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Oil edges up, but U.S. drilling drags on prices

20 Feb 2017   Prices

Oil prices rose on Monday, but gains were minimal as investors gauged whether an increase in U.S. drilling and record stockpiles would undermine efforts by producers to cut output and bring the market into balance. Brent futures LCOc1 were up 1 cent at $55.82 a barrel at 0050 GMT, while U.S. West Texas Intermediate crude CLc1 rose 3 cents to $53.43 a barrel. U.S. energy companies added oil rigs for a fifth consecutive week, Baker Hughes said on Friday, extending a nine-month recovery with producers encouraged by higher crude prices, which have traded mostly over $50 a barrel since late November. [RIG/U] The Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, agreed last year to cut output almost 1.8 million barrels per day […]

Oil Hovers in Tight Trading Range Amid Global Supply Tug-of-War

20 Feb 2017   Prices

Oil held above $53 a barrel, after spending last week in the smallest trading range in 13 years, as investors weighed rising U.S. drilling activity against OPEC production cuts. Futures rose 0.3 percent in New York after fluctuating in the narrowest range since January 2004. U.S. drillers boosted the rig count to the highest since October 2015, Baker Hughes Inc. said on Friday. Meanwhile, hedge funds raised net-long positions on West Texas Intermediate to a record, according to Commodity Futures Trading Commission data. Oil has held above $50 a barrel since the Organization of Petroleum Exporting Countries and 11 other nations started trimming supply on Jan. 1 to ease a global glut. While Goldman Sachs Group Inc. predicts the market will shift into deficit during the first half of this year, U.S. crude stockpiles have increased the past six weeks to the highest level in more than three decades. […]

Iraqi forces battle their way toward Mosul airport

20 Feb 2017   Iraq

U.S.-backed Iraqi forces fought Islamic State fighters on Monday to clear the way to Mosul’s airport, on the second day of a ground offensive on the jihadists’ remaining stronghold in the western side of the city. Federal police and elite interior ministry units known as Rapid Response are leading the charge toward the airport, located on the southern limit of the Mosul, trying to dislodge the militants from a nearby hill known as Albu Saif. The Iraqi forces plan is to turn the airport into a close support base for the onslaught into western Mosul itself. Islamic State militants are essentially under siege in western Mosul, along with an estimated 650,000 civilians, after they were forced out of the eastern part […]

US Defense Secretary Mattis: No plan to seize Iraqi oil

20 Feb 2017   Iraq

U.S. Defense Secretary Jim Mattis said Monday the United States does not intend to seize Iraqi oil, shifting away from an idea proposed by President Donald Trump that has rattled Iraq’s leaders. Mattis’ arrived on an unannounced visit in Iraq as the battle to oust Islamic State militants from western Mosul moved into its second day, and as the Pentagon considers ways to accelerate the campaign against IS in Iraq and Syria. Those efforts could be complicated by Trump’s oil threat and his inclusion of Iraq in the administration’s travel ban – twin blows that have roiled the nation and spurred local lawmakers to pressure Prime Minister Haider al-Abadi to reduce cooperation with Washington. “I think all of us here in this room, all of us in America have generally paid for our gas and oil all along, and I’m sure that we will continue to […]

China’s North Korea import ban the latest gyrating coal policy: Russell

20 Feb 2017   China, Coal, North Korea

Coal markets could be forgiven for feeling slightly confused about the recent signals coming out of top importer China, with both bullish and bearish developments in evidence. The most obvious bullish news relates mainly to coking coal used in steel-making, and like many announcements in China it’s political in nature. China said on Feb. 18 that it will suspend all imports of coal from its nuclear-armed neighbor North Korea until Dec. 31, a move that, if implemented, would bring a dramatic halt to cargoes from China’s fourth-biggest supplier of imported coal. The statement from the Ministry of Commerce was brief and didn’t go into reasons for the ban, although it came shortly after Pyongyang tested an intermediate-range ballistic […]

Texas Oil Fields Rebound From Price Lull, but Jobs Are Left Behind

20 Feb 2017   Shale Oil, USA

In the land where oil jobs were once a guaranteed road to security for blue-collar workers, Eustasio Velazquez’s career has been upended by technology. For 10 years, he laid cables for service companies doing seismic testing in the search for the next big gusher. Then, powerful computer hardware and software replaced cables with wireless data collection, and he lost his job. He found new work connecting pipes on rigs, but lost that job, too, when plunging oil prices in 2015 forced the driller he worked for to replace rig hands with cheaper, more reliable automated tools. “I don’t see a future,” Mr. Velazquez, 44, said on a recent afternoon as he stooped over his shopping cart at a local grocery store. “Pretty soon every rig will have one worker and a robot.” Oil and gas workers have traditionally had some of the highest-paying blue-collar jobs — […]

Is Big Oil Underestimating Autonomous Vehicles?

20 Feb 2017   Electric Cars

Companies like Tesla, Uber and Google have sparked a lot of interest in the roll out of autonomous vehicles (AVs), or driverless cars, and while it is still early days, the transition to AVs could have enormous implications for the oil industry. There is a great deal of logic in AVs. For instance, an estimated 4 percent of total household vehicles are in use at any one time. AVs promise to make the transportation system much more efficient by allowing for the shared use of vehicles. Instead of every single person needing their own car, which they use only a fraction of their day, a single AV could service multiple households. Or, more specifically, a pool of AVs could provide enough transit service for a much larger number of people. This will cut down on fuel consumption, traffic, air pollution, and potentially provide an economic jolt from the savings. […]

Study links PM2.5 pollution with millions of preterm births globally

20 Feb 2017   Air Quality

A new study, led by a team from The Stockholm Environment Institute (SEI) at the University of York, has found that in 2010, about 2.7 million preterm births globally—or 18% of all pre-term births—were associated with outdoor exposure to fine particulate matter (PM 2.5 ).The open-access study is published in the journal Environment International. There are many known risk factors for preterm birth—from the mother’s age, to illness, to poverty and other social factors. Recent research has suggested that exposure to air pollution could also be a risk factor. The researchers combined national, population-weighted, annual average ambient PM 2.5 concentration, preterm birth rate and number of livebirths to calculate the number of PM 2.5 -associated preterm births in 2010 for 183 countries. Uncertainty was quantified using Monte-Carlo simulations, and analyses were undertaken […]

Oil Slips as U.S. Crude Stocks Rise

18 Feb 2017   Prices

Crude futures eased on Friday, caught between larger-than-expected growth in U.S. crude stocks and reports that the Organization of the Petroleum Exporting Countries could consider extending its production cuts beyond the six-month deal. Brent crude, the global oil benchmark, fell 0.4% to $55.40 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.3% at…

Oil firms as OPEC floats extended output cut; markets still bloated

18 Feb 2017   Prices

Oil prices edged up on Friday, lifted by a report that producer club OPEC could extend an output cut aimed at reining in a global fuel supply overhang. Brent crude futures were trading at $55.76 per barrel at 0311 GMT (10:21 p.m. ET on Thursday), up 11 cents from their last close. U.S. West Texas Intermediate (WTI) crude futures, were up 10 cents at $53.46 per barrel. The Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia plan to cut output by almost 1.8 million barrels per day (bpd) during the first half of 2017, and estimates suggest compliance by OPEC is around 90 percent. The cuts are aimed at curbing oversupply that has dogged markets since 2014. To help rebalance the market, OPEC sources told […]

Something Has Got To Give In Oil Markets

18 Feb 2017   Prices

Oil wrestled with positive fundamental expectations and bearish present circumstances this week to remain glued to the $53 mark. In the present, stress of record high crude oil and gasoline inventories in the US resulted in a 2 cpg drop in the prompt 1-month gasoline spread. Meanwhile positive fundamental expectations were revealed in the steady climb of the Brent June/July spread which yielded just 14 cents contango suggesting that physical traders see massive inventory draws in the middle of 2017. In flat price the result of the tug of war between present bearish circumstances and positive expectations has been an extraordinarily sideways market near the $53 mark. Year to date WTI has managed a range of just $4.53. Over the last twenty trading days WTI has managed a range of just $3.12- the last time WTI had a 20-day range of $3.12 or less was in July of […]

Only Crisis Or Cuts Will Move Oil Markets

18 Feb 2017   Prices

Despite hints from OPEC that the cartel would be extending its production cut deal, oil prices fell slightly this week. Oil continues to trade within a range with volatility falling to almost a three year low. (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) Friday, February 17, 2017 Oil prices fell slightly this week as more signs emerged that the market is still oversupplied. OPEC officials said that they were considering extending the production cut deal for another six months, a move that could be interpreted as bullish in the sense that they will keep oil off of the market for longer. However, it failed to inspire confidence – an extension would come because the market is still woefully oversupplied. Oil prices reacted in a way that has become a familiar pattern in recent weeks – moving only slightly […]

More Than 440,000 Global Oil, Gas Jobs Lost During Downturn

18 Feb 2017   Oil Supply

A report from Houston-based consulting firm Graves & Co. shows that the industry has suffered more than 440,000 jobs lost since the beginning of the most recent downturn. The recent years of depressed oil prices and industry uncertainty have been the source of strict CAPEX (capital expenditures) cuts for oil and gas companies worldwide. Layoffs came in droves, much to the detriment of the industry’s workforce. As of Feb. 10, 2017, the total number of oil and gas layoffs around the globe is 441,371, according to data compiled by Houston-based consulting firm Graves & Co. In a Feb. 15 report, John Graves, president of Graves & Co., noted the reduced pace of industry job cuts over the past few months … still, additional cuts may be announced. “There has been no recovery in offshore and international oil and gas activity with the price of crude in the $50 range […]

Saudi Arabia debating shape of Aramco ahead of IPO: sources

18 Feb 2017   Saudi Arabia

An oil tank is seen at the Saudi Aramco headquarters during a media tour at Damam city November 11, 2007. Saudi Arabia is considering two options for the shape of Saudi Aramco when it sells shares in the national oil giant next year: a global industrial conglomerate, and a specialized international oil company, industry and banking sources said. The listing of Aramco, expected to be the world’s biggest initial public offer and raise tens of billions of dollars, is a centerpiece of the government’s ambitious plan – known as Vision 2030 – to diversify the economy beyond oil. When the plan was publicly released in June last year, it pledged to “transform Aramco from an oil-producing company into a global industrial conglomerate”. But now Saudi officials and their advisers are debating whether to make Aramco “a Korean chaebol”, as one source said, referring to sprawling South Korean conglomerates, or […]

Gulf States to maintain defense spending despite oil price slump

Gulf Arab states are poised to continue to spend billions of dollars on defense despite low oil prices causing severe budget deficits forcing Gulf States to introduce austerity measures and cut spending. Saudi Arabia’s total defense budget is forecast at $82 billion in 2016, steadily rising to $87 billion in 2020 while that of UAE is put at $15.1 billion in 2016 reaching $17.0 billion in 2020, according to Teal Group, a U.S-based defense analysis firm which has also forecast increased spending by Kuwait, Qatar, Oman and Bahrain. “Defense spending is linked to national security and threat perception, not resource prices,” said Richard Aboulafia, vice president of Teal Group. Oil prices more than halved in 2016 from their peaks in 2014. “Even if low oil prices might complicate the timing of defense deals, it really has little to do with the total medium- and long-term volume of sales,” he […]

Mexico says gasoline costs to fall slightly, prices set daily next week

18 Feb 2017   Mexico

A man points a nozzle at the camera at a Pemex petrol station in Mexico City, Mexico February 3, 2017. Mexico’s Finance Ministry said on Friday that national gasoline prices would fall 2 Mexican cents per liter on Saturday, but prices would be set daily beginning next week as the country moves toward a free market in gasoline. The ministry said in a statement that maximum prices would be published daily, with Saturday’s price holding until the next update on Tuesday. Prices will be set going forward on the web page of the Energy Regulator Commision (www.gob.mx/cre). Mexico raised gasoline prices at the start of the year, and the 14 percent hike in regular gas prices sparked protests and looting around the country. The hike helped drive the annual inflation rate in January to its highest level in more than four years. The government is expected to adjust the […]

Energy Companies Face Crude Reality: Better to Leave It in the Ground

A new era of low crude prices and stricter regulations on climate change is pushing energy companies and resource-rich governments to confront the possibility that some fossil-fuel resources are likely to be left in the ground. In a signal that the threat is growing more serious, Exxon Mobil Corp. is expected in the coming week to disclose that as much as 3.6 billion barrels of oil that it planned to produce in Canada in the next few…

Natural Gas Prices Fall To 3 Month Lows On Disappointing Inventory Draw

Natural gas has fallen to a new three-month low thanks to lower-than-expected draws on storage, prompting the Wall Street Journal to report that the coming months may see bearish oversupply. The Energy Information Administration (EIA) reported yesterday that natural gas in storage in the country fell by 2.445 trillion cu ft in the week to February 10, down by 114 billion cu ft from the previous week and at the lowest for the last three months. Analysts polled by S&P Platts had a consensus forecast for a draw of 126 billion cu ft , citing the unusually warm weather across most of the country. A Reuters survey expected storage to be down by 104-137 Bcf. The draw was smaller than in the preceding week, when it stood at 152 billion cu ft, Investor.com recalls, and also smaller than the decline a year earlier, when it was 163 billion cu […]

Gasoline Glut in New York Has Traders Sending Cargoes Abroad

18 Feb 2017   Oil Supply

The biggest gasoline market in the U.S. is bursting at the seams. Traders are lining up to export gasoline and diesel from New York Harbor, an area that normally relies on fuel imports from Europe and eastern Canada, shipping data compiled by Bloomberg show. While at least 6 cargoes that were headed to New York from Europe in January and early February were diverted to the Caribbean or the U.S. Gulf Coast, that wasn’t enough to stem the oversupply building up in terminals along the Eastern Seaboard. Record-high inventories in the region are now pushing prices low enough to turn the typical trade flow on its head. “We have been exporting out of the New York Harbor, but clearly not enough, so that’s putting pressure on the products,” said Robert Campbell, head of oil products research for Energy Aspects, by phone from New York Thursday. At least two million […]

Worst Gasoline Glut in 27 Years Could Be Oil Rally’s Nemesis

18 Feb 2017   Oil Supply, USA

A gasoline glut brought on by drivers buying less at filling stations is emerging as one of the biggest threats to the yearlong oil-price rally. U.S. gasoline consumption plummeted last month, nearly matching a 15-year low, government estimates show. It fell to as low as 8.2 million barrels a day, averaged over the four-week period ended Jan. 27. January sales at the pump fell 4.4% from a year ago, according to data from the…

Exclusive: GM plans to build, test thousands of self-driving Bolts in 2018

18 Feb 2017   Electric Cars

General Motors Co plans to deploy thousands of self-driving electric cars in test fleets in partnership with ride-sharing affiliate Lyft Inc, beginning in 2018, two sources familiar with the automaker’s plans said this week. It is expected to be the largest such test of fully autonomous vehicles by any major automaker before 2020, when several companies have said they plan to begin building and deploying such vehicles in higher volumes. Alphabet Inc’s Waymo subsidiary, in comparison, is currently testing about 60 self-driving prototypes in four states. Most of the specially equipped versions of the Chevrolet Bolt electric vehicle will be used by San Francisco-based Lyft, which will test them in its […]

Senate Confirms Scott Pruitt as E.P.A. Head

18 Feb 2017   USA

The Senate confirmed Scott Pruitt on Friday to run the Environmental Protection Agency , putting a seasoned legal opponent of the agency at the helm of President Trump’s efforts to dismantle major regulations on climate change and clean water — and to cut the size and authority of the government’s environmental enforcer. Senators voted 52 to 46 to confirm Mr. Pruitt, the Oklahoma attorney general who has built a career out of suing to block the E.P.A.’s major environmental rules and has called for the dissolution of much of the agency’s authority. One Republican, Susan Collins of Maine, crossed party lines to vote against Mr. Pruitt, while two Democrats, Joe Manchin III of West Virginia and Heidi Heitkamp of North Dakota, both from coal-rich states where voters generally oppose environmental rules, voted for him.

U.S. Rig Count Rises As Crude Inventory Levels Hit Record High

18 Feb 2017   USA

The number of active oil and gas rigs in the United States increased again on Friday by 10. Both benchmarks were trading down earlier on Friday under heavy pressure from record-high crude oil inventories ( 518.1 million barrels ), and record-high gasoline inventories ( 259 million barrels ). The total number of active oil and gas rigs in the United States is now 751, according to oilfield services provider Baker Hughes , which is 237 rigs above the rig count a year ago. The number of oil rigs increased by 6, up from 591 last week to 597 this week. The number of active oil rigs in the United States is now the highest since October 09, 2015. Oil rigs have increased by 120 since the OPEC agreement was announced on November 30, and are following a steep trajectory upwards as OPEC continues to hold its members to specified […]

U.S. shale oil braces for the unfamiliar in 2017: inflation

18 Feb 2017   Shale Oil

U.S. shale producers are facing their first production cost increase in five years in 2017 as industry activity picks up and energy service providers hike fees to take a bigger share of the profits generated by higher oil prices. Drilling innovations over the past decade have generated a dizzying reduction in the cost of pumping oil from shale formations across the United States – the world’s largest energy consumer – triggering an energy revolution and a production boom. When that boom ended with the onset of a two-year global price war in 2014, shale producers responded with even deeper cost cuts. Technological breakthroughs allowed producers to wring more oil from the rock and halved the per-barrel price needed to turn a profit. But […]

A Push for Diesel Leaves London Gasping Amid Record Pollution

Every winter, as if on cue, the coughing begins. As soon as the weather turns cold, Tara Carey, an international aid worker living in London, ritually places cough syrup on her bedside table because she knows her sleep will be punctuated by hacking coughs. She also coughs at work. And she coughs while cycling to her office, on a road so toxic that for a brief period last month the air pollution there was greater than in infamously smoggy Beijing.

Vladimir Putin: Clear signs of Russian economic growth

18 Feb 2017   Russia

As oil prices stabilize in the wake of an OPEC-led production deal, Russian President Vladimir Putin said signs of economic strength are becoming clear. The president sat with his top economic advisors for the second time this year, saying there are clear signs of positive momentum. By his read , the 0.2 percent decline in gross domestic product last year was better than expected. “The trends are becoming more or less clear, and we have an overall understanding of the ongoing developments,” he said. “Overall, we are seeing positive economic momentum.” The International Monetary Fund said it expected a 0.6 percent contraction for Russia last year, but growth would return at 1.1 percent in 2017. After keeping its key lending rates unchanged […]

Peak Supermajors

18 Feb 2017   -, Peak Oil

Hey everybody, Last Sunday I put together a quick presentation on the most recent oil & gas production data for the “supermajors” (Shell, Total, BP, Chevron, ExxonMobil): Introduction Today I would like to introduce my “Peak Supermajors” project. The goal of this project is to answer the question “when will we reach peak oil” by studying the production and financial health of the world’s largest oil companies. Because oil is a finite resource, its daily global production will eventually reach a peak. By measuring when individual oil companies reach peak oil, I hope to bring us closer to answering the question “when will we reach peak oil?” I am beginning my project by analyzing the largest publicly-traded companies: the “ supermajors “. These 5 companies – BP, Chevron, ExxonMobil, Royal Dutch Shell and Total – produce nearly 20% of the world’s oil and gas. They are mostly descendants from […]

Oil Slips as U.S. Crude Stocks Rise

17 Feb 2017   Prices

Crude futures eased on Friday, caught between larger-than-expected growth in U.S. crude stocks and reports that the Organization of the Petroleum Exporting Countries could consider extending its production cuts beyond the six-month deal. Brent crude, the global oil benchmark, fell 0.4% to $55.40 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.3% at…

Record High Oil Inventories Crush Hopes For $70 Oil

17 Feb 2017   Prices

Another week brings yet more signs that the highly-anticipated oil market “balance” will not occur in the immediate future. Heading into 2017, there was a broad consensus that global oil production would fall below demand in the first half of the year, a deficit that would help bring down inventories and lead to relative balance between supply and demand. Mid-2017 seemed to be the timeframe that everyone was looking at for this development to occur. But there are growing signs that the oil market won’t reach balance by then, and perhaps not this year at all. “We don’t really see a real balancing of the market coming until much much later,” Richard Gorry of JBC Energy Asia told CNBC in an interview. “Right now the oil market is oversupplied by about 500,000 barrels per day in the first quarter. So to see inventories continue to go up is absolutely […]

Oil Gains on Possible Extension to Production Cuts

17 Feb 2017   Prices

U.S. oil prices edged higher Thursday as growing U.S. inventories were offset by reports that the Organization of the Petroleum Exporting Countries was prepared to consider extending supply cuts. Light, sweet crude for March delivery settled up 25 cents, or 0.5%, at $53.36 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, lost 10 cents, or 0.2%, to $55.65 a barrel on ICE Futures Europe. On Thursday,…

Oil prices steady on OPEC cuts, but record U.S. fuel stocks weigh

17 Feb 2017   Prices

Oil prices held steady on Thursday, supported by ongoing supply cuts led by producer group OPEC, although rising fuel inventories and crude production in the United States weighed on sentiment. Brent crude futures were trading at $55.73 per barrel at 0209 GMT (9:09 p.m. ET on Wednesday), down just 2 cents from their last close. U.S. West Texas Intermediate (WTI) crude futures, were down 4 cents at $53.07 per barrel. The Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia have agreed to cut output by almost 1.8 million barrels per day (bpd) during the first half of 2017, and estimates suggest compliance by OPEC is around 90 percent. The production cuts are aimed at reining in a global fuel supply overhang that has dogged markets for over two […]

Natural Gas Falls to Nearly-Three-Month Low

17 Feb 2017   Prices

Natural gas fell to new lows after storage levels failed to shrink as quickly as analysts expected, a bearish signal that the market may be oversupplied in the months to come. The U.S. Energy Information Administration said natural-gas stockpiles shrank by 114 billion cubic feet last week, compared with the 127 bcf expected by forecasters surveyed by The Wall Street Journal. Total storage fell to 2.4 trillion cubic feet, or 3.7%…

Exploring Hydrocarbon Depletion

17 Feb 2017   Peak Oil

Technological advances and learning-by-doing have made U.S. shale oil profitable even at $55/barrel. Just ten years ago shale oil was expensive. Global oil prices spiked to $135/barrel in 2008 but shale oil didn’t and couldn’t respond. Now, at only $55/barrel, U.S. oil producers are going all in, announcing billions of dollars of increased investment, particularly in Texas and North Dakota, and energy experts like Daniel Yergin are expecting U.S. production to increase this year by more than 500,000 barrels per day or about 6%. This remarkable transformation is a perfect example of learning-by-doing. Cost reductions in solar, wind, and batteries get a lot of attention. But fossil fuel producers also learn from experience, and the pace of learning in U.S. shale oil over the last couple of years has been impressive. Recent research by Thom Covert and others help us […]

Energy Companies Face Crude Reality: Better to Leave It in the Ground

17 Feb 2017   Peak Oil

A new era of low crude prices and stricter regulations on climate change is pushing energy companies and resource-rich governments to confront the possibility that some fossil-fuel resources are likely to be left in the ground. In a signal that the threat is growing more serious, Exxon Mobil Corp. is expected in the coming week to disclose that as much as 3.6 billion barrels of oil that it planned to produce in Canada in the next few…

Oil firms as OPEC floats extended output cut; markets still bloated

17 Feb 2017   Prices

Oil prices edged up on Friday, lifted by a report that producer club OPEC could extend an output cut aimed at reining in a global fuel supply overhang. Brent crude futures were trading at $55.76 per barrel at 0311 GMT (10:21 p.m. ET on Thursday), up 11 cents from their last close. U.S. West Texas Intermediate (WTI) crude futures, were up 10 cents at $53.46 per barrel. The Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia plan to cut output by almost 1.8 million barrels per day (bpd) during the first half of 2017, and estimates suggest compliance by OPEC is around 90 percent. The cuts are aimed at curbing oversupply that has dogged markets since 2014. To help rebalance the market, OPEC sources told […]

Exclusive: OPEC could extend or deepen supply cut if oil glut persists – sources

17 Feb 2017   OPEC

OPEC could extend its oil supply-reduction pact with non-members or even apply deeper cuts from July if global crude inventories fail to drop to a targeted level, OPEC sources said. The group, together with Russia and other non-OPEC oil producers, agreed late last year to cut output by 1.8 million barrels per day (bpd) to reduce a price-sapping glut. The deal took effect on Jan. 1 and lasts six months. For global petroleum inventories to fall by some 300 million barrels to the five-year average, producing countries must comply 100 percent with the supply accord and growth in demand for crude will have to stay healthy, the sources said. “If we have full commitment by everybody, inventories will go down. By sometime in the middle of this year, […]

OPEC cuts not doing the job, analyst says

17 Feb 2017   OPEC

Production cuts from the Organization of Petroleum Exporting Countries aren’t enough to cut global crude oil supplies, a market analyst said Thursday. OPEC members, and coordinating non-member states, last year agreed to hold production levels steady in an effort to erase a glut of oil on the market. An oversupplied market last year pushed oil to historic lows and OPEC’s agreement is aimed at restoring balance. Market watchers estimate a compliance rate of about 90 percent so far. Saudi Arabia is the largest contributor to overall cuts and secondary sources reported total OPEC production at 32.1 million barrels per day at the end of January, a decline of 2.7 percent from December and below the target range. Libya and Nigeria are exempt from […]

Iraq’s February Oil Sales Accelerate Despite OPEC Effort to Cut

17 Feb 2017   Iraq

Daniel Yergin Expects Big U.S. Oil Producer OPEC Response Iraqi crude shipments rose 3 percent in the first half of February even after OPEC’s second-biggest producer agreed to participate in global output cuts to mop up a glut that has put pressure on oil prices. Exports increased to 3.93 million barrels a day in the first 15 days of the month, 122,000 barrels a day more than the average for all of January, according to port-agent reports and ship-tracking data compiled by Bloomberg. Shipments from the southern Iraqi port of Basra grew by 10 percent, while sales by the Kurdish Regional Government in the north of the country were up 13 percent, the data show. The Organization of Petroleum Exporting Countries is limiting output in the first half of this year to cut global crude stockpiles that are weighing on prices. The group agreed on Nov. 30 to reduce […]

These Oil Majors Just Made Egypt Their Highest Priority

17 Feb 2017   Egypt

Since 2011, political instability and regional insecurity have plagued Egypt’s economy, and the energy sector has not been spared. Until recently a net gas exporter, Egypt turned into a net importer in 2014 after political turmoil plunged the country into continued energy shortages, with domestic demand outstripping supply. In addition, shattered investor confidence and several devaluations of the local currency deterred foreign companies from investing in Egypt. But Cairo’s fortunes may have turned in August 2015, when Italy’s oil and gas major Eni SpA discovered Zohr, the largest gas field in the Mediterranean ever to be discovered. Now Eni, as well as UK’s supermajor BP, are betting big on the Egyptian gas exploration and production, and will be making Egypt their top investment destination in the coming years, pouring billions of dollars in their projects there. Eni plans to invest US$10 billion in Egypt over the next five years, […]

Iraq plans to acquire ‘large fleet’ of oil tankers

17 Feb 2017   Iraq

Iraq plans to acquire a “large fleet” of oil tankers to transport the OPEC nation’s crude to global markets, Oil Minister Jabar al-Luaibi said in a statement on Friday. The nation’s tanker fleet was largely destroyed during the U.S.-led offensive to dislodge Iraq from Kuwait in 1991, according to the state-run Iraqi Oil Tankers Company’s website. The company owned as many as 24 tankers in the 1980s. “The ministry is keen to restructure the company and develop its operations by building and buying a large fleet of tankers,” Luaibi told the company’s management, according to the statement. Iraq is OPEC’s second-largest producer, after Saudi Arabia. (Reporting by Maher Chmaytelli; Editing by Adrian Croft)

Hurdles Mount for Saudi Aramco’s IPO

17 Feb 2017   Saudi Arabia

Complications restructuring Saudi Arabia’s state-owned oil company and disentangling its finances from those of the government are slowing the march toward what is expected to be the biggest initial public offering in history. The hotly anticipated listing of a minority stake in Saudi Arabian Oil Co., the kingdom’s corporate crown jewel, is now unlikely to happen until late 2018 at the earliest, and if foreign advisers have their way, won’t happen until 2019, according to more than a half-dozen people involved in the process. The country’s deputy crown prince first said early last year that the initial public offering would happen in 2017 or 2018. More recently, Saudi officials have said 2018 will be the year.

View full article at www.wsj.com

Trump Burning Bridges In Iraq Over “Take the Oil” Comments

17 Feb 2017   Iraq

“The old expression, ‘to the victor belong the spoils’—you remember. I always used to say, keep the oil. I wasn’t a fan of Iraq. I didn’t want to go into Iraq. But I will tell you, when we were in, we got out wrong…we should have kept the oil.” Those were President Trump’s comments at the CIA the day after his inauguration in January. President Donald Trump has repeatedly said that the U.S. should have “taken Iraq’s oil,” an argument that he revisited as recently as last week. “We’ve spent $6 trillion…in the Middle East,” President Trump said during a meeting with airline executives at the White House on February 9. “ We’ve got nothing. We’ve got nothing. We never even kept a small, even a tiny oil well. Not one little oil well. I said, ‘Keep the oil.’” The notion that the U.S. military should have taken Iraq’s […]

How Saudis Cut Oil Output Without Really Cutting

17 Feb 2017   Saudi Arabia

Saudi Arabia has led the way among major energy exporters in cutting oil production. At the same time, the kingdom is adding to global supply in a surprising way.  The deal to cut oil output has been a success, at least for its first month, largely because there was little cheating and because Saudi Arabia cut production by 500,000 barrels a day.  Don’t ignore the other side of the ledger, though: the Saudis, huge consumers of energy themselves, are economizing. That could allow them to export more.

As Consultations Continue, Nigeria Records 58 Per Cent Decrease in Pipeline Vandalism in Niger Delta

17 Feb 2017   Nigeria

The Nigerian National Petroleum Corporation, NNPC, said on Thursday that it has recorded about 58 per cent reduction in cases of pipeline sabotage. This was disclosed in the Corporation’s monthly Financial and Operations Report for December 2016. According to the report, only 18 cases of vandalized points on downstream pipelines were recorded in November 2016 as against 43 in the previous month. The downward trend in the cases of pipeline sabotage, according to the report, was due to sustained engagement with stakeholders by the Federal Government and the NNPC. The federal government has been engaging leaders and stakeholders in the Niger Delta to ensure security of oil and gas facilities as well as development of the region. Last year, President Muhammadu Buhari met with a delegation of leaders and public officials in the Niger Delta. The presidency, led by Vice President Yemi Osinbajo, has since followed that up with […]

Mexico City, Parched and Sinking, Faces a Water Crisis

17 Feb 2017   Climate, Mexico

On bad days, you can smell the stench from a mile away, drifting over a nowhere sprawl of highways and office parks. When the Grand Canal was completed, at the end of the 1800s, it was Mexico City’s Brooklyn Bridge, a major feat of engineering and a symbol of civic pride: 29 miles long, with the ability to move tens of thousands of gallons of wastewater per second. It promised to solve the flooding and sewage problems that had plagued the city for centuries. Only it didn’t, pretty much from the start. The canal was based on gravity. And Mexico City, a mile and a half above sea level, was sinking, collapsing in on itself. It still is, faster and faster, and the canal is just one victim of what has become a vicious cycle. Always short of water, Mexico City keeps drilling deeper for more, […]

Asian refiners receive full Saudi crude allocations for March

17 Feb 2017   Saudi Arabia

Saudi Aramco’s major crude oil buyers in Northeast Asia and Southeast Asia are receiving full term allocations for Saudi crude oil loading in March, according to traders contacted by S&P Global Platts this week. March allocations for Chinese buyers were met and traders at China’s top trading companies said they were not aware of any requirements that were not met. Traders at several Japanese end-users also said their March requirements were met and were not aware of cuts to any company in the country. The same was said by the biggest crude oil importers in South Korea and Taiwan. Article continues below… Oilgram News brings you fast-breaking global petroleum and gas news on and including: Industry players, upstream and downstream markets, refineries, midstream transportation and financial reports Supply and demand trends, government actions, exploration and technology Daily futures summary Weekly API statistics, and much more Traders at oil companies […]

Is The Bakken A Bust?

17 Feb 2017   Shale Oil

North Dakota has released December production data for the Bakken and for all North Dakota . They were a little shocking. (Click to enlarge) Bakken production down 86,150 barrels per day 895,330 bpd. North Dakota production down 92,029 bpd to 942,455 bpd. It was noted that this the largest decline ever in North Dakota production. But it should not be overlooked that the October increase in production was also the largest ever increase in North Dakota production. From the Director’s Cut Oil Production November 31,034,520 barrels = 1,034,484 barrels/day December 29,216,093 barrels = 942,455 barrels/day (preliminary) (all-time high was Dec 2014 at 1,227,483 barrels/day Gas Production November 52,785,707 MCF = 1,759,524 MCF/day December 47,679,872 MCF = 1,538,060 MCF/day (preliminary) (all-time high was Nov 2016 at 1,759,524 MCF/day) Producing Wells November 13,520 December 13,337 (preliminary) (all-time high was Nov 2016 at 13,520) 11,449 wells or 86% are now unconventional Bakken […]

OPEC’s Oil Curbs Grant Russia’s Urals a Rare Ticket for S. Korea

17 Feb 2017   South Korea

The biggest oil producers in the Middle East are helping crude from Western Siberia boldly go where it’s rarely gone before. Top South Korean refiner SK Innovation Co. is set to receive about 1 million barrels of Urals crude in its first purchase of the Russian blend oil in a decade. The shipment was made viable because of rising costs for rival supply from the Middle East, as nations such as Saudi Arabia curb output to comply with a deal between global producers. The cargo is also another example that helps illustrate how the reductions by top OPEC members are rerouting the flow of oil across the globe. In recent weeks, Asia has become a destination for grades that typically don’t show up in the region — from U.S. Mars Blend and Southern Green Canyon to West Canadian Select, Hibernia and White Rose. The premium of Oman crude, often […]

Worst Gasoline Glut in 27 Years Could Be Oil Rally’s Nemesis

17 Feb 2017   USA

A gasoline glut brought on by drivers buying less at filling stations is emerging as one of the biggest threats to the yearlong oil-price rally. U.S. gasoline consumption plummeted last month, nearly matching a 15-year low, government estimates show. It fell to as low as 8.2 million barrels a day, averaged over the four-week period ended Jan. 27. January sales at the pump fell 4.4% from a year ago, according to data from the…

How Long Can The Permian Craze Continue?

17 Feb 2017   Shale Oil

The two great dueling forces in the world oil market, OPEC and American production, have created an atmosphere of uncertainty, as prices hover above $50. Last week the EIA reported another record inventory and an increasing rig count , while analysts point to a possible crisis as a market held aloft by buoyant predictions of OPEC cuts slowly faces up to insufficient demand. Crucial to this situation is the state of the U.S. patch, particularly the Permian Basin, which since late last year has been the focus of recovering production. The EIA data for the field is good, with new well production rising sharply and overall production of oil and gas rising sharply in 2017. While some speculate the bubble may burst , prospects for companies already invested in the Permian look positive, even if production costs are rising. The Permian has seen the highest increase in rig count […]