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RE: OPEC, for some quiet moments.. - admin - 04-11-2016

Oil climbed the most in almost two months as U.S. crude output continued to slide before a meeting between suppliers to discuss freezing production. Futures rose as much as 6.9% in New York. U.S. output slid for the 10th time in 11 weeks through April 1 and crude stockpiles fell, according to data from the Energy Information Administration on Wednesday. The number of active oil rigs in the U.S. dropped to the lowest level since 2009 this week, Baker Hughes Inc. data show. Major producers from Saudi Arabia to Russia will meet in Doha on April 17 to discuss freezing output in a bid to stabilize prices.

Oil rises most in two months on U.S. output drop, freeze talks

In the energy world, India is becoming the new China. The world’s second-most populous nation is increasingly becoming the center for oil demand growth as its economy expands by luring the type of manufacturing that China is trying to shun. And just like China a decade ago, India is trying to hedge its future energy needs by investing in new production at home and abroad.

India becoming new center of oil demand growth

The battle for control over Libya is the battle to control Libya’s oil wealth, and it reached its climax on 7 April when the National Oil Corporation (NOC) in Benghazi put its full backing behind the new UN-backed government in neighboring Tunisia. On Thursday, the NOC addressed a letter to the Fayez Serraj, head of the United Nations-backed Presidency Council, informing him that all oil revenues collected by the NOC would be sent to the new Council’s approved bank account in what amounts to official recognition of Libya’s new unity government.

Struggle For Libya’s Oil Wealth Reaches Climax | OilPrice.com

While unusual, Riyadh's current fiscal predicament is not without precedent. Again, the Saudi crown has about $600 billion in sovereign wealth to spend before it runs out of cash. Oil prices would have to stay low for four to five years in order to drain those accounts, and as we are seeing, the period of under-investment currently taking place in the oil patch simply sows the seeds of the next price rebound.

Making Sense of the Mideast Oil Muddle | RealClearWorld




RE: OPEC, for some quiet moments.. - admin - 04-12-2016

Hedge funds betting that oil’s rally was over missed an 11% gain after U.S. crude inventories unexpectedly fell. Short positions in West Texas Intermediate crude jumped 35% in the week ended April 5, according to the U.S. Commodity Futures Trading Commission. The next day, the government reported a 4.94 MMbbl drop in U.S. oil inventories, the first decline in eight weeks.

Reports of oil rally's death premature as inventories decline

As oil markets look for the green shoots of a price recovery, LNG participants are hunkering down for a long winter. The most influential executives, investors and traders in the liquefied natural gas market will gather in Perth, Australia, this week for the industry’s biggest conference. While Brent oil has surged about 50% since hitting a 12-year low in January amid the worst energy crash in a generation, LNG continues its downward slide.

LNG backers face comatose market as oil shows signs of life

Hedge funds ended their record bearish streak on U.S. natural gas as an unusual spring cold snap stoked demand amid signs that output is slipping from an all-time high. Speculators held a net-long position in four gas contracts for the first time since December 2014, U.S. Commodity Futures Trading Commission data for the week ended April 5 show. Long positions climbed 0.9%, while shorts slid 4.7%.

Hedge funds become U.S. gas bulls for first time since 2014

There’s not much money in new well drilling these days. In fact, the latest figures from the American Petroleum Institute (API) reveal a 70 percent annual decline in new natural gas well completions along with a staggering 90 percent drop in new oil wells as of the start of April.

70-90% Decline In Well Completions Raises Hope For Oil & Gas | OilPrice.com




RE: OPEC, for some quiet moments.. - admin - 04-14-2016

But just because demand for LNG may pick up, industry players weren't entirely certain that would benefit Australian players in the sector. The slump in LNG prices has an upside Against the backdrop of a price slump, supply glut and slowing demand, industry players at the industry conference in Perth have cited the high cost of business in Australia as a further drag, particularly as North American shale gas is rising as a serious competitor to LNG. "The question going forward as this tranche of supply comes to the market is where the next tranche of supply going to come from," said energy giant Chevron's Chief Executive John Watson. "The opportunity is going to for those who can get cost down and compete in the market place," he told CNBC on the sidelines of the same conference.

Australia LNG still looking up despite price drop, resources minister Frydenberg says

Oil climbed to a four-month high in London as forecasts for lower U.S. shale production signaled the global oversupply will slowly diminish. Brent advanced 1.6% to the highest since Dec. 4. Output from U.S. shale will drop to 4.84 MMbopd in May, the lowest level in almost two years, according to a report on Monday from the Energy Information Administration. Still, crude inventories probably rose by 1 MMbbl last week, remaining near the highest level since 1930, according to a Bloomberg survey before another report from the EIA on Wednesday.

Oil rises to four-month high as U.S. shale production slides

Oil declines eased after a government report showed U.S. crude production fell to the lowest level since October 2014. Output slipped below 9 MMbopd for the first time in 18 months, the Energy Information Administration reported Wednesday. Active oil rigs in the U.S. fell to 354 last week, the fewest since November 2009, according to Baker Hughes Inc. Prices fell earlier as speculation swirled over the likely outcome of an April 17 meeting of major suppliers.

Crude trades near $42 as U.S. output slips to lowest since 2014

The early success of an oil supply accord between OPEC and Russia in reviving crude prices is magnifying the potential costs of failure if producers meeting this weekend fail to complete their deal. Brent crude futures, which sank to a 12-year low in January, have climbed 30% since Saudi Arabia, Russia, Qatar and Venezuela reached a preliminary agreement to freeze output on Feb. 16. While Russia’s energy minister says he’s “optimistic” the accord will be finalized in Doha on April 17, Goldman Sachs Group Inc. warned that the weight of expectation poses a “bearish catalyst’ if the talks fail.

Oil producers risk severe impact on prices if freeze deal fails




RE: OPEC, for some quiet moments.. - admin - 04-15-2016

Total has signed a memorandum of understanding with Korea Gas Corporation (KOGAS) during the LNG 18 conference in Perth, Australia, to reinforce mutual cooperation to explore opportunities throughout the LNG value chain. The main purpose of the agreement is to jointly identify and pursue opportunities to develop the LNG market in Asia and in new importing countries and to cooperate in LNG trading and terminal optimization.

Total, KOGAS extend cooperation on LNG

Global oil markets will “move close to balance” in the second half of the year as lower prices take their toll on production outside OPEC, the International Energy Agency said. The world surplus will diminish to 200,000 bopd in the last six months of the year from 1.5 MMbopd in the first half, the agency said in a report on Thursday. Production outside the Organization of Petroleum Exporting Countries will decline by the most since 1992 as the U.S. shale oil boom falters. The glut is also being tempered as Iran restores exports only gradually with financial barriers to sales persisting even after the lifting of international sanctions.

IEA sees oil oversupply almost gone in second half on shale drop

Oil investors looking for signs of a sustained price recovery would do well to assess U.S. supplies rather than the banter between major producers on freezing output, according to Saxo Bank A/S. While OPEC members and producers outside the group are set to meet in Qatar this month to discuss a deal, just a cap on output would have limited impact on prices because several participants are already pumping near record amounts of crude, Ole Hansen, the bank’s head of commodity strategy, said in an interview on Thursday. The rebalancing of the oil market amid a glut triggered by the U.S. shale boom hinges more on American drilling activity, he said.

Oil market ‘fooled’ by freeze talks seen better off gauging U.S.

OPEC said it may deepen cuts to its forecast for global oil demand growth due to slowing economic expansion in emerging markets, warmer weather and the removal of fuel subsidies. The Organization of Petroleum Exporting Countries trimmed estimates for demand growth in 2016 by 50,000 bopd because of a slowdown in Latin America, projecting worldwide growth of 1.2 MMbopd. Weakness in Brazil’s economy, the removal of fuel subsidies in the Middle East and milder winter temperatures in the northern hemisphere could prompt further cutbacks, the group said.

OPEC warns of deeper cuts to oil demand forecast on slowdown




RE: OPEC, for some quiet moments.. - admin - 04-16-2016

"The main unknown going into Sunday is what Saudi Arabia's position will be," a Citi Research team led by Edward L. Morse wrote in a note to clients. "The world's largest petroleum exporter has been silent about whether it attends and what position it stakes out," they added. Citi's team points out that there were two major public comments from the Saudis over the last two months: Back in February at the CERA conference in Houston, oil minister Ali Al-Naimi said the Saudis would always fulfill its customers' needs. He also remarked that there was "less trust" between the big oil powers, according to Forbes. And two weeks ago, the Deputy Crown Prince Mohammed bin Salman told Bloomberg that the Kingdom would only participate in a price freeze if and only if Iran and other suppliers do, too.

Saudi Arabia is the wild card Doha meeting - Business Insider

The preliminary agreement by Russia, Saudi Arabia, Venezuela and Qatar to freeze output has already put a floor under crude prices and a deal this weekend to include other producers would extend the recovery, according to Qatar’s Energy Ministry. Analysts and traders have puzzled over exactly why oil producers have devoted so much diplomatic energy to the meeting in Doha on April 17, when the consensus is that the freeze would have little immediate impact on crude production. The letter—an invitation to the Doha meeting that Norway declined—gives some answers.

Qatar's oil-freeze letter to Norway reveals Doha deal logic

Capital spending in Canada’s oil and natural gas sector is forecast to decline $50 billion, or 62%, since 2014, the largest two-year decline since the Canadian Association of Petroleum Producers (CAPP) and its predecessor organizations started tracking this data in 1947, according to new data compiled by CAPP. Total capital investment in the oil and natural gas sector is forecast to decline to $31 billion in 2016, down from a record $81 billion in 2014.

Capital investment in Canada's oil and gas industry down 62% in 2 years: CAPP

The U.S.'s embarrassment of oil riches may not have been that beneficial after all. Those are the findings of a recent Goldman Sachs report, in which the bank explained that the net effects of cheaper crude on growth have been "negative so far," given the impact on oil producers who are now finding it hard to churn out more black gold while maintaining needed levels of capital expenditures.

Oil boom 'too much of a good thing': Goldman




RE: OPEC, for some quiet moments.. - admin - 04-18-2016

A dramatic build-up in China’s strategic petroleum reserve and surging demand for imported crude oil are likely to transform the global energy markets this year, regardless of any production freeze agreed by OPEC and Russia this weekend. Chinese credit stimulus and a 20pc rise in public spending has set off a fresh mini-cycle of growth that is already sucking in oil imports at a much faster pace than expected. Barclays estimates that the country will import an average of 8m barrels per day (b/d) this year, a huge jump from 6.7m b/d last year. This is arguably enough to soak up a big chunk of the excess supply currently flooding global markets.

Soaring oil demand in China rescues OPEC

Woodside has signed a five-year charter contract with Norwegian company Siem Offshore Australia Pty Ltd—an agreement that delivers Australia its first LNG-powered marine support vessel in 2017. Woodside COO Mike Utsler said the announcement positioned the company as an early adopter of LNG as a marine fuel in the region.

Woodside charters Australia's first LNG-powered support vessel

Moody's warns that "persistently low natural gas prices" have placed several coal and nuclear power plants at risk of closure, with merchant generators scrambling to cut costs. "Gas prices by far have the most dominant effect on the unregulated power sector in the US," Moody's said in a March 31 report. "Low natural gas prices have devastated most of the US merchant power sector because gas-fired power plants often serve as the marginal plant during times of peak power demand," Moody's said. "Lower natural gas prices have effectively driven down wholesale power prices for all generators, regardless of whether they are using natural gas, coal, nuclear power or renewable resources to generate their electricity."

SNL: MarketWeek: Moody's: Fall in natural gas prices may lead to large-scale plant retirements | SNL

Nigeria is currently dealing with one of its worst fuel shortages in years. The crisis has been dragging on for over a month already, and, despite promises from the head of the state oil firm, the "situation has deteriorated in the past few years," according to Reuters.

Nigeria fuel crisis bad for economy - Business Insider




RE: OPEC, for some quiet moments.. - admin - 04-19-2016

While the long-awaited Doha meeting disappointed energy investors who expected an output freeze deal, shale industry pioneer Harold Hamm, who didn't "have a whole lot of hope" in the Sunday meeting, told CNBC that the crude glut will be balanced the second half of this year.

Hamm: Forget Doha, oil oversupply gone this year - Yahoo Finance

China’s own output of oil has fallen by 200,000 b/d over the last year as PetroChina and Sinopec slash investment, while demand has continued to grow. Car sales are expected to rise by 6pc this year and Chinese customers are switching to bigger models. The International Energy Agency forecasts that Chinese petrol demand will jump by 8.8pc this year, and jet fuel by 7.5pc.

Soaring oil demand in China rescues OPEC

Some of the recent expansion of U.S. crude production, for example, has come from so-called "stripper" wells — once abandoned sites that are seeing new life thanks to advanced production techniques. Many of these are profitable even at current market prices. But at $40 a barrel, roughly 2 million barrels a day of current global crude output costs more to pull out of the ground than it's worth, according to an analysis of global oil production by Wood Mackenzie, a commodities market research firm.

Low oil prices don't cut into US production by much

Mohammed bin Salman, the young Saudi deputy crown prince who’s taken control of economic policy in the world’s top oil producer, had publicly warned twice that no deal was possible without Iran’s participation. In turn, Iran insisted on its right to boost crude production to the level it pumped before it became subject to international sanctions.

Grand oil bargain is victim of Saudi Arabia's Iran fixation




RE: OPEC, for some quiet moments.. - admin - 04-21-2016

So I did some basic math for just the LNG trade, taking into account an expected increase in demolitions and/or conversions as well as the anticipated supply coming into the market (at 84% utilization, the 2015 average) coupled with expected increases in exporting capacity from key nations. Now, I did assume a lot and averaged quite a bit, but long story short, my math indicated the oversupply issue could clear up as soon as mid-2018 if the new LNG capacity coming online is able to find customers abroad. Of course, the largest assumption here is that new LNG capacity coming online will do so in the expected time frame and find customers. The finding of customers is largely dependent on further development of the energy and retail market for the LNG trade.

LNG Shipping Market Supply Side Macro Outlook - April 2016 | Seeking Alpha

A dramatic build-up in China’s strategic petroleum reserve and surging demand for imported crude oil are likely to transform the global energy markets this year, regardless of any production freeze agreed by OPEC and Russia this weekend... Standard Chartered said Chinese imports could reach 10m b/d by the end on 2018, implying a supply crunch and a fresh spike in oil prices as the market is turned on its head. Energy consultancy Wood Mackenzie says $400bn in oil and gas projects have been shelved since the onset of the commodity slump. A great number of depleting fields will not be replaced.

Soaring oil demand in China rescues OPEC

Just two days after the collapse of international oil-supply talks in Doha, Russia signaled it isn’t afraid to play a game of chicken. Freed from a plan to coordinate output with OPEC members, Russian officials said Tuesday that the country may boost both production and exports. Output could grow by 100,000 bopd to 10.81 MMbopd in 2016, according to Deputy Energy Minister Kirill Molodtsov.

Russia may raise oil output, exports after failure of Doha talks

The Organization of Petroleum Exporting Countries will resume talks at a meeting in June to reach an agreement on freezing oil output, Iraq’s governor to OPEC said just days after politics thwarted a deal to cap production and curb the global glut.

Iraq says OPEC will pursue output-freeze talks at June meeting




RE: OPEC, for some quiet moments.. - admin - 04-21-2016

Within a decade of revolutionizing domestic natural gas markets, U.S. shale will for the first time enter Europe, a region dominated by Russian and Norwegian supplies. Portugal will receive the tanker Creole Spirit, the sixth cargo from Cheniere Energy Inc.’s Sabine Pass facility, according to two people with direct knowledge of the matter. The first left the plant in Louisiana for Brazil in February.

Cheniere's LNG set to reach Europe as U.S. shale gas goes global

As oil’s collapse leaves some fields with no chance to turn a profit, China’s biggest producer is ready to cut its losses. PetroChina Co. sees oil and gas output falling the first time in 17 years as it shuts high-cost fields that have “no hope” of making profits at current prices, Wang Dongjin, the company’s president, said Wednesday in Hong Kong after the company reported the lowest net income since it began trading publicly.

PetroChina cuts output for first time in 17 years

Global oil markets will “move close to balance” in the second half of the year as lower prices take their toll on production outside OPEC, the International Energy Agency said. The world surplus will diminish to 200,000 bopd in the last six months of the year from 1.5 MMbopd in the first half, the agency said in a report on Thursday. Production outside the Organization of Petroleum Exporting Countries will decline by the most since 1992 as the U.S. shale oil boom falters. The glut is also being tempered as Iran restores exports only gradually with financial barriers to sales persisting even after the lifting of international sanctions.

IEA sees oil oversupply almost gone in second half on shale drop

Most recent analyses of oil prices have focused on the amount of mismatch between supply and demand, and the need to craft a temporary agreement to reduce oil production. The thing that is missing in this discussion is an analysis of buying power of consumers. Is the problem a temporary problem, or a permanent one?

A Lasting Solution To Low Oil Prices | OilPrice.com




RE: OPEC, for some quiet moments.. - ArtM72 - 04-21-2016

"PetroChina Co. sees oil and gas output falling the first time in 17 years as it shuts high-cost fields that have “no hope” of making profits at current prices"

Not surprising, but interesting to see China simultaneously filling its SPR and shutting down capacity. As US output continues to diminish and prices slowly rebound we are certainly in the scenario most frequently predicted a couple years back. So the question now becomes when will the oil price boom occur and will drilling ramp back soon enough so the boom is not disruptive to the economic recovery of Europe and elsewhere.

Nonetheless what is going on in China is hopeful. It is good for IOC that PetroChina will buy energy on the world market when the price is cheaper than what it costs for them to produce themselves.