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RE: OPEC, for some quiet moments.. - admin - 05-16-2016

However, with the exception of Royal Dutch Shell’s acquisition of smaller rival BG Group, there has so far been nothing like the wave of large deals that followed the late 1990s oil downturn. That is because this downturn was preceded by a period of virtual “free money” following the 2008 financial crisis, says Tony Hayward, chairman of Glencore and former chief executive of BP. “Much of the industry was massively overleveraged in a way it wasn’t in 1998 and 1999,” he adds, and that is leading to bankruptcies in the US shale industry, and preventing consolidation.

Corporate winners and losers amid the oil price crash - FT.com

Not so in the swampy Siberian marshes that are Rosneft’s heartland. At Yuganskneftegaz, the production subsidiary that accounts for more than one-tenth of the country’s oil output, the state-controlled Russian oil company doubled its drilling rate during 2015. This counterintuitive move highlights a paradox driving the Russian oil industry — thanks to the weakness of the rouble and the nature of the country’s tax system, energy companies are coping with the collapse in crude prices better than their peers almost anywhere in the world. Russia, the world’s third-largest oil producer, lifted output to a post-Soviet record of 10.91m barrels a day in January, partly due to a 12 per cent increase in drilling last year. But that may not be enough. With the enormous west Siberian fields developed in Soviet times in decline, Russia needs to invest ever more just to keep oil production steady. Rosneft’s sharp increase in drilling at Yuganskneftegaz came as output at the unit fell 3.2 per cent last year. Rosneft said in December it could increase capital expenditure by one-third this year in rouble terms compared with 2015, just to keep production stable.

Amid the oil price crash, Rosneft is running to stand still - FT.com

Oil climbed after a government report showed that U.S. crude inventories unexpectedly declined. Futures rose as much as 3.3%. Crude stockpiles fell 3.41 MMbbl last week, the U.S. Energy Information Administration said. Analysts surveyed by Bloomberg had projected a 750,000-bbl gain. Crude output fell to 8.8 MMbpd, the lowest since September 2014. Refineries usually bolster operating rates in May to meet summer gasoline demand, which leads to lower crude supplies in months ahead.

Oil rises after unexpected decline in U.S. crude stockpiles

Saudi Arabia’s new oil minister, Khalid al-Falih, landed his job on May 7 in a major housecleaning by King Salman and his son Deputy Crown Prince Mohammed bin Salman. Al-Falih, who’s also chairman of the board of directors at state producer Saudi Aramco (a job he’ll hold on to), says he’ll maintain the policies of his predecessor, Ali al-Naimi, who is in his 80s. “If the market considers the appointment as signaling more of the same for Saudi policy, that could allow prices to continue following their gradual trend upward,” says Edward Bell, a commodity analyst at Dubai bank Emirates NBD.

Saudi Arabia Gets a New Oil Czar - Bloomberg




RE: OPEC, for some quiet moments.. - admin - 05-16-2016

Three bankruptcies this week shows that $45/bbl oil isn’t enough to rescue energy companies on the verge of collapse. Since the start of 2015, 130 North American oil and gas producers and service companies have filed for bankruptcy owing almost $44 billion, according to law firm Haynes & Boone. The tally doesn’t include Chaparral Energy Inc., Penn Virginia Corp. and Linn Energy LLC, which filed for bankruptcy this week owing more than $11 billion combined.

Oil at $45 proving no savior as bankruptcies pile up

The number of rigs seeking oil fell for an eight consecutive week, Baker Hughes said Friday as the total rig count settled just above 400. According to the Houston-based service provider, the number of active oil rigs fell 10 to 318, which represents the lowest level since Oct. 23, 2009, when 312 rigs were reported. However, at that time, a far greater number of rigs—725—were seeking gas.

U.S. drillers idle ten oil rigs for eight week of decline

The global oil surplus in the first half of this year will probably be smaller than previously estimated because of robust demand in India and other emerging nations, the International Energy Agency said. Supply will exceed demand by an average of 1.3 MMbopd in the first six months of 2016, down from the 1.5 MMbopd projected a month ago, following surprisingly strong consumption in the first quarter, the Paris-based adviser said in a report. Still, further gains in oil prices “are likely to be limited by brimming crude and products stocks,” it predicted.

IEA sees smaller global oil surplus as India drives demand gains

Iranian crude production rose to levels last seen before sanctions were imposed more than four years ago, helping to drive OPEC output to the highest in almost eight years, according to the International Energy Agency. Iran pumped 3.56 MMbopd last month, a rate last reached in November 2011 before trade restrictions were imposed over the country’s nuclear program, the IEA said Thursday. Exports soared more than 40% to 2 MMbopd—near pre-sanctions levels—as the nation worked to regain lost market share.

Iran oil output rose to pre-sanctions levels in April, IEA says




RE: OPEC, for some quiet moments.. - admin - 05-18-2016

If the oil market needed a theme song for now, it might turn to the one where Taylor Swift nervously sings: “Are we out of the woods yet?” A slump in U.S. production, unexpected cuts in output from Nigeria to Colombia and rising gasoline demand have helped drive a major rally since mid-February. As investors boost their bullish bets, analysts from UBS Group AG to Morgan Stanley and Goldman Sachs Group Inc. see pitfalls ahead.

Oil market at crossroads as big rally masks risks lurking ahead

U.S. explorers aren’t the only ones idling rigs as sub-$50 crude forces oil and gas drillers in Africa to slow their search for new reserves. The number of oil and gas rigs offshore Africa remained at 20 in April, the lowest since 2009, according to data published on Friday by Baker Hughes Inc. Onshore rigs fell to 70 from 71 in March, leaving the total for the continent at 90, near the lowest in four years.

Africa offshore drilling at six-year low as explorers curb quest

For LNG buyers, 2040 is beginning to feel even further away. Just a few years ago, faced with limited supply and relentless demand growth, LNG buyers were happy to lock in contracts that ran through nearly the middle of the century, often paying prices linked to the cost of oil. Now, as the market moves deeper into oversupply, being tied to a producer for the next two decades is shifting from a blessing to a curse. Less than 15% of long-term LNG supply contracts will expire in the next five years, according to data compiled by Bloomberg. Meanwhile, new projects in Australia and the U.S. are saturating the world with LNG, depressing spot prices this year in Asia’s energy trading hub of Singapore even as oil has risen about 20%. That’s giving buyers the incentive to try to renegotiate their deals with suppliers, according to analysts at Citigroup Inc. and Energy Aspects Ltd.

LNG buyers dreading 2040 try to renegotiate amid supply glut

The number of active oil rigs in the U.S. fell for the seventh week in a row, according to data released Friday by Baker Hughes. According to the Houston-based service provider, the number of rigs seeking oil fell four to 328, which represents a 51% contraction from the 668 rigs reported during the like period last year and an 80% drop from the 1,609 reported during the peak in October 2014.

U.S. oil rig count falls for seventh straight week




RE: OPEC, for some quiet moments.. - admin - 05-18-2016

Oil hit a seven-month high on speculation that U.S. crude stockpiles declined last week while supply losses in Canada and Nigeria whittled away the global excess. West Texas Intermediate climbed as much as 1.5% in New York. U.S. crude inventories probably fell by 3.3 MMbbl, according to a Bloomberg survey before government data Wednesday. It would be the first consecutive weekly decrease since September. Wildfires in Canada came to within a kilometer of an Enbridge Inc. oil-sands terminal as warm weather and wind spread the flames.

Oil rises to seven-month high as supply losses tame surplus

Oil rose to a six-month high as Goldman Sachs Group Inc. said the market moved into a deficit earlier than expected following supply disruptions in Nigeria and an increase in demand. Futures climbed 3.3% in New York. The shift to a supply deficit this month came one quarter earlier than forecast, Goldman Sachs said in a report. The bank raised its price forecasts, while projecting a return to surplus early next year. Militant attacks and pipeline outages have cut Nigerian volumes by at least 30%, its petroleum minister said last week.

Oil rises to six-month high as Goldman sees demand above output

Iraq’s oil industry is on a roll. Production has jumped more than 40% since mid-2014 and exports are at near-record levels. It probably won’t last. Plunging government revenue is hampering the state’s ability to invest, while OPEC’s second-biggest crude producer is reaching the limits of its capacity to store and export oil, according to analysts at Energy Aspects Ltd. and FGE. Spending on the country’s biggest fields may shrink to as little as $7 billion this year from about $13 billion in 2015 and $20 billion in 2014, Richard Mallinson of Energy Aspects said Monday.

Iraq oil surge seen losing steam just as markets need more crude

We are beginning to see the first real signs of the global oil markets moving rapidly back into balance. OPEC, which produces approximately 40 percent of the world’s oil supply, cannot meet future oil demand on their own.

Oil Price Spike Is Not As Far Away As Many Think | OilPrice.com




RE: OPEC, for some quiet moments.. - admin - 05-29-2016

The surge in the global supply of shale oil has curbed OPEC’s ability to balance crude markets, a former Qatari energy minister said. The Organization of Petroleum Exporting Countries was able to balance the market in the past because output from shale oil deposits in the U.S. and other non-OPEC nations was insignificant, Abdullah bin Hamad al-Attiyah told reporters at an industry event in Doha.

Shale oil seen stifling OPEC's historic market-balancing role

Santos said Thursday that GLNG train 2 has started producing liquefied natural gas (LNG) on Curtis Island, Queensland. The announcement follows first LNG production from train 1 in September 2015 and GLNG’s first LNG export cargo in October 2015.

Santos reports first LNG from GLNG train 2

One analyst told CNBC that he doubted the very foundation of the U.S. shale oil industry which he said had been founded and expanded on cheap money and had effectively been a "Ponzi scheme" – an investment operation that generates returns for older investors by acquiring new investors. "I think in ten years' time someone is going to write a great book and make a great movie about the shale industry in the U.S. because I think it is, quite frankly, one of the biggest Ponzi schemes known to mankind," Gavin Wendt, founding director & senior resource analyst at MineLife, told CNBC on Thursday.

Shale oil industry a 'Ponzi scheme' or can it boom again?

Global crude supplies will start to dwindle in as little as two years, boosting prices, as the industry cuts investment to weather the worst market collapse in a generation, according to Statoil ASA. Oil companies reduced capital expenditure last year and are likely to cut it further this year and next, Statoil’s CFO Hans Jakob Hegge said in an interview in London. Lower spending means there could be a “significant effect” on crude supply after 2020, he said.

Oil industry headed for record third straight year of cutbacks




RE: OPEC, for some quiet moments.. - admin - 06-03-2016

The surge in the global supply of shale oil has curbed OPEC’s ability to balance crude markets, a former Qatari energy minister said. The Organization of Petroleum Exporting Countries was able to balance the market in the past because output from shale oil deposits in the U.S. and other non-OPEC nations was insignificant, Abdullah bin Hamad al-Attiyah told reporters at an industry event in Doha.

Shale oil seen stifling OPEC's historic market-balancing role

Oil declined for a fourth day on concern recent gains were unsustainable, while shuttered Canadian operations started to reopen. Futures fell as much as 1.8% in New York after rising 6.9% in May as supply was curbed by wildfires in Alberta and militant attacks in Nigeria. Canadian oil-sands producers including Suncor Energy Inc. have begun resuming operations as cooler weather helps keep the blazes at bay.

Oil falls as recent gains deemed unsustainable, disruptions ease

Oil explorers in the U.S. put a pause on their rig cancellations this week as improving technology and rising prices make some basins more profitable. Rigs targeting crude in the U.S. were unchanged at 318, after 10 were idled last week, Baker Hughes Inc. said on its website Friday. Explorers have dropped more than 1,000 oil rigs since the start of last year. Natural gas rigs were trimmed by 2 to 85, bringing the total for oil and gas down by 2 to 404.

Shale drillers hold off retiring oil rigs as cash flows improve

The oil market doomsayers are beginning to capitulate. Speculators reduced bets on falling prices to the lowest level in 11 months as oil briefly breached $50/bbl on signs supplies are coming into balance. Crude climbed 7.4% this month in New York amid lower U.S. production and unplanned disruptions in Canada and Nigeria. Prices are up almost 90% since February. Money managers’ short position in U.S. benchmark crude reached the least since June, according to data from the Commodity Futures Trading Commission.

Oil pessimists exit market as supplies seen closer to balance




RE: OPEC, for some quiet moments.. - admin - 06-05-2016

Exxon Mobil Corp. may invest more than $10 billion in Argentina’s Vaca Muerta shale formation in the next decades, Chairman and Chief Executive Officer Rex Tillerson said Thursday. The oil giant has so far invested $200 million in the world’s second largest shale gas deposit, Tillerson said after meeting with Argentine President Mauricio Macri in Buenos Aires. Exxon has received approval to invest $250 million more for a pilot project in the coming months. If the pilot project is successful, the company will start full development during a period of 20 to 30 years that could involve additional investment “that would be well in excess of $10 billion,” he said.

Exxon CEO Says Argentina Shale Investment May Exceed $10 Billion - Bloomberg

The United Arab Emirates’s economy minister joined forecasters looking for $60 crude this year with demand and production moving more in line. "It’s possible for oil prices to reach $60 or more during this summer" as demand increases in the U.S., U.A.E. Economy Minister Sultan Bin Saeed Al Mansoori said at a conference in Abu Dhabi on Monday. Crude will end the year higher than $60/bbl, Mario Maratheftis, global chief economist at Standard Chartered Plc, said on Bloomberg TV. SEB Bank forecast last week that Brent would touch $60 at times in 2016.

Oil at $60 gains more backers on forecast for higher U.S. demand

OPEC members gathering in Vienna June 2 are expected to go along with a Saudi Arabia-led policy focused on squeezing out rivals amid signs the strategy is working. That means the meeting may be less fraught than the previous summit in December, which ended with public criticism of the Saudi position from Venezuela and Iran.

Oil states expected to stick with Saudis: OPEC reality check

Saudi Arabian Oil Co., the world’s largest crude exporter, increased production to an all-time high last year while keeping its reserves unchanged as the kingdom battles for market share. Saudi Aramco, as the state-owned company is known, produced 10.2 MMbopd in 2015, up from 9.5 MMbopd in 2014, according to an annual review posted on its website Thursday. Natural gas output rose to 11.6 Bscfd from 11.3 Bscfd. The company discovered two gas fields and three oil deposits last year, compared with five gas fields and three oil deposits in 2014.

Saudi Aramco boosts oil output to record in fight for market




RE: OPEC, for some quiet moments.. - admin - 06-06-2016

Oil explorers put drilling rigs back to work in U.S. fields for only the second time this year as supply and demand come closer into balance. Rigs targeting crude in the U.S. rose by 9 to 325 this week, Baker Hughes Inc. said Friday. Explorers have idled more than 1,000 oil rigs since the start of last year. Natural gas rigs were trimmed by 5 to 82 this week, bringing the total for oil and gas up by 4 to 408.

U.S. shale drillers restart oil rigs as market improves

U.S. exports of shale gas stand to increase confidence in the fuel as a long-term energy source, while giving Europe the chance to diversify its natural gas supplies, Norway Petroleum and Energy Minister Tord Lien said Wednesday.

Norway sees U.S. gas as chance for Europe to diversify supplies

Banks are increasingly requiring U.S. oil and gas companies to maintain minimum levels of liquidity, an unusual step that could help reduce the risk of being exposed to companies struggling to maintain operations and repay debt. One of the energy companies hardest-hit by so-called minimum liquidity covenants is Chesapeake Energy Corp, according to a Reuters review of regulatory filings. Chesapeake must maintain $500 million in cash and other assets that can be easily converted to cash at all times, even as it posts losses and could be faced with nearly $1 billion in collateral calls. The covenants enable banks, themselves facing increased regulatory scrutiny over exposure to highly leveraged energy companies, to limit risk without cutting credit lines, several oil and gas attorneys, executives and analysts said.

Lenders to U.S. oil and gas companies seek liquidity floors | Reuters

Saudi Arabia, one of the founders of OPEC, is sounding the group’s death knell. The world’s biggest crude exporter has already undermined OPEC’s traditional role of managing supply, instead choosing to boost output to snatch market share from higher-cost producers, particularly U.S. shale drillers, and crashing prices in the process. Now, under the economic plan known as Vision 2030 promoted by the king’s powerful son, Deputy Crown Prince Mohammed bin Salman, the government is signaling it wants to wean the kingdom’s economy off oil revenue, lessening the need to manage prices. Moreover, the planned privatization of Saudi Arabian Oil Co. will make the nation the only member of the Organization of Petroleum Exporting Countries without full ownership of its national oil company.

Saudi Arabia’s new oil plan shows it’s just not that into OPEC




RE: OPEC, for some quiet moments.. - admin - 06-07-2016

Oil held gains after closing at the highest level in more than 10 months on signs the global glut is contracting more quickly than projected. Futures were little changed in New York after advancing 2.2% on Monday. A shrinking oil surplus has the potential to send crude prices as high as $60/bbl this year, according to Ali Majed Al Mansoori, chairman of the Abu Dhabi Department of Economic Development.

WTI holds gains in New York after closing at 10-month high

China’s tumbling crude production amid record-high demand from its oil refineries is helping tighten a global market recovering from a glut. Output in April from the world’s second-biggest consumer fell by the most since November 2011 to the lowest in 14 months. Meanwhile, the country’s refineries processed a record 10.93 MMbopd. The production declines “will help rebalance the market and will be positive for prices,” according to Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein & Co.

China helping balance oil as thirsty refiners rely on old fields

Algeria has more drilling rigs than the rest of Africa combined, yet oil production still isn’t recovering after years of decline. It’s little wonder the nation remains one of the most vocal supporters of action to increase prices by curbing output at the OPEC meeting next month. The Organization of Petroleum Exporting Countries has been hit hard by the decline in oil prices. Algeria, like other members, is rolling out economic reforms to deal with the consequences of the slump, which include the nation’s first current-account deficit in more than a decade. Unlike Saudi Arabia and Iraq, it’s been unable to soften the blow by boosting output.

Africa's busiest oil industry running hard to stand still

The United States remained the world's top producer of petroleum and natural gas hydrocarbons in 2015, according to U.S. Energy Information Administration estimates. U.S. petroleum and natural gas production first surpassed Russia in 2012, and the U.S. has been the world's top producer of natural gas since 2011, and the world's top producer of petroleum hydrocarbons since 2013.

U.S. remains largest producer of petroleum and natural gas hydrocarbons: EIA




RE: OPEC, for some quiet moments.. - admin - 06-08-2016

Trafigura Group has joined other leading energy trading houses in saying oil demand is growing "strongly" this year, suggesting that OPEC’s cheap oil strategy is spurring consumption despite weak economic growth in China and other emerging nations. “Strong consumption growth," led by gasoline demand in the U.S. and China, Trafigura said in its interim report on Tuesday. The Singapore-based company said it’s now trading more that 4 MMbpd of crude and refined products for the first time, up 46% year-on-year.

Global oil demand is growing ‘strongly,’ leading trader says

Saudi Arabia is curtailing renewable-power targets as the world’s biggest oil exporter plans to use more natural gas, backing away from goals set when crude prices were about triple their current level, according to Energy Minister Khalid Al-Falih. The kingdom aims to have power generation from renewable resources like the sun make up 10% of the energy mix, a reduction from an earlier target of 50%, Al-Falih said in Jeddah, Saudi Arabia. Al-Falih provided new details of the country’s solar power program as he joined other ministers to announce parts of a plan adopted by the cabinet on Monday to overhaul the country’s economy.

Saudi Arabia scales back renewable energy goal to favor gas

Moves by China to stockpile oil are providing a further boost to the tanker shipping market which is already buoyant due to global bargain-hunting caused by lower crude prices, shipowners said on Monday. Rates for supertankers transporting 2-million-barrel cargoes of crude surged to record highs in late December of over $110,000 a day and have stayed close to $60,000 a day in recent weeks, helped by firm appetite for cargoes and a tight supply of ships available for hire. China is expected to add 70-90 million barrels to its strategic crude oil purchases in 2016 as it takes advantage of low prices, a Reuters survey has shown.

China's oil stockpiling to boost tanker market: owners | Reuters

The oil market is turning its attention back to the U.S. as more of its rigs return to work following a surge to $50/bbl, raising concern that a production rebound may stifle crude’s recovery. “All eyes” are on the U.S. response to higher prices, Morgan Stanley said in a report Monday, adding that the trend in rig numbers will be closely watched in the coming months. Drillers returned nine oil rigs to operation last week, the biggest gain since December and only the second addition this year, according to Baker Hughes Inc., which has been compiling the data since 1944.

Oil near ‘sweet spot’ puts 70-year-old U.S. index back in focus