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RE: OPEC, for some quiet moments.. - admin - 11-16-2015

There is simply no longer any fundamental reason to link the price of LNG to oil. When oil-indexed LNG contracts were created five decades ago, oil was among the key fuels used for power generation. LNG is and always has been almost exclusively imported to generate electricity. But today, oil is chiefly used for creating transportation fuels and use in power generation has dwindled. Oil and LNG no longer supply the same markets, so there is no reason to link the price of LNG to oil. The few island markets where oil-fired power generation still dominates, such as Hawaii, tend to be isolated or fragmented, meaning oil only works for power generation under special circumstances.

www.energyintel.com/pages/worldopinionarticle.aspx?DocID=905743

Surplus oil inventories are at the highest level in at least a decade because of increased global production, according to the Organization of Petroleum Exporting Countries. Stockpiles in developed economies are 210 MMbbl higher than their five-year average, exceeding the glut that accumulated in early 2009 after the financial crisis, the organization said in a report. Slowing non-OPEC supply and rising demand for winter fuels could “help alleviate the current overhang,” enabling a recovery in prices, it said. The group’s own production slipped last month because of lower output in Iraq.

OPEC says oil-inventory surplus is biggest in at least a decade

The LNG construction industry has enjoyed a sustained boom thanks to healthy order books of new LNG projects, especially in the U.S. and Australia, which will see it reach peak capacity in 2015. However, as the global LNG market faces another supply glut, and with few pre-FID LNG projects on the horizon likely to materialize, a new analysis by Wood Mackenzie warns that the LNG Engineering, Procurement and Construction (EPC) sector, which has generated over $200 billion of revenue in the last decade, will be facing its steepest decline in decades, leading to heightened competition and downsizing.

LNG construction sector hits its peak and faces steep fall: Wood Mac

Competition is growing in Russia’s biggest oil market. While Saudi Arabia’s encroachment in Europe is getting all the attention, the biggest threat comes from another part of the Middle East -- Iran. The world’s largest oil exporter has started shipping crude to traditional Russian markets like Poland and Sweden, but Saudi supplies to Europe won’t increase by enough to reduce prices, said Texas-based consultant Stratfor. In contrast, a surge in Iranian exports after the lifting of sanctions could erode the value of Russian shipments to the region as soon as next year, according to KBC Advanced Technologies.

Russia’s oil rivalry with Saudis masks the bigger Iranian threat




RE: OPEC, for some quiet moments.. - admin - 11-16-2015

United Arab Emirates, one of the wealthiest Gulf states, is pushing ahead with large new energy projects, betting an oil price recovery will start as early as next year as demand begins to absorb the global glut. "These are times of some hesitancy, times of pain for some ... But pain is not new ... We will pass it stronger," energy minister Suhail Al Mazrouei told the UAE's biggest annual oil show in Abu Dhabi.

UAE plans oil expansion, bets on recovery

Oil prices may have tanked in the past 18 months due to weak demand in the face of a supply surplus, but the low prices are likely to spur buying, particularly in Asia, that will help rebalance supply and demand even as the Organization of the Petroleum Exporting Countries (OPEC) sticks with its robust production quota.

Asia, China demand for cheap oil will help balance OPEC output

Chesapeake Energy Corp.’s bonds have plunged to half their face value as lenders fret that tumbling energy prices are hurting their chances of getting paid on borrowings that are three times the current worth of the company’s oil and gas fields.

Chesapeake lenders flee debt as oil rout pummels reserves value

Russia’s central bank recently warned about the growing financial risks to the Russian economy from Saudi Arabia encroaching upon its traditional export market for crude oil. Russia sends 70 percent of its oil to Europe, but Saudi Arabia has been making inroads in the European market amid the oil price downturn.

Saudis Planning For A War Of Attrition In Europe With Russia’s Oil Industry | OilPrice.com




RE: OPEC, for some quiet moments.. - admin - 11-18-2015

Still, it is useful to pay attention to supply changes from outside the U.S. For example, in its November report, OPEC raises a few red flags on Brazil, where a deteriorating economy, a simmering corruption scandal, and a major pullback in the state-owned oil firm Petrobras, could all conspire to cut into Brazil’s oil output.

Future Of Brazil’s Oil Industry In Serious Doubt | OilPrice.com

The North Dakota Department of Mineral Resources has reported that the state’s oil production dropped by about 25,000 barrels a day in September. As the chart below via @javierblas2 illustrates, North Dakota oil production has dropped on a year-over-year basis for the first time in over a decade.

Worrying Signs For North Dakota’s Oil Industry | OilPrice.com

By appearances, OPEC has the tell-tale signs of an aging prizefighter. It still technically possesses a knockout punch, but it’s unable to land one against younger, more agile opponents, amid doubts as to whether it has the legs to go the distance.

In the oil price war, it’s hard to tell who’s losing—OPEC or US shale - Quartz

Consequences of lower oil prices are now really having effect in North Dakota. Never before, since the shale oil boom started (2007), August production numbers were lower than July production numbers. September production numbers, are now lower too.

The Bakken’s Big Decline Is Already Underway | OilPrice.com




RE: OPEC, for some quiet moments.. - admin - 11-18-2015

INTEROIL says that a new Antelope appraisal well being considered on the western flank of the Papua New Guinean field could see its expected reserves payment from Total expanded by as much as $C400 million ($A401 million) to $1.2 billion.

PNGIndustryNews.net + Papua LNG on Japan’s priority list

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.

OPEC challenges shale afresh as Iraq crude floods Gulf of Mexico

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. Exxon Mobil Corp., Royal Dutch Shell, Chevron Corp., ConocoPhillips and Hess Corp. have all either delayed or abandoned projects that range from the deep seas of the Gulf of Mexico to Canada’s oil sands and the U.S. Arctic. At the same time, Exxon and Chevron both announced plans to substantially increase U.S. crude production, largely as a result of their shale operations.

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

BP Plc will need to revise its plan to explore for oil in an untapped frontier off the coast of southern Australia before regulators will approve its drilling program estimated to cost more than A$1 billion ($710 million). The London-based energy producer’s plan “does not yet meet the criteria for acceptance under the environment regulations,” the National Offshore Petroleum Safety and Environmental Management Authority wrote in a statement posted on its website. The company will be able to resubmit its proposal.

BP’s drilling plan offshore Australia turned back by regulator




RE: OPEC, for some quiet moments.. - Martinistocks - 11-18-2015

Rig Count in Utica Play Continues Slide
November 18, 2015

YOUNGSTOWN, Ohio – The rig count in eastern Ohio’s Utica shale continues to fall, according to the latest data from the Ohio Department of Natural Resources.
Through the week ended Nov. 14, ODNR reports 19 rigs were operating in the Utica compared to 20 a week earlier.
Just four new horizontal well permits were issued during the week, ODNR reports. All were for wells in Belmont County and awarded to XTO Energy, a subsidiary of Exxon Mobil.

To date, 1,644 wells have been drilled in the Ohio section of the Utica and 1,059 wells are in production.
No new permits were issued for Columbiana, Mahoning or Trumbull counties during the week ended Nov. 14.
Nor were any new permits awarded for wells in Lawrence or Mercer counties in western Pennsylvania, according to the Pennsylvania Department of Environmental Protection.


RE: OPEC, for some quiet moments.. - admin - 11-19-2015

QGC Pty Limited, along with joint venture partners China National Offshore Oil Corporation and Tokyo Gas, has announced a two-year, A$1.7 billion development of its natural gas tenements west of Wandoan, Australia, to support gas production. The investment, which follows receipt of Commonwealth and State Government environmental approvals, has been approved by QGC’s parent company BG Group and the joint venture partners.

BG Group and partners to invest A$1.7 billion in Australian gas expansion

A Dutch court Wednesday ruled that natural gas extraction from Europe’s largest deposit should be cut by another 18% as local residents sought to stop tremor-inducing production that’s damaging their houses. The Council of State said output from Groningen gas field should be temporarily limited to 27 Bcm (950 Bcf) for the year from Oct. 1, the court said in its ruling. That’s about 6% of expected European Union gas use this year. Higher output may be allowed if it’s “relatively cold,” it said.

Dutch court rules gas output from EU’s biggest field be cut

A lot of hope has been pinned on liquefied natural gas (LNG) exports as an outlet for surging North American gas supply. But a couple of events the past week show that getting LNG exports off the ground may be more difficult than most observers have predicted. The biggest potential setback came in western Canada, where it appears that the newly-elected Canadian federal government is making a move to limit offshore shipments of petroleum.

Could The Tide Be Turning Against North American Natural Gas? | Zero Hedge

The main point I want to make is that oil production is 2.4% of US GDP. The US has the biggest oil industry in the world and yet it has rather small importance to the economy as a whole. The fall in the value of oil production to $50 may turn out to be catastrophic for some OPEC countries, it barely affects USA GDP at all and bestows major benefits via lower energy costs and a positive impact on the trade balance.

Why OPEC Can’t Win The Oil Price War | OilPrice.com




RE: OPEC, for some quiet moments.. - jft310 - 11-20-2015

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MANAMA, Bahrain (Bloomberg) -- Saudi Arabia is working with other OPEC members and producers from outside the group to stabilize the market, Saudi Oil Minister Ali al-Naimi said.

The world economy is going through an unstable situation, al-Naimi said. Crude demand is expected to rise by 1 MMbpd every year in this decade, and the world requires more investments in oil to compensate for decline rates, he said. The decline rate of recovery at the world’s oil fields is at about 4 MMbpd, he said.

“Saudi Arabia is a very reliable supplier. We cooperate with OPEC and non-OPEC countries to stabilize the market,” al-Naimi said at a conference in Manama, Bahrain. “We need billions of dollars to continue exploration and producing oil and to invest in spare capacity to stabilize the market.”

Threatened by surging production mainly from North America and Russia, the Organization of Petroleum Exporting Countries has been pumping above its quota for 17 months as it seeks to take market share from higher-cost regions. Oil tumbled since the middle of last year as U.S. stockpiles and production expanded, creating a global oversupply.

Saudi Arabia, the world’s top crude exporter, led OPEC to reject demands from members including Algeria and Venezuela to cut supply to bolster prices. The group opted to maintain its production target to protect market share at the last meeting in June. OPEC ministers are due to meet Dec. 4 to assess the market and decide on production levels.

Arab countries hold 57% of the world’s oil reserves, and that will grow on new discoveries, al-Naimi said. Arab countries need $700 billion of energy investments over the next 10 years, and oil consumption in the region is about 10% of the world’s demand, he said


RE: OPEC, for some quiet moments.. - admin - 11-23-2015

More than 40 thought-leaders and Hill staff filled the historic Kennedy Caucus Room of the Russell Senate Office Building on Tuesday morning for an hour-long discussion on U.S. energy policy, which concentrated mostly on the decades-long ban on exporting domestic crude oil. Hosted by the American Council for Capital Formation (ACCF), the policy briefing examined the role that free trade of American energy resources could play in bolstering international security and strengthening global energy markets.

U.S. energy exports critical to strengthening security in Asia-Pacific: ACCF

Saudi Arabia is working with other OPEC members and producers from outside the group to stabilize the market, Saudi Oil Minister Ali al-Naimi said. The world economy is going through an unstable situation, al-Naimi said. Crude demand is expected to rise by 1 MMbpd every year in this decade, and the world requires more investments in oil to compensate for decline rates, he said. The decline rate of recovery at the world’s oil fields is at about 4 MMbpd, he said.

OPEC with others to stabilize market, Saudi oil minister says

Such is the state of the oil industry these days that there is sometimes nowhere to put the oil. Off the coast of Texas, a line of roughly 40 tankers has formed, waiting to unload their crude or, in some cases, for a willing buyer to come along. Similar scenes are playing out off the coasts of Singapore and China and in the Persian Gulf.

An Oil-Soaked Globe as Production Keeps Climbing and Demand Falls - The New York Times

Goldman Sachs told clients that the increasing glut of oil on the global market has combined with mild weather from a freak El Nino this winter. The twin-effect could send prices plummeting to $20 a barrel, the so-called ‘cash cost’ that forces drillers to abandon production. “Risks of a sharp leg lower remain elevated,” it said.

Goldman eyes $20 oil as glut overwhelms storage sites - Telegraph




RE: OPEC, for some quiet moments.. - ArtM72 - 11-23-2015

Just an anecdote about tankers parked off Florida. I was at a wedding in Florida last week where the groom's aunt and four others had been charter fishing the day before. They landed four Wahoos 56+ inches, the largest 64 inches long, in two hours, along with a king mack and black fin tuna. Where were they fishing? They were trolling around tankers offshore that were sitting at anchor. VERY big splash when they pulled into the dock with their catch.

Wish our luck with Wahoo were as fortunate. LOL


RE: OPEC, for some quiet moments.. - admin - 11-24-2015

'ArtM72' pid='64876' datel Wrote:Just an anecdote about tankers parked off Florida. I was at a wedding in Florida last week where the groom's aunt and four others had been charter fishing the day before. They landed four Wahoos 56+ inches, the largest 64 inches long, in two hours, along with a king mack and black fin tuna. Where were they fishing? They were trolling around tankers offshore that were sitting at anchor. VERY big splash when they pulled into the dock with their catch. Wish our luck with Wahoo were as fortunate. LOL

Have to admit I didn't know Wahoo is a fish, but it seems a good catch, congrats!