North America

U.S. Treasury says it will not issue drilling waivers to Russia sanctions

22 Apr 2017   Russia, USA

U.S. Treasury Secretary Steven Mnuchin arrives to meet with China’s Finance Minister Xiao Jie during the IMF/World Bank spring meetings in Washington, U.S., April 21, 2017. The U.S. Treasury will not give permission to U.S. companies, including Exxon Mobil Corp, to drill in areas prohibited by U.S. sanctions on Russia, Treasury Secretary Steven Mnuchin said on Friday. Mnuchin said in a statement that the decision had been made in consultation with President Donald Trump. (Reporting by Yeganeh Torbati; Editing by Andrew Hay)

Exxon Won’t Get Drilling Waiver for Russia, Mnuchin Says

22 Apr 2017   Russia, USA

Exxon Mobil Corp. won’t be allowed to bypass U.S. sanctions against Russia to resume drilling for oil in a joint venture that seeks to tap billions of barrels of that country’s crude. Treasury Secretary Steven Mnuchin said the decision was made after consultation with President Donald Trump, according to a statement on Friday. Exxon initially requested the drilling waiver in 2015 and pushed for approval every few months since then, according to a person with knowledge of the matter who wasn’t authorized to speak publicly. The waiver request drew criticism from a cross-section of leading U.S. policymakers, from Republican Senator John McCain, who wondered in a tweet whether Exxon was “crazy,” to Senator Bob Menendez, a New Jersey Democrat and sanctions hardliner who sits on the Senate Foreign Relations Committee. “We understand the statement today by Secretary Mnuchin in consultation with President Trump,” Alan Jeffers, an Exxon spokesman, said […]

U.S. Oil Drilling Growth Shows First Signs of Cooling Off

22 Apr 2017   Shale Oil, USA

U.S. oil drillers slowed the pace of a months-long expansion as investors worry that growing shale production will ruin OPEC’s efforts to prop up prices. Drillers added 5 rigs targeting crude this week, bringing the total to 688, according to Baker Hughes Inc. data reported Friday. While all four of the biggest oil basins boosted activity this week, the handful of rigs added is the smallest amount of growth in nearly two months. The number of working rigs has more than doubled from a 2016 low of 316 in May, often expanding weekly by double digits, with as many as 29 rigs added during one week in January. Crude dropped below $50 Friday on concerns that surging U.S. production could undermine OPEC’s efforts to reduce global supplies. “It’s not surprising to see the rig count continue to build from the carryover from recently higher commodity prices,” Luke Lemoine, an […]

Schlumberger posts yearly gain on North American oil recovery

22 Apr 2017   USA

Gains in first quarter activity in North America were offset somewhat by declines in Russia and parts of Europe, oilfield services company Schlumberger said. Most first quarter indicators for the largest company of its kind in the world were lower, both when compared to the fourth quarter and year-over-year. First quarter revenue of $6.9 billion was down 3 percent compared to the previous term, but up 6 percent from first quarter 2016. The market downturn characterized by historically low crude oil prices last year sidelined companies like Schlumberger as investments in exploration and production dwindled. Crude oil prices pulled out of a historic slump last year after members of the Organization of Petroleum Exporting Countries agreed to curb production in an effort […]

Massive Natural Gas Deposit Discovered In The Gulf Coast Basin

22 Apr 2017   Shale Gas, USA

Technological advancements have just pushed the boundaries of recoverable oil and gas in the U.S. further, according to an announcement by the U.S. Geological Survey. The agency reported that two formations in the Gulf Coast Basin may contain as much as 304.4 trillion cubic feet of natural gas plus 1.9 billion barrels of natural gas liquids, making the area the largest untapped continuous gas deposit in the country. The two formations—Haynesville and Bossier—also contain some 4 billion barrels of crude, according to mean estimates, the USGS also said in a press release. (Click to enlarge) Most of the newly recoverable gas is in the Haynesville formation, which contains around 195.8 trillion cubic feet. It also holds 900 million barrels of natural gas liquids and some 1.1 billion barrels of oil. The rest is in the Bossier formation. The USGS has been reassessing a lot of oil and gas deposits […]

US E&P Budgets Rebound, Grow For First Time Since 2014 Downturn

22 Apr 2017   Oil Supply, USA

Exploration and production (E&P) spending in the United States will increase this year for the first time since the 2014 downturn, which roiled the industry for two years rife with lay-offs and bankruptcy filings.  Increasing capital expenditures (CAPEX) is expected to drive production up this year by 5 percent, according to Fitch Ratings’ measurement across 40 U.S. E&Ps. Total drilling and completion spending is on the rise, too, increasing by roughly 58 percent.  Most of the CAPEX is dedicated toward highest-return shale plays, especially the Permian Basin, Eagle Ford, STACK, Haynesville and Marcellus basins, the ratings group said in a statement April 21.

What’s more, the Fitch sample forecasts that land rig counts in the lower 48 will increase up to 65 percent, year-over-year. The pace is likely to slow during the second half of 2017, but still culminate in up to 875 land rigs by year-end.  The disparity between CAPEX and production growth for the year indicates growth will continue next year. Spending more money on the production side – rather than testing and delineation – as well as efficient gains, will further boost 2018 growth, Fitch said.  In August 2016, analysts at RBN Energy, LLC, said E&P CAPEX had likely hit bottom when 46 U.S. E&Ps revealed spending that year at $41 billion – down 51 percent and 70 percent from investment made in 2015 and 2014, respectively.

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Trump denies Exxon permission to drill for oil in Russia

22 Apr 2017   Russia, USA

The Trump administration has denied ExxonMobil permission to bypass sanctions to drill for oil in Russia. “The Treasury Department will not be issuing waivers to U.S. companies, including Exxon, authorizing drilling prohibited by current Russian sanctions,” Treasury Secretary Steven Mnuchin, said in a statement Friday. Mnuchin said he consulted with President Trump on the decision. Exxon had applied for a waiver from sanctions imposed by the Obama administration in a bid to resume its lucrative joint venture with Russian state oil giant PAO Rosneft. In a statement, Exxon said “we understand” the decision by the Treasury Department. Exxon explained that its application for a license was aimed at meeting the company’s “contractual obligations” in Russia, where competitors are allowed to drill under European sanctions. There are powerful reasons why Exxon would want to get back into business with Rosneft: Their agreement to form a joint venture, signed in 2011, […]

Oil-Sands Operators Bet on Local Advantage as U.S. Partners Flee

21 Apr 2017   Canada, Tar Sands

Now that multinational energy producers have sold their stakes in Canada’s oil sands, local companies are hatching plans to make some real changes.  Cenovus Energy Inc. and Canadian Natural Resources Ltd. are betting they can exploit new technologies and their deeper understanding of Canadian-specific issues, such as environmental rules and relations with native communities, to profit from one of the world’s biggest hydrocarbon reserves without their former partners.  “The oil sands require a focus on environmental issues like carbon pricing, indigenous issues, things like that, that are very specific kinds of skills that companies need to have for Alberta, for Canada,” said Harrie Vredenburg, a professor at the University of Calgary’s Haskayne School of Business. “Some of the multinationals are not necessarily particularly suited to that. In all those things, it does favor the Canadian firms.”

1Q Oil, Gas M&A Deals Hit Record $73 Billion

21 Apr 2017   USA

Investors enter 2017 with renewed enthusiasm for oil and gas deals, pushing transaction value 160 percent above last year, but that excitement may be on the wane. Reassured by Donald Trump’s presidential agenda and the relative stability of oil prices once OPEC and non-OPEC countries settled on oil quotas, investors opened 2017 with a record $73.04 billion deals, according to findings by PwC. The investment represents a 160 percent increase in mergers and acquisitions (M&A) deal value, year over year, which includes the return of foreign capital in U.S. shale assets. As for deal volume, 53 were announced during the first quarter, up 36 percent year over year. And yet despite all of this, PwC said there are signals the tide is starting to turn. Commodity prices retreated during the middle of the first quarter and oil and gas equity index declines may have tempered investor exuberance. “As the […]

China talks clean energy with Canada

20 Apr 2017   Canada, China

Chinese officials discussed clean energy during talks with the Canadian prime minister as both economies look to diversify their energy sectors. File photo by Stephen Shaver/UPI April 19 (UPI) — Clean energy and technologies related to the fight against climate change are some of the ways to foster trade with Canada, the Chinese premier said. Canadian Prime Minister Justin Trudeau spoke by phone late Tuesday with his Chinese counterpart, Li Keqiang. A readout of the meeting from the official Xinhua News Agency stated that both sides discussed bilateral opportunities in energy. The two leaders expressed willingness to expand bilateral trade and investments, the official newspaper reported. “The two countries should also strengthen cooperation on tackling climate change and cooperate in new areas such as clean energy to create new growth points in the relationship,” Li said. Many of the export metrics trended lower for Canada in 2015 and unemployment […]

Canada pipeline development facing headwinds

20 Apr 2017   Canada, Pipelines

Delays in implementation and concerns about North American trade policies create uncertainty for the western Canadian pipeline development, analysis found. A survey from IHS Markit of the pending or proposed pipeline networks in Canada, including Keystone XL , found the review process takes more than five years on average per project. Those time delays, along with U.S. President Donald Trump ‘s pledge to reconfigure regional trade policies, leaves parts of the Canadian energy market in limbo, the report found. “Lessons from the timing of Keystone XL and concerns over a possible resurgence of U.S. protectionism have highlighted the importance of market diversification,” it said. Canada is the No. 1 oil exporter to the United States and remains relatively landlocked […]

Exxon Seeks U.S. Waiver to Resume Russia Oil Venture

20 Apr 2017   Russia, USA

Exxon Mobil Corp. has applied to the Treasury Department for a waiver from U.S. sanctions on Russia in a bid to resume its joint venture with state oil giant PAO Rosneft, according to people familiar with the matter. Exxon has been seeking U.S. permission to drill with Rosneft in several areas banned by sanctions and applied in recent months for a waiver to proceed in the Black Sea, according to these people. The…

Exxon Mobil Seeks U.S. Sanctions Waiver for Oil Project in Russia

20 Apr 2017   Russia, USA

Exxon Mobil is pursuing a waiver from Treasury Department sanctions on Russia so it may drill in the Black Sea in a venture with the Russian state oil company Rosneft , a former State Department official said Wednesday. An oil industry official confirmed the account. The waiver application was made under the Obama administration, the officials said, speaking on condition of anonymity, and the company has not dropped the proposal. The proposal is now before the Trump administration at a delicate time in Russian-American relations, with rising tensions over the war in Syria and a looming congressional inquiry into reports of Russian efforts to influence the United States presidential election. The appeal did not come up during Senate confirmation hearings of Secretary of State Rex W. Tillerson , who was Exxon Mobil’s chief executive before his appointment by President Trump and was known to have a strong […]

Summary of Weekly Petroleum Data for the Week Ending April 14, 2017

20 Apr 2017   USA

U.S. crude oil refinery inputs averaged over 16.9 million barrels per day during the week ending April 14, 2017, 241,000 barrels per day more than the previous week’s average. Refineries operated at 92.9% of their operable capacity last week. Gasoline production decreased last week, averaging 9.8 million barrels per day. Distillate fuel production increased last week, averaging just about 5.2 million barrels per day. U.S. crude oil imports averaged over 7.8 million barrels per day last week, down by 68,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged over 7.9 million barrels per day, 2.0% above the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 843,000 barrels per day. Distillate fuel imports averaged 167,000 barrels per day last week. U.S. commercial crude oil inventories (excluding those in the Strategic […]

Oil Industry Worried About Trump’s “Buy American”

20 Apr 2017   USA

U.S. President Donald Trump signed an executive order on Tuesday that would promote his “Buy American, Hire American” trade policy, an agenda that is worrying oil pipeline companies. Trump’s executive order is vague in details. The “Buy American” part of the executive order seeks to tighten the standards in U.S. government procurement programs, which essentially means that federally-funded construction projects use more American-made goods. It is not at all clear how this will alter current policy. The administration wants to close what it sees as too many loopholes, such as nearly-finished imported goods being completed in the U.S. and then deemed to be “Made in America.” The “Hire American” agenda calls for a reform of the H-1B visa program, which allows companies to hire skilled foreign workers. The executive order, if carried out, would affect companies building oil pipelines in the U.S., requiring them to use U.S. steel in […]

Trump’s EPA To Reconsider Oil And Gas Emissions Rule

20 Apr 2017   Climate, USA

The U.S. Environmental Protection Agency will reconsider a rule on greenhouse gas emissions from oil and gas operations and delay its compliance date, the agency said on Wednesday in the Trump administration’s latest move to reduce regulations. Oil interest groups, including the American Petroleum Institute and the Texas Oil and Gas Association, had petitioned the EPA a year ago to reconsider the rule limiting emissions of methane and other pollutants from new and revamped oil and gas wells and systems. The EPA said in a statement that it would delay the rule’s June 3 compliance date by 90 days and take public comments during that period. Under Democratic President Barack Obama, the EPA released the first methane limits on the facilities in May 2016, […]

What Does The Future Hold For Canada’s Oil Sands?

20 Apr 2017   Canada, Tar Sands

Phases in Canada’s Oil Sands We have entered a unique phase in major oil sands acquisitions in Alberta. Canadian companies are using their operational expertise, large market values, and stable balance sheets to build up larger positions in Canada’s oil sands. Over the last decade, oil production from Canada’s oil sands has increased 100 percent and an increasing number of players are participating in that growth. In 2006 there were 6 companies, not including the Syncrude Canada consortium, that controlled all oil sands production in Alberta. Now, there are around 20 oil sands producers. (Click to enlarge) Over the years, key acquisitions took place in Canada’s oil sands that helped grow the resource to what it is now: 1. The first phase was from 2006 to 2010 when oil companies were acquiring undeveloped assets to secure a position in developing Canada’s oil sands. Examples include Statoil’s $2.2 billion acquisition […]

Exxon seeks waiver from U.S. sanctions on Russia:

20 Apr 2017   Russia, USA

Exxon Mobil Corp ( XOM.N ) has applied to the Treasury Department for a waiver from U.S. sanctions on Russia as the oil major looks to resume its joint venture with Rosneft ( ROSN.MM ), the Wall Street Journal reported on Wednesday. Exxon has been seeking permission from the United States to drill with the Russian state-owned Rosneft in certain banned areas and applied in recent months for a waiver to proceed in the Black Sea, the newspaper reported, citing people familiar with the matter. ( on.wsj.com/2osAxzB ) The company wound down drilling in Russia’s Arctic in 2014 in the face of U.S. sanctions targeting cooperation between Western companies and Moscow’s oil sector. Exxon and Rosneft in 2012 unveiled an offshore exploration partnership that could […]

Bankruptcy leads to closure of platform offshore California

19 Apr 2017   Offshore, USA

The pending closure of an oil installation offshore California because of a corporate bankruptcy marks a shift in state trajectory, environmentalists said. Venoco, which has its headquarters in Colorado, said it filed for Chapter 11 bankruptcy and would dispose of its assets as a result. The company will quit-claim its lease for the offshore South Ellwood field back to the state and now starts the decommissioning of its offshore Holly platform and associated infrastructure onshore. Venoco Chief Operating Officer Mike Wracher said there was a steady string of circumstances that led to the financial constraints that necessitated bankruptcy, including the ongoing closure of Line 901 in California. “We have pursued a number of market-based and regulatory solutions to address these challenges during the last […]

Why The Permian Doesn’t Keep OPEC Awake At Night

19 Apr 2017   Shale Oil, USA

The old saying goes, “Everything’s bigger in Texas”. The latest subject of this axiom is the legendary Permian Basin. The recent headlines have been eye-popping. “The Permian Basin Keeps On Giving”. “A $900 Billion Oil Treasure Lies Beneath West Texas Desert”. “Shell’s New Permian Play Profitable at $20 A Barrel”. “The World’s Hottest Oil Play”. “Permian Basin Prevails”. “The Permian Basin: An existential Threat To Canadian Oil As The War On Cost Heats Up”. “This Texas Oilfield Is Messing With OPEC”. The articles contain analysis and commentary concluding that no matter what happens in the rest of the world, the future of oil prices will be heavily influenced by U.S. light tight oil (LTO) producers and more specifically, the Permian. This is more of the popular thesis OPEC is dying or dead and the United States has replaced Saudi Arabia as the world’s swing producer. Except it is not […]

Oil Servicers Still Struggle as Canadian Producers Ramp Up

18 Apr 2017   Canada

Only 34% of servicing businesses have no risk of insolvency Moody’s says Calfrac will likely need to restructure debt The worst may not be over for everyone in Canada’s oil patch even as crude prices show signs of stability. While producers are on firmer footing, oilfield service companies are still keeping restructuring advisers and lawyers busy as the effects of nearly three years of depressed oil prices continue to roll through one of Canada’s most important industries. About 48 percent of Canada’s publicly traded oil, gas and consumable fuels companies aren’t in any danger of insolvency, whereas only 34 percent of energy equipment and services companies are in the clear, according to data analyzed by PwC. “The big oil producers have seen the worst; it’s the continued fallout that’s causing even more concern,” said Kyle Kashuba , a partner in Torys LLP’s restructuring practice in Calgary. “It’s the ripple […]

Canada Is the G-7’s Surprise Growth Leader, For Now

18 Apr 2017   Canada

Central bank’s latest GDP forecast tops developed-world peers Weak exports, business investment are flies in the ointment Almost out of nowhere, Canada has become one of the fastest growing economies in the developed world. The oil-producing nation, which struggled mightily with falling crude prices the past two years, grew at an annualized pace of almost 4 percent in the first quarter, according to the Bank of Canada’s latest estimates. No other Group of Seven economy even came close. For all 2017, the central bank is projecting 2.6 percent growth — which would put the economy at the top of the rich-country growth scale. Yet even with the economy suddenly running hot, caution prevails . The Canadian dollar has had a middling performance despite the strong economic numbers. At a rate decision last week in Ottawa, Canada’s central bank revised up growth projections for 2017, but cut them for 2018. […]

Pipeline Built to Survive Extremes Can’t Bear Slow Oil Flow

15 Apr 2017   Arctic, USA

Trans Alaska carrying just a quarter of its peak volume The lower the flow, the higher the risks from Arctic cold Here at the top of the world, January brought a glimpse of the anxious future facing Alaska’s once-mighty oil pipeline. The 800-mile Trans Alaska Pipeline System was built for extreme conditions. But as the state’s oil production declines, the pipeline faces a new challenge: flows so sluggish operators worry the line may become unusable, cutting off access for hundreds of North Slope oil wells. With the mercury dipping as low as -60 Fahrenheit, workers in January fired up heating units across the system. It worked, but if the brutal cold had lasted or the oil flow had slowed further, the pipeline would have been in uncharted territory. Four decades after it opened, Alaska’s pipeline — once a symbol of independence for an oil-strapped nation — is facing a […]

Gas at $3 per gallon could hurt U.S. economy

14 Apr 2017   USA

The U.S. national average price for a gallon of gasoline would need to move close to $3 before it starts having a negative economic impact, an analyst said. U.S. retail gasoline prices have been on a steady increase for the better part of the year. Motor club AAA reports a national average price for a gallon of regular unleaded at $2.40 early Thursday, an increase of 15 percent, or 32 cents per gallon higher than this date last year. Over the course of a year, that difference could eat into savings or discretionary spending. Gasoline prices are tied to crude oil prices and the health of the nation’s refinery infrastructure. Crude oil prices are up almost […]

U.S. Oil Rig Count Hits 2 Year High

14 Apr 2017   USA

This week’s Baker Hughes rig count has oil rigs up by 11, with a majority of the growth occurring in the Permian Basin in Texas and New Mexico. The number of active oil rigs in the United States now stands at 683 – 332 rigs higher than the figure one year ago. The last time oil rigs were this high in number was in April 2015. Gas rigs declined this week by 3—after five consecutive weeks of growth—bringing the total oil and gas rig count to 847, or 407 more than a year ago today. This week marks the thirteenth straight week of increases to the oil and gas rig count. Both benchmarks were trading down on the day an hour after data release, with WTI trading down 14 cents at $52.97, and Brent trading down 23 cents at $55.63. State-wise, New Mexican drilling activity grew by seven rigs, […]

Dakota Access Pipeline to start interstate service May 14

14 Apr 2017   Pipelines, USA

The controversial Dakota Access Pipeline will begin interstate crude oil delivery on May 14, according to a filing with the U.S. Federal Energy Regulatory Commission. Energy Transfer Partners LP on Thursday filed what is known as a tariff, which lays out details about the line and the oil to be delivered. The 1,172-mile (1,885-km) Dakota Access line runs from western North Dakota to Patoka, Illinois. The $3.8 billion project became a focus of international attention, drawing protesters from around the world, after a Native American tribe sued to block completion of the final link of the pipeline through a remote part of North Dakota. The Standing Rock Sioux tribe said the pipeline […]

U.S. Oil-Rig Count Climbs by 11

14 Apr 2017   Shale Oil, USA

The number of rigs drilling for oil in the U.S. rose by 11 in the past week to 683, according to oil-field services company Baker Hughes Inc. The Baker Hughes report was delivered a day early because U.S. financial markets will be closed in observance of Good Friday. The U.S. oil-rig count is typically viewed as a proxy for activity in…

U.S. offshore oil production on the rise

14 Apr 2017   Offshore, USA

With two oil fields in the Gulf of Mexico starting production this year, and five on tap for 2018, offshore production is set to increase, a U.S. report found. Eight new fields in the U.S. waters of the Gulf of Mexico started producing oil last year, leading to a high-water mark of 1.6 million barrels per day, beating the previous record set in 2009 by 44,000 bpd. By January, regional offshore production was up another half million barrels on a daily basis. A March report from analytical group Wood Mackenzie found the cost to break even on oil and gas projects in deep waters, the U.S. Gulf of Mexico in particular, has dropped from around $70 […]

U.S. crude stockpiles fall unexpectedly: EIA

13 Apr 2017   USA

U.S. crude stocks fell unexpectedly last week, the Energy Information Administration said on Wednesday, while gasoline and distillate inventories also declined in a report that analysts said should be supportive for prices. Crude inventories fell by 2.2 million barrels in the week to April 7, compared with analysts’ expectations for an increase of 87,000 barrels. “A near 2.2 million barrel draw to commercial crude stocks and continued draws to product stocks should provide support to current prices,” said Troy Vincent, oil analyst at ClipperData. Oil prices bounced around following the release. Traders attributed the up-and-down action to the drawdown in inventories against another increase in U.S. production, higher inventories at the Cushing, Oklahoma, oil hub, and traders exiting profitable trades after the last two weeks of price gains. U.S. crude was down 9 cents to $53.31 a barrel as of 11:21 a.m. ET, while Brent crude dropped 17 cents […]

Summary of Weekly Petroleum Data for the Week Ending April 7, 2017

13 Apr 2017   Oil Supply, USA

U.S. crude oil refinery inputs averaged 16.7 million barrels per day during the week ending April 7, 2017, 268,000 barrels per day more than the previous week’s average. Refineries operated at 91.0% of their operable capacity last week. Gasoline production increased last week, averaging over 9.9 million barrels per day. Distillate fuel production increased last week, averaging about 5.1 million barrels per day. U.S. crude oil imports averaged 7.9 million barrels per day last week, up by 28,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged about 8.1 million barrels per day, 3.0% above the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 488,000 barrels per day. Distillate fuel imports averaged 118,000 barrels per day last week. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) […]

Gulf of Mexico crude oil production, already at annual high, expected to keep increasing

13 Apr 2017   Offshore, Oil Supply, USA

U.S. crude oil production in the Federal Gulf of Mexico (GOM) set an annual high of 1.6 million barrels per day (b/d) in 2016, surpassing the previous high set in 2009 by 44,000 b/d. In January 2017, GOM crude oil production increased for the fourth consecutive month, reaching 1.7 million b/d. On an annual basis, oil production in the GOM is expected to continue increasing through 2018, based on forecasts in EIA’s latest Short-Term Energy Outlook (STEO). In 2016, eight projects came online in the GOM, contributing to the high production levels. Another seven projects are anticipated to come online by the end of 2018. Based on anticipated production levels at these new fields and existing fields, annual crude oil production in the GOM is expected to increase to an average of 1.7 million b/d in 2017 and 1.9 […]

Florida lawmaker fending off calls for oil and gas drilling

13 Apr 2017   Offshore, USA

Amid calls for more oil and gas drilling, a Democratic senator in Florida said he was “beating back” pressure for exploration in the Gulf of Mexico. Industry groups like the American Petroleum Institute have praised executive orders from President Donald Trump that favor the oil and gas industry. With changes in Washington, Kevin Doyle, the Florida director of the Consumer Energy Alliance, said in a message sent to UPI that he called on state leaders to evaluate the potential for oil and gas exploration in the waters off the western coast of Florida. By Doyle’s estimates, state coffers could be bolstered for the benefit of Florida residents struggling with medical bills and dwindling pensions. “A strong and growing constituency in Florida supports […]

U.S. Oil Production, Imports Rise Faster Than Expected

13 Apr 2017   Oil Supply, USA

The EIA’s short-term energy outlook , released on April 11, predicted increases in American energy production, along with an increase in imports. The agency’s forward predictions on the outlook of U.S. oil and gas production are mostly bullish, despite earlier reports that total energy production in the U.S. had fallen by 4 percent , a change driven largely by declining demand for coal and low oil and gas prices. However, while the agency expects natural gas prices to climb, there are only moderate expectations for future increases in the price of oil, a sign that the EIA doesn’t expect demand to seriously outstrip supply in the short-term. The EIA report estimated the average U.S. oil production in 2016 to have been 8.9 million bpd. Looking ahead, the EIA estimates the average for 2017 to hover around 9.2 million bpd and 9.9 million the following year, an increase of 11 […]

Gas prices up on geopolitical tensions, end of winter

12 Apr 2017   USA

A steady rise in crude oil prices and maintenance at the nation’s refineries means steady pain at the pump for U.S. motorists, motor club AAA reports. AAA lists a national average price for a gallon of regular unleaded gasoline at $2.39, up slightly from Monday for nearly a two-week streak of gains. By the motor club’s estimates, the national average for the price of gas is up more than 4 percent, or about 10 cents per gallon, from one month ago. “Pump prices in 48 states and Washington D.C. have moved higher over the last week, led by the switch over to more expensive summer-blend gasoline and increased driving demand,” AAA explained in a weekly retail market report . […]

Texas New Drilling Permits Shoot Up Threefold in March

12 Apr 2017   Oil Supply, USA

The Texas Railroad Commission issued 1,310 new oil and gas drilling permits to shale producers last month, up from just 511 a year ago. Most of these were issued for the Permian, cementing further its top spot among most desirable drilling destinations in the shale patch. However, as Reuters notes , the increase in permits went hand in hand with a decline in well completions: oil well completions were down 44 percent in March on an annual basis, to 533 wells, and gas well completions were down 60 percent to 77. Texas currently sports the most active drilling rigs in the U.S., at 418 or half of the total, according to Baker Hughes data. One industry insider from Texas told Reuters that the decline in well completions is no cause for alarm. Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association, said that producers will amass […]

EIA STEO projects higher US crude production, increases in travel and gasoline demand

12 Apr 2017   Oil Supply, USA

Outlook (STEO), the US Energy Information Administration (EIA) projects that US crude oil production, which averaged an estimated 8.9 million barrels per day (b/d) in 2016, will average 9.2 million b/d in 2017 and 9.9 million b/d in 2018. That level is higher than originally forecast, exceeding the previous record level of 9.6 million barrels per day reached in 1970, said EIA Acting Administrator Howard Gruenspecht. For summer 2017, EIA forecasts motor gasoline consumption to average 9.5 million barrels per day (b/d), up about 20,000 b/d (0.3%) compared with last summer, which was a record high. Highway travel is forecast to be 1.4% higher than the level last summer. The effect of the increase in highway travel is expected to be partially offset by a 1.2% increase in […]

As Texas oil output surges, cash crude discounts near two-year lows

12 Apr 2017   USA

Surging West Texas oil production has pushed the value of the region’s spot crude to its lowest discount to the U.S. oil benchmark in nearly two years, as an exuberant shale industry pumps more to take advantage of higher prices and demand from refiners who have seen supplies cut by top global producers. OPEC and non-OPEC suppliers are working toward cuts of 1.8 million barrels per day, around 2 percent of the 92 million bpd global market, as they try to bring down record oil inventories and raise prices. But supply cuts by exporters worldwide have given an incentive and opportunity to U.S. shale producers to do the opposite. They have sent rigs back into the field and are working to boost output after more than a two-year industry recession. The Permian Basin is the biggest […]

Trump administration moving ahead with ending Jones Act exemptions

12 Apr 2017   USA

The Trump administration appears to be moving ahead with an Obama administration proposal aimed at reversing long-standing Jones Act exemptions and is not considering weakening its criteria for waivers from the maritime law, a US Customs and Border Protection spokeswoman said. Those waivers “may only be granted if necessary in the interest of national defense,” as they traditionally have been, Katrina Skinner, the CBP spokeswoman, said in a statement to S&P Global Platts on Monday. The issue centers on a change CBP proposed on January 18, just two days before the Obama administration ended, that would revoke decades of rulings allowing foreign-built vessels to transport certain equipment, such as repair pipe, between US ports and oil and gas operations in US waters. The change, which is backed by the US maritime industry and a bipartisan swath of Congress, would represent a significant strengthening of the federal government’s enforcement of […]

Former Russian Energy Minister: U.S. Should Join OPEC Output Cuts

12 Apr 2017   OPEC, USA

U.S.-Russian relations took a turn for the worse over the past week after American airstrikes in Syria. U.S. Secretary of State Rex Tillerson is in Moscow this week for discussions. Meanwhile, oil analysts are trying to figure out if the OPEC deal, which hinges on Russian participation, will be extended for another six months. Oilprice.com spoke with Igor Yusufov , a former Russian energy minister and founder of a $3 billion energy investment fund called Fund Energy, to get the latest view from Moscow. Oilprice.com: Only a few months ago, the U.S. and Russia appeared to be on their way to improved relations. But the U.S. airstrikes in Syria looks to have dashed those hopes. What happens next with U.S.-Russian relations? Some political commentators in the U.S. are wondering whether the sudden confrontational approach from the U.S. government towards Russia is an effort to undercut criticisms of alleged ties […]

Wall St. Gears Up For The World’s Biggest Oil Trade

11 Apr 2017   Mexico, Prices

International banks are preparing for the Hacienda Hedge – the secretive oil deal that has seen Mexico earn billions from successful bets on future oil prices. Detailed in an analysis by Javier Blas for Bloomberg, the history of the Hacienda Hedge is certainly impressive and might incite other countries to try their hand at betting on future oil prices. Or then again, it might not, as Mexico’s success story seems to be kind of unique. Blas interviewed Mexican government officials, traders, brokers, and bankers, and reviewed thousands of documents to compile the history of the bet that bankers await every year and that, contrary to what the Mexican authorities say, could swing the oil market. The story began in 1990, when Iraq’s invasion of Kuwait took one-tenth of the global oil supply off the market, raising prices. The government then accurately predicted that the high prices wouldn’t last, betting […]

Summer Driving Expectations Get Oil Investors Excited Again

10 Apr 2017   Prices, USA

Summer may be a few months away but oil investors are already getting their hopes up that American drivers will do their part to rebalance the market. Hedge funds increased bets on higher West Texas Intermediate crude prices for the first time in six weeks, shrugging off rising U.S. supplies, as the coming driving season is expected to help ease the glut. Their wagers on more expensive gasoline jumped the most since last year, U.S. Commodity Futures Trading Commission data show. U.S. fuel producers typically boost crude processing at this time of year as they prepare for the summer surge in demand. In a sign that they’ve already started, a government report showed refineries operating at the highest rate in about three months. Foreign refiners are also developing a taste for American barrels. Crude exports rose to a record in February as China displaced Canada as the biggest customer, […]

US Jobs Report: Oil, Gas Employment Increases in March

8 Apr 2017   USA

Employment in oil and gas extraction and oilfield services increase in March, according to the latest US jobs report. The March jobs report is indicative of another positive step forward for the oil and gas industry. Data from the U.S. Bureau of Labor Statistics released April 7 show another monthly increase in the number of mining jobs, which includes oil and gas extraction. Mining added 11,000 jobs in March, with 8,800 of them being in support activities for mining. Jobs in oil and gas extraction increased by 1,800. Employment in mining has now risen by 35,000 since hitting a recent low in October 2016. Part of the uptick in U.S. employment can be attributed to the ramp-up in onshore activity with shale plays such as the Permian garnering a lot of investments. Many E&P (exploration and production) companies are now searching for talent again after being left with an […]

Canada sees emerging role for wind energy

7 Apr 2017   Canada

With economic diversification on the agenda in Canada, the country’s natural resources minister said this may be the start of the era for wind energy. Wind energy advocates and government officials visited Quebec for a regional energy conference as the North American energy landscape is shifting. Robert Hornung, the president of the Canadian Wind Energy Association, told the audience more of the economic growth needs to be powered by low-carbon sources. “We have the resources and we have the technology,” he said. The Canadian government estimates it has the eighth largest wind-energy portfolio in the world, with nearly 12,000 megawatts of installed capacity. Some provincial governments are taking the initiative on clean energy, which Saskatchewan leading efforts with its […]

Oil Rises as Refiners Pick Up Pace

7 Apr 2017   Oil Supply, Prices, USA

Oil prices rose to a one-month high after U.S. data gave hope that the country’s building crude stocks would soon reverse direction and begin falling. Refinery activity rose well beyond what analysts had expected, hitting 90.8% of capacity compared with just 89.3% a week ago, the U.S. Energy Information Administration said Wednesday. Traders have focused more on that Thursday than other data in the report that showed surprise…

Trump to OK new offshore plan, reverse Arctic, Atlantic bans: sources

7 Apr 2017   Oil Supply, USA

The Trump administration is developing at least one order aimed at both a new five-year offshore oil and natural gas leasing plan and reversing an Obama administration decision to bar drilling in the majority of US Arctic waters and a large chunk of its Atlantic waters, according to industry sources who have spoken to Department of Interior officials working on these actions. The details of the order, or separate orders or memorandums, are still being worked on, but are expected to be signed by President Donald Trump before the end of April, these sources said Thursday. The new five-year offshore leasing plan, which could take years to complete, will replace the five-year plan the Obama administration finalized in November. That 2017-2022 federal leasing plan currently includes 10 sales in the Gulf of Mexico and one in Alaska’s Cook Inlet over those five years, but does not include sales in […]

Hiring Bounces Back in 2017 for Oilfield Services Onshore, Offshore

7 Apr 2017   Oil Supply, USA

Onshore recruiting is underway again, and hiring for positions offshore may not be too far behind, according to recent announcements. A recent spike in hiring announcements suggests oilfield services companies are hitting the ground running to ramp up a workforce to tap North American shales. In North America, oilfield service companies are hiring . A quick check of Rigzone data shows job listings from Halliburton, Parker Drilling and Schlumberger, among others. Hiring offshore, too, is expected to pick-up next year with the acceleration of shale activity and final investment decisions (FID), according to Rystad Energy research. Dramatic layoffs dominated headlines during the last two years as historic low commodity prices roiled markets. Among the Big Four – Schlumberger, Halliburton, Baker Hughes and Weatherford International – up to 40 percent of workers lost their jobs. Companies with less exposure to North American markets made more modest cuts, up to 30 […]

Lawmakers Confuse Themselves on Climate Change

7 Apr 2017   Climate, USA

Last week, the day after President Trump signed an executive order to undo his predecessor’s efforts to fight climate change, the House Committee on Science, Space and Technology held a hearing that encapsulated everything that’s wrong with the way U.S. lawmakers handle science. Global warming is a time-sensitive threat; greenhouse gases are accumulating in the atmosphere, threatening a sharp increase in heat waves, droughts, and floods by mid-century (and eventually, the melting and collapse of the ice sheets at the Earth’s poles). But last week’s hearing, titled “Climate Science: Assumptions, Policy Implications, and the Scientific Method” and chaired by Texas Republican Lamar Smith, meandered from one tangent after another. A good chunk of time was spent questioning whether Penn State University climatologist Michael Mann called a colleague who disagreed with him “a carnival barker” and “a denier pundit.” Some evidence was presented that he had. But does this diminish […]

Energy sector a bright spot for Oklahoma

6 Apr 2017   USA

Gains in exploration and production activity in shale-rich Oklahoma are pulling the economy out of a slump, though recovery is slow, the state treasury said. Oklahoma is one of the top contributors to total U.S. oil production, accounting for about 5 percent of the nation’s total output. Lower crude oil prices curbed exploration and production activity last year and the state’s economy faltered as a result. State Treasurer Ken Miller said that, as exploration and production activity gains traction, the economy as a whole is showing signs of life. Data for March show tax collections from oil and natural gas production more than doubled year-on-year to $47.9 million. For the economy as a whole, however, total collections of $915 million […]

Summary of Weekly Petroleum Data for the Week Ending March 31, 2017

6 Apr 2017   Oil Supply, USA

U.S. crude oil refinery inputs averaged over 16.4 million barrels per day during the week ending March 31, 2017, 203,000 barrels per day more than the previous week’s average. Refineries operated at 90.8% of their operable capacity last week. Gasoline production decreased last week, averaging over 9.5 million barrels per day. Distillate fuel production increased last week, averaging about 5.0 million barrels per day. U.S. crude oil imports averaged about 7.9 million barrels per day last week, down by 374,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged over 7.9 million barrels per day, 2.3% above the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 607,000 barrels per day. Distillate fuel imports averaged 131,000 barrels per day last week. U.S. commercial crude oil inventories (excluding those in the Strategic […]

Canadian Oil Disruption, OPEC Output Cuts Open Door for Mexico

5 Apr 2017   Canada, Mexico

Canadian crude shipments to the U.S. are poised to shrink just as the effects of OPEC-led output cuts are being felt in the Caribbean. That’s good news for Mexico and other local oil producers. Syncrude Canada Ltd. told customers that they wouldn’t receive any supply in April from its 350,000 barrel-a-day upgrader, according to people familiar with the matter. The plant, which turns bitumen from Alberta’s oil sands into light synthetic crude, moved forward maintenance following a fire last month. Light crude and condensate jumped to the highest level in more than a year last week, and Western Canadian Select on Monday was the strongest since June 2015, when wildfires disrupted oil sands production. The loss of some Canadian shipments comes just as U.S. refiners are returning from seasonal maintenance and shipments from the Middle East are declining. Mexico stands to benefit from the disruption, as higher heavy Canadian […]