OPEC, for some quiet moments..

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It's been a while since we've heard about peak oil—the point at which we use up half the world’s reserves and see production terminally decline—but it's happening. And yet, we still have enough oil left to burn our way to climate catastrophe. In a paper released at the end of July, Sir David King, the British Foreign Office’s Special Representative on Climate Change, and his co-author, Oliver Inderwildi of Oxford University’s Smith School of Enterprise and the Environment, refute what they call “a common misperception about peak oil”: that fossil fuels are growing scarce. Rather, they argue, peak oil means it’s getting more difficult and costly to get oil out of the ground—and there’s less of the cheaper, easy oil available.

Welcome to the Age of Crappy Oil | Motherboard

In last month’s Short Term Energy Outlook (STEO), the Energy Information Administration (EIA) projected that it now expects record U.S. gasoline consumption this year

U.S. Gasoline Consumption On Target For A Record Year | OilPrice.com

OPEC has done it again. Talk of a potential deal to freeze output helped push oil close to $50/bbl and prompted money managers to cut bets on falling prices by the most ever. West Texas Intermediate, the U.S. benchmark, went from a bear to a bull market in less than three weeks.

‘Well-timed’ OPEC talk forces oil bears into record reversal

Oil retreated, halting the longest run of gains in four years as Iraq sought to increase exports amid a global oversupply and Nigerian militants called an end to hostilities. Futures fell 3% in New York after climbing 16% the previous seven sessions. Iraq will boost crude shipments by about 5% in the next few days following an agreement to resume exports from three oil fields in Kirkuk. The Niger Delta Avengers declared an end to attacks on oil infrastructure and will conduct talks with the government, according to a statement on a website that says it represents the group.

Oil ends longest gain in 4 years on Nigeria, Iraq supply boost

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OPEC and some producers from outside the group may agree to freeze output during informal talks next month, which could prove “self-defeating” because it would benefit other suppliers, according to Goldman Sachs Group Inc. A deal would show signs of cooperation from Saudi Arabia’s new energy minister after six failed attempts, Goldman analysts including Damien Courvalin said in a report dated Aug. 22. An output cap would likely prove counter productive for the Organization of Petroleum Exporting Countries if it led to further price gains and an increase in supply from other producers, it said.

Goldman sees possible OPEC output freeze as self-defeating

August 11, 2016 may be the point in this oil price cycle that will mark the start of a sustained increase in crude oil prices. That’s the date that the International Energy Agency (IEA) published their forecast that demand for oil would exceed supply in the 3rd quarter. Shortly after the IEA’s Oil Market Report came out, the Saudi Energy Minister Khalid al-Falih said the kingdom would work with other producers to stabilize the market. Tighter supply and OPEC willing to curb production growth is a recipe for higher oil prices.

Forget The Pullbacks – Oil To See Strong Rebound In 2017 | OilPrice.com

Iraq asked international oil companies to boost output just as other OPEC nations are heading for talks amid a global glut. Newly installed Oil Minister Jabbar Al-Luaibi called on companies to increase oil and gas production to boost national revenue, according to an emailed statement from the Oil Ministry on Tuesday. Crude output in OPEC’s second-biggest producer peaked this year at 4.51 MMbpd in January and was down to 4.36 MMbpd in July, according to data compiled by Bloomberg.

Iraq looks to boost oil output before OPEC talks in Algeria

Papua New Guinea (Bloomberg) -- Oil Search Ltd. said development of a second standalone LNG export terminal in Papua New Guinea is unlikely with Exxon Mobil Corp. and Total SA expected to favor cooperation to expand the existing PNG LNG project. The Sydney-based company owns 29% of the Exxon Mobil-led PNG LNG project and a 22.8% stake in the Papua LNG development operated by Total and co-owned by explorer InterOil Corp. Exxon Mobil, after prevailing over Oil Search in the $2.5-billion battle for control of InterOil Corp. in July, said it will funnel gas from the Papua project into an expansion of PNG LNG.

Oil Search says second PNG greenfield project may not proceed

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Saudi Arabia’s energy minister said an oil-output freeze would be "positive" if it happens, while ruling out a cut in production. Iran’s oil minister became the latest OPEC member to say he will attend a meeting of producers in Algiers next month to discuss market conditions, including the possibility of keeping crude production at current levels. Saudi Arabia rejected an earlier attempt by some in the Organization of Petroleum Exporting Countries to freeze output at an April meeting in Doha.

Saudi oil minister sees output freeze as ‘positive’

Iran’s Oil Minister Bijan Namdar Zanganeh will participate in an informal meeting of OPEC members next month in Algiers, a state news service reported.

Iran’s oil minister will join OPEC talks on market in Algeria

A lower for longer oil price consensus is pushing more governments to rethink current tax structures and follow the example of those who have already made adjustments, EY said while launching its 2016 global oil and gas tax guide. The report, which summarizes the oil and gas corporate tax regimes in 86 countries—up from 84 in 2015 with the addition of Cuba and Iran—highlights national tax structure changes over the last year. Countries that introduced or adjusted fiscal regimes to capitalize on the previous high oil price environment, in particular, have had to act quickly in order to remain attractive.

Lower for longer oil price outlook drives global change in tax structures: EY

China’s state-owned oil companies have been beaten down by low oil prices and stagnant demand at home. PetroChina and Cnooc reported dismal earnings this week, and offered little reason for hope moving forward.

China’s Oil Majors Are Burning Through Oil Reserves | OilPrice.com

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Oil prices rose 1 percent on Thursday on U.S.-Iran military tensions in the Gulf and speculation the dollar will fall on a monetary policy speech due from the U.S. Federal Reserve chair. The market, however, gave back some gains after an interview by Saudi Arabia's energy minister with Reuters raised fresh doubts about a potential OPEC output freeze. Crude futures rallied toward the close after a U.S. defense official said a U.S. Navy ship fired three warning shots after an Iranian fast-attack craft approached two U.S. ships in the northern Gulf on Wednesday.

Oil up on U.S.-Iran scare, dollar; Saudi output stance cuts gains | Reuters

Implications could include higher crude prices over time as the country increases imports China’s struggling oil sector has entered a challenging new phase: long-term decline of its domestic production. Oil production in China likely peaked last year at around 4.3 million barrels a day

China’s Decline in Oil Production Echoes Globally - WSJ

Iran's oil minister said on Friday that Tehran will cooperate with Organization of the Petroleum Exporting Countries (OPEC) to stabilize the world market, but expects others to respect its rights, the ministry's news agency SHANA quoted him as saying. Asked about an oil output freeze plan, Bijan Namdar Zanganeh also said that Iran supports any effort to bring stability to the market.

Iran says will cooperate with OPEC to stabilize the oil market: IRNA

Did you predict that oil prices would bounce in 2016? Nice! Did you attempt to cash in by buying the biggest oil ETF? That's where you went wrong. A chart of oil prices shows that WTI crude has risen about 27 percent this year. But the USO ETF, which promises exposure to oil prices, has fallen more than 1 percent. The structure of the futures market largely explains the disparate performances.

Snake oil: Why the $3 billion USO ETF is down this year even as crude has surged

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A new report by the U.S. Energy Information Administration estimates that members of the Organization of Petroleum Exporting Countries (OPEC) earned $404 billion in net oil export revenue in 2015 - the lowest levels since 2004. The figures, based on EIA estimates, show a 46 percent decline in revenues when compared to the same statistic from 2014, when the 12-member bloc earned $753 billion.

EIA: OPEC Earns Lowest Oil Revenues in Over A Decade | OilPrice.com

Crude could return to $100/bbl because the two-year market downturn has curbed investment, according to Lukas Lundin, a member of Lundin Petroleum AB’s board and chairman of Lundin Mining Corp. That kind of price rebound won’t be good for the industry, said Lundin, a member of the billionaire Swedish family with interests spanning oil and solar energy, to diamonds and gold.

Potential rebound to $100 crude could hurt oil industry, Lundin says

For all the feverish speculation of OPEC action that’s roiling oil markets, the real reason for crude’s recent recovery probably lies elsewhere. Oil futures have rallied more than 10% since the Organization of Petroleum Exporting Countries said it would hold informal talks in Algeria in late September, fueling expectations it could revive a pact on freezing production. Banks from Citigroup to Bank of America Merrill Lynch see a simpler explanation for the rebound: the global oil oversupply is finally dissipating.

Look past OPEC freeze hype to understand oil’s advance

China’s biggest oil company wants natural gas to account for half its output by the end of the decade. PetroChina aims to raise natural gas as a share of its production from 37% currently, President Wang Dongjin told reporters Thursday in Hong Kong. The company supports the government’s efforts to liberalize gas prices and implement market-based reforms, he said.

China’s biggest oil company aims for 50% natural gas by 2020

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Explorers in 2015 discovered only about a tenth as much oil as they have annually on average since 1960. This year, they’ll probably find even less, spurring new fears about their ability to meet future demand. With oil prices down by more than half since the price collapse two years ago, drillers have cut their exploration budgets to the bone. The result: Just 2.7 Bbbl of new supply was discovered in 2015, the smallest amount since 1947, according to figures from Edinburgh-based consulting firm Wood Mackenzie Ltd. This year, drillers found just 736 MMbbl of conventional crude as of the end of last month.

Oil discoveries at 70-year low signal supply shortfall ahead

Natural gas is rapidly becoming one of the most traded global commodities, but that doesn’t mean it will have a global price, according to Royal Dutch Shell. While the fuel can be transported anywhere on LNG carriers, it will probably remain regionally priced for the time being, with some contracts continuing to track oil, said Roger Bounds, senior V.P. for global gas at Shell. Prices will depend on location, regulation and infrastructure, as some countries replace coal in electricity generation to cut carbon emissions.

Shell says while gas is the future, it won’t be traded like oil

Crude prices could rise to as much at $70 a barrel during the peak summer driving season next year as the oil market swings from a surplus to a significant deficit, said Francisco Blanch, head of global commodities and derivatives research at Bank of America Merrill Lynch. In recent weeks traders have been hanging on every word from ministers of petro-states after officials confirmed earlier this month they would speak on the sidelines of the International Energy Forum next month about taking measures to prop up oil prices.

Oil prices essentially going nowhere until next year, ClipperData’s Smith says.

Cost estimates for the Alaska LNG Project have been shaved 20% or more, but the project is still not economic, its managers told state legislators in hearings that ended late Thursday. Based on that, three North Slope producers who are now part of Alaska LNG -- BP, ConocoPhillips and ExxonMobil -- will not proceed further with the project as it is currently structured, all three companies told a combined meeting of the House and Senate Resources Committee on Thursday.

North Slope gas producers support switch to state-led Alaska LNG project - Natural Gas | Platts News Article & Story

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Emerging markets are going to be the single biggest factor affecting future oil and gas demand, said a major oil company official at an ONS (Offshore Northern Seas) conference session on Wednesday, in Stavanger, Norway. “What drives growth in demand is emerging markets,” said Spencer Dale, group chief economist at BP. “All the time, we see more people being lifted out of lower incomes in many countries and placed into middle incomes. There is going to have to be enough dependable energy supply to support this movement.”

Industry experts detail demand growth, investment trends at ONS

Iran’s plan to keep boosting crude production until it regains its OPEC market share is dimming prospects of collective action by major producers to freeze output, according to Patrick Allman-Ward, CEO of Dana Gas PJSC. “I’m not overly optimistic about an oil freeze being agreed,” Allman-Ward said in a Bloomberg Television interview in Dubai on Sunday. “There’s pressure with Iran working to increase production. The environment is not that conducive to a freeze.” Dana Gas produces hydrocarbons from Egypt to Iraq.

Iran oil-market share grab seen dimming prospect for production freeze

Crude markets will continue to be plagued by volatility in the short and medium term after suffering the biggest downturn in a generation over the past two years, according to oil-company executives gathering for one of the industry’s biggest conferences in Norway. “The volatility is here to stay,” ConocoPhillips CEO Ryan Lance said on the sidelines of the ONS Conference in Stavanger on Monday. Market rebalancing “will extend into 2017. The inventory levels are still quite high."

Oil executives see volatility as market starts to rebalance

Saudi Arabia, the world’s biggest oil exporter, won’t boost output to capacity and flood the market, the kingdom’s Energy Minister Khalid Al-Falih said weeks before OPEC meets to discuss ways to stabilize prices. Saudi Arabia isn’t concerned about global demand in spite of a drop in oil prices and a slower economy, Al-Falih said in an interview with Al-Arabiya television. The country is able to pump as much as 12.5 MMbopd, he said in comments broadcast during an official visit to buyers in Asia, its biggest market, including China.

Saudi Arabia says it won’t flood oil market ahead of OPEC talks

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China’s got the world puzzling over its oil hoard. From underground caverns by the Yellow Sea to a scattering of islands in the Yangtze River delta, the government has been stockpiling crude for emergencies in a network of storage sites dotted around the country. Record purchases this year by the world’s biggest energy consumer have helped oil prices recover from the worst crash in a generation. What the country plans to do next could determine where they go from here.

Mystery of oil held on Chinese islands puzzles crude markets

The worst has passed for oil prices, which are now too low to ensure investment in the new supplies needed during the rest of the decade, IHS Markit Ltd.’s Vice Chairman Daniel Yergin said. Crude futures, trading near $48/bbl on Wednesday, will rise next year to the "mid-$50 range,” Yergin said in an interview. The market is rebalancing as the global oversupply diminishes, with U.S. crude production set to fall another “couple of hundred thousand” barrels a day by the end of this year, he said. The recovery will be unaffected by any OPEC decision to freeze output, he added.

Worst is over for oil as investment at risk, IHS’s Yergin says

Looking only at oil production in the Lower 48 states (excluding the Gulf of Mexico), Rystad Energy observes 120,000 bpd higher output in August 2016 compared to EIA’s latest August 2016 STEO. Nearly 70 rigs in the Permian basin have returned to operation since early May and current horizontal drilling activity in West Texas and New Mexico is comparable to the levels observed in 2Q-4Q 2015. Additional completion works on drilled but uncompleted (DUC) wells have also been initiated and new volumes coming from the Permian basin are sufficient to balance the decline from more mature liquid plays in September-October 2016.

U.S. onshore production has stopped declining; growth is coming from Permian basin

Russia sees no need for talks with other major oil exporters on freezing output with prices at around $50/bbl, according to the Energy Ministry in Moscow. If prices fall, then Russia will consider resuming discussions, the ministry’s press service cited Energy Minister Alexander Novak as saying.

Russia says oil output freeze not needed with price near $50

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Vladimir Putin said he’d like OPEC and Russia, producers of half of the world’s oil, to reach a deal to freeze supply and expects the dispute over Iran’s participation can be resolved. “From the viewpoint of economic sense and logic, then it would be correct to find some sort of compromise,” Putin said in an interview in Vladivostok. “I am confident that everyone understands that. We believe that this is the right decision for world energy.”

Putin Pushes for Oil Freeze Deal With OPEC, Exemption for Iran - Bloomberg

Japan will propose a broad cooperation in the energy sector with Russia that could include a nearly $10 billion investment in Russian state-owned oil giant Rosneft, the Nikkei newspaper reported on Friday. The report comes as Prime Minister Shinzo Abe plans to meet Russian President Vladimir Putin on the sidelines of a two-day business conference beginning Friday in Vladivostok.

Japan may invest $10 billion in Russian oil firm Rosneft: Nikkei | Reuters

Finally, perhaps the most devastating effect of the EV revolution will be on the oil industry. BNEF forecasts EVs cutting off 13 million barrels per day of oil demand by 2040. The implications of that figure are hard to exaggerate – if it comes to pass, it effectively means permanently lower oil prices. The prevailing view in the industry is that the $1 trillion or so in investment reductions between 2015 and 2020 will set the world up for a supply crunch as too few projects come online. But, BNEF says that the EV revolution could mean the off-cited mantra in the industry of prices remaining “lower for longer” could become “lower forever.” BNEF says the long-term cap on oil prices is $80 per barrel and is falling fast. The effects are so massive they are hard to even contemplate – whole countries will be tossed into crisis (Saudi Arabia, Iran, Iraq, Russia, Venezuela, to name a few) if oil prices remain permanently low.

EV Revolution Set To Cripple More Than Just The Oil Industry | OilPrice.com

Operators in Argentina are focusing on reversing the Neuquén basin's gas production decline by targeting low-permeability, tight gas reservoirs. The shift to tight gas production over the last three years is being driven by pricing incentives and lower costs versus shale gas wells. However, at current costs only the best tight gas wells break-even at the incentivized $7.50/MMbtu gas price according to the latest Wood Mackenzie analysis. In the past two years, tight gas production has almost tripled in the Neuquén basin. By first-quarter 2016, production reached 565 MMcfd, or 16 MMcmd, representing a quarter of the basin’s output.

Tight gas production ramps up in Argentina's Neuquén basin, Wood Mac says

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Global oil-market stability is impossible without the cooperation of Russia and Saudi Arabia, the world’s biggest crude producers, the kingdom’s influential deputy crown prince said, speaking with Vladimir Putin ahead of an OPEC meeting later this month. Saudi Arabia hopes to work with Russia for stability in oil markets, Prince Mohammed bin Salman said Sunday in a meeting with the Russian president in Hangzhou, China. World leaders are gathering in China this week for a summit of Group of 20 nations. Russia and Saudi Arabia will meet with other producers in Algeria this month to discuss oil markets.

Stable oil price requires Saudi, Russian cooperation, prince says

There is currently no need to limit oil output, Saudi Energy Minister Khalid Al-Falih said on Monday, after signing an energy agreement with his Russian counterpart Alexander Novak. “There is no need now to freeze production,” Al-Falih said in an interview with Al Arabiya television in Hangzhou, China. “It is among the preferred options, but it is not necessary today. The market is improving day by day.”

Saudi oil minister says no need now to freeze crude output

As speculation swirls over whether oil producers will reach a deal to coordinate output and aid a recovery in prices, Iran says it’s ready to pump more. The OPEC member can raise production to 4 MMbpd in two to three months from the current daily level of about 3.8 MMbpd, Mohsen Ghamsari, director of international affairs at state-run National Iranian Oil Co., said in Singapore on Monday. The company faces no technical or operational reasons to restrict or cut output, state news agency Mehr cited Managing Director Ali Kardor as saying.

Iran’s ready to pump more as OPEC faces ‘prisoner’s dilemma’

Woodside Petroleum may look to funnel gas from Scarborough field off Western Australia to one of its existing LNG plants after agreeing to a $400-million deal to buy half of BHP Billiton Ltd.’s stake in the remote offshore resource. Woodside’s purchase on Monday of a stake in Scarborough means the gas could eventually be piped to either its Pluto or North West Shelf onshore plants, according to Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein & Co. A plan by BHP and Exxon Mobil Corp. to use a floating LNG plant to develop gas from Scarborough field has stalled in the past few years due to its location and low oil prices.

Woodside eyes LNG boost after $400-million gas deal with BHP