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RE: OPEC, for some quiet moments.. - admin - 10-06-2016

The biggest player in the Permian basin, America's most coveted oil field, thinks rig counts in the region are poised for explosive growth. In an interview with Bloomberg, Pioneer Natural Resources Co. CEO Scott Sheffield predicted that 100 oil rigs will be added in the area considered to be U.S. shale drillers' version of prime real estate over the next year. Bloomberg Intelligence Analysts Vincent Piazza and Daniel Krauser note that Pioneer has the highest gross production of any driller in the Spraberry and Wolfcamp formations in the Texan oil field. The shale revolution sparked a frenzied rise in U.S. crude production that eventually drove oil prices to their lowest level in more than a decade earlier this year. While prices have since recovered, they've failed to sustainably hold above $50/bbl—and any advances may continue to be capped if drillers boost activity in the productive Permian basin.

Top Permian oil producer says rig counts in the region are going to soar

OPEC finally blinked in its two-year price war with U.S. oil producers. Whether that translates into a financial victory for the American shale industry remains to be seen. Oil prices and the shares of U.S. drillers kept climbing on Thursday, a day after the Organization of Petroleum Exporting Countries promised its first production cut in eight years. The U.S. companies will need oil to hold above $50/bbl for months before they commit to more spending, according to analysts at firms including S&P Global Platts and Oppenheimer & Co.

OPEC ‘capitulation’ leaves challenges for U.S. shale drillers

Oil’s rally will stall at $55/bbl as U.S. shale drillers get back to work and a “wall of supply” from investments made over the past decade hits the market, Goldman Sachs Group said. Global oil markets are set to remain “very oversupplied” in 2017 amid the return of disrupted output in Nigeria and Libya, resilient U.S. shale production and the start of major projects commissioned over the past 10 years, Goldman’s head of commodities research Jeff Currie said in a Bloomberg television interview.

‘Wall of supply’ to block oil rally at $55, Goldman Sachs says

Saudi Arabia, the world’s largest crude exporter, cut pricing for November oil sales to Asia and Northwest Europe and for most grades to other regions amid a global supply glut. State-owned Saudi Arabian Oil Co., known as Saudi Aramco, lowered its official pricing for Arab Light crude to Asia by 25 cents/bbl to 45 cents less than the regional benchmark, it said Wednesday in an emailed statement.

Saudi Aramco cuts pricing for oil sales to Asia as glut persists




RE: OPEC, for some quiet moments.. - admin - 10-07-2016

U.S. liquefied natural gas was supposed to go mainly to Asia and Europe, lured by prices as much as four times higher than those at home. So far, South America has been the destination of choice. Thanks to a global glut that depressed prices, Cheniere Energy Inc. has sent more than half of the LNG tankers from its Sabine Pass terminal in Louisiana to South America.

South America becomes home for U.S. shale gas amid rising demand

For OPEC’s production deal to work, it was always clear that Saudi Arabia would need to make sacrifices. The world’s largest oil exporter faces the risk the costs will keep getting bigger. To bring output to the top end of the 32.5-MMbopd to 33-MMbopd range agreed to by the Organization of Petroleum Exporting Countries, the Saudis would only need to make the typical end-of-summer reductions as local demand tapers off, according to Citigroup. If Nigeria and Libya restore production, the kingdom may need to cut twice as much, Petromatrix GmbH estimates. U.S. shale drillers also stand ready to fill any supply gap.

Saudis risk more pain from OPEC reversal as rivals ramp up

Encana Corp., one of Canada’s largest energy explorers, is increasing capital spending by as much as 64% as it seeks to pull more crude out of America’s most prolific oil field. The Calgary-based driller plans to spend $1.4 billion to $1.8 billion on its capital program next year, CEO Doug Suttles said in an interview late Tuesday. That’s up from the $1.1 billion-to-$1.2 billion range the company estimated last month for spending this year.

Encana to boost spending with eye on biggest U.S. oil patch

Brazil’s Congress voted on Wednesday night to open up its pre-salt oil fields to foreign investors by scrapping Petroleo Brasileiro SA’s obligation to be the area’s sole operator. The legislation was approved by a 292-to-101 vote, following a bad-tempered debate during which opponents, many dressed in the orange jumpsuits of the state-controlled oil company, repeatedly attempted to delay proceedings. Various amendments to the legislation will be debated next week before President Michel Temer signs it into law.

Brazil Opens Oil Fields to Foreign Firms in Major Policy Shift - Bloomberg




RE: OPEC, for some quiet moments.. - admin - 10-08-2016

OPEC’s most senior official will discuss the possible participation of Russia in an OPEC production cut next week, officials in the group said this week, as the cartel seeks to bolster a landmark deal in Algiers.

OPEC Chief to Discuss Non-OPEC Production Cut With Russia - WSJ

Saudi Arabia’s deputy crown prince sent his energy minister to an OPEC meeting last month with a difficult mission: Make a deal with rival Iran but don’t compromise the kingdom’s ability to fight for oil-market share, people familiar with the matter said.

How a Saudi Royal Sparked an OPEC Deal and Sent Oil Prices Past $50 - WSJ

Saudi Aramco is preparing to give investors unprecedented access to its accounts, lifting the lid on the world’s biggest oil producer ahead of a planned initial public offering in 2018. Saudi Arabia’s state-controlled oil company is busy overhauling its accounts so as to publish figures for its 2017 financial year in an industry-friendly format, said four people close to the company. It is also planning to show investors backdated accounts in this format for its 2015 and 2016 financial years, which could be released as soon as 2017.

Saudi Aramco prepares to publish its accounts for first time

A pile up of tankers waiting in the North Sea suggests a glut is building again in the market where benchmark crude is traded, highlighting the task facing OPEC as it seeks to rein in a global glut.  At least 10 tankers are at or near two locations off the U.K. coast where they must wait to transfer their cargoes, according to vessel-tracking information compiled by Bloomberg. It is rare for more than one or two tankers to remain at the sites -- England’s Southwold and Scotland’s Scapa Flow -- for multiple days, historical data show. The current increase is also happening amid seasonal work at the U.K.’s largest oil field.

Oil Tankers Piling Up in North Sea Show Glut Facing OPEC - Bloomberg




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

Oil’s rally will stall at $55 a barrel as U.S. shale drillers get back to work and a “wall of supply” from investments made over the past decade hits the market, Goldman Sachs Group Inc. said. Global oil markets are set to remain “very oversupplied” in 2017 amid the return of disrupted output in Nigeria and Libya, resilient U.S. shale production and the start of major projects commissioned over the past 10 years, Goldman’s head of commodities research Jeff Currie said in a Bloomberg television interview.

'Wall of Supply' to Block Oil Rally at $55, Goldman Sachs Says

OPEC crude production rose to a record in September, according to a Bloomberg survey, driven by returning output from Libya and Nigeria, members who will likely be exempt from last week’s deal to cut supply. Overall production from the Organization of Petroleum Exporting Countries increased by 170,000 barrels a day from the previous month to 33.75 million barrels a day, the survey of analysts, oil companies and ship-tracking data showed. Nigeria and Libya added a combined 190,000 barrels a day which compensated for a drop in output from Saudi Arabia and Angola.

OPEC Crude Output Rises to Record as Nigeria, Libya Boost Supply - Bloomberg

Oil and gas producers have worked diligently to reduce the cost of their operations following the fall in crude oil prices at the end of 2014. Without $100 oil, E&P companies the world over were forced to find ways to cut costs in order to make their operations profitable. On the whole, producers have reduced opex per barrel by 9 percent, according to information from Wood Mackenzie, but a closer look shows that this is in large part due to Russia skewing the numbers. Russia has reduced opex by 30 percent, far exceeding the average. If it is removed from the data set, the average global reduction in opex is just 4 percent, and it still varies greatly by region. Canada has reduced opex by 18 percent, while Wood Mackenzie has U.S. onshore opex unchanged between 2014 and 2015.

How Sanctions Have Benefited Russian Oil | OilPrice.com

Forecasting oil prices has proven to be a difficult exercise this year, with investment banks, ratings agencies and national and supranational organisations left baffled by how the market price has fluctuated throughout 2016. Barclays are one such investment bank who have been wide of the mark with oil price predictions, forecasting Brent Crude to bottom at $37 per barrel in January, $9 above the actual $28 price that was seen.

2016 Oil Price Forecasts: Why Is Everyone Getting It Wrong | OilPrice.com




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

Explorers added oil rigs in the U.S. for a sixth consecutive week after OPEC’s pledge to cut output livened up the crude market, allowing producers to lock in higher prices with hedge contracts. Rigs targeting crude in the U.S. rose by 3 to 428, adding to the largest level of work since February. Producers haven’t pulled back activity since the end of June. Natural gas rigs fell by 2 to 94 this week, while miscellaneous rigs rose by 1 to 2, bringing the total for oil and gas up by 2 to 524.

Shale explorers boost activity further after OPEC’s ‘lifeline’

Russia, the world’s largest energy exporter, is willing to consider freezing or even cutting oil output in cooperation with OPEC, said President Vladimir Putin. Speaking at the World Energy Congress in Istanbul Monday, Putin said he hoped OPEC would agree on limits to its crude production in November and that Russia was ready to support that decision. Russia will continue to be a reliable energy supplier, he said.

Putin Says Russia Ready to Freeze or Even Cut Output With OPEC - Bloomberg

Four wells are better than none if you’re trying to assess whether your country could host the next shale boom—but it’s not nearly enough. Cuadrilla Resources on Thursday won the right to horizontally drill and hydraulically fracture the wells in northern England after a two-and-a-half year battle. If it can prove it won’t cause too many traffic problems, it could also get permission to drill another four. While the go-ahead for Cuadrilla is a chink in the armor that has so far stymied attempts to produce shale gas in the UK, it’s nowhere close to what the country needs to replicate U.S. success in exploiting shale gas reserves using fracing, according to analysts and academics.

As UK gives nod to fracing, a U.S.-style shale boom remains far away

Saudi Arabia's foreign exchange reserves have fallen 20 percent over the last two years, to $587 billion through March, the last month for which IMF data were available. On Monday, the kingdom said it would cut ministers' pay by 20 percent and pare perks for public sector employees, who make up two-thirds of the country's workforce, Reuters reported.

OPEC deal shows Saudi oil strategy has backfired, says John Kilduff




RE: OPEC, for some quiet moments.. - admin - 10-11-2016

The oil-price could recover to $60/bbl by the end of 2016, said Saudi Arabia’s Energy Minister, just weeks after agreeing to cut supply for the first time in eight years. The world’s largest crude exporter will work with other producers to determine output caps and is “optimistic” about reaching a deal by the end of November, although OPEC shouldn’t take action that would shock the oil market, Khalid Al-Falih said Monday. Many non-OPEC producers have expressed a willingness to cooperate and the minister said he will meet his Russian counterpart in the next couple of days.

Saudi minister says oil at $60 by year-end not ‘unthinkable’

Australia Pacific LNG confirmed Monday that it had produced the equivalent of a cargo of liquefied natural gas from the second train at its LNG facility on Curtis Island near Gladstone, Queensland. Page Maxson, CEO of Australia Pacific LNG, said the second train had produced 150,000 m3 of LNG, equivalent to the volume required to fill an LNG ship.

Australia Pacific LNG's second train starts production

Oil rose to a one-year high in London as Saudi Arabia expressed optimism that OPEC will work out a deal with other producers and Russia said it would back an accord. Brent crude rose as much as 3.5%, erasing a 1.2% drop in early trading. Many other producers have expressed their readiness to work with the Organization of Petroleum Exporting Countries, Saudi Minister of Energy and Industry Khalid Al-Falih said in Istanbul, where he’s attending the World Energy Congress. He will meet in the next couple of days with his Russian counterpart, who said on Monday his country is ready for an accord with OPEC after the group’s members agree on quotas.

Brent hits one-year high as optimism grows over output deal

Oil may need to rally further before China’s producers make enough money to reverse a drop in output to the lowest in more than six years. Production by the world’s biggest consumer after the U.S. will stabilize with prices around $50/bbl and may not rebound until they are above $60, according to Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein. China, the world’s fifth-largest producer in 2015, pumped 5.7% less crude in the first eight months of the year as state-run companies shut fields too expensive to operate amid the worst price crash in a generation.

China oil output rebound seen unlikely until prices top $60




RE: OPEC, for some quiet moments.. - admin - 10-12-2016

The Australia Pacific liquefied natural gas (LNG) plant, run by ConocoPhillips , confirmed on Monday that production had begun in the second of its two units. "The second train is up and running, enabling our LNG Facility on Curtis Island to deliver commercial quantities of LNG at sustained output from both trains," Australia Pacific LNG Chief Executive Page Maxson said in a statement.

Australia Pacific LNG second unit starts producing | Reuters

Oil prices on Tuesday retreated from one-year highs, after OPEC said it was trying to reach a global agreement to cap production for at least six months amid doubts about how much that would reduce a crude glut. The International Energy Agency, the energy watchdog of the West, said it was unclear how rapidly global oil supply could fall in line with demand even if the Organization of the Petroleum Exporting Countries and major producer Russia agreed on a steep output cut. [IEA/M]

Oil down on OPEC doubts as it floats six-month output cap plan | Reuters

Saudi Arabia, the biggest oil exporter, sees its crude reserves of 266.5 billion barrels lasting 70 more years and hasn’t sought an independent consultant to review the figures, according to a bond prospectus seen by Bloomberg News. The nation’s wealth is based mainly on oil, with crude sales accounting for 75 percent of total export earnings, according to the prospectus. Saudi Arabia plans to sell at least $10 billion in bonds maturing in five, 10 and 30 years, and it disclosed plans to hold investor meetings in London, Los Angeles, Boston and New York starting on Wednesday.

Saudi Arabia Sees Its Oil Reserves Lasting Another 70 Years - Bloomberg

Due to the slump in oil prices, OPEC producers have lost more than US$1 trillion in revenues over the past three years, OPEC Secretary General Mohammad Barkindo has told reporters in Washington DC.

OPEC Chief Says Cartel Lost US$1 Trillion To Oil Price Bust | OilPrice.com




RE: OPEC, for some quiet moments.. - admin - 10-14-2016

At the G20 meeting in Hangzou, China, President Putin met with Deputy Crown Prince Salmon of Saudi Arabia, the eldest son of the Saudi King and his country's Defense Minister. The Russians, despite having “…a firm alliance with Iran in hand, are now cementing a strategic oil partnership with Saudi Arabia.” They met again in Vienna, where the Saudis "agreed to narrow their differences [over output] with Iran to about 600,000 barrels per day". For nearly 22 months, Russia and Saudi Arabia have been competing for market share, with the Saudis producing over 10 million barrels per day and the Russians over 11 million. The competition has all oil producers suffering budget crises. It seems like they've finally wrestled each other into a draw. It didn't hurt that Russia had been seriously cultivating the other Gulf Kingdoms for support.

Putin just upped Russia's status in global oil markets - Business Insider

Hedge fund manager Pierre Andurand said he expects crude oil prices to reach $60/bbl over the next three months and $70 next year as Saudi Arabia agrees to cut production and helps rebalance the market. Saudi Arabia recognizes "a prolonged period of low prices is endangering longer term supplies," Andurand, who foresaw oil’s plunge in 2014, said in an investor note. With reduced supply, the kingdom hopes oil prices will rise sooner, thus avoiding a future supply shortfall amid current global cuts in capital spending, he wrote.

Oil seen at $70 next year as OPEC cuts speed supply slide

Oil retreated after U.S. government data showed inventories climbed for the first time since August. Crude stockpiles rose 4.85 MMbbl last week, according to the Energy Information Administration. That’s more than twice the 2 MMbbl gain forecast by analysts surveyed by Bloomberg, and well above a 2.7 MMbbl increase reported Wednesday by the industry-funded American Petroleum Institute.

U.S. crude stocks rise for first time in six weeks

"The big takeaway is how into a corner the Saudis have backed themselves. This whole plan has backfired on them. They're going to be bearing most of the cutback if they pull it off, and they've had to really kowtow to the Iranians in this whole thing," Kilduff told CNBC's "Power Lunch." . Ahead of the meeting in Agiers, Saudi Arabia softened its stance, reportedly offering to cut its own production if Iran agreed to freeze its current output at roughly 3.6 million barrels a day. On Tuesday, the kingdom became even more accommodating. Saudi Energy Minister Khalid al-Falih said Iran, along with Libya and Nigeria, could be allowed to pump "at maximum levels that make sense," even as other producers limited production, Reuters reported.

OPEC deal shows Saudi oil strategy has backfired, says John Kilduff




RE: OPEC, for some quiet moments.. - admin - 10-15-2016

North Dakota oil production dropped below one million barrels a day in August for the first time in more than two years as depressed prices forced explorers to cut back. Production from the state’s portion of the Williston Basin fell to 981,000 barrels a day, the lowest since March 2014, according to a report by the North Dakota Pipeline Authority. The state’s crude output has shrunk from a peak of more than 1.23 million barrels a day in December of that year.

North Dakota Is Pumping Oil at the Slowest Pace in Two Years - Bloomberg

One of the biggest threats to an extended rally in U.S. natural gas prices is lurking in the oil patch. Gas production in most of the country has dropped amid cost-cutting. Not so in the Permian Basin, the nation’s biggest crude reservoir and one of the few places where drilling has remained profitable. Permian drillers led by Occidental Petroleum Corp. and Pioneer Natural Resources Co. are pumping more oil as prices rise, pushing natural gas extracted as a byproduct from the West Texas play to almost 7 billion cubic feet a day, Bloomberg Intelligence data show. That’s about 8 percent of U.S. supply.

Oil Rebound’s Dirty Little Secret Threatens U.S. Gas Bulls - Bloomberg

Kashagan, a vast oil field in the Caspian Sea, sent its first crude for export after about 16 years in development and more than $50 billion of investments. The venture loaded 26,500 metric tons of crude for export into the country’s pipelines, Kazakhstan’s Energy Ministry said in an e-mailed statement Friday. Of that, 7,700 tons was sent to the Caspian Pipeline Consortium. Reaching stable production will take “some time” as commissioning work continues both offshore and onshore, the ministry said.

Oil From $50 Billion Kashagan Field Starts Flowing to Export - Bloomberg

Now, I just got word that no less than six executives at this company are using their own money to buy their company's stock at market.

OilPrice.com Special Investor Report




RE: OPEC, for some quiet moments.. - admin - 10-17-2016

Royal Dutch Shell Plc is considering a sale of its stake in a Malaysian liquefied natural gas export plant, which could fetch more than $1 billion, people familiar with the matter said. The Anglo-Dutch energy giant is gauging interest in its 15% stake in MLNG Tiga Sdn., which owns an LNG terminal in Sarawak on the island of Borneo. Malaysia’s state-owned Petroliam Nasional Bhd., which holds 60% of MLNG Tiga, has pre-emptive rights on the stake.

Shell said to weigh sale of over $1 billion Malaysia LNG stake

Don’t expect a major ramp-up of oil production in Oklahoma’s hot new shale plays any time soon, even as companies invest billions of dollars in the region, said Newfield Exploration Co.’s CEO. Producers need more exploration time and a higher oil price before they can begin accelerating drilling in the SCOOP and STACK oil formations, Lee Boothby said in an interview in Oklahoma City Thursday. Newfield may eventually sell its Bakken shale assets in North Dakota as one way of financing development, he said.

Newfield CEO sees cautious approach on ‘huge’ Oklahoma oil find

One of the biggest threats to an extended rally in U.S. natural gas prices is lurking in the oil patch. Gas production in most of the country has dropped amid cost-cutting. Not so in the Permian basin, the nation’s biggest crude reservoir and one of the few places where drilling has remained profitable. Permian drillers, led by Occidental Petroleum and Pioneer Natural Resources, are pumping more oil as prices rise, pushing natural gas extracted as a byproduct from the West Texas play to almost 7 Bcfgd, Bloomberg Intelligence data show. That’s about 8% of U.S. supply.

Oil rebound’s dirty little secret threatens U.S. gas bulls

Increased drilling by shale producers buoyed by higher prices will slow the decline in U.S. crude production, a government forecast showed. The Energy Information Administration (EIA) raised its outlook for U.S. crude production next year, which now is estimated to fall 1.6% from 2016, compared to the 3% decline it predicted last month in its monthly Short-Term Energy Outlook. The forecast released Thursday takes into account a surge in drilling activity as crude prices rose 90% from lows in February.

U.S. oil output slide seen slowing as shale drillers return