Oil falls close to three-month low as oversupply weighs Oil prices fell close to three-month lows on Wednesday after U.S. industry data showed weekly oil stocks declined by less than expected, feeding into concerns over persistent oversupply dragging down prices. Global benchmark Brent crude LCOc1 was on track for the first monthly loss since January and the largest of 2016. Futures traded down 49 cents at $44.38 a barrel at 0914 GMT. U.S. West Texas Intermediate (WTI) crude CLc1 was trading down 26 cents at $42.66 a barrel, close to a three-month low of $42.36 reached on Tuesday. “Today’s weakness is just part of the general belief that the market is oversupplied,” said Tamas Varga, oil analyst at London brokerage PVM Oil Associates. Weekly industry data from the American Petroleum Institute (API) late on Tuesday showed that U.S. […]
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Oil Heads Back To $30, And Probably Lower Financial players are now bailing out of their bullish positions in oil markets. The US dollar’s recovery means they have no need for a “store of value”. They are leaving behind mounting chaos. Prices will probably need to go well below $30/bbl to enable the market to rebalance. There was never any fundamental reason why oil prices should have doubled between January and June this year. There were no physical shortages of product, or long-term outages at key producers. But of course, there was never any fundamental reason for prices to treble between 2009 – 2011 in the Stimulus rally, or to jump nearly 50% between January – May last year. Instead, prices once again rose because financial players expected the US$ to decline They realised this meant they could make money by buying oil on the futures market as a “store of value” Now, as the US$ has […]
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U.S. Oil Prices Hit 3-Month Lows on Growing Oversupply Concerns U.S. oil prices sank to a fresh three-month low Tuesday as a glut of gasoline keeps weighing on the market. U.S. oil for September delivery settled down 21 cents, or 0.5%, at $42.92 a barrel on the New York Mercantile Exchange. Six losing sessions out of the past seven have sunk it to its lowest settlement since April 25. Brent, the global benchmark, gained 15 cents, or 0.3%, to $44.87 a barrel on ICE Futures Europe, snapping a three-session losing streak. Oversupply concerns have sent oil into retreat throughout July, reversing a five-month rally that had sent oil above $50 a barrel. U.S. refiners have overwhelmed even record demand, and saturated international markets have supplies backing up in the U.S., too, analysts said. Despite those fears, U.S. drillers are showing signs they’re ready to ramp up production again. They added 15 active rigs to oil fields last week, the […]
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Oil falls towards $44, lowest since May, on glut worries Oil on Tuesday hit its lowest since May, falling towards $44 a barrel, pressured by concerns that a long-awaited rebalancing of the market would be delayed due to excess supply. Brent crude is still up more than 60 percent from a 12-year low near $27 in January, but the rally has petered out on signs that the supply glut will persist and as economic jitters raised concern about the strength of oil demand. Global benchmark Brent LCOc1 was trading at $44.49 a barrel at 0900 GMT, down 23 cents. It fell to $44.28 intraday, the lowest since May 10. U.S. crude CLc1 was down 36 cents at $42.77, having fallen to its lowest since April earlier. “Right now, there […]
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How Much Oil Is in Storage Globally? The waterways surrounding this island nation have become home to one of the world’s biggest oil-storage sites. The problem: It is unclear how much oil is in the tankers anchored there. The historic fall in oil prices has created a pileup of inventories, much of it stashed in tanks in the U.S. and other industrialized countries that are committed to disclosing the latest tally. But millions of barrels are also flowing to locations outside the scope of industry trackers. Some countries, such as Russia and China, choose not to report their oil-storage levels. And traders and oil companies that park supertankers have no obligation to make public their supply. Their decision to keep this information private doesn’t violate any international laws or agreements. But it makes for a more-cryptic and volatile oil market, analysts say. How much crude is in these locations, and how quickly it can be resold […]
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Low Oil Prices Kill Off 7 Billion Barrels Of Oil Production Offshore Oil Rig The Trent Capital expenditure cuts of $150 billion for 2016 and 2017 by U.S. exploration and production companies are expected to result in average production losses of 4.2 million barrels per day in the Lower 48 through 2020, according to Wood Mackenzie. This is not only a trend in the U.S., with upstream companies around the world trimming capex by more than $370 billion for 2016 and 2017. Wood Mackenzie believes that this will impact oil production and the world will result in 7 billion fewer barrels of oil through 2020. “The plays that saw the highest proportion of their capital expenditure cut were Eagle Ford and the Bakken,” said Jeanie Oudin, Wood Mackenzie Senior Research Manager, Lower 48. “That’s because the two plays were in full-scale development, with most operators’ acreage held by production at the time oil prices began to fall, allowing for a […]
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Increased drilling may slow pace of crude oil production declines Baker Hughes Higher and more stable crude oil prices are contributing to increased drilling in the United States, which may slow the pace of production declines. Benchmark West Texas Intermediate (WTI) crude oil prices averaged $46.59 per barrel (b) over the past three weeks, a 40% increase over the average price in the first quarter of 2016. The rig count for active onshore rotary rigs in the Lower 48 states, as measured by Baker Hughes, stood at 352 rigs on July 22, 45 rigs above the number at the end of June. Although declines from existing wells are expected to result in a net decrease in production, increased drilling and higher well productivity are expected to partially offset the decline. Released each Friday, the Baker Hughes rig count measures the number of active rigs in various basins across North […]
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Libya’s Oil Deal Turns Sour As Army Chief Threatens To Bomb Tankers The chief of staff of the Libyan army has warned foreign companies the army will fire at any non-Libyan tanker entering the country’s territorial waters. The warning comes after a spike in tensions in Libya brought about by a controversial deal struck by the so-called government of unity and the Libyan Petroleum Facilities Guard (PFG). Libya’s National Oil Corporation (NOC) firmly believes the deal, struck by the UN-backed government and the PFG to reopen key ports was a mistake, NOC chairman Mustafa Sanalla said in a letter to UN’s envoy to Libya Martin Kobler and to oil and diplomatic officials. Brigadier General Abdel-Razek al-Nadhouri said NOC – its division on Benghazi – was the only party that was entitled to close any deals regarding Libya’s oil. The PFG, which has been blocking ports across Libya, said on Friday it had agreed to a deal with the Government […]
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What Will Happen To Turkey’s Energy Security Following The Failed Coup? On July 15, 2016, a new chapter opened in Turkish political history. A group of military officers attempted a coup to overthrow the Erdogan regime in Turkey. Recep Tayyip Erdogan was elected as President of Turkey in August 2014, and since then Turkish politics has been experiencing turbulence. The most common criticisms of the Erdogan regime include allegations of corruption, restrictions of freedom, and foreign policy crises, such as with Syria and Russia. It is expected that the post-coup attempt period will also be unsteady. According to some experts, Erdogan may take advantage of the coup attempt to set up a more authoritarian system. As a matter of fact, experts consider it likely that there will be another coup in the months or years to come . The question is, while Turkish politics is in upheaval, what will happen to Turkey’s energy security? The waves created by the coup […]
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Militant Attacks Slash Nigeria Revenue in May, Central Bank Says Nigeria’s revenue fell to the lowest in at least one year in May as militant attacks in the oil-producing Niger River delta caused crude production to slump. The federal government collected 384.9 billion naira ($1.2 billion) of revenue in May, down 1.6 percent from April, the Central Bank of Nigeria said in a report posted on its website on Tuesday. That was 53 percent below the government’s budget estimate of 814.9 billion naira, the central bank said. “Pipeline destruction, vandalism and the persistent decline in crude oil prices contributed to the decline,” according to the report. “Non-oil revenue, at 199.1 billion naira, or 51.7 percent of the total revenue, fell short of both the provisional monthly budget estimate of 362.3 billion naira and the preceding month’s level by 45 and 2.7 percent, respectively.” President Muhammadu Buhari in May approved a record 6.1 trillion naira budget with a deficit of […]
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Venezuela’s economic woes send a chill over closest ally Cuba The crisis in Venezuela has spread to its closest ally Cuba, with Havana warning of power rationing and other shortages that some fear could mark a return to the economic austerity that traumatised the island nation after the collapse of the Soviet Union. Only a year after the euphoria that followed the re-establishment of diplomatic relations with the US, hopes of an economic rebound in Cuba have faded and an undercurrent of concern and frustration is evident on the streets of the capital. “Just when we thought we were going forward, everything is slipping away again,” says Havana retiree Miriam Calabasa. “I am worried people are going to decide enough is enough: then what?” Government offices now close early, with open windows and whirring fans in lieu of air-conditioners. Already scant public lighting has been reduced further, and traffic in Havana and other cities is down noticeably.
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Special Report: In Venezuela’s murky oil industry, the deal that went too far Even for Venezuela’s notoriously opaque economy, it was a sweetheart deal that went too far. Last August, state oil company Petroleos de Venezuela SA issued one of its largest tenders in recent years: a multi-billion dollar project in the Orinoco Belt, the world’s largest crude reserve. The project was designed to shore up the OPEC country’s stagnating oil production and ease an economic crisis. Then, out of the blue, a tiny Colombian trucking and trading firm with no relevant experience beat global industry leaders to win the contract, worth around $4.5 billion according to one PDVSA [PDVSA.UL] document. Alarm bells rang among PDVSA’s foreign partners, which include Chevron ( CVX.N ) and Rosneft ( ROSN.MM ). Trenaco, headquartered in Switzerland but largely run out of Colombia, had edged out the world’s top service companies — Halliburton ( HAL.N ), Schlumberger ( SLB.N ) and Weatherford ( WFT.N ) — […]
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Oil Refiners Struck by Glut Find Comfort in China Teapot Drought Lack of infrastructure crimps exports from private refineries Not commercially viable to export fuel now: Teapot association Oil refiners rocked by a market glut in Asia are finding some solace as what was expected to be a flood of fuel from China’s private processors is proving to be a benign trickle. While the Chinese companies known as teapots were expected to swamp the market after they received government approval to ship supplies overseas, a lack of facilities to transport products from plants to ports has hindered such plans. For instance, one of the refiners took two months to fill a single ship of 35,000 metric tons after having to repeatedly cart the fuel in 30 ton trucks, according to BMI Research. Teapots have gained prominence over the past year after the government relaxed rules governing their oil purchases and sales. Processors elsewhere in Asia and beyond braced for more […]
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Climate change risk threatens 18 U.S. military sites: study Rising sea levels due to hurricanes and tidal flooding intensified by climate change will put military bases along the U.S. East Coast and Gulf Coast at risk, according to a report released on Wednesday. Nonprofit group the Union of Concerned Scientists analyzed 18 military installations that represent more than 120 coastal bases nationwide to weigh the impact of climate change on their operations. Faster rates of sea level rises in the second half of this century could mean that tidal flooding will become a daily occurrence for some installations, pushing useable land needed for military training and testing into tidal zones, said the report titled “The U.S. Military on the Front Lines of Rising Seas.” By 2050, most of these sites will be hit by more than 10 times the number of floods than at present, the report said, and at least half of them will experience daily floods. […]
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Oil Majors Lost One Engine; Now the Second One Is Sputtering BP says second-quarter refining margins drop to 6-year low Downstream business was key last year in cushioning cheap oil If Big Oil was a two-engine airplane, you could say it’s been flying on a single engine since energy prices crashed in 2014. Now, the second motor is sputtering. The major integrated oil companies, including Exxon Mobil Corp., Total SA and BP Plc, have relied on their so-called downstream businesses, which include refining crude into gasoline, oil trading and gas stations, to cushion the losses on their upstream units, which pump crude and natural gas. “The crash in oil prices in late 2014 brought refineries worldwide a pleasant surprise: booming margins,” said Amrita Sen, chief oil analyst at consulting firm Energy Aspects Ltd. in London. “But now, the market is changing.” BP, the first major to report second-quarter results, showed the impact on Tuesday. The British company said its downstream […]
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Canada phasing out some oil railcars early Getting older rail cars that carry crude oil out of service quicker means eliminating the weakest link in the chain of safety, the Canadian government said. Canadian Transport Minister Marc Garneau issued a directive that puts the phase-out date for rail cars designated DOT-111 at Nov. 1, at least six months ahead of schedule. “By removing the least crash resistant tank cars in service, we continue to modernize how dangerous goods are shipped in Canada and further protect Canadians and their families who live near Canada’s rail network,” he said in a statement. The Canadian government issued new regulations in 2014 aimed at increasing safety on the Canadian rail system. The measure from regulator Transport Canada started with an order to remove around 5,000 tanker […]
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Ruble Extends Year’s Worst Losing Streak as Oil Trades Below $45 Currency catching up with crude after verbal interventions Bonds fall, pushing five-year yields to highest in two weeks The ruble extended its worst losing streak of this year, pressured by verbal intervention from government leaders and crude trading below $45. The Russian currency dropped 0.9 percent to 65.9937 against the dollar by 6:46 p.m. in Moscow, the lowest in a month, and extended a six-day decline to 5 percent. Though the ruble depreciated 3.1 percent in July, it still outperformed a near 10 percent drop in crude. The money Russia earns in local currency from each barrel of oil, increased 1 percent to 2,955 rubles. “The ruble is finally catching up with the oil move,” said Alexei Egorov, an analyst at Moscow-based Promsvyazbank PJSC. “The government really needs the oil in rubles to be at a higher level. The current situation is quite unpleasant for the budget.” The currency […]
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BP planning to bring more barrels online Even though results for the second quarter show yet another loss, BP CEO Bob Dudley said thousands of barrels of new production is coming online this year. BP said Tuesday it recorded a net $2.3 billion loss in the second quarter for its third straight quarterly slump. The results came less than two weeks after the British energy giant revealed the total cost associated with the 2010 oil spill in the Gulf of Mexico was around $62 billion. After revealing the total cost for the first time since the incident, Dudley said he was “very pleased” to have been able turn the page on one of the worst accidents […]
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Britain offers new oil and gas licenses amid exploration drought Britain has cut rental fees by up to 90 percent in its latest tender for oil and gas licenses in the North Sea launched on Wednesday in a bid to attract companies to find new fields in the mature basin. Companies will now be able to apply for cheaper and more flexible licenses to gain access to 1,261 blocks by Oct. 26, followed by license awards to be issued by the Oil and Gas Authority (OGA) at a later date. The hunt for new oil and gas fields in the British part of the North Sea is expected to fall to the lowest in 45 years this year as energy companies have scaled back exploration budgets due to weak oil […]
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