OPEC, for some quiet moments..

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OPEC’s decision to shrink oil production is both a blessing and a curse for natural gas markets. It’s bad news for the U.S. gas bulls enjoying a rally that has propelled prices to the highest in two years. Crude explorers have more incentive to drill with oil futures surging on the promised cuts by the Organization of Petroleum Exporting Countries. And with every barrel of oil they pull out of the ground, they’ll inevitably pull out gas, a byproduct that threatens to add to a U.S. supply glut that’s already hit a record... While the potential flood of so-called associated gas threatens to derail the rally in U.S. gas prices, it also stands to be a boon for the liquefied natural gas market. A large share of LNG contracts are linked to benchmark oil futures. And a drop in U.S. gas prices will allow the nation’s LNG exporters to offer supplies to the world at a deeper discount.

OPEC Deal Is Bad News for U.S. Gas and Good News for LNG - Bloomberg

OPEC clinched a deal to curtail oil supply, confounding skeptics as the need to clear a record global crude glut—and prove the group’s credibility—brought its first cuts in eight years. Crude rose as much as 8.8% in London. OPEC will reduce output to 32.5 MMbpd, Iranian Oil Minister Bijan Namdar Zanganeh told reporters in Vienna Wednesday. The breakthrough deal showed an apparent acceptance by Saudi Arabia that Iran, as a special case, can still raise production.

OPEC to cut production by 1.2 MMbpd in drive to end oil glut

The biggest beneficiaries of OPEC’s decision to shrink oil production will include its most implacable enemies: U.S. shale drillers. After a 2 1/2-year price war in which the the Organization of Petroleum Exporting Countries sought to starve shale explorers and other high-cost producers into submission, the group agreed Wednesday to curb output by 1.2 MMbpd.

Texas shale is big winner as OPEC deal brightens oil outlook

Kinder Morgan and Enbridge won Canadian government approval for two pipeline projects—a long-awaited boost for the oil industry that could potentially expand exports, open new Asian markets and lift prices for locally produced barrels of crude.

Canada boosts oil patch as Trudeau backs Kinder Morgan, Enbridge pipelines

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The U.S. shale industry, gutted by 2 1/2 years of bankruptcies, writedowns, credit downgrades and layoffs, is poised to step back from the brink, thanks to an old enemy: OPEC. Abandoning a policy that sought to starve shale explorers and other high-cost drillers into submission, the Organization of Petroleum Exporting Countries relented on Wednesday and agreed to curb output by 1.2 MMbopd. Other producing nations that aren’t cartel members also signaled plans to cut back by as much as 600,000 bopd, OPEC said.

Shale cheers former enemy as OPEC cut ends years of starvation

Oil prices may break above $60/bbl if OPEC and Russia fully adhere to their promises to pump less, says Goldman Sachs Group. West Texas Intermediate could rise by $6 above the bank’s current forecast of $55/bbl and $56.50/bbl for Brent in the first half of 2017, Goldman Sachs said in a Nov. 30 note. That’s if the organization complies as promised with a new production target of 32.7 MMbopd, coupled with 350,000 bopd in cuts from non-OPEC members Russia and Oman.

Goldman sees oil breaking $60 if OPEC deal done as promised

Sempra Energy’s liquefied natural gas (LNG) subsidiaries have filed applications with the Federal Energy Regulatory Commission (FERC) seeking authorization to site, construct and operate the proposed Port Arthur LNG natural gas liquefaction facility along the Sabine-Neches Waterway in southeast Texas.

Port Arthur LNG files application to construct liquefaction, export facilities in Texas

Russia has committed to cooperate with OPEC by cutting as much as 300,000 bpd from its oil output but offered no clear method for enforcement, creating uncertainty about how easily the reduction can be delivered.

Russia to cut oil output by 300,000 bpd but details remain unclear

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After months of meetings from Doha to Moscow, it was a 2 a.m. phone call between two of the most powerful men in the global oil industry that finally broke the impasse. On the eve of the Nov. 30 meeting of the Organization of Petroleum Exporting Countries, the odds of finishing a deal to reduce supply and ease a global oil glut didn’t look good. Members remained deadlocked over how much each should reduce. They had been forced to cancel talks aimed at getting other suppliers like Russia and Brazil to play a part.

OPEC Deal Hinged on 2 a.m. Phone Call and It Nearly Failed - Bloomberg

Higher oil prices stemming from OPEC’s agreement to cut crude production should give some banks a boost. Bank stocks were slammed earlier this year when, among other factors, falling oil and gas prices raised concerns about troubled energy companies’ ability to repay loans. But Wednesday’s landmark deal struck by members of the Organization of the Petroleum Exporting Countries—and the resulting jump in oil prices—should help banks...

Oil-Price Rebound Gives Banks New Reason to Cheer - WSJ

Saudi Arabia’s decision to push for an OPEC deal to reduce crude-oil production and boost prices traces back to the kingdom’s need to diversify its economy away from crude oil exports. In its thrust toward diversification, the Organization of the Petroleum Exporting Countries’ de-facto leader needs to monetize massive reserves of crude oil. That means building up targeted noncrude sectors such as refined petroleum products, petrochemicals and minerals mining. From there, the kingdom would help finance...

Saudis Wager On Higher Oil Prices to Drive Economic Diversification - WSJ

New data from the U.S. Energy Information Administration shows that for the first three quarters of 2016, renewable energy including conventional hydro resources generated 15.1% of the United States power consumption. That's up from just over 13% last year, with carbon-free energy getting a boost from growth in wind, hydro and geothermal resources. Solar power showed the greatest increase, generating 41% more power than it did in the same period of 2015. In total, non-hydro renewables grew by 18.8% and accounted for 8.5% of total net electrical generation so far this year.

EIA: Renewable generation composed 15% of output over the last 3 quarters | Utility Dive

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The result is significant by any measure. OPEC is planning to cut 1.2 million barrels per day beginning in January and non-OPEC producers could add another 600,000 barrels per day in reductions. The global supply-demand balance will likely flip from surplus to deficit when the deal is implemented, and Goldman Sachs sees oil prices rising to $60 per barrel in the first half of next year.

OPEC Deal Could Trigger Drilling Boom In U.S. Shale | OilPrice.com

"Going into the meeting, the Saudis upped their production to about 11 million barrels a day, from 10 million, so they are simply going back to where they were last year," Cramer said.

Cramer Remix: Why the Trump team's pro-growth agenda doesn't matter

“Assuming OPEC makes good on an apparent production-cut deal, U.S. oil production growth is all but guaranteed to return in 2017,” Joseph Triepke, founder of Infill Thinking, an oil-research firm, told Bloomberg. “All U.S. tight-oil plays will benefit, but none more than the Permian, where we estimate as many as 150 rigs could be reactivated next year.”

OPEC Deal Could Trigger Drilling Boom In U.S. Shale | OilPrice.com

We went through a decade's worth of annual long-term demand projections from the International Energy Agency (the latest set came out earlier this month). Back in 2006 -- those halcyon days before the financial crisis, quantitative easing and One Direction -- the IEA's base case was for global oil demand to rise by almost 40 percent by 2030, topping 116 million barrels a day. That uber-bullish view has been tempered somewhat since

Oil's Unlikely Bollywood Ending - Bloomberg Gadfly

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So what gives? Well, the bottom line is still the bottom line for big oil companies — and unfortunately, even a few extra bucks tacked on to a barrel of oil is not going to undo the past 10 years of pain. Big Oil is stuck in a secular decline. And that means all investors should be wary of thinking a recovery in oil prices is a sign that oil giants like Chevron and Exxon are back.

Big Oil is in decline, and the OPEC deal can’t rescue it - MarketWatch

OPEC’s agreement to cut production for the first time in eight years has the potential to balance the oil market, as long as everyone sticks to it, former Saudi Arabia Oil Minister Ali al-Naimi said. "The only tool they have is to constrain production," al-Naimi said of OPEC at an event in Washington, D.C. "The unfortunate part is we tend to cheat."

OPEC deal can work, but ‘We tend to cheat,’ Al-Naimi says

Russia, the world’s largest energy exporter, held November output near a post-Soviet record, which is likely to remain a high-water mark in the near term after a pledge to cut production.  Russian crude and condensate production averaged 11.21 MMbpd in November, compared with a record 11.23 MMbpd in October, according to the Energy Ministry’s CDU-TEK statistics unit.

Russian oil output near post-Soviet record as it prepares to cut

OPEC’s work isn’t done yet. Oil traders and investors cheered Wednesday’s landmark deal to curtail oil production. But history shows compliance with past accords to be patchy at best. Even if countries stick to their output caps, those that won exemptions could make the collective target all but unreachable if they boost production. The difficulty of monitoring non-OPEC cuts adds a further layer of uncertainty. “You do have a problem with production compliance for sure,” said Olivier Jakob, managing director of Zug, Switzerland-based consultants Petromatrix GmbH. Rising output from Libya and Nigeria—both exempt from cuts—will push OPEC production beyond the quota next quarter, while “it will be very difficult to get 100% compliance from non-OPEC countries,” he said.

OPEC history shows hard work on cuts deal is only just beginning

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U.S. shale oil companies are using the post-OPEC rally to hedge their oil price risk for next year and 2018 above $50 a barrel, bankers, merchants and brokers said, pushing the forward oil curve upside down. The rush to hedge -- locking in future cash flows and sales prices -- could translate into higher U.S. oil production next year, offsetting the first output cut by the Organization of Petroleum Exporting Countries in eight years. As such, the producer group could end up throwing a life-line to a sector it once tried to crush.

American Shale Companies' Rush to Hedge Is Turning the Oil Market Upside Down - Bloomberg

As strange as it sounds, producers are experimenting with ways to zap previously unextractable oil resources with microwaves, which has the potential to kick-start an even bigger energy revolution than fracking — and appease environmentalists while they’re at it. This is potentially “a whole shift in the paradigm,” says Peter Kearl, co-founder and CTO of Qmast, a Colorado-based company pioneering the use of the microwave tech. Some marquee names are betting on the play: Oil giants BP and ConocoPhillips are pouring resources into developing similar extraction techniques, which can be far less water- and energy-intensive than fracking.

Move Over, Fracking. There’s a New Technology in Town | Fast Forward | OZY

The surveys showed Saudi Arabia, the largest OPEC producer, churning out close to its peak summer-month level, meaning officials there are likely waiting until January to adjust production to the lower winter level, said the Commerzbank analysts. As well, they noted Saudi Arabia announced the biggest price discount in official selling prices for Asian customers on Monday, suggesting the country is keeping up with its strategy of defending market share. “Under these circumstances, it’s hard to imagine how OPEC will convince non-OPEC producers to cut production when they meet at the end of the week,” said Weinberg and the team. So far, four non-cartel members have said they will attend Saturday’s meeting in Vienna.

OPEC deal may already be running into trouble, says this chart - MarketWatch

Oil traded at a 16-month high as OPEC prepared to meet non-members in an effort to secure additional output cuts following last week’s surprise deal to curtail supply. Futures rose as much as 1.4% in New York. Members of the Organization of Petroleum Exporting Countries will meet producers from outside the group in Vienna on Saturday to discuss the supply curbs, according to OPEC Secretary General Mohammad Barkindo. In the U.S., drillers added rigs for a fifth week to reach the highest level since January, data from Baker Hughes showed.

Oil hits 16-month high as focus shifts to non-OPEC cuts

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Sometime in the next 12 to 24 months, the world will see probably see the biggest IPO in history, and one that may remain unparalleled for a century or more – the IPO of Saudi oil giant Aramco. Aramco says it has more than 260 billion barrels of recoverable reserves – 10 times the level that Exxon has.

What You Need To Know About The World’s Biggest IPO | OilPrice.com

To understand why Saudi Arabia changed course and decided OPEC should go back to managing supply, look at two of the kingdom’s biggest policy challenges: the urgent need to plug holes in its budget and the plan to sell a stake in the state-owned oil monopoly. Two years after the world’s biggest exporter backed the Organization of Petroleum Exporting Countries’ switch to a pump-at-will strategy to defend market share, Saudi Arabia’s oil minister promised to bear the biggest burden in curbing global supply. The market response suggests it may have been the prudent thing to do. By promising to cut production by just 4.7%, the country gained an 18% jump in oil prices.

Saudi Arabia switches OPEC tack with eye on world’s top IPO

What’s perhaps more interesting is that Russia did not, in fact, obligate itself to cut from essential production. It surfaced last week that the country’s total output had reached a new post-Soviet record of over 11.2 million barrels per day. The precise figure, according to Deputy Energy Minister Kirill Molodtsov, was 11.231 million barrels, and it is from this production level that Russia will take off the 300,000 bpd it agreed to cut to help OPEC in its market rebalancing efforts.

How Russia Outsmarted OPEC | OilPrice.com

U.S. pipeline capacity for natural gas exports to Mexico has rapidly expanded in the past few years and currently stands at 7.3 billion cubic feet per day (Bcf/d). This existing cross-border capacity primarily supplies the Northeast and Central regions of Mexico. New capacity projected to be completed in the next several years will help to supply Mexico’s Central and Northwestern regions

New U.S. border-crossing pipelines bring shale gas to more regions in Mexico - Today in Energy - U.S. Energy Information Administration (EIA)

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Oil fell in New York on speculation that OPEC production cuts will bolster U.S. shale production, and amid signs that the organization won’t insist all its partners deliberately reduce output. Futures fell 1% in New York after declining 1.7% on Tuesday, the first drop in five days. The Energy Information Administration increased its U.S. oil output forecast for this year and next, and domestic explorers last week raised the number of rigs in action to the most since January. OPEC will accept natural output declines as part of the 600,000-bpd reduction agreed with non-members, rather than insist they intentionally cut, according to three officials familiar with the matter.

Oil slides on rising U.S. supply outlook, follow-up OPEC talks

Norway has this year politely declined invitations from OPEC to join talks on curbing oil production. Its strategy is now paying off. Western Europe’s biggest crude producer, which isn’t a member of the Organization of Petroleum Exporting Countries and will not feature alongside Russia among non-members contributing to output cuts under last week’s deal, will nonetheless reap the benefits of higher prices on revenue and activity. Investments in Norway’s offshore industry, set to drop for a third straight year in 2017, will get a helping hand from the OPEC deal next year, Tord Lien, the country’s Petroleum and Energy Minister said. It’s too early to say by how much, he said.

OPEC deal seen helping Norway oil investment as soon as 2017

Up to $15 billion in increased spending will flow into the non-OPEC shale market in 2017, according to a new analysis from Rystad Energy. This incremental change comes after OPEC’s decision to cut production by 1.2 MMbpd. Non-OPEC shale well services are best positioned with an estimated $10 billion of additional spending, followed by drilling contractors with $2.5 billion, assuming 10,000 wells are to be drilled and completed.

Service companies exposed to shale seen as winners of OPEC deal

The CEO of Continental Resources (NYSE:CLR), Harold Hamm was recently quoted to have said that the US can increase oil production to 20 mb/d. Technically speaking, this may indeed be true, if only we could ignore the financial aspects. If money would be no object, then the shale industry could just throw all the idle rigs back into action, and drill wherever shale oil is to be found, and perhaps by the end of the decade, the US might just reach such a production level.

Can Shale Really Defeat OPEC Oil Production Cut Rally? - The United States Oil ETF, LP (NYSEARCA:USO) | Seeking Alpha

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Among other sources, Cheniere Energy Inc. has contracts with several bidirectional pipelines to receive fracked gas from Marcellus. Cheniere won approval from U.S. regulators to export LNG in 2010, years ahead of competitors. Cheniere’s Sabine Pass terminal is currently the only operational export terminal in the lower 48 states. That’s about to change, though, as four more terminals are forecast to become operational by 2018 and at least a dozen more have been approved or are pending certification.

Can the U.S. Become an Energy Superpower in 2017?

OPEC is likely to bring the oil market into balance by the middle of next year, but its production cut looks set to fall short of its stated goal of draining the stockpiles that are depressing prices. The oil market will rebalance “toward the middle of next year," according to Nigeria’s Minister of State for Petroleum Emmanuel Kachikwu, bringing an end to more than three years when supply exceeded demand. However, Bloomberg News calculations based on OPEC data show that across the whole of 2017 there will be little overall reduction in record oil inventories—even if the group convinces non-members to join supply curbs at a meeting on Saturday. “Even with 100% compliance from both OPEC and non-OPEC producers global stocks are unlikely to fall in the first half of 2017," said Tamas Varga, analyst at brokerage PVM Oil Associates in London. “That should keep oil prices in check.”

OPEC deal won’t be enough to drain oil stockpiles

Oil-hauling supertankers are bracing for the worst earnings year since 2013 as they become collateral damage in OPEC’s quest to trim a global glut of crude. So-called very large crude carriers, 1,200-ft vessels each hauling 2 MMbbl, will earn an average of $25,000 a day next year, according to the median of eight shipping analysts surveyed by Bloomberg. That’s 12% lower than they were anticipating before the Organization of Petroleum Exporting Countries took a decision on Nov. 30 to cut collective output by enough to fill four ships a week.

Oil tanker market heads for worst year since 2013 on OPEC cut

Commodity trader Glencore and Qatar’s sovereign wealth fund agreed to buy a 10.2-billion euro ($11-billion) stake in Russia’s largest oil producer from the state in a triumph for President Vladimir Putin over sanctions imposed by the West.

Glencore, Qatar buy $11-billion stake in Russia's Rosneft

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OPEC is likely to bring the oil market into balance by the middle of next year, but its production cut looks set to fall short of its stated goal of draining the stockpiles that are depressing prices.

OPEC’s Historic Deal Won’t Be Enough to Drain Oil Stockpiles - Bloomberg

“In particular, possible climate policies following COP21 have the potential to reduce energy consumption levels and alter the energy mix substantially,” according to OPEC’s World Oil Outlook released on Tuesday. The cartel is not the first to argue that oil demand may be soon nearing its peak

OPEC Sees Peak Oil Demand In Just Over A Decade | OilPrice.com

For the three titans of Latin American oil—Pemex, PDVSA and Petrobras—last week’s OPEC-driven price rally won’t be enough to halt a slow descent from the ranks of international crude heavyweights. Even as news of the cartel’s 1.2 MMbpd output cut spurred the steepest three-day oil gain in 15 months, the biggest Latin American producers remain hobbled by financial, political, technical and structural problems. Mexico and Brazil have been turning to outside investors to help boost output, with Mexico on Monday offering up stakes for the first time to drill in its deep waters.

Post-OPEC rally no miracle cure for Latin America’s crippled oil giants

Only five of 14 non-OPEC oil producers have agreed so far to meet the group on Saturday for talks aimed at widening a deal to reduce output, casting doubt on whether OPEC will secure the full cuts it is seeking, two OPEC sources said. The Organization of the Petroleum Exporting Countries, which finalised its first oil output cut in eight years last month to prop up prices, is to hold talks with non-member countries in Vienna in the hope that they will also limit supply. The last time non-OPEC countries joined the organization in cutting output, in late 2001 as prices dropped in the aftermath of the Sept. 11 attacks, non-members promised cuts of 462,000 barrels per day, not quite the 500,000 bpd OPEC then sought.

Only five non-OPEC producers so far attending talks to widen output cut | Reuters