North America

Governor opposition complicates Trump administration’s Atlantic drilling plans

19 Aug 2017   Offshore, USA

The Trump administration is facing increasing pressure from governors of East Coast states to keep federal Atlantic waters out of the five-year oil and natural gas leasing plan it hopes to finalize late next year. Several East Coast governors, including Republicans and supporters of President Donald Trump, have ramped up pressure on the administration to keep the Atlantic out of the 2019-2024 federal offshore lease plan. This is significant since the administration is required by federal law to consider local and state opposition to offshore drilling before it approves a lease sale. “The coast has spoken,” said Sierra Weaver, a senior attorney with the Southern Environmental Law Center. “It’s time for Washington to listen.” Interior Secretary Ryan Zinke “has been clear that the administration will listen to local and state interests,” said Dustin Cranor, a spokesman for Oceana, an environmental group. “If that’s the case, the Atlantic Ocean should […]

U.S. gasoline production is running near record levels

18 Aug 2017   Oil Supply, USA

Gasoline production by U.S. refiners and blenders has run near record levels over the first seven months of 2017, with four-week rolling average production well above its five-year average and close to the top of its five-year range. U.S. gasoline inventories also remain relatively high despite growing domestic and foreign demand. Growth in U.S. gasoline production since March is the result of record-high refinery runs. For the week ending April 21, 2017, U.S. refinery runs exceeded 17.5 million barrels per day (b/d) for the first time since EIA began publishing the weekly data series in 1990. Refinery runs have since exceeded this threshold eight additional times, reaching an all-time high of 17.9 million b/d the week ending on August 4, 2017. About 44% of the input to […]

US To Sell 14 Million Barrels Of Crude Oil From Emergency Reserve

16 Aug 2017   USA

The U.S. Department of Energy said on Tuesday it will sell 14 million barrels of crude oil from the nation’s emergency reserve in late August. The sale from the Strategic Petroleum Reserve was expected as it was required under laws signed by former President Barack Obama in 2015 and 2016 to help fund medical research and the overall federal government. The reserve, a series of caverns on the Louisiana and Texas coasts, currently holds nearly 680 million barrels of oil, far more than required by international supply agreements. (Reporting by Timothy Gardner; Editing by Dan Grebler)

America’s Shale Natural Gas Production Is Taking Off – Sort Of

16 Aug 2017   Shale Gas, USA

America’s shale gas production is about to surge 12 percent. Sort of. The Energy Department issued a report Monday estimating that the nation’s prolific shale formations will yield 59.4 billion cubic feet a day in September, a massive jump from the roughly 53 billion projected for August. The difference: The agency began including the more than 6 billion cubic feet a day of gas flowing out of the Anadarko basin of Oklahoma and Texas. The addition of the Anadarko is testament to the flood of gas flowing out of shale formations known better for their oil riches. Almost half of the country’s shale gas is now being produced in crude plays, pulled out of oil wells as a byproduct. These supplies, known as associated gas, threaten to quash any meaningful recovery in an already-glutted market. “This is again telling us why we are in a perpetual bear […]

Energy Department Faces Pressure Over Power Study

16 Aug 2017   Coal, Nuclear, USA

U.S. Energy Secretary Rick Perry at a clean energy conference in Beijing in June. Energy Secretary Rick Perry faces stepped-up pressure from environmental groups over a power grid study that he has signaled could help bolster coal and nuclear power. On Monday, the Sierra Club announced it filed suit in U.S. District Court for the Northern District of California, alleging that the Energy Department violated laws on public access to information by not responding to its Freedom of Information Act requests for communications between the agency and outside groups, such as fossil-fuel interests. The suit asks the court to force the department to turn over those records. “We’ve repeatedly asked DOE for information to ensure reality and science are coming before polluter politics, but we have only been met with delays and secrecy,” said Mary Anne Hitt, a Sierra Club director. The Energy Department didn’t immediately respond to a […]

Is Trump Gearing Up To End The Iran Nuclear Deal?

15 Aug 2017   Iran, USA

Jack Thompson and Oliver Thränert argue that President Trump´s administration is laying the groundwork for the U.S. to withdraw from the Iran nuclear deal. However, they suggest that if the U.S. were to end its participation in the Joint Comprehensive Plan of Action (JCPOA) on Iran’s nuclear program, it would severely damage transatlantic relations and the nuclear non-proliferation regime. As a result, Thompson and Thränert urge European governments to talk with Trump’s most influential advisers and convince them that a unilateral withdrawal from the JCPOA will leave the U.S. isolated. U.S. President Trump seems determined to kill the nuclear deal with Iran. European leaders should strive to prevent this, as it would severely damage transatlantic relations and the nuclear non-proliferation regime. Key Points • The Joint Comprehensive Plan of Action (JCPOA) of 2015, which would have been impossible without close transatlantic cooperation, brought Iran back into compliance with the […]

Mexico Becomes Increasingly Important For U.S. Energy Exports

15 Aug 2017   Mexico

U.S. energy sales account for more than 50 percent of Mexico’s current energy imports as Mexican energy reforms open the market and as the country is switching to natural gas-fired electricity production, the Washington Examiner reported on Monday, citing an S&P Global Platts report due to be released this week. “Pipeline imports of U.S. natural gas make up nearly 60 percent of total Mexican natural gas supply, compared to just 22 percent in 2010,” the report, viewed by the Washington Examiner, said. “Platts Analytics expects that U.S. natural gas imports will rise to nearly 70 percent of total supply by 2022,” according to the report. According to the EIA , the U.S.-Mexico energy trade has significantly changed in recent years. Historically, the energy trade has been driven by Mexico’s sales of crude oil to the United States and by U.S. net exports of refined petroleum products to Mexico. The […]

U.S. Gasoline Demand At All-Time High

15 Aug 2017   USA

Given all the media hype about peak oil demand — which is supposed to come about largely as a result of the explosive growth of electric vehicles (EVs) — you might be forgiven for missing the news that U.S. gasoline demand just hit a new all-time high. This new demand record comes despite EV sales that tripled in the U.S. from 2012 to 2016. My news feed tends to be dominated by headlines like Goldman Sachs warns of peak oil demand by 2020 (even though that headline doesn’t accurately reflect what the article said). But do the facts contradict the narrative? Sensationalism dominates the news, and the idea that oil demand will begin to decline shortly is definitely sensationalistic. I believe that this is one reason oil prices remain depressed because it perpetuates expectations that oil’s days will soon be at an end. Every Wednesday the Energy Information Administration […]

Ahead of NAFTA talks, Canada looks to U.S. Midwest

12 Aug 2017   Canada

Alberta Premier Rachel Notley hails the start of construction of an Enbridge oil pipeline feeding U.S. states as representatives gear up for NAFTA negotiations. Photo courtesy provincial government of Alberta Aug. 11 (UPI) — Canadian leaders said they were keen to build trade ties in the U.S. Midwest in the days leading up to negotiations on the North American Free Trade Agreement. Chris Nielsen, a member of the legislative assembly from Edmonton, Alberta, leads a delegation on behalf of Trade Minister Deron Bilous to Minnesota to discuss the partnership with the 11 states that compromise the U.S. Midwest: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin. “This program is an important opportunity to learn more about how our largest trading partner is making decisions and developing policy — as we work together to continue growing our economies and creating jobs,” Nielsen said in […]

British Columbia Vows to Block Pipeline Expansion

11 Aug 2017   Canada, Pipelines

The government of British Columbia, Canada’s westernmost province, vowed Thursday to use every legal option to stop construction of Kinder Morgan Inc.’s planned expansion of a pipeline connecting the Alberta oil sands with the Pacific Coast. Under new, left-leaning leadership and citing risks to its environment and food supply, the province began to detail its plan to halt the energy project that Prime Minister Justin Trudeauapproved…

U.S. could be world’s No. 3 LNG exporter

10 Aug 2017   LNG, USA

The potential exists for the United States to become the third-largest exporter of liquefied natural gas in a few short years, a federal report finds. Photo courtesy of Cheniere Energy Aug. 9 (UPI) — The United States could be the third-largest exporter of liquefied natural gas in the world by the end of the decade, a short-term federal report found. Thanks in large part to shale operations, the United States in 2009 passed Russia to become the largest natural gas producer in the world. Most of the transport, however, is contained within North America. In 2016, the last full year for which the U.S. government reported data, natural gas made up about 34 percent of total domestic electricity generation, followed by coal with 30 percent. Renewable energy that year accounted for about 15 percent of the total mix, though renewable energy momentum has since accelerated. There’s only one facility […]

Coal production gains slowing, U.S. report finds

10 Aug 2017   Coal, USA

Coal is in the rise in the first months of the Trump presidency, but renewable energy showing momentum in its own right. File photo by Kevin Dietsch/UPI Aug. 9 (UPI) — Coal exports from the United States increased, but are slowing down, while renewable energy is on pace for short-term growth, the federal government reported. The U.S. Energy Information Administration reported coal exports were around 37 million tons total for the first five months of the year, a level that’s 60 percent higher than the same time last year. U.S. President Trump in his first weeks in office took aim at environmental rules he said threatened the coal industry. According to the White House, more than 600 coal mines closed in the six years ending in 2015, production declined by more than 177 million tons and more than 36,000 jobs were lost “without any sign of relief.” On the […]

It wasn’t even a hurricane, but heavy rains flooded New Orleans as pumps faltered

10 Aug 2017   Climate, USA

After Hurricane Katrina destroyed his house and forced him to flee to nearby Baton Rouge, Ronald Williams spent a dozen years waiting for the right time to go home. Seven months ago, after repeated government promises that New Orleans was once again about as flood-proof as the city can get, Williams finally got up the nerve to return. But on Saturday, from the steps of his new rental home, Williams watched water again pour through the city’s streets after a thunderstorm dropped as much as nine inches of rain in just four hours. The ensuing flood overwhelmed the city’s pump system and covered much of central New Orleans in several feet of water, taking 14 hours to drain […]

Summary of Weekly Petroleum Data for the Week Ending August 4, 2017

10 Aug 2017   Oil Supply, USA

U.S. crude oil refinery inputs averaged 17.6 million barrels per day during the week ending August 4, 2017, 166,000 barrels per day more than the previous week’s average. Refineries operated at 96.3% of their operable capacity last week. Gasoline production increased slightly last week, averaging 10.3 million barrels per day. Distillate fuel production increased last week, averaging 5.3 million barrels per day. U.S. crude oil imports averaged about 7.8 million barrels per day last week, down by 491,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged over 8.0 million barrels per day, 4.9% below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 1.1 million barrels per day. Distillate fuel imports averaged 41,000 barrels per day last week. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum […]

US Energy Agency to Take on $50 Billion Backlog as Senate Acts

9 Aug 2017   Pipelines, USA

The main U.S. energy regulator can get back to the business of approving multibillion-dollar natural gas pipelines after the Senate moved to fill two of four vacancies at the long-crippled agency. Senators on Thursday confirmed the nominations to the Federal Energy Regulatory Commission of Robert Powelson, former chairman of the Pennsylvania Public Utility Commission, and Neil Chatterjee, a senior aide to Senate Majority Leader Mitch McConnell. With their appointments, the five-seat panel regains the quorum it needs to approve liquefied natural gas export terminals, clear natural gas pipelines and issue rules governing wholesale power markets. FERC was without a quorum for six months, a stalemate that potentially slowed $50 billion of energy ventures under consideration by the agency. “We aren’t counting our chickens yet, but the approvals would certainly be a net positive for midstream industry growth, and, ultimately, for producers and consumers of natural gas,” said […]

Are Strong U.S. Crude Inventory Draws Sustainable?

9 Aug 2017   USA

The decline in U.S. comparative inventories since February is the most significant oil market development since prices collapsed three years ago. It means that U.S. demand has exceeded supply for most of the last 5 months. The main cause is lower net imports, not higher domestic consumption, and that is probably not sustainable. Comparative Inventories: The Key To Understanding Oil Prices Comparative inventory (C.I.) is the difference between current storage levels of crude oil plus a select group of refined products, and their 5-year average for the same weekly time period (Figure 1). It is an indicator that normalizes seasonal variations in production, consumption and refinery utilization. (Click to enlarge) Figure 1. Comparative Inventory Is The Difference Between Stock Levels & Their 5-Year Average. Source: EIA and Labyrinth Consulting Services, Inc. C.I. is the key to understanding oil prices yet few analysts use or even discuss it. Instead they […]

Keystone XL Pipeline Fate in Balance as Nebraska Opens Hearings

9 Aug 2017   Pipelines, USA

Nebraska regulators opened a final hearing on TransCanada Corp’s proposed Keystone XL pipeline on Monday, a week-long proceeding that marks the last big hurdle for the long-delayed project after President Donald Trump approved it in March. The proposed 1,179-mile (1,897-km) pipeline linking Canada’s Alberta oil sands to U.S. refineries has been a lightning rod of controversy for nearly a decade, pitting environmentalists worried about spills and global warming against business advocates who say the project will lower fuel prices, shore up national security and bring jobs. Trump’s administration handed TransCanada a federal permit for the pipeline in March, reversing a decision by former President Barack Obama to reject the project on environmental grounds. But the line still needs a nod from regulators in Nebraska – which would be the last of three states to approve its proposed path into the heartland. A lawyer […]

EIA cuts U.S. oil production growth forecast for 2018

9 Aug 2017   Oil Supply, USA

The U.S. Energy Information Administration said on Tuesday it expects U.S. crude oil production in 2018 to rise by less than previously expected. The agency forecast that 2018 crude oil output will rise by 560,000 barrels per day to 9.91 million bpd. Last month, it expected a 570,000 bpd year-over-year increase to 9.9 million bpd. For 2017, it forecast a rise of 500,000 bpd to 9.35 million bpd. Last month, it expected a 460,000 bpd increase to 9.33 million bpd, according to the EIA’s monthly short-term energy outlook. Meanwhile, the agency forecast that U.S. oil demand for 2017 is set to grow by 340,000 bpd compared with a 310,000 bpd previously. For 2018, oil demand is expected to rise by 330,000 bpd vs 360,000 bpd previously.

Dear Millennials, Big Oil Is Not Your Enemy

9 Aug 2017   USA

Oil and gas is, apparently, the latest industry that millennials have marked for death . They don’t want to work in the industry because it’s dirty, difficult, and dangerous . Accurate as this may be, that millennial perspective is far from the whole story of oil and gas. On the face of it, especially to millennials, the oil industry is only about making as much money as possible by pumping and selling as much oil as possible, harming the environment irreparably in the process. But that’s a rather narrow view. It seems all too easy set aside the fact that thousands of everyday products are either entirely or partially derived from petroleum and natural gas. Yes, that Super Bowl commercial had it right, whether we like it or not. To be fair, some of the products made from oil derivatives do have greener substitutes, but certainly not all—including some […]

Oil Prices Rise As The U.S. Rig Count Falls

7 Aug 2017   USA

The number of active oil rigs in the United States fell this week by 1 rig as drillers in the United States proceed more cautiously than earlier in the year. Combined, the total oil and gas rig count in the US now stands at 954 rigs, up 490 rigs from the year prior, with oil rigs in the United States decreasing by 1 and gas rigs decreasing by 3. Canada, which added 14 oil and gas rigs the week prior, lost 3 rigs this week, with the number of oil rigs falling by 5 and gas rigs increasing by 2. Prices lost a bit of ground on the week as signs point to the resilience of US oil producers who continue to take low oil prices on the chin. While down $0.13 week over week, WTI was trading up 0.84% on the day at $49.44 at 12:16pm. Brent crude […]

Among States, Texas Consumes the Most Energy, Vermont the Least

7 Aug 2017   USA

Source: U.S. Energy Information Administration, State Energy Data System. EIA’s State Energy Data System (SEDS) recently released 2015 data estimates for all 50 U.S. states and the District of Columbia. The estimates include data on both total energy consumption and energy consumption per capita, which is calculated by dividing total consumption by population. In 2015, Texas consumed a total of 13 quadrillion British thermal units (Btu), or about 13% of total U.S. energy consumption. Texas has consumed the most energy in every year since 1960, the earliest year for which EIA has data. California ranked second in energy use, with a total consumption of 8 quadrillion Btu, about 8% of U.S. total energy use. Louisiana , Florida , and Illinois round out the top five energy-consuming states, which together account for more than one-third of total U.S. total energy use. Total energy consumption by the top 10 states exceeded […]

Is The EIA Exaggerating U.S. Oil Production?

7 Aug 2017   Oil Supply, USA

Oil is back at $50 per barrel, restoring some semblance of confidence in the market. But that is just about as much as we can expect in terms of a rally, according to most analysts, with momentum likely to dissipate from here. But not everyone agrees. Many are worried that oil prices will crash again next year as OPEC scrambles for an exit strategy, but there is actually a bullish case for oil that is not outlandish. First, crude oil inventories continue to fall. The EIA just released another week’s worth of data, showing another drawdown in inventories. It was a bit more modest last week – 1.5 million barrels – compared to previous four weeks, but the drawdowns continue. U.S. crude oil inventories are now down more than 50 million barrels from the peak hit in March, with stocks back within the five-year range. But a larger reason […]

Weekly US coal production estimate highest since February: EIA

3 Aug 2017   Coal, USA

Weekly US coal production totaled an estimated 16.1 million st in the week ended July 29, up 4.4% from the prior week and up 13.1% from the year-ago week, US Energy Information Administration data showed Thursday. It was the fifth highest estimate so far this year, and first to top 16 million st since the week ended February 18. The production increase comes as stockpiles continue to decline and coal consumption is higher. Platts Analytics’ Bentek Energy estimates utility coal stockpiles as of last Thursday stood at 129.7 million st, which would be the lowest monthly total since September 2014. Platts Analytics also estimated US coal consumption is up 3.2% this year compared to last year, primarily due to higher natural gas prices. For the recently-concluded week, coal production in Wyoming and Montana, which primarily consists of coal from the Powder River Basin, totaled an estimated 7.62 million st, […]

OPEC Cuts: A Curse For U.S. Refiners, A Blessing For Canadian Oil Sands

3 Aug 2017   Canada, OPEC, USA

The lowered exports of OPEC heavy crude grades to North America are tightening the price spread between WTI and Western Canadian Select (WCS), cutting into the refining margins of U.S. refiners and at the same time helping Canadian oil sands producers sell their heavy oil at a higher price, Fitch Ratings said in a release this week. OPEC has been mostly cutting heavy grades since the start of the production curbs. After the cartel extended the cuts into March next year and after it saw that oil prices continue to be depressed due to the persisting glut, OPEC is now deliberately targeting lower supplies to the U.S. to draw down the stockpiles, which the industry and market monitor most closely for signs of where the global demand/supply is going. OPEC’s biggest exporter and de facto leader, Saudi Arabia, has pledged to cut its total August exports to 6.6 million […]

Wintershall warns U.S. against playing ‘geopolitical football’

3 Aug 2017   Germany, Russia, USA

German energy company Wintershall, a European partner with Russia’s Gazprom, said the European energy sector can’t be used for “geopolitical football .” President Donald Trump on Wednesday signed a bill into law that sanctions Iran, North Korea and Russia. The Russian measure in particular is significant given the election issue clouding the Trump administration. Trump in a signing statement expressed reservations about the bill’s impact, saying it encroaches on presidential authority and may harm U.S. interests as they relate to Russian diplomacy and outreach with European allies. Sanctions on Russia relate in part to crude oil and natural gas pipeline infrastructure and came as the European market works to address diversity issues. Russia meets about a quarter of Europe’s […]

PSAC increases its Canadian drilling forecast for 2017

3 Aug 2017   Canada

The Petroleum Services Association of Canada (PSAC) has updated its 2017 Canadian Drilling Activity Forecast to reflect an increase in its projected total number of wells to be drilled during the year to 7,200 from 6,680. SAC based the update on average natural gas prices of $2.75/Mcf (Can.) for AECO, crude oil prices of $49.00/bbl (US) for West Texas Intermediate, and the Canada-US exchange rate averaging $0.77. On a provincial basis for 2017, PSAC now estimates 3,604 wells to be drilled in Alberta, up from 1,900 wells in the original forecast. It is expected 580 wells will be drilled in British Columbia this year, with PSAC’s revised forecast up 300 wells from the original forecast. The revised forecast for Saskatchewan now sits at 2,794 wells compared with 1,940 wells in the original forecast. Manitoba is forecasted to count 206 wells. “One of the events that played out that was not well understood at the time of the original forecast was the relatively quick impact of the transfer of investment out of the oil sands into the conventional sector and, more specifically, towards liquid rich natural gas and light tight oil, which ultimately provide a faster return on investment dollars than the longer-term investment oil sands projects,” explained Mark Salkeld, PSAC president and chief executive officer. “This investment shift played an important role in taking a rig count from what we thought would be closer to 200 active rigs to well over 300 in first-quarter 2017,” he said. “The cost reductions from the services sector demanded by their customers are also still playing a significant role in helping with activity levels enabling [exploration and production] companies to drill more wells at less cost,” Salkeld noted. “The downside to this is that slim services sector margins mean less funds available for new [research and development] and innovation.

Summary of Weekly Petroleum Data for the Week Ending July 28, 2017

3 Aug 2017   Oil Supply, USA

U.S. crude oil refinery inputs averaged 17.4 million barrels per day during the week ending July 28, 2017, 123,000 barrels per day more than the previous week’s average. Refineries operated at 95.4% of their operable capacity last week. Gasoline production decreased last week, averaging 10.3 million barrels per day. Distillate fuel production increased last week, averaging over 5.2 million barrels per day. U.S. crude oil imports averaged about 8.3 million barrels per day last week, up by 209,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged about 8.0 million barrels per day, 3.8% below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 549,000 barrels per day. Distillate fuel imports averaged 108,000 barrels per day last week. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) […]

Exclusive: Sanctions gap lets Western firms tap Russian frontier oil

3 Aug 2017   Russia, USA

A gap in U.S. sanctions allows Western companies to help Russia develop some of its most technically challenging oil reserves, and risks undermining the broad aim of the measures, a Reuters investigation has found. When Washington imposed the sanctions on Moscow in 2014 over its annexation of Crimea and role in the Ukraine conflict, the U.S Treasury said it wanted to “impede Russia’s ability to develop so-called frontier or unconventional oil resources”. The restrictions were designed to prevent Russia countering declining output from conventional wells by tapping these hard-to-recover reserves which require newer extraction techniques like fracking, an area where it relies on Western technology. Three years on, however, Norway’s Statoil is helping Kremlin oil giant Rosneft ( ROSN.MM ) develop unconventional resources while British major BP ( BP.L ) is considering a similar project. Statoil is not breaching sanctions, nor would BP be doing so. […]

How Will The EU Respond To Fresh US Sanctions On Russia?

3 Aug 2017   Europe, Russia, USA

“Okay, you think we’re the bad guys, we’re going to be bad guys and we’ll see whether you like it or not” Konstatin Eggert, a political commentator, told The Washington Post in response to U.S.’s bid to introduce fresh economic sanctions on Russia. With the expulsion of tens of U.S. diplomats from Russia, this next stage in the great political battle is underway. Though the Trump administration has given mixed signals about whether it would sign the new sanctions bill into law, it might not matter. Combined with an earlier piece of legislation based by the Senate this summer, there could be, as Vox says, veto-proof majorities in both chambers of Congress. Effectively it would mean Trump would require permission before he could ease any sanctions on Russia – creating an obstacle in his bid to develop improved relations with Moscow. And it’s not just causing ructions between Washington […]

U.S. gas prices for August could be the highest for the year

2 Aug 2017   Prices, USA

Peak summer demand and declining levels of supplies, both domestic and foreign, mean spikes in the price of gas for U.S. consumers, market analyses find.  Motor club AAA reports a national average retail price for a gallon of regular unleaded gasoline at $2.32 for Tuesday, up a fraction of a percent from Monday and 1.75 percent, or 4 cents per gallon, higher than last week. All but three states reports hikes in the price at the pump during the last week. e official summer driving season is nearing a peak and domestic inventories are moving lower, which means higher gasoline prices for the near future, AAA spokesperson Jeanette Casselano said in a statement.  “As summer moves forward, the days of dropping summer gas prices appear to be behind us for now,” she said. “U.S. crude inventories are moving in the opposite direction of demand – a perfect storm for continued price increases heading into August.”  A July forecast from the U.S. Energy Information Administration put the average price per gallon for the summer driving season, which runs through September, at $2.38, about 7 percent, or 15 cents, higher than the average last summer.  The West Coast market is the most expensive in the country, with California holding the distinction as the state in the Lower 48 with the highest price at $2.94 per gallon, but were also more or less stable compared with last week. In its weekly retail market report, AAA found supply and demand were in check, as a breakdown at a Phillips 66 refinery was offset by a 200,000 barrel jump in gasoline inventories in the market.

Canadian oil struggling for world position

2 Aug 2017   Canada

The Canadian oil sector should expect growth in exploration and production, but its place on the global stage is still uncertain, a trade group said. The National Energy Board said that, as of July 7, it expected total production of crude oil and equivalent will be 4.05 million barrels per day for the year , which, if the forecast proves accurate, would be about 5 percent higher than last year. Crude oil prices are up more than $10 per barrel from this time last year and Western Canadian Select, the nation’s benchmark for the price of oil, is moving higher in early Tuesday trading, while rival benchmarks lose ground. WCS is trading about $10 lower than West Texas Intermediate, […]

Fight Over Abandoned Oil Wells in Canada May Go to Top Court

2 Aug 2017   Canada

A battle over whether energy-company creditors should help pay for cleaning up thousands of abandoned oil wells in Canada may be heading to the country’s Supreme Court. At the center of the dispute is Redwater Energy Corp., a small publicly traded oil producer in Alberta that filed for bankruptcy in late 2015. The receiver that’s liquidating the company argues it should be able to sell its best wells and leave the worst behind for an energy industry-funded group to clean up. The province’s regulator argues that buyers should have to take both good and bad wells, even if it means that the sale proceeds will be lower. A court in Alberta sided with the receiver in May 2016, reducing companies’ […]

Is Russia Poised To Own A Stake In U.S. Oil?

2 Aug 2017   Russia, USA, Venezuela

As the country’s economy continues to tank, Venezuela’s national oil company PDVSA is approaching the deadline for a $1.1bn note issue due in November, and there’s a pretty good chance they’re not going to be able to make the payment. With a dire need for more cash and credit and soaring inflation rates at an all-time high of 886 percent, Venezuela is in desperate need of allies with deep pockets. In their search for funding Venezuela has turned to Russian oil giant Rosneft. In 2016 PDVSA signed onto a loan from Rosneft offering 49.9 percent of its shares in Citgo, a U.S.-based, Venezuelan-owned refining company, as collateral. Thanks to this deal, Rosneft has a lien on all of PDVSA’s Citgo refineries in the US, meaning that if and when Venezuela defaults on the bond, Russia will seize their assets and own a number of refineries on U.S. soil. This […]

U.S. crude production in May hit 16-month high on Texas increase

1 Aug 2017   Oil Supply, USA

U.S. crude output rose to the highest level in more than a year, boosted by gains in Texas and the offshore Gulf of Mexico, the Energy Information Administration said in monthly data released on Monday. Production in May rose 59,000 barrels per day to 9.17 million bpd, compared with 9.11 million barrels per day in April. The figures reflected a 27,000-bpd upward revision to April’s production data. Output in Texas rose by 78,000 bpd while North Dakota production fell 12,000 bpd from the previous month. U.S. crude output and demand have been closely watched by the oil market as some analysts expect that growing output from U.S. shale formations could offset OPEC’s production cuts aimed at reducing a global supply glut. The agency said U.S. demand for distillate fuel in May rose 6 percent from a year earlier, or 224,000 bpd to 3.969 million bpd according to the […]

Will Sanctions On Russia Push The EU To US Energy?

1 Aug 2017   Europe, Russia, USA

We just need the smoke to settle, first. It brings me back to just a few years ago, when I found myself in the middle of a political tiff between Moscow, Brussels, and Washington. Then, the issue has centered on a move by the Obama Administration to decrease European reliance on Russian natural gas by offering alternative energy sourcing. The alternative source being considered back then was gas coming from Iraq and Kurdistan, something still being discussed today. At the time, I was a consultant to both the Iraqi Ministry of Oil and the Kurdish Ministry of Natural Resources. That meant I was in the middle of what was on occasion some rather rancorous negotiations. While the EU in Brussels wanted to diversify away from relying heavily on fuel from Russia, it has also always disliked being lectured to by Washington. This morning had all those memories coming back. […]

Pemex crude output drops slightly in June, exports up 21 percent

31 Jul 2017   Mexico

Mexican national oil company Pemex’s [PEMX.UL] crude output dropped slightly in June compared with the previous month, while exports rose 21 percent, the company said. Pemex produced 2.01 million barrels per day (bpd) in June, down from 2.02 million in May, the company said. Exports rose to 1.157 million bpd in June, compared with 958,000 bpd in May, Pemex added. About 65 percent of exports went to the Americas, with 15 percent bound for Europe. The Mexican government is in the midst of implementing a sweeping energy reform finalized in 2014 that ended the decades-long production monopoly enjoyed by Pemex, formally known as Petroleos Mexicanos. Mexican crude output has declined over the past dozen years from a peak of 3.4 million barrels per day in 2004. The government expects crude production to average 1.94 million bpd this year.

Canadian heavy oil plugs gap left by OPEC, Latam

31 Jul 2017   Canada, Tar Sands

Canada’s struggling oil market has found something of a lifeline as traders scramble for heavy crude due to OPEC production cuts and sinking Latin American output. Output has fallen in Organization of the Petroleum Exporting Countries and non-OPEC Latin American countries such as Mexico and Colombia, leading refiners as far away as China to look to Alberta’s oil sands to fill the gap. The interest has boosted the price for heavy Western Canada Select (WCS) oil, which is within range of its tightest discount to U.S. crude ever. Canadian heavy oil is an easy substitute for Middle Eastern and Latin American grades, and the rising demand represents a rare bright spot for the oil sands, which have been hit hard by falling prices and the high cost to produce and blend Alberta’s heavy, tar-like bitumen. “We’ve been seeing a structural change (in the market) since […]

Russia to Cut 755 U.S. Diplomats, Staff Amid New Sanctions

31 Jul 2017   Russia, USA

Russian President Vladimir Putin said Sunday that the U.S. would have to cut 755 diplomats and staff in the country by September in retaliation for impending U.S. sanctions on Moscow. In an interview with Russian state television, Mr. Putin said the U.S. presence in Russia would be reduced by more than half, following the passage of new sanctions legislation by Congress that has further frayed ties between Moscow and…

U.S. lawmakers expect more sanctions on Venezuela over vote

29 Jul 2017   USA, Venezuela

Republican U.S. lawmakers said on Friday they expected Washington would announce more sanctions on Venezuela if its government proceeds with an effort to elect a legislative body that critics call a plan to create a dictatorship. Republican Senator Marco Rubio, who has worked closely with President Donald Trump’s administration on Latin American issues, held a news conference with two other Republican members of Congress, all from Florida, to discuss the issue ahead of the controversial vote in Venezuela on Sunday. Julio Borges, who leads Venezuela’s opposition-led National Assembly legislature, telephoned in to the news conference to discuss the vote. Rubio noted that the Trump administration had announced sanctions this week, and added, “You can expect more.” The Trump administration imposed sanctions on 13 senior Venezuelan officials on Wednesday, heaping pressure on unpopular President Nicolas Maduro to scrap plans for the new congress. A senior Trump administration […]

Alaska energy threat a new low, House leader says

29 Jul 2017   Congress

The Trump administration walked an ethical line by using a “bag man” to threaten Alaska’s energy over a healthcare vote, a leader in the U.S. House said. U.S. Sen. Lisa Murkowski , R-Alaska, joined two other Republican leaders in voting against the so-called “skinny repeal” of the Affordable Care Act, the signature healthcare policy of former President Barack Obama . The measure, a last-ditch effort to overhaul Obamacare, failed with a 51-49 vote early Friday morning. Ahead of the vote, U.S. Interior Secretary Ryan Zinke spoke with Murkowski and fellow Sen. Dan Sullivan, who voted in favor of the repeal, and threatened to block plans for more oil […]

US growth picks up but wage shadows remain

29 Jul 2017   USA

The rate of US growth picked up steam but wage growth undershot estimates, underscoring the economy’s recent patchy performance. Gross domestic product climbed at an annualised rate of 2.6 per cent over the period, from 1.2 per cent in the first quarter, the commerce department said on Friday. The reading came in slightly below Wall Street forecasts of 2.7 per cent. A slate of revisions also pushed the average growth pace from the first quarter of 2016 to the first three months of this year down by 0.1 percentage point to 1.7 per cent, emphasising policymakers’ frustration over the tepid rate of expansion despite continued progress in the labour market. Separate data released on Friday showed that total compensation and wages of civilian workers both rose 0.5 per cent in the three months ending in June, down from 0.8 per cent in the previous period. Total compensation, a figure that also includes benefits, was forecast to tick up by 0.6 per cent. Most economists expect wage growth to accelerate given that the unemployment rate is near its normal level, which should put employers in a position where they need to offer higher salaries to draw-in workers. Weak wage growth has contributed to disappointingly lukewarm inflation that has stubbornly remained below the Federal Reserve’s targets. Investors have been paying close attention to any signs of a pick-up and Friday’s data represent the latest disappointment.

Pace Of US Oil Rig Count Growth Slows As Prices Climb

29 Jul 2017   USA

The number of active oil rigs in the United States rose this week by 2 rigs showing a growth—albeit a slower one—in oil drilling as US players proceed more cautiously than before. Combined, the total oil and gas rig count in the US now stands at 958 rigs, up 495 rigs from last year, with oil rigs in the United States increasing by 2 and gas rigs increasing by 6 this week. Canada, which added 15 oil and gas rigs the week prior, added another 14 rigs for week this week. Of the 14 new active rigs this week in Canada, 11 were oil rigs. Oil rigs in Canada now stand at 129, up 60 on the year. Prices had risen to an eight-week high on Thursday, a continued to climb on Friday, with WTI trading up 1.08% at $49.57 at 12:01pm and Brent crude trading up 1.67% at […]

Pennsylvania Senate votes to tax natural gas production, consumption

29 Jul 2017   LNG, USA

Pennsylvania’s Senate approved a tax reform bill with provisions to tax both natural gas production and consumption in the state. Oil and gas trade associations there strongly criticized the July 26 action, which passed by a 26-24 vote. The amended bill, which apparently attempts to close a budget deficit, now heads back to the state House, where its prospects are uncertain.  HB 542 would impose an $80-million severance tax on unconventional gas production and a $400-million tax on gas consumption, according to the Pennsylvania Independent Oil & Gas Association. Sales of LPG and for generation of electricity would be exempt. “It is widely accepted that the Marcellus shale is a once-in-a-lifetime economic opportunity for Pennsylvania,” PIOGA Pres. Daniel J. Weaver said. “The development of this enormous resource—drilling and production—is the initial benefit that has already created significant job growth in the commonwealth. The much bigger and longer-term benefit that we are just beginning to realize is from the increased use of this enormous resource.  “The Senate action last night has struck a severe blow to both ends of this benefit spectrum,” Weaver said. Unconventional gas producers tapping Pennsylvania’s portion of the Marcellus shale formation are only beginning to recover from several depressed prices the last 2 years that resulted in significant job cuts and financial losses, he said.

The bill’s gross receipts tax on gas is even more baffling, Weaver said. “Lower prices in Pennsylvania the past 5 years have not only reduced burner tip prices, but have caused massive reductions in the price of electricity across the commonwealth,” he said.  API-Pennsylvania Executive Director Stephanie Catarino Wissman said the bill targets creators and industry to pay more and families to take home less. “This punitive tax hike isn’t about paying one’s fair share or doing one’s part; the natural gas industry alone has paid over $1.2 billion in impact taxes since 2011, the bulk of which goes to local governments,” she said. “The real impact is on families who could be paying much more for living in Pennsylvania if the House doesn’t reject this measure.”  The American Petroleum Institute affiliate’s top official called HB 542 “a backwards approach that ignores economic reality, puts tens of thousands of good family sustaining jobs and money for groceries in peril, while jeopardizing the future prosperity of the commonwealth.  “We can continue to work together by making investments in Pennsylvania, and that begins with smart energy policy so that the benefits of energy development continue to flow,” she said.

Next year U.S. oil production will exceed its 1970 peak

29 Jul 2017   Oil Supply, USA

Crude oil production in the U.S. will reach an average of 9.9 million barrels a day in 2018, the Energy Information Administration projects in its latest Short-Term Energy Outlook report. This would surpass the previous record of 9.6 million barrels per day, set in 1970. So much for Hubbert’s Peak. In 1956, geologist M. King Hubbert famously predicted, in a presentation to the American Petroleum Institute, that oil production in the U.S. would peak no later than 1970 . To make his estimates, Hubbert added up all the plausible extrapolations of domestic crude oil reserves. His more conservative calculation assumed the ultimate production of 150 billion barrels, in which case production would peak in 1965. But if ultimate production could rise to 200 billion barrels, the peak would be delayed until 1970. Read ’em and weep M.K. Hubbert Many people thought Hubbert’s predictions were vindicated when U.S. production began […]

Trump Seeks Way to Declare Iran in Violation of Nuclear Deal

28 Jul 2017   Iran, USA

President Trump, frustrated that his national security aides have not given him any options on how the United States can leave the Iran nuclear deal, has instructed them to find a rationale for declaring that the country is violating the terms of the accord. American officials have already told allies they should be prepared to join in reopening negotiations with Iran or expect that the United States may abandon the agreement, as it did the Paris climate accord. And according to several foreign officials, the United States has begun raising with international inspectors in Vienna the possibility of demanding access to military sites in Iran where there is reasonable suspicion of nuclear research or development. If the Iranians balk, as seems likely, their refusal could enable Washington to declare Tehran in violation of the two-year-old deal. Mr. Trump has enormous latitude to abandon the accord. It was never a […]

U.S. oil refiners pare exposure to Venezuelan crude imports

28 Jul 2017   USA, Venezuela

(Reuters) – U.S. refiners are shifting away from processing heavy crude, lessening the potential impact on their businesses and motorists of any supply disruptions from Venezuela as the Trump administration considers new sanctions on the country. Refiners Valero Energy Corp and Marathon Petroleum Corp on Thursday said they plan to run more light and sweet crudes this quarter, continuing a trend away from heavy, sour crudes supplied by Venezuela and other OPEC producers. Deliveries of Venezuelan crude to Citgo Petroleum, the U.S. refining arm of state-run Petroleos de Venezuela [PDVSAC.UL], slipped to about 70,000 barrels per day (bpd) last month from an average of some 200,000 bpd earlier this year. Phillips 66, the fourth-largest importer of Venezuelan crude this year, received about half its expected supply in June. U.S. imports of Venezuelan crude fell 32 percent in June to a 13-year low of 491,000 bpd, according to Reuters data. […]

U.S. coal exports soar, in boost to Trump energy agenda, data shows

28 Jul 2017   Coal, USA

U.S. coal exports have jumped more than 60 percent this year due to soaring demand from Europe and Asia, according to a Reuters review of government data, allowing President Donald Trump’s administration to claim that efforts to revive the battered industry are working. The increased shipments came as the European Union and other U.S. allies heaped criticism on the Trump administration for its rejection of the Paris Climate Accord, a deal agreed by nearly 200 countries to cut carbon emissions from the burning of fossil fuels like coal. The previously unpublished figures provided to Reuters by the U.S. Energy Information Administration showed exports of the fuel from January through May totaled 36.79 million tons, up 60.3 percent from 22.94 million tons in the same period in 2016. While reflecting a bounce from 2016, the shipments remained well-below volumes recorded in equivalent periods the previous five years. […]

Is A Bull Market For Natural Gas Around The Corner?

While the number of drilled but uncompleted wells (DUCs) in the U.S. oil patch is growing as producers wait for higher oil prices, the shale gas plays have seen the number of DUCs decline as drillers take advantage of higher natural gas prices this year compared to last year’s lows. Expectations of additional takeaway capacity coming online—as well as the rebound in natural gas prices—are making drillers more confident that they will be able to sell their production at higher prices. The companies are still cautious after the downturn, but the economics of drilling an oil well and a gas well have diverged since the 2015-2016 price rout. Gas prices have almost doubled since March 2016, and drillers are hoping that a bull market is coming, analysts reckon. However, higher production could also depress natural gas prices once again. The Henry Hub natural gas spot price averaged US$2.98 per […]

A Worldwide Gas Glut Claims $27 Billion Victim in Canada

27 Jul 2017   Canada, LNG

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 buyers 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 […]

After LNG project scrapped, TransCanada looks for more export options

27 Jul 2017   Canada, LNG

Canada stills needs to find ways to get its gas assets out of North America, TransCanada says after a project slated for British Columbia was scrapped. File photo by Stephen Shaver/UPI July 26 (UPI) — There’s still a need to get Canadian natural gas out of North America, energy company TransCanada said after an export option for British Columbia was scrapped. Malaysia energy company Petronas said that, as the head of a partnership, it was no longer pursuing a liquefied natural gas project at Port Edward in British Columbia. Anuar Taib, the company’s CEO, said the decision was made because of an “extremely challenging environment” brought on by a weak market. Pipeline and energy company TransCanada, which was involved with a Petronas affiliate on the project, said it was disappointed with the decision, but would be reimbursed for costs associated with the development. “There is still a strong need […]