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Oil Prices Leap Higher After API Reports Huge Crude Draw

26 Jul 2017   Prices

The American Petroleum Institute (API) reported a huge draw of 10.23 million barrels in United States crude oil inventories, compared to S&P Global Platts survey of analysts who expected a draw of only 2.5 million barrels for the week ending July 21. Gasoline inventories, on the other hand, bucked analyst traditions with a 1.903-million-barrel build for the week ending July 21, compared to analyst expectations that inventories for the fuel would fall by 1.25 million barrels. Crude prices were up over 3 percent on Tuesday afternoon on expectations that the United States would see a drop in inventories, largely prompted by reports that Saudi Arabia is considering even deeper oil export cuts , particularly to the United States. Saudi Arabia-to-US oil exports were below 20 million barrels in June, down from 24.4 million barrels in May and 44 million barrels in December 2016, according to S&P Global Platts Oil […]

Oil adds to rally on optimism over declining stocks

26 Jul 2017   Prices

Oil prices firmed on Wednesday to hold near eight-week highs hit in the previous session, on expectations of a drawdown in U.S. stocks and as a rise in shale oil production shows signs of slowing. Brent crude futures rose 32 cents, or 0.6 percent, to $50.52 a barrel by 0142 GMT, after rallying more than 3 percent on Tuesday. U.S. West Texas Intermediate futures rose 42 cents, or 0.9 percent to $48.31 a barrel. U.S. crude stocks fell sharply last week as refineries boosted output, while gasoline inventories increased and distillate stocks decreased, data from industry group the American Petroleum Institute showed on Tuesday. Crude inventories fell by 10.2 million barrels in the week ending July 21 to 487 million, compared with expectations for a decrease of 2.6 million barrels. The market has been buoyed by Saudi Arabia’s announcement at a meeting of the Organization of […]

Oil Prices Spike In Spite Of Bearish EIA Forecast

26 Jul 2017   Prices

Oil prices have faced increased pressure in 2017; if it’s not Nigeria and Libya output, it’s US shale. If it’s not US shale, it’s predictions of weakening demand. If it’s not predictions of weakening demand, it’s Iraq’s pledges to boost capacity despite production cut promises. If it’s not Iraq’s eager production plans, it’s OPEC’s failure to live up to expectations. And today, the Energy Information Administration is the one dealing the latest blow to oil prices, which had finally started to climb on news that Saudi Arabia was curbing oil exports in August. At 11:40am EST, WTI had climbed a hefty 3%, with Brent reaching $50 per barrel. The price climb may be short lived, especially in the wake of the EIA’s latest commentary on US crude oil production. U.S. crude oil output, according to the EIA, is now expected to rise to an average of 9.9 million bpd […]

As Hedge Funds Bet Against Oil, Traders See Another Story

26 Jul 2017   Prices

Traders and refiners buying and selling actual barrels say it’s starting to look somewhat more bullish. (Bloomberg) — Hedge funds are still holding large bearish bets against oil and OPEC, yet out in the real world traders and refiners buying and selling actual barrels say it’s starting to look somewhat more bullish. “The market is looking a bit better,” Ian Taylor, chief executive officer of Vitol Group, the world’s largest oil trader, said in an interview. “Physical differentials are improving across the world.” Differentials are an important indicator of the state of the market. They reflect the price of each type of crude compared with a benchmark, often Brent or West Texas Intermediate. The narrower the discount — or larger the premium — the stronger the market for that particular grade. While financial investors largely look at just those two big crude contracts, physical traders have a broader view […]

Reduced Saudi oil imports lead U.S. oil inventories lower

26 Jul 2017   Saudi Arabia, USA

The Khurais oil field in Saudi Arabia. Continued low imports to the United States of Saudi crude oil is a factor in the decline in U.S. oil inventories. File Photo by Ali Haider/EPA July 25 (UPI) — Low imports of crude oil from Saudi Arabia, coupled with firm domestic petroleum demand, will likely reduce U.S. oil inventories, analysts said Tuesday. U.S. commercial oil inventories are expected to fall in the week ending July 21, analysts surveyed by S&P Global Platts said in a report. U.S. crude oil stock has fallen nearly 19 million barrels in the past three weeks, as excess surplus is reduced. The supply, as of July 14, was 26 percent higher than the five-year average, but lower than the 37 percent surplus above the five-year average seen at the start of 2017. Sabotage was reported in Nigerian crude oil production on Tuesday, which came after Nigeria […]

UAE buys first U.S. oil cargo to replace Qatar condensate: sources

26 Jul 2017   Qatar

The United Arab Emirates will import the country’s first oil cargo from the United States, two sources familiar with the matter said, as the OPEC producer sought substitutes to replace Qatari condensate supplies after a diplomatic row. The UAE halted condensate imports from Qatar after it, along with Saudi Arabia, Egypt and Bahrain, severed diplomatic and transport ties with Qatar after accusing it of supporting terrorism, a claim which Doha denies. Abu Dhabi National Oil Co (ADNOC) bought a U.S. Eagle Ford condensate cargo in a tender for September arrival, the sources said on Wednesday. Specific volumes were not available but the cargo will arrive in a supertanker that can carry up to 2 million barrels of oil, one of the sources said. ADNOC declined to comment. ADNOC faced limited options in sourcing for condensate substitutes as strong demand for the ultra-light oil in South Korea […]

UAE September crude cut should be model for others: energy minister

DUBAI (Reuters) – The United Arab Emirates’ energy minister said on Wednesday that he hoped a decision by Abu Dhabi National Oil Co (ADNOC) to cut crude allocations by 10 percent for September would become a model for other national oil companies inside and outside OPEC. Suhail bin Mohammed al-Mazroui wrote on Twitter that ADNOC’s move, announced on Tuesday, should “become a model for other NOCs (national oil companies) in OPEC and non-OPEC countries to achieve market stability.” “Notifying the customers and the market of the actual changes to the lifting schedule provides transparency and credibility of cut compliance,” he wrote. The Organization of the Petroleum Exporting Countries and allied non-OPEC producers agreed on May 25 to extend an existing supply curb into 2018.

Iraq production shoots up in June

26 Jul 2017   Iraq

Iraqi Oil Minister Jabbar al-Luiebi (center) lays a cornerstone at the Halfaya oil field, in Missan province, on July 9, 2017. The ceremony marked the beginning of the third and final development phase, which is slated to raise production from 200,000 bpd to 400,000 bpd. (Source: Oil Ministry) PUBLISHER’S NOTE: To access an extensive collection of data gathered and curated by Iraq Oil Report on a monthly basis, including field-by-field production figures, please subscribe to the Iraq Oil and Financial Dataset . Oil Minister Jabbar al-Luiebi has consistently said he intends to achieve a production capacity of 5 million bpd by the end of this year, and Iraq appears to be well on its way. Oil production jumped by nearly 100,000 barrels per day (bpd) – from 4.573 million bpd in May to 4.671 million bpd in June – according to an Iraq Oil Report analysis of production data […]

Unlikely humanitarians – shippers returning to Libya face a tough moral dilemma

26 Jul 2017   Libya

A surge in Libyan oil exports — production has increased sharply in the past few months, jumping to four-year highs of over 1 million b/d this month — is seeing more and more oil tankers travel to and from the North African country’s key oil terminals, increasing tanker activity and pushing up freight rates in the Mediterranean. So far, so good for shipowners. But as more tankers call at Libyan ports, something which they were happy to avoid altogether less than a year ago, they can find themselves being drawn into the role of unlikely — and possibly begrudging — humanitarians. Increasingly they are receiving calls to assist unseaworthy vessels carrying migrants heading for Europe, shipping sources say. Under the International Convention for the Safety of Life at Sea (SOLAS) — which was first introduced after the sinking of the Titanic — all vessels have a legal obligation to […]

Militants hit Nigerian crude oil pipeline

26 Jul 2017   Nigeria

Nigerian crude oil production was lowered following a militant tank on an oil pipeline, the state oil company said. File photo by vanhurck/Shutterstock July 25 (UPI) — A militant attack on a crude oil pipeline in Nigeria has sidelined more than 100,000 barrels of oil per day, the head of a state oil company announced. Maikanit Baru, the head of the Nigerian National Petroleum Corp., said as-yet identified saboteurs caused a breach on a major transit artery, curbing 150,000 barrels of oil per day. The rupture from the Trans-Niger pipeline came as parties to a committee monitoring a production agreement coordinated by the Organization of Petroleum Exporting Countries, of which Nigeria is a member, met to consider its impacts. Baru said the problem at the pipeline created obstacles to sustaining what he said was the 2.2 million barrels of crude oil production per day reached last week. “Unfortunately, we […]

Venezuela’s economic and political crisis in charts

26 Jul 2017   Venezuela

While the cause of the protests that have swept across Venezuela is president Nicolás Maduro’s plan to rewrite the country’s constitution, the clashes come against a backdrop of collapsing living standards, medicine shortages, increasing international isolation and ballooning corruption.  A look at the numbers reveals the rapid changes that have drastically reshaped life in the oil-rich South American nation. Share on Twitter (opens new window) Share on Facebook (opens new window) EmailShare this chart Ninety-three per cent of Venezuelans said their income was not sufficient to buy the food they need, according to a survey by some of the country’s top universities. Nearly three-in-four Venezuelans reported suffering weight loss last year, and, of those, a 9kg loss on average. The price of basic groceries for a family is currently about 15 times the minimum wage and prices continue to rise. The International Monetary Fund projects Venezuela’s inflation rate could reach 720 per cent this year.  Maritza Landaeta, a director of the Bengoa Foundation, a Caracas-based health and nutrition charity, recently said: “Malnutrition in Venezuela is a problem of corruption, not a lack of money.” Government price controls and other policies have crippled domestic production, and after the oil price drop caused imports to decrease dramatically, insufficient food is available for the country’s more than 30m people. Food shortages became so drastic that Coca-Cola ceased production in Venezuela in 2016 because there was not enough sugar.

US Treasury preps Venezuelan oil export sanctions

26 Jul 2017   Venezuela

The US Treasury Department is crafting sanctions which would prohibit the import of Venezuelan crude oil into the US, one of several sanctions options the White House is considering in response to an expected vote Sunday in Venezuela, an administration source said Tuesday. But the Trump administration, which has studied the impact of the potential crude oil import sanctions on the US refining sector, is not expected to impose Venezuelan oil sanctions, at least in the near term, the source said. “Treasury is preparing them, but that doesn’t mean they’ll implement them,” the source said. Related: Find more content about Trump’s administration in our news and analysis feature. The Trump administration has yet to decide on its expected sanctions response to the Sunday vote called by Venezuelan President Nicolas Maduro to elect a constituent assembly to redraft the country’s constitution, sources, both in and outside the administration, said Tuesday. […]

Brazil: Reserves and Production

26 Jul 2017   Brazil

Guest Post by George Kaplan Brazil is a major oil producing country, but in 2016 was still a net importer, though imports dropped significantly and they have been a slight exporter overall so far this year. It is one of the few countries that have consistently grown production over recent years, and possibly the only non-OPEC country that will show overall growth of conventional crude in the ten years to (say) 2022. Production Brazil ANP or anp (Agência Nacional do Petróleo, Gás Natural e Biocombustíveis) publishes Excel files for monthly production on all wells. In theory it should be easy to extract field data from these, in practice not so much. The files are downloaded from a database but not always consistently, sometimes in field units sometimes SI, sometimes one month per file sometimes more, around 2010 onshore and offshore was split but naming conventions weren’t always followed, handling […]

Dead Bodies Start Piling Up as Fuel Theft Booms in Mexico

26 Jul 2017   Mexico

Buying stolen gasoline in the central Mexican state of Puebla is easy. Pull off the main highway into a busy parking lot, and the black marketeers are waiting in pickup trucks loaded with jerrycans. They’ll siphon the fuel into your tank—boasting as they do that unlike a lot of the country’s regular gas stations, they don’t cheat customers. An error has occurred You have 1 free Businessweek article left. Register for more. Register or Sign In Already a subscriber? Link your Bloomberg Terminal account or your Businessweek subscription account to access all articles. While this illegal curbside commerce has been going on for decades, it has exploded in the past few years and now costs Pemex , Mexico’s state oil company, more than 20 billion pesos ($1.1 billion) a year. The huachicoleros , as the fuel thieves are known in Mexico, dig up pipelines and hijack tanker trucks. These […]

Halliburton, Schlumberger take hit on Venezuela bills in second quarter

26 Jul 2017   Venezuela

Venezuela was unable to pay its biggest oilfield suppliers in cash in the second quarter, and top service companies Halliburton and Schlumberger accepted promissory notes that they immediately wrote down by hundreds of millions of dollars, their second-quarter reports showed. Schlumberger, the world’s largest oilfield service firm by revenue, took a $510 million impairment charge on promissory notes received from Petroleos de Venezuela SA [PDVSAC.UL] in lieu of $700 million in outstanding fees. Halliburton similarly recorded a pre-tax charge of $262 million on promissory notes from its main customer in Venezuela in exchange for $375 million in fees, according to its financial filing. Neither company identified PDVSA by name, and both described the oil company as their “primary customer” in Venezuela. A PDVSA source confirmed it issued the notes. Foreign oil companies […]

In Australia, Shell signals new era for LNG

26 Jul 2017   Australia

The largest facility of its kind ever built, Shell’s floating Prelude liquefied natural gas facility arrives at its home off the coast of Western Australia. Photo courtesy of Shell Australia. July 25 (UPI) — The arrival of a floating liquefied natural gas facility off the coast of Australia signals a milestone for the region as an energy hub, Royal Dutch Shell said. The company’s Prelude vessel, its first-ever floating platform for LNG, arrived off the coast of Western Australia, after leaving its South Korean shipyard in late June . Large for a floating facility, it’s one-quarter the size of an equivalent inland plant. With LNG emerging in market share because of its diverse deliverability options, Shell said the Prelude FLNG vessel opens up new doors in new countries. For Australia, the company said the vessel will keep 260 local workers on board and create more than 1,500 jobs during […]

China, India oil imports show Saudi Arabia is already carrying the burden of cuts:

26 Jul 2017   OPEC, Saudi Arabia

Saudi Arabia wants to do more to boost crude oil prices by taking a razor to its exports, but the kingdom is already doing much of the heavy lifting in Asia, where it is surrendering market share in the world’s top importing region. Saudi Energy Minister Khalid al-Falih said after a meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies on Monday that his country would limit crude oil exports to 6.6 million barrels per day (bpd) in August, almost 1 million bpd below levels a year ago. This commitment is belated recognition that OPEC and its non-OPEC allies, including Russia, have to do more than just comply with their November agreement to cut output by a combined 1.8 million bpd. For the output restrictions to work by draining global oil inventories, the producers will also have to curb exports. Vessel-tracking […]

After China-induced price spike, coal set to resume long-term decline

26 Jul 2017   Coal

Coal prices’ march to eight-month highs, driven by China’s huge appetite for power consumption, looks like an interlude in a longer-term decline and is seen losing traction later this year. Investors widely anticipate a slow demise for coal use due to policies encouraging cleaner natural gas and renewable energy generation, but the shorter-term outlook for the industry has seen a sharp reversal of fortunes. Asia’s benchmark physical coal prices GCLNWCPFBMc1 have gained more than a third from lows seen in May to nearly $98 per ton, while European benchmark API2 2018 coal futures are at eight-month highs of around $74 a ton. Recent gains are largely due to high demand in China, where power consumption has jumped […]

China’s crude oil imports to exceed 400 million tonnes this year: Sinopec executive

26 Jul 2017   China

China’s crude oil imports will exceed 400 million tonnes this year, said an executive at a Chinese state oil giant on Tuesday, as continuing low oil prices and declining domestic output sparked increased overseas purchases. China’s crude imports are also expected to grow by double digits in 2018, Zhang Haichao, vice president of Sinopec Group, told Reuters on the sidelines of an industry conference in Beijing on Tuesday. Zhang’s estimates mean Chinese demand for imported crude would grow by around 400,000 barrels per day (bpd) this year, which would likely make China the world’s largest crude oil importer on an annual basis for the first time ever. For the first six months of 2017, China imported 212 million tonnes of crude, or 8.55 million bpd, up nearly 14 percent from the same period in 2016, according to customs data. [O/CHINA1] China’s crude oil imports have grown […]

EnergyQuest: Australia achieves record LNG exports in 2016-17

26 Jul 2017   Australia

Australia exported a record volume of 51.4 million tonnes of LNG during the 2016-17 financial year, according to figures just released by energy consultancy EnergyQuest, Adelaide. It is the first time the country has broken the 50-million-tonne export barrier. The figure also is a 37% increase on the 2015-16 LNG export volume of 37.5 million tonnes. EnergyQuest forecasts higher-still exports in the next financial year, 2017-18, suggesting that the volume will reach 63 million tonnes by midyear 2018 with increases expected from Gorgon and the start of Wheatstone next month, plus Ichthys coming on stream in 2018. Sales for the 2017-18 year have been estimated at $22.3 billion (Aus.), which is a 29% increase on the $16.6 billion for the previous year. EnergyQuest says that production volumes increased in virtually every Australian LNG export project. The exceptions were Darwin LNG, which was down 900,000 tonnes, and BG Group’s Queensland […]

New Regulations May Come As A Rude Awakening For Oil Companies

26 Jul 2017   Shale Oil

An agency little-known outside accounting circles recently issued draft rules to change the standards which govern the verification of the year-end oil and gas reserves of public companies. The change would increase the burden of an audit, but the agency sees the need to tighten the scrutiny of such estimates. If they are right, then some companies will see downward revisions of reserves, their single greatest asset, as the rules become effective over about the next two years. The Public Company Accounting Oversight Board ( PCAOB ) governs the auditors which validate the financial filings of public companies in the U.S. It was created along with Sarbanes-Oxley reforms and endowed with the power to license, discipline and revoke licenses for the auditors themselves, and it has become the official gate-keeper of one set generally accepted accounting practices. Both the public companies and the PCAOB answer to the U.S. Securities […]

Anadarko Blinks First In The Shale Standoff

26 Jul 2017   Shale Oil

As a reminder, in his latest letter to investors , Clark said that “the rising decline rates of major US shale basins, and the increasing incidents of frac hits (also a cause of rising decline rates) have convinced me that US shale producers are not only losing competitiveness against other oil drillers, but they will find it hard to make money…. at some point debt investors start to worry that they will not get their capital back and cut lending to the industry. Even a small reduction in capital, would likely lead to a steep fall in US oil production. If new drilling stopped today, daily US oil production would fall by 350 thousand barrels a day over the next month.” What I also find extraordinary, is that it seems to me shale drilling is a very unprofitable industry, and becoming more so. And yet, many businesses in the […]

Researchers Have Been Underestimating the Cost of Wind and Solar

26 Jul 2017   Solar, Wind

How should electricity from wind turbines and solar panels be evaluated? Should it be evaluated as if these devices are stand-alone devices? Or do these devices provide electricity that is of such low quality, because of its intermittency and other factors, that we should recognize the need for supporting services associated with actually putting the electricity on the grid? This question comes up in many types of evaluations, including Levelized Cost of Energy (LCOE), Energy Return on Energy Invested (EROI), Life Cycle Analysis (LCA), and Energy Payback Period (EPP). I recently gave a talk called The Problem of Properly Evaluating Intermittent Renewable Resources (PDF) at a BioPhysical Economics Conference in Montana. As many of you know, this is the group that is concerned about Energy Returned on Energy Invested (EROI). As you might guess, my conclusion is that the current methodology is quite misleading. Wind and solar are not […]

A Worldwide Gas Glut Claims $27 Billion Victim in Canada

26 Jul 2017   Canada

Petronas drops high-profile LNG plans in British Columbia Plummeting prices threaten projects from Australia to Russia A $27 billion energy project in Canada just became the latest casualty of a worldwide glut of natural gas. Malaysia’s Petroliam Nasional Bhd abandoned on Tuesday its plans for the Pacific Northwest LNG terminal, a plant that would have liquefied Canada’s gas and sent the fuel by tanker from the western shores of British Columbia to markets in Asia. Petronas cited market conditions in its decision. Pacific Northwest LNG joins a growing list of projects that have been killed in recent months by plummeting LNG prices, throwing the economics of export terminals from Australia to Russia to Mozambique into question. Prices have crashed as increasing volumes of gas from Australia and America’s shale formations hit the water, inundating the market with so much supply that analysts say demand may not catch up until […]

U.S. energy secretary duped into fake interview with Russian comedians

26 Jul 2017   Ukraine, USA

U.S. Energy Secretary Rick Perry optimistically discussed expanding American coal exports to Ukraine and other energy matters during a lengthy phone call this month with a Russian prankster who Perry thought was Ukraine’s prime minister. Perry actually was talking with comedians known in Russia for targeting celebrities and politicians with audacious stunts, Energy Department spokeswoman Shaylyn Hynes said in a written statement. Pranksters Vladimir Krasnov and Alexei Stolyarov are sometimes called the “Jerky Boys of Russia,” after an American duo who put out recordings of their prank phone calls in the 1990s. They have made faux calls to British singer Elton John, who thought he was speaking to Russian President Vladimir Putin, and others. “These individuals are known for pranking high-level officials and celebrities, particularly those who are supportive of an agenda that is not in line with their governments. In this case, the energy security […]

While Oil Patch Bleeds, Gas Drillers Race to Unleash Wells

26 Jul 2017   Shale Oil

Backlog of unused wells in Northeast plunges and output soars Price gains, new pipes have gas drillers letting wells loose Oil prices have been lousy for so long that U.S. producers are hoarding unfinished wells rather than pumping crude out of them. In the natural gas patch, just the opposite is happening. While the energy slump has idled lots of wells for both commodities, their economics have diverged. Oil remains at half its price in 2014, leading to a record backlog of drilled-but-uncompleted wells spread across shale formations where fracking brought on a surge in crude production. Meanwhile, gas futures are almost double last year’s low, and the so-called fracklog of wells in the Marcellus gas fields of Pennsylvania and West Virginia is shrinking as drillers there unleash supplies to take advantage of higher prices. By the end of June, the fracklog in the Marcellus was the smallest in […]

Green Car Congress: Stanford, CMU, MIT team reviews challenges to practical implementation of solid-state Li-ion batteries

26 Jul 2017   Electric Cars

Toyota, which has been working on solid-state batteries for EVs for a number of years (earlier post), is in the news with a report by the Wall Street Journal that it will be ready to commercialize a solid-state battery by 2022. Solid-state lithium-ion batteries, with higher volumetric energy densities than currently available lithium-ion batteries, offer a number of conceptual advantages including improved packaging efficiency; improved safety; and long cycle life. However, there remain a number of unresolved issues precluding commercialization at this point. A team from Stanford, Carnegie Mellon University, and MIT recently published an open-access paper in the Journal of the Electrochemical Societyreviewing the practical challenges hindering the development of solid-state Li-ion batteries.

Shortage Of Fracking Crews Slows The Shale Boom

26 Jul 2017   Shale Oil

The resurgence in shale drilling and production could be bumping up against some limits, with output expected to fall far short of market expectations for this year and next, according to a new study. Some of the constraints that shale companies will run into are on the access to oilfield services (OFS), including rigs, equipment and personnel, according to Kayrros, a French research firm backed by the former CEO of OFS giant Schlumberger, and reported on by the FT . Over the past three years, the oil market downturn led to sharp cutbacks in drilling and spending, with OFS companies bearing the brunt of the contraction. Oil producers demanded sharply lower prices for rigs, equipment and completion services, which translated into plunging revenues for OFS companies. But the rebound is tightening that market, with backlogs for completion services reported in places like the Permian basin. Oil producers had hoped […]

Devon reports record rate for STACK well

26 Jul 2017   Shale Oil

Devon Energy Corp., Oklahoma City, reported a production rate of 6,000 boe/d from a well drilled in southwest Kingfisher County, Okla.  The company said it’s a record rate for initial production for a well in the STACK play (Sooner Trend, Anadarko, Canadian, Kingfisher), based on its comparison with publicly available data. The company said the rate was facility constrained.  The Privott 17-H well is expected to recover more than 2 million boe. Initial production was 50% oil.  The well was drilled with a 10,000-ft lateral and landed in the upper Meramec interval near the company’s Showboat development. Devon will spud the Showboat development in the third quarter and has plans for about 25 wells across four landing zones.  Devon said it also brought online four other high-rate Meramec wells in the over-pressured oil window during the second quarter. The company has more than 600,000 net acres by formation in the STACK play (OGJ Online, Sept. 7, 2016). “Devon will continue to test development concepts including well density, multilayer well stacking, intralayer well staggering, and further completion design improvements,” said Wade Hutchings, senior vice-president, exploration and production.

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Russia sees oil supplies dwindling from global market

26 Jul 2017   OPEC

Hundreds of millions of barrels of crude oil are lacking from the global energy market because of joint efforts with OPEC, Russia’s oil minister said Monday. Members of a committee monitoring a deal coordinated by the Organization of Petroleum Exporting Countries are meeting in St. Petersburg to consider the effectiveness of managed declines that began in January. The agreement includes major non-OPEC oil producers like Russia and Kazakhstan. For the first time in three years, Russian Energy Minister Alexander Novak said global oil and petroleum product volumes have declined. “More than 350 million barrels of oil supply have been removed by the joint effort,” he was quoted by Russian news agency Tass as saying. […]

German conservative calls for phase-out of petrol and diesel

26 Jul 2017   Germany

Germany should soon start phasing out petrol and diesel, a member of Chancellor Angela Merkel’s Christian Democrats (CDU) said as Britain announced it would ban the sale of new petrol and diesel-powered cars from 2040. Germany’s car industry is in hot water after Der Spiegel reported on Friday that Volkswagen <VOWG_p.DE >, BMW, Audi and Porsche may have colluded to fix the prices of diesel emissions treatment systems. EU antitrust regulators are investigating allegations of a cartel. The supervisory boards of Daimler and Volkswagen are due to meet on Wednesday to discuss the issue. “We need to start getting rid of combustion technology in the short-term,” Oliver Wittke, a transport expert in Merkel’s CDU, told Deutschlandfunk radio. Herbert Behrens, a transport expert in the radical Left party, also said the government should start taking action now so that it could cope without fossil fuels by 2050. […]

Oil steady after fall ahead of OPEC/non-OPEC meeting

24 Jul 2017   Prices

Oil prices were little changed on Monday following a steep fall in the previous session amid growing expectations that the joint OPEC and non-OPEC ministerial meeting later in the day would address rising production from Nigeria and Libya, two OPEC members exempted from the cuts. Six OPEC and non-OPEC ministers will meet on Monday in St Petersburg to discuss the market outlook and compliance with output cuts. They may recommend a conditional cap on Nigerian and Libyan oil production, sources familiar with the talks said. The joint OPEC/non-OPEC ministerial committee could also discuss a deeper cut in production, but more studies are needed, according to one of the sources. Kuwait’s oil minister, Essam al-Marzouq, said on Saturday that compliance was good with oil production cuts by OPEC and non-OPEC countries and that deeper cuts were possible. London Brent crude for September delivery was unchanged at $48.06 […]

Libya, Nigeria Oil Output Caps Are Said to Be Ruled Out for Now

24 Jul 2017   Prices

Limiting oil output from Nigeria and Libya won’t be on the agenda when OPEC and other producers meet on Monday, with both African nations saying they’ll need to keep pumping at a higher level before they can join a global effort to stem a supply glut, according to two people familiar with the planned talks. Nigeria is ready to cap or even reduce supply if it can maintain output of 1.8 million barrels a day, said the two people, asking not to be identified because the information is confidential. Libya isn’t planning to join any agreement to curb output until it reaches its target of 1.25 million barrels a day by December, they said. Producers including Saudi Arabia and Russia are gathering in St. Petersburg, Russia, to assess the effectiveness of an international accord to pare output. There’s no need for the Organization of Petroleum Exporting Countries and other oil producers to make deeper cuts in supply, Oman’s minister of oil and gas, Mohammed Al Rumhy, told reporters on Monday in St. Petersburg. Kuwaiti Oil Minister Issam Almarzooq said in an interview in the city that producers haven’t discussed deeper cuts and would have further consultations before their joint ministerial monitoring committee meets later on Monday.

OPEC, non-OPEC debate how to cap rising Libyan, Nigerian oil output

24 Jul 2017   OPEC

Russia called on OPEC to limit oil output rises from its members Libya and Nigeria in the near future, as it hosted a meeting of key OPEC states on Monday to discuss ways to prop up oil prices. OPEC has agreed with several non-OPEC producers led by Russia to cut oil output by a combined 1.8 million bpd from January 2017 until the end of March. But OPEC states Libya and Nigeria are exempt and their production has been rising. The deal to curb output propelled crude prices above $58 a barrel in January but they have since slipped back to the $45 to $50 range as the effort to drain global inventories has taken longer than expected. Rising output from U.S. shale producers has offset the impact of the output curbs, as has climbing production from Libya and Nigeria, which were granted an […]

Falih: no discussion of deeper oil output cuts at OPEC/non-OPEC meeting

24 Jul 2017   OPEC

Saudi Energy Minister Khalid al-Falih said there would be no discussion of deeper oil output cuts at a meeting of ministers from OPEC and non-OPEC nations on Monday. Ministers from countries including Kuwait, Venezuela, Algeria, Saudi Arabia, Russia and Oman will discuss production caps on Nigeria and Libya, Falih told reporters.

OPEC Huddles With Oil Allies in Fight Against Glut

24 Jul 2017   OPEC

ST. PETERSBURG—The Organization of the Petroleum Exporting Countries met Monday with big oil-producing allies such as Russia, wrestling with a difficult fact: They are pumping too much crude. OPEC, the 14-nation cartel, and 10 big non-OPEC producers agreed last year to reduce their petroleum output by almost 1.8 million barrels a day—nearly 2% of global oil supply—to draw down a global glut that keeps prices low. But prices have…

OPEC Grapples With Growing Threats to Oil Deal

24 Jul 2017   OPEC

OPEC is worried that its plan to drain a global oil glut—and thereby raise crude prices—isn’t working. A long-planned meeting in St. Petersburg, Russia, on Monday to discuss the oil market with big producers outside the cartel has turned into a critical gathering. Over the weekend, the Organization of the Petroleum Exporting Countries said, its ministers have held a series of “intensive consultations” about the challenges for an…

No Winners in Gulf Feud as Saudi, Qatari Assets Converge on Oil

24 Jul 2017   Qatar, Saudi Arabia
No Winners in Gulf Feud as Saudi, Qatari Assets Converge on Oil


Investors aren’t taking sides in the biggest political crisis in the Gulf in decades because their focus has already returned to oil.  Seven weeks after Saudi Arabia led a coalition of Arab states in cutting ties with Qatar over allegations that it supports terrorism, holders of both countries’ stocks and bonds are paying almost identical risk premiums. Their five-year credit default swaps converged for the first time in two years, stocks are valued at about 13.7 times’ projected earnings over the next 12 months, and their international bonds were almost level on Monday.

The Gulf dispute remains in stalemate after Qatar denied the charges and rejected the Saudi bloc’s demands, which include rolling back ties with Iran and shutting the Al Jazeera news channel. Meanwhile, the feud is taking a back seat to oil for investors, said analysts including Saad Siddiqui at JPMorgan Chase & Co. The price of crude is languishing under $50 a barrel, far below the level many Gulf producers need to balance their budgets.

IMF Sees 2017 Saudi Growth ‘Close to Zero’ on Oil Prices, Cuts

24 Jul 2017   Saudi Arabia

Saudi Arabia’s economy will stall this year with growth “close to zero” due to lower oil revenue, the International Monetary Fund said.  The fund lowered its 2017 growth forecast to 0.1 percent from 0.4 percent, citing OPEC production cuts, uncertainty over oil prices and the structural reforms the country is undertaking to reduce its reliance on crude, it said in a statement on Friday concluding its Article IV consultation. The IMF also lowered its non-oil growth projection to 1.7 percent from 2.1 percent — compared with actual growth of 0.2 percent in 2016.  Lower oil prices and austerity measures are weighing on Saudi Arabia’s economy, which contracted in the first quarter for the first time since 2009 — illustrating the scale of the challenge facing the country’s new heir, Crown Prince Mohammed bin Salman, as he implements his blueprint for a transition away from oil dependency. Even so, the fund said it welcomed the government’s direction, which it said would help the fiscal deficit “narrow substantially in the coming years.”  “Non‑oil growth is expected to pick up this year and overall growth is expected to strengthen over the medium term as structural reforms are implemented,” the IMF board said in the statement released on Friday. It cautioned the government to monitor the impact of the fiscal measures and to “make corrections if needed.”

Libya’s Oil King Won’t Be Stopped By OPEC

24 Jul 2017   Libya

Conflict-torn Libya, divided between rival factions in the east and the west, recently reached 1 million bpd of crude oil output—for the first time since 2013. The oil production recovery has put in the spotlight the chairman of Libya’s National Oil Corporation (NOC), Mustafa Sanalla, whom analysts see as a central figure in the oil sector, wearing the hats of both a diplomat and an oil minister. It will be Sanalla who will lead Libya’s delegation at the upcoming meeting of the Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC) in Russia, at which he will argue his country’s position and share production plans for the immediate future. And the monitoring committee will be eager to find out how much Libya’s plans could further offset the cartel and friends’ production cuts, from which the African nation is—for now at least—exempt. Winning exemption at the time of the November OPEC deal wasn’t […]

Saudi Arabia Turns Off the U.S. Oil Tap

24 Jul 2017   Saudi Arabia

At last, Saudi Arabia seems to be doing what it takes to reduce the world’s most visible oil glut: the one in the U.S. Unfortunately, its renewed vigor comes as OPEC’s deal to reduce excess crude stockpiles starts to show signs of unraveling elsewhere, a subject that will be wrestled with by the group’s oil ministers as they and other producer nations meet in St Petersburg on Monday. Data published last week by the U.S. Energy Information Administration show that imports from Saudi Arabia in the week to July 14 fell to their lowest for seven years: just 524,000 barrels a day. For sure, one week’s number doesn’t mean much on its own, particularly when a single very large crude tanker could raise or lower that figure by half. But this isn’t an isolated figure. The EIA data show a clear drop in deliveries from Saudi Arabia since the […]

Aggressive U.S. Oil Sanctions Could Bankrupt Venezuela

24 Jul 2017   USA, Venezuela

The U.S. government has warned that it would take “swift economic actions” if the Venezuelan government proceeds with a July 30 move to rewrite the constitution to consolidate power in the hands of President Nicolas Maduro. With the country in shambles, the move is clearly intended to shore up the President’s power in the face of fierce and growing opposition. The statement from the U.S government is widely interpreted as a threat to sanction state-owned oil company PDVSA, the government’s main source of revenue. “My sense is there’s an intensive review on a variety of options,” Michael Shifter, president of the Inter-American Dialogue, told the WSJ last week. “I wouldn’t be surprised about discussions on very severe measures against the Venezuelan government. If so, I hope they do more good than harm. The precise details of what the sanctions might look like are not known yet, with a spectrum […]

China’s Diesel, Gasoline Exports Surge to Ease Domestic Glut

24 Jul 2017   China

China’s diesel and gasoline exports surged in the first half of the year as a domestic supply glut and slowing demand growth prompted refiners to sell more fuel abroad.  Diesel shipments jumped almost 21 percent in the first six months compared to the same period a year ago, averaging about 328,500 barrels a day, according to Bloomberg calculations based on data posted Sunday on the website of the General Administration of Customs. Gasoline exports rose 8.1 percent, averaging nearly 222,000 barrels a day.  China’s state-run fuel makers have sent more fuel overseas to draw down stockpiles that have swollen thanks to a refining capacity glut and higher production from independent refiners, known generally as teapots. Meanwhile, the nation’s gasoline and diesel demand growth has been slowed by alternative transportation such as shared bicycles, as well as gas-fed vehicles and electric cars, according to ICIS China, a Shanghai-based commodity researcher.  “Alternative transportation has taken a notable toll on consumption of traditional fuels this year,” Lin Jiaxin, an analyst with ICIS China, said before the data were released. “With new refining units coming online in the second half of the year, refiners will have to ship even more overseas.”

Trump May Have Unintentionally Killed U.S. Nuclear

24 Jul 2017   Nuclear, USA

President Trump has a different view of climate change than the previous administration. His decision to disassociate the U.S. from the Paris Climate Accords has received the lion’s share of recent publicity in this regard. Now the President’s March 28th Executive Order (EO) could harm the U.S. nuclear power industry (although we doubt that was his intent). The EO directs the EPA, among other things, to review the previous administration’s “Clean Power Plan”. There are two main parts to the CPP with respect to electric power generators: 1) carbon pollution emissions guidelines for both new and existing generation and 2) federal efforts to measure the social costs of carbon (SC-CO2) as well as nitrous oxide and methane. It is the latter that concerns us here. Two states, New York and Illinois, have recently taken steps to subsidize aging nuclear generating stations. Both states used a variant of the SC-CO2 […]

Mystery surrounds only oil well drilled in ANWR

24 Jul 2017   Arctic, USA

With oil development advocates again emboldened by the prospects of cracking open the Arctic National Wildlife Refuge, a big secret that could add to the continuing debate over exploration remains as cloaked in mystery as ever. Experts say data from the KIC-1 well — the only well ever drilled in the refuge — remains the tightest of North America’s “tight holes,” an industry term for top-secret wells. The explorers, BP, Chevron and two Alaska Native corporations — subsurface landowner Arctic Slope Regional Corp. and village corporation Kaktovik Inupiat Corp.— have kept the data hidden, with only a small number of people aware of what the drillers found. Federal government geologists aren’t in the know. The rare Alaska state employee who has viewed the information isn’t talking. But the results from the 1986 well, drilled 15 miles southeast of the village of Kaktovik, could be something of a Rosetta stone, […]

EPA chief spent almost half of spring in home state of Oklahoma

24 Jul 2017   Climate, USA

 The head of the U.S. Environmental Protection Agency, Scott Pruitt, was in his home state of Oklahoma on at least 43 of the 92 days of March, April and May, according to copies of his travel records obtained by the Environmental Integrity Project watchdog group and reviewed by Reuters. Pruitt’s frequent visits to Oklahoma have raised concerns among critics that he is cultivating political relationships in the state at taxpayer expense, instead of focusing on his job as head of the environmental regulator. EPA officials contend that Pruitt works hard and pays for his trips home to Tulsa to see his wife and children. “Administrator Pruitt works long hours and is available around the clock,” said EPA spokeswoman Liz Bowman. “He is extremely focused and disciplined, which is evident by the fact that he spearheaded over two dozen significant regulatory actions since being sworn in.” Pruitt has […]

Schlumberger CEO Blames U.S. Investors for Stagnant Oil Prices

24 Jul 2017   Prices

U.S. investors are driving down the price of oil by shoveling too much money into American shale companies, the chief executive of Schlumberger Ltd., the world’s largest oil-field service firm, said Friday. Paal Kibsgaard, an outspoken energy executive based in Paris, blamed the surge in U.S. drilling for crude prices that are mired below $50 a…

Russia is top China oil supplier fourth straight month in June, longest streak ever

24 Jul 2017   -

FILE PHOTO: A general view of a crude oil importing port in Qingdao, Shandong province, November 9, 2008. Stringer/File Photo BEIJING (Reuters) – Russia was China’s biggest crude oil supplier for a fourth straight month in June, its longest streak ever in the top spot, data from the General Administration of Customs showed on Monday. China’s total crude oil imports reached 36.11 million tonnes in June, or 8.79 million barrels per day (bpd), making the country the world’s largest buyer for a second month. However, imports dipped 2.9 percent from May’s purchases, the second-highest on record. Russia’s shipments to China last month rose 27 percent from a year ago to 1.27 million bpd, but were down from its record 1.35 million bpd in May, the customs data showed. The country has been China’s top oil exporter since March, its longest period ever as the biggest supplier. Russian crude exports […]

Oil Slides Most in Two Weeks as OPEC Production Is Seen Rising

22 Jul 2017   Prices

OPEC output set to exceed 33 million b/d: Petro-Logistics OPEC, Russia seen standing pat on output deal as glut persists Oil dropped the most in two weeks as a report that OPEC’s July supply will be the highest this year fueled worries over a global glut. Futures tumbled 2.5 percent in New York on Friday, erasing gains from earlier this week. Supply from OPEC is set to exceed 33 million barrels a day this month as members including Saudi Arabia and Nigeria increase shipments, according to tanker-tracker Petro-Logistics SA. This calls into question the effectiveness of the Organization of Petroleum Exporting Countries’ deal to reduce output and help rebalance the market as producers gather in St. Petersburg, Russia. “To really see the market push much higher, we need to see a drumbeat that inventory levels are being pared, like the main producers who are cutting production say is happening,” […]

OPEC jitters put $50 per barrel in the rearview mirror

22 Jul 2017   Prices

The price for Brent crude oil loses sight of $50 per barrel as nerves set in ahead of next week’s OPEC-led monitoring committee. File photo by Monika Graff/UPI July 21 (UPI) — Market jitters about what happens next with the OPEC-led production deal acted Friday as a spoiler for the recent rally in crude oil prices. “Unease is mounting across the energy complex as traders brace for Monday’s OPEC/non-OPEC monitoring meeting in which the global supply pact will be discussed,” an emailed market fundamentals report from London oil broker PVM read. OPEC-member Kuwait leads the monitoring committee to the table next week in St. Petersburg, Russia. Crude oil prices were dealt a blow after the committee’s first meeting of the year resulted in an extension, rather than an enhancement, of the agreement. Speaking to the official Kuwait News Agency, Kuwaiti Oil Minister Essam al-Marzouq said the committee would focus […]