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RE: OPEC, for some quiet moments.. - admin - 12-23-2016

Oil prices are set to recover next year as OPEC fulfills its agreement to cut output, halting the slump that battered the global oil industry, Saudi Arabia’s energy minister said. The kingdom sees no need for additional production cuts on top of the curbs pledged in recent weeks by OPEC and 11 other oil-producing countries, Khalid Al-Falih said at a ceremony to announce the annual budget in Riyadh. The intervention is intended only to “nudge along” the re-balancing of an oversupplied global oil market, he said in a Bloomberg interview.

Saudi Arabia’s energy minister sees oil recovering on OPEC cuts

Exxon Mobil Corp.’s offer to raise its bid for InterOil Corp. to as high as $3.9 billion isn’t enough to pacify the deal’s most prominent opponent. InterOil founder Phil Mulacek, who left in 2013 and remains the third-largest shareholder, said Exxon still isn’t offering shareholders full value for InterOil’s hydrocarbon reserves in Papua New Guinea. Exxon last week increased the amount of gas reserves for which it would pay a bonus to shareholders, essentially boosting its maximum offer by 9.8%.

Exxon foe says bigger InterOil offer still isn’t good enough

Saudi Arabia expects oil revenue to jump by 46% next year after a deal between the kingdom and other producers to curb output drove up global prices. The world’s top oil exporter expects to collect 480 billion riyals ($128 billion) from oil sales in 2017, compared with 329 billion this year, the Finance Ministry said in a budget statement Thursday. Non-oil revenue will climb 6.5% next year to 212 billion riyals, it said.

Saudi Arabia sees oil revenue rising 46% in 2017 as prices climb

Britain's High Court ruled on Tuesday that a fracking permit awarded by a local council to developer Third Energy was legal, after it was challenged by environmental campaigners, opening the way to shale gas extraction in the UK. Substantial amounts of shale gas are estimated to be trapped in underground rocks and the British government wants to exploit it to help offset declining North Sea oil and gas output, create some 64,000 jobs and help economic growth.

RPT-UPDATE 1-British shale gas gets boost from court ruling on permit | Reuters

RE: OPEC, for some quiet moments.. - admin - 12-27-2016

Oil explorers added rigs for the eighth straight week, extending a ramp-up of activity in the U.S. shale patch as prices hover near $53/bbl. Rigs targeting crude in the U.S. rose by 13 to 523 this week, Baker Hughes said Friday. Drillers have added 207 rigs since the count hit a seven-year low on May 27.

U.S. operators extend revival as oil trades near 17-month high

Oil rose to the highest close in more than a week as Iraq signaled that it would adhere to the OPEC production targets. Futures climbed 0.9% in New York. Iraq said most international oil companies working in the country, along with the semi-autonomous Kurdish region, have agreed to cut crude output to fulfill an OPEC accord that takes effect in January. Saudi Arabia, the world’s biggest oil exporter, said its budget deficit will fall next year. Prices fell 1.5% on Wednesday after a report showed U.S. crude supplies rose by 2.26 MMbbl last week.

Oil advances as Iraq signals compliance with output accord

A breakthrough in international strategy and the election of ExxonMobil CEO Tillerson as U.S. Secretary of State could stand to benefit Rosneft and Russia significantly. Valentina Kretzschmar, a Wood Mackenzie analyst, sees the recent privatization deal in which Glencore and the Qatar Investment authority bought a 19.5 percent stake in the Russian oil major as ‘’a tectonic shift in the way the country is perceived by investors’’. Wood Mac expects an acceleration in the foreign expansion of Rosneft, which has the ambition to become a major international player like ExxonMobil or Shell. The Russian oil giant has suffered from the international sanctions that have been imposed on Russia and some of its biggest companies and banks in the wake of its 2014 military campaign in Crimea.

Rosneft To Ramp Up Global Expansion Under Trump |

Oil major Royal Dutch Shell is facing rising pressure from shareholders to shield its business from climate change threats and to play a bigger role in lowering global carbon emissions. Activist shareholder group Follow This, representing some of Shell's retail shareholders, will put forward a resolution at next year's annual shareholder meeting requesting Shell to set targets for annual greenhouse gas emissions reductions, its founder told Reuters.

Activist investors are pushing Shell to act on Climate Change before it's too late - Business Insider

RE: OPEC, for some quiet moments.. - admin - 12-27-2016

At 8.8 million barrels a day, the U.S. is already pumping almost as much crude as two years ago, with just a third of the rigs it operated at the peak, data from Baker Hughes Inc. and the Energy Information Administration show. Since May, drillers have added about 200 rigs, taking advantage of rising prices as talk of an OPEC supply cut circulated.

Shale Specter Haunts OPEC’s Feast as Oil Seen Rallying Into 2017 - Bloomberg

With OPEC’s oil revenues slumping to $518 billion last year from $956 billion in 2014, the group may have had little choice on the cutbacks. Even Saudi Arabia, the group’s biggest producer, has found itself burning through billions in cash reserves, slashing public-sector wages and tapping bond markets to plug a budget deficit.

Shale Specter Haunts OPEC’s Feast as Oil Seen Rallying Into 2017 - Bloomberg

The biggest threat to OPEC’s plan could come from within. Nigeria and Libya got exemptions because conflicts in both countries damaged their output. If each nation reached its potential next year, then their additional barrels would almost wipe out the producer group’s supply cuts. Iran too didn’t have to make cuts from the same starting point as other OPEC countries. Several years of sanctions lowered its production and revenues from exports and the country argued that it needed the right to make up for that period. Another challenge could come from the dozens of U.S. drillers who survived the rout by becoming leaner and more efficient. After three years of turmoil, there are already signs of a rebirth in America’s shale fields as prices have risen and stabilized at around $50. If they jump by another $10, shale output that’s now at 4.5 million barrels a day could quickly rise by 500,000 barrels, Citigroup’s Morse wrote in a Dec. 22 research note.

Shale Specter Haunts OPEC’s Feast as Oil Seen Rallying Into 2017 - Bloomberg

In the dying breaths of the year, the commodity price plunge claimed its latest victims as three energy companies outlined bankruptcy filing plans. Forbes Energy Services Ltd., Bonanza Creek Energy Inc. and Memorial Production Partners LP will use the U.S. courts to restructure their borrowings, each said Friday in regulatory filings. Bonanza and Memorial will give current shareholders some recovery of their investments, while Forbes said it plans to allocate them nothing and cede control to senior bondholders.

Trio of energy firms to start 2017 with bankruptcy

RE: OPEC, for some quiet moments.. - admin - 12-28-2016

For decades, coal has been the dominant energy source for generating electricity in the United States. EIA's Short-Term Energy Outlook (STEO) is now forecasting that 2016 will be the first year that natural gas-fired generation exceeds coal generation in the United States on an annual basis. Natural gas generation first surpassed coal generation on a monthly basis in April 2015, and the generation shares for coal and natural gas were nearly identical in 2015, each providing about one-third of all electricity generation.

Natural gas expected to surpass coal in mix of fuel used for U.S. power generation in 2016 - Today in Energy - U.S. Energy Information Administration (EIA)

The latest Short-Term Energy Outlook released on December 6, forecasts Brent to average $52 a barrel and WTI to average $51 a barrel in 2017. While the EIA expects both Brent and WTI to average $50 a barrel during the first half of 2017, the second half is likely to see higher oil prices of $55 a barrel. Global inventory builds are likely to average 0.4 million bpd for 2017, with the first half showing higher builds at 0.8 million bpd. As far as total world production and consumption is concerned, the EIA forecasts 97.42 million barrels per day in production, whereas demand is forecast to be 96.99 million barrels per day.

The Unsustainable $60 Oil Spike In 2017 |

OPEC's effort to balance an oversupplied oil market could have the unintended consequence of crimping crude demand from China, said Matt Smith, head of commodities research at shipment-tracking firm ClipperData. Falling demand from China, the world's second largest oil consumer, would hurt OPEC's current strategy. The Organization of the Petroleum Exporting Countries, along with nonmembers, is cutting production in a bid to reduce huge stockpiles of oil that have built up during more than two years of weak oil prices. But cutting production has boosted prices, and that could result in less strategic buying from China, according to Smith.

China could derail OPEC’s effort to balance oil markets, says analyst

U.S. Gulf Coast refiners are cashing in on rising fuel demand from Mexico, shipping record volumes to a southern neighbor that has failed to expand its refining network to supply a fast-growing economy. The fuel trade could top a million barrels per day (bpd) at times in 2017 as Mexico becomes increasingly dependent on the United States for strategic energy supplies and providing business worth more than $15 billion a year to refiners such as Valero (VLO.N), Marathon Petroleum (MPC.N) and Citgo Petroleum. The rise in Mexico's fuel imports reflects an economy that, after expanding for 27 quarters in a row even amid a public austerity plan, has been unable to increase its refining output to satisfy the consistent growth of its energy demand.

U.S. refiners cash in on Mexico's record fuel imports | Reuters

RE: OPEC, for some quiet moments.. - admin - 12-29-2016

Rising crude prices and a deregulatory push in Washington may spur as many as 40 companies to hold initial public offerings over the next two years, potentially tripling 2016’s activity, according to Maynard Holt, CEO at Houston-based investment bank Tudor Pickering Holt & Co. After a year in which explorers in the Permian basin straddling Texas and New Mexico dominated the business, interest in new oil-industry offerings is likely to spread wider. It could include pipeline operators and regions like the Bakken in North Dakota and Wyoming’s Powder River basin, Holt said in a telephone interview Wednesday. Mergers and acquisitions should pick up as well.

Oil IPOs seen ready to bloom across the U.S.

Oil extended the longest winning streak in more than four months before OPEC and other producing nations start reducing output to stabilize the market. Futures advanced 0.5% in New York, climbing for a seventh session. Prices are set to recover next year as production cuts help to re-balance an oversupplied market, Saudi Arabia’s Energy Minister Khalid Al-Falih said last week. OPEC and 11 nations from outside of the group including Russia have agreed to trim about 1.8 MMbopd from January.

Oil extends longest run of gains since August

Malaysia’s Petroliam Nasional Bhd. is seeking to move ahead with a proposed $27-billion liquefied natural gas plant in western Canada after identifying a new site for shipping the fuel, a shift that may help reduce costs and quell local opposition. Petronas’s Pacific NorthWest LNG project would continue as planned with the liquefaction plant on Lelu Island in British Columbia. The company would move the docking facilities to neighboring Ridley Island, where ships would berth to take deliveries of the fuel for export, according to two people familiar with the negotiations.

Petronas said to eye new island for $27-billion Canada LNG plan

The world’s most popular oil-tracking exchange traded fund missed out on 2016’s big crude rally. Front-month West Texas Intermediate crude futures have gained 45% so far this year as OPEC engineered the first global output cut in 15 years. The U.S. Oil Fund LP, an ETF designed to track oil prices that has seen investors pour in nearly $3 billion in the past two years, only grew 6.6% over the same period.

One group of investors didn’t cash in on 2016 rally

RE: OPEC, for some quiet moments.. - admin - 12-30-2016

Shale oil companies are ready to play chicken with supply and demand again. Roiled by a year that began with crude at a 12-year low and ended with a surprise OPEC agreement boosting prices, U.S. producers including Continental Resources and Pioneer Natural Resources are promising not to overreact—or overspend.

Shale drillers promise no 2017 binges as oil hangover eases

Oil fell for the first time in nine sessions in New York after a government report showed U.S. crude stockpiles increased for a second week. Crude stockpiles rose 614,000 bbl last week, according to the Energy Information Administration. A 1.5-MMbbl decline was forecast by analysts surveyed by Bloomberg, and a 4.2-MMbbl increase was reported Wednesday by the industry-funded American Petroleum Institute. Fuel stockpiles fell while refinery activity slipped from the highest level in three months. Refiners along the Gulf Coast try to reduce inventories in December to lower their tax bills.

Oil falls first time in nine days as U.S. crude supplies climb

The number of countries receiving exported U.S. crude oil has risen since the removal of restrictions on exporting U.S. crude oil in December 2015. U.S. crude oil exports have occurred despite relatively small price spreads between international crude oils and domestic crude oils, as well as other factors that should reduce crude oil exports such as falling U.S. crude oil production and added cargo export costs.

EIA: U.S. crude oil exports are increasing and reaching more destinations

Exxon Mobil has reported a new natural gas discovery in the Papua New Guinea North Highlands, 13 miles (21 km) northwest of Hides gas field. Interest owners are Exxon Mobil (42.5%), Oil Search Limited (37.5%) and Barracuda Limited, a subsidiary of Santos Limited (20%, subject to regulatory approval), with Oil Search as operator. The Muruk-1 well encountered similar high-quality sandstone reservoirs as the Hides field and was in line with pre-drill expectations. It was safely drilled to 10,630 ft (3,130 m). Evaluation is underway to determine the size of the discovery.

Exxon Mobil, Oil Search in Papua New Guinea gas find

RE: OPEC, for some quiet moments.. - admin - 12-31-2016

Working gas in storage was 3,360 Bcf as of Friday, December 23, 2016, according to EIA estimates. This represents a net decline of 237 Bcf from the previous week. Stocks were 413 Bcf less than last year at this time and 79 Bcf below the five-year average of 3,439 Bcf. At 3,360 Bcf, total working gas is within the five-year historical range.

Weekly Natural Gas Storage Report - EIA

Speculators have been increasing their bets that oil prices will rise, setting up a punishing outcome if OPEC's production cuts disappoint, Again Capital founding partner John Kilduff said Thursday. OPEC not only faces the challenge of getting its own members to deliver the promised cuts. It must also contend with potentially weaker demand in China and the threat of rebounding U.S. production, Kilduff said. "The boat is loaded to one side in the market right now. Shorts have covered. People have piled in from the long side, waiting for these cutbacks to come through. If they don't, there's going to be big punishment in this market," he told CNBC's "Squawk Box."

Oil traders face 'big punishment' if OPEC doesn't deliver output cuts

BP and PTT Public Limited Company (PTT) have entered into a sales and purchase agreement for liquefied natural gas. Under the agreement, BP will provide PTT with approximately 1 million tonnes of LNG per annum.  The term of the agreement is 20 years.  LNG supply will commence in 2017 and will be sourced from BP’s diverse portfolio of LNG, including the Freeport LNG project in the U.S.

BP, PTT sign LNG sale and purchase agreement

One of those comes in a place I’ve been watching closely the past year: the tiny Mediterranean island of Cyprus. Which this past week announced the winning bidders for an offshore licensing round — handing out acreage that could be prospective for some of the world’s largest natural gas targets. Cyprus’s Ministry of Energy, Commerce, Industry, and Tourism said it has awarded three offshore blocks — one to Italy’s Eni, one to an Eni/Total partnership, and the other to ExxonMobil and Qatar Petroleum. That’s big news because these licenses lie just kilometers away from Egyptian waters where Eni discovered the 30 trillion-cubic feet Zohr natural gas field — one of the biggest petro-finds in recent history.

Oil and gas companies are rushing to Cyprus and Iran - Business Insider

RE: OPEC, for some quiet moments.. - admin - 01-02-2017

With Donald Trump set to enter the White House in January and populists on the march across Europe, political risk will loom large in 2017. Cautious investors may find stability in an unfamiliar place: the oil market. A deal between the Organization of Petroleum Exporting Countries and other producers to limit output next year won’t simply siphon off some of the global glut of crude: if participating nations make the cuts they’ve promised, the effort will also add to a buffer of unused capacity that can be tapped to plug supply disruptions.

Oil market seen as haven from political risk in 2017

Investors are showing no sign of turning their backs on oil heading into 2017. Money managers’ wagers on rising West Texas Intermediate crude prices are triple what they were at the end of 2015, and are the highest since the start of the crude market crash 2 1/2 years ago. Crude futures settled at the highest in almost 18 months on Dec. 28, with investors now eyeing the Organization of Petroleum Exporting Countries and other producers to see who complies with agreed output cuts.

Hedge funds bet oil rally to extend into 2017 as output cuts hit

After more than two years of nearly full-time travel as president of the Society of Petroleum Engineers (SPE) and having given hundreds of speeches, I have come to expect certain questions, including, “When will prices recover?” or, “Should I stay in the industry?” As I talk to students and young professionals, I notice a major difference in attitudes about climate change, compared to those of more senior engineers.

Climate change: inconvenient truth or opportunity to lead?

We are approaching the end of 2016, and here, there be dragons. The “lower-for-longer malaise” has settled in place, and the longer we stay below a stable global price of $65/bbl, the more pressure that is placed on companies to tighten their belts and show shareholders fiscal efficiency. If your company has focused exclusively on onshore unconventionals, you are likely feeling lots of pain. In the Bakken play, for example, the rig count has dropped from 203 units in 2012 to 30 in October 2016. The loss of rigs is, of course, reflective of lost jobs and a reduction of capital investments.

Here, there be dragons

RE: OPEC, for some quiet moments.. - admin - 01-04-2017

U.S. natural gas prices are on track to cap their biggest fourth-quarter rally in 16 years, turning the fuel into the best-performing commodity of the year. And gas bulls are betting things will get even better. The biggest drop in U.S. natural gas supplies since a polar vortex sent temperatures plunging two years ago will keep prices of the heating fuel rising into the new year, according to eight out of 10 traders and analysts surveyed by Bloomberg. The rest were split between neutral and bearish calls.

Biggest fourth-quarter gas rally in 16 years may spill into 2017

Transition points. But, as we approach what hopefully is a recovery point, we must think beyond the immediacy of the marketplace today. It is time to consider impending industry and societal transitions, how they will impact our companies, and how we will navigate these changes. For the oilfield service, supply and manufacturing sector, we are impacted while leading the change. This position makes the stakes ever greater.

Navigating a market in transition

Trump’s frequent denunciations of Chinese imports implies that he will take some action, such as tariffs, early during his term which might affect upstream investment.  The U.S. imports about $500 million a year of oil field and drilling equipment, although it’s not clear if this includes offshore drilling platforms. Chinese companies are suffering (like the rest of the industry) from the drop in drilling and reduced upstream investment across the sector.  Reportedly, out of 70 rigs stacked offshore China, only 3 have been delivered to customers by September.

How President Trump Could Hurt The Oil Industry

With OPEC and non-OPEC production cuts on the horizon (although not guaranteed), institutions exposed to oil have shifted their outlooks for price risk, as reflected in their current positions in NYMEX WTI futures and options. As the WTI forward curve has shifted into backwardation, analysts are calling for swollen inventories to be drawn down towards the middle of 2017, pulling the market back into balance.

Hedging Rush Keeps Oil Prices Down |

RE: OPEC, for some quiet moments.. - admin - 01-04-2017

The British-Dutch oil-and-gas giant bulked up in February with the roughly $50 billion acquisition of BG Group PLC, giving Shell a dominant position in liquefied natural gas and some of the world’s most prized offshore oil fields in Brazil. It also saddled the company with a mountain of debt—$78 billion at the end of the third quarter—that is higher than peers

Shell Seeks to Streamline in 2017 - WSJ

In the meantime, interest from E&Ps is also heating up in another corner of the global: Brazil. Where France’s Total this week announced a $2.2 billion deal to buy stakes in two offshore presalt oil fields from state major Petrobras. A few days later, Total said it is now planning to spend $1 billion per year on Brazil oil and gas projects going forward. Showing that the major is very motivated on this part of the world. At the same time, interest in Brazil is growing stronger from big investors like China. With Petrobras recently signing a $5 billion funding deal with China Development Bank.

Oil and gas companies are rushing to Cyprus and Iran - Business Insider

There is nothing outwardly remarkable about oil well cluster number 933 in the South Priobskoye field: Siberian marshland stretches out to the horizon, dotted with birds and drilling rigs. But beneath the surface, this spot is at the forefront of the Russian oil industry’s efforts to deliver a shale energy revolution that could be just as transformative as the one witnessed in the US over the past 15 years. Gazprom Neft, the oil division of state-controlled gas giant Gazprom, set a Russian record in the summer by completing 30 hydraulic fractures along the length of one well at cluster 933. This process — better known as fracking — involves injecting a mixture of water, sand and chemicals into rocks such as shale to release oil and gas.

Gazprom Neft strives to go it alone in Russian shale oil

The spot energy index in the S&P Goldman Sachs Commodity Index (GSCI) rose 48% since the start of 2016, more than any other commodity group in the S&P GSCI. The spot S&P GSCI industrial metals, precious metals, and agriculture indices increased less, rising 22%, 8%, and 5%, respectively, while the spot S&P GSCI livestock index declined 10%. Among individual commodities, zinc, natural gas, crude oil, and diesel saw larger percentage increases than all other commodities in the S&P GSCI. Commodity price movements were influenced by global economic growth as well as by commodity-specific supply-side factors in 2016.

Energy commodity prices rose more than other commodity sectors in 2016 - Today in Energy - U.S. Energy Information Administration (EIA)