Tom Whipple

rss feed

Tom Whipple's Latest Posts

WTI Prices Surge On Keystone Spill

24 Nov 2017   Prices

Oil prices surged on Wednesday on news that the Keystone pipeline might not restart for several weeks. The outage at the damaged pipeline ended several years of contango for WTI, pushing the benchmark into a state of backwardation for the first time since 2014. TransCanada made a lot of headlines in the past week. The Keystone pipeline ruptured and spilled more than 200,000 gallons of crude oil in South Dakota last week, just days before TransCanada was given a greenlight for the Keystone XL in the state of Nebraska. South Dakota regulators now say that they could revoke the permit for the Keystone pipeline if it is found that the company violated the terms of its license. The spill was the third for the Keystone pipeline in less than 10 years. “If it was knowingly operating in a fashion not allowed under the permit or if construction was done […]

U.S. oil prices rise to two-year high on Keystone pipeline outage

24 Nov 2017   Prices

U.S. crude oil rose to a two-year high on Friday, as the shutdown of a major crude pipeline from Canada to the United States tightened North American markets.  Trading activity is expected to be very low on Friday due to the U.S. Thanksgiving holiday. U.S. West Texas Intermediate (WTI) crude futures were at $58.44 a barrel at 0550 GMT, up 42 cents, or 0.7 percent from their last settlement. Price rose to as much as $58.58 a barrel early on Friday, the highest since July 1, 2015. Sponsored Brent crude futures LCOc1 were at $63.42, down 13 cents. In a sign of a tightening market, both crude benchmarks are in backwardation, where spot prices are higher than those for future delivery, which makes it unattractive for traders […]

Oil Extends Rally Above $58 as Keystone Outage Cuts U.S. Supply

24 Nov 2017   Prices

TransCanada is said to have reduced line’s shipments by 85% Ministers from six OPEC countries and Russia meet in Bolivia Oil extended its rally above $58 a barrel as supply disruptions on the Keystone pipeline added to optimism that the U.S. glut is waning and that OPEC will prolong its output curbs. Futures gained as much as 0.7 percent in New York to a two-year high. TransCanada Corp. was said to have cut 85 percent of Keystone’s November shipments because of last week’s spill in South Dakota. The line’s shutdown means that between 550,000 and 600,000 barrels a day of crude are not heading to the Cushing, Oklahoma distribution hub, said Michael Loewen, a commodities strategist at Scotiabank. “WTI is getting a bit of a bid from the Keystone outage,” Loewen said in a phone interview from Toronto. Oil closed above $58 a barrel in New York for the […]

WTI flips into big backwardation after pipeline spill: Kemp

24 Nov 2017   Prices

U.S. crude futures prices have swung into substantial backwardation after a spillage on the Keystone pipeline severely reduced crude deliveries from Canada into the U.S. Midwest. U.S. crude futures, also known as West Texas Intermediate (WTI), are based on crude delivered into the tank and pipeline system around Cushing, Oklahoma. Futures prices are therefore very sensitive to anything that affects the regional supply-demand balance in the Midwest. Sponsored After the spill on Nov. 16, the calendar spread between WTI futures for delivery in January and July 2018 has surged from a contango of 2 cents a barrel to a backwardation of $1.17. The six-month WTI […]

Will oil touch $100 a barrel again?

24 Nov 2017   Prices

This seems unlikely, both in the short and long term, and in the context of new energy sources. But there’s always politics It took the better part of a year but the production cut effected by the 14-member cartel, Organisation of Petroleum Exporting Countries (OPEC), in January is beginning to show results. Prices of the benchmark Brent grade crude have shot up by 36 per cent since the middle of this year and went within touching distance of the $65-a-barrel mark before retracing steps in the last few trading sessions. On Friday, Brent was trading in the $61-62-a-barrel range. Exactly a year ago OPEC decided to take 1.2 million barrels a day off the market through production cuts in an effort to bring down output to around 32.5 million barrels a day. The cartel persuaded the 11 non-OPEC oil-producing countries led by Russia to cut collective output by 600,000 […]

The 10 Most Influential Oil Countries

24 Nov 2017   Oil Supply

The world’s top oil exporters are undoubtedly some of the world’s most influential countries. As such, it behooves analysts to always stay abreast of the internal dynamics of these economic power houses. Here’s what’s going on in the countries that have the power to make or break the oil market. 1. Saudi Arabia As the world’s leading oil exporter, Saudi Arabia shipped 7.5 million barrels per day in 2016, according to data published by the Organization of Petroleum Exporting Countries (OPEC). As far as oil exports go, the Kingdom is top of the pile, despite the OPEC agreement that cut 486,000 barrels per day off its production level of 10.5 million bpd. The Kingdom holds a lot of clout in the oil market, and as such, plays a leading role in the industry cartel, which is currently implementing a 1.2 million-barrel per day production cut to rebalance a three-year […]

OPEC Will Extend The Cut

24 Nov 2017   OPEC

There will be an OPEC deal extension—no matter the public tussling between opposing forces in the industry cartel—if the world’s largest oil producers are really determined to end the supply glut. A failure to agree on the market remediation would cause oil prices to plummet immediately, forfeiting any gains that have been made in the last year. Saudi Arabia needs $60 per barrel for its Aramco initial public offering to be a success in the second half of next year. It plans to sell just five percent of its prized company in the largest IPO in financial history, but a low price could force the country to sell a larger share, siphoning off government revenues at a time of strained budgets. Aramco’s IPO is important not just for Saudi Arabia’s non-oil future. As one of the world’s most efficient and low-cost oil producers, its longevity can be seen as […]

OPEC agenda points to short meeting to set oil policy

24 Nov 2017   OPEC

A draft agenda for OPEC’s meeting on Nov. 30 in Vienna pencils in three hours for the group’s oil ministers to decide whether to extend their oil supply curbs, indicating that decision-making is expected to run smoothly.  The members of Organization of the Petroleum Exporting Countries, Russia and nine other producers are curbing oil output by about 1.8 million barrels per day until March 2018. They are expected to extend the deal at the Vienna meeting. Sponsored Three hours would be a short meeting by the standards of OPEC, whose gatherings have in the past sometimes stretched into the early hours of the morning as ministers argued about policy. OPEC Secretary General Mohammad Barkindo said on Nov. 7 the group was seeking […]

Russia is ready to discuss extension of OPEC deal in Vienna: TASS cites Novak

24 Nov 2017   OPEC, Russia

Russia is ready to discuss an extension of a global deal between OPEC and other countries to cut oil output in Vienna on November 30, TASS news agency quoted the Energy Minister Alexander Novak as saying on Friday. “We are ready to discuss this issue, and I think we will be able to discuss it at the meeting in Vienna by the 30th (of November),” Novak said.

OPEC Is in the Dark About Shale

24 Nov 2017   OPEC

Andy Hall is said among analysts who briefed OPEC officials Annual shale growth forecasts from 300,000 b/d to 1.7 million OPEC will have to decide whether to extend global oil cuts without knowing whether they’re triggering a new flood of rival supply from U.S. shale producers. Analysts gave differing outlooks for U.S. shale output in a briefing to officials from the Organization of Petroleum Exporting Countries, stoking concern ahead of OPEC’s planned meeting on Nov. 30, according to people with knowledge of the discussions. The analysts included Andy Hall, the veteran crude trader who closed his hedge fund this year, said the people, who asked not to be identified because the briefing was private. The duration of any extension in output limits will depend partly on estimates of future supplies of U.S. shale and other competing crudes. OPEC and allied producers including Russia are to gather next week in […]

Fuel crisis grips Uzbekistan

24 Nov 2017   Uzbekistan

Uzbekistan is in the grip of another fuel crisis, with some parts of country reportedly left without any supplies of gasoline. While the Central Asian republic has regularly experienced fuel shortages since its independence, the latest crisis appears more acute than in previous years. Authorities are taking measures to alleviate the situation, which comes as Uzbek leader Shavkat Mirziyoyev nears his one-year anniversary of being elected. State information website reported on November 14 that only filling stations in Tashkent and in the immediate area around the Uzbek capital were still receiving stable deliveries of gasoline. Government-run television channel Uzbekistan 24 reported that there were severe shortages of the fuel just 50 km from the city, while in some provinces there was no gasoline at all. Podrobno blamed a rise in the number of “speculators” selling gasoline illegally for exacerbating the crisis. The website noted that the fuel was […]

Saudi Trade-Off: More Social Freedom, No Political Dissent

24 Nov 2017   Saudi Arabia

In asserting himself over Saudi Arabia, 32-year-old Crown Prince Mohammed bin Salman is imposing a trade-off that appeals to many fellow young Saudis. The prince, in essence, is broadening social liberties in exchange for closing off the limited political freedoms that existed in the Saudi kingdom. That is an approach that has worked for other Gulf monarchies, most notably the United Arab Emirates. There, no hint of political dissent is tolerated but social and religious rules are relatively relaxed. Women enjoy many rights denied to them in Saudi Arabia. An abundance of entertainment and shopping options keeps potential troublemakers busy. Saudi Arabia, one of the world’s most conservative societies, strictly enforces a stringent interpretation of Islamic religious rules. But the kingdom had allowed a […]

Kurdistan’s Oil Exports Still Below Pre-Conflict Levels

24 Nov 2017   Iraq

Kurdistan’s crude oil exports increased in the past couple of days, but oil flows are still well below the levels seen before the independence referendum in the semi-autonomous region that raised the tensions between the Kurds and the federal government in Baghdad. Kurdistan’s oil flows rose to 270,000 bpd on Wednesday and Thursday, compared to flows of between 200,000 bpd and 230,000 bpd in October, Kurdistan 24 news outlet reported on Thursday, quoting oil sources. Although crude oil flows from Kurdistan are on the rise, they are still nearly half the volumes compared to the levels before the Kurds voted on September 25 to break away from Iraq. Baghdad—which never recognized the legitimacy of the referendum—moved on in October to take control over the oil-rich area around Kirkuk. In the middle of last month, Iraqi government forces seized the oil fields around Kirkuk, which had been under Kurdish control […]

How Greed, Fear, And Our Own Biases Blind Us To The Reality Of Climate Change

24 Nov 2017   Climate

The Climate Science Special Report that the Trump administration released last Friday is straightforward and relentlessly sobering. Scientists from 13 government agencies agree that the long-term global warming trend is “unambiguous” and that human activity is responsible. There is, they tell us, “no convincing alternative explanation.” Meanwhile, the president whose administration released the report maintains that climate change is a hoax and he and his EPA administrator, Scott Pruitt, resist efforts to address it. What’s going on? How is this possible? Short-term economic self-interest (i.e., greed) is the driver for the energy industry, its supporters and their propaganda. But it’s the psychological factors, and the biology in which they’re grounded, that sustain denial. If we’re going to mobilize Americans to address climate change, we first have to understand what they’re thinking and why, and then help them change their minds. The belief that human activity is not causing global […]

Is Trouble Brewing In The Permian?

24 Nov 2017   Shale Oil

The Permian shale play has been attracting so much attention lately it’s started to get a little bit boring. But not for oil investors. The rush to the Permian has continued as everyone forecasts growing production there. The projections suggest strong growth—doubling production over the next three years according to some Permian producers. But one analyst thinks that this explosive growth is a rather unlikely event. At a recent event, Michael Hanson from merchant bank Parkman Whaling said that there is a set of conditions that producers in the Permian will need to meet if their vision of doubling production by 2020 is to become a reality. These are all conditions that do not depend on the producers themselves, but on a lot of factors they have no control over, which makes the challenge all the greater. For starters, despite the Permian’s reputation for being a low-cost play, costs […]

Is Texas Poised For A Sharp Rise In Output?

24 Nov 2017   Shale Oil

His analysis is based on RRC data only. Each RRC data set from Jan 2014 to Sept 2017 for crude and from April 2014 to Sept 2017 for condensate and natural gas are used in the “all data” estimate, the most recent 49 months of data are collected for each individual data set. After March 2016 there was a shift in the data for crude and condensate so for the C+C estimate, I include an estimate which uses all data from April 2016 to the most recent data point (“Corrected 18 month vintage”). Dean prefers to present an “all vintage data” estimate and an estimate using only the most recent 3 months “correction factors”. For Sept 2017 the all vintage data estimate is 3174 kb/d, the last 3 month vintage estimate is 2957 kb/d, and the last 18 month vintage estimate is 3039 kb/d with falls of 68, 96, […]

Nigeria: Reps Kick Against Nigerian Govt’s Plan to Spend $1.8 Billion On Refineries

24 Nov 2017   Nigeria

The House of Representatives has criticised a bid by the Nigerian National Petroleum Corporation, NNPC to spend $1.8 billion on the maintenance of the refineries across the country. In a motion by Ibrahim Isiaka (Ogun – APC) at the plenary on Tuesday, he queried the viability of further expenditure on the country’s four refineries and the daily allocation of 445,000 barrels of crude to the facilities as they perform poorly. “The House is cognisant that sums of $308 million, $57 million, $200 million, and lately, more than N264 billon were spent on refineries, yet it was reported that the NNPC is seeking $1.8 billion to carry out another TAM (Turn Around Maintenance) to make the refineries attractive to investors.” He added that the federal government’s efforts to bring in private investors to build refineries had not yielded the desired result. “Despite major paradigm shift and consideration of different reliefs, […]

Oil Production Cuts Taking A Toll On Russia’s Economy

24 Nov 2017   Russia

The OPEC/non-OPEC production cuts hurt Russia’s economic growth in October, Economy Minister Maxim Oreshkin said on Thursday in the first negative comment about the pact from a high-ranking Russian official. “Because of the OPEC deal we have a negative direct impact from oil production, as well as indirect effects related to low investment activity due to production limits,” Oreshkin said, just a week before OPEC and its non-OPEC allies led by Russia meet to decide on the extension of the deal. Just after the pact was extended for the first time in May, it was Oreshkin who said that the deal was working and that Russia was “ready to live forever at oil prices $40 or below.” Back then the market was not convinced that the cuts were working, but now that Brent oil prices are above $60, Russia looks hesitant to lend its support to a nine-month extension […]

U.S. oil prices ease from two-year highs on oversupply worries

23 Nov 2017   Prices

U.S. oil prices eased back from a two-year high on Thursday, as concerns about oversupply outweighed the impact of a pipeline shutdown in the United States. U.S. light crude CLc1 was trading down 17 cents at $57.85 a barrel at 1015 GMT, slipping from its highest level since mid-2015 reached on Wednesday of $58.15. Sponsored Brent crude LCOc1 was at $62.98 per barrel, or 34 cents below its last close. U.S. crude had been boosted by the shutdown of the 590,000 barrel-per-day (bpd) Keystone pipeline, which runs from Canada to the United States. Last week’s closure due to an oil spill sent crude prices to their highest since June 2015. But rising production in the United States has renewed concerns about global oversupply. U.S. output C-OUT-T-EIA has risen by 15 […]

Shale Hedges Threaten The Oil Rally

23 Nov 2017   Prices

The 20 percent increase in oil prices since September led to a wave of hedging by U.S. shale drillers eager to lock in future production at prices not seen in years. The flip side of that hedging wave is that locking in prices could cut the price rally off at the knees, ensuring that more supply will be forthcoming in the next few quarters. Shale drillers were hesitant for much of the year, but kicked their hedging programs into high gear after oil prices posted strong gains beginning in September. “The past three months have seen a significant increase in oil hedging, with the volume of new positions more than twice the volume of Q3 hedges that rolled off the books,” Standard Chartered wrote in a recent research note. The volume of oil hedged for 2018 increased by 29 percent over the past three months. Meanwhile, natural gas prices […]

U.S. crude settles at two-year high after pipeline disruption

23 Nov 2017   Prices

Oil settled at a two-year high Wednesday after the shutdown of one of the largest crude pipelines from Canada cut supply to the United States. o The restart of the 590,000 barrel-per-day (bpd) Keystone pipeline, shut last week due to a spill, could take several weeks. Operator TransCanada Corp has told clients it will cut deliveries on the pipeline linking Alberta’s oil sands with U.S. refineries by 85 percent through the end of November. U.S. West Texas Intermediate crude (WTI) futures settled up $1.19, or 2 percent, at $58.02 per barrel, the highest since July 2015, on concerns over reduced supplies on the Keystone pipeline and after the American Petroleum Institute (API) late Tuesday reported a […]

OPEC anticipation gives oil bulls a chance to run

23 Nov 2017   OPEC, Prices

Weak British economic growth wasn’t enough to offset short-term pipeline issues in North America or OPEC rumors that lifted oil prices higher on Wednesday. The British Office for Budget Responsibility said the economy slowed this year as higher inflation put a lid on personal incomes and spending. As a result, and in combination with headwinds from the British exit from the European Union, the budget office said it lowered its forecast for gross domestic product for the foreseeable future. “We now expect growth to average 1.4 per cent a year over the next five years, slowing a little over the next two [years],” its report read. The low growth forecast coincided with U.S. reports of slow momentum in hiring. The U.S. Labor […]

The Energy Goliaths Driving Global Demand

23 Nov 2017   China, India

The two countries, world leaders in population size, will be crucial drivers in world economic growth and the consumption of energy. But measuring future trends with any accuracy has been a difficult prospect for organizations like the U.S. Energy Information Agency (EIA), which released a report on China and India on November 21. China’s economic growth has been continually revised by the EIA over the years. In 1990, it was estimated that China’s economy would grow by 4.5 percent between 1990 and 2000. In fact, China achieved an average of 10.4 percent per year during that time, and maintained that rate between 2000 and 2010. A peak rate was reached in 2007 when the Chinese economy grew by 14.2 percent. Its growth rate has subsequently slowed, with 2016 seeing the slowest rate (6.7 percent) in twenty-five years. The EIA’s total energy consumption projection for China was consequently way off […]

U.S. Oil Rig Count Rises Amid Record Breaking Production

23 Nov 2017   Oil Supply, USA

The number of oil and gas rigs in the United States rose again this week. The boost in the number of active oil rigs this week brings the total gained in November to 10—the first monthly gain since July. Oil and gas rigs combined were up by 14 in November—also the biggest increase seen since July, in a sign that drillers are once again eager to add rigs after scaling back in August. This week, the number of active oil rigs increased by 9, with gas rigs falling by 1. The Permian basin, after gaining two rigs this week, now boasts 165 more rigs than this time last year, a staggering 72-percent increase. The WTI and Brent benchmarks rose earlier today on a small crude oil inventory decline as reported by the EIA, further supported by the Keystone pipeline shutdown that took 600,000 bpd offline. WTI and Brent are […]

Ice Apocalypse

23 Nov 2017   Climate

Eric Holthaus at Grist has a look at Antarctica’s melting glaciers – Ice Apocalypse. In a remote region of Antarctica known as Pine Island Bay, 2,500 miles from the tip of South America, two glaciers hold human civilization hostage.Stretching across a frozen plain more than 150 miles long, these glaciers, named Pine Island and Thwaites, have marched steadily for millennia toward the Amundsen Sea, part of the vast Southern Ocean. Further inland, the glaciers widen into a two-mile-thick reserve of ice covering an area the size of Texas. There’s no doubt this ice will melt as the world warms. The vital question is when. The glaciers of Pine Island Bay are two of the largest and fastest-melting in Antarctica. (A Rolling Stone feature earlier this year dubbed Thwaites “The Doomsday Glacier.”) Together, they act as a plug holding back enough ice to pour 11 feet of sea-level rise […]

OPEC chatroom dead as Qatar crisis hurts Gulf oil cooperation

23 Nov 2017   OPEC

OPEC’s most powerful internal alliance, bringing together the oil producer group’s Gulf members, is disintegrating fast.  As a six-month-old spat between Saudi Arabia and Qatar deepens, the organization’s Gulf ministers will have to scrap their tradition of meeting behind closed doors to agree policy before OPEC holds its twice-yearly talks, OPEC sources said. Sponsored “We used to have a WhatsApp group for all ministers and delegates from the Gulf. It used to be a very busy chat room. Now it’s dead,” said a senior source in the Organization of the Petroleum Exporting Countries. Four other sources said there had been no official contact on oil policy between the Gulf Arab nations, in a grouping known as the Gulf Cooperation Council (GCC). […]

OPEC ministers say oil market is finding balance

23 Nov 2017   OPEC

OPEC will need to extend supply cuts when it meets next week to end years of global oil oversupply, oil ministers from two OPEC members said on Wednesday, just over a week before the group meets to discuss supply policy. The Organization of the Petroleum Exporting Countries, non-member Russia and nine other producers agreed to curb oil output by about 1.8 million barrels per day until March 2018. They are expected to extend the deal at a Nov. 30 meeting in Vienna. Sponsored Top crude exporter Saudi Arabia is lobbying oil ministers to extend output cuts by nine months, sources familiar with the matter said. “In my view, an extension of the agreement will help us in stabilizing the market,” Qatar Oil Minister Mohammed al-Sada said on the sidelines of a gas exporter meeting in Santa Cruz, Bolivia, on Wednesday. OPEC has been successful […]

Iraq Wants To Build Gas Pipeline To Kuwait In Blow To Shell

23 Nov 2017   Iraq, Kuwait

In a bid to reduce gas flaring and pay off outstanding reparations for the 1990 invasion of Kuwait, Iraq has hired Japanese firm Toyo Engineering to help it build a gas pipeline to Kuwait, in what could be a blow to Shell’s gas ambitions in Iraq, industry sources tell Reuters . Kuwait is looking to diversify its gas imports from Qatar after several Arab states led by Saudi Arabia severed ties with Qatar earlier this year accusing it of sponsoring terrorism. Iraq has gas reserves, and it extracts large volumes of gas together with the oil, but the gas is currently being flared. “The Kuwaiti gas project is a quick fix and an easy way to monetize gas resources,” a senior industry source told Reuters. Part of the supplies could be used to help pay the US$4.6 billion remaining reparations that Iraq has to pay to Kuwait for the […]

IS insurgency exploits Baghdad-KRG conflict

23 Nov 2017   Iraq

Thousands of federal and Kurdish soldiers are pointing their weapons at each other, leaving volatile territory inadequately guarded and vulnerable to an emboldened IS insurgency. Iraqi forces drive past an oil production plant as they head towards the city of Kirkuk on October 16, 2017. ( The self-proclaimed Islamic State (IS) militant group is taking advantage of new security gaps in northern Iraq, capitalizing on a deteriorating rivalry between Baghdad and the Kurdistan Regional Government (KRG). Insurgents have launched an escalating campaign of guerrilla-style attacks since Oct. 16, when federal security forces began to shift their focus away from IS and launched an operation to reclaim Kirkuk and other disputed territories from the KRG. “Attention is being taken away from the ISIS threat and [focused] more on posturing and positioning between the Iraqi and Kurdish forces,” said Col. Ryan Dillon, a spokesperson for the U.S. […]

Venezuela’s PDVSA in talks to supply gas to neighbors

23 Nov 2017   Venezuela

Venezuelan state-run oil company PDVSA  is in contract talks to export natural gas to neighbors Colombia, Trinidad and Tobago, and Aruba, a company official said on Wednesday. Gas sales could provide a welcome boost to energy revenues for a country suffering acute cash problems and in talks to restructure its debt. Venezuela, which is almost entirely dependent on crude exports, has seen income decline since oil prices crashed in 2014. Sponsored Colombia used to export gas to Venezuela through a pipeline. That flow would be reversed if an agreement with Colombia is reached on price, PDVSA’s vice president of gas, Cesar Triana, said during a gas conference in Santa Cruz, Bolivia. Price talks between PDVSA and Colombian state-run energy firm […]

Four U.S. Citizens Are Among Those Venezuela Detained for Alleged Graft at Citgo

23 Nov 2017   Venezuela

Venezuelan Attorney General Tarek Saab said Tuesday the acting president and five directors of Citgo Petroleum Corp. tried to defraud the nation. American citizens were among the executives at Citgo Petroleum Corp. that the Venezuelan intelligence agency arrested here on Tuesday, a development likely to exacerbate strains between Washington and Caracas. Venezuela arrested six top executives of the U.S. subsidiary of state-oil company Petróleos de Venezuela SA, including its acting president, as part of what officials called an anti-corruption purge. At least four of those arrested are naturalized U.S. citizens, a Citgo official said on Wednesday. A U.S. State Department spokesman declined to comment, citing privacy laws. Another U.S. official said the American government is monitoring the arrests, citing “significant congressional interest.” More In a statement, Houston-based Citgo said it was looking into the corruption allegations. A Citgo spokesman declined to comment further. Relations between Washington and Caracas […]

Colombia’s Ecopetrol To Invest Up To $4B In 2018

23 Nov 2017   Colombia

Ecopetrol will invest between $3.5 billion and $4 billion during 2018, the majority in production and exploration projects. BOGOTA, Nov 22 (Reuters) – Colombia’s state-run oil company Ecopetrol said on Wednesday it would invest between $3.5 billion and $4 billion during 2018, largely in production and exploration projects. The company, the Andean nation’s largest, said in a filing to the financial regulator that it expected to produce between 715,000 and 725,000 barrels per day (bpd) in 2018. This year Ecopetrol expects to produce around 715,000 bpd. The predicted investment of $3.5 billion to $4 billion would be 35 percent to 55 percent higher than this year’s amount. Only 4 percent of the investment will be spent abroad in Mexico, the United States, Brazil and Peru, the statement said, with the rest destined for Colombian projects. The company is not taking out external financing for the 2018 plan. Ecopetrol expects […]

Exclusive: PDVSA in credit talks with Rosneft, Eni, Repsol, Statoil – exec

23 Nov 2017   Venezuela

Venezuela’s PDVSA is in talks with Russia’s Rosneft, Italy’s Eni, Spain’s Repsol, and Norway’s Statoil to get credit for oil and gas projects, a company executive said on Wednesday, in a bid to reverse a slump in output to an almost 30-year low.  Venezuela and state-run oil company Petróleos de Venezuela, S.A., or PDVSA  are seeking fresh funding as the country works to refinance $60 billion of debt in the face of U.S. sanctions against what the White House calls President Nicolas Maduro’s “dictatorship.” “We are speaking to our allies, with our strategic partners, which are Rosneft, Eni, Repsol, Statoil, and they are willing to continue working with us, to continue financing our projects to boost crude and gas […]

No joke: China government warns northern cities to get serious in war on smog

23 Nov 2017   China, Climate

 Some northern Chinese cities failed to improve air quality by much last month, hitting the smog-prone region’s overall results in a drive against pollution, the government said as it warned provincial officials to comply with stringent steps to clear the skies.  “Some cities did not improve air quality by much or even experienced some volatility, and in a way, they have dragged down the regional air quality level,” Ministry of Environmental Protection (MEP) spokesperson, Liu Youbin, said at a regular briefing on Thursday. Sponsored He did not identify the underperforming cities, but the comment comes amid concerns about the country’s ability to reduce pollution in winter as it battles […]

China diesel in rare rally as smog war, tax fears stir supply worries

23 Nov 2017   China

A rally in China’s diesel prices has pushed the fuel to a rare premium over gasoline as dealers scramble to scoop up supplies amid fears of shortages due to Beijing’s war on smog and possible tax changes.  Led by a spike in benchmark crude prices, wholesale diesel prices have jumped 11 percent since October to 6,700 yuan ($1,011) per tonne on Tuesday in eastern Shandong province, a 320 yuan premium to gasoline, according to consultancy Longzhong Information Group. Diesel, which normally trades at a discount to gasoline, touched a 500 yuan premium earlier this month, the widest premium in at least two years, even though the market remains well supplied. Sponsored “Diesel prices have been rising madly … almost every day […]

U.S. crude inventories fall; big draw at Cushing hub

23 Nov 2017   Oil Supply, USA

U.S. crude oil stockpiles fell last week, with most of the decline coming out of the Cushing, Oklahoma storage hub, while gasoline and distillate inventories rose slightly, the Energy Information Administration said on Wednesday.  Crude inventories fell 1.9 million barrels in the week to Nov. 17, slightly more than analysts’ forecasts in a Reuters poll for a decrease of 1.5 million barrels, but much less than 6.4 million-barrel draw reported by industry group the American Petroleum Institute late Tuesday. Sponsored Crude stocks in Cushing fell by 1.8 million barrels, EIA said. The key U.S. storage hub and delivery point for U.S. crude futures could see additional draws in coming weeks, depending on how long the U.S.-Canada Keystone pipeline, which delivers to Cushing, is shut. That […]

U.S. Oil-Rig Count Rises in Latest Week

23 Nov 2017   USA

The number of rigs drilling for oil in the U.S. rose by nine to 747 this week. The number of rigs drilling for oil in the U.S. rose by nine to 747 this week, Baker Hughes, a GE company, reported. The U.S. oil-rig count is typically viewed as a proxy for activity in the sector. After peaking at 1,609 in October 2014, low oil prices put downward pressure on production and the rig count fell sharply. The oil-rig count has generally been rising over the past year. The nation’s gas-rig count fell by one to 176 in the past week, according to Baker Hughes. The U.S. offshore-rig count is up by one from last week to 22, which is one fewer than a year ago. Oil prices were up 1.7% at $57.78 a barrel in afternoon trading Friday. Write to Austen Hufford at

Keystone pipeline spill sends oil prices higher

23 Nov 2017   Pipelines, Prices

The prospect of a prolonged clean-up from a leak along a large oil pipeline sent US crude prices higher on Wednesday, as traders braced for lower supplies from Canada. The Keystone pipeline, which runs south from the Alberta oil sands to American refineries, spilled about 5,000 barrels in South Dakota last week, owner TransCanada said. The incident took place four days before TransCanada won a critical permit to build another pipeline south from the oil sands called Keystone XL. The line remained closed on Wednesday as company staff and federal pipeline safety officials worked at the spill site. A manager with the South Dakota Department of Environment and Natural Resources told Reuters that the clean-up will take several weeks, suggesting that flows on the 590,000 barrels-per-day artery will continue to be curtailed. “With no timeline for restart, expect roughly 4m barrels per week of Canadian imports to be backed out,” TAC Energy, a fuel wholesaler, said in a note to customers. The news pushed the price of West Texas Intermediate, the US oil benchmark, to a 28-month high of $58.09 a barrel, up 2.2 per cent on the day. The price of WTI for prompt delivery also rose in comparison to contracts for future delivery, suggesting traders were scrambling to obtain immediate supplies.

Summary of Weekly Petroleum Data for the Week Ending November 17, 2017

23 Nov 2017   Oil Supply, USA

U.S. crude oil refinery inputs averaged over 16.8 million barrels per day during the week ending November 17, 2017, 199,000 barrels per day more than the previous week’s average. Refineries operated at 91.3% of their operable capacity last week. Gasoline production increased last week, averaging over 10.4 million barrels per day. Distillate fuel production increased last week, averaging over 5.3 million barrels per day. U.S. crude oil imports averaged about 7.9 million barrels per day last week, down by 25,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged 7.7 million barrels per day, 5.3% less than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 514,000 barrels per day. Distillate fuel imports averaged 190,000 barrels per day last week. U.S. commercial crude oil inventories (excluding those in the Strategic […]

Weekly US coal production again dips as demand remains light

23 Nov 2017   Coal, USA

Weekly US coal production totaled an estimated 14.9 million st in the week that ended November 18, up 0.9% from the prior week, but down 6.2% compared with the year-ago week, US Energy Information Administration data showed Wednesday. Production has now lagged behind 2016 for eight of the last nine weeks, as weak demand, coupled with uncertainty regarding weather and natural gas prices, are encouraging utility buyers to limit deliveries. Platts Analytics estimates utility coal stockpiles stood at 136.5 million st in the week that ended November 16, roughly 20% below year-ago levels. For the most recently concluded week, coal production in Wyoming and Montana, which primarily consists of coal from the Powder River Basin, totaled an estimated 7 million st, up 0.4% compared with last week but down 7% from the year-ago week. On an annualized basis, 2017’s coal production in Wyoming and Montana would total 356 million […]

Texas Update- November 2017

23 Nov 2017   Oil Supply, USA

Dean Fantazzini has provided his latest estimates of Texas oil and natural gas output. His analysis is based on RRC data only. Each RRC data set from Jan 2014 to Sept 2017 for crude and from April 2014 to Sept 2017 for condensate and natural gas are used in the “all data” estimate, the most recent 49 months of data are collected for each individual data set. After March 2016 there was a shift in the data for crude and condensate so for the C+C estimate, I include an estimate which uses all data from April 2016 to the most recent data point (“Corrected 18 month vintage”). Dean prefers to present an “all vintage data” estimate and an estimate using only the most recent 3 months “correction factors”. For Sept 2017 the all vintage data estimate is 3174 kb/d, the last 3 month vintage estimate is 2957 kb/d, and […]

Thanksgiving Travelers Smash Records

23 Nov 2017   Transportation

As we all know from the personal experience of enduring long lines at the airport and inching along frosty highways in bumper-to-bumper holiday traffic, Thanksgiving week is unquestionably one of the busiest long-distance travel periods of the year. Long-distance trips increase by 54 percent around Thanksgiving, a huge number, especially when considering that the increase for Christmas is just 23 percent compared to the average for the rest of the year. The average mileage for these long-distance Turkey Day trips (classified by the U.S. Department of Transportation’s Bureau of Transportation Statistics as to and from a destination 50 miles or more away) is a whopping 214 miles. Unfortunately, it’s looking like all of those miles are going to add up to hefty tabs at the pumps this year. Thanksgiving travelers can expect to spend more on gas this year than on other holiday road trips in the last few […]

Eight energy majors commit to reduce methane emissions within natural gas industry

BP, Eni, ExxonMobil, Repsol, Shell, Statoil, Total and Wintershall committed to reduce further methane emissions from the natural gas assets they operate around the world. The energy companies also agreed to encourage others across the natural gas value chain—from production to the final consumer—to do the same. The commitment was made as part of wider efforts by the global energy industry to ensure that natural gas continues to play a critical role in helping meet future energy demand while addressing climate change. Since natural gas consists mainly of methane, a potent greenhouse gas, its role in the transition to a low-carbon future will be influenced by the extent to which methane emissions are reduced, the partners said. The eight energy companies […]

TransCanada’s Safety Record Played No Role in Nebraska’s Keystone XL Approval

23 Nov 2017   Pipelines

Today a Nebraska commission handed TransCanada the final permit it needed to build its long-contested Keystone XL pipeline, a decision which did not consider the company’s previous safety violations. The decision to approve the international pipeline comes despite a major oil spill just a few days earlier from the company’s Keystone l line in South Dakota. Pipeline opponents vowed to appeal the approval, which was for a different, slightly longer and more expensive route through Nebraska than the one TransCanada preferred. While not a complete victory for the company, Ken Winston , a lawyer representing environmental groups against the pipeline, explained that the alternative route presents the same kind of environmental problems as the preferred one. He pointed out that TransCanada brought up many problems with the alternative route, which he plans to mention in his appeal. A few days into the presidency, Trump reversed President Obama’s Keystone XL […]

Keystone clean-up to last several weeks, line restart unclear

23 Nov 2017   Pipelines

The clean-up of an oil spill from TransCanada Corp’s Keystone pipeline may last several weeks, South Dakota’s environmental regulator said on Wednesday, but it is still unclear when the key artery will restart. An aerial view shows the darkened ground of an oil spill which shut down the Keystone pipeline between Canada and the United States, located in an agricultural area near Amherst, South Dakota, U.S., in this photo provided November 18, 2017. Last week, the Keystone system linking Alberta’s oil sands with U.S. refineries spilled 5,000 barrels in rural northeastern South Dakota, four days before neighboring Nebraska voted to remove a big regulatory obstacle for the company’s Keystone XL project. “We expect it to take several weeks. Our focus is making sure they do that clean-up in accordance with our regulations,” said Brian Walsh, environmental scientist manager for the South Dakota Department of […]

Exxon joins European oil firms in initiative to limit emissions

Exxon Mobil joined European peers including Royal Dutch Shell and Total in a new initiative to find ways to reduce potent emissions in their rapidly growing natural gas operations. BP, Italy’s Eni, Exxon, Spain’s Repsol, Shell, Norway’s Statoil, Total and Wintershall “committed to further reduce methane emissions from the natural gas assets,” they said in a joint statement. Methane, one of the most potent greenhouse gases emitted into the atmosphere, is released during the extraction, processing and transporting of natural gas. For example, around 10 percent of gas transformed into liquefied natural gas (LNG) is released into the atmosphere between production and consumption, according to Shell. The new initiative is the latest step by the world’s leading oil and gas companies to reduce carbon emissions from their operations to help meet […]

British energy lauded for momentum as economy falters

23 Nov 2017   United Kingdom

The number of new bidders trying to wade into the British offshore energy sector is a vote for as much as 6 billion barrels of new oil, a trade group said. The British government said it received 96 applications from 68 different companies, some of which were bidding for the first time ever, for rights to tap into the potential in a license round covering 44,100 square miles in the British North Sea and surrounding waters. Mike Tholen, the director of exploration and production for trade group Oil & Gas U.K., said the new entrants represented a vote of confidence for offshore as early signs point to the potential for as much as 6 billion barrels of new oil. “While […]

Russia’s budget deficit indicative of growth

23 Nov 2017   Russia

Russia’s budget deficit is moving in a direction indicative of economic recovery even as oil prices remain low by historic standards, a minister said. The budget deficit will be around 2 percent of the national gross domestic product, or possibly even less, by the end of the year. Russian Economic Development Minister Maksim Oreshkin said that, despite oil prices falling below $40 per barrel in recent quarters, the economy was on the road to recovery. “What is being discussed now is the issue of economic growth,” he was quoted by Russian news agency Tass as saying. The Russian Central Bank said inflation is holding steady at it’s target rate of around 4 percent, but moved in a range […]

New wind farm in service off the British coast

23 Nov 2017   United Kingdom, Wind

Norwegian energy company Statoil said Wednesday its Dudgeon wind farm off the British coast is now feeding the grid from its 67 wind turbines. The Dudgeon wind farm is about 25 miles off the coast of Norfolk. Its turbines, with a combined capacity of 402 megawatts, can meet the energy demands of around 410,000 average households at its peak. The Norwegian company, one of the main energy suppliers to the European market, said Dudgeon is part of its efforts to add more green components to its portfolio. “As part of our strategy to develop from an oil and gas company to a broad energy major, Statoil will grow significantly in profitable renewable energy, with an ambition to invest around $12 billion […]

Exxon, Shell, BP Join Forces to Cut Emissions From Natural Gas

Exxon Mobil Corp. has joined with seven other big energy companies to reduce pollution from natural gas production, an effort by the industry to present itself as part of the solution as governments and consumers demand more environmentally friendly energy. Big oil companies like Exxon and Royal Dutch Shell RDS.B 1.21% PLC have increasingly touted natural gas as a core tool to combat climate change, since it is produces fewer greenhouse gas emissions than the fuel it often replaces in electricity production, coal. The rare trans-Atlantic alignment was first reported by The Wall Street Journal, ahead of the companies’ announcement Wednesday. The collaboration by companies including Exxon, Shell, BP PLC and Total SA, shows the oil and gas sector is proactively trying to address burgeoning concerns about natural […]