12-06-2016, 10:37 PM
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.