Recent Articles

Oil Settles Higher on Signs of Tightening Supply

21 Jan 2017   Prices

Crude prices rose, driven by signs of the market tightening after major oil producers agreed to cut output and by weakness in the U.S. dollar. U.S. crude prices settled up $1.05, or 2%, to settle at $52.42 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose $1.33, or 2.46%, to $55.49 a barrel on ICE Futures Europe. Major oil producers have taken great pains in recent weeks to emphasize that they are…

Chinese growth, tight markets lift oil prices

21 Jan 2017   Prices

A slight gain in the Chinese economy followed by a week of data supporting market balance sentiments lifted crude oil prices early Friday. Crude oil prices moved in volatile territory for much of the week, with full percentage increases followed by corresponding decreases the following session. Markets moved in wide swings in response to market reports from the Organization of Petroleum Exporting Countries and the International Energy Agency. Both reported some tightening in a market where oversupply last year dragged oil prices to historic lows. While OPEC coordinates a balanced approach in the first half of the year through managed production declines, China reported its economy grew 6.8 percent during the fourth quarter, slightly better than expected. OPEC’s production move and […]

Oil Slides After Massive Rig Count Gain

21 Jan 2017   USA

The number of active oil and gas rigs in the United States increased on Friday by 35 for a total of 694 active rigs, according to oilfield services provider Baker Hughes , which is 57 rigs above the rig count a year ago. Not surprisingly, most of this week’s gains were in the form of oil rigs, which were up 29, from 522 last week to 551 this week. The number of active oil rigs in the United States is now 41 more than the same week last year. Gas rigs also saw a bump of 6, from 136 last week to 142 this week, which is 15 above the count for the same week last year. This marks 11 straight increases to the gas rig count. Last week marked the first decrease in active oil rigs in 12 weeks. The upward trajectory to the number of active oil […]

Money managers boost bullish bets on U.S. crude to highest in over two years

21 Jan 2017   Prices

Hedge funds rushed to place bullish wagers on U.S. crude oil last week, boosting it to the highest levels since mid 2014, data showed on Friday, as prices rallied on hopes that Saudi Arabia and the world’s top producers were sticking to a plan to rein in output. The speculator group raised its combined net long futures and options position in two major NYMEX and ICE markets by 44,481 contracts to 371,539 in the week to Jan. 17, its highest since July 2014, U.S. Commodity Futures Trading Commission (CFTC) data showed. Gross long positions in NYMEX futures and options among speculators soared to the highest on record, based on publicly available data to 2006. U.S. oil futures on the New York Mercantile Exchange rose nearly 4 percent and averaged $52.18 per barrel during the five trading days ended Jan. 17, […]

Has OPEC Seriously Underestimated U.S. Shale Dynamics?

21 Jan 2017   OPEC, Prices, Shale Oil

Oil was flat this week as rising U.S. shale production and a bearish inventory report continued to put pressure on WTI and Brent. Crude oil inventories rose by another 2.4 million barrels, gasoline stocks jumped by nearly 6 million barrels, and upstream production figures provided further evidence that U.S. shale output is coming back is already here in the form of a huge rig count increase . Oil price to fall below $50 if OPEC fails to deliver. A new CNBC survey of energy forecasters finds that experts believe that oil prices will fall from today’s levels if the […]

OPEC, Russia Meet in Vienna for First Check on Oil-Cuts Progress

21 Jan 2017   OPEC

No compatible source was found for this media. OPEC’s Barkindo: ‘So Far, So Good’ on Production Cut Deal Representatives of OPEC and several other major oil producers will start arriving in Vienna on Friday for their first meeting to monitor compliance with an agreement to cut output. Ministers from Saudi Arabia, Kuwait, Algeria and Venezuela will meet counterparts from non-OPEC nations Russia and Oman to figure out ways to verify that the 24 signatories to the historic deal are following through on their pledge to remove a combined 1.8 million barrels a day of supply from the market for six months. They intend to prove the group is serious about finally eliminating a three-year crude oversupply and dispel skepticism stemming from previous unfulfilled promises. International oil prices rose to an 18-month high of more than $58 a barrel after the Organization of Petroleum Exporting Countries and several non-members agreed […]

Saudi Arabia’s Falih says 1.5 million barrels/day cut from market in January

21 Jan 2017   Oil Supply, OPEC

Saudi Arabian Energy Minister Khalid al-Falih said on Friday that 1.5 million of an agreed upon 1.8 million barrels per day (bpd) of oil had been taken out of the market in January. Falih estimated the growth of shale oil in 2017 at 200,000 to 300,000 barrels per day, he told Al Arabiya television. An estimate of 500,000 barrels of shale oil by the head of the International Energy Agency (IEA) were exaggerated, Falih said. (Reporting by Maha El Dahan and Mohamed el Sherif)

Socialism, Not Oil, Is The Cause Of Venezuela’s Problems

21 Jan 2017   Venezuela

Venezuela’s economy has collapsed. Unfortunately, most people mistakenly believe Venezuela’s policies created a successful economy prior to the collapse in oil prices. The truth is that Venezuela’s socialist policies held back its economy during the oil boom and are the direct cause of its economic collapse today. Upon Hugo Chavez death in 2013, and before the collapse in oil prices, Salon published an article titled “Hugo Chavez’s Economic Miracle” that praised the success of his brand of socialism. Salon was far from alone. Numerous left-leaning pundits and celebrities, and even some very influential economists, have held up Venezuela as a rare example of a successful socialist economy. For example, in a 2007 speech sponsored by the Bank of Venezuela, Joseph Stiglitz — 2001 recipient of the Nobel Prize in Economic Sciences and former senior vice president and chief economist of the World Bank — claimed that “Venezuela’s economic growth […]

Iraqi forces consolidate gains in half-liberated Mosul

21 Jan 2017   Iraq

 For one brigadier in Iraq’s elite Counter Terrorism Service (CTS), the final stage of liberating the eastern half of Mosul was personal: he could rescue his relatives. On Wednesday, as Iraqi forces were conducting clearance operations in the last contested neighborhoods, the brigadier – who requested anonymity because his actions were not sanctioned by superiors – left his vehicle and went searching for an aunt he hadn’t seen for over 15 years. Down an alleyway in the Muhandiseen neighborhood, which IS had […]

China is shaping up to be a world leader on climate change

21 Jan 2017   China, Climate

On Tuesday in Davos, all eyes were on Xi Jinping, the first Chinese president to attend the World Economic Forum’s annual meeting. His appearance came at an important moment for China, as it increasingly takes on a global leadership role, including, critically, on climate change. In his speech, President Xi stood up to defend the Paris climate agreement and called for stronger international co-operation to meet today’s global problems. The entire world needs to build cities in which we can move, breathe and be productive. It must also ensure better access to clean energy, use it more efficiently and protect the natural resources that are the foundation of our economy. China’s role will be key, not only as the world’s largest emitter but also as its largest investor in sustainable infrastructure. China has come so far so fast that many people are unaware of how much progress it has made, from investing in renewable energy to tackling air pollution. It still faces significant adjustment challenges, particularly around reducing coal consumption, but it is displaying the commitment and creativity needed to tackle this urgent and complex challenge. China has recognised not only the grave risks of unmanaged climate change, to which it is very vulnerable, but also the great attractions of an alternative path for growth which is cleaner, more efficient, innovative and dynamic.

China quietly shelves plans to launch Shanghai crude oil futures

21 Jan 2017   China

China’s plans to create a new crude futures contract to compete with global pricing benchmarks have been shelved due to market resistance, five sources with knowledge of the matter said, dealing a blow to Shanghai’s ambitions to be a leading energy trading hub. Potential international participants were worried they would not be able to freely exchange the yuan currency given a Chinese clampdown on capital outflows, and concerned at Beijing’s heavy handed intervention in its volatile commodity markets last year, the sources said. Most of the trillions of dollars of oil traded each year is priced off two crude derivatives, U.S. West Texas Intermediate (WTI) and London’s Brent, and executed mainly on the New York Mercantile Exchange (NYMEX) owned by CME Group and Intercontinental Exchange. With Asia becoming the world’s biggest […]

U.S. gas market has eliminated storage surplus despite warm winter:

The U.S. gas market has tightened significantly over the last nine months as low prices have spurred strong consumption and exports while slashing drilling of new wells. The market has rebalanced despite an unusually mild winter so far, which points to the degree of underlying tightness and suggests prices will need to remain higher in 2017 than they were in 2016 to avoid a shortage. At the half-way point in the current winter heating season, working gas stocks in underground storage are 77 billion cubic feet (3 percent) below the five-year average. At the same point last year, stocks were 473 billion cubic feet (17 percent) above average, according to the U.S. Energy Information Administration. The storage surplus continued growing until it peaked at 874 billion cubic feet (54 percent) at the start of April 2016 ( ). Since then, however, the surplus has shrunk thanks to a […]

U.S. drillers add the most oil rigs since April 2013: Baker Hughes

21 Jan 2017   USA

U.S. energy companies this week added the most oil rigs in nearly four years, extending an eight-month recovery as drillers take advantage of a deal by OPEC to cut supplies that has boosted prices over $50 a barrel since early December. Drillers added 29 oil rigs in the week to Jan. 20, bringing the total count up to 551, the most since November 2015, energy services firm Baker Hughes Inc said on Friday. During the same week a year ago, there were 510 active oil rigs. Since crude prices first topped $50 a barrel in May after recovering from 13-year lows in February, drillers have added a total of 235 oil rigs in 30 of the past 34 weeks, the biggest recovery in rigs since […]

What happened to the cold winter the U.S. was promised?

21 Jan 2017   Climate, USA

Last fall, the general consensus among weather forecasters was that most of the Central and Eastern United States would likely endure a colder, snowier winter than it is used to. But instead, the third week in January – climatologically the coldest week of the year – is ushering in temperatures some 20 degrees Fahrenheit above average across the eastern two-thirds of the country. For example, Chicago may hit 55 F (12.8 C) on Saturday. The recent milder temperatures have also diminished snow cover to below-average levels everywhere east of the Rocky Mountains – save the Dakotas – and any snow that is left is almost certain to melt over the next week or so. What has happened is that several of the atmospheric “ingredients” that would power the chilly season have instead opted to go rogue from what the outlooks had originally predicted. The winter started off cold and […]

Schlumberger Waits for International Oil Spending to Pick Up

21 Jan 2017   USA

Schlumberger Ltd. is waiting for the rest of the world’s oil producers to catch up to the North American crude recovery. The world’s largest oilfield service provider sees international spending picking up in the second half of the year and into 2018, Chief Executive Officer Paal Kibsgaard told analysts and investors on an earnings conference call Friday. That will follow growth in North America, which has been adding rigs as oil prices stabilized and is forecast to see spending increase about 30 percent, he said. The promise of international growth was not enough for investors — Schlumberger fell the most in more than a month. “They’re a little bit less exposed to onshore North America than others,” Rob Desai, an analyst at Edward Jones in St. Louis who rates the shares a buy and owns none, said in a phone interview. “There will be a little bit slower international […]

U.S. Oil Producers Ramp Up Spending

21 Jan 2017   Oil Supply, USA

U.S. oil producers, optimistic that higher crude prices are here to stay, have issued 2017 budgets that call for dramatically greater spending to tap new wells. Preliminary capital-spending plans released in recent weeks by more than a dozen American shale drillers, including Hess Corp. and Noble Energy Inc., show an average 60% budget increase for the group. The trend comes after two years of austere budget cuts and layoffs…

Schlumberger Posts Another Loss But Looks Towards Growth

21 Jan 2017   USA

Schlumberger Ltd. posted a loss in its latest quarter on lower revenue, but the company said energy prices and production were both poised to increase. Schlumberger and other companies in the oil-field-services sector have been hurt by weak demand from oil and natural gas producers for services such as drilling and completing oil-and-gas wells due to a two-year decline in energy prices. During 2016, though, energy prices rose and…

Trump’s Vow to Break From OPEC Oil Imports Echoes Old Refrain

21 Jan 2017   USA

U.S. President Donald Trump’s pledge to make America independent from OPEC isn’t a new refrain in Washington. His “America First Energy Plan” posted on the White House website Friday doesn’t just echo his own campaign pledges but also President George W. Bush’s vow to cut imports from the Middle East when he famously said the nation was “addicted to oil.” Shipments from OPEC rose 10 percent during Bush’s time in office. It’s not an easy task. It would mean replacing about 3 million barrels a day of imports. That’s about three times as much as East Coast refineries consume. Saudi Arabia and Venezuela lead the pack of OPEC suppliers to the U.S. They account for more than half of U.S. imports from the 13-nation group. Bush said he would put the country on course to reduce oil imports from the Middle East by more than 75 percent by 2025. […]

Trump Inauguration: New US administration may bring major US oil policy changes

21 Jan 2017   USA

Trump campaigned on rolling back oil, gas regulations Pipelines, LNG terminals could get quicker permitting reviews Critics of biofuel mandate buoyed by Cabinet picks President Donald Trump’s inauguration Friday may prove to be the start of the most significant shift in the direction of oil policy in decades. Trump, who made promises on the campaign trail to boost US oil and gas output and roll back regulations unfriendly to industry, is expected to be a stark policy departure from President Barack Obama, who spent much of his political capital over the past four years pushing efforts to combat climate change. Related: Find more content about Trump’s administration in our news and analysis feature. Whether Trump is successful in repealing those efforts, such as new rules on methane emissions, remains unclear, as does whether the White House can even play a role in how much oil producers actually drill. But […]

Trump’s Advisers Draft First-Day Energy Policy Changes

21 Jan 2017   USA

Aides to Donald Trump have drafted a list of environmental policy and energy-related changes that he could sign within hours after he is sworn in as U.S. President on Friday, Bloomberg reports , quoting two people familiar with the transition team’s plans. The list of immediate energy policy changes reportedly includes measures to rescind Obama’s orders that federal agencies take into account climate change when they give the go-ahead to pipelines or decide which areas should be open for drilling, Bloomberg sources say. In addition, Trump’s advisers are said to be targeting the social cost of carbon and are proposing to suspend the use of that metric until reviewed and recalculated. The transition team is also advising Trump to rescind an executive order from 1968 that gave the power to the State Department to determine if a cross-border pipeline and other energy projects serve the national interest, Bloomberg reports. […]

Will This Be The Biggest Oil Bid Round This Decade?

21 Jan 2017   Oil Supply

Big spending is back in the oil and gas world. With ExxonMobil unloading a $6.6 billion mega-buy in the Permian Basin of Texas this week — just a day after Noble Energy unveiled a $2.7 billion acreage purchase in the same play. In fact, new data from Evaluate Energy shows that petro-M&A hit a high in Q4 2016. With oil and gas buyouts totalling just under $60 billion during the quarter — by far the highest since Q2 2015, a quarter that was skewed by Shell’s $50 billion acquisition of BG Group. Check out the chart below. (Click to enlarge) Oil and gas M&A saw a notable jump during Q4 2016 And news this week suggests oil companies may have another big target for project acquisitions over the coming months. In Brazil’s prolific subsalt play. Brazil’s Oil Secretary Marcio Felix told Reuters that the country will launch not one, […]

California Aims for 40% Reduction in Greenhouse Gases by 2030

21 Jan 2017   Climate

California on Friday released a blueprint for meeting an aggressive climate-change goal: a 40% reduction in greenhouse gases by 2030, compared with 1990 levels. The plan, released by the California Air Resources Board, is “designed to continue to shift the California economy away from dependence on fossil fuels to a thriving sustainable future,” according to the plan’s executive summary. By extending the state’s…

Oil Resumes Advance as Report Shows U.S. Crude Stockpiles Fell

20 Jan 2017   Prices

Nomura Middle East CEO: Oil Heading Toward $60 Oil resumed gains after the biggest drop in more than a week as industry data showed U.S. crude stockpiles declined, while OPEC and other producing nations trim production to ease a global glut. Futures rose as much as 1.4 percent in New York after sliding 2.7 percent on Wednesday amid a surge in the dollar. U.S. crude supplies fell by 5.04 million barrels last week, the American Petroleum Institute was said to report. Government data Thursday is also forecast to show a decline. U.S. production will increase this year as output cuts by OPEC and 11 other nations spur an industry revival, the International Energy Agency said in a monthly report. Oil has held above $50 a barrel since OPEC and nations including Russia agreed late last year to trim supply by about […]

Oil Tanks After EIA Reports Surprise Crude, Gasoline Build

20 Jan 2017   Prices

A day after the API reported a 5.04-million-barrel decline in commercial U.S. crude oil inventories, the Energy Information Administration crushed hopes of a prolonged price recovery by reporting a build of 2.3 million barrels for the week to January 13, to a total of 485.5 million barrels. Last week, the EIA reported an increase of 4.1 million barrels in commercial crude oil inventories, versus analyst expectations of a 930,000-barrel build. According to the EIA, in the week to January 13 refineries processed 16.5 million barrels of crude daily, down by 639,000 bpd on the week, producing 9 million barrels per day of gasoline, down on the previous week’s 9.7 million barrels daily. Inventories of the fuel rose by 6 million barrels in the period, compared with a 5-million-barrel increase in the week to January 6. Yesterday, the API estimated that gasoline inventories had jumped by a hefty 9.75 million […]

Despite OPEC Deal Oil Prices Could Fall Sharply From Here

20 Jan 2017   Prices

The impact of the OPEC production cuts could be much more muted than many had hoped for as non-OPEC output comes roaring back in 2017. And it isn’t just from U.S. shale. The IEA predicts that non-OPEC countries on the whole will add 380,000 bpd of net capacity this year, and crucially, that figure includes the promised 558,000 bpd reductions that 11 countries promised in conjunction with the OPEC cuts. Of course, U.S. shale will be a major factor in this output rebound. In its latest Oil Market Report, the IEA revised up its forecast for U.S. production this year, expecting gains of 170,000 bpd. Drilling activity is rising quickly – in December, the U.S. saw the largest monthly increase in the rig count in more than two years. Capex is rising, employment is positive, and the industry is becoming more efficient at drilling. “Whether it be shorter drilling […]

BP predicts “peak oil” will hit between 2025 and 2040

20 Jan 2017   Peak Oil

Oil major BP has outline six main trends which could “shape the future” of energy. The company said energy transitions this year will look at a “dominant fuel” with gas growing faster than any other fossil fuel. It will see a sharp change in price coupled with such agreements like the 2015 Paris agreement which aims to keep the global temperature rise by below two degrees. Meanwhile, the firm said there is much more of a focus around peak oil from a demand side which will gradually start to decline. Broad consensus has suggested “peak oil” the peak oil window will be between the years of 2025 and 2040. However the report added there was still “considerable uncertainty” surrounding this. BP’s head of long-term planning, Dominic Emery, said the company was also preparing for a world where power comes increasingly from renewable sources. Both wind and solar power have […]

International Energy Agency Monthly Oil Market Report

20 Jan 2017   IEA
  • The global demand outlook for 2016 has been raised following the release of robust preliminary 4Q16 numbers. Colder weather in northern Europe provided impetus as did rapid industrially-driven Asian growth. Global oil demand growth for 2016 is now expected to be 1.5 mb/d, slowing to 1.3 mb/d in 2017 as product prices potentially rise.
  • Global oil supplies fell by more than 0.6 mb/d in December, to 97.6 mb/d on lower OPEC and non-OPEC output. For 2016, world supply was up 0.3 mb/d from the previous year as record OPEC output more than offset a 0.9 mb/d decline in non-OPEC.
  • OPEC crude production, now excluding Indonesia, fell 320 kb/d from record rates to 33.09 mb/d in December after lower Saudi output and disruptions in Nigeria curbed supply. Early indications suggest a deeper OPEC reduction may be under way for January, as Saudi Arabia and its neighbours enforce supply cuts.
  • Non-OPEC supplies are forecast to grow by 385 kb/d in 2017, as higher prices in the wake of an anticipated coordinated supply cut stimulate increased investment in the US. Recovering LTO production underpins a 320 kb/d gain in total US output this year.
  • OECD industry stocks fell across crude and oil products in November, marking a fourth consecutive monthly decline. Taking into account preliminary data for December, stocks are 82 mb below July’s historical peak, even if for now they remain above the symbolic 3 000 mb level.
  • Oil prices rose in early December and stayed within a $53-57/bbl range thereafter. Dubai, after weakening initially, gained versus other benchmarks due to lower expected OPEC output, opening the arbitrage to Asia for Brent and WTI-linked crudes. Fuel oil was a strong performer due to supply shortages.
  • Higher estimates for 4Q16 global refinery crude throughput – up by 160 kb/d – were partly responsible for a 260 kb/d downward revision for 1Q17. Our analysis of refined product stocks movements shows a 4Q16 build in the OECD, with the overhang in non-OECD implied refined product inventories persisting.

OPEC Faces Headwinds From Rising Non-OPEC Production

20 Jan 2017   OPEC

OPEC is facing headwinds with rising production from rivals, the International Energy Agency said Thursday, the latest warning that OPEC’s efforts to take barrels out of the market could backfire. The Organization of the Petroleum Exporting Countries—the 13-nation oil cartel that controls over a third of global crude production—promised to…

Why Big Oil Is Unprepared For The Coming Energy War

Recently, I gave a presentation on the future of energy to an audience of about 250 oil and gas professionals. Halfway through, I asked the carbon crowd to, “Raise your hand if you have driven an electric vehicle.” It took me less than five seconds to squint and visually sift out the elevated hands. Five adventuresome people, or about 2 percent of the audience acknowledged that they had taken a ride on a lithium horse. “Isn’t that a bit disconcerting?” I asked. “By now all of you in the room should be aware that new-age electric vehicles represent the first meaningful threat to your monopoly in powering the transportation market.” I went on to ask, “Don’t you think you should at least go to a Tesla, Nissan or BMW dealership and test drive the looming adversary?” Silence. I wasn’t surprised by the results of my straw poll. Hear-nothing, see-nothing […]

OPEC Head: Oil Inventories Already Dropping From High Levels

20 Jan 2017   OPEC

Global oil stocks have already started falling, but they need to drop by another 270 million barrels so that OPEC can say that the oil market is coming to balance, OPEC Secretary General Mohammed Barkindo told Reuters on the sidelines of the World Economic Forum in Davos. OPEC’s main goal is to speed up the inventory drawdown, and it will continue to focus on bringing the level of drawdown near a five-year industry average, the organization’s chief said. “Stocks have already come down to below 3 billion barrels in OECD commercial stocks. The delta now is around 270 million,” Barkindo told Reuters. OPEC’s latest Monthly Oil Market Report published on Wednesday said that total OECD commercial stocks fell in November 2016 to stand at 2.993 billion barrels, some 271 million barrels above the latest five-year average. The drop in oversupply would help create an “equilibrium oil price”, according to […]

Oil Settles Higher After IEA Says OPEC Cuts on Track

20 Jan 2017   IEA, OPEC

Oil prices rose Thursday after the International Energy Agency’s monthly report suggested global oversupply is easing. The Paris-based IEA said production from the Organization of the Petroleum Exporting Countries was falling and inventories in big consumer countries have been draining. Bulls highlighted this information in pushing for higher prices, but the IEA warned that gains could be offset by expansion outside of OPEC,…

OPEC Seeks to Quiet Doubts on Supply Cuts as Rally Falters

20 Jan 2017   OPEC

When OPEC and Russia meet this weekend to gauge progress on their oil-supply deal, they’ll be trying to dispel the shadow of previous unfulfilled promises. Oil prices rose 20 percent in the month after OPEC agreed to cut output, reaching $54.06 a barrel in New York on Dec. 28. Since then, they’ve slipped almost 5 percent as traders, with one eye on rising U.S. shale production , await proof that OPEC and other producers will live up to their deal. They recall how Russia broke its pledge during cutbacks in 2008, while some members of the producers group failed to fully implement the agreement. The solution: The dealmakers have created a panel to verify the cuts, a five-nation group with both OPEC and non-OPEC members that will meet Jan. 22 in Vienna. While some see this as an impressive indication of intent in the midst of a two-year price […]

Saudi Oil Shipments Soared Ahead of OPEC Production Cut

20 Jan 2017   Saudi Arabia

No compatible source was found for this media. OPEC’s Barkindo: ‘So Far, So Good’ on Production Cut Deal Saudi Arabia’s crude exports surged to a 13 1/2-year high in November, just before it led global producers in restricting supplies to curb the worst glut in decades. The world’s biggest exporter shipped 8.26 million barrels a day, according to data published Thursday on the website of the Joint Organisations Data Initiative in Riyadh. That was the biggest outflow for any month since May 2003. OPEC decided at the end of November to restrict supplies by 1.2 million barrels a day starting this month, with Saudi Arabia instrumental in the plan. Despite the extra barrels exported, Brent crude oil prices did rise that month, mostly because of the announcement of supply restrictions. Non-member producers, including Russia, pledged additional curbs. The initial signs are that producers are honoring their commitments to cut […]

China To Pour $3 Billion in Iran’s Refining Capacity

20 Jan 2017   Iran

China will invest US$3 billion in the upgrade of Iran’s oil refining facilities, Iranian media reported, with the bulk of the investment going into the Abadan refinery. According to Deputy Oil Minister Abbas Kazemi, China has already “opened the financing” for the refinery’s upgrade. Iran’s oil and gas infrastructure has suffered the results of years of neglect because of insufficient maintenance funds during the sanction years as well as access to new technology and equipment. Last week China’s statistical bureau reported that the country’s crude oil imports had increased to 64.4 percent of domestic demand and this is expected to continue, with imports rising by a total 17 percent in the period 2015-2020, with domestic output falling by 7 percent in the period, according to the National Development and Reform Commission. With demand set to rise by 8 percent in the five-year period, the financial commitment in Iran could […]

IS guerilla campaign intensifies in Diyala, Salahaddin

20 Jan 2017   Iraq

Despite losing ground in Mosul, IS militants to the east have stepped up insurgent attacks, conducting deadly raids on security forces, oil infrastructure, and rural villages. Hadi al-Amiri (R), the head of the Badr Organization, speaks with officers on the outskirts of Muqdadiyah, in Diyala province, on Jan. 23, 2015. (STRINGER/Reuters) On the evening of Jan. 13, Ali Haidar, the commander of the 110th Brigade of the Badr Organization paramilitary group, received a tip from an Iranian intelligence officer operating in Diyala province: five militants from the self-proclaimed Islamic State (IS) were in the Nada Area, just south of Khanaqin.Haidar led a detachment of 35 troops to investigate. But instead of catching a few IS militants by surprise, it was the Badr soldiers who were ambushed – by at least 20 militants – in a figh…


View full article at

Nigeria: Militants Didn’t Blowup Pipeline in Ughelli, Says Military

20 Jan 2017   Nigeria

The Nigerian Military has denied reports that militants blew an oil pipeline in Delta State after Vice President Yemi Osinbajo’s visit, saying it was a bush-burning incidence that was put under control immediately. A statement issued by the Director, Defence Information (DDI), Brig.-Gen. Rabe Abubakar, yesterday in Abuja said: “The report to say the least is not only a ruse but a complete imagination of its author as the said incident was a bush burning, which was immediately put under control. This prompt action prevented environmental catastrophe that the incident might have caused’. According to some observers of the peace efforts of the present government, the incidence was an indication that the visit of Osinbajo to the Niger Delta region was a wasted effort, as action, which supposedly happened in Ughelli, Delta State, would have been in apparent defiance of the “efforts of the Federal Government at […]

Exclusive: Brazil plans two subsalt auctions in 2017, another in 2018

20 Jan 2017   Brazil

A man works at the Cidade Angra dos Reis offshore platform at the Lula oil field, about 300 km (186.4 miles) from the coast of Rio de Janeiro, February 16, 2011. Brazil plans to hold two subsalt oil auctions in 2017, putting new exploration areas up for bidding in November for what should be the “most competitive” round of the year, Oil Secretary Marcio Felix said in an interview on Thursday. The auctions, an effort to lure foreign investment in a sector that for much of the past decade was the object of protectionist policies in Brazil, will be the first since 2013 for the offshore region known as the subsalt, where giant discoveries were made starting about a decade ago. The first auction, expected in the first half of this year, will offer areas next to existing discoveries already in development, Felix said. The November auction will be […]

Explorers in World’s Fastest-Growing Oil Market Seek Tax Breaks

20 Jan 2017   India

Explorers in the world’s fastest-growing oil market are seeking lower taxes on crude produced domestically to encourage fresh drilling as India tries to reduce its dependence on energy imports. State-run Oil & Natural Gas Corp. and the biggest private producer Cairn India Ltd. want Finance Minister Arun Jaitley to at least halve the tax on crude oil production in the federal budget due Feb. 1. India surprised some explorers last year with its 20 percent levy on crude produced locally, moving from a fixed charge. Companies pay more now with crude near $50 a barrel than they did under the old system when it was double the price. “Globally, given the low oil price scenario, governments have provided incentives to stimulate and attract investments,” said Sudhir Mathur, interim chief executive officer at Cairn India. “In India, the cess rate of 20 percent acts as a disincentive to increase production […]

China’s Cnooc to Raise Spending First Time Since Oil’s Plunge

20 Jan 2017   China

Cnooc Ltd. plans to raise capital spending for the first time since crude began its crash in 2014 as China’s biggest offshore oil and gas producer prepares for life after the slump and a second year of falling output. The Beijing-based explorer will increase expenditure, including in the Gulf of Mexico, to 60 billion to 70 billion yuan ($8.7 billion to $10.2 billion) for 2017 after cuts in the last two years, according to a statement to the Hong Kong stock exchange and a press conference on Thursday. It set its production target to between 450 million to 460 million barrels of oil equivalent after last year posting the first output decline since at least 1999. “As a pure upstream player, Cnooc has to invest for the future, especially in exploration as it needs to find new reserves to keep sustainable development,” said Tian Miao, a Beijing-based analyst at […]

China Q4 GDP grows 6.8 percent year-on-year, slightly better than expectations

20 Jan 2017   China

China’s economy grew 6.8 percent in the fourth quarter from a year earlier, slightly more than expected, supported by higher government spending and record bank lending that has stoked concerns about an explosive rise in debt. The world’s second-largest economy expanded 6.7 percent in 2016, the National Bureau of Statistics said on Friday, roughly in the middle of the government’s 6.5-7 percent growth target but still the slowest pace in 26 years. Economists polled by Reuters had expected China would report 6.7 percent growth for both the fourth quarter and the full year. The economy grew 6.7 percent in the third quarter. While China is on more solid economic footing than this time last year, it faces increasing uncertainties in 2017, with a housing frenzy showing signs […]

China-U.S. trade tensions top Big Oil’s worry list

20 Jan 2017   China, USA

Oil executives and Middle East producers are concerned that trade tensions between the United States and China risk clouding the outlook for global energy demand growth and a recovery in the price of oil. “It is not unique to our country to feel a certain level of anxiety (about tensions). But there is a lot of wisdom on both sides… I hope this anxiety will prove unfounded,” Saudi Energy Minister Khalid al-Falih told Reuters. Chinese President Xi Jinping offered a vigorous defense of free trade in Davos on Tuesday, underscoring Beijing’s desire to play a greater global role as the United States turns inward. “The two largest economies need to sort out their differences for the wellbeing of the global community,” Falih, who sets energy policies for the world’s largest […]

China Fires Up Its Furnaces While Diggers and Oil Drills Slow

20 Jan 2017   China

China may be mining less coal and pumping less crude but it’s processing more raw materials than ever in its mills, refineries and smelters. Cost pressures and environmental regulation curbed domestic crude and coal output last year while economic stimulus propelled steel making, aluminum smelting and oil refining to record levels. The outlook for 2017 depends on the pace of supply-side reforms aimed at shifting away from heavy industry to a consumer-led economy, according to Susan Gao, head of consulting at CRU Group in China. Aluminum makers ramped up output as government stimulus boosted demand, lifting prices and profits, and as new or idled smelters came online. After exports slowed for the first time in four years, shipments of aluminum are set to rise again in 2017, according to consultant SMM Information & Technology Co. That may set up trade friction with the incoming U.S. presidential administration of Donald […]

Oil Demand at Risk as China Reins In Buyers That Bought Less

20 Jan 2017   China

Demand from some of the most coveted oil buyers may slow this year because they didn’t purchase all that they could in 2016. While China’s private refiners have received their first batch of quotas to buy foreign crude in 2017 and may get approval to purchase more later, the amount probably won’t exceed 2016 volumes, according to JPMorgan Chase & Co. That’s because the government is cutting allocations for those who bought less last year. What the processors have been allowed to directly import in the latest tranche is 62 percent of 2016’s total levels, the bank said in a report. The refiners, known as teapots, have been wooed by everyone from producers such as Saudi Arabia to oil traders including Trafigura Group as a global supply glut stoked competition among sellers. While benchmark crude prices are gaining from their worst crash in a generation amid supply curbs by […]

Analysis: Asia’s unquenchable thirst for oil to outpace 2017 refining growth

20 Jan 2017   Asia

Asia is gearing up to witness new refining capacity growth in at least four countries in 2017, but capacity reductions in some top consuming nations will pull down the net addition to a level that would be lower than the anticipated demand growth the region is likely to see this year. While China, India, Taiwan and Vietnam are expected to add to their refining capacities this year, Japan will witness closures, while some independent refiners in China might be forced to give up capacity, analysts and market participants told S&P Global Platts. “Oil demand growth in the Asian region is expected to exceed the net refining additions this year,” said Sri Paravaikkarasu, Head of Oil, East of Suez, at Facts Global Energy. “And looking at the next five-year horizon, oil products demand growth should exceed net refining additions every single year, helping to clear product surplus somewhat.” Growth in […]

Natural Gas Flips to Gains After Stockpile Data

Natural gas prices rose Thursday, flipping up from losses after data showed a larger-than-expected drain from storage last week. The U.S. Energy Information Administration said natural-gas stockpiles shrank by 243 billion cubic feet in the week ended Friday. Analysts and traders surveyed by The Wall Street Journal forecast a drain of just 229 bcf and the five-year average for this week of the year is just 170 bcf. The report…

Energy Secretary Nominee Rick Perry Regrets Call to Eliminate Agency

20 Jan 2017   USA

Former Texas Gov. Rick Perry regrets his call six years ago for the elimination of the federal agency that President-elect Donald Trump has tapped him to lead, according to written testimony he is set to deliver to Congress on Thursday. He doesn’t say whether he also regrets forgetting its name—the Energy Department—entirely. Mr. Perry faced ridicule in 2011 after forgetting, during a Republican presidential…

Solar Could Be A Cheaper Power Source Than Coal Within A Decade

20 Jan 2017   Solar

Coal already faces tremendous competition in the U.S. from low cost natural gas, and pressure from environmentalists concerned about its pollution. The last thing the coal industry needs are more problems. But when it rains it pours… or in this case when it’s sunny the solar industry looks to rain on coal. Coal cost an average of roughly $0.06 per kWh globally which makes it the cheapest power source on average around the world. (Natural gas is much more expensive outside the U.S.) Solar is looking to usurp the title of cheapest power source though. In 2016, countries from Chile to the United Arab Emirates broke records with deals to generate electricity from sunshine for less than 3 cents a kilowatt-hour, half the average global cost of coal power. This year Saudi Arabia, Jordan, and Mexico are poised to hold auctions and tenders which could see solar generation prices […]

Trump’s Energy Pick Perry Softens Stance On Climate Change

20 Jan 2017   Climate

Rick Perry, President-elect Donald Trump’s pick to run the U.S. Energy Department, said during his Senate confirmation hearing on Thursday that global warming caused by humans is real, but that efforts to combat it should not cost American jobs. The comment marks a shift for the former Texas governor who had previously called the science behind climate change “unsettled” and a “contrived, phony mess”. It also clashes with Trump’s statements during his campaign for the White House that global warming is a hoax meant to weaken U.S. business. “I believe the climate is changing. I believe some of it is naturally occurring, but some of it is also caused by man-made activity. The question is how do […]

Expert warns of Arctic drilling risks

20 Jan 2017   Arctic

A highly acclaimed Oxford professor who’s considered an expert on energy research has thrown cold water on Norway’s hopes for a new oil era in the Arctic. Dieter Helm doesn’t think oil prices will rise much higher and are more likely to fall, making costly oil investments in the Barents Sea unprofitable. Environmental activists have been at the forefront of warning about the risks of Arctic oil exploration and production. An Oxford professor and energy expert claims the economic risks are high as well. PHOTO: Greenpeace Helm, addressing an annual gathering of top oil industry officials in Sandefjord this week, said that an oil price of USD 50 a barrel is in fact high in historical perspective, even though it’s half of what it was just a few years ago. He thinks the current level of around USD 54, which has doubled in the past year but remains far […]

Big Oil May Finally Get to Drill in the Arctic, But Is It Worth It?

20 Jan 2017   Arctic

Far above the Arctic Circle, one of the longest-running controversies in U.S. oil drilling is about to reignite. Bouyed by Donald Trump’s election, Republicans are pushing to allow oil exploration in the Arctic National Wildlife Refuge , the frigid wilderness in northern Alaska that’s been a political battleground for drillers and conservationists for decades. The prospects for industry look better than they have in years, with Republicans in control of Congress and Trump vowing to boost U.S. energy production. There’s just one catch. No one really knows how much oil actually lies beneath the refuge, or how much producers like Exxon Mobil Corp. and ConocoPhillips care about it in a world awash in cheap oil, from Texas shale to offshore Africa. While the government estimates the area could hold 12 billion barrels of crude, making it one of the biggest untapped reserves in the U.S., no one’s sunk a […]