Oil Pares Biggest Two-Day Rally in a Month Before U.S. Rig Data WTI rose 6.1% previous two days after falling into bear market Baker Hughes reports rig data Friday as U.S. drilling expands Oil declined after the biggest two-day increase in more than a month as prices fluctuated following a fall into a bear market this week. Start your day with what’s moving markets. Get our markets daily newsletter. Business Your guide to the most important business stories of the day, every day. You will now receive the Business newsletter Politics The latest political news, analysis, charts, and dispatches from the campaign trail. You will now receive the Politics newsletter Pursuits Travel with us, drive with us, eat with us – around the world. You will now receive the Pursuits newsletter Game Plan The school, work and life hacks you need to get ahead. You will now receive the Game Plan newsletter Futures dropped as much as 1.2 percent in New […]
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Oil prices slip as short-covering rally fizzles Oil prices dipped on Friday, ending a two-day rally, as a glut of crude and refined products weighed on markets and investors eyed a possible stutter in China’s imports. U.S. West Texas Intermediate (WTI) crude futures CLc1 fetched $41.74 per barrel at 0930 GMT (0530 ET), down 19 cents from their last close, after trading as low as $41.44 earlier in the day. They were on track roughly to break even on the week. International Brent crude futures LCOc1 were trading at $44.07 per barrel, down 22 cents on the day but set for a weekly gain of around 3.5 percent. Downward pressure returned as overproduction in crude and refined products has left onshore storage tanks brimming and triggered the chartering of tankers to store unsold fuel. There are also growing worries that […]
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Oil Prices Decline on Crude Stocks Growth Oil prices slipped on Thursday, after a sharp fall in U.S. gasoline stocks was outweighed by an increase in crude stocks. Brent crude, the global oil benchmark, fell 0.7% to $42.78 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.3% at $40.69 a barrel. U.S. government data released Wednesday surprised traders with a 3.3 million-barrel decline in gasoline inventories , temporarily sending crude prices higher. “Gasoline stocks drawing in the middle of the summer driving season is actually something quite normal and they are drawing from a relatively elevated level, so I think those people that have come out and indicated that this is a turning point are perhaps premature in that assessment,” said Harry Tchilinguirian, head of commodity strategy at BNP Paribas SA BNPQY 0.21 % . Even with the draw on U.S. gasoline stocks, total […]
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Oil prices give up early gains as oversupply weighs Oil prices slipped after gains earlier on Thursday and the previous day as overproduction and large volumes of unsold crude and ample refined products around the world weighed on markets. Brent crude futures were trading at $42.77 a barrel at 0942 GMT, down 33 cents from their last close and down from an intra-day high of $43.65 a barrel. U.S. West Texas Intermediate (WTI) crude futures were trading at $40.69 per barrel, down 14 cents, and after hitting an intra-day high of $41.41 per barrel and rising 3.3 percent in the previous session. “Prices began to recover following the publication of the U.S. inventory data [on Wednesday], and continued to do so into the morning,” Commerzbank said in a note. U.S. gasoline stocks dropped 3.26 […]
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Oil Soars 6 % As Andy Hall Warns Of A “Violent Reversal” WTI Crude is up over 6 percent in 24 hours since yesterday’s surprise build (and production cut), as the machines squeeze out an over-exuberant short positioning once again. However, just as we saw last year around this time, Astenbeck’s infamous oil veteran Andy Hall is warning that a “violent reversal higher” looms again amid extreme positioning and potentially improving fundamentals. Exaggerating the move further is the surge in the contango which has once again made sea-storage profitable, sending yield-seeking traders into the carry trade (and squeezing shorts further). As Bloomberg reports , despite what Hall called a “miserable month” for oil in July, supplies are still shrinking, he said in his letter, setting up prices to reverse themselves. “Prices are now back at levels that would ensure the eventual bankruptcy of most of the oil industry”, hammering both private oil companies and producing countries like […]
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Crude Slump Sees Oil Majors’ Debt Burden Double to $138 Billion Net debt for top five oil firms has risen tenfold since 2008 Big oil companies tell investors debt load will rise further When commodity prices crashed in late 2014, oil executives could look at their mining counterparts with a sense of superiority. Back then, the world’s biggest oil companies enjoyed relatively strong balance sheets, with little borrowing relative to the value of their assets. Miners entered the slump in a very different state and some of the world’s largest — Rio Tinto Plc, Anglo American Plc and Glencore Plc — had to reduce dividends and employ draconian spending cuts to bring their debt under control. Two years on, you could excuse mining executives for feeling smug. As crude trades well below $50 a barrel, Exxon Mobil Corp., Royal Dutch Shell Plc and other oil giants have seen their debt double to a combined $138 billion, spurring concerns they’ll need […]
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Major Banks Growing More Bearish On Oil Prices The renewed downturn in oil prices has forced major banks to slash their price forecasts for 2017 as a new bear market induces heightened pessimism. The Wall Street Journal surveyed 13 investment banks on their predictions for Brent prices, and the average result was $56 per barrel for 2017, which was about $1 per barrel lower than the survey the WSJ conducted in June. The investment banks also don’t see oil prices bouncing back to $50 per barrel until the end of this year, which is a dramatic change from last year’s expectation that oil would hit $70 in 2016. “There is still a lot of oil out there and the sentiment is pretty bearish,” Michael Wittner, chief oil analyst at Société Générale SA, told the WSJ. “For the time being, the path of least resistance for oil prices continues to be lower.” On Wednesday, the EIA provided another […]
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OPEC’s New Chief Says Oil Above $100 a Barrel Was ‘Abnormal’ Oil above $100 was ‘unsustainable’ risk to economy: Barkindo Rise in U.S. rigs unlikely to boost output or hurt price: OPEC Oil’s climb above $100 a barrel before prices crashed in 2014 was driven by “abnormal” conditions that couldn’t last, according to OPEC’s new Secretary-General. The “skyrocketing of prices” that pushed crude as high as $147 in 2008 was “unsustainable” and probably harmful to the global economy, Mohammed Barkindo said in the group’s monthly Bulletin. The Organization of Petroleum Exporting Countries will continue to work with other oil producers and consumers to find the commodity’s “elusive fair price,” he said. Oil surged above $100 as climbing demand, political risks to supply and a weakening dollar lured speculators to bet on ever-rising prices. After slumping in the financial crisis of 2008, prices recovered to trade near $100 until summer 2014, when a glut caused by booming U.S. shale supply sent […]
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Angolan/OPEC Relations: Toxic or Worse? On Tuesday, news broke of Angola’s decision to back out of a deal with Cobalt International Energy to purchase an oil discovery for $1.8 billion. Sonangol, Angola’s state energy firm, had reached an agreement with the Texas-based company a year ago, but Isabel dos Santos, the billionaire daughter of the Angolan president and Sonangol’s new boss, advised Cobalt to find a new buyer for its assets, which lie off the Angolan Coast, earlier this week, according to The Financial Times. The move, which distances Sonangol from an ongoing United States Department of Justice investigation into Cobalt’s conduct in Angola, serves as a show of strength for Santos, after several members of her father’s political opposition called her appointment a clear sign of nepotism. Santos’ refusal to accept the deal shows the new leader’s willingness to make meaningful breaks in preexisting polices and structures in a difficult economic period for […]
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Amid economic hard times, Venezuelans turn to city farming Facing a national food crisis, Venezuela’s pumpkin-growing socialist president is exhorting compatriots to grow fruit and vegetables on balconies and roofs and in barracks across the country. His government’s “Great Agro-Venezuela Mission” is promoting city farming to offset shortages which have led to lootings and riots as the OPEC country undergoes a major economic crisis. “We need to plant to ensure food sovereignty,” President Nicolas Maduro said, recounting how he and his wife harvested pumpkins on their patio for a soup that tasted “like heaven.” “He who learns to cultivate in his city, his school, his university, his factory, in his communal space … cultivates another form of faith in life,” he added, urging people to grow products in schools, military bases and even jails. In the first data on the new push, Maduro’s government boasts that in the last three months, some 135,000 Venezuelans have produced 273 tonnes […]
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Continental Resources expecting production gains Though reporting both a net loss for the second quarter and declining output, U.S. shale player Continental Resources raised its forecast for production. Continental said in emailed results for the second quarter that it took a net loss of $119 million, nearly double the loss reported one year ago. The company is one of the largest stakeholders in the Bakken shale oil reserve in North Dakota , where production was down 11 percent from the previous quarter. Total production for the company was lower than the first quarter by about 5 percent to around 219,000 barrels of oil equivalent per day. First quarter production, however, was in line with what the company expected and a 3 percent […]
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Work slated for Barents, North seas The Norwegian government said it gave its consent for new oil and natural gas operations offshore in the North Sea and Barents Sea, with Statoil the big winner. Statoil was granted consent by the Petroleum Safety Authority of Norway to operate at three different sites this week. The most significant of those three was consent to drill three wells at the Snohvit natural gas field in the Barents Sea. The Norwegian government confirmed a sizable discovery of oil and natural gas at the Snohvit field in the Barents Sea two years ago at 525 billion cubic feet of recoverable natural gas and more than 130 million barrels of recoverable oil […]
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Chesapeake Energy cut debt by $1 billion Struggling U.S. shale player Chesapeake Energy said it reported a loss for the second quarter, but reduced debt by more than $1 billion. The company said second quarter revenue declined 54 percent year-on-year and the loss was around $1.8 billion. Chesapeake said the primary driver of the loss was weak energy prices, which for crude oil are down more than 12 percent from last year and more than 50 percent below peak levels in 2014. Chesapeake, meanwhile, was able to cut its debt load by more than $1 billion as it worked to keep costs under control. “Financial discipline remains our top priority,” CEO Doug Lawler said in a statement. Chesapeake in early February retained the services of longtime counsel […]
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Chevron to Sell Assets in Asia Worth Up to $5 Billion Chevron Corp. is paring its Asia operations, selling assets worth up to $5 billion in an effort to raise cash, according to people familiar with the situation. The California-based energy giant is set to begin selling its offshore China assets this month, the latest in a series of divestments in Asia. The company is looking to raise up to $10 billion globally from asset sales, a big chunk of which will come from its Asia upstream operations, as part of a broader effort to cut costs and adapt to an environment of lower oil prices. Among the assets Chevron is looking to sell is its stake in an offshore oil field production venture with China’s state-owned oil company Cnooc Ltd., which could fetch as much as $1 billion, according to people familiar with the situation. The […]
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$40 Billion In Spending Planned For Canada’s Oil Sands The oil sands of Alberta have attracted a lot of attention recently, not just because of the wildfires that took a lot of production offline in May, but also because of longer-term issues such as environmental protection and oil price trends. It seems, however, that they have a reasonably bright future ahead of them. A GlobalData report has revealed that total capex investments in the oil sands stand at $82.8 billion, of which $40.6 billion worth of new and expanding projects are seen to come on stream over the next ten years. That’s pretty impressive against the backdrop of divestments and cost cuts that have plagued the local oil industry thanks to the oil price rout. The oil sands are a major contributor to the Canadian GDP. Last month Statistics Canada reported that, because of the wildfires, GDP in May fell by 0.6 percent, which was the […]
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Stripper Well Producers to Face Failure if Methane Rule Allowed Smaller oil and gas producers could be at risk of failing if stripper wells are not exempted from the U.S. Environmental Protection Agency’s (EPA) new methane rules, according to the National Stripper Well Association (NSWA). NSWA Chairwoman Darlene Wallace said in an Aug. 3 press statement that the EPA should be aware of, and held accountable for, the economic damage done to small producers by forced compliance with regulations that simply shouldn’t apply to stripper well producers. The original rule had a pure exemption for stripper wells, but the exemption was eliminated in the final rule, an NSWA spokesperson told Rigzone. Wallace said the EPA’s decision to eliminate the exemption was a significant, radical and unannounced change for most producers, who have been struggling to comply since then. A stripper well, for tax purposes, is any oil well whose maximum daily average oil production does not exceed 15 barrels […]
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Might the fossil fuel industries implode faster than the clean energy industries can grow to replace them? In a memorable recent statement, some of Germany’s top scientists argued that “controlled implosion of fossil industries and explosive renewables development” can deliver the targets in the Paris agreement on climate change. Taking this premise at face value, and setting aside the thought that other factors might also be needed, the course of events in July does not offer much hope that “controlled” is a word easily applicable to the array of existential problems currently battering the energy incumbency. And while the clean energy industries continue to make progress, they are clearly not “exploding” as fast as they could. Might it be that the ongoing implosion of fossil fuel industries will happen much faster than the necessarily explosive transition to solutions? Let me start with coal. The prospects for this bankruptcy-strewn industry grew worse in July. It increasing looks as though the Chinese government’s recent retreat from coal is […]
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Russian economic woes spreading beyond borders Five straight quarters of economic decline in oil-rich Russia are starting to have a spillover effect on the economies of its neighbors, a data review finds. A review by the U.S. Energy Information Administration of U.N. and World Bank data finds contraction in Russia is spreading beyond its vast border. About 8 percent of the people living in Russia are foreign-born and, with the Russian economy in decline, remittances are lower as well. “In some developing countries, remittances are a significant source of purchasing power,” the EIA’s report read. “Under such circumstances, slower growth or outright declines in remittances can negatively affect the economies of countries dependent on them and, in turn, potentially slow their oil consumption growth.” From Central Asia […]
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