OPEC, for some quiet moments..

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Iran is on track to out-produce Qatar, the world’s biggest LNG exporter, at the vast natural gas deposit they share in the Persian Gulf. But as much as they might want, the Iranians won’t have much gas to export because they are likely to use most of the new production themselves.

Iran set to out-produce Qatar at world's biggest gas field

Iraq pumped 4.57 MMbopd in February and plans to boost output later in the year even as the OPEC member reaffirmed its commitment to the group’s decision to cut production to counter a global glut. The country plans to increase output to 5 MMbopd by the end of 2017, Oil Minister Jabbar Al-Luaibi said Wednesday at a news conference in the southern city of Basra. Iraq exported 3.87 MMbopd from its southern and northern shipment hubs in February, the ministry’s spokesman, Asim Jihad, said in an emailed statement.

Iraq plans to boost crude oil production, exports in 2017

Prices have sunk, stockpiles ballooned and doubts about OPEC’s effectiveness grown, yet Wall Street hasn’t lost faith in oil’s recovery. Crude plunged below $50/bbl in New York last week on signs that OPEC’s production cuts aren’t clearing a global glut quickly enough, and that U.S. shale drillers are ready to fill in any shortfall. Nonetheless, Goldman Sachs Group, Morgan Stanley, Bank of America and Citigroup say they’re still confident prices will climb by the end of the year.

Wall Street keeps faith in oil recovery even as prices drop

Even with a rising crude oil price throughout most of 2016, total U.S. oil production in 2016 was below its 2015 level. However, monthly production began growing in the fourth quarter of the year after declining over its first three quarters. Total production managed to stay above the five-year average thanks to prior year increases. With the removal of restrictions on exports of domestically-produced crude oil at the end of 2015, crude oil exports increased and the difference between Brent and WTI crude prices narrowed, which made crude imports relatively more attractive.

EIA: Despite growth late in 2016, U.S. crude oil production decreased while imports, exports increased

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Though OPEC has managed to achieve a high standard of compliance, it has mostly been due to the oversized cut by the largest member of the group—Saudi Arabia. Meanwhile, the actions and statements of the second and third largest producers in OPEC are throwing worrying signs at the oil bulls.

Iran and Iraq ramp up oil production - Business Insider

Statements by Saudi Arabia's oil minister and OPEC's Secretary General were hardly reassuring about them continuing the current production limiting accord, after June 30, when it is set to expire. The Saudi oil minister explicitly said that the accord adherents would not abide "free-riders," which is how he referenced the shale producers, in particular. Apparently, sideline discussions among this disparate group was even more pointed. The production deal has been shouldered almost entirely by Saudi Arabia. If you take out their over-compliance, the OPEC compliance rate with the cutbacks is under 50%.

Oil prices could hit 2016 lows—commentary

OPEC and its allies may prolong production cuts after they expire in June if the world’s crude inventories remain excessive, Saudi Arabia’s Energy Minister said. The curbs will be sustained if stockpiles are “still above the five-year average, if the markets are still not confident in the outlook, if we don’t see companies and investors feel good about the health of the global oil industry,” Khalid Al-Falih said in a Bloomberg television interview in Washington. “We want to signal to them that we’re going to do what it takes to bring the industry back to a healthy situation.”

Saudi Arabia Says Oil-Supply Cuts May Be Extended If Needed - Bloomberg

OPEC will have to extend its oil output curbs in order to sustain a recovery in prices, as a revival in crude production outside the group may scupper its efforts to erode an overhang of unused inventory, a poll of market analysts showed on Friday. Six of the 10 analysts polled by Reuters said they believed OPEC will extend its output cuts beyond June this year, while two felt the group did not need to extend the deal and a further two were undecided.

OPEC will need to extend output curbs to sustain oil price recovery: Reuters poll | Reuters

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Iraq pumped 4.57 million barrels a day of oil in February and plans to boost output later in the year even as the OPEC member reaffirmed its commitment to the group’s decision to cut production to counter a global glut. The country plans to increase output to 5 million barrels a day by the end of 2017, Oil Minister Jabbar Al-Luaibi said Wednesday at a news conference in the southern city of Basra. Iraq exported 3.87 million barrels a day from its southern and northern shipment hubs in February, the ministry’s spokesman, Asim Jihad, said in an emailed statement.

Iraq Plans to Boost Crude Oil Production and Exports This Year - Bloomberg

Oil and gas companies are loosening their purse strings and preparing to pump more oil and gas. Producers expect to spend $25 billion more this year on capital projects than they did last, an increase of 11 percent over 2016, according to the energy research firm Wood Mackenzie. And they hope to pump 1 million more barrels of oil and gas per day. WoodMac analyzed figures from the 119 oil and gas firms that have already announced their capital budgets. Ninety-nine expect to spend more this year.

Is the boom back? Drillers to spend $25 billion more in 2017 | Fuel Fix

Halfway into an OPEC-led oil supply cut, Asia remains awash with fuel in a sign that the group's efforts to rein in a global glut have so far had little effect. The Organization of the Petroleum Exporting Countries (OPEC) and other suppliers including Russia have pledged to cut production by almost 1.8 million barrels per day (bpd) during the first half of this year to rein in oversupply and prop up prices. Yet almost three months into the announced cuts, oil flows to Asia, the world's biggest and fastest growing market, have risen to near record highs. The Asian surplus will pressure global oil prices and weigh on the budgets of major oil producing nations but may also help spur growth in demand needed to soak up the excess.

Halfway into 2017's oil supply cut, Asia remains awash with fuel | Reuters

The Interior Department is weighing Eni SpA’s request to explore for oil in waters north of Alaska, giving the Trump administration a chance to reverse course from former President Barack Obama’s attempt to curtail Arctic drilling. Eni’s exploration well would be in an area it previously leased from the federal government, and so it isn’t covered by the executive order Obama issued in December to block the sale of new drilling rights within huge swaths of the Chukchi and Beaufort seas. As the Trump administration considers ways it could reverse Obama’s directive, approving this plan could encourage more oil companies to consider Arctic exploration.

Trump Weighing Eni's Arctic Drilling Bid in Post-Obama Pivot - Bloomberg

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The exodus of oil-price optimists has begun. Money managers cut bets on rising West Texas Intermediate crude by a record amount during the week ended March 14, while wagers on a further price drop doubled as oil remained below $50 a barrel. "It’s sort of a negative feedback loop, where money managers were selling because the price was falling, and the price was falling in part because money managers were selling,” said Tim Evans, an analyst at Citi Futures Perspective in New York, in a telephone interview.

Bullish Bets on Crude Cut by Most Ever as Price Falls Below $50 - Bloomberg

The latest U.S. figures on crude-oil inventories and production should rattle the nerves of major oil producers already worried about the success of OPEC-led efforts to rebalance global supply and demand. Government data released Wednesday showed U.S. crude-oil inventories hit a record last week as imports rose and refinery activity edged lower, while domestic production hit its highest level in more than a year.

Here’s why U.S. oil data should rattle OPEC nerves - MarketWatch

Oil headed for a weekly increase as U.S. stockpiles retreated from record levels while Saudi Arabia said it’s prepared to continue production curbs in the second half of the year. Futures were little changed in New York, up 0.9% for the week. U.S. inventories last week fell for the first time this year, according to EIA data on Wednesday.  Output curbs by OPEC and its partners may continue past June if global stockpiles remain above the five-year average, according to Saudi Arabia’s Energy Minister Khalid Al-Falih.

Crude set for weekly gain as Saudis willing to extend curbs

The U.S. rig count increased by a total 21 rigs in the latest Baker Hughes rig count, from 768 rigs working on March 10 to 789 rigs on March 17. The total U.S. rig count has increased by 313 from its count of 476 one year ago. U.S. land rigs increased by 22, from 743 rigs working on March 10 to 765 on March 17, and the U.S. offshore rig count decreased by one, from 20 to 19 rigs.

U.S. rig count climbs by 21 following stockpile decline

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Chevron Corp. has signaled the end of major new LNG projects in Western Australia and is unlikely to sanction an expansion of its Gorgon and Wheatstone export developments as it focuses on boosting returns from $88 billion of investment. The climate for developing large greenfield LNG projects has shifted to smaller developments given a slump in the price of oil to under $50 a barrel, according to Nigel Hearne, a managing director with the company’s Australia unit. “The mega projects of the past decade are giving way to smaller, more targeted investments with quicker economic returns,” Hearne said in a speech in Perth on Tuesday. “As it stands there is unlikely to be another large greenfield LNG development” in Western Australia.

Chevron Calls End of LNG Mega Project After $88 Billion Spree - Bloomberg

OPEC oil producers increasingly favor extending beyond June a pact on reducing crude supply to balance the market, sources within the group said, although Russia and other non-members need to remain part of the initiative. The Organization of the Petroleum Exporting Countries is curbing its output by about 1.2 million barrels per day (bpd) from Jan. 1 for six months, the first reduction in eight years. Russia and other non-OPEC producers agreed to cut half as much.

OPEC leans toward oil cut extension, but non-members need to be in: sources | Reuters

Russia will cut its oil output by 300,000 barrels per day by the end of April and will maintain production at that level until the global oil cuts deal expires at the end of June, Energy minister Alexander Novak said on Friday. Russia had cut output by 160,000 bpd by the middle of March, said Novak, a figure he said would reach 200,000 bpd by the end of the month.

Russia cutting output by 300,000 barrels per day by end of April

Exxon Mobil Corp., Royal Dutch Shell Plc and Chevron Corp., are jumping into American shale with gusto, planning to spend a combined $10 billion this year, up from next to nothing only a few years ago. The giants are gaining a foothold in West Texas with such projects as Bongo 76-43, a well which is being drilled 10,000 feet beneath the table-flat, sage-scented desert, and which then extends horizontally for a mile, blasting through rock to capture light crude from the sprawling Permian Basin.

Big Oil’s Plan to Buy Into the Shale Boom - Bloomberg

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Exxon Mobil Corp., Royal Dutch Shell Plc and Chevron Corp., are jumping into American shale with gusto, planning to spend a combined $10 billion this year, up from next to nothing only a few years ago. The giants are gaining a foothold in West Texas with such projects as Bongo 76-43, a well which is being drilled 10,000 ft beneath the table-flat, sage-scented desert, and which then extends horizontally for a mile, blasting through rock to capture light crude from the sprawling Permian basin.

Oil giants upending shale turf where wildcat drillers once ruled

Oil closed at the lowest level since November, erasing the gains that followed OPEC’s deal to cut output, as U.S. crude supplies are forecast to climb. Futures dropped 1.8% in New York, erasing an early gain, while the S&P 500 Index fell the most in five months, as investors assessed the prospects for Donald Trump’s pro-growth policies gaining congressional approval. The industry-funded American Petroleum Institute was said to have reported that U.S. supplies rose last week. Government data Wednesday will probably show stockpiles climbed to a record, a Bloomberg survey showed. Prices increased earlier amid speculation OPEC may extend its supply-cut deal past June.

Oil closes at lowest since November, as U.S. supply seen rising

The rally in global oil prices has stalled at the worst possible time for explorers, just as banks reassess credit lines crucial to their growth. This year’s reviews, due to start next month, will arrive with the industry nursing a nasty case of whiplash. Spot prices surged late last year on OPEC’s pledge to cut output, hitting $54.06/bbl in New York. Since then, they’ve fallen 12%, undercut by rising U.S. rig counts. Futures contracts show longer-term prices deteriorating as well.

Oil's bad timing pressures drillers, as banks review loans

The latest published well production data from the Ohio Department of Natural Resources (ODNR) suggests that shale gas production in Ohio contracted by 180 MMcfgd during fourth-quarter 2016, with only 58 new wells turned in line. This represents a 54% year-over-year decline in activity compared to fourth-quarter 2015, with rather flat development over the past year.

Early 2017 recovery in Utica production seems realistic, Rystad says

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Total has started production from the Moho Nord deep offshore project, located 75 km offshore Pointe-Noire in the Republic of the Congo. The project has production capacity of 100,000 boed. “Moho Nord is the biggest oil development to date in the Republic of the Congo.  A showcase for Total’s deep offshore operational excellence, it consolidates our leading position in Africa.” stated Arnaud Breuillac, president, exploration & production at Total. “Moho Nord will contribute to the reinforcement of the cash flow of the Group and to its production growth.”

Total starts production on deepwater Congo field

An historic agreement between OPEC countries and other oil producers to reduce their output won’t be enough to nudge crude prices above $60/bbl this year, according to energy lender Arab Petroleum Investment Corp. Consumer countries have built up large stockpiles of crude during nearly three years of low prices, and U.S. shale production is rebounding as prices have recovered since OPEC reached the production deal November. That means the process of balancing the market will take at least until the second half of this year, the company known as Apicorp said Monday in a report.

Oil prices seen stuck below $60 this year as high stocks persist

A year after Cheniere Energy Inc.’s Louisiana terminal shipped the first exports of U.S. natural gas from shale, cargoes from the facility are fetching higher prices than ever. The export price of liquefied gas from Sabine Pass rose as high as $7.52/MMbtu in January, topping last year’s high of $6.21, according to an Energy Department report Friday. Fifteen tankers sailed from the terminal that month and in February, the most since commissioning began at the facility last year.

America's shale gas selling at record prices to overseas buyers

Madalena Energy Inc. has announced the commencement of the first horizontal multi-frac re-entry in the Vaca Muerta shale formation at Coiron Amargo Sur Este (CASE). Madalena’s partner, Pan American Energy LLC, Sucursal Argentina (PAE) is the operator at CASE with a 55% working interest. Madalena and Gas y Petroleo del Neuquén, the provincial oil and gas company in the Province of Neuquén, hold 35% and 10% working interests, respectively.

Madalena Energy begins drilling Vaca Muerta shale at Coiron Amargo Sur Este

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Ratings agency Fitch on Wednesday downgraded Saudi Arabia’s credit rating by one notch on concerns that the oil-exporter will struggle to fully implement its ambitious economic measures to wean the country off its oil dependence. Fitch lowered the kingdom’s long-term foreign and local currency ratings to A+ from AA- with a stable outlook. It noted the “continued deterioration of public and external balance sheets” as a reason

Fitch Cuts Saudi Arabia’s Credit Rating - WSJ

Geopolitical rivals Saudi Arabia and Iran may be headed for another OPEC showdown, as the producer group enters negotiations over extending oil production cuts in force since January. Saudi Arabia may demand that Iran, which is allowed a slight rise in output under the deal, commit to an output reduction as a condition of continuing the cuts, people familiar with the kingdom's thinking told S&P Global Platts.

Saudi Arabia may insist on Iran oil output cuts to continue OPEC deal: sources - Oil | Platts News Article & Story

OPEC and allies reviewing the impact of their oil cuts this weekend face a market with an unambiguous message: their work is far from done. As producers meet in Kuwait to gauge how well they’ve implemented output cuts agreed on last year, talks will be overshadowed by the question of whether the persisting glut requires the curbs to be extended beyond the summer. With U.S. crude stockpiles swelling to record levels and prices sinking below $50 a barrel, OPEC and its partners have little choice but to keep going, according to all 13 analysts surveyed by Bloomberg.

OPEC, Allies Meet as Oil Market Warns Them: Job's Not Done - Bloomberg

Libya's oil production has reached 700,000 barrels per day (bpd), the National Oil Corporation (NOC) said on Wednesday, recovering from a drop earlier this month caused by fighting at two key oil ports. "We are working very hard to reach 800,000 barrels by the end of April 2017, and, God willing, we will reach 1.1 million barrels next August," NOC Chairman Mustafa Sanalla was quoted as saying in a statement.

Libyan oil output rises to 700,000 barrels per day after port fighting ends: NOC | Reuters

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Perhaps the Bank of Russia knows something the world doesn’t. As the Organization of Petroleum Exporting Countries and its allies prepare to meet for a review of their production cuts this weekend, the central bank of the world’s biggest energy exporter is hunkering down for years of oil near $40/bbl. While analysts in a Bloomberg survey see the price of benchmark Brent crude -- which trades at a small premium to Russia’s Urals export blend -- rising 16% from current levels by the end of the year, oil’s 10% decline in March alone amid supply woes is making the market nervous. Russia, a key partner in the deal and a participant in the talks in Kuwait, might only add to those jitters.

Russia seen hunkering down for $40 oil

OPEC and allies reviewing the impact of their oil cuts this weekend face a market with an unambiguous message: their work is far from done. As producers meet in Kuwait to gauge how well they’ve implemented output cuts agreed on last year, talks will be overshadowed by the question of whether the persisting glut requires the curbs to be extended beyond the summer. With U.S. crude stockpiles swelling to record levels and prices sinking below $50/bbl, OPEC and its partners have little choice but to keep going, according to all 13 analysts surveyed by Bloomberg.

OPEC, allies meet as oil market warns them: job's not done

Thailand has a message for embattled global LNG sellers: It’s going on a shopping spree. Southeast Asia’s second-largest economy is signing new contracts for liquefied natural gas purchases and expanding terminals to boost imports to replace flagging domestic production. Thailand will boost LNG imports by more than 70% this year, according to Wuttikorn Stithit, executive V.P. for natural gas supply and trading at the state-controlled energy giant PTT Pcl.

Global gas market battered by glut gets eager buyer in Thailand

The heart of Europe’s gas market may finally get a helping hand from the American shale revolution as fuel is poised to cross the Atlantic to replenish depleted inventories after the coldest January in seven years. Northwest Europe, one of the biggest trading regions for the fuel, hasn’t yet attracted any liquefied natural gas cargoes from the U.S., which the shale boom turned into the world’s biggest gas producer. So far, sellers have favored markets in South America and Asia where prices have been higher.

U.S. shale to feed European gas market battered by winter

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Saudi Arabia slashed the tax rate paid by state oil producer Saudi Aramco, a key milestone in preparing the company for what may be the world’s biggest initial public offering. Aramco’s income tax, paid on the company’s profit, is being cut to 50% from 85%, CEO Amin Nasser said in an emailed statement. The centerpiece of plans to overhaul the economy of the world’s largest oil exporter, Saudi Arabia aims to sell as much as 5% of the company late next year in an IPO that the kingdom estimates could value the business at about $2 trillion.

Saudi Aramco tax slashed to prepare oil producer for giant IPO

OPEC’s worries about the booming U.S. oil production have increased significantly with the big three oil companies’ interest in shale. Exxon Mobil Corp., Royal Dutch Shell Plc, and Chevron Corp., are planning $10 billion of investments in shale in 2017, a quantum jump compared to previous years. All the naysayers who doubted the longevity of the shale oil industry may have to modify their forecasts. OPEC lost when they pumped at will as lower oil prices destroyed their finances, and now they are losing their hard-earned market share as a result of cutting production. Shell’s declaration that they can “make money in the Permian with oil at $40 a barrel, with new wells profitable at about $20 a barrel” is an indication that Shell is here to stay, whatever the price of oil.

Shell’s New Permian Play Profitable At $20 A Barrel | OilPrice.com

Wood Mackenzie's latest analysis of oil and gas hedging activity shows a recent surge in oil hedges. Those hoping that recent oil-price weakness will prompt U.S. producers to pull back drilling activity and ease the glut of oil supply may need to keep waiting. Andy McConn, research analyst at Wood Mackenzie, explains why recent hedging activity will keep drilling levels buoyant during periods of low oil prices

Surge in oil hedging could worsen U.S. supply glut, Wood Mac says

Oil at $50 to $55 a barrel would put producers in a “good position” with stockpiles expected to fall later this year, according to Kuwait’s Oil Minister Issam Almarzooq. “I think if we can retain $50 to $55 throughout 2017 I think we will be in a good position,” Almarzooq said in a Bloomberg interview from Kuwait City. Brent crude, the global benchmark, has dropped 11% this year, and was trading at $50.46/bbl in Dubai.

Kuwait says oil at $50-$55/bbl puts producers in good position