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RE: OPEC, for some quiet moments.. - admin - 07-27-2015

The total number of active U.S. rigs drilling for oil climbed as of Friday, according to the latest weekly rig count data from Baker Hughes. Oil-directed drilling went up by 21, increasing the total number of oil rigs to 659. Gas-directed drilling dropped by two rigs to 216, for a total U.S. rig count of 876, including one miscellaneous rig. The largest jump in oil rigs in 15 months was likely response to WTI price at $60 per barrel in May and June.

False uptick: Baker Hughes U.S. oil rig count rises by 21

Crude oil slipped back into a bear market Thursday, disappointing U.S. shale drillers that pinned their hopes on higher prices. West Texas Intermediate, the benchmark U.S. contract, tumbled 21% since June 10 to $48.45/bbl, erasing more than $100 billion in market value from the companies in the Bloomberg Intelligence North America Independent Explorers and Producers Index.

Oil turning back to bear erases $100 billion from shale drillers

Saudi Basic Industries Corp., the world’s second-biggest chemicals manufacturer, plans to expand investment in U.S. shale gas projects through joint ventures, according to acting Chief Executive Officer Yousef al Benyan. Sabic, as the company is known, signed an agreement with Houston, Texas-based Enterprise Products Partners L.P. to get shale gas, al-Benyan said in an interview in Riyadh. The company may use the feedstock in the U.S. or export it to other countries such as the U.K., he said. Sabic has converted crackers at U.K. plants to use shale gas as feedstock to produce olefins and their derivatives more competitively.

Saudi Arabia’s Sabic considering shale gas investments in U.S.

Encana Corp., the Canadian natural gas producer switching its focus to oil, fell to a 13-year low after second-quarter earnings missed analysts’ estimates. Encana slid 9.3% to C$10.19 at 10:57 a.m. in Toronto, after earlier dropping 10% to the lowest since July 2002. The company said it eliminated about 200 jobs in the past month.

Encana slides to 13-year low as oil collapse brings job cuts




RE: OPEC, for some quiet moments.. - admin - 07-29-2015

United Kingdom (Bloomberg) -- Global oil and natural-gas producers have delayed $200 billion of investment in more than 45 projects following the slump in crude prices, according to Wood Mackenzie Ltd. The deferrals “create a substantial hole in the industry’s investment pipeline,” accounting for about 20 Bbbl of reserves, the Edinburgh-based researcher said in an emailed report.

Oil majors delay $200 billion of spending, Wood Mackenzie says

Oil extended losses in a bear market as a rebound in U.S. drilling signaled that producers can withstand lower prices and may keep adding supplies to a global glut. Futures slipped 0.5% in New York after a 5.4% drop last week. The number of rigs seeking oil rose by 21 to 659, the third weekly gain this month, Baker Hughes Inc. data show. Speculators cut their net-long positions in West Texas Intermediate to the lowest level in more than two years, according to the Commodity Futures Trading Commission. China’s benchmark stock index fell to the lowest since 2007.

Oil slides in bear market as U.S. drillers increase rig count

The U.S. rig count increased by 19 this week as oil prices dropped below $48 per barrel–the latest sign that the E&P industry is out of touch with reality. The last time the rig count increased this much was the week ending August 8, 2014 when WTI was $98 and Brent was $103 per barrel. What are they thinking? In fairness, the contracts to add more rigs were probably signed in May and June when WTI prices were around $60 per barrel (Figure 1) and some felt that a bottom had been found, left behind in January through March, and that prices would continue to increase.

Has The E&P Industry Lost Touch With Reality? | OilPrice.com

The Russian media is reporting an indefinite delay in the final signing of the contract for Russia’s state-run Gazprom to supply China with gas through a new Siberian pipeline because of a decline in Chinese demand for the fuel. The lower demand stems from an economic slowdown in China, reducing the country’s need for gas, as well as the increased availability of liquefied natural gas (LNG) from countries such as Australia.

Russia-China Gas Relationship On The Rocks | RealClearEnergy




RE: OPEC, for some quiet moments.. - Thylacine-2 - 07-29-2015

Bloomberg says that "Oil extended losses in a bear market as a rebound in U.S. drilling signaled that producers can withstand lower prices and may keep adding supplies to a global glut."

That conclusion is unwarranted. The addition of some rigs certainly doesn't indicate that producers can withstand lower prices. What the addition of rigs may indicate is that some companies jumped the gun a bit and signed some drilling contracts when oil recovered to $60. Or that some drilling was necessary to hold leases.


RE: OPEC, for some quiet moments.. - Getitrt2 - 07-29-2015

I would say good and helpful comments, Thy. We probably have more and better industry expertise on SHU than Bloomberg has! It also seems to me that the small number of rigs added is insignificant compared to the number the industry is down from its highs.


RE: OPEC, for some quiet moments.. - admin - 07-29-2015

“Ending the ban on oil exports is an opportunity for our nation to become an energy superpower—to send a signal to the world that we are ready to lead on issues of energy and the environment, to empower our allies and compete against our foes, to lift up our economy and create jobs while lowering gasoline prices and increasing domestic energy production,” Murkowski said.

U.S. could be energy superpower with repeal of oil export ban, Senate committee hears

BP Plc and Chevron Corp. fired the opening salvo for a further round of cost cuts by major oil companies grappling with the prolonged collapse in crude prices. “It’s really tough times for the industry,” BP CEO Bob Dudley said Tuesday, comparing the market to 1986 when tumbling prices forced drastic cost savings.

Oil industry starts fresh round of cost cuts as oil slump persists

Total SA’s second-quarter profit almost matched year-earlier results as higher margins at Europe’s biggest refining business helped the company shrug off a 50% slump in crude prices. Net income, excluding some non-recurrent items, slid 2.1% to $3.09 billion from a year earlier, beating the $2.67 billion average of 15 estimates compiled by Bloomberg. The dividend will remain at 61 euro cents ($0.67) a share, the Courbevoie, France-based producer said Wednesday in a statement.

Total profit beats estimates as production, refining advance

To understand why U.S. oil production is so resilient, it helps to consider the maze of pipelines running out of Midland, Texas. New lines have relieved a chokepoint in America’s biggest oil-producing area. A massive supply glut had forced producers to offer discounts of more than $20/bbl below the U.S. benchmark last year. This month, prices have been at an average premium of 78 cents, the most in records going back to 1991.

How pipelines saved America’s biggest oil basin from bust




RE: OPEC, for some quiet moments.. - jft310 - 07-30-2015

CNBC states a Saudi official stated they will cut production after the summer drive time ends .


RE: OPEC, for some quiet moments.. - admin - 07-30-2015

A more detailed breakdown of these sources of energy offers some additional insights. As Bob Dudley notes in his introduction to the report: "The US replaced Saudi Arabia as the world’s largest oil producer – a prospect unthinkable a decade ago. The growth in US shale gas in recent years has been just as startling, with the US overtaking Russia as the world’s largest producer of oil and gas."

CONVERSABLE ECONOMIST: Snapshots of the Global Energy

"The Saudis do not have as much clout as the market gives them credit for," RBC Capital Markets commodity strategist Michael Tran wrote in a note to clients. "The ability to execute their new energy strategy diminishes as competing countries, such as Iran and Iraq, ramp up production."

The Saudis don't have as much clout as everything says - Business Insider

The U.S. Federal Energy Regulatory Commission (FERC) has granted authorization to Excelerate Energy, in cooperation with the Puerto Rico Electric Power Authority (PREPA), to site, construct, and operate the proposed Aguirre Offshore GasPort project. The order confirms the final Environmental Impact Statement (EIS) that resulted in a finding of no significant environmental impact. As part of the order, the project will comply with all the environmental conditions outlined by FERC.

FERC approves Excelerate Energy's Puerto Rico FLNG project

Russia's Economy Ministry said on Tuesday it expected gas production at Gazprom to decline to 414 billion cubic metres (bcm) this year, an all-time low, due to sluggish demand and a decline in upstream investments. Gazprom, Russia's and the world's biggest natural gas producer, said in its latest forecast in May that it expected its natural gas production to recover this year to 450 bcm after it declined last year to just above 444 bcm.

UPDATE 1-Russia's Gazprom gas output seen at all-time low in 2015 | Reuters




RE: OPEC, for some quiet moments.. - admin - 07-31-2015

BP Plc and Chevron Corp. fired the opening salvo for a further round of cost cuts by major oil companies grappling with the prolonged collapse in crude prices. “It’s really tough times for the industry,” BP CEO Bob Dudley said Tuesday, comparing the market to 1986 when tumbling prices forced drastic cost savings.

Oil industry starts fresh round of cost cuts as oil slump persists

After years of languishing in a shale-induced coma, the U.S. natural gas market is waking up. Seasonal price swings will intensify as the country begins shipping liquefied natural gas cargoes to Asia and Europe later this year, said Bank of America Corp., RBC Capital Markets LLC and Wood Mackenzie Ltd. While that’s good news for traders yearning for volatility, it could be bad news for consumers. Exports will help prices rebound from the slump caused by the U.S. pumping record amounts from shale formations. Growing domestic winter demand is already causing spikes and trading volumes in futures markets have rebounded to the highest level in three years. Average retail gas prices also will rise with LNG exports, according to Bloomberg New Energy Finance.

Gas awakening from U.S. shale slumber as LNG shipments near

RN-Exploration, a wholly owned subsidiary of Rosneft, and Exxon Mobil Exploration and Production Mozambique Offshore Limited have filed joint bids to participate in the fifth license round organized by the Republic of Mozambique’s Institute of National Petroleum (Instituto Nacional de Petróleo). Rosneft and Exxon Mobil decided to file joint bids for the participation in the license round for contract areas in the Angoche basin (A5-A and A5-B) and the Zambezi Delta (Z5-C and Z5-D). If successful, Exxon Mobil will become the operator.

Exxon, Rosneft file joint bids for Mozambique license round

House Speaker John Boehner (R - Ohio) has called for the lifting of the oil export ban—a move he says will help create jobs, lower energy prices, and support America’s allies. Boehner, speaking at his weekly press briefing, said, “Until recently, our nation’s energy policy was rooted in a scarcity mindset that went back to the 1970s. But now, America is experiencing an energy boom, and our policy needs to follow suit.

Boehner calls for end to U.S. oil export ban




RE: OPEC, for some quiet moments.. - admin - 08-02-2015

A long-active militant group, the Kurdistan Workers’ Party (known as the PKK for its Kurdish name), attacked a pair of energy pipelines inside Turkey this week, including a natural gas pipeline from Iran on Monday and an oil export pipeline that snakes from northern Iraq to the Turkish coast on Wednesday. The PKK’s armed wing reportedly took credit for the oil pipeline attack; Turkish officials blamed the PKK for the gas pipeline attack, which bore all the hallmarks of similar PKK strikes over the years.

Striking Pipeline, Kurdish Militants Deal Blow to Fellow Kurds | Foreign Policy

What could go wrong for liquefied natural gas (LNG) in Asia to derail the current consensus of strongly rising demand being met by supply that is increasing even faster? One of the assumptions that often remains unspoken when analysing energy markets is the status of the infrastructure needed to ensure products can actually get from one place to another, and then be processed at their destination.

COLUMN-Asia LNG output vs regas capacity mismatch looming: Russell | Reuters

Earlier in the year I documented half a dozen media reports which turned out to be 100 percent false. Now I expose another half dozen in just the past few weeks. Prices remain unchanged as a result of the largest drop in production in a year, as well as a large inventory draw this week via the EIA. The very fact that prices haven’t responded demonstrates my points. This comes despite the dollar index (UUP) over the last month remaining essentially flat while USO has fallen over 15 percent (so much for that relationship, except when the dollar rises right?)…

Top 6 Myths Driving Oil Prices Down | OilPrice.com

The rest of the shale gas plays declined. The earliest big shale gas plays–the Barnett, Fayetteville and Haynesville–were down 25%, 14% and 48% from their respective peak production levels for a total decline of -4.8 bcf/d since January 2012. The fact that Eagle Ford and Bakken gas production declined suggests tight oil production may finally be declining as well. To make matters worse, total U.S. dry natural gas production declined -144 mmcf/d in June compared to May, and -1.2 bcf/d compared to April (Figure 2). Marketed gas declined -117 mmcf/d compared to May and -1 bcf/d compared to April.

A Reality Check For U.S. Natural Gas Ambitions | OilPrice.com




RE: OPEC, for some quiet moments.. - admin - 08-03-2015

We are getting some news out of Saudi Arabia about oil cutbacks that will have a dramatic impact on the price of oil and make it unlikely we will visit the $43 level again. We all know that our production has already peaked and I expect it to decline pretty precipitously versus what others say it will. I am in the camp inspired by David Demshur, CEO of Core Labs, that says the 70% depletion rate the first year of a shale well is extraordinarily shallow and that means our production will drop quickly if drilling remains this muted.

Jim Cramer — Saudi cutbacks may mean bottom for oils

A nightmare scenario may be unfolding for Russia and some OPEC members: Low oil prices, rather than being a fast way to hobble upstart US shale oil, seem likely to linger for quite a while longer, perhaps well into next year and beyond. If prices do stay in their current range of $45 to $55 per barrel—and a lot of analysts believe they will, if not fall even further—some of the world’s petro-rulers have tough decisions ahead to stave off serious political instability. In early Asia trading today, internationally traded Brent benchmark futures were as low as $53.01 a barrel.

Low oil prices are lasting a lot longer than petro-rulers thought they would - Quartz

The shale drilling industry is highly dynamic. While rig count has fallen by about 60% in the 3 plays since end 2014 this is in part offset by rig productivity that has more than doubled in recent years. The rig count decline has more recently stabilised. Improved productivity should help profitability, but this is cancelled by the collapse in oil price. The estimated recent annual decline rates are 47% for the Bakken, 55% for the Eagle Ford and 22% for the Permian. These declines are not constant. Since year one declines are often of the order 70% and the smaller number of wells now being drilled means that the number of fast declining year one wells in the production pool is falling. Play decline rates are therefore also falling with time.

OilVoice | US Shale Oil: drilling productivity and decline rates - Page 1

Anyone who understood that U.S. drillers in shale plays had large inventories of drilled, but not yet completed wells, knew that production would probably rise for some time into 2015--even as the number of rigs operating plummeted. Shale drillers who are in debt--and most of the independents are heavily in debt--simply must get some revenue out of wells already drilled to maintain interest payments. Some oil production even at these low prices is better than none. Only large international oil companies--who don't have huge debt loads related to their tight oil wells--have the luxury of waiting for higher prices before completing those wells.

This Is Why A Serious Decline In U.S Shale Plays Is Not Far Away | OilPrice.com