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RE: OPEC, for some quiet moments.. - admin - 09-07-2016

Evidence is mounting that, after a yearslong glut, the U.S. natural-gas market may be close to finding balance

End in Sight for U.S. Natural-Gas Glut - WSJ

Oil prices have continued to languish below $50 per barrel as a glut of crude oil and gasoline persist even as global demand continues to rise. The IEA still predicts that oil consumption will expand by another 1.4 million barrels per day in 2016, while production stagnates. That dynamic suggests that the market is converging towards some sort of balance, although the speed with which that takes place is hotly debated. But in the short-term the record levels of crude oil and refined products sitting in storage have prevented oil prices from rebounding.

Limited Spare Capacity Could Lead To An Oil Price Spike |

China is bothering energy analysts and investors. It’s bothering them because it has been on a buying spree for crude in the last two years but nobody knows for sure how much of it the world’s second-largest consumer of oil has stashed away in strategic and commercial tanks. At least, that was true up until this morning, when China graciously reported their oil strategic inventory reserves as of the first of the year—31.97 million tons, or between 33 and 36 days’ worth of China imports.

China Releases Secret Data On Crude Oil Inventories |

A drop in global shipping costs and competitive pricing of crude produced in North America is opening the door for U.S. crude exports to reach Asia-Pacific more economically than rival grades from elsewhere in the Atlantic basin, including the North Sea and West Africa, according to a comparison of delivered crude prices launched by global commodity market price reporting agency Argus this month.

U.S. crude exports competitive to Asia-Pacific, delivered prices show

RE: OPEC, for some quiet moments.. - admin - 09-08-2016

An international agreement to cap crude-oil output in a way that would restrict actual supply and support prices looks no nearer after the two largest producers pledged to cooperate. Most members of the Organization of Petroleum Exporting Countries that can raise production have indicated they will aim to do so, while others are already close to short-term limits.

Oil-market rescue seen no nearer amid Saudi-Russia ‘lip service’

One of the world’s biggest commodities traders doubts oil producers will be able to agree on curbing output to pull up prices. While it’s “easier” to have talks on freezing supplies now than it was at a meeting in Doha earlier this year, a deal is unlikely at a gathering in Algiers later this month, said David Fyfe, Gunvor Group Ltd.’s head of market research and analysis. Producers have pledged to discuss measures to help the market, but Saudi Arabia has said it sees no need to limit oil output and Russia expressed doubt that a cap is needed.

OPEC risks ‘crying wolf’ as oil trader Gunvor doubts accord

Iran hinted that it may soon drop its opposition to an oil-production freeze, with a senior official saying the OPEC member’s crude output is closing in on its pre-sanctions level and that limiting supply is “a political decision.” The Persian Gulf exporter is pumping 3.8 MMbpd, approaching its target of 4 MMbpd, Mohsen Ghamsari, director for international affairs at the National Iranian Oil Co., said Wednesday at a conference in Singapore. He said earlier in the week that Iran could reach its target in two to three months.

Iran oil output near target means freeze is ‘political decision’

The U.S. Energy Information Administration bolstered its crude production outlook for 2016 and next year. The agency boosted its domestic output forecast for 2017 to 8.51 MMbpd from 8.31 MMbpd projected in August, according to its monthly Short-Term Energy Outlook released Tuesday. It raised its 2016 forecast to 8.77 MMbpd from 8.73 MMbpd.

EIA boosts U.S. oil production outlook

RE: OPEC, for some quiet moments.. - admin - 09-09-2016

The oil bulls are out again as one RBC oil expert sees oil heading about 50 percent higher over the next year. Last week, Crude oil fell nearly 7 percent, hitting a three week low of $43 on Thursday before rebounding a bit on Friday following the weaker than expected jobs report. While she believes oil prices will be volatile in the short term, RBC Capital Markets' global head of commodity strategy, Helima Croft, predicts that the commodity will rise as high as $60 in the year ahead.

Oil could be set for a serious comeback: RBC’s Croft

The largest oil traders are anticipating little relief to what has become the worst market slump in a generation. All but one of 15 senior oil traders and executives interviewed this week at the annual Asia-Pacific Petroleum Conference in Singapore expect crude to remain between $40 and $60 over the next 12 months. Brent crude has traded in that range for the past five months.

Biggest oil traders see another year of pain as glut endures

Oil extended gains after a government report showed that U.S. stockpiles plunged. Crude inventories fell 14.5 MMbbl, according to the Energy Information Administration. That was the biggest drop since January 1999. A 905,000-bbl gain was projected by analysts surveyed by Bloomberg before the release. Tropical Storm Hermine moved into the Gulf of Mexico on Aug. 28, disrupting shipping and output before moving northeast.

Oil extends gains after U.S. supplies tumble the most since 1999

A meeting in Algiers at the end of September between OPEC and Russia—which together pump more than half the world’s oil—has raised expectations that a deal could be struck to boost prices. Oil is still trading at half its 2014 level amid a persistent global oversupply. While a production decline in the U.S. has helped to curb the surplus and prices have risen more than 25% this year, swollen inventories across the globe have kept crude below $50/bbl, too low for many producers to balance their budgets.

Four scenarios for oil producers as they seek to boost prices

RE: OPEC, for some quiet moments.. - admin - 09-10-2016

Tropical storms and Hurricane Hermine combined to slow the movement of oil tankers and shut in offshore drilling, forcing the U.S. oil industry to dip into its massive oversupply at the highest rate for this time of year.

Oil prices surge as US burns through crude supply at record rate

Oil's struggles continue and according to one expert, investors shouldn't expect the commodity to break through $55 for a few years. The problem lies with the oil glut as supply continues to outpace demand. Despite recent optimism around talks between Russia and Saudi Arabia that could result in reduced output, Dennis Gartman, editor of The Gartman Letter, doesn't see the supply issue easing.

Oil’s not going above $55 for years, and here’s why: Gartman

As the world’s biggest crude producers stop short of taking action to address the global oversupply, output cuts by their largest customers are helping to mop up the glut. While Asia buys more oil than any other region, it also accounts for about 8 percent of supply and has been cutting back as crude’s collapse prompts a wave of spending reductions from China to Malaysia. Shrinking domestic production will mean a greater need for imports that may help support global oil prices.

World’s Biggest Crude Buyers Make Cuts the Oil Giants Won’t - Bloomberg

Iran's steep oil output growth has stalled in the past three months, new data showed, suggesting Tehran might be struggling to fulfill its plans to raise production to new highs while demanding to be excluded from any OPEC deals on supply curbs. Iran's oil output soared to 3.64 million barrels per day in June from an average of 2.84 million bpd in 2015 following the easing of Western sanctions on Tehran in January, adding to a global crude glut which has slashed oil prices.

Exclusive: Iranian oil output stagnates for third month amid OPEC bargaining | Reuters

RE: OPEC, for some quiet moments.. - admin - 09-13-2016

OPEC production stayed around record highs in August. The 14-member oil cartel saw output fall by about 23,000 barrels per day, to 33.2 million, in August, according to external sources cited in the OPEC Monthly Oil Market Report, released on Monday. But more interestingly, looking under the hood, the data showed that Saudi Arabia and Iran saw production rise, while Nigeria, Libya, Venezuela, and Iraq saw production drop, which you can see in the chart below. Notably, this data parallels the two camps within OPEC: one that has managed to weather lower oil prices so far, and one that has hit its "reckoning point" this year.

Oil production shows the split between OPEC members - Business Insider

As OPEC officials shuttle between Tehran, Moscow and Paris in preparation for an informal meeting in Algiers, the focus of their efforts appears to be moving from a production freeze to voluntary output caps. OPEC, led by Saudi Arabia, and other producers are considering a route to a deal in the Algerian capital this month that involves each country agreeing it won’t raise its production above a certain ceiling, instead of freezing at current levels. The option, one of the several under consideration, could be a way to overcome opposition from members including Iran by allowing them to join an agreement while fulfilling plans to boost production.

OPEC focus moves from freeze to output ceilings as unity sought

Oil trimmed its weekly gain after the biggest U.S. stockpile slump in 17 years was seen as a one-off caused by a tropical storm that disrupted imports and offshore production. Futures dropped 1.2% in New York, paring the weekly advance to 5.8%. Crude inventories fell 14.5 MMbbl last week, the biggest decline since January 1999, according to Energy Information Administration data Thursday. Imports tumbled 21% as Tropical Storm Hermine moved into the Gulf of Mexico on Aug. 28, disrupting shipping and output.

Oil trims weekly gain as U.S. stockpile plunge seen as one-off

Saudi Arabia told OPEC that its oil production dropped by 40,000 bpd in August to 10.63 MMbpd as the group debates a deal to curb output to shore up prices. The figures were submitted to the Organization of Petroleum Exporting Countries, according a person with knowledge of the data, who asked not to be identified because the information hadn’t yet been made public. The country’s output declined from an all-time high of 10.67 MMbopd in July, according to OPEC submissions.

Saudi oil output said to drop as OPEC debates production freeze

RE: OPEC, for some quiet moments.. - admin - 09-14-2016

Global oil demand growth is slowing at a faster pace than first thought, the International Energy Agency (IEA) said in its latest market update, warning that markets would have to wait "a while longer" for markets to rebalance. "Global oil demand growth is slowing at a faster pace than initially predicted. For 2016, a gain of 1.3 million barrels a day (mb/d) is expected," the IEA said in its September report published on Tuesday, equating to a downgrade of 100,000 barrels a day from its previous forecast.

IEA oil report: Rebalancing the market will take longer than we thought

Demand for gas from the Groningen field in the Netherlands will "fall sharply from 2020" as production is reduced, Economy Minister Henk Kamp said in a letter to the Dutch parliament released on Tuesday. The Netherlands has been forced to scale back production by roughly half at Groningen, which once met 10% of European Union gas requirements, to 24 billion cubic metres per year due to damage from earthquakes.

Groningen gas demand expected to fall

From Norway to the Bahamas, from Algeria to Australia. Ultra-low crude prices combined with cheap shipping rates are encouraging a host of exotic new oil trading routes that wouldn't look out of place in the latest travel brochures. Oil exporters are tapping into new markets as they attempt to work through a glut in crude supplies that’s reshaping oil market economics and redrawing decades-old shipping routes.

Oil map redrawn as cheap tankers make crazy voyages profitable

Since the accident at Fukushima Daiichi in March 2011 and the subsequent shutdown of nuclear reactors in Japan, five reactors have received approval to restart operations under the new safety standards imposed by Japan's Nuclear Regulation Authority (NRA). Only three of those reactors are currently operating. Applications for the restart of 21 other reactors, including 1 under construction, are under review by the NRA. Some reactors that meet the new NRA safety standards and have been approved to restart continue to face legal or political opposition that may delay or forestall their restart. After the Fukushima accident, all 54 of Japan's reactors were shut down. Twelve reactors totaling 7.2 gigawatts (GW) were permanently closed.

Five and a half years after Fukushima, 3 of Japan’s 54 nuclear reactors are operating - Today in Energy - U.S. Energy Information Administration (EIA)

RE: OPEC, for some quiet moments.. - admin - 09-16-2016

China’s crude oil output dropped to the lowest in more than six years as the country’s state-run energy giants continued to pump less from aging, high-cost fields. Production during August in the world’s largest energy consumer dropped 9.9 percent from a year ago to 16.45 million tons, according to data from the National Bureau of Statistics on Tuesday. That’s about 3.89 million barrels a day, the lowest since December 2009, according to Bloomberg calculations. Output is down 5.7 percent during the first eight months of the year.

China Crude Output Drops to 6-Year Low as Giants Shut Fields - Bloomberg

At least 135 oil and gas companies are still in deep trouble, according to Debtwire Analytics, a New York company that studies debt and predicts coming bankruptcies and restructuring. On top of Debtwire’s newest list: Comstock Resources, the Frisco-based exploration company focused largely on natural gas. From 2009 to 2011, during the country’s shale boom, Comstock dumped hundreds of millions of dollars into the development of its Cotton Valley shale fields in East Texas, among others, according to regulatory filings.

135 oil companies are on edge of bankruptcy. So why is that good news? | Fuel Fix

The surplus in global oil markets will last for longer than previously thought, persisting into late 2017, as demand growth slumps and supply proves resilient, the International Energy Agency said. World oil stockpiles will continue to accumulate through 2017, a fourth consecutive year of oversupply, according to the IEA. Consumption growth sagged to a two-year low in the third quarter as demand faltered in China and India, while record output from OPEC’s Gulf members is compounding the glut, said the agency, which just last month saw the market returning to equilibrium this year.

IEA sees oil oversupply persisting in 2017

Kazakhstan’s giant Kashagan oil field has taken 16 years and more than $50 billion to bring to the verge of production. It could take another decade to reach its potential, with initial output at half the forecast level. Eni SpA, working with partners Royal Dutch Shell Plc, Total SA and the Kazakh state, expects Kashagan to start in October and pump 370,000 barrels a day within a year. Consulting firm Wood Mackenzie Ltd. contends the field will produce only about 154,000 barrels a day in 2017 and won’t get anywhere near targeted volumes until the next decade.

Vast Kazakh Oil Field Seen Taking Another Decade to Reach Target - Bloomberg

RE: OPEC, for some quiet moments.. - admin - 09-18-2016

Amid the most enduring global oil glut in decades, two OPEC crude producers whose supplies have been crushed by domestic conflicts are preparing to add hundreds of thousands of barrels to world markets within weeks. Libya’s state oil company on Wednesday lifted curbs on crude sales from the ports of Ras Lanuf, Es Sider and Zueitina, potentially unlocking 300,000 bpd of supply. In Nigeria, Exxon Mobil Corp. was said to be ready to resume shipments of Qua Iboe crude, the country’s biggest export grade, which averaged about 340,000 bpd in shipments last year, according to Bloomberg estimates. On top of that, a second Nigerian grade operated by Royal Dutch Shell Plc is scheduled to restart about 200,000 bopd of flow within days.

Global oil glut set to worsen as Nigeria, Libya fields restart

The International Energy Agency said wells are depleting at an average rate of 9pc annually. Drillers are not finding enough oil to replace these barrels, preparing the ground for an oil price spike in the future and raising serious questions about energy security. “There is evidence that cuts in exploration activities have already resulted in a dramatic decline in new oil discoveries, dropping to levels not seen in the last 60 years,” said the IEA’s World Energy Investment 2016 report. The drop is so drastic that the effects are likely to overwhelm slow gains from fuel efficiency and the switch to electric cars, at least for the rest of this decade. Much of the steepest fall in spending is in stable political areas. Britain’s North Sea investment has shrivelled to £1bn from an average of £8bn over the last five years.  Spending in Canadian fields has plummeted by 62pc. This decline tightens the future stranglehold of the OPEC cartel and Russia on global oil supplies, although the consequences will not be obvious until it is too late. The big national oil companies in the Gulf have costs of $10 a barrel or less, and most have kept up investment.

Oil investment crashes to 60-year low, incubating next energy shock

Don’t count on a big rally in crude oil, said Jeff Currie, head of commodities research at Goldman Sachs Group Inc. Or any rally, for that matter. Two years into an oil rout that saw West Texas Intermediate oil fall to about $26 a barrel in February, the risk is “to the downside” because there aren’t any clear catalysts to push up prices, Currie said in an interview in Lake Louise, Alberta. For the next 12 months, he said, oil is likely to trade in the $45-$50 range.

Goldman’s Currie Sees Oil Staying Below $50 as Surplus Lingers - Bloomberg

After almost two years in recession, the country's rainy day fund has shrunk to just $32.2 billion this month, according to the Russian Finance Ministry. It was $91.7 billion in September 2014, just before oil prices started to collapse. And it's getting worse. Analysts expect the fund will shrink to just $15 billion by the end of this year and dry up completely soon after that. "At the current rate, the fund would be depleted in mid-2017, perhaps a few months later," Ondrej Schneider, chief economist at the Institute of International Finance, wrote in a note this week. The government's reserve fund is designed to cover shortfalls in the national budget at times of low oil and gas revenues. Russia's 2016 budget is based on the assumption the country would be able to sell its oil for $50 per barrel. But the average oil price in the first eight months of the year was less than $43 per barrel. Oil now makes up just 37% of all government revenues, compared to roughly 50% just two years ago.

Russia is seriously running out of cash - Sep. 16, 2016

RE: OPEC, for some quiet moments.. - admin - 09-20-2016

It’s been a tough couple of years for Big Oil. Battered by plunging prices, the oil majors have seen their profits sink and their prospects darken. BP lost $3.3 billion in 2015; Shell lost nearly $7.5 billion in the third quarter of 2015 alone, its biggest loss in a decade. Even mighty ExxonMobil saw its profit shrink by half in 2015 from the previous year. The usual oil company response to a period of shrinking profits is to rein in new drilling, cut costs, and wait for prices to rise again. And recent months have seen a modest recovery in oil prices. But a new report from the influential U.K. think tank Chatham House says the old playbook isn’t going to work this time. The problems go way beyond rock-bottom oil prices, and they are unlikely to vanish in a hoped-for recovery. The oil majors, the report says, “cannot assume that, as in the past, all they need to survive is to wait for crude prices to resume an upward direction. The oil markets are going through fundamental structural changes driven by a technological revolution and geopolitical shifts,” and the business model that has worked for the last quarter-century is broken.

Big Oil Companies Have Already Become Dinosaurs

Oil companies longing for the glory days of ultra-high crude prices might wish to think again. The rising oil prices that came to characterize energy markets in the mid-2000s, and which culminated in a record near-$150/bbl in 2008, were not the windfall investors might have imagined, according to a new note from Goldman Sachs Group Inc. Instead, returns for major oil companies such as BP Plc, Royal Dutch Shell Plc, and Exxon Mobil Corp., actually declined between 2005 and 2014 as measured by cash return on capital invested.

Big Oil was never that big a money-maker, Goldman Sachs says

McKinsey Energy Insights (MEI), a data and analytics specialist, forecasts that it will take more than six months for the oil markets to fully rebalance. In its latest research, MEI suggests that the pace and timing of an oil price recovery depends on four key drivers in the short-term: GDP growth, decline in producing fields, slowdown in U.S. light tight oil (LTO) production and OPEC Gulf state behavior, in particular, Iran and Saudi Arabia.

Oil seen recovering but glut will persist into 2017

OPEC members are close to reaching an agreement on how to stabilize the market, Venezuelan President Nicolas Maduro said after speaking to his counterparts from Iran and Ecuador. Maduro held “positive discussions” with fellow members of the Organization of Petroleum Exporting Countries who attended the Summit of the Non-Aligned Movement, he said Sunday at a press conference following the event, in which 15 heads of state gathered in the South American country. Maduro said he spoke with Ecuadorian President Rafael Correa and Iranian President Hassan Rouhani at the summit and that he hopes an accord can be reached by the end of the month.

OPEC ‘very close’ to agreement to stabilize market, Venezuelan president says

RE: OPEC, for some quiet moments.. - admin - 09-21-2016

Major oil producers will rely on acquisitions for about half their reserve replacement in the future after cutting exploration budgets to weather the crude-price collapse, according to Wood Mackenzie. Big oil companies are no longer trying to replace all their production through conventional exploration, the energy consulting company said in a report published Tuesday.

Majors must count on M&A to replenish reserves, WoodMac says

Petroleo Brasileiro reduced investments and said it will sell more assets in its latest business plan as it looks to downsize operations and slash the industry’s biggest debt load. The 2017-2021 business plan, the first drafted under CEO Pedro Parente, focuses on accelerating debt reduction and adapting to low international oil prices amid Brazil’s deepest two-year recession on record, the state-controlled company said Tuesday. Petrobras, as the Rio de Janeiro-based producer is known, has reduced its five-year investment goal to $74.1 billion, down from $98.4 billion in the most recent plan and $236.5 billion in the five-year plan it announced in 2012.

Petrobras cuts five-year spending plan 25% to $74 billion

Exxon Mobil Corp. for years has kept the value of its huge oil and gas reserves steady in the face of slumping energy prices while rivals since 2014 have slashed $200 billion off their combined holdings. Analysts and investors have taken notice, and now a Wall Street antagonist, New York Attorney General Eric Schneiderman, is examining accounting practices at the nation’s largest energy company, according to people familiar with the matter.

Exxon’s Accounting Practices Are Investigated - WSJ

India’s crude oil imports peaked in August as refineries stepped up purchases to meet record domestic fuel consumption. Indian refiners imported 18.81 million metric tons (about 4.45 million barrels a day) of crude oil during the month, a 9.1 percent increase over last year, according to the oil ministry’s Petroleum Planning & Analysis Cell. That is the highest level in data on the PPAC’s website going back to April 2009.

India’s Oil Imports Touch Highest on Record as Demand Booms - Bloomberg