Recent Articles

Trump to Order Review of 1906 Monuments Law to Help Oil, Mining

26 Apr 2017   USA

Executive order to seek review of Antiquities Act designations National monuments puts land off limits to energy development President Donald Trump will order a review of as many as 40 large national monuments that have been declared over the past two decades, beginning a process that could lead to the repeal of protections for those lands and new opportunities for oil and mining companies. Interior Secretary Ryan Zinke — whom Trump will task with the review in an order set to be signed Wednesday — told reporters it is meant to ensure local communities have a chance to weigh in on the set-aside of lands. Zinke will have 45 days to come up with preliminary determinations on which, if any, monument declarations should be redrawn or yanked. “The concern that I have and the president has is the local community affected should have a voice,” Zinke said. The order […]

Norway at least doubles Barents Sea reserve estimate

26 Apr 2017   Norway

 The estimated amount of undiscovered oil and gas in the Norwegian waters of the Barents Sea is likely twice what was previously assumed, the government said. Apart from Russia, Norway is the lead oil and natural gas exporter to the European market, designating nearly all of its offshore production for European Union demand. The Norwegian Petroleum Directorate said new data from eastern and northern parts of the Barents Sea, areas previously a source of dispute with Russia, led to upward revisions of the reserve estimate by up to 65 percent. NPD Director General Bente Nyland said figures still carry a degree of uncertainty, but added the Barents Sea in general is already expecting a record this […]

Will Russia Join The OPEC Cut Extension?

26 Apr 2017   Russia

As the global oil supply glut grows, Russia has not yet climbed on board of OPEC’s production cut agreement extension. (Click to enlarge) (Click to enlarge) Chart of the Week (Click to enlarge) • At the end of March, U.S. natural gas storage levels stood at 2,051 billion cubic feet (Bcf), or about 15 percent above the five-year average. • Storage levels tracked average levels for most of the winter, but mild weather in February and March caused inventory drawdowns to slow. • But that pales in comparison to the same period a year ago, when inventories stood near an all-time high, pushing prices below $2/MMBtu. • Gas markets today are a bit more balanced, although slightly elevated storage levels could keep prices from rising to $4/MMBtu. Market Movers • Saudi Aramco says that the company should be valued at $2 trillion ahead of its IPO, but independent analysts […]

Barents Sea Oil Reserves Twice As Big As Previously Thought

26 Apr 2017   Norway

The Norwegian Petroleum Directorate (NPD) said on Tuesday that its latest estimates show that the undiscovered oil and gas resources in the Barents Sea are twice as large as previously thought, drawing criticism from green groups over potential opening up of drilling in sensitive iced areas. The NPD has recently mapped the eastern part of the northern Barents Sea, a large part of which is located in the previously disputed area, “and most of the new information has been collected after the demarcation line agreement with Russia entered into force in the summer of 2011,” the Norwegian oil regulator said. A large part of the resources in the new area—which are estimated at 1.4 billion standard cubic meters of oil equivalents—are not open for drilling, according to the NPD. The Barents Sea could hold a total of 2.8 billion standard cubic meters of oil equivalents, equal to 17.6 billion […]

Iceland Geothermal Project Completes Deep Drilling In Volcano

26 Apr 2017   Iceland

Geologists and engineers have successfully drilled into the heart of a volcano in Iceland, as part of a project aimed at assessing the economic feasibility of using deep unconventional geothermal resources to deliver renewable energy. Drilling so deep into such a hot borehole poses many difficulties, but if researchers manage to overcome the challenges, fewer geothermal wells would need to be drilled in the future because the energy content of fluids so deep into the ground is much higher than conventional geothermal steam. The Deployment of deep enhanced geothermal systems for sustainable energy business (DEEPEGS), funded under the EU’s Horizon 2020 program, considers unconventional geothermal resources as those that are superhot, up to 550 degrees Celsius (1,022 degrees Fahrenheit), and very deep—more than 3 kilometers (1.864 miles). Earlier this year the Iceland Deep Drilling Project (IDDP) at the Reykjanes Peninsula in Iceland completed drilling at a depth of 4.659 […]

North Sea Oil Floods to Asia Like Never Before on OPEC Cuts

26 Apr 2017   Asia, Norway

Grade’s premium to Dubai oil has lowest close in seven years Smaller gap makes Brent more attractive to Asian refineries North Sea oil is flooding into Asia like never before thanks to the most competitive crude prices in seven years. OPEC’s own output cuts are partly to blame. Brent, a global benchmark, closed at a premium of just 57 cents a barrel to Dubai crude on Monday, the greatest incentive to move North Sea oil east since June 2010, data from PVM Oil Associates in London show. It was at about $2.50 at the end of November, when the Organization of Petroleum Exporting Countries said it would cut output. North Sea tankers sailing to Asia soared to a record this month, hauling at least 540,000 barrels a day. Supply of heavy grades, dominating much of the output of Saudi Arabia and neighboring countries, has diminished since OPEC and allied […]

Oil Steadies After Six-Day Slide as U.S. Stockpiles Seen Falling

25 Apr 2017   Prices

U.S. inventories probably fell 1.95 million barrels last week Russia’s Novak will meet nation’s oil bosses on OPEC-led deal Oil halted a six-day slide before U.S. government data that’s forecast to show crude stockpiles fell for a third week. Futures were little changed in New York after dropping 7.4 percent over the previous six sessions. Stockpiles probably slid by 1.95 million barrels last week, according to a Bloomberg survey before a report from the Energy Information Administration on Wednesday. Russian Energy Minister Alexander Novak will meet with the nation’s oil bosses this week to discuss extending an accord by global producers to cut output. Oil’s rally faltered last week amid concern that rising U.S. output will offset efforts by the Organization of Petroleum Exporting Countries and its allies to trim a global glut. While OPEC members mull an extension to the six-month deal past June, American drillers targeting crude […]

Oil Slides on Signs of Oversupply

25 Apr 2017   Prices

Oil prices retreated Monday, as growing U.S. production and other signs of global oversupply keep thwarting a widely-expected rally. Monday’s downturn from overnight gains is the latest sign oil may continue to fall instead of rising toward $60 a barrel as many predicted, brokers and analysts said. Losses Monday would mark the sixth down session in a row for U.S. oil. It is now off 8.3% from the one-month high it hit April 11 and…

Oil recovers some ground, rise in U.S. drilling caps gains

25 Apr 2017   Prices

Oil prices recovered some lost ground on Monday after big losses last week, driven by expectations that OPEC will extend output cuts till the end of 2017, although a relentless rise in U.S. drilling capped gains. Brent crude futures LCOc1 rose 54 cents by 0920 GMT to $52.50 per barrel. U.S. West Texas Intermediate (WTI) crude oil futures CLc1 added 49 cents to reach $50.11 a barrel. Oil prices fell steeply last week on the back of stubbornly high crude supplies, despite a pledge by the Organization of the Petroleum Exporting Countries (OPEC) and some other producers to cut production by almost 1.8 million barrels per day (bpd) for six months from Jan. 1 to support the market. But prices on Monday received a respite after a panel of OPEC and […]

The Bullish Case For Oil Is Fading Fast

25 Apr 2017   Prices

Oil prices took another dip on Monday, and with WTI down to $49 per barrel, crude oil has given up most of the gains that it had made so far this month, taking prices down to their lowest levels since late March. Major investors are also losing a bit of confidence in oil’s comeback. Hedge funds and other money managers took a breather in the buildup, buying up long positions in the most recent week for which data is available. Much of the rally in oil prices between the end of March and mid-April occurred as investors closed out short positions and took on bullish bets. Since then, however, hedge funds have slowed their net-long builds, a sign of waning confidence in higher oil prices. Also, the futures market no longer looks all that encouraging. The contango is back, a sign of concerns about near-term oversupply. Front-month contracts are […]

Op-Ed: Will OPEC Production Cuts Fail?

25 Apr 2017   OPEC

OPEC complies with its production cut deal, but one month before the cartel returns to Vienna to consider an extension, crude oil’s march toward market stability and a $65 per barrel price point is slow. A barrel of oil lingers priced in the low $50s and the global supply and demand ratio remains out of whack. Does that mean failure for OPEC’s six-month experiment to stabilize global markets and increase the price of oil ? Not according to the experts. When markets closed April 21, the price of WTI had dropped below $50 to $49.62 per barrel , underscoring investor weariness. That falls short of the $65 target – in fact, it’s far closer to prices in November before the historic decision by OPEC and non-OPEC member nations agreed to limit their production. WTI closed at $45.23 per barrel Nov. 29. After the agreement was announced Nov. 30, the […]

Oil Veteran Says OPEC Needs Year to Pull Off Elusive Mission

25 Apr 2017   OPEC

Production cuts need to be extended through 1H 2018: Fesharaki Onshore oil inventories are still rising, FGE founder says OPEC needs a year more to accomplish what’s at the moment proving to be mission impossible, according to a veteran oil analyst. Saudi Arabian oil minister Khalid Al-Falih acknowledged last week that the group and its allies, after three months of limiting output, have failed to hit their target of eroding oil inventories below the five-year historical average. The reductions need to be prolonged to not only until the end of 2017, but also extended through the first half of next year for the goal to be met, said Fereidun Fesharaki, the head of industry consultant FGE. While the Organization of Petroleum Exporting Countries and its partners began cutting output in January as part of a six-month deal, International Energy Agency data show inventories rose during the first quarter in […]

Iran sees oil reserve potential growing with new discoveries

25 Apr 2017   Iran

Discoveries in the Persian Gulf of petroleum reserves may boost Iran’s ranks in terms of global capacity, a national director said. Ali Vakili, identified by the Iranian Oil Ministry’s official news agency Shana as a managing director for the Fuel Conservation Co. of Iran, told delegates at a domestic oil and gas conference during the week that Iran’s global position as an energy producer could expand. “A golden triangle of oil deposits has been recently discovered in the Persian Gulf, which will most probably improve the country’s rank in holding oil reserves in the world,” Shana reported . “The official said Iran sits atop the world’s fourth largest oil reserves, which may become even bigger with new discoveries.” The director offered no […]

For Aramco Insiders, Prince’s $2 Trillion IPO Valuation Doesn’t Add Up

25 Apr 2017   Saudi Arabia

Officials at Saudi Arabian Oil Co. have told their superiors there is a hitch in the plans to take the state-owned oil company public: It is likely worth at least $500 billion less than the government previously suggested. The country’s deputy crown prince, who is leading a push to overhaul the economy, has pegged the value of the company known as Saudi Aramco at $2 trillion. But officials working on the deal have struggled to come up with a scenario under which Saudi Aramco is worth more than $1.5 trillion,…

Iraq begins final expansion phase at Halfaya oil field aiming to double output

25 Apr 2017   Iraq

Iraq has launched the third and final phase of work to expand its southern Halfaya oil field, aiming to double its output capacity in 2018 to 400,000 barrels per day, a state-run oil company said. Additional facilities to separate crude oil from associated natural gas will be set up as part of Halfaya’s expansion, Adnan Noshi, head of Maysan Oil Co which oversees oilfields in Maysan province, told Reuters on Tuesday. Halfaya, operated by PetroChina, is Maysan Oil’s largest field, producing 200,000 of the company’s total output of 380,000 bpd, Noshi said. Expansion at Halfaya should raise Maysan’s overall output to nearly 600,000 bpd in 2018, he said. Iraq plans to increase its oil output capacity to 5 million bpd before the end of the year. Output stood at more than 4.7 million […]

Production stops falling as Iraq claims OPEC compliance

25 Apr 2017   Iraq

Iraq’s attempts to reduce oil production appear to have leveled off in March, as senior oil officials said they are fully complying with OPEC cuts.The country produced an estimated 4.586 million bpd in March, according to an analysis of field-by-field data gathered by Iraq Oil Report – a .4 percent increase from the February output levels reported by the Oil Ministry to OPEC.Month-to-month oil export levels also held steady: the Oil Ministry reported 3.259 million bpd of federal oil sale… This content is for registered […]

Nigeria Said to Let Market Set Naira Rate on Exchange Window

25 Apr 2017   Nigeria

Central bank Governor Emefiele said to tolerate naira dropping Naira forward contracts jump to highest levels since March Nigeria’s central bank will let the market determine the naira’s rate in a new foreign-exchange window for portfolio investors as the nation struggles to revive its economy amid a dollar shortage. Naira forward contracts and banking stocks rose. Governor Godwin Emefiele told senior bankers that he would tolerate the naira weakening in the window, which started today, according to a person who attended meetings with the policy maker over the past two weeks. While that may cause the currency to depreciate to its black-market level, the central bank probably won’t devalue the interbank exchange rate, the person said, declining to be identified because he wasn’t authorized to speak publicly. Isaac Okorafor, a spokesman for the central bank, didn’t answer calls to his mobile or immediately respond to a text message. Nigeria […]

Venezuelan opposition seeks new strategy as unrest enters fourth week

25 Apr 2017   Venezuela

Barricading roads with trash and even bathtubs, small groups of protesters held “sit-ins” around Venezuela on Monday in an effort to maintain momentum as anti-government unrest entered a fourth week. Ten people have been killed during near daily clashes this month between security forces armed with rubber bullets and tear gas, and protesters who have sometimes thrown rocks and petrol bombs. At least 10 people have also died during night-time looting. President Nicolas Maduro’s socialist government accuses protesters of seeking a violent coup with U.S. connivance, while the opposition says he has become a dictator repressing peaceful demonstrations. The protesters’ main demand is for elections, although the anger is also underpinned by crippling economic crisis in the oil-producing country. “I have an empty stomach because I […]

Chevron to sell Bangladesh gas fields to Chinese co

25 Apr 2017   Bangladesh

U.S. oil and gas company Chevron Corp said on Monday it has agreed to sell its three gas producing fields in Bangladesh to Chinese firm Himalaya Energy, as part of a plan to raise billions of dollars by shedding non-core properties this year. “The agreement is for the sale of Chevron’s Bangladesh companies, which hold our interests in Bangladesh,” a company spokesman told Reuters, declining to share the deal value or any timeline. The spokesman said Himalaya Energy is owned by a consortium of China ZhenHua Oil and CNIC Corp Ltd. ZhenHua is a state-owned oil company while CNIC is an investment corporation established in Hong Kong. Reuters reported in February that ZhenHua Oil had signed […]

Chevron leaving Asian geothermal assets behind

25 Apr 2017   Phillipines

U.S. supermajor Chevron Corp. said Monday it was departing from the Asian geothermal sector with the regional sale or planned sales of its subsidiaries. For an undisclosed sum, the company said it sold off its geothermal business in Bangladesh to a Chinese consortium. The conclusion of the sale of its geothermal business unit in the Philippines is expected later this year. The U.S. company said the transaction was in line with plans to dispose of non-strategic assets. Figures from the sale in Indonesia will show up in Chevron’s first-quarter results. Chevron will be among the first supermajors to report first-quarter results later this year. Fourth-quarter results revealed the company posted its first annual loss in decades as […]

Is Australia The Next Big Thing In Shale?

25 Apr 2017   Australia

As natural gas prices have seen a bit of a correction, it’s easy to forget that natural gas is actually a pretty good play right now — at least in certain parts of the world. As the chart below shows, North American natgas prices have been uninspiring recently. With rates at the Henry Hub slipping back to near $3/mcf — trading at $3.16 as I write. (Click to enlarge) North American natural gas prices have been subdued over the past year (source: Energy Information Administration) That gives little to get excited about for traders. A far cry from the end of 2014, when a surge to over $5/mcf suddenly (and briefly) brought the natgas market back to life. But natural gas markets are very different elsewhere in the world — as news this week from Australia and Argentina shows. Unlike oil, natgas prices show big regional variations. A consequence […]

Gas Prices In North Korea Shoot Up 83% As China Mulls Oil Embargo

25 Apr 2017   North Korea

Gasoline prices in North Korea’s capital Pyongyang jumped by as much as 83 percent within three days on the back of reports that China is mulling over an oil embargo for its unruly neighbor. North Korea imports almost all the oil it uses from China, so an embargo will effectively paralyze the country, even if Pyongyang turns to Russia for alternative supplies or resorts to smuggling—neither of which would provide North Korea with adequate supplies of the fuel, one analyst from the Asia Research Center at the Yanbian University said. Beijing has in recent months taken a tougher stance against Pyongyang, regional analysts note , but not because the U.S. is pushing it to do it, rather because an increasingly belligerent North Korea is a direct and potentially serious threat to China’s own national security. The change in stance is in fact a change in priorities, according to the […]

China to boost non-fossil fuel use to 20 percent by 2030: state planner

25 Apr 2017   China

China aims for non-fossil fuels to account for about 20 percent of total energy consumption by 2030, increasing to more than half of demand by 2050, its state planner said on Tuesday, as Beijing continues its years-long shift away from coal power. In a policy document, the National Development and Reform Commission said carbon dioxide (CO2) emissions will peak by 2030 and total energy demand will be capped at 6 billion tons of standard coal equivalent by 2030. (Reporting by Josephine Mason; Editing by Christian Schmollinger)

Converting Coal Would Help China’s Smog At Climate’s Expense

25 Apr 2017   China, Climate

China’s conversion of coal into natural gas could prevent tens of thousands of premature deaths each year. But there’s a catch: As the country shifts its use of vast coal reserves to send less smog-inducing chemicals into the air, the move threatens to undermine efforts to rein in greenhouse gas emissions, researchers said Tuesday. The environmental trade-off points to the difficult choices confronting leaders of the world’s second largest economy as they struggle to balance public health and financial growth with international climate change commitments. Between 20,000 and 41,000 premature deaths annually could be prevented by converting low-quality coal in the country’s western provinces into synthetic natural gas for residential use, according to the findings of researchers from the United States and China published in the Proceedings of the National Academy of Sciences. If the gas were used for industrial purposes, fewer deaths would be averted […]

Atlantic storm season starts early, putting energy industry on notice

25 Apr 2017   USA

Atlantic hurricane season can cause power outages and high gas prices for consumers and the year is off early with Tropical Storm Arlene, forecasters note.  Arlene was only the second such tropical storm observed in April in the Atlantic Ocean. Forecasters for the U.S. National Hurricane Center said Friday that detecting a storm as weak as Arlene was “practically impossible” before the modern weather-satellite era.  Genscape, which provides energy market data, said power plants may be affected differently as the season moves closer to its official start.  “As production continues to shift to inland regions and hurricane activity in the Gulf remains below average, Genscape is seeing the impact from hurricanes shift from production-destruction to impacting demand through shifts in temperatures,” it said in a commentary on Arlene.  Hurricane Matthew was a Category 3 storm when it hit the east coast of Florida in early October. The U.S. Energy Information Administration estimated about 2.5 million residential, commercial, and industrial electricity customers lost power across five states because of Matthew.  Motor club AAA reported that Matthew forced the closure of fuel terminals in Florida, Georgia and South Carolina. Most of the coastal ports reopened in the region by the time remnants of Matthew moved out to sea, however the storm caused short-term gasoline shortages and skewed the national average price at the pump higher.

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Halliburton Helped by Drilling Boost in U.S.

25 Apr 2017   Shale Oil

Stepped-up drilling for oil in the U.S. may have global producers on edge about oversupply, but the increased activity in the domestic energy sector is a boon for oil-field services firm Halliburton Co. The Houston company reported its first quarterly increase in revenue since the fourth quarter of 2014, when oil prices fell off and started to pressure production. The company said its results in the first three months of 2017…

Why EV’s Aren’t Winning The Race From Hybrids Yet…

25 Apr 2017   Electric Cars

The Ford Fusion Hybrid knocked the Prius out of the top spot for the first time in U.S. sales during January and March. That’s reflected more market competition and an overall hybrid sales decline in the U.S. since gasoline prices took a dive in 2014 and stayed down. Compared to that pivotal year, U.S. hybrid sales were down from 43,790 in March 2014 (right before the oil price drop) to 32,012 units sold in March 2017. Sales for the Prius liftback, which had been the flagship green car in the U.S. and globally for the past decade, dropped about 50 percent during that period. Pressure has been on Toyota and other automakers – especially Japanese rival Honda – to join the electric vehicle race. Toyota, Honda, and Hyundai had been leaning toward hydrogen fuel cell vehicles over EVs as an alternative technology. But growing sales of EVs in China […]

US onshore rig day rates jump as glut fades

25 Apr 2017   Shale Oil

Perhaps the most surprising sign of a recovery in the US onshore drilling industry has been the abrupt about-face for day rates, an analysis by RigData, a unit of S&P Global Platts, showed Friday. The first quarter has seen a 3.5% spike in the average day rate to $14,600, according to RigData. While that is still down from a record $19,015 in Q4 2014, it is the biggest quarter-to-quarter jump since the previous post-bust recovery in 2010. A major contributing factor to the day rate recovery has been the erosion of the rig glut, which can be monitored by tracking the available rig ratio. The ratio is calculated by dividing the number of available rigs by the number of marketed rigs. Once this ratio has sustained above a certain threshold, then day rates soften; when it trends below that threshold, day rates begin to rise. On a nationwide basis, […]

People aren’t buying enough gas

25 Apr 2017   USA

U.S. gasoline futures were down more than 1 percent on Monday, reflecting demand concerns as refiners emerge from the winter maintenance season and prepare to turn out more fuel. Meanwhile, U.S. crude settled 39 cents lower at $49.23, extending last week’s deep losses. “As gas prices drop, that creates an undertow for the entire crude oil market,” said Tom Kloza, global head of energy analysis at Oil Price Information Service. Part of the problem is a tough comparison with extraordinarily low gasoline prices last year. The national average gasoline price on Monday was nearly 28 cents above last year’s level, according to “I’m in the camp that says last year was a little bit of the anomaly,” Kloza said. “Gas was so cheap that we drove a little bit more almost capriciously. This year, I just don’t think it’s going to happen.” In a troubling sign, the nation’s […]

East Coast refiners eye Texas oil as North Dakota alternative

25 Apr 2017   Shale Oil, USA

U.S. East Coast refiners are looking to buy increasing volumes of domestic crude oil from the Gulf Coast, two sources said, the latest twist in a trade flow upheaval in the wake of the opening of the Dakota Access pipeline. Major U.S. East Coast refiners profited from railing hundreds of thousands of barrels of discounted Bakken crude to their plants daily from 2013 until 2015. But as more and more pipelines were built in North Dakota, the discount began to disappear, and so did the rail cars. Now, at least two East Coast refiners, Phillips 66 ( PSX.N ) and Delta Air Lines Inc’s ( DAL.N ) subsidiary Monroe Energy, are looking to move more crude […]

Trump to sign offshore orders as 100th day in office, shutdown near

25 Apr 2017   Offshore, USA

Ahead of his 100th day in the White House on Saturday, President Trump is expected this week to unveil details of major policy initiatives, including executive orders aimed at expanding oil and natural gas drilling in federal waters and an outline of his tax reform goals. The week will also be complicated by ongoing negotiations with Congress to keep the federal government from shutting down on Friday, as occurred in 2013. These negotiations appear to be centered on funding for Trump’s border wall. While the border wall is a thorny issue for many Republicans and a nonstarter for Democrats, White House Chief of Staff Reince Priebus said the administration expects Trump’s “priorities” to be included in the spending bill Congress needs to pass by midnight Friday to avoid shutdown. “So we expect a massive increase in military spending,” Priebus said Sunday on NBC’s “Meet the Press.” “We expect money […]

Reserve estimate raised for North Sea oil field

25 Apr 2017   Norway

Norwegian government says there’s more oil than initially estimated in the Edvard Grieg field in the North Sea. Map courtesy of the Norwegian Petroleum Directorate. April 24 (UPI) — Results of a well on the Edvard Grieg oil field in the North Sea led to an increase in the estimated reserve potential, the Norwegian government said. The Norwegian Petroleum Directorate said it was assessing the results of an appraisal well drilled in the central waters of the North Sea about 1.5 miles from the platform designated for the Edvard Grieg oil field. Edvard Grieg was proven as an oil field in 2007 and, according to the NPD, operator Lundin Petroleum put the reserve estimate at 220 million barrels of oil equivalents. Based on the results from the latest appraisal well, the NPD said the reserve estimate was revised upwards by between 10 million and 30 million barrels of recoverable […]

Norway’s Statoil plays down risks ahead of Arctic drilling

25 Apr 2017   Arctic, Norway

Norway’s Statoil on Monday played down concerns that drilling in the Arctic is risky, days before it kickstarts its drilling campaign in the Barents Sea, where the country believes around half of its remaining resources could be located. Despite opposition from environmentalists, the company plans to drill five wells in the Norwegian sector of the Barents Sea, including Korpfjell, which will be the world’s northernmost well and in a formerly disputed border area with Russia “We will start drilling the first well, Blaamann, during May … followed by Kayak, Gemini (Nord), Korpfjell and Koigen (Central),” said a Statoil spokesman, adding each might take about a month to drill. All the wells are in areas free of sea ice thanks to the warm Gulf Stream, with sea and wind conditions similar to the […]

Energy Firms’ $5.1 Billion Financing for Russia Gas Pipeline Stokes EU Fears

25 Apr 2017   Europe, Russia

European energy firms pledged Monday to finance half the cost of a natural-gas link from Russia to Germany, lending support to a pipeline plan that is fueling tensions within the European Union. A consortium of five companies—Engie SA, OMV AG, Royal Dutch Shell PLC, Uniper SE and Wintershall Holding GmbH—said they would provide up to €4.75 billion ($5.1 billion) in long-term financing to Nord Stream 2 AG, a wholly owned…

Solar power reliability in Britain boosted with batteries

25 Apr 2017   Solar

Batteries deployed at solar farms in Britain could add reliability to the renewable energy portfolio in the country, developers said. Investment manager Ancala Partners and energy storage provider Anesco said their joint effort led to the completion of their first portfolio-scale deployment of batteries at 10 solar plants across Britain. Solar power is an intermittent source of renewable energy and its expansion in the British grid means more reliability is necessary. “Batteries offer a unique solution to the challenges of intermittent generation by storing and deploying electricity into the National Grid at the times it is required most” the collaborators announced. The development comes about a week after the British grid reached a milestone when about 4 percent, or 29 gigawatt hours, of the nation’s […]

Russia elbows Saudi Arabia aside as China’s top crude oil supplier in March

25 Apr 2017   China, Russia

Workers look at a drilling rig at a well pad of the Rosneft-owned Prirazlomnoye oil field outside the West Siberian city of Nefteyugansk, Russia, August 4, 2016. Russia reclaimed its position as China’s biggest crude oil supplier in March, customs data showed on Tuesday, displacing Saudi Arabia after two months in second place as Moscow fights to hang on to its slice of the Chinese market. Russian shipments grew nearly 1 percent to 1.104 million barrels per day (bpd) from the same month a year earlier, as China’s private refineries maintained high processing rates and restocked inventories after receiving fresh 2017 import quotas. China’s crude imports rose to a record in March, overtaking the United States and shattering expectations. Saudi shipments were 1.072 million barrels in March, up nearly 15 percent from a year ago, the General Administration of Customs said. For the first three months, Saudi arrivals stood […]

Russia’s Oil Cuts Won’t Be So Easy If OPEC Deal Is Extended

25 Apr 2017   Russia

Country typically increases output in second half of the year Rosneft and Lukoil plan higher spending and more drilling For Russian oil companies, the historic agreement to boost prices by cutting output in conjunction with the Organization of Petroleum Exporting Countries was an easy win. Extending the deal will be less straightforward. Cuts so far this year came alongside the traditional seasonal stagnation in Russian production, meaning the country made relatively few sacrifices in exchange for an increase in crude prices of more than 10 percent. For the powerful Russian oil bosses who plan to discuss the OPEC accord with Energy Minister Alexander Novak this week, a decision by the government to extend the cuts beyond June would stymie plans to boost output, creating many more headaches than the initial agreement. “It was not a surprise and not a big deal to have production going down in the first […]

Oil recovers some ground, rise in U.S. drilling caps gains

24 Apr 2017   Prices

Oil prices recovered some lost ground on Monday after big losses last week, driven by expectations that OPEC will extend output cuts till the end of 2017, although a relentless rise in U.S. drilling capped gains. Brent crude futures LCOc1 rose 54 cents by 0920 GMT to $52.50 per barrel. U.S. West Texas Intermediate (WTI) crude oil futures CLc1 added 49 cents to reach $50.11 a barrel. Oil prices fell steeply last week on the back of stubbornly high crude supplies, despite a pledge by the Organization of the Petroleum Exporting Countries (OPEC) and some other producers to cut production by almost 1.8 million barrels per day (bpd) for six months from Jan. 1 to support the market. But prices on Monday received a respite after a panel of OPEC and […]

Oil Halts Five-Day Slide as Markets Rally and OPEC Keeps Cutting

24 Apr 2017   Prices

Committee said to conclude March compliance at 98%: delegate U.S. dollar weakens versus euro after French election results Oil rose for the first time in six days as an OPEC-led committee was said to back prolonging supply cuts and as other markets rallied after the first round of French presidential elections. Futures climbed as much as 0.9 percent in New York after slumping 6.7 percent last week, the first drop in four weeks. A six-month extension to the output cut deal is necessary, the committee concluded, according to delegates with knowledge of the matter. Equities gained and the dollar weakened against the euro as a snap poll by Ipsos showed centrist Emmanuel Macron would win the second round of voting in France. Oil had retreated below $50 a barrel amid concern rising U.S. crude production will offset efforts by the Organization of Petroleum Exporting Countries to trim a global […]

Space May Be Next Frontier for Earth’s Crude Oil Giants: Analyst

24 Apr 2017   Middle East

Navitas says the Middle East could play space mining role Satellites prospecting asteroids could be launched in 5 years The Middle East has an outsize impact on energy here on Earth. One analyst thinks some regional powerhouses may leverage that role into the development of natural resources in space. Countries like the United Arab Emirates and Saudi Arabia are developing space programs and investing in nascent private space commodity initiatives, said Tom James, a partner at energy consultant Navitas Resources. Doing so could give them a foothold in building extraterrestrial reserves of water — a substance likely to fuel travel within space — and other resources that could be used for in-space manufacturing. “Water is the new oil of space,” James said in Singapore. “Middle East investment in space is growing as it works to shift from an oil-based to a knowledge-based economy.” Prospecting satellites can be built for […]

Venezuela’s President Maduro calls for talks with opposition

24 Apr 2017   Venezuela

The latest protests were on Saturday and another march is planned for Monday Venezuela’s President Nicolas Maduro has called for talks to resume with the opposition. He also said he wanted local elections to take place. His comments came as another large demonstration is planned for Monday after three weeks of tense protests across the country. Demonstrators have been calling for presidential elections due next year to be brought forward and for President Maduro to step down. Last year’s negotiations between the opposition and the government broke down when the opposition accused Mr Maduro of breaking agreements and using the talks to buy time. Speaking during his Sunday TV programme, Mr Maduro endorsed the idea of elections for mayors and state governors but did not mention a vote at presidential level. “Elections – yes, I want elections now,” he said “That is what I say as the head of […]

UK Conservatives pledge energy price cap, hitting utility shares

24 Apr 2017   United Kingdom

Britain’s ruling Conservative Party said it would cap domestic energy prices if it retained power in an election in June, targeting an industry it accuses of not working properly and sending shares in the leading providers down sharply. Shares in British energy suppliers Centrica and SSE fell by 4-5 percent after ministers said the Conservative’s election manifesto would include pledges on controlling energy prices. Energy bills have doubled in Britain over the past decade to about 1,200 pounds ($1,640) a year, angering consumers who face rising inflation, and drawing the ire of politicians ahead of a June 8 national election. Energy companies say higher prices reflect increased wholesale costs and environmental levies. Prime Minister Theresa May’s government has previously said the energy market does not work properly and called for more competition in […]

Oil Crashes Into $40’s As Hedge Funds Sell Off

22 Apr 2017   Prices

Oil prices fell fast on Friday afternoon as traders see the rising rig count as yet another sign that the markets are still grossly oversupplied. (Click to enlarge) Friday, April 21, 2017 Oil is heading for its largest weekly drop in over a month as doubts resurfaced over OPEC’s resolve. That comes despite the highly optimistic comments from top officials from Saudi Arabia and Kuwait. There seems to be a growing consensus within OPEC in favor of an extension of the deal. But the one holdout could be Russia, without which an extension is uncertain. Russia’s energy minister Alexander Novak was guarded when asked about Russia’s support for an extension, declining to take a position while citing progress that has already been made in the reduction of oil stocks. “The situation has gradually been improving since the beginning of March,” Novak said to reporters. Goldman says ignore the crude […]

Oil dives below $50 as confidence in Opec wavers

22 Apr 2017   Prices

Oil was set for the biggest weekly drop in a month as market confidence in Opec’s ability to overpower a resurgent US shale industry wavered. US benchmark West Texas Intermediate fell below $50 a barrel on Friday — down $1.32 to $49.39 — by 6.45pm in London. The global Brent marker dropped $1.24 to $51.75 a barrel. Both benchmarks fell by more than 7 per cent this week, marking the biggest falls since early March. As supply curbs by Opec producers and those outside of the cartel took effect in January — sending prices higher in 2017 — US shale production has rebounded, locking the oil market into the middle of two competing forces. Data from US drilling company Baker Hughes on Friday showed that the number of rigs drilling for oil in the US rose for a 14th consecutive week. Drillers added five rigs in the week to April 21, bringing the total count to 688 — the most since April 2015. Analysts at Goldman Sachs said the price falls this week, however, were technical and not based on supply and demand fundamentals.

Why the crude rally has fizzled, continued: Market analysis series

22 Apr 2017   Prices

This is the second of a three-part look at why oil prices have failed to rally despite OPEC’s best efforts at managing supply cuts. Read part 1 here . So, why is everyone so bullish? Many oil analysts take as a fait accompli that OPEC-led production cuts thus far are key to balancing the crude market. If this is the case, though, why hasn’t it happened yet? But the bulls say give it time. In the long run, the market will balance. Everyone knows what Keynes said about the long run (that we are all dead). That the market is prime for a rally has become gospel truth. But isn’t something so paradigmatic just a little bit risky? “Oil prices will get better, and you can take that to the bank,” David Purcell, head of macro research at Tudor, Pickering and Holt, said at a recent Dallas conference. “The […]

Oil Price Volatility and US EIA Data

22 Apr 2017   Prices

A number of news media pieces have recently suggested that oil prices may fall due to soaring output in the US. Output from US light tight oil (LTO) may not rise as quickly as some EIA reports may suggest. One source of confusion is that the EIA creates many reports and some are more reliable than others. The two charts below cover US LTO and US crude plus condensate (C+C) output. US LTO Output from the EIA Drilling Productivity Report (DPR) and EIA Tight Oil (LTO) estimates in kb/d. US EIA monthly C+C output and centered 4 week average output in kb/d. The data for the DPR and for tight oil output are found at the links provided at the US EIA website. The data for US monthly C+C output and the 4 week average US C+C output is also from the EIA. The 4 week average data is […]

OPEC panel recommends six-month extension of oil output cuts: source

22 Apr 2017   OPEC

An OPEC and non-OPEC technical committee recommended that producers extend a global deal to cut oil supplies for another six months from June, a source familiar with the matter said, in an effort to clear a glut of crude that has weighed on prices. The Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers originally agreed to cut production by 1.8 million barrels per day (bpd) for six months from Jan. 1 to support the market. Compliance numbers were also reviewed at the meeting in Vienna on Friday that comprised of officials from countries monitoring adherence to agreed output levels, namely OPEC members Kuwait, Venezuela, Algeria and non-OPEC Russia and Oman. Overall compliance with pledged cutbacks stood at 98 percent in March, a source said. Two sources said the rate in March represented an increase from February’s level. Oil prices still declined on Friday, with Brent crude […]

At Least 12 Die as Rioting Breaks Out in Venezuela

22 Apr 2017   Venezuela

At least a dozen people were killed as the streets of Caracas, Venezuela, erupted into a night of riots, looting and clashes between government opponents and the National Guard late Thursday and early Friday, with anger from two days of pro-democracy demonstrations spilling into unrest in working-class and poor neighborhoods. The attorney general’s office in Venezuela said 11 people had died of electrocution and gunshot wounds “in acts of violence” in El Valle, a neighborhood of mixed loyalties, where armored vehicles struggled to contain crowds of looters. In Petare, a working-class section in eastern Caracas, a protester was shot dead at the entrance to the city’s largest barrio, said Carlos Ocariz, the district mayor. Throughout the night, the sounds of banging pots and pans reverberated through the capital, a traditional form of protest known as the “cacerolazo,” which has taken on greater significance as the country struggles with shortages […]

Maduro targets companies as Venezuela unrest grows

22 Apr 2017   Venezuela

Venezuela’s president Nicolás Maduro has ordered an investigation into Telefónica’s Movistar for alleged “coup-mongering” after a week of protests against his increasingly repressive rule. Mr Maduro accused the subsidiary of Spain’s Telefónica of supporting opposition rallies which have led to pitched battles in which nine people have been killed and scores detained. “I denounce the company Movistar of Venezuela. I have ordered an investigation because it joined the coup-mongering call against the country, and that is not its function,” he said, adding “every two hours the company Movistar sent millions of messages to its phone and internet customers” as part of a “cyber war”. Telefónica was unavailable for comment, but it is not the only company caught up in the strife in Venezuela. On Wednesday, General Motors said it ceased operations after one of its plants was seized by local authorities. The US-based company said the move will cause “irreparable damage to the company and its 2,678 workers”. Tensions continue to grow as Mr Maduro’s foes demand early elections to speed up his removal from office amid worsening shortages of basic goods, violent unrest and political repression. Opponents are vowing no let-up in the pressure as the socialist leader clings to power. “When one lives in a lawless country, one has to take to the street to protest for our dignity and rights,” said Julio Borges, a leading opposition lawmaker. Local media reported unrest in poor areas of the capital on Thursday night. Critics had called for protests across the country on Friday, a silent march in Caracas on Saturday of people dressed in white to commemorate those killed in the unrest, and a nationwide sit-in to block some of Venezuela’s main roads on Monday.

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)