USA

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

20 Feb 2017   Shale Oil, USA

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

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

18 Feb 2017   Oil Supply, USA

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

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

18 Feb 2017   USA

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

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

18 Feb 2017   USA

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

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

17 Feb 2017   USA

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

U.S. Crude Inventories Reach Record High After EIA Reports Significant Build

16 Feb 2017   Oil Supply, USA

For the third week in a row the Energy Information Administration (EIA) has reported an increase in commercial crude oil inventories of 9.5 million barrels, to a total of 518.1 million barrels – exceeding the seasonal limit. The report came a day after the API estimated commercial inventories had jumped by 9.94 million barrels . The news is bound to cause worry among OPEC members who are being made painfully aware by U.S. shale boomers that the production cut agreement agreed to in November was a windfall for them – a windfall that they will make the best of while it lasts. Though prices started the week on the rise, boosted by the latest positive update from OPEC, including the IEA praising the cartel for its 90-percent compliance rate, the API figures partially offset the rise and now the EIA figures might offset the rest. The weekly inventory reports […]

Trump’s First Law Removes Transparency Rule For Big Oil

16 Feb 2017   Congress

President Trump’s first legislative act was to sign into law a repeal of a transparency rule aimed at keeping public oil companies in check with regard to their international operations and limiting the scope for bribery and corruption. Part of the so-called Dodd-Frank Act, devised after the 2008 financial crisis to avoid a repeat of the events that led to it, the rule stipulated that U.S. public oil companies must declare all payments made to the U.S. and foreign governments and agencies in the form of royalties and taxes, starting from their financial year ending in or after September 2018. It was an Act that Big Oil was very vocally against, saying the rule put it at a disadvantage to its foreign peers. Many of these foreign competitors are based in Europe, however, and are bound by similar regulations issued by the EU, supporters of Dodd-Frank have argued. Public […]

Trump Signs Measure Curbing Dodd-Frank Rules on Mining, Oil and Gas Companies

15 Feb 2017   USA

President Donald Trump signed a joint resolution in the Oval Office Tuesday rolling back part of the Dodd-Frank financial regulation overhaul that would require resource extraction issuers to report payments made to governments for the commercial development of oil, natural gas or minerals. Mr. Trump was seated at his desk, flanked by Vice President Mike Pence and members of Congress including Rep. Jeb Hensarling (R., Texas) and…

U.S. gas prices remain relatively stable

15 Feb 2017   Prices, USA

Retail gasoline prices in the United States continue to hold steady despite regional fluctuations because oil markets in are limbo, a market survey found. Motor club AAA reports an average retail price for a gallon of regular unleaded gasoline at $2.28, only a fraction of a cent higher than the previous day and less than a percent, or about 2 cents, higher than one week ago. By region, the West Coast markets remains the most expensive in the country with California holding the honors of the state in the Lower 48 with the highest price for gas at $2.87 per gallon. AAA data indicates some price hikes may be in store for this market because of a decline in gasoline inventories and unplanned maintenance […]

Chesapeake Energy Settles With Estate of Former CEO

15 Feb 2017   USA

Chesapeake Energy Corp. and the estate of its former chief executive, the late Aubrey McClendon, have agreed to settle a legal dispute involving claims that Mr. McClendon stole sensitive documents from Chesapeake to start a rival company. The Oklahoma City-based company was seeking $445 million in damages from Mr. McClendon’s estate for the alleged theft of maps and data. The company said Mr. McClendon took that information with him…

More drilling permits issued in Texas

14 Feb 2017   Shale Oil, USA

The number of new drilling permits issued in Texas last month was more than 80 percent higher than the previous year, state data show. Texas is the No. 1 oil producer in the state and accounts for about half of all the drilling activity in the country. Preliminary data from the Railroad Commission of Texas, the state oil and gas overseer, show 81.5 million barrels of oil produced in November, about 1 million barrels less than the previous month. The Texas energy sector, as well as the state economy , was under pressure for most of last year because of a downturn in crude oil prices. Since late last year, crude oil prices recovered in response to a decision from the […]

Will The U.S. See A Carbon Tax Under Trump?

14 Feb 2017   USA

Last week a group of Republicans and businessmen tabled a proposal for a carbon tax, designed to replace the Obama administration’s string of environmental regulations aimed at reducing climate change-aggravating emissions. The idea is not new. It has been put forward before by energy industry representatives, including Exxon’s then CEO Rex Tillerson , now Secretary of State, as a transparent and direct way to curb the effects of CO2 emissions on climate, even though the company lobbied against carbon tax bills last year. Basically, the idea amounts to replacing regulations with taxation—the latter which would be much more efficient in achieving the ends for which the regulations were devised. Starting from US$40 per metric ton of carbon dioxide, taxes would be increased every year to motivate more aggressive efforts to curb these emissions. Annual revenues from the tax are estimated broadly in the US$200 billion to $300 billion range, […]

U.S. Dependent on China for Rare Earth Minerals

14 Feb 2017   -, China, USA

An overlooked report has revealed the United States is completely reliant on imports from foreign countries, most heavily China, for rare earth minerals critical to our national security. The report, released by the United States Geological Survey, stated the United States is 100% dependent on foreign imports for at least 20 elements and minerals, including 17 classified as rare earth minerals critical to the development of high-grade magnets used in aircraft and missile systems. In addition to the use in military hardware, many rare earth minerals are critical for the development of GPS systems, satellite imaging, night vision goggles, and consumer products like smartphones and flat-screen televisions. One country has a near monopoly over exporting rare earth minerals to the United States: China. According to the report, the United States is 100% reliant on foreign countries (most notably the African nations of Gabon and South Africa) for the mineral […]

U.S. boosts monthly rate of oil rig additions to most since 2012: Baker Hughes

11 Feb 2017   USA

U.S. energy companies accelerated the rate of growth in oil rigs added over the past four weeks by the most since 2012 as drillers take advantage of a rise in crude prices since OPEC agreed to cut supplies in late November. Drillers added eight oil rigs in the week to Feb. 10, bringing the total count up to 591, the most since October 2015, energy services firm Baker Hughes Inc said on Friday. During the same week a year ago, there were 439 active oil rigs. The average rate of rig additions over the past four weeks increased to 17, its highest rate of growth since February 2012, Baker Hughes data showed. Since crude prices first topped $50 a barrel in May after recovering from 13-year lows last February, drillers have added a total of 275 oil rigs in 33 of the past 37 weeks, the biggest recovery in […]

U.S. Oil-Rig Count Climbs by 8

11 Feb 2017   USA

The number of rigs drilling for oil in the U.S. rose by 8 in the past week to 591, according to oil-field services company Baker Hughes Inc. The U.S. oil-rig count is typically viewed as a proxy for activity in the sector. After peaking at 1,609 in October…

Oil Companies, Corrupt Governments to Benefit as Congress Guts Transparency Rule

10 Feb 2017   Congress

On February 3, the Republican-led Senate used an obscure procedural tool to end a bipartisan provision meant to fight corruption and overseas oil bribery, a rule opposed by Rex Tillerson as head of ExxonMobil. The Securities and Exchange Commission’s (SEC) transparency rule, part of the 2010 Dodd-Frank financial reform bill, was created to reduce corruption by requiring drilling and mining companies to disclose royalties and other payments made to governments in exchange for oil, gas, and mining extractions. Critics say overturning the rule could threaten national security. Written by Sen. Ben Cardin (D-MD) and Sen. Richard Lugar (R-IN), the transparency rule mandated that extractive companies listed on the U.S. Stock Exchange — including Exxon, Chevron, and several Chinese oil conglomerates — publish details of the hundreds of billions of dollars paid for the rights to a nation’s natural resources. The transparency rule was implemented in 2016 with broad support […]

U.S. gasoline tax hike may dent fuel demand in oversupplied market

10 Feb 2017   Prices, USA

A potential increase in gasoline taxes in several U.S. states could put a dent in demand at the pumps and mark another setback for a market already flooded with excess fuel. States where gasoline taxes in some cases have not risen in decades, are discussing hikes. Conditions might be ripe for the proposed increases to win approval in state legislatures, tax experts said this week. The discussions come at a time when U.S. refiners are still reeling from their worst year since the shale boom and face the prospect of weak retail demand for the first time in five years. Oversupply, in the world’s second largest energy consumer, was rampant in 2016 and this year looks no different. Any significant increase in taxes is likely to be […]

Trump Expected to Name Two Veteran Lobbyists to Advise on Energy Issues

9 Feb 2017   USA

President Donald Trump is likely to tap two veteran lobbyists to advise on energy and environmental issues in the White House, according to multiple people close to the new administration, filling key roles with longtime Washington experts. Michael Catanzaro, a lobbyist at CGCN Group, is likely to be tapped to cover domestic energy issues, and George David Banks, executive vice president at conservative nonprofit American…

Reduced US crude exports to Canada drag December total lower

9 Feb 2017   Canada, USA

US crude exports fell by 156,000 b/d in December, to 442,000 b/d, after exports into Eastern Canada dried up, a S&P Global Platts analysis of US Census Bureau data released Tuesday showed. US crude exports to Canada declined by 155,000 b/d, to 196,000 b/d, as flows from New York and Maine dropped to zero after averaging 187,000 b/d in October and 25,000 b/d in November. Crude exports from New York into Canada averaged 137,000 b/d over 2016 and are most likely rail shipments of Bakken crude. Statistics Canada data confirms that Canada slashed its US crude imports in December, bringing in more Nigerian, Algerian and Saudi Arabian cargoes, while total imports were down by 145,000 b/d at 593,000 b/d. The Statistics Canada data shows that New Brunswick imports from the US fell to zero in December, with the province’s US imports averaging 35,000 b/d in 2016 and shipments arriving […]

U.S. refiners give mixed reviews of GOP-backed border tax plan

9 Feb 2017   USA

U.S. independent refiners like Phillips ( PSX.N ) and Valero ( VLO.N ) have offered mixed support for Republican efforts to boost American jobs and products, expressing concerns about how a border tax on imports could upend the energy ecosystem. The comments by refining executives in a wave of recent earnings calls offer the first glimpse of the balancing act U.S. refiners must perform under the Trump Administration: Applaud pro-business proposals while raise alarms about protectionist policies that may hurt American consumers – and perhaps their own balance sheets. Congressional Republicans and the Trump administration are considering a basket of tax reforms, the centerpiece of which is a 20 percent tax on imports, to try to drive domestic manufacturing and energy industry growth. The tax would be offset by cutting income taxes on exports. Refining executives warned it would have significant consequences for the U.S. refining industry that imports […]

U.S. rig count up 4 percent

8 Feb 2017   USA

The number of rigs actively exploring for or producing oil or gas in the United States was up 4.4 percent year-on-year in January, Baker Hughes reported. Baker Hughes published its report for January rig counts . Rig counts reflect exploration and production activity and serve as a loose barometer for industry confidence in a particular market. In the United States, the oilfield services company recorded 683 rigs on average working as of January. That’s up nearly 8 percent from December and 4.4 percent higher than January 2016. The worldwide rig count was 1,918 for January, up 8.2 percent from December and up 1.4 percent year-on-year. Crude oil prices dropped below $30 per barrel in early 2016, but recovered to around […]

Republican grandees make case for US emissions tax

8 Feb 2017   Climate, USA

A group of former senior US officials from past Republican administrations has backed a tax on carbon dioxide emissions, with revenues used to pay hundreds of dollars to every American citizen each year, as the way to make the conservative case for tackling the threat of climate change.  The group includes James Baker, who was Treasury secretary for President Ronald Reagan and secretary of state for President George H.W. Bush; George Shultz, who was secretary of state under Mr Reagan; Hank Paulson, who was Treasury secretary under George W Bush; Martin Feldstein, who was the chairman of the Council of Economic Advisers for Mr Reagan, and Greg Mankiw, who performed the same role for the younger Mr Bush.

Some of them are meeting officials from President Donald Trump’s White House on Wednesday, to present a plan for addressing global warming that they say would “embody the principles of free markets and limited government.”  Their package includes a tax on carbon dioxide emissions, starting at $40 per ton, with all of the revenue recycled in dividends paid back to the public. The group, known as the Climate Leadership Council, argues that the tax, which could rise over time, would send “a powerful signal to businesses and consumers, while generating revenue to reward Americans for decreasing their collective carbon footprint.”

Oil benchmark futures play back in vogue as U.S. debates import tax

8 Feb 2017   USA

After several years of neglect, oil investors are again betting heavily on the price difference between two global benchmarks – Brent and U.S. crude futures – due to a push in Washington to impose a controversial import tax. At the start of this decade, the play on the spread between North Sea Brent and U.S. West Texas Intermediate (WTI) contracts futures earned traders and banks hundreds of millions of dollars, provided they played the high-stakes game right. This trade, nicknamed the “widowmaker” for its high level of risk, fell out favor about four years ago when the two contracts resumed moving in tandem, sharply reducing the spread volatility on which it depended. Then OPEC’s decision in November to cut crude output, hoping to reverse more than a year of steep […]

Volkswagen Forms U.S. Unit for Zero-Emission Vehicles

8 Feb 2017   Electric Cars, USA

Volkswagen AG launched a U.S. subsidiary Tuesday designed to oversee $2 billion in investments to promote zero-emission vehicles such as electric cars, a commitment the German auto giant made in the wake of cheating on U.S. emissions tests for several years. Dubbed Electrify America LLC, the organization is an attempt to show a renewed commitment to clean vehicles by pouring money into electric-vehicle charging stations in the U.S….

Shell, Phillips 66 buy 6.4 million barrels of oil from U.S. emergency reserve

8 Feb 2017   USA

Oil companies Shell and Phillips 66 together bought 6.4 million barrels of oil last week from the Strategic Petroleum Reserve (SPR), according to a Department of Energy document released on Tuesday. Shell bought 6.2 million barrels of oil and Phillips 66 bought 200,000 barrels on Jan. 18, according to the department document, seen by Reuters. The federal government held the sale to fund a revamp of the emergency oil stash, which is stored in salt caverns in Louisiana and Texas along the Gulf Coast. The Department of Energy had said it would sell up to 8 million barrels as part of its modernization program. Shell will take delivery of 1.7 million barrels of oil to a […]

EPA Scientists Worry Their New Boss Doesn’t Want Science

7 Feb 2017   Climate, USA

Scott Pruitt, Oklahoma’s attorney general, is probably going to be the head of the Environmental Protection Agency. The full Senate will almost certainly vote to confirm him to the cabinet-level job this week. And that has the scientists who work for the EPA freaking out. The problem is, well, that whole protecting-the-environment thing. Advocacy groups complain Pruitt ignored scientific reports that showed oil and gas drilling have caused an epidemic of earthquakes in Oklahoma and failed to enforce pollution rules that would have stopped waste from Arkansas chicken farms from floating downriver into Oklahoma. As Oklahoma’s AG, Pruitt sued the EPA over mercury, methane, and other environmental rules, although he lost. And he doesn’t seem to think climate change is a threat worth studying , […]

U.S. East Coast Has a Growing Appetite for Foreign Oil

7 Feb 2017   Oil Supply, USA

U.S. East Coast refineries, which have thrived for a few years on a boom of production from the Bakken shale play in North Dakota and eastern Montana, are increasingly looking abroad to supply their needs. Last year through November, the region imported 884,000 barrels a day, which would be the highest full-year total since 2011, data from the U.S. Energy Information Administration show. Rising supplies overseas made imported oil cheaper than domestic for the first time since 2013, data from the U.S. Energy Information Administration show. The price switch opened the doors for refineries like PBF Energy Inc., Philadelphia Energy Solutions and Phillips 66 to boost imports, says Andy Lipow, president of Lipow Oil Associates LLC in Houston. He said the new Dakota Access Pipeline, one of the energy projects supported by President Donald Trump, will make the East Coast even more reliant on imports. The 1,172-mile line developed […]

Iran says U.S. sanctions stop American oil firms taking part in projects

6 Feb 2017   Iran, USA

Iran has imposed no restrictions on U.S. oil firms willing to participate in energy projects in the country but American sanctions make such cooperation impossible, Iran’s deputy oil minister said on Monday. “Iran has not imposed any restrictions on the U.S. companies, but they cannot participate in our (oil and gas) tenders due to the U.S. laws,” Amir Hossein Zamaninia, deputy oil minister for trade and international affairs, was quoted as saying by state news agency IRNA. “Based on the U.S. Congress sanctions, the American oil companies cannot work in Iran,” he added. Iran said on Saturday that it will hold the country’s first tender in mid-February since the lifting of international sanctions to develop oil and natural gas fields. […]

US Could Export More Oil Than OPEC Countries In 2017

6 Feb 2017   exports, USA

The U.S. may export more oil in 2017 than four OPEC member states produce, according to a survey of energy analysts by Bloomberg. The U.S. is already outproducing Libya, Qatar, Ecuador and Gabon; in 2017, U.S. companies could ship more oil overseas than those OPEC nation pump out of the ground, according to Bloomberg . “The United States has dramatically increased energy production and use even as emissions continue to decline,” Reid Porter, a spokesman for the American Petroleum Institute (API), told The Daily Caller News Foundation. “For the first time in our lifetime, we can now say that North America has the potential to become a net energy exporter,” Porter said. “That’s a revolutionary change, a significant shift from where we were just a few short years ago.” The U.S. Energy Information Administration (EIA) expects oil production to top nine million barrels a day in 2017. The U.S. […]

Iran thumbs nose at Washington on oil

4 Feb 2017   Iran, USA

Iran is still able to get its crude oil to the international market and increase production despite souring U.S. relations, an Iranian official said Friday. The White House is expected to hit Iran with new sanctions in response to a recent missile test after putting Tehran “on notice” earlier this week . Iran secured relief from some Western sanctions in early 2016 after the United Nations confirmed compliance with a multilateral deal that scaled back Tehran’s nuclear research program. Alaeddin Boroujerdi, the chairman of Iran’s Foreign Policy and National Security Commission, said Iran was still secured by the Joint Comprehensive Plan of Action, as the nuclear agreement is called. “Despite enemies’ economic war against Iran, we were able to increase oil export from 1 […]

Republicans kill energy sector disclosure, emissions rules

4 Feb 2017   Congress

U.S. Republicans on Friday repealed a securities disclosure rule aimed at curbing corruption at oil, gas and mining companies and voted to ax emissions limits on drilling operations, part of a push to remove Obama-era regulations on the energy industry. In a 52-47 vote, the Republican-controlled Senate approved a resolution that wipes from the books a rule requiring companies such as Exxon Mobil and Chevron Corp to publicly state the taxes and other fees paid to foreign governments. The House of Representatives already has passed the measure. President Donald Trump is expected to sign it shortly. Exxon and other major energy corporations have fought for years to prevent the rule, required by the 2010 Dodd-Frank Wall Street […]

U.S. oil rig count rises to highest since October 2015: Baker Hughes

4 Feb 2017   Shale Oil, USA

U.S. energy companies added oil rigs for a 13th week in the last 14, extending a nine-month recovery as drillers take advantage of crude prices that have held mostly over $50 a barrel since OPEC agreed to cut supplies in late November. Drillers added 17 oil rigs in the week to Feb. 3, bringing the total count up to 583, the most since October 2015, energy services firm Baker Hughes Inc said on Friday. During the same week a year ago, there were 467 active oil rigs. Since crude prices first topped $50 a barrel in May after recovering from 13-year lows last February, drillers have added a total of 267 oil rigs in 32 of the past 36 weeks, the biggest recovery in rigs since a global oil […]

U.S. gasoline stocks are rising much faster than usual: Kemp

4 Feb 2017   USA

U.S. gasoline stocks are rising much faster than normal at the start of the year, threatening to leave refiners struggling to clear an overhang of motor fuel later in the year. Gasoline stockpiles rose by almost 21 million barrels during the first 27 days of 2017, compared with an average increase of less than 12 million barrels at the same time of year during the previous decade. Stocks have only risen this fast on one other occasion in the last 10 years, and that was in 2016, when refiners and blenders ended up with a large surplus which lingered through the summer ( tmsnrt.rs/2koIvZX ). Stocks hit a seasonal record of 257 million barrels on Jan. 27, according to an analysis of data from the U.S. Energy Information Administration. Stocks are now 4 million barrels higher than in 2016 and almost 26 million barrels higher than the 10-year seasonal […]

America’s Biggest Asphalt Plant Is Shutting When the Country Might Need It Most

4 Feb 2017   USA

Axeon Specialty Products LLC is shuttering the U.S. largest asphalt refinery when the country might need it the most. The Stamford, Connecticut-based company announced last month it plans to close its Paulsboro, New Jersey, refinery, and convert it into a terminal. The planned shutdown comes as President Donald Trump has pledged to build new roads, highways and bridges across the country. The U.S. would need 63 percent more asphalt than its consumes now just to pave roads at the rate it reached a decade ago, Energy Information Administration data show. Any new road building runs up against the question of funding and a simple pledge isn’t enough to keep Axeon’s plant running, Gurpal Dosanjh, Bloomberg Intelligence analyst, said in a phone call from New York. “It’s very difficult for any company to base it’s future on a one sentence […]

Congress Moves to Rescind Rule Requiring Big Oil to Reveal Foreign Government Payments

4 Feb 2017   Congress

The Senate voted Friday to rescind a rule that would have required energy companies to report payments to foreign governments for the right to develop oil, gas and mineral assets, handing a victory to an industry that has spent nearly six years fighting the disclosures. Senators voted 52-47 to repeal the Securities and Exchange Commission regulation, taking advantage of a previously little-used law, the Congressional Review Act, which allows Congress to overturn agency rules. Using the same law, the Senate on…

Rig Count Sees Largest 4 Week Gain Since April 2014

4 Feb 2017   USA

The number of active oil and gas rigs in the United States increased on Friday by 17, nearly erasing earlier gains to both WTI and Brent crude oil benchmarks. Both benchmarks were trading up early on Friday on the back of geopolitical tensions between Iran and the United States over the threat of fresh sanctions. The total number of active oil and gas rigs in the United States is now 729, according to oilfield services provider Baker Hughes , which is 158 rigs above the rig count a year ago. This week marks the largest four-week gain to the number of oil rigs (+54) since April 2014 (+56). All of this week’s gains were oil rig gains, which were up from 566 last week to 583 this week. The number of active oil rigs in the United States is now the highest since October 2015. Oil rigs have increased […]

Exporters Tout Benefits of Republicans’ ‘Border Adjustment’ Proposal

3 Feb 2017   USA

U.S. exporters are starting to put political weight behind a House Republican tax plan, touting the benefits of “border adjustment” to investors and forming a coalition to push the idea. Companies such as Dow Chemical Co. and Lockheed Martin Co. have been speaking about the plan’s benefits on earnings calls. On top of that, the American Made Coalition is launching an effort Thursday to rally support for border adjustment. The…

Republican border adjustment tax: how it could work

3 Feb 2017   USA

The Trump administration is promising sweeping reforms to the corporate tax system, in a move that could have big consequences far outside the US.  A main point of reference is a corporate tax blueprint drawn up by Republican members of the House of Representatives — in particular a proposal for a “border adjustment tax”. The idea has sparked intense opposition from parts of the US business community. But proponents say it would boost investment in the country.  Last week the White House suggested that such a tax would be one way to finance the wall Donald Trump has promised to build on the frontier with Mexico.

What is in the proposal?

Under the border adjustment proposal, companies would no longer deduct the cost of imported goods from their taxable profits, while exports would not be taxable.  While many details remain unclear, taxing spending on imports instead of taxing sales of exports would be a winner for a country with a large trade deficit. The Tax Foundation, a Washington think-tank, says the border adjustment tax would be expected to raise $1tr over a decade. But other aspects of the plan are likely to reduce business tax revenues overall, reinforcing the decline in corporate tax revenues as a share of the economy over the past 50 years

Tillerson Vow to Keep Away From Exxon Runs Into World of Oil

ExxonMobil’s global reach will pose a wealth of conflict-of-interest questions for former CEO Rex Tillerson now that he’s the US secretary of state. (Bloomberg) — Exxon Mobil Corp. boasts that it drills for oil and gas on six continents and sells fuel and chemicals in almost every country on the planet. That global reach will pose a wealth of conflict-of-interest questions for former CEO Rex Tillerson now that he’s the U.S. secretary of state. Tillerson, who spent his entire 41-year career at Exxon, cut his financial ties under an ethics agreement after Donald Trump nominated him, giving up deferred stock rights in return for a $180 million cash payout to an independently managed trust. Tillerson also must recuse himself from decisions “directly and substantially related to” his former employer for two years under the president’s ethics order for his appointees. “He has severed himself in a pretty final and […]

Top 10 Bankruptcies Of 2016 Feature 9 Energy Firms

2 Feb 2017   Shale Oil, USA

Low oil prices and the distress of the solar, coal, and oil and gas producers resulted in nine energy firms making the top 10 of public company bankruptcies for 2016 with assets valued at more than US$3 billion each, according to a recent publication by law firm Jones Day. The top 10 bankruptcies of public companies – defined as a company with publicly traded stock or debt – included just one non-energy entry and came from the airline industry. Jones Day’s top 10 bankruptcies list for 2016 paints a rather gloomy picture of the energy industry’s struggles amid the downturn in oil prices, slashed investments in drilling, and heavy borrowing before the slump. Saint Louis-based solar energy company SunEdison Inc held the unfortunate no.1 spot on Jones Day’s list with US$11.5 billion worth of assets and more than US$8 billion in debt. SunEdison filed for Chapter 11 protection in […]

U.S. May Export More Oil in 2017 Than Four OPEC Nations Produce

2 Feb 2017   exports, USA

U.S. crude exports are poised to surpass production in four OPEC nations in 2017 and may grow even more if President Donald Trump honors pledges to ease drilling restrictions and maximize output. The world’s largest oil-consuming country could sell as much as 800,000 barrels a day of crude overseas this year, according to four analysts surveyed by Bloomberg. That’s more than OPEC producers Libya, Qatar, Ecuador and Gabon each pumped in December. The U.S. exported 527,000 barrels a day in the first 11 months of 2016, Energy Information Administration data show. Chalk it all up to a resurgence in shale oil and gas, which Trump is counting on to create jobs and rebuild roads, schools and bridges. U.S. output will rebound to more than 9 million barrels a day in 2017 after sliding 5.6 percent to 8.87 million in 2016, the EIA estimates . And since restrictions on U.S. […]

Former Exxon CEO Tillerson Confirmed as US Secretary of State

2 Feb 2017   USA

Rex Tillerson, the former Exxon Mobil Corp. chief, won Senate confirmation as secretary of state after lawmakers split mostly along party lines on U.S. President Donald Trump’s choice of an oilman with no government experience but a career negotiating billions of dollars of energy deals worldwide. On a vote of 56-43 Wednesday, Republicans overcame a demand by Democrats to delay the confirmation until Tillerson provided his views on the executive order Trump signed restricting entry to the U.S. from seven predominantly Muslim nations. One of Tillerson’s first challenges as the top U.S. diplomat will be dealing with the fallout from the order, which has brought condemnation from governments around the world. Republican senators echoed Trump’s conviction that Tillerson’s role […]

U.S. crude and distillate stocks rise sharply: EIA

2 Feb 2017   Oil Supply, USA

U.S. crude stocks rose last week, along with gasoline and distillate inventories, the Energy Information Administration said on Wednesday, as refiners continued to let stocks build in a seasonally slow season for production. Crude inventories rose 6.5 million barrels in the week to Jan. 27, far exceeding analyst expectations for an increase of 3.3 million barrels. Crude prices declined briefly after the data and then rebounded as traders focused on other factors. U.S. West Texas Intermediate crude futures were at $53.20 a barrel, up 0.7 percent on the day, or 38 cents, while Brent crude gained 0.9 percent to $56.05 a barrel, up 47 cents. “Crude prices are still receiving support due to the weakening US dollar index and as markets look ahead to the upcoming OPEC report highlighting the […]

BLOG: Federal Oil, Gas $6B Revenue Marks Lowest Level Since 2004

2 Feb 2017   USA

Revenue from oil and gas production on federal and American Indian lands declines by almost 37% between 2015 and 2016 – and American Indian land development remains at a standstill. Since peaking in 2014 at $14 billion, revenue collected by the government from oil and gas production on federal and American Indian lands has been in decline – bottoming out in 2016 at $6 billion, which is the lowest total since 2004, according to the U.S. Energy Information Administration. Each year, money collected from royalties and rents, leases and fees is redistributed among those states where production occurred on federal lands. The states in turn apply the funds to their general budgets for legislative allocation. The funds collected from these lands has decreased along with oil prices, an EIA spokesperson told me. Royalties, which accounted for 86 percent of the total 2016 revenue, are valued based on the amount […]

Saudi Arabia may raise U.S. oil investments under Trump: Falih

1 Feb 2017   Saudi Arabia, USA

Saudi Arabia may increase its oil investments in the United States due to a more fossil fuel-oriented energy policy by the U.S. administration of President Donald Trump, the kingdom’s energy minister told the BBC in an interview. “President Trump has policies which are good for the oil industry and I think we have to acknowledge it,” Minister of Energy, Industry and Mineral Resources Khalid al-Falih told the BBC. Asked whether there is a worry about Trump’s promise to pursue energy independence, Falih said: “We have no problem with the growth of American indigenous oil supply. I have said it repeatedly as long as they grow in line with global energy demand, we welcome them,” Falih said. “We had billions of dollars invested in refining and distribution in the United States […]

Oil Braces for Trump Ban Fallout as Halliburton Says Stay Put

1 Feb 2017   USA

Halliburton advises affected workers not to come to the U.S. Oil-services giant Halliburton Co. told employees to stay put. Another global oil company is reconsidering whether to place a crude trader in Houston. And universities that train energy workers across the country estimated that hundreds of students may be affected. Of all the energy sectors that may feel the pain of President Donald Trump’s order to temporarily ban people from seven majority-Muslim countries, oil and natural gas companies — industries he vowed to help during his election campaign — stand to be hit the hardest. On Monday, energy companies led declines in the Standard & Poor’s 500 Index as investors weighed Trump’s first week in office. “Oil and gas is going to have the most heartburn from this,” Michael Webber, deputy director of the Energy Institute at University of Texas at Austin, said by phone Monday. “Other parts of […]

Exxon says it can more than double output in Permian Basin

1 Feb 2017   Oil Supply, USA

ExxonMobil, the world’s largest listed oil company, has said it will be able to more than double its output in the Permian Basin region of the US and maintain it at that level for decades, in a vote of confidence in the outlook for North American shale production.The company told analysts on Tuesday morning that it could add 350,000 barrels of oil equivalent per day from the Permian region of Texas and New Mexico, thanks to the $6.6bn acquisition of companies from the Bass family announced in January. Its current output in the region is 140,000 b/d.That increase would take shale oil from the Permian and the Bakken formation of North Dakota to 20-25 per cent of Exxon’s total production of crude and related liquids, up from 12 per cent today. It could be sustained on a “multi-decade production plateau”, the company said.Large oil companies including Exxon were left out of the initial boom in US shale gas and oil production, but in recent years it has been working to build up its operations, while its smaller rivals have been under financial strain from the weakness of crude and gas prices. Chevron, the second-largest US oil group, has also been building up its operations in the Permian Basin.

Why The Trump Administration Is A Huge Wildcard For The Oil Industry

1 Feb 2017   USA

The implications of a Trump presidency for the oil markets are hard to discern, given the unpredictability of the new administration. But a few possible scenarios are worth considering. The first is the most obvious. Trump and his Republican allies in Congress will do all they can to preside over a drilling boom. That will mean repealing regulations – the Congress is introducing legislation this week to kill an Obama era executive order on methane emissions from oil and gas wells drilled on federal land. It will presumably result in the opening up of territory for new drilling both onshore and offshore, from the Atlantic Ocean to the Arctic Ocean and everywhere in between. The oil-friendly campaign could also result in trying to undermine competing technologies to fossil fuels, by scrapping incentives for renewables and withdrawing from the Paris Climate Change Accord. The result could be much more U.S. […]

Trump’s Border Tax Could Kill U.S Oil Exports, Raise Gas Prices

1 Feb 2017   USA

Crude is rallying on this final day of January, as hopes and projections of OPEC production cuts return to the fore once more. Before we charge into a new month tomorrow, amid weekly inventory data to boot, hark, here are five things to consider in oil markets today. 1) The implications of a Border Adjustment Tax (BAT) – aka an import tax – on U.S. crude would not only impact import flows, but exports and domestic production as well. If crude was homogenous, then there could be direct substitution: U.S. domestic production, suddenly at a 20 percent advantage given an import tax, could replace crude imports. But it is not quite that simple; crude comes in many different grades (we tracking nearly 400 of ’em). There are three main grades: light, medium and heavy. This is where the challenge arises. U.S. shale plays produce higher quality, light crude. This […]

EIA: US Oil Production Rose 105,000 Bpd In November

1 Feb 2017   Oil Supply, USA

U.S. crude output rose for the second consecutive month in November, according to a U.S. government report released Tuesday. Evidence of the growth in U.S. production comes as the oil market is weighing whether output cuts from major producing nations will be enough to reduce a supply glut that has weighed on global markets for more than two years. U.S. crude output rose 105,000 barrels per day in November to 8.904 million bpd from a revised 8.799 million bpd in October, the U.S. Energy Information Administration said in a monthly report. Oil production in the U.S. Gulf of Mexico rose 90,000 bpd in the month, and output in Texas climbed by 20,000 bpd, according to the report. North Dakota production fell by 7,000 barrels a day. While the government data is from November, weekly rig reports from driller Baker Hughes suggest that U.S. […]