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RE: OPEC, for some quiet moments.. - admin - 01-05-2017

Oil climbed to an 18-month high in New York as output cuts by Kuwait and Oman signaled OPEC and its partners are delivering on their agreement to stabilize the market. Futures rose as much as 2.8% after adding 45% last year, the biggest annual gain since 2009. Officials from Oman and Kuwait told local media they’re cutting oil production in January, fulfilling pledges that they and 22 other producers made on Dec. 10. Prices also advanced as China’s manufacturing purchasing managers index stabilized near a post-2012 high, signaling demand may be supported in the world’s second-biggest oil user.

Oil hits 18-month high as Kuwait, Oman fulfill OPEC cuts

When it comes to OPEC production cuts, "We tend to cheat," said former Saudi Arabia Oil Minister Ali al-Naimi after the group reached an agreement to curb output late last year. But the extent of that cheating won't be too bad this time around, reckons Goldman Sachs Group Inc.'s Damien Courvalin. The analyst sees OPEC and non-OPEC nations enacting a full 84% of their agreed-upon cuts, citing the incentive among lower-cost producers to "fast-forward the normalization in inventories."

There's an early sign OPEC's push to normalize the oil market may be working

But the longer that oil prices stayed low, the more obvious it became—the industry could not simply cut its way to fiscal health. The savings were not enough. The improvements needed were on the order of days, not hours, per well. More fundamental change was required, and that change would need to manifest itself in both technology and technique. The proverb, “Necessity is the mother of invention,” held true.

Lower for longer

Although 2016 was another tough year, the oil market is slowly moving toward balance, while U.S. production is down 900,000 bpd from the peak. Prices have risen a bit ($51/bbl at the time of this writing), but many projects (especially in deep water) are still challenged. Chevron has reduced operating costs substantially, and improved efficiency in our upstream businesses. Competitive development costs are down 30% in the Permian basin. Unit development costs are down 30% to 40% in the Vaca Muerta, Appalachia and Duvernay plays.

Chevron in 2016/2017: A few insights




RE: OPEC, for some quiet moments.. - admin - 01-06-2017

Oil rose as Saudi Arabia was said to meet its pledged output cut this month and U.S. stockpiles fell the most in almost four months. The kingdom is going for full compliance with OPEC cuts so other countries do the same, said a person familiar with Saudi policy who asked not to be named because the matter is private. Saudi Arabia announced higher prices for Asian customers next month as it prepares for lower exports. A government report showed U.S. fuel stockpiles surged last week as refineries boosted operating rates and crude supplies tumbled.

Oil rises as Saudi Arabia said to comply with OPEC output cuts

Exxon Mobil has announced the development of its cMIST technology, which dehydrates natural gas using a patented absorption system inside pipes and replaces the need for conventional dehydration tower technology. This “in-line” technology could be deployed at both land-based and offshore natural gas production operations.

Exxon Mobil develops natural gas dehydration technology

As OPEC starts to make its production cuts work, the true impact of its actions is perhaps most in evidence in an obscure part of the physical oil market. While Brent futures, a benchmark based on North Sea supply, are trading $4/bbl higher than in June, the price of cheaper Middle East crude is rising faster still. The gap between the two varieties—now the smallest in 15 months—reveals where buyers are experiencing the greatest supply restrictions. It also has the potential to influence where oil flows.

The oil trade that shows where OPEC’s cuts are starting to bite

One such nation that will likely gain additional attention from our industry is Albania, which is where I have been working as country manager for TransAtlantic Petroleum since leaving Iraq some two years ago. Having a footprint and shape that are similar to New Jersey, and a population of about 2.7 million, it may surprise some people that this relatively obscure country holds the largest onshore oil field in all of Europe, and likely the largest onshore conventional gas field on the continent. This advisor page provides some personal insight as to why a country that is best known for its Communist past, and the struggles that followed, should now deserve greater attention as we move through 2017.

Don’t overlook Albania




RE: OPEC, for some quiet moments.. - admin - 01-07-2017

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 | OilPrice.com

OPEC’s recent agreement to limit crude production is unleashing a tide of speculative bets on rising oil prices, raising the prospect that the oil market could reverse suddenly if the group fails to deliver. U.S. crude prices have soared 19% since the Organization of the Petroleum Exporting Countries agreed on Nov. 30 to its first supply reduction since 2008.

Slick Gains: Speculative Money Fueling Oil Rally - WSJ

It has become painfully obvious that the much-hyped OPEC agreement to reduce global oil production by close to 2 million bpd won’t have the effect that its initiators had hoped for. True, crude has jumped above US$50 but failed to pass the US$55 barrier and move closer to US$60, which would have solved a lot of problems for some of the world’s biggest producers. This price increase, however, has spurred optimism among some producers and motivated them to plan output ramp-ups, which will in turn dampen the upward potential of crude more effectively than growing doubts about top producers’ willingness to stick to their commitments under the historical agreement.

The Oil Supply Glut Is Here To Stay In 2017 | OilPrice.com

Libya, the holder of Africa’s biggest crude reserves, is ramping up output from its biggest oil field again after two years of internal conflict, the latest reminder of just how vulnerable OPEC’s quest to clear a global crude glut might be. The Sharara deposit in the Libya’s south west will ship almost 1.9 MMbbl this month from its Zawiya port near Tripoli, according to a loading program obtained by Bloomberg. That compares with a pumping rate from the field of almost 9 MMbbl a month as recently as late 2014, before internal conflict halted flows.

Libya’s oil revival gathers pace to highlight risks on OPEC deal




RE: OPEC, for some quiet moments.. - admin - 01-09-2017

The Canadian government says it won’t grant extensions to exploration licenses for Exxon Mobil, BP and other oil firms as it prepares for consultations over the impact of an Arctic drilling moratorium. The companies hold leases that expire over the next six years, totaling C$1.9 billion ($1.4 billion) in bids. Prime Minister Justin Trudeau and U.S. President Barack Obama announced new restrictions on Arctic oil development on Dec. 20, with Canada saying existing leases wouldn’t be affected without industry input on a path forward.

Canada rules out Arctic drilling extensions for Exxon and BP

The promise of production cuts from OPEC and its partners sent oil rallying in 2016. Now traders want proof they’re delivering on those vows. It won’t come easy. The challenge: Building a coherent picture from the morass of data that emerges at each step along the process, from the wellheads where the oil is produced, to the tankers that carry it, and the depots that store it. Unlike in the U.S., where output is published weekly, members of the Organization of Petroleum Exporting Countries can take months to disclose their production. Beyond that, their data can be at odds with independent surveys, and countries have been known to cheat on such deals. With a rising U.S. rig count offering a bearish undertone, each new hint on the accord’s implementation can be expected to swing prices.

Will OPEC deliver its output cut deal? Here’s how we’ll know

Williams Cos. CEO Alan Armstrong has something everybody wants, and he knows it. “It’s a gold mine,” he says. “It’s irreplaceable.” Some 67 years after the Transco pipeline was laid from the Gulf Coast of Texas to New York City, it remains the crown jewel of the natural gas industry, fed by America’s richest shale patch. In the past year, the allure of this 10,500-mile system has helped trigger two failed takeover bids for Williams, a clash between Armstrong and billionaire pipeline magnate Kelcy Warren and a mass exodus from the company’s board.

Crown jewel of U.S. shale fuels endless pursuit of Williams

Royal Dutch Shell shut the Trans Niger oil pipeline after a fire, threatening to worsen a drop in Nigerian output due to unplanned disruptions. The line, which can transport about 180,000 bopd to the Bonny Export Terminal in the Niger Delta, was halted Tuesday due to a blaze at Kpor in Ogoniland, Precious Okolobo, a company spokesman in Lagos, said Thursday by phone. Shell declined to comment on the impact on production.

Shell pipeline fire threatens to deepen Nigerian oil output drop




RE: OPEC, for some quiet moments.. - johnwgrant - 01-09-2017

http://www.investorvillage.com/groups.asp?mb=19168&mn=70567&pt=msg&mid=16737719

Posted by: saintsinneridiot

The study argues that changes in Europe make the Global gas market less flexible. The point seems to be LNG prices may face huge price swings as supply is inflexible and demand is also becoming less flexible.

Overall the idea that LNG may face huge price swings is an interesting one and if the price really rises it can create huge profit opportunities for companies which are selling unhedged gas. Conversely, it could also cause losses because the supply and demand take years to adjust to a 'bad' market. My take is be aware of huge profits and huge losses possible in LNG.


RE: OPEC, for some quiet moments.. - admin - 01-10-2017

Yea, thanks for that John. Basically one generally has these price swings in situation where the short-term elasticities of both supply and demand are low. Much of LNG is tied to oil via long-term contracts still..


RE: OPEC, for some quiet moments.. - admin - 01-10-2017

The oil industry is expected to boost spending for the first time in three years after slashing almost half a million jobs globally during the downturn, according to industry consultant Graves & Co. More than three quarters of the 440,131 oil jobs eliminated around the world through the end of 2016 came from the oilfield service providers, drilling contractors and equipment makers, said John Graves, whose Houston firm assists in oil and gas deals with audits and due diligence. He has tracked announcements of layoffs from all parts of the oil industry since the downturn began in the middle of 2014. Roughly a third of the cuts came in the U.S., Graves estimates.

Oil industry growing again after losing half-million jobs

Saudi Arabia is staying in the battle for market share by continuing to pump the type of oil that’s similar to rival U.S. and African supply, while fulfilling its promise to cut output by focusing curbs on other varieties.

Saudis said to duel rivals by curbing heavy oil over light crude

Iraq’s oil exports from its southern ports in the Gulf reached a record high in December, just before the country was due to join other major producers in cutting output to help curb a global oversupply. Shipments from southern ports in Basra Province averaged 3.51 MMbpd in December, Oil Minister Jabbar Al-Luaibi said in an emailed statement, up from 3.407 MMbpd in November. He didn’t disclose figures for exports through Iraq’s northern pipeline network, which typically average about 600,000 bopd.

Iraq’s southern oil exports hit record before OPEC cuts

Total and Tullow have entered into a package agreement under which Total will acquire an additional 21.57% interest from Tullow in the Uganda Lake Albert oil project. Following this transaction, Total will hold a 54.9% interest, strengthening its position in this competitive project and paving the way for a project sanction in the near future.

Total to acquire additional interest in Uganda Lake Albert project




RE: OPEC, for some quiet moments.. - johnwgrant - 01-11-2017

https://www.bloomberg.com/news/articles/2017-01-10/europe-left-in-the-cold-as-frost-triggers-global-hunt-for-lng

The year has started off with a very cold snap, meaning Europe will have to pay a premium to stay warm.

European countries from France to Greece are losing out in a search for liquefied natural gas cargoes amid a freezing spell, as ships sail to buyers in Asia willing to pay a higher price to meet peak winter demand.

Buyers in northeast Asia, the biggest consumer, are paying a two-year high of about $9.90 per million British thermal units for spot LNG cargoes shipped from Qatar or the U.S., meaning European countries, where prices have typically been lower, need to pay more. Hub prices in France’s southern hub almost doubled over the past month to about $11.40 a million Btu on Jan. 9 on the Pegas exchange in Paris, the highest on record.


RE: OPEC, for some quiet moments.. - admin - 01-11-2017

Oil prices fell about 2 percent on Tuesday, extending the previous session's sharp sell-off, as the U.S. dollar strengthened and doubts over implementation of a global deal to cut output loomed. Members of the Organization of the Petroleum Exporting Countries (OPEC), such as Saudi Arabia, appear to be reducing production under a global deal to rein in oversupply but it is unclear whether other big producers like Iraq will follow suit.

US crude settles at one-month low on strong dollar, OPEC cut doubts

Oil companies found only 3.7 billion barrels of so-called conventional crude in 2016, 14 percent less than the previous year and the lowest amount since 1952

Oil Discoveries Seen Recovering After Crashing to 65-Year Low - Bloomberg

Argentina has clinched a deal with labor unions and energy companies aimed at luring investors to the Vaca Muerta shale formation in Patagonia, one of the largest unconventional reserves in the world, the government said on Tuesday. As part of the pact, the country will offer a subsidized price of $7.50 per million British thermal units of natural gas produced at new wells through the year 2020. The government issued a statement calling the subsidized price "indispensable for attracting long-term investment".

Argentina clinches labor/subsidy deal to attract energy investment | Reuters

Oil prices faltered at the start of the second week of the year, as fears set in about a rapid rebound in U.S. shale production. For the better part of two months, optimism surrounding the OPEC deal has buoyed oil prices, but bullish sentiment from speculators are showing early signs of abating, raising the possibility that the oil rally is running out of steam.

Oil Prices Running Out Of Reasons To Rally | OilPrice.com




RE: OPEC, for some quiet moments.. - admin - 01-12-2017

For every one dollar reduction in the price of oil, Russia suffers a staggering two billion dollar loss in its revenue. On top of the economic sanctions slapped on Russia following the annexation of Crimea, one may consider the record Russian oil production of 11.247 mbpd nothing short of a miracle. But how did Russia, while other oil producers were in doldrums, keep its nodding donkeys busy pumping oil? In the U.S., the rig count was falling every week and oil companies were filing for bankruptcy. Yet the Russian production in October touched a post-Soviet Era high. The secret to its success appears to be a combination of tax measures, the dollar value and the advantage of low-cost production.

The Secrets Behind Russia’s 2016 Oil Success | OilPrice.com

OPEC's production cuts combined with expected output growth from the US and former Soviet Union suggest that the barrels that will actually be pumped and sent to market will trend lighter and sweeter over the short term, according to data cited by Michael Tran, commodity strategist at RBC Capital Markets, in a note. Within OPEC, the bulk of the cut will be falling on countries that produce medium and heavy oil. Meanwhile, Libya and Nigeria, which are sitting out the cut as noted above, produce light and sweet crude. In other words, the production cut deal tightens the amount of medium/heavy oil on the market more than sweet and light. And, although Tran notes it is unlikely, sustained production improvement from Nigeria or Libya would add even more light and sweet. Moreover, the market is further skewed when factoring in other players.

Problem with OPEC production cut - Business Insider

Big Oil is poised to reap rewards this year as investments made before the crude-price slump pay off just as the recovery starts. Seven of the world’s largest energy companies will together boost oil and natural gas output by 398,000 bpd, the most since 2010, according to data from Oslo-based consultant Rystad Energy AS. In 2018, output will rise even faster.

Big Oil hits sweet spot as projects reap rewards of recovery

The oil industry will shake off the effects of the biggest downturn in a generation this year as they more than double project approvals and increase exploration spending for the first time in three years, according to Wood Mackenzie. Companies will green-light more than 20 oil and gas fields for development compared with nine in 2016, the Edinburgh-based industry consultant said in a report Wednesday. Drillers, led by U.S. shale operators, will also increase spending on exploring for new oil and developing existing projects by 3% to $450 billion following two years of cuts.

Oil industry starts revival as project approvals to double