To: Andrew~ who wrote (14912 ) 11/20/2015 2:26:09 PM From: Goose94 Read Replies (1) | Respond to Crude Oil prices continued to test a lower bound at $40 per barrel, but have so far resisted plunging much below that level. The story has been the same for the past few weeks: production in the U.S. is inching down, but slowly. Meanwhile, storage levels have climbed. This past week, crude inventories leveled off after several weeks of gains, perhaps portending a coming drawdown. Still, bearish sentiment persists. estimates that 37 oil and gas companies have filed for chapter 11 bankruptcy protection so far this year, as the financial storm from low crude prices overwhelms their ability to keep the lights on. The bankruptcy cases account for more than $13.1 billion in outstanding debt among the companies involved. Still, despite the wave of bankruptcies, the industry is not consolidating as fast as many previously anticipated, which appears to be delaying market adjustment. announced that it would be willing to market oil and gas extracting from producers that win an upcoming auction in December. Mexico has opened up its energy sector and has held a few rounds auctioning off offshore tracts, but has not garnered as much interest as it would like. Pemex’s offer to market oil and gas for private producers could offer a degree of certainty to companies on the fence about bidding in the auction, providing some assurances about how to move product to market. Pemex, as a state-owned firm that held an iron grip on Mexico’s energy sector for more than seven decades, still owns or controls most of the nation’s energy infrastructure. Unlike the previous auctions, the sale in December will offer onshore tracts. That has increased the expectation of success, as many of the fields are either already producing or at least have proven reserves. A larger number of companies are expected to participate, including some smaller upstream companies. requiring prepayment for selling crude or refined products to Venezuela’s state-owned firm PDVSA, knowing that offering credit means no guarantee of being paid back. PDVSA is a significant oil producer, but also needs to import different types of crude and refined products to meet domestic demand. According to Reuters, the situation is so bad that at least one trading firm says that it is limiting spot purchases because selling to PDVSA at all – including sales with prepayment – carry risks. PDVSA has promised to honor all of its debts, but revenue has dramatically shrunk while debts have piled up. Venezuela’s situation will likely get worse before it gets better. warning about a future supply crunch as the industry fails to adequately invest in new sources of production. At a conference in Bahrain on November 19, oil minister Ali al-Naimi said that the “stability” of the oil markets depends on continuous upstream investment. Naimi says that at least $700 billion will be needed in order to meet rising demand. “To meet this growing need, there should be a continuation if not an increase in the pace of investments in the petroleum industry to guarantee the stability of the market on the short and long term,” he said . new report from Wood Mackenzie finds that Argentina will pick up the pace in the coming years. The report predicts that oil and gas production from the Vaca Muerta will rise by a modest 10 percent in 2016, but will double by 2018. Much of the production will come from horizontal wells as drilling costs decline and the basin exhibits growth and maturity. Argentina is a place worth watching. Wall Street Journal , which could amount to a 28 percent cut. In China’s regulated market, the move could have mixed effects. On the one hand, it will help increase demand for natural gas, a key goal on behalf of the Chinese government to allow for a reduction in coal consumption. But, it will also reduce revenues for upstream gas companies, damaging the prospects of further shale gas development. plan for the 2017-2022 period, which included a tentative plan to auction off tracts in the Atlantic Ocean, the first time the region would be open for oil and gas drilling. The proposal was predictably met with praise from the industry as well as criticism from environmental groups and small businesses worried about the effect on tourism.
