeline to the Turkish port of Ceyhan on the Mediterranean. Baghdad oversees crude production from the south and from parts of the Kirkuk region in the north that is shared with the Kurds. (Reporting by Aref Mohammed in […]

Iran’s oil minister defends market share

27 Aug 2016   Iran

Iran’s oil minister said Friday he’ll go to an Algerian meeting where producers could move to stabilize prices, but kept his defense of market share. “Revival of Iran’s lost share in the oil market is the national demand of Iranian nation,” Oil Minister Bijan Zanganeh was quoted in the ministry’s official news agency SHANA as saying. Saudi Arabia’s oil minister suggested there may be some coordinated action taken among major producers on the sidelines of the International Energy Forum next month in Algeria. In comments to the official Saudi news agency, Oil Minister Khalid al-Falih said “any possible action” required to stabilize the market was under consideration. Zangeneh noted widespread support for some sort […]

Iranian Oil Production Stalls Ahead of OPEC Talks

27 Aug 2016   Iran

Iran’s revival as a crude-oil exporter appears to have stalled, seven months after Western sanctions over its nuclear program were lifted, casting uncertainty over the country’s willingness to cooperate with other producers on limiting output. Iran’s production has taken on heightened significance in recent weeks as the Organization of the Petroleum Exporting Countries gets ready for talks next month on oil output. Iran has previously refused to consider joining fellow OPEC members in action to lift crude prices by curbing output until its exports and production reach presanctions levels. But the country’s ability to reach presanctions levels above four million barrels a day are now in question. Iran has been pumping 3.85 million barrels a day this month, the country’s oil minister Bijan Zanganeh said Saturday, little changed from above 3.8 million barrels a day he cited in June . That is up from less than three million barrels […]

Iran Lays Out Conditions For Joining OPEC Output Freeze

27 Aug 2016   Iran

In the past two weeks, Iran has rejoined the OPEC production freeze headline and jawboning fray, by making bold statements that it would be willing to work with OPEC on the recurring plan other members, mostly Venezuela, have proposed to push prices higher, namely freeze oil production (at a level which is an all-time high output for OPEC’s largest member, Saudi Arabia, beyond which it can’t produce even if it wanted). So earlier today, Iran’s oil minister Bijan Zanganeh made the most explicit statement on the topic, when he laid out the conditions under which Iran would be willing to “help other oil producers stabilize the world market.” It was a simple condition: Iran will cooperate as long as it is excluded from the freeze, or as Reuters put it, Iran will cooperate “so long as fellow OPEC members recognize its right to regain lost market share, […]

Yemen’s Houthi Forces Claim Missile Hit On Saudi Aramco Oil Facilities

27 Aug 2016   Saudi Arabia, Yemen

Saudi-Yemen war Yemeni Shiite Houthi rebels have reportedly fired missiles targeting Saudi Aramco, allegedly damaging the oil giant’s facilities in southwestern Saudi Arabia on Friday, according to local Houthi-affiliated media , with no confirmation from Saudi officials or Aramco itself. Yemen is the site of a proxy war between Saudi Arabia and Iran, and Iranian media were the first to report on the Houthi claims coming out of Yemen. In February 2015, the Houthi rebels forced President Abd-Rabbu Mansour Hadi to flee to Saudi Arabia, Yemen’s neighbor to the north. The Shi’ite Houthis are allied with Iran, Saudi Arabia’s regional archrival. The international community recognizes Hadi as Yemen’s legitimate leader. Since March 2015, the Houthi rebels and loyalists to Hadi have been fighting a civil war in Yemen and forces in a Saudi-led Arab coalition are trying to restore Hadi to power. Yemen’s geographical position is strategic because it […]

Saudi Aramco Says Operating as Normal After Yemeni Attack Report

27 Aug 2016   Saudi Arabia, Yemen

Yemen’s Saba said missile caused extensive damage at Aramco Saudi says projectile caused fire at a power relay facility Saudi Arabia’s state-run oil company said all of its oil, gas and refining plants are operating as normal, after Yemeni rebels said they hit facilities with a missile. All installations in the kingdom are safe, Saudi Aramco said in a statement. A projectile fired from Yemen caused a fire at a power relay facility in southern Saudi Arabia, the state-run Saudi Press Agency reported, citing a spokesman for civil defense at the Ministry of Interior. The fire in Najran was put out without casualties, the report said, without giving further details. Earlier, the Yemeni Saba news agency, controlled by Houthi rebels fighting Saudi Arabian-led forces in Yemen, cited “an unidentified military source” as saying a single missile was fired into Saudi Arabia. It caused extensive damage to facilities of the […]

Colombian peace deal with FARC won’t cure oil industry’s problems: analysts

27 Aug 2016   Colombia

Analysts and industry sources are skeptical that the peace agreement announced this week between the Colombian government and a rebel group with which it has been at war for a half century will provide any short-term boost to the fortunes of Colombia’s beleaguered oil industry. Continued violence, logistical difficulties and an expected tax increase later this year on top of an already high government take will continue to make Colombia’s oil patch a challenging place to find, produce and transport oil and gas, experts said, particularly compared with more hospitable venues. After nearly four years of negotiations, the government announced late Wednesday it had reached agreement on all major points with the Revolutionary Armed Forces of Colombia (FARC), with which it has been at war since 1964. The accord will be put to a nationwide vote October 2. Public opinion is sharply divided on the proposed accord. FARC declared […]

Dakota Access Pipeline poses an ‘existential’ threat, groups says in letter to Obama

27 Aug 2016   USA

Environmental and tribal groups protesting an oil pipeline from North Dakota said in a letter to the White House it poses a threat to their existence. Tribal groups are suing federal regulators over permits for the 1,134-mile pipeline because of threats to the Missouri River and other regional water ways. The U.S. Army Corps of Engineers, which examined separately each water crossing, is accused of sidelining tribal interest. In a letter to President Obama , tribal and environmental groups said the oil pipeline from North Dakota would threaten sacred sites and potentially parts of the regional drinking water supply. “If there were to be a spill, which history has taught us is not a question of if […]

Land Buyers Stampede Into Texas Oil Patch

27 Aug 2016   Shale Oil

Oil prices are mired in their worst slump in decades, but you wouldn’t know it in West Texas, where a land grab has energized an otherwise dormant market and sent some explorers’ shares soaring. Blackstone Group BX -1.21 % LP said Thursday that it has agreed to invest $1.5 billion in a pair of drilling deals there. One came about after the New York investment firm early this year lost out to a big oil company bidding on about 12,000 acres south of New Mexico. Blackstone didn’t walk away from the auction empty-handed, though, having persuaded the sellers to join it in a new billion-dollar drilling venture in the area. The firm also committed $500 million more to another group of experienced oilmen who had purchased 16,000 acres about 100 miles to the northeast, in another section of the region’s red-hot Permian Basin. Cash for the deals came from […]

US GDP underscores weak first-half growth

27 Aug 2016   USA

The US economy grew at a slightly slower rate than initially forecast in the second quarter, underscoring a weak performance in the first half of 2016.  The economy expanded at an annualised rate of 1.1 percent, rather than the predicted estimate of 1.2 percent, the Department of Commerce said.  Consumer spending rebounded sharply in the three-month period to a growth rate of 4.4 per cent from 1.6 per cent in the first quarter.

However, a fall in inventories among businesses weighed heavily on gross domestic product, knocking the figure down by 1.3 percentage points. Investment was weak more broadly as energy groups cut back on capital spending on structures such as oil rigs in light of the decline in the price of crude. Residential investment, which encompasses new-home construction, also fell after several quarters of strong gains.

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U.S. Sees Unchanged Oil Rig Count As Canada Boasts 19 New Oil Sites

27 Aug 2016   USA

Oil rigs Friday’s Baker Hughes report heralded the end of eight straight weeks of U.S. oil rig gains, which boasted a net change of zero, hopefully subduing, even if just for a day, the volatile oil market that seems to hang on—or sway with—every API or EIA report, and every word from OPEC’s, Saudi Arabia’s or Iran’s mouth. Meanwhile, Canada saw an increase of 25 oil and gas rigs this week, with a total of 146 sites now in operation. This week last year, the nation had in operation 196 rigs. Most of the Canadian growth was seen in the oil count, which saw a 19 rig increase. The remaining six rigs contributed to the gas count. Canada’s oil rig count has been rising for the most part since the beginning of April, when it reached a low of just eight operational oil rigs—it now has reached a total […]

USDOT proposes speed limiters for large commercial vehicles; potential savings up to ~$1B in fuel each year depending on limit

27 Aug 2016   Transportation

The US Department of Transportation’s (DOT’s) National Highway Traffic Safety Administration (NHTSA) and Federal Motor Carrier Safety Administration (FMCSA) are proposing equipping heavy-duty vehicles with devices that limit their speeds on US roadways, and requiring those devices be set to a maximum speed, a safety measure that could save lives and more than $1 billion in fuel costs each year. Specifically, NHTSA is proposing to establish a new Federal motor vehicle safety standard (FMVSS) requiring that each new multipurpose passenger vehicle, truck, bus and school bus with a gross vehicle weight rating (GVWR) of more than 11,793.4 kilograms (26,000 pounds) be equipped with a speed limiting device. The proposed FMVSS would also require each vehicle, as manufactured and sold, to have its device set to a speed not greater than a specified speed and to be equipped with means of reading the vehicle’s current speed setting and the two […]

Baker Hughes: US Oil Drilling Rig Count Steady After 8 Weeks Of Hikes

27 Aug 2016   USA

The number of U.S. oil drilling rigs were unchanged this week after eight weeks of consecutive rises, according to a closely followed report on Friday, although traders and analysts expect the rig count to keep rising given the recovery in crude prices. The rig count remained steady at 406 in the week to Aug. 26, compared with 675 a year ago, energy services firm Baker Hughes Inc said. . Before this week, the rig count rose by 76 since the week ended July 1, the most in a row since April 2014, after crude prices hit the key $50-a-barrel mark that made a return to the well pad viable. “Rigs are going to continue to climb,” said John Kilduff, partner at New York energy hedge fund Again Capital. “We are in a price environment where there are an increasing number of fields that are profitable, […]

North Slope gas producers support switch to state-led Alaska LNG project

27 Aug 2016   Arctic

Cost estimates for the Alaska LNG Project have been shaved 20% or more, but the project is still not economic, its managers told state legislators in hearings that ended late Thursday. Based on that, three North Slope producers who are now part of Alaska LNG — BP, ConocoPhillips and ExxonMobil — will not proceed further with the project as it is currently structured, all three companies told a combined meeting of the House and Senate Resources Committee on Thursday. A fourth partner, the state of Alaska, is investigating alternative project structures, including state ownership, and will continue development. The producers support that effort, they told legislators. Article Continues below… LNG Daily is essential reading as LNG supply dynamics continue to change in big markets like Japan, China, India and the U.S. This premier independent news publication for the global LNG industry gives readers information on every aspect of the […]

Oil Trades Near $47 as Saudis See Freeze as Positive for Market

26 Aug 2016   Prices

Saudi Arabia’s Khalid Al-Falih doesn’t advocate production cut Iran’s oil minister to attend producer talks in Algiers: Shana Oil traded near $47 a barrel as Saudi Arabia’s energy minister said an output freeze would be positive for the market and after a report that Iran will attend informal talks next month. Futures lost 0.7 percent in New York after rising 1.2 percent Thursday. A freeze will signify that producers are content with the current market situation, Saudi Arabian Energy Minister Khalid Al-Falih said, ruling out an output cut. Iran will participate in the discussions in Algiers, a state news service reported. Oil suppliers want a deal to manage production, OPEC’s Secretary General Mohammed Barkindo told Arabic-language newspaper Al-Hayat. Oil entered a bull market Aug. 18, less than three weeks after tumbling into a bear market. Prices surged partly on speculation that informal discussions among members of the Organization of […]

Low oil prices a win for consumers

26 Aug 2016   Prices

The increase in U.S. oil production that helped push crude oil prices lower may have hurt the industry, but that’s offset by consumer benefits, the API said. U.S. crude oil production was around 9.4 million barrels per day last year on average. That marked an 8 percent increase from the previous year, which in part led to a market that favored the supply side given global economic stress. Oil production next year is expected to decline to 8.3 million bpd as energy companies invest less, though if estimates are accurate, 2017 production would still be 12 percent higher than 2013. The American Petroleum Institute, which represents the business interest of the industry and provides it with key […]

No specific action on OPEC freeze discussed yet: Saudi energy minister

26 Aug 2016   Prices, Saudi Arabia

A gas flame is seen in the desert near the Khurais oilfield, about 160 km (99 miles) from Riyadh, Saudi Arabia June 23, 2008. Saudi Arabian Energy Minister Khalid Al-Falih does not believe it is necessary for any “significant intervention” in oil markets at this time, he told Reuters following a speech on Thursday. The kingdom produced 10.67 million barrels per day of crude oil, the most in its history, in July, and Al-Falih said on Thursday that production has remained around that level, though he could not cite a specific number for August. Talks are scheduled in Algiers, Algeria, in September to discuss a global output freeze pact. The price of Brent oil bottomed out at about $27 a barrel in January, a 12-year low, in response to a supply glut and concerns about demand. Al-Falih said there have not been any specific discussions on a production freeze […]

Look Past OPEC Freeze Hype to Really Understand Oil’s Advance

26 Aug 2016   Prices

Fading contango is clearest sign of recovery: Credit Suisse Market moving from massive surplus to balance: BofAML’s Blanch For all the feverish speculation of OPEC action that’s roiling oil markets, the real reason for crude’s recent recovery probably lies elsewhere. Oil futures have rallied more than 10 percent since the Organization of Petroleum Exporting Countries said it would hold informal talks in Algeria in late September, fueling expectations it could revive a pact on freezing production. Banks from Citigroup Inc. to Bank of America Merrill Lynch see a simpler explanation for the rebound: the global oil oversupply is finally dissipating. A narrowing discount — also known as contango — on immediate supplies of Brent crude is the “clearest indicator” that the two-year glut is fading, Credit Suisse Group AG said. The spread between the first monthly Brent futures contract and the sixth has contracted more than 40 percent in […]