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RE: OPEC, for some quiet moments.. - admin - 01-16-2016

China won’t let fuel prices fall in line with crude below $40/bbl as the world’s second-biggest oil consumer seeks to curb pollution and shield domestic producers from oil’s collapse.

China sets oil price floor at $40 to protect domestic supply

Wood Mackenzie's latest review of the global LNG industry concludes that the market was characterized by weak Asian demand in 2015, with a year-on-year decline of 2%. As a result, many LNG players shifted their focus to developing markets and employing new regasification capacity. Despite weakened demand and the impact of the oil price crash, LNG production remained high throughout the year reaching 250 million tonnes in 2015—up 4 million tonnes on 2014—primarily due to a number of key project start-ups. In 2016, the initial focus will be on the U.S., with the start of exports from Sabine Pass, signifying a key milestone; however, Wood Mackenzie cautions that with a further 125 million tonnes of LNG under development, real LNG growth is post 2016.  Key findings from Wood Mackenzie’s 2015 LNG review include:

U.S., Australian LNG start-ups in 2016, but real LNG growth yet to come

The world mostly ignored Ed Morse 11 months ago when the head of commodities research at Citigroup said oil could drop as low as $20. It’s paying attention now that crude has tipped below $30. Crude futures in the U.S. sank into the $20s for the first time in more than 12 years on Tuesday, hours after BP Plc said it would slash an additional 4,000 jobs, Petroleo Brasileiro SA cut its spending plan and Petroliam Nasional Bhd. warned that it faces several tough years. Morse, who wrote in a Feb. 9 research note that oil could fall "perhaps as low as the $20 range for a while," said in Calgary Tuesday that the world is now confronting $20 oil. “The $20 number is something you have to talk about,” Morse said. “When you’ve seen a $10 price slide and WTI is trading just slightly above $30, the likelihood is fairly great. Clearly oil markets cannot maintain a price at below the $30 level for very long. The question is how much longer.”

$20 oil no longer mirage as world confronts 12-year low

Iran may only be able to deliver about half of the promised surge in crude output after sanctions are lifted as it struggles to revive idled fields, according to banks including UBS Group AG and Saxo Bank A/S. Abouzar production platform. The Persian Gulf nation will increase crude oil production by 100,000 bpd, or 3.7%, a month after sanctions are lifted and by 400,000 bpd in six months, according to the median estimate of 12 analysts and economists surveyed by Bloomberg. Oil Minister Bijan Namdar Zanganeh has pledged to boost output by half a million barrels a day within weeks of the end of sanctions and by the same amount again in six months. The strictures may be removed as soon as Jan. 18.

Iran’s post-sanctions oil surge likely to come in a half measure

RE: OPEC, for some quiet moments.. - Putncalls - 01-17-2016

According to GS it will take until 2017 for Iran's exports to ramp up another 500,000 BBLs/day. The initial production increase in Q1 2016 is expected to be more like 150,000 BBL/day.

RE: OPEC, for some quiet moments.. - jft310 - 01-18-2016

Puts I posted the Goldman CNBC interview in a seperate thread . New oil bull market in oil 2016

RE: OPEC, for some quiet moments.. - ArtM72 - 01-18-2016

What might be as interesting and more of a concern to this board is Iran's huge gas reserves and how those might contribute to a future glut. On the other hand, with more natural gas automobiles than any nation on earth until the past couple years Iranian gas may further stimulate NG consumption by expanding its use in traditionally oil and coal applications.

RE: OPEC, for some quiet moments.. - Putncalls - 01-18-2016

The problem Iran has with LNG is that the ROI is much lower than that of oil investments. As far as NG cars; they no longer have much purpose with gasoline under 2.50 for the rest of our lives.

RE: OPEC, for some quiet moments.. - ArtM72 - 01-18-2016

'Putncalls' pid='66029' dateline='<a href="tel:1453065 Wrote:The problem Iran has with LNG is that the ROI is much lower than that of oil investments. As far as NG cars; they no longer have much purpose with gasoline under 2.50 for the rest of our lives.

good point on the ng cars so long as we reme,mber recent $200/bbl oil price projections. And then there is the fate testing issue. Don't want to be kicking the barrel bucket...any time soon.

RE: OPEC, for some quiet moments.. - admin - 01-19-2016

Another 100 rigs are expected to be dropped by the middle of this year, Mulvehill said. U.S. production rose by 8,000 bopd last week to 9.23 MMbopd, according to weekly Energy Information Administration data. It was the sixth time in seven weeks that U.S. output climbed. For the year, output is forecast to average 8.73 MMbopd, down 7.4% from 9.43 MMbopd in 2015, according to the Energy Information Administration. Output will probably further decline to 8.46 MMbopd in 2017, the EIA said.

U.S. drillers park one oil rig as production continues climb

BHP Billiton has announced an expected impairment charge of approximately $4.9 billion post-tax—approximately $7.2 billion pre-tax—against the carrying value of its onshore U.S. assets.  According to the company's website, BHP has operations in the Eagle Ford and Permian basin in Texas, the Fayetteville shale in Arkansas and the Haynesville shale in Louisiana. The charge will be recognized as an exceptional item in the company's financial results for the half year ended Dec. 31, 2015.

BHP Billiton expects to book $4.9-billion writedown on U.S. shale assets

Think oil in the $20s is bad? In Canada they’d be happy to sell it for $10. Canadian oil sands producers are feeling pain as bitumen—the substance at the center of the heated debate over TransCanada Corp.’s Keystone XL pipeline—hit a low of $8.35 on Tuesday, down from as much as $80 less than two years ago.

Crude at $10 already a reality for Canadian oil-sands miners

Oil will turn into a new bull market before the year is out as the price rout shuts down sufficient production to erode the global glut, according to Goldman Sachs Group Inc. The crash in U.S. oil futures—which sank back below $30/bbl on Friday to a new 12-year low—will send the nation’s shale-oil boom spinning into reverse in the second half of the year, the bank said in a report. As U.S. production slumps by 575,000 bpd, global oil markets will tip from surplus to deficit, Goldman predicts.

Goldman Sachs sees oil bull market being born in crash

RE: OPEC, for some quiet moments.. - admin - 01-19-2016

Oil prices rose more than 3 percent on Tuesday as data showed Chinese oil demand likely hit a record high in 2015, but contracts remained near 12-year lows as the IEA said the market should stay oversupplied this year.

Oil rises on record Chinese demand, oversupply caps gains | Reuters

An oil-exporting country’s “fiscal breakeven” oil price is the minimum price per barrel that the country needs in order to meet its expected spending needs while balancing its budget (figure 1). Oil prices below this level should result in budget deficits unless government policies change. Breakeven prices have become popular among analysts and decision-makers in public and private sectors as indicators of oil-producing countries’ economic and political stability and as ingredients in oil price forecasts. In recent years, for example, analysis based on fiscal breakeven prices was used to forecast instability in Russia and Iran, and—driven by an assumption that Saudi Arabia would cut its production in order to prevent prices from falling below its fiscal breakeven—to predict that oil prices would never fall far below one hundred dollars a barrel.

Blake Clayton and Michael A. Levi: Fiscal Breakeven Oil Prices: Uses, Abuses, and Opportunities for Improvement - Council on Foreign Relations

Explorers parked one more drilling rig in U.S. oil fields this week as producers strive to make good on a government forecast that daily production will fall by a million barrels in the next two years. Rigs targeting oil in the U.S. fell by 1 to 515 after more than 150 were idled since August, Baker Hughes Inc. said on its website Friday. It was the eighth time in nine weeks that oil rigs declined. Natural gas rigs were down 13 to 135, trimming the total by 14 to 650. The slowdown among the big U.S. plays was led by the Niobrara in Colorado, where three rigs were let go, leaving 19 oil rigs to work there.

U.S. drillers park one oil rig as production continues climb

Royal Dutch Shell has withdrawn from a US$10 billion gas project in Abu Dhabi citing technical challenges and costs. The company made the disclosure as Brent crude traded near a 12-year low, briefly dropping below $28 per barrel. Royal Dutch Shell is finalising a plan to buy BG Group in what would be one of the biggest oil and gas mergers in years. In a brief statement it said it had decided to leave the joint development of the Bab sour gas reservoirs with Abu Dhabi National Oil Company (Adnoc) after evaluating the project. “The evaluation concluded that for Shell, the development of the project does not fit with the company’s strategy, particularly in the economic climate prevailing in the energy industry.”

Shell exits from Abu Dhabi’s $10 billion Bab sour gas project | The National

RE: OPEC, for some quiet moments.. - admin - 01-20-2016

“The reason most probably is going to be a commercial reason,” said the UAE’s energy minister, Suhail Al Mazrouei, on the sidelines of the World Future Energy Summit in Abu Dhabi yesterday. “The price of gas has dropped by more than 50 per cent. Developing a more expensive solution is not going to be viable at this time. But that is good news also for us because we do not want to develop gas that is more expensive than the gas that we can import.” He added that the government was working on several ideas about importing liquefied natural gas as well as expanding imports from Dolphin gas project. “So we are not worried about the supply of gas,” he said.

Shell exits from Abu Dhabi’s $10 billion Bab sour gas project | The National

Oil is so plentiful and cheap in the U.S. that at least one buyer says it would need to be paid to take a certain type of low-quality crude. Flint Hills Resources LLC, the refining arm of billionaire brothers Charles and David Koch’s industrial empire, said it would pay -$0.50 a barrel Friday for North Dakota Sour, a high-sulfur grade of crude, according to a list price posted on its website. That’s down from $13.50 a barrel a year ago and $47.60 in January 2014.

The North Dakota Crude Oil That's Worth Less Than Nothing - Bloomberg Business

According to the Energy Information Administration’s Monthly Energy Review database, world field production of crude oil in September was up 1.5 million barrels a day over the previous year. More than all of that came from a 440,000 b/d increase in the U.S., 550,000 b/d from Saudi Arabia, and 900,000 b/d from Iraq. If it had not been for the increased oil production from these three countries, world oil production would actually have been down almost 400,000 b/d over the last year.

U.S. Crude Production Could Fall Harder Than Thought In 2016 |

But the U.S. situation will be very different in 2016. The number of active U.S. oil rigs today is about a third of the levels reached in 2014. JODI’s separate database estimates that U.S. oil production was already down year-over-year by October 2015. And the EIA’s drilling productivity model estimates that production from the U.S. counties associated with the tight oil boom will have fallen another 500,000 b/d from the September values by the end of next month.

U.S. Crude Production Could Fall Harder Than Thought In 2016 |

RE: OPEC, for some quiet moments.. - admin - 01-21-2016

Estimated total U.S. oil and natural gas well completions fell by 51% in the fourth quarter of 2015 as compared to year-ago levels, according to API's 2015 Quarterly Well Completion Report, Fourth Quarter. Estimated development oil well completions in the fourth quarter fell 55% as compared to fourth-quarter 2014 estimates. Estimated development gas completions decreased 37% over the same period.

Drilling down by half in fourth quarter, API says

Chevron Corp. announced Monday that its Australian subsidiaries have signed a non-binding Heads of Agreement (HoA) with ENN LNG Trading Company (ENN) for the delivery of LNG to China from the Chevron-operated Gorgon natural gas project in Australia. When the deal is finalized, ENN is expected to receive up to 0.5 mtpa of LNG over 10 years, with deliveries starting in 2018 or the first half of 2019.

Chevron signs Gorgon LNG agreement with ENN

Winners and losers are emerging from the energy bust. What’s a meal for Clark is indigestion for banks that financed the boom using oil and gas properties as collateral. The four biggest U.S. banks—Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co.—have set aside at least $2.5 billion combined to cover souring energy loans and have said they’ll add to that if prices stay low. There’s plenty to keep Clark bargain-hunting. Last year, 42 U.S. energy companies went bankrupt, owing more than $17 billion, according to a report from law firm Haynes & Boone.

Some bankrupt oil and gas drillers can’t give their assets away

Saudi Oil Minister Ali al-Naimi said crude prices will rise and foresees that market forces and cooperation among producing nations will lead in time to renewed stability. “I am optimistic about the future, the return of stability to the global oil markets, the improvement of prices and the cooperation among the major producing countries,” al-Naimi said. “Market forces as well as the cooperation among producing nations always lead to the restoration of stability. This, however, takes some time.”

Saudi oil minister says he’s optimistic crude prices to rise