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RE: OPEC, for some quiet moments.. - admin - 05-19-2017

U.S. shale explorers are boosting drilling budgets 10 times faster than the rest of the world to harvest fields that register fat profits even with the recent drop in oil prices. Flush with cash from a short-lived OPEC-led crude rally, North American drillers plan to lift their 2017 outlays by 32% to $84 billion, compared with just 3% for international projects, according to analysts at Barclays Plc. Much of the increase in spending is flowing into the Permian basin, a sprawling, mile-thick accumulation of crude beneath Texas and New Mexico, where producers have been reaping double-digit returns even with oil commanding less than half what it did in 2014.

Shale drillers seen outspending the world with $84-billion spree

India’s first producer of natural gas from coal seams in the country’s oldest mining region will spend about $1 billion to look for some of the newest forms of energy. Great Eastern Energy Corp. will invest as much as 20 billion rupees ($312 million) over the next four to five years to drill 144 new wells at its Raniganj block in the eastern state of West Bengal, according to CEO Prashant Modi. The company, which began looking at the block in 1993, will invest an additional 50 billion rupees in other unconventional assets, including shale.

Indian explorer bets $1 billion on natural gas, unconventional shale

Production from the seven most advanced developments in the Vaca Muerta play (covering only 8% of play acreage), is expected to increase by 43% in 2017 to 77,000 boed, and to double 2016 levels by 2018 to 113,000 boed, according to the new Vaca Muerta Development Study by Wood Mackenzie.

Production from Argentina's Vaca Muerta to reach 113,000 boed by 2018, Wood Mackenzie says

Baker Hughes Incorporated has announced that the average U.S. rig count for April 2017 was 853, up 64 from the 789 counted in March 2017, and up 416 from the 437 counted in April 2016. The average Canadian rig count for April 2017 was 108, down 145 from the 253 counted in March 2017, and up 67 from the 41 counted in April 2016.

Average U.S. rig count increased by 416 from April 2016, Baker Hughes says

RE: OPEC, for some quiet moments.. - admin - 05-22-2017

Just under a week from now, the Organization of Petroleum Exporting Countries will meet in Vienna to decide whether to extend the first oil production curbs in eight years in order to eliminate a glut. The group will evaluate data, described below, that highlights two key details: First, Saudi Arabia is shouldering much of the burden. Second, non-member producers – who pledged reductions of their own – haven’t delivered in full.

OPEC Reality: Saudis Delivered, Non-OPEC Didn’t.

A wave of new petroleum production from countries like Canada and Brazil is adding a new problem for oil traders who until now had been primarily preoccupied with U.S. output and an OPEC-led coalition cutting supply. Rising output from Canada and Brazil, along with smaller gains in the U.K. and Norway, represents an under-the-radar concern for some oil traders ahead of next week’s meeting between members of the Organization of the

The Non-Shale, Non-OPEC Problem for Oil Traders - WSJ

Shale explorers pushing to expand oil production are struggling to find enough fracing crews after thousands of workers were dismissed during the crude rout. Independent U.S. drillers underspent their first-quarter budgets by as much as $2.5 billion collectively, largely because they couldn’t find enough fracing crews to handle all the planned work, according to Infill Thinking LLC, a research and consulting firm focused on oilfield services and exploration. If the scarcity holds, output increases planned for this summer may get pushed into 2018, creating an unanticipated production bulge with “scary” implications for oil prices, said Joseph Triepke, Infill’s founder.

Frac crew shortage may push oil's biggest bubble to 2018

Oil is getting ensnared in the turmoil surrounding  Donald Trump even as U.S. crude production, which has undercut OPEC’s output curbs, declined for the first time in 13 weeks.

Oil stuck in Trump slump as risk aversion damps U.S. supply drop

RE: OPEC, for some quiet moments.. - admin - 05-23-2017

OPEC officials gathering in Vienna on Friday to prepare for next week’s ministerial meeting kept their focus on rising U.S. shale oil production, which has been diluting the price impact of their production cuts.

OPEC keeps focus on shale threat as officials meet in Vienna

OPEC may get its members to agree to continue to tamp down oil production, but it will be a Pyrrhic victory. The biggest threat to the 13-member group’s dominance has been U.S. shale. In November 2014, OPEC decided to keep production levels high in the hope it could maintain market share. But that was a difficult task to begin with, and since then, U.S. shale producers have become even more efficient.

U.S. shale roars back at OPEC

Drilling rigs and roughnecks are hot commodities once again across the Montney shale formation in northern British Columbia and Alberta, and companies like Grimes Well Servicing are having a hard time keeping up with demand.

Canada's Permian of the north roused by cheap gas drilling

OPEC’s second biggest producer is also its biggest cheater. And if past is prologue, that lengthens the odds the group will be able to squeeze too many more price gains out of its output cuts. Iraq pumped about 80,000 more bopd than permitted by OPEC curbs during the first quarter. If that deal gets extended to 2018, the nation will have even less incentive to comply because capacity at key southern fields is expanding and three years of fighting Islamic state has left it drowning in debt.

OPEC's worst cheater will get harder to ignore as curbs falter

RE: OPEC, for some quiet moments.. - admin - 05-24-2017

Iranian President Hassan Rouhani is in a stronger position after his re-election to push through plans for wooing foreign investors the country needs to boost oil production, according to analysts at Cornerstone Global Associates and SVB Energy.

Rouhani win seen speeding Iran's oil push amid Trump threats

Let the gushing begin. After an executive from U.S. liquefied natural gas exporter Cheniere Energy Inc. spoke to a few hundred people at a conference in Beijing last week, the first question from the audience turned out to be an invitation to visit one of China’s biggest energy firms and a main LNG buyer, the state-owned giant known as Sinopec.

China's love for U.S. gas begins as Trump rolls out red carpet

The White House plan to trim the national debt includes selling off half of the nation’s emergency oil stockpile, part of a broad series of changes proposed by President Donald Trump to the federal government’s role in energy markets. Trump’s first complete budget proposal, released in part on Monday, would raise $500 million in fiscal year 2018 by draining the strategic petroleum reserve, and as much $16.6 billion in oil sales over the next decade.

Trump proposes selling off half the U.S. strategic oil reserve

For the first time in almost 80 years, a private company has sunk a new offshore oil well in Mexican waters -- the latest step in the country’s drive to allow foreign competitors back into its energy markets. A joint venture of London-based Premier Oil Plc, Houston’s Talos Energy LLC and Mexico’s Sierra Oil & Gas began drilling the well May 21, Premier said in a statement Monday. It’s the first offshore exploration well to be launched by anyone other than state-run monopoly Petroleos Mexicanos since the country nationalized its oil industry in 1938.

Mexico oil reform advances with first private well in 80 years

RE: OPEC, for some quiet moments.. - admin - 05-29-2017

Saudi Arabia is pushing the OPEC oil cartel and other big producers gathered here this week to extend crude production cuts for another nine months. The reason: the timing of the blockbuster IPO of Saudi Arabian Oil Co., people familiar with the matter said. The Saudis want higher oil prices well into 2018 to support the initial public offering of their state-owned oil company, Aramco

Why OPEC Plans Oil Cuts Into 2018: Aramco’s Coming IPO - WSJ

Worries about slowing Chinese growth will affect the market, he told CNBC's "The Rundown". The world's second largest economy is also the second largest importer of crude oil behind the U.S. "If China weakens further, that poses downside risk. But if we see the rebound in the (China Caixin Manufacturing Purchasing Managers Index) and we see Chinese manufacturing PMI as a proxy for global growth improve, then we see some upside potential here," Schenker added.

China is downside risk for oil prices as OPEC meets: Analyst

Now research from Bloomberg New Energy Finance indicates that falling battery costs will mean electric vehicles will also be cheaper to buy in the U.S. and Europe as soon as 2025. Batteries currently account for about half the cost of EVs, and their prices will fall by about 77 percent between 2016 and 2030, the London-based researcher said.

Pretty Soon Electric Cars Will Cost Less Than Gasoline - Bloomberg

Year after year, Mexico places a multi-billion-dollar bet in a deal that big banks lust after. This is the untold story of how the “Hacienda hedge” happens. From The men huddled in the same first-floor conference room as always, only this time they’d decided to make their annual oil bet bigger and bolder than ever before. Fewer than a dozen representatives from three Mexican government ministries and Petróleos Mexicanos, the state energy company, were about to make a wildly contrarian play. If it paid off, the profits would be enormous. And if they were wrong? They would have spent a small fortune in vain.

Uncovering the Secret History of Wall Street’s Largest Oil Trade - Bloomberg

RE: OPEC, for some quiet moments.. - admin - 05-30-2017

After sparing its prized U.S. market from oil-output cuts, Saudi Arabia plans to "markedly" reduce exports to its political ally in the coming weeks in an effort to reduce swollen and highly visible crude inventories in the world’s biggest consumer. "Exports to the U.S. will drop measurably," Energy and Industry Minister Khalid Al-Falih told reporters after chairing a meeting between OPEC and other major producers in Vienna on Thursday. Saudi crude shipments to the U.S. will fall below 1 MMbpd next month, said two people briefed on the kingdom’s oil policy, a reduction of more than 15% from the average so far this year.

Saudis take aim at swollen U.S. oil stockpiles in strategy shift

OPEC may be celebrating an historic deal to extend supply cuts, but after the party, the organization will face a trio of questions it left unanswered. Will the lucrative yet delicate relationship between Saudi Arabia and Russia survive the life of the agreement? Will surging U.S. shale output prove too much temptation for OPEC countries to stick to their own production promises? And, perhaps most perplexing: What does OPEC have planned long-term?

OPEC leaves market guessing on exit strategy after oil pact

As the oil market responds skeptically to OPEC’s output-cut deal, Goldman Sachs Group Inc. says the group has some challenges to tackle. The organization will face the test of defending market share and generating revenue growth as it transitions from the curbs, the bank said in a May 25 report. Additionally, backwardation -- when near-term crude prices are higher than those for later months -- will be needed for the cuts to achieve their goal of shrinking an oil inventory glut, and prevent an “unbridled” increase in U.S. shale production, according to Goldman.

Goldman warns OPEC faces test as spectre of U.S. shale looms

After top oil exporters failed to impress markets with their extended supply cuts, Russia’s Alexander Novak said there’s more they can do. Russia and OPEC have tools to further support crude prices if needed, the nation’s energy minister said in an interview as a lackluster  outcome from their meeting in Vienna sent futures slumping below $50/bbl in New York.

Russia's Novak sees room to do more for oil after OPEC flop

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

Gasoline prices heading into Memorial Day weekend average $2.40 per gallon (gal) nationally, up from last year's price of $2.30/gal. Despite the year-over-year increase, 2017 marks the second-lowest price ahead of the Memorial Day weekend since 2009, when the national average price of retail regular gasoline was $2.31/gal. Relatively low crude oil spot prices, weaker year-over-year gasoline demand, and high gasoline inventories have contributed to relatively low gasoline prices.

Gasoline prices ahead of Memorial Day are higher than 2016, but second lowest since 2009 - Today in Energy - U.S. Energy Information Administration (EIA)

Canadian equity markets risk being swamped with oil sands company shares this year as Royal Dutch Shell and ConocoPhillips prepare to offload $6.8 billion worth of stakes in two domestic producers, just months after acquiring them. The two firms acquired shares in Canadian Natural Resources Ltd and Cenovus Energy as part of deals struck earlier this year to sell off oil sands assets.

Shell, ConocoPhillips $6.8-billion oilsands share selloff risks flooding market | Financial Post

Oil prices slipped on Monday as further increases in U.S. drilling activity undercut an OPEC-led push to tighten supply. Trading was subdued due to public holidays in China, the United States and Britain, but concerns lingered over whether OPEC action would be enough to stem the tide of oversupply. Brent crude futures were trading down 19 cents at $51.96 per barrel at 0857 GMT. The contract ended the previous week down nearly 3 percent.

Oil slips as more US drilling outweighs OPEC-led cuts

Oil traders and analysts are expecting large volumes of crude to draw from storage tanks across the United States in coming weeks, in what would be the most tangible sign of an inventory overhang reduction that has punished prices over the last two years. A reduction would show the market is finally reversing course after years of stock builds that left a worldwide overhang of half a billion barrels of crude oil and refined products.

Big drop in U.S. oil stocks finally on the way, traders say | Reuters

RE: OPEC, for some quiet moments.. - admin - 06-02-2017

U.S. crude production forecasts keep growing. The Energy Information Administration said domestic output will climb to a record 9.96 MMbpd in 2018, up from 9.9 MMbbl projected last month, according to the agency’s monthly Short-Term Energy Outlook released Tuesday. Production will average 9.31 MMbpd in 2017, up from 9.22 million projected in April.

U.S. oil ouput seen rising to record in 2018, as shale booms

Tokyo Gas America Ltd ., a wholly owned subsidiary of Tokyo Gas Co., Ltd., has acquired a 30% equity interest in Castleton Resources LLC (CR), a subsidiary of Castleton Commodities International LLC (CCI) formed to acquire and develop oil and gas assets in the East Texas/Louisiana region, with a specific focus on unconventional Haynesville assets. This is the third investment in unconventional upstream assets for Tokyo Gas in the United States and the first equity investment in an upstream company.

Tokyo Gas invests in development of unconventional Haynesville assets

Oil demand will continue to grow in coming decades even as nations around the world restrict greenhouse-gas emissions to counter climate change, said Exxon Mobil Corp. CEO Darren Woods. Population growth and a desire for higher living standards will increase usage of petroleum-derived fuels, especially for transportation, because there are few widely-available alternatives, Woods said during Exxon’s annual shareholders’ meeting on Wednesday. Woods said there’s a huge untapped energy market among the 1 billion people who currently have no access to electricity and the 3 billion who don’t use modern cooking fuels.

Exxon CEO sees crude oil surviving Paris-driven carbon limits

Libya’s biggest oil field boosted production, allowing the OPEC nation to pump crude at the highest level since October 2014. Crude from Sharara field rose by 25,000 bpd to 250,000 bbl, according to a person with direct knowledge of the matter who asked not to be identified because they aren’t authorized to speak to the media. Libya’s output rose to 827,000 bpd after the increase in output from Sharara, Mustafa Sanalla, head of the state-run National Oil Corp., said in a text message.

Recovery of Libya’s largest oil field boosts OPEC country's output

RE: OPEC, for some quiet moments.. - admin - 06-04-2017

But better times could be ahead, says Fundstrat's Thomas Lee. He offers three reasons: "Oil futures moving into backwardation, bullish for Energy stocks—in the past, this was a sign that oil supply/demand fundamentals are moving into balance," Lee writes. "Energy CDS and high-yield spreads have rallied strongly in 2017, reflecting improving fundamentals and spreads consistent with oil market in stable backwardation," Lee says. "Energy stocks have lagged severely, and is the only sector in the S&P 500 where equity and CDS/HY have diverged—past divergences favor a catch-up in the equity," Lee writes.

Time to Buy Oil Stocks? - Barron's

The oil-rich Permian Basin is emerging as a major source of new natural gas, a development that could deepen an existing glut and pressure gas prices for years. The West Texas region has become the most prolific spot for horizontal oil drilling and fracking. The new oil wells also produce natural gas, making it a nearly free byproduct that energy companies can then sell on top of the more-sought-after crude.

The Oil Play That Could Flood the Natural-Gas Market - WSJ

The real question, of course, is not how long the announced cuts will remain in place, but how long can this herd of cats be kept in compliance with the cuts? The simple answer is that as long as the cuts are supportive of prices and data starts to finally flow regarding a significant draw-down in inventory the various members of the OPEC/NOPEC output cut team will play the compliance game. Resolve and discipline will falter in a scenario where prices spike or fall considerably.

How Much Will Inventories Shrink As OPEC Extends Cuts? |

The latest OPEC meeting was uncharacteristically tranquil, with little of the eleventh hour infighting and arm-twisting that has been so prevalent in previous meetings. The cooperative spirit has allowed OPEC to roll over its production cuts for another nine months, as expected, a move that has to be described as a successful outcome. "Nine months with the same level of production that our member countries have been producing at is a very safe and almost certain option to do the trick,” Saudi energy minister Khalid al-Falih told reporters. Yet the oil markets are unimpressed.

Why OPEC Couldn’t Move Oil Prices Higher |

RE: OPEC, for some quiet moments.. - admin - 06-05-2017

A decrease in crude stockpiles that spurred an early oil rebound wasn’t enough to counter broader market concerns about U.S. production that continues to rise. Futures fell after gaining as much as 1.7 percent in New York. While U.S. inventories declined by 6.43 million barrels last week, production jumped by 22,000 barrels a day to 9.34 million, the most since August 2015, the Energy Information Administration reported on Thursday. At the same time, output from Libya, exempt from OPEC’s deal to cut supply, rose to the highest since October 2014 as production from its biggest field increased.

Oil Reverses Gains as Rising Output Outweighs Stockpile Declines - Bloomberg

“We’re going to do what it takes,” Khalid Al-Falih, Saudi Arabia’s energy minister, said in March. But by agreeing to an unexciting extension of cuts on May 25, the Organization of Petroleum Exporting Countries is merely tinkering. Unless the group acts decisively, it faces a slow process of attrition in rebalancing the market. But it can act decisively in two directions: much deeper cuts, or a longer-term commitment to higher output to scare off competitors.

OPEC Can Still Do What It Takes to Prop Up Oil - Bloomberg

OPEC oil output rose in May, the first monthly increase this year, a Reuters survey found on Wednesday, as higher supply from two OPEC states exempt from a production-cutting deal, Nigeria and Libya, offset improved compliance with the accord by others. A drop in output in Angola and Iraq and continued high compliance from Gulf producers Saudi Arabia and Kuwait helped lift OPEC's adherence with the supply cut deal to 95 percent from 90 percent in April, according to Reuters surveys. The Organization of the Petroleum Exporting Countries pledged to reduce output by about 1.2 million barrels per day (bpd) for six months from Jan. 1 as part of a deal with Russia and other non-members.

OPEC oil output rises in May as cut-exempt Nigeria, Libya pump more | Reuters

The first floating terminal proposed to export natural gas out of the Gulf of Mexico has been cleared by U.S. regulators to send cargoes overseas. Fairwood Peninsula Energy Corp.’s Delfin liquefied natural gas project gained approval from the Energy Department on Thursday to send 1.8 billion cubic feet of LNG a day to countries that don’t have free-trade agreements with the U.S.

First Floating Gas Terminal in Gulf Gains Approval for Exports - Bloomberg