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RE: OPEC, for some quiet moments.. - admin - 01-28-2016

Wood Mackenzie has updated its analysis published in July 2015 on the impact of continued low oil prices on upstream oil and gas projects. It concludes that in the last six months of 2015 an additional 22 major projects and 7 Bboe of commercial reserves have been deferred, on top of the 46 developments and 20 Bboe of reserves identified previously. Deepwater projects have been hit hardest, accounting for over half of the total, as companies are forced to rework projects with high breakevens, large capital requirements and high costs. “The impact of lower oil prices on company plans has been brutal,” Angus Rodger, principal analyst for upstream research at Wood Mackenzie, said. “What began in late-2014 as a haircut to discretionary spend on exploration and pre-development projects has become a full surgical operation to cut out all non-essential operational and capital expenditure. Tumbling prices and reduced budgets have forced companies to review and delay Final Investment Decisions (FID) on planned projects, to re-consider the most cost-effective path to commerciality and free-up the capital just to survive at low prices.”

Toll of oil price slump mounts as 68 major projects delayed

After a 2015 that famed oil bull Andrew Hall said "wasn't much fun" because of plunging crude prices, the chief of Astenbeck Commodities says the market is ripe for a jump as producers operate near maximum capacity while supply risks rise. Hall's Astenbeck Commodities Fund suffered a more than 35% drop in 2015 as bullish bets on oil took a hit, pulling its total assets under management to $2.1 billion, according to company documents.

Renowned oil investor sees conditions ripe for a rebound in crude

During the next eight days, independent U.S. oil explorers are expected to report 2015 losses totaling almost $14 billion, the result of the steepest price collapse in a generation. Hess Corp. kicks off earnings season for the companies on Wednesday with what analysts predict will be an annual loss of $1.6 billion, its worst performance in at least 28 years. It will be followed by peers including Murphy Oil Corp. and Anadarko Petroleum Corp., which also have been squeezed by a crude drop of more than 70% since June 2014.

U.S. oil explorers seen reporting $14 billion in 2015 losses

Three major U.S. shale oil companies have slashed their 2016 capital spending plans more than expected in a bid to survive $30/bbl oil prices, with one of them saying prices would need to rise more than 20% just to turn a profit. The cuts on Monday from Hess Corp, Continental Resources and Noble Energy ranged from 40% to 66%. This marks the second straight year of pullbacks by a trio of companies normally seen as among the most resilient shale oil producers.

U.S. shale firms, struggling to profit with $30 oil, slash spending more

RE: OPEC, for some quiet moments.. - admin - 01-29-2016

Russia said on Thursday that OPEC had proposed oil production cuts of up to 5% in what would be the first global deal in over a decade to help reduce a glut of crude and prop up sinking prices. It remained unclear whether Russian Energy Minister Alexander Novak was referring to a months old proposal by OPEC members Venezuela and Algeria or a new proposal backed by OPEC leader Saudi Arabia. Saudi officials did not immediately comment on the proposal, and a Gulf OPEC delegate said it came from Venezuela and Algeria.

Russia says studying proposal for global oil production cuts

The chances of a deal between Russia and OPEC are viewed as very slim, despite an intraday spike Thursday in crude prices on talk of a proposed production agreement. "There's nothing new. It's another part of a stream of news that comes out of Russia and there's no indication that the Saudis have any desire to do anything," said Edward Morse, global head of commodities research at Citigroup.

Chances of OPEC, Russia oil deal slim to none

Iranian President Hassan Rouhani said on Thursday that oil prices would not stay low for long as producers restore market balance. "The price of oil is at a low level ... I don't think it will last in the long term ... The pressure on oil-producing nations means balance will be restored in the short term," Rouhani, whose country is the third-largest producer in OPEC, said at the French Institute of International Relations.

Low oil prices will not last long, Iran’s president says

Canadian oil and natural gas producer Penn West Petroleum Ltd. cut its 2016 capital budget by as much as 90% from a year earlier, to weather a steep plunge in crude oil prices. The company, which cut its capex to C$50 million ($35 million), said it expects to produce 60,000-64,000 boed this year, about 30% lower than its 2015 production estimate.

Penn West slashes capital spending 90%, sees lower output

RE: OPEC, for some quiet moments.. - admin - 01-31-2016

Russian oil firms would have to pay more tax on some of their fields under reforms being prepared by the finance ministry, which is seeking to get more revenue into the budget, according to three officials and a draft of the plans seen by Reuters. The proposal will be a test of whether the ministry, which has been lobbying for austerity in the face of an economic slump, can stand its ground against the powerful energy lobby, which argues it needs support not higher taxes. According to the officials, who belong to two different ministries and spoke to Reuters on condition of anonymity, a consequence of the tax reform would be the de facto cancellation the tax breaks on some fields. That could affect all greenfield, or newly developed, oilfields that currently enjoy various tax breaks, the sources from the finance ministry and the energy ministry said.

Russian finance ministry readies for fight with big oil over tax | Reuters

The Saudi central bank’s net foreign assets tumbled more than $19 billion in December as the kingdom draws on reserves amid the plunge in oil prices. Reserves declined about 3 percent to more than $608 billion, bringing the drop in 2015 to $115 billion, according to central bank data released on Thursday.

Saudi December Net Foreign Assets Drop More Than $19 Billion - Bloomberg Business

Saudi Arabia outlined ambitious plans on Monday to move into industries ranging from information technology to health care and tourism, as it sought to convince international investors it can cope with an era of cheap oil. A meeting and presentation at a luxury Riyadh hotel was held against a backdrop of low oil prices pressuring the kingdom's currency and saddling it with an annual state budget deficit of almost $100 billion - the biggest economic challenge for Riyadh in well over a decade.

Saudi Arabia to move beyond oil to IT, healthcare and tourism

Mr Norrish said excess output peaked in the last quarter of 2015 at 2.1m b/d. The over-supply will narrow to 1.2m b/d in the first quarter as of this year as a string of Opec and non-Opec reach “pain points”, despite the return of Iranian crude after the lifting of sanctions. By the end of this year there may be a “small deficit”. By then the world will need all of Opec’s 32m b/d supply to meet growing demand, although it will take a long time to whittle down record stocks.

Opec pleads for Russian alliance to smash oil speculators - Telegraph

RE: OPEC, for some quiet moments.. - admin - 02-01-2016

For 2016 my forecast is that the US will produce 8.59 mmbbls per day, the EIA forecast 8.74 mmbbls per day, I am suggesting that production will be about 150,000 bbls per day less than the EIA. By 2017 I think that US production will have stabilised at about 8.34 mmbbls per day, whilst the EIA are projecting an average of 8.47 mmbbls/day. Of course the reality of how oil prices evolve could change that but it seems to me that a drop of about 1.3 mmbbls per day, from peak production in March 2015, is already three quarters baked in.

Is The EIA Too Optimistic On U.S. Oil Output? |

Canada is the fifth largest hydrocarbon liquids producing jurisdiction in the world, a fact not widely known outside of the ‘patch. Whatever many think Canada should be, this is what we are. The following chart shows the top ten global producers of crude oil, condensate and natural gas liquids.

Do Canadians Want To Stay In The Oil Business? |

Barclays said extreme positioning on the derivatives markets has prepared the ground for a short squeeze. “Unhedged short positions held by speculators are huge so there is certainly the potential for a steep move up in prices at some point,” it said.

Opec pleads for Russian alliance to smash oil speculators - Telegraph

JP Morgan said the overhang of record short contracts could cause US crude prices to snap back toward $40 very quickly if sentiment shifts. The mood is already turning: net inflows into ‘long oil’ exchange traded funds (EFTs) have been running at $500m a week in January.

Opec pleads for Russian alliance to smash oil speculators - Telegraph

RE: OPEC, for some quiet moments.. - admin - 02-01-2016

Still, the world's largest producer of oil appears on a crash-course for bankruptcy as early as of 2018, according to a new Big Crunch analysis. Many oil-dependent nations are having to dig deep to balance budgets, with crude oil fetching so little on the global market. Money-rich nations like Qatar and Kuwait look to be getting by, while poorer nations like Libya have descended further into strife and civil war. Oil would need to be selling for $269 a barrel for Libya to balance its budget, according to the IMF.

Saudi Arabia struggles to cope with cheap oil

Saudi Arabia wants to cooperate with other oil producers to support the oil market, Saudi-owned Al Arabiya television reported on Sunday, quoting an unnamed Saudi source. The source also told the Dubai-based satellite channel that the kingdom was not the source of a proposal to cut production that Russia was studying.

Saudi Arabia will cooperate on oil output, didn't propose production cut, says Arabiya

OPEC oil production has jumped to its highest in recent history in January as Iran increased sales following the lifting of sanctions and its rivals Saudi Arabia and Iraq also boosted supply, a Reuters survey showed on Friday. Rising output in the Organization of the Petroleum Exporting Countries further aggravates the market share battle between top global producers. In the past year this has flooded the market with new barrels, creating one of the worst oil gluts in history and helping send prices to a 12-year low.

Iran pushes OPEC oil output to new high as sanctions are lifted

Oil pared gains near a three-week high as Russia said that although it’s prepared to discuss output with the Organization of Petroleum Exporting Countries, no action is currently planned. Futures traded up 0.9% in New York after earlier climbing 2.7%, as Russian Energy Minister Alexander Novak said that while OPEC member Venezuela has proposed a meeting next month, nothing is scheduled. Four OPEC delegates also said yesterday that no gathering has been arranged. Iraq said earlier in the week that Saudi Arabia and Russia had become more flexible about cooperating to reduce output.

Oil pares gains as Russia says no meeting with OPEC scheduled

RE: OPEC, for some quiet moments.. - admin - 02-02-2016

U.S. energy firms cut oil rigs for the sixth straight week, data showed on Friday, and were expected to shed more with major U.S. shale oil companies slashing spending plans after crude prices hit 12-year lows. Drillers removed 12 oil rigs in the week ended Jan. 29, bringing the rig count down to 498, the least since March 2010, oil services company Baker Hughes said. That compares with 1,223 rigs in same week a year ago. In 2015, drillers cut on average 18 rigs per week for a total of 963 oil rigs for the year, the biggest annual decline since at least 1988.

U.S. oil drillers cut rigs for sixth straight week: Baker Hughes

As oil prices continue to decline, North American E&P companies have hedged just 15% of their total production volumes for 2016, including 14% of oil and 18% of natural gas, leaving the companies largely exposed to current depressed market prices, according to new analysis from IHS. According to the IHS Energy Comparative Peer Group Analysis of North American E&Ps, production hedging for the group of 51 companies studied will fall even more significantly in 2017, when just 4% of total production will be hedged, including only 2% of oil and 7% of gas, IHS said.

Oil and gas companies face difficult year as hedging protections roll off: IHS

A new note from Francisco Blanch at Bank of America Merrill Lynch, however, puts the oil move into a much bigger perspective, arguing that a sustained price plunge "will push back $3 trillion a year from oil producers to global consumers, setting the stage for one of the largest transfers of wealth in human history."

BofA: The Oil Crash Is Kicking Off One of the Largest Wealth Transfers in Human History - Bloomberg Business

Looking further ahead, US crude production is expected to average 8.7 mbpd in 2016, down 700,000 bpd from 2015. Russian output will also slip, though more slowly, from its record levels, and the North Sea will slink back into decay. Still, OPEC looks to continue its onslaught, however disjointed. Saudi Arabia has no intention of cutting its vigorous production and Iran could flood the market with up to 750,000 additional bpd by the end of 2016 as international sanctions are stepped down.

China sponge soak up world's oil - Business Insider

RE: OPEC, for some quiet moments.. - admin - 02-03-2016

For its part, China sees its crude demand rising to 11.32 mbpd in 2016, up approximately 460,000 bpd from last year. Net crude imports are slated to swell 7.3 percent to 7.14 mbpd – Saudi Arabia being the primary beneficiary. Further, China seeks to dramatically expand its strategic petroleum reserves (SPR) by 2020. Some 360 million barrels of capacity still wait, and 2016 could see China import 150 million barrels of SPR-destined crude.

China sponge soak up world's oil - Business Insider

Exxon Mobil Corp. on Tuesday reported its smallest quarterly profit in more than a decade and said it will cut 2015 spending by one-quarter and suspend share repurchases as it copes with a prolonged downturn in crude prices.

Exxon's fourth-quarter profit falls 58%, cuts capex by quarter

BP slumped to its worst annual loss in over 20 years in 2015, the British oil and gas company announced on Tuesday, and said it would cut thousands more jobs in the face of a deep rout in oil prices. The company, which is still grappling with the huge costs from the deadly 2010 Gulf of Mexico oil spill, said it would cut 7,000 jobs by 2017, nearly 9% of its workforce.

BP reports worst annual loss in over 20 years as it cuts 7,000 jobs

Anadarko Petroleum Corp. on Monday reported a larger quarterly loss but smaller than Wall Street expected and the U.S. oil company said it expects to slash capital spending about 50% this year to conserve cash.

Anadarko posts quarterly loss, expects to cut capex in half

RE: OPEC, for some quiet moments.. - admin - 02-04-2016

Oil and gas fields already paid for and in production can sustain Brazilian state-run company Petroleo Brasileiro SA for two to three years of low prices, a board member for the firm told reporters on Friday. "We have various fields where the cost per barrel is $50 and most or all of them have had their investment completed. Today, the cost to carry on production will cost less or nearly nothing," Petrobras board member Segen Estefen told reporters at an event in Rio de Janeiro.

Producing fields can sustain Petrobras for 2-3 years of low prices, board member says

Oil producers in West Texas, defying expectations they would fall victim to OPEC’s price war, are instead selling investors on the idea that they can still profit with prices below $35/bbl. Drillers in the Permian basin, the biggest U.S. shale field, have raised at least $2 billion from share sales over the past eight weeks. And more issuances are on the way as producers try to avoid piling on additional debt.

Texas shale drillers lure $2 billion in new equity to Permian

Three major U.S. shale oil companies have slashed their 2016 capital spending plans more than expected in a bid to survive $30/bbl oil prices, with one of them saying prices would need to rise more than 20% just to turn a profit. The cuts on Monday from Hess Corp, Continental Resources and Noble Energy ranged from 40% to 66%. This marks the second straight year of pullbacks by a trio of companies normally seen as among the most resilient shale oil producers.

U.S. shale firms, struggling to profit with $30 oil, slash spending more

Cabot Oil & Gas Corp. has cut its 2016 capital budget to $325 million, a 47% reduction from the company’s $615-million preliminary budget for the year. The Houston-based company’s revised budget represents a 58% reduction from last year’s $774-million capital program.

Cabot Oil & Gas cuts 2016 preliminary budget in half

RE: OPEC, for some quiet moments.. - admin - 02-05-2016

Texas has a message for $30 crude doomsayers: Bring it on. A handful of shale patches in the state, which would be the world’s sixth-largest oil producer if it were a country, are profitable with crude below $30/bbl, according to an analysis by Bloomberg Intelligence. In the Eagle Ford’s DeWitt County, which produced more than 100,000 bopd in November, the average well can be profitable with U.S. benchmark crude at $22.52/bbl, $4 below the lowest level this year.

Texas toughness in oil patch shows why U.S. still strong at $30/bbl

Oil bulls distressed that last week’s rally fizzled can find some comfort in forecasts for a bigger and longer rebound by the end of the year. Analysts are projecting prices will climb more than $15 by the end of 2016. New York crude will reach $46/bbl during the fourth quarter, while Brent in London will trade at $48 in the same period, the median of 17 estimates compiled by Bloomberg this year show. A global surplus that fueled oil’s decline to a 12-year low will shift to deficit as U.S. shale output falls, according to Goldman Sachs Group Inc.

Oil price seen surging about 50% by fourth quarter as supply eases

Low oil prices will persist for longer than previously expected, according to Morgan Stanley, which reduced its quarterly crude forecasts for this year by as much as 51%. Morgan Stanley now sees oil mostly falling through 2016, compared with a previous outlook for prices to rise each quarter, analysts including Adam Longson said in a report Thursday. Brent crude is expected to average $29/bbl in the three months to December, compared with an estimate for $59 in a Jan. 18 note.

Oil seen ‘lower for longer’ by Morgan Stanley as forecasts cut

But the rumors persist. The latest fuel to the rumor fire is the fact that now six OPEC member states have said that they would be willing to attend an emergency meeting if one was called, the highest total yet. Venezuela has officially requested an emergency meeting, and the oil minister from the South American OPEC member said that six OPEC members plus two non-members are willing to discuss measures to stabilize oil prices.

Six OPEC Members, Plus Russia, Now Open to Emergency Meeting - Yahoo Finance

RE: OPEC, for some quiet moments.. - admin - 02-07-2016

The global oil surplus of approximately 1.6 million barrels per day in 2015 is likely to evaporate slowly during the course of this year. Global demand growth should absorb 1.2 million barrels while output declines from exhausted fracked wells in the U.S. and other non-OPEC countries should reduce output by about 400,000 barrels in 2016,” Minerd wrote. He grants that those moves could be offset by increased Iranian production, but expects world demand growth, supported by cheaper prices, to erode much of the surplus and help bring the market into balance by the end of the year (see chart below).

This is how the oil rout’s ‘endgame’ might play out - MarketWatch

Perhaps the most interesting statistic of the day, however, has come from Wood Mackenzie, who says that only 0.1 percent – or 100,000 bpd – of global oil production has been curtailed thus far due to the price slump. It says this drop, albeit modest, has come from the Canadian oil sands, U.S. conventional production, and from the UK’s North Sea. Wood Mackenzie estimates that 2.2 million barrels per day of Canadian production is currently ‘cash negative’, while so is 230,000 bpd of Venezuela’s heavy oil production, and 220,000 bpd of production from the North Sea. It is also important to note that although we are not seeing considerable production losses, we are seeing a lot of oil being left in the ground that otherwise would have been extracted.

Global Oil Production On Pause, But Decline Seems Imminent

Non-OPEC oil supplies are sharply lower in December. Overall supplies are estimated to have slipped by more than 0.6 mb/d from the month prior, to 57.4 mb/d. A seasonal decline in biofuel production, largely due to the Brazilian sugar cane harvest, of nearly 0.4 mb/d was the largest contributor to December’s drop. Production in Vietnam, Kazakhstan, Azerbaijan and the U.S. was also seen easing from both November’s level and compared with a year earlier. Persistently low production in Mexico and Yemen were other contributors to the year-on-year decline. As such, total non-OPEC liquids output slipped below the year earlier level for the first time since September 2012.

Non OPEC Oil Production To Collapse In 2016 |

The U.S. rig count plunged this week, as the deleterious effects of the deeper fall in oil prices since December start to be felt. According to Baker Hughes, the U.S. rig count declined by a shocking 48 rigs for the week ending on February 5, the largest reduction since March of 2015. The total rig count now stands at 571, made up of 467 oil rigs and 104 natural gas rigs.

U.S. Rig Count In Free Fall: Plunges By 48 In One Week |