OPEC, for some quiet moments..

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The Brent crude price benchmark for millions of barrels of physical crude sales each day is poised for its biggest shakeup in a decade with a new grade added to the mix from January next year. Norway’s Troll crude, which pumped more than 200,000 bbl each day last year, will from Jan. 1 be included alongside existing grades that make up the Dated Brent benchmark -- Brent, Forties, Oseberg and Ekofisk. Statoil ASA, the nation’s biggest oil company, will become the biggest holder of North Sea barrels within the benchmark, published by S&P Global Platts, according to a presentation by the price assessor its London Oil & Energy Forum on Monday.

Brent crude oil benchmark to undergo biggest change in a decade

The giant tankers anchored along the Scottish coast in the Firth of Forth weren’t going anywhere. They were just providing floating storage because there was no demand for their cargo, North Sea crude oil. But the flickering computer screens in the world’s trading rooms told a different story. Prices through the month of April were jumping, showing someone was buying, stunning traders and leaving some with heavy losses. That wasn’t the only bizarre gyration last year in the market for Brent, whose price determines the cost of just about every petroleum-based product, from jet fuel to plastic spoons. Such unusual moves damaged confidence so much that some traders retreated from the market.

Shell shakes up oil trading world with brash buying sprees

Saudi Arabia boosted oil exports and production last year to the highest monthly averages on record as the global crude market endured oversupply. Exports climbed to 7.65 MMbpd on average last year, from 7.39 MMbpd a year earlier, according to Joint Organisations Data Initiative (JODI) monthly data compiled by Bloomberg.

Saudi Arabia breaks records on oil exports and output for year

Russia overtook Saudi Arabia as the world’s largest crude producer in December, when both countries started restricting supplies ahead of agreed cuts with other global producers to curb the worst glut in decades. Russia pumped 10.49 MMbopd in December, down 29,000 bpd from November, while Saudi Arabia’s output declined to 10.46 MMbopd from 10.72 MMbopd in November, according to data published Monday on the website of the Joint Organizations Data Initiative (JODI) in Riyadh. That was the first time Russia beat Saudi Arabia since March.

Russia overtakes Saudi Arabia as world's largest crude producer

[Palm]

All these calls/prdictions here that oil would be at $70-$100 by now have poofed away. Citi is saying MAYBE oil will hit $70 later this year, but they and many or most others say it's not very likely. Better chances that oil stays under $60 and near term drops toward the $40s.

Production caps are being observed for now but US production is ramping up and it won't be long before OPEC production observers say enough is enough; we are losing market share and the world has changed for a good while as shale has changed the game.

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For the first time ever, hedge funds hold more than a billion barrels of bets that crude oil prices will rally. Money managers last week extended their faith in OPEC-led supply cuts, increasing outright long positions in the global benchmark Brent and its U.S. counterpart West Texas Intermediate to a fresh record. Speculators are on hold, though, with futures in New York stuck in the tightest range in 13 years and Brent implied volatility the lowest in more than two years, data compiled by Bloomberg show.

A Billion Barrels of Bets Backing Stagnant Oil Price: Chart - Bloomberg

Crude prices could plunge toward $30 a barrel -- a rout of about 40 percent from current levels -- unless OPEC extends production cuts that are propping up the market, ABN Amro Bank NV said.

Oil in Low $30s Seen by ABN Amro Unless OPEC Extends Supply Cuts - Bloomberg

Royal Dutch Shell PLC said Monday there is no evidence of a glut in liquefied natural gas supply, taking a contrarian view on a market in which the Anglo-Dutch energy giant is one of the largest operators.

Shell Sees No Glut of Liquefied Natural Gas as Demand Rises - WSJ

A new problem that has suddenly emerged is the record levels of gasoline sitting in storage. The market has already had to digest the fact that U.S. crude oil stocks were rising, and investors have done their best to explain away the trend. But now gasoline inventories are climbing to unexpected heights.

Biggest Gasoline Glut In 27 Years Could Crash Oil Markets | OilPrice.com

[admin]

All these calls/prdictions here that oil would be at $70-$100 by now have poofed away. Citi is saying MAYBE oil will hit $70 later this year, but they and many or most others say it's not very likely. Better chances that oil stays under $60 and near term drops toward the $40s. Production caps are being observed for now but US production is ramping up and it won't be long before OPEC production observers say enough is enough; we are losing market share and the world has changed for a good while as shale has changed the game.

LOL. Here is what I wrote just after the OPEC agreement.

Finally there seem to be some OPEC supply freeze/cut agreement, a turnaround from a disastrous strategy. Even if it sticks, it isn't likely to achieve a great deal though. An increase in the oil price will simply be filled by increasing supply, mainly from US shale.

The OPEC Agreement Is Meaningless - The United States Oil ETF, LP (NYSEARCA:USO) | Seeking Alpha

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OPEC and Russia will need to prolong their six-month deal to cut oil output if they plan to trim the global inventory glut that has kept a lid on prices, said  Total CEO Patrick Pouyanne. “If they want really to have an impact on the market, which means to have the inventories going down because inventories are quite high, it will have to be extended beyond May,” Pouyanne said Tuesday in a Bloomberg television interview in New York. “I’m convinced that they will do it.”

Total CEO says OPEC needs to prolong cuts to eliminate glut

Wall Street is throwing the most money at U.S. energy companies since at least 2000 amid growing confidence that the industry is emerging from the worst downturn in a generation. Energy firms raised $6.64 billion in 13 equity offerings in January, drawn in by a rich combination of oil prices consistently above $50 a barrel and a rush to drill that’s doubled the rigs in use in the U.S. and Canada since May. The biggest change from last year: oilfield servicers that provide the rigs, fracking equipment and sand used by drillers.

Wall Street’s Love Affair With Energy Heats Up as Rigs Soar - Bloomberg

Commodity markets will probably stay in a “holding pattern” until there are hard data showing real demand and shrinking stockpiles to support the recent price rally, according to Goldman Sachs Group Inc., which expects such evidence to emerge in the second quarter.

Goldman says commodities need proof of demand to rally more

OPEC officials this week hailed the “excellent” and “unprecedented” implementation of their agreement to cut oil production, but were still waiting for solid evidence that the deal was fulfilling their key measure of success and shrinking the global glut.

OPEC still waiting for evidence oil cuts are doing their job

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Iran is hard at work gaining a foothold in the global energy market, and it’s not letting U.S. President Donald Trump’s confrontational tone stop it from trying. Political rhetoric is unlikely to turn into tangible impediments for Iran’s ambition to join Russia and Norway in the ranks of major gas exporters, according to Deputy Oil Minister Amir Hossein Zamaninia.

Iran's natural gas push not deterred by Trump

Saudi Arabia has said oil giant Saudi Aramco is worth more than $2 trillion, enough to consume Apple Inc. twice, and still have room for Google parent Alphabet Inc. The kingdom may have to settle for less. A lot less. Industry executives, analysts and investors told Bloomberg their analysis -- based on oil reserves and cash flow projections under different tax scenarios -- suggests Aramco is worth no more than half, and maybe as little as a fifth, of that amount. This means Saudi Arabia would earn a fraction of the $100 billion implied by its valuation if it sells 5% to the public in 2018, as planned.

Saudi Arabia's $2-trillion Aramco vision runs into market reality

Why is informed money so long and what are the fundamental grounds for all this institutional investor enthusiasm? In an overview of the supply/demand dynamics of the crude oil market, Nick Cunningham highlighted not only the glut in WTI, but also the product glut. “Oil and refined products inventories in the U.S. continue to climb at a worrying pace, raising some red flags for an oil market that was supposed to be on the mend.”

Why Is Smart Money So Long In Oil? | OilPrice.com

Although crude oil inventories in the U.S. are expected to rise, the global oil market is showing signs of tightness and will continue to see crude stocks draw down, Goldman Sachs has said in recent note. “We do not view the recent U.S. builds as derailing our forecast for a gradual draw in inventories, with in fact the rest of the world already showing signs of tightness,” Reuters quoted Goldman analysts as saying on Tuesday.

Goldman Sachs: Global Oil Inventories To Continue Dropping | OilPrice.com

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Oil traded near the highest level since July 2015 as a drop in U.S. crude imports signaled that OPEC’s output cuts are taking effect. Futures in New York are set for a 1.4% advance this week. U.S. government data showed crude inventories rose less than expected last week as imports dropped the most since November. The slowdown in the expansion of record stockpiles and shipments from overseas into America may signal the production cuts by OPEC are starting to tighten supplies globally.

OPEC cuts help drive crude prices to 19-month high

Shell Argentina Country Chairman Teófilo Lacroze and YPF Chairman Miguel Ángel Gutiérrez have signed preliminary terms and conditions of an agreement to develop a shale gas pilot project in Vaca Muerta, Neuquén. Shell estimates an investment of $300 million, which would take place in two phases.

YPF and Shell agree on pilot project for Bajada de Añelo, Argentina

The exact dollar value of Saudi Aramco may be up for debate, but the listing of the world’s biggest company will be priceless for the kingdom’s markets. The highly-anticipated share sale has become emblematic of Saudi Arabia’s push to transform its economy and open its doors to more foreign capital. Whatever you think of the valuations involved -- be it the $2 trillion once suggested by Crown Prince Mohammed bin Salman or the $400 billion estimate said to have been made by consultant Wood Mackenzie Ltd. -- the offering has the potential to make waves in markets from Tokyo to Toronto.

Saudi Aramco IPO to impact markets in many ways

The United States is expected to become a net exporter of natural gas on an average annual basis by 2018, according to the recently released Annual Energy Outlook 2017 (AEO2017) Reference case. The transition to net exporter is driven by declining pipeline imports, growing pipeline exports, and increasing exports of liquefied natural gas (LNG). In most AEO2017 cases, the United States is also projected to become a net exporter of total energy in the 2020s in large part because of increasing natural gas exports.

EIA: LNG exports expected to drive growth in U.S. natural gas trade

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Oil will stabilize around $55 to $65/bbl as OPEC fulfills its agreement to cut output, with stockpiles and shale production keeping prices from rising much more, the Middle East head of Lukoil PJSC said. Russia’s second-largest oil producer hasn’t had to reduce production in Iraq as a result of the curbs pledged by OPEC, Gati Al-Jebouri said Monday in a Bloomberg television interview. Lukoil’s output in Iraq is about 400,000 bpd, he said. OPEC’s cutbacks have brought a period of stability to the market, he said.

Lukoil's Middle East head sees oil at $55-$65/bbl on cuts

Oil has been bound to the tightest price range in more than a decade, and yet hedge funds have never been so confident it will eventually rally. Money managers boosted their bets on rising WTI prices to a record on speculation that OPEC and its partners will manage to ease a global supply glut. America’s crude producers, which are increasing output, aren’t so sure. They’ve been hedging against price declines for this year and 2018.

Investors see oil break out of narrow range with record bets

Total has signed an agreement for the sale of stakes and the transfer of operatorship in various mature assets in Gabon to Perenco. The transaction is subject to approval by the authorities. This agreement includes the sale of the Group’s 100%-owned affiliate Total Participations Petrolières Gabon, which holds interests in 10 fields. In addition, Total Gabon (Total 58%) has announced the sale of its interests in five fields and the Rabi-Coucal-Cap Lopez pipeline network. The total value of the transactions is around $350 million before adjustments and the production divested by Total represents around 13,000 SEC bpd.

Total sells interests in mature Gabon fields to Perenco

Royal Dutch Shell Plc is unlikely to take on new oil-sands projects as it maintains a grip on costs after crude’s crash forced competitors to write down Canadian reserves. While Shell’s existing oil-sands operations generate strong cash flows, the expense of developing new projects discourages additional investments, CEO Ben Van Beurden said in an interview.

Shell shuns new oil sands projects, as low crude prices force cost control

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Exxon Mobil is pinning its fortunes closer to home as new CEO Darren Woods veers from the oil titan’s longtime focus on Asian and African riches. After a two-year pricing rout erased 19% of Exxon Mobil’s untapped crude by making it unprofitable to extract, Woods faces a tough task in sustaining the company’s output. Woods’s ability to replenish the portfolio will rely heavily on regions the driller long avoided: the U.S. Great Plains and Latin America.

Exxon Mobil’s post-Tillerson fortunes closer to home as new CEO pivots

BP Plc said it will need an oil price of about $40/bbl in 2021 to be able to cover spending and dividends, lowering the so-called cash-balance point from $60 this year. The break-even level will fall as BP keeps capital spending at no more than $17 billion a year, the London-based company said Tuesday in a statement.

BP targets $40 break-even price in four years to reassure investors

OPEC’s Nov. 30 output agreement to cut production by 1.2 MMbpd may have put a floor under the oil price, but has also awakened U.S. shale. Exploration and production companies have added 77 rigs this year to Feb. 24, according to the latest figures from Baker Hughes, while U.S shale production is forecast to reach about 4.87 MMbpd in March, according to the Energy Information Administration's latest Drilling Productivity Report. That's the highest since May 2016. Estimates of just how much shale will be added over this year range from as high as 900,000 bpd by Macquarie and Rystad Energy to a more modest 400,000 bpd by JP Morgan Asset Management.

U.S. shale surge threatens OPEC strategy

Since 2013, the average wellhead break-even price (BEP) for key shale plays has decreased from $80/bbl to $35/bbl. This represents a decrease of over 55%, on average. The wellhead BEP decreased across all key shale plays, with Permian Midland experiencing the largest decrease, falling by over 60% from $98/bbl in 2013 to $38/bbl in 2016 (for horizontal wells only). Due to a higher average royalty, different decline profile and hydrocarbon split, Eagle Ford experienced one of the highest wellhead BEP among the main shale oil plays in 2016. Source: Rystad Energy. There are several reaso

Rystad examines what to expect from U.S. shale break-even prices in 2017

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Exxon Mobil Corp. is trading in long-term projects that pump oil over decades for U.S. shale drilling that can be switched on or off as crude prices change. Long a world leader in multi-billion dollar oil and natural gas developments that take years to build and even longer to profit, Exxon is diverting about one-third of its drilling budget this year to shale fields that will deliver cash flow in as little as three years, said Chairman and CEO Darren Woods.

Exxon Mobil shifts investments to quick-earning shale

With Ryan Zinke at the helm, the Interior Department is set to prioritize coal, oil and natural gas development over renewable projects on federal lands and waters. The Senate confirmed Zinke Wednesday on a 68-31 vote, putting a self-described "Teddy Roosevelt Republican" in charge of making decisions about where -- and whether -- to allow drilling and mining on U.S. public lands. Roughly 20% of the nation’s land is now under the watch of Zinke, a fifth-generation Montanan.

Energy from U.S. lands seen gaining under new Interior Chief

Canada’s first exports of LNG may soon be heading overseas from a port in Louisiana. A year ago, Cheniere Energy built an LNG export terminal along Louisiana’s coast and became the only company shipping U.S. shale gas by tanker. Now it’s looking for supplies to send abroad from as far off as the Montney shale play, which straddles Canada’s Alberta and British Columbia provinces.

Canada may have the U.S. to thank for its first-ever LNG exports

Petrobras and Total inform that they have signed yesterday definitive contracts in relation to the package of assets contemplated in a strategic alliance, outlined December 2016 The contracts seal the strategic alliance between the two companies creating new partnerships in the upstream and downstream sectors, together with a reinforced technical cooperation covering operations, research and technology. This alliance should allow both companies to combine their internationally recognized expertise on all segments of the oil and gas value chain in Brazil and internationally.

Total and Petrobras sign definitive contracts, seal strategic alliance