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RE: OPEC, for some quiet moments.. - admin - 11-03-2015

Big U.S. oil companies are starting to think small. A stubborn 16-month crude rout with no end in sight is driving the largest U.S. oil producers away from costly, high-risk megaprojects long touted as the industry’s future and toward safer shale operations that generate the cash needed to satisfy anxious investors.

Oil producers curb megaproject ambitions to focus on U.S. shale

OPEC will probably hold production steady at its meeting next month as the gap between supply and demand for oil closes, according to the analyst who correctly predicted last year’s rout in prices. “I don’t think they have to do anything,” Gary Ross, founder and chairman of PIRA Energy Group, said in an interview in Singapore on Monday, referring to the Organization of Petroleum Exporting Countries. Global consumption of crude will continue to grow while output from non-OPEC countries will decline next year, helping to bring the market toward equilibrium, he said.

OPEC seen staying pat on output by oil guru who called 2014 rout

Russian oil production broke a post-Soviet record in October for the fourth time this year as earlier investments boosted output and producers prove resilient to lower crude prices. Production of crude and gas condensate, which is similar to a light oil, averaged 10.776 MMbpd during the month, according to data from the Energy Ministry’s CDU-TEK unit. That is an increase of 1.3% from a year earlier and up 0.3% from the previous month.

Russian crude output hits post-Soviet record defying price slump

University of California at Berkeley chemists have developed an innovative new storage material for methane that could lessen the complexity of filling up with natural gas, and extend the range of such vehicles. The material is a flexible metal organic framework that expands when methane is pumped in. The UC Berkeley chemists and colleagues at the National Institute of Standards and Technology and in Europe findings have been published in the journal Nature

This Breakthrough Could Lead To More NatGas Vehicles On The Road | OilPrice.com




RE: OPEC, for some quiet moments.. - admin - 11-04-2015

Oil is near a bottom and global supplies look poised to close their gap with demand as investments in new production decline and consumption grows, according to Pulitzer Prize-winning author Daniel Yergin. U.S. crude output, which surged to the most in more than three decades this year and triggered a price collapse, will retreat by about 10% in the 12-months ending April, according to Yergin, vice chairman at IHS Inc. Global oil supply and demand will begin to move into balance by late 2016 or 2017 and prices may rise to $70/bbl to $80/bbl by the end of the decade.

Yergin sees oil price near bottom as U.S. output set to fall

Improving economies in Europe and elsewhere together with a continued decline in output of shale oil point to a recovery in demand for crude and an increase in prices next year, according to United Arab Emirates Energy Minister Suhail Al Mazrouei. “I’m optimistic that we will see an upward correction in 2016,” he said Tuesday to reporters in Abu Dhabi. “What’s the percentage of correction? I can’t say it’s going to be a high percentage, but there will be an improvement on 2015.”

U.A.E. sees crude gaining in 2016 on stronger demand, less shale

U.S. natural gas extended its decline toward $2 per million British thermal units as a glut of the power-plant and heating fuel nears a record. Unusually warm weather for this time of year is threatening to crimp gas demand just as caverns and reservoirs are filling up with supplies. Money managers raised bearish gas bets last week to an all-time high. Prices haven’t fallen below $2 since April 2012.

U.S. natural gas heads toward $2 as stockpiles near record

Wood Mackenzie's corporate upstream research team has assessed the third quarter (Q3) results from the Major oil and gas companies, identifying four key themes to look out for in 2016. Wood Mackenzie says the latest round of earnings results offered the industry an early glimpse at what lies ahead in 2016 in terms of companies' budgets and strategies. The stand out themes that Wood Mackenzie notes include: weak financial performance in Q3, surging production levels, deep cost cutting; and tighter allocation of limited capital.

Wood Mac identifies key themes for the Majors in 2016




RE: OPEC, for some quiet moments.. - admin - 11-05-2015

'Thylacine-2' pid='64148' datel Wrote:Admin, what's your take on the notion that prolonged low oil prices would lead to a recession? In the past a low oil price was considered a stimulus. Perhaps that was when the economic activity (cost) to produce the oil was relatively low.

Hi Thy, sorry for not noticing this before. It's a good question, actually. The financial pain in many oil producing countries and regions could in fact overwhelm those who benefit from lower oil prices but it largely depends on how they react to it. If the 'victims' cut back spending more than the 'beneficiaries' increase it, this could well lead to a global slowdown.

I don't think this is happening, countries like Saudi Arabia continue to spend and simply let the deficit increase and liquidate assets. They can keep this up for quite some time (five years, according to the IMF).

Another risk is that one of the victims falls into acute financial crisis which could have wider effects.

Lately it looks like the growth scare is a bit overblown, as it happens.




RE: OPEC, for some quiet moments.. - admin - 11-06-2015

Oil traded below $48/bbl before U.S. government data forecast to show crude stockpiles increased in the world’s biggest consumer. Futures fell as much as 0.6% in New York after advancing 3.8% Tuesday. Inventories probably expanded for a sixth week, keeping supplies more than 100 MMbbl higher than the five-year seasonal average, a Bloomberg survey shows before an Energy Information Administration report Wednesday. China has a bottom-line goal of 6.5% annual economic growth, according to its new development blueprint released Tuesday.

Oil falls below $48/bbl before U.S. crude stockpile data

The 44-page report, marked "CONFIDENTIAL," includes an annex containing comments from two members, Iran and Algeria, suggesting OPEC return to its old policy of propping up prices at a desired level by adjusting supplies. "Reaching agreement on a fair and reasonable price of oil for the next six to 12 months" is one of the steps that Iran recommends OPEC take. "OPEC production ceiling should be set for six or 12 months intervals."

OPEC confidential report sees market share squeeze to 2019

Cheniere Energy Inc. plans to ship the first liquefied natural gas cargo from the U.S. in January, joining a flood of supplies that’ll allow buyers access to cargoes from all corners of the world. Consumers will soon be able to get the supercooled fuel “at a moment’s notice,” Cheniere CEO Charif Souki said at the Singapore International Energy Week on Monday. Global LNG supply is expected to climb to 500 Bcmg by 2020, with Australia and the U.S. contributing the most to supplies, Fatih Birol, the executive director of the International Energy Agency, said at the event. About 325 Bcmg were traded in 2014, according to the Paris-based IEA.

U.S. gas set to enter global market as flood of supplies looms

The free trade of America's abundant energy resources would provide an invaluable opportunity for the U.S. to help strengthen and stabilize global energy markets, especially if China is engaged as a partner, according to a new policy brief released by the American Council for Capital Formation (ACCF). The paper specifically identifies U.S. crude oil and LNG exports as potentially playing a crucial role in easing current tensions in the South China Sea, along with advancing political and economic stability in the Asia Pacific.

U.S. oil, gas exports key to more stable global energy markets: ACCF




RE: OPEC, for some quiet moments.. - admin - 11-08-2015

The Petroleum Services Association of Canada (PSAC) is calling for 5,150 wells to be drilled in Canada next year, according to the association's 2016 Canadian Drilling Activity Forecast. The forecast suggests that next year will see the same slumped activity that hit the sector hard in 2015, but indicates that the bottom has leveled off as 2015 finishes out with a total forecast of 5,340 wells drilled, in comparison.

Canadian drilling looks to have bottomed out as PSAC predicts only slight drop in 2016

Job cuts related to the oil industry jumped to a six-month high in October. Staffing firm Challenger, Gray & Christmas released its monthly report on Thursday morning. It showed that overall layoffs fell 14% from September to 50,504. Layoffs were down 1.3% year-on-year.

Challenger Gray Job Cut Report October - Business Insider

Liquefied natural gas is cheap, and according to Goldman Sachs Group Inc. it’s only going to get cheaper. A wave of new supply from Australia to the U.S. is deepening a glut of the fuel, raising the risk of losses for exporters and prompting some buyers to look at breaking contracts with suppliers, according to the Wall Street bank, which cut its forecast for prices in Asia next year by 13%. LNG will probably drop a further 23% by 2018, Goldman said.

LNG golden promise fading for Goldman on wave of oversupply

Persian Gulf oil producers are delaying oil projects and squeezing contractors for hundreds of millions of dollars in savings, as the pain from low crude prices spreads to state-owned energy companies

Persian Gulf Producers Delay Oil Projects - WSJ




RE: OPEC, for some quiet moments.. - Putncalls - 11-08-2015

GS was wrong on the 30$ oil. They say the US "frackers" will start fracking away again at 50$ WTI but the rig count continues to decline with the price at 46. We will soon see what their predictions are made of.


RE: OPEC, for some quiet moments.. - admin - 11-09-2015

Only 1 percent of the Bakken Play area is commercial at current oil prices based on my analysis that follows. Only 4 percent of horizontal wells drilled since 2000 meet the EUR (estimated ultimate recovery) threshold needed to break even at current oil prices, drilling and completion, and operating costs. The leading producing companies evaluated in this study are losing $11 to $38 on each barrel of oil that they produce, the very definition of waste.

Only 1 Percent Of Bakken Shale Is Profitable At These Prices | OilPrice.com

Ironically, the rejection of Keystone XL could lead to higher CO2 emissions via more crude-by-rail, according to energy consultant Wood Mackenzie. On Nov 6, the U.S. State Department recommended that TransCanada's petition to build Keystone XL (KXL) be rejected. President Obama agreed with the recommendation citing concerns that the pipeline would advsersely impact climate change and would have limited to no positive impact on the economy.

Heavy oil still flows, despite Obama's Keystone XL rejection: Wood Mackenzie

U.S. crude explorers pulled back drilling rigs for a 10th straight week as conviction grows that the worst oil downturn in decades is nearing its bottom. Rigs targeting oil in the U.S. fell by six to 572, extending a five-year low after nearly 100 were idled since the start of September, Baker Hughes Inc. said on its website Friday. Natural gas rigs gained two to 199, bringing the total down by four to 771. The Eagle Ford Shale in south Texas, whose total rig count is down by 72% since the middle of 2012, was the only one of the four major U.S. basins to drop oil rigs this week. Three were let go there, bringing the active oil rig count down to 61.

U.S. oil drillers idle six rigs as oil cycle hovers near lows

Oil demand will soon reflect the “attractiveness” of the current level of crude prices, and Asia will be a vital engine of economic expansion for decades, Saudi Oil Minister Ali al-Naimi said. OPEC’s chief joined him in seeing Asia as the main hub for growth. Oil demand in Asia will rise by about 16 MMbopd to almost 46 MMbopd by 2040, Abdalla Salem El-Badri, secretary-general of the Organization of Petroleum Exporting Countries, said in an article posted on the International Energy Forum’s website. The region will need to import 40 MMbopd of crude oil and refined products by then, he said.

Current oil price to soon spur demand growth: Saudi oil minister




RE: OPEC, for some quiet moments.. - admin - 11-10-2015

The scale of the global oil and gas industry’s spending cuts are making another surge in energy prices possible by diminishing future supply, Saudi Vice Minister of Petroleum & Mineral Resources Prince Abdulaziz bin Salman said. Investments have been cut by $200 billion this year and will drop another 3% to 8% next year, marking the first time since the mid-1980s that industry cut the spending for two consecutive years, Prince Abdulaziz said in a copy of his speech for delivery to energy ministers in Doha Monday. Nearly 5 MMbopd of projects have been deferred or canceled, he said in the remarks.

Saudi vice oil minister sees price surge after cutbacks

Global demand for crude will bring more balance to the oil market as soon as next year, according to Pulitzer Prize-winning author and energy consultant Daniel Yergin and OPEC Secretary General Abdalla El-Badri. The oil market will rebalance in 2016 or 2017, as demand grows between 1.2 MMbpd and 1.5 MMbpd through 2020, Yergin, vice chairman of consultants IHS, said in a speech in Abu Dhabi. Demand will rise by about 17 MMbopd day to almost 110 MMbopd by 2040, with 70% of the growth to come from Asia, the head of the Organization of Petroleum Exporting Countries said at an event in Doha.

Yergin joins OPEC in seeing oil market balanced as soon as 2016

Synthetic porous materials that flex to take up and release fuel could lead to cheaper natural gas cars that don’t need cumbersome storage tanks.

Novel Materials Could Cut the Cost and Inconvenience of Natural Gas Cars | MIT Technology Review

Next year, on a remote island off Australia’s western coast, the world’s most expensive liquefied natural gas export terminal will start shipping cargoes into a market that has changed vastly since 2009, when the project was approved. Chevron’s $54 billion Gorgon LNG facility, initially budgeted at $31 billion, was supposed to have begun operations in 2014. Labor disputes have delayed it, and lower LNG prices have potentially reduced its profitability.

The Making of a Buyer’s Market in Natural Gas - Bloomberg Business




RE: OPEC, for some quiet moments.. - jft310 - 11-12-2015

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Home > News > OPEC challenges shale afresh as Iraq crude floods Gulf of Mexico
OPEC challenges shale afresh as Iraq crude floods Gulf of Mexico
11/11/2015
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NAOMI CHRISTIE

HOUSTON (Bloomberg) -- OPEC’s latest challenge to U.S. shale oil producers would be about two miles long, lined end to end, and weigh almost 3 million metric tons. It’s due to reach American ports this month.

Iraq, the fastest-growing producer within the 12-nation group, loaded as many as 10 tankers in the past several weeks to deliver crude to U.S. ports in November, ship-tracking and charters compiled by Bloomberg show. Assuming they arrive as scheduled, the 19 MMbbl being hauled would mark the biggest monthly influx from Iraq since June 2012, according to Energy Information Administration figures.

The cargoes show how competition for sales among members of the Organization of Petroleum Exporting Countries is spilling out into global markets, intensifying competition with U.S. producers whose own output has retreated since summer. For tanker owners, it means rates for their ships are headed for the best quarter in seven years, fueled partly by the surge in one of the industry’s longest trade routes.

“In the longer term, we expect the U.S. to have to increase imports next year by some 500,000 bpd to 800,000 bpd year on year,” Steve Sawyer, the head of refining at FGE, a consultant in London. “Given our projections for Iraqi output, it could well come from here.”

Hunting for Buyers

Iraq, pumping the most since at least 1962 amid competition among OPEC nations to find buyers, is discounting prices to woo customers. The U.S. may increasingly become one of them after its own output dropped by as much as 500,000 bopd since June. An increase in trade between the two would boost tanker owners. Deliveries take at least 57% longer than for those to Asia, the most popular destination.

The tanker industry’s biggest ships earned an average of almost $76,500 a day so far in the fourth quarter, which would be the highest since mid-2008 if maintained through year-end, according to data from Clarkson Plc, the world’s biggest shipbroker.

Shipowners have already seen the benefit of higher rates thanks in part to the longer-distance cargoes. Shares of Oslo-listed Frontline Ltd., led by billionaire John Fredriksen, rose 61% to $28.60 from the 2015 low in August. Euronav NV is up 25% from the year’s low in February.

Gulf of Mexico

The ships bringing the 19 MMbbl include vessels that left Iraq’s Basra Oil Terminal and are currently signaling U.S. ports as their destination. There is also one vessel that went through Egypt’s Suez Canal and identified by shipbrokers as going to the U.S. All except one are very large crude carriers, the industry’s biggest vessels, sailing to terminals in the Gulf of Mexico.

The U.S. is pumping 450,000 bpd less crude than during the peak in June. If all that oil were replaced by supplies from Iraq, it would require about seven supertankers each month.

Iraq is among the least expensive places in the world to extract crude. Capital costs are about seven times cheaper than for light, tight oil suppliers in the U.S. when measured by fields’ daily plateau capacity, according to the International Energy Agency in Paris.

West Texas Intermediate, the U.S. benchmark, fell 50 cents to $43.71/bbl on the New York Mercantile Exchange at 9 a.m. London time Wednesday. Brent, the global marker, lost 19 cents to $47.25.
premiums or discounts to global benchmarks, competing for buyers with suppliers such as Saudi Arabia, the world’s biggest exporter. Iraq sold its Heavy grade at a discount of $5.85/bbl to the appropriate benchmark for November, the biggest discount since it split the grade from Iraqi Light in May. Saudi Arabia sold at $1.25 below benchmark for November, cutting by a further 20 cents in December.

“It’s being priced much more aggressively,” said Do


RE: OPEC, for some quiet moments.. - admin - 11-12-2015

The International Energy Agency (IEA) estimates that the oil price crash has cut Opec revenues from $1 trillion a year to $550bn, setting off a fiscal crisis that has already been going on long enough to mutate into a bigger geostrategic crisis.

Saudi Arabia risks destroying Opec and feeding the Isil monster - Telegraph

the oil industry needs $650bn a year of fresh investment just to keep output steady as old wells are depleted and the decline rate steepens, yet new outlays have fallen 20pc this year and are expected to drop by another 20pc next year.

World energy watchdog fears 1970s oil crunch as Mid-East regains stranglehold - Telegraph

OPEC’s latest challenge to U.S. shale oil producers would be about two miles long, lined end to end, and weigh almost 3 million metric tons. It’s due to reach American ports this month. Iraq, the fastest-growing producer within the 12-nation group, loaded as many as 10 tankers in the past several weeks to deliver crude to U.S. ports in November, ship-tracking and charters compiled by Bloomberg show. Assuming they arrive as scheduled, the 19 MMbbl being hauled would mark the biggest monthly influx from Iraq since June 2012, according to Energy Information Administration figures.

OPEC challenges shale afresh as Iraq crude floods Gulf of Mexico

That presents problems for LNG markets. It is not clear “who will absorb the additional gas that is set to be available on a shorter term basis, particularly given recent downward revisions in the outlook for economic growth,” the IEA concludes. Even when considering the growing appetite in China, India and other rapidly growing Southeast Asian nations, “it is unlikely, in our view, that Asian markets can easily take all of the available additional volumes.”

LNG Glut Set To Worsen Considerably Over Next 3 Years | OilPrice.com