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RE: OPEC, for some quiet moments.. - admin - 07-19-2017

Total SA (TOT) , Royal Dutch Shell Plc (RDS.B)  and Eni SpA (E) are the top picks in the oil sector ahead of second quarter earnings season according to Goldman Sachs analysts. The trio are best positioned to benefit from increased production as they ramp up output following the "flawless execution" of recent projects, the investment bank said in its reporting preview dated July 12. "Total remains our preferred stock in the sector as it offers the most attractive combination of CF (cash flow) generation (6.5% 2017-19 FCF yield), high growth (c.5% production CAGR to 2020E) and high return on new investment opportunities on the back of ongoing cost discipline and better execution," wrote analysts Michelle Della Vigna, David Chreng, Peter Hackworth and Duncan Milligan.

Goldman Sachs Reveals 3 Top Oil Stocks to Own - TheStreet

OPEC member Ecuador will no longer comply with an agreed OPEC production cut due to the country's financial difficulties and plans to gradually raise its oil output, the government said on Monday. Oil Minister Carlos Perez said that Ecuador's compliance with the agreed cuts was only around 60 percent, putting current output at 545,000 bpd. "We need funds for the fiscal treasury and for that reason we've taken the decision to gradually increase production, although not to the country's full potential, because of OPEC's output restrictions and the ceiling that we have as a result," Perez said in a televised interview.

UPDATE 1-OPEC's Ecuador says plans to gradually increase oil production

The global natural gas market is undergoing a major transformation driven by new supplies coming from the United States to meet growing demand in developing economies and industry surpasses the power sector as the largest source of gas demand growth, according to the IEA’s latest market analysis and five-year forecast on natural gas. This evolution of the role of natural gas in the global energy mix has far-reaching consequences on energy trade, air quality and carbon emissions, as well as the security of global energy supplies, according to the new report, Gas 2017.

IEA sees global gas demand rising to 2022 as US drives market transformation

While oil advanced last week, prices in New York are still below $50 a barrel on concerns expanded global supplies will offset output curbs by the Organization of Petroleum Exporting Countries and its allies. The group’s output climbed last month to the highest this year as members exempt from the deal -- Nigeria and Libya -- pumped more and others slipped in delivering their pledged curbs. “Macro data in China point to renewed growth momentum in June, following a somewhat sluggish April and May,” said Jan Edelmann, an analyst at HSH Nordbank AG in Frankfurt.

Oil holds above $46 amid robust economic growth in China - Houston Chronicle




RE: OPEC, for some quiet moments.. - admin - 07-20-2017

Talk to a Big Oil executive these days, and the chances are they’ll steer the conversation toward gas. “In 20 years, we will not be known as oil and gas companies, but as gas and oil companies,” Patrick Pouyanne, chief executive officer of French giant Total SA, told a conference in St. Petersburg last month. Pouyanne and his peers have pitched the fuel as a bridge between a fossil-fuel past and a carbon-free future. Gas emits less pollution than oil and can be burned to produce the power that grids will need for electric cars.

What If Big Oil’s Bet on Gas Is Wrong? - Bloomberg

I think there is a high probability that we could see [WTI] rallying back to $50,” Bob Parker, member of the investment committee at Quilvest Investment Management, said on Bloomberg TV. The prediction comes after a string of data gives some hope to oil bulls, who had been chased out of the market in June.

4 Reasons Oil Will Rally Back To $50 | OilPrice.com

Something that’s been whispered about in the last few months is now being talked about loudly: U.S. oil drillers’ debts. There have been a few notable warnings that shale boomers might want to slow down their production boost lest they bring on another price crash, but the truth seems to be that they can’t do it: they have debts to service. Now that international oil prices are once again on a downward spiral, drillers are facing a new challenge, according to Bloomberg: their bondholders are no longer optimistic.

Are More Bankruptcies On The Way For U.S. Oil? | OilPrice.com

While governments around the world are starting to mandate electricity over oil for powering motor vehicles, what are the chances of oil supply being severely impacted in the next quarter century? Electric vehicle demand appears ready to be increasing in key markets like China, Europe, and the U.S., but it is something to keep in perspective with overall global demand. France has committed to banning gasoline and diesel-powered vehicles by 2040. Germany and the European Union are cracking down on automakers for violations of diesel emissions rules and reporting with Daimler most recently pulled into the fray.

Electric Vehicles Won’t Topple Oil…Yet | OilPrice.com




RE: OPEC, for some quiet moments.. - admin - 07-21-2017

Argentina's state-run oil firm YPF SA, France's Total SA, Wintershall Energía SA and BP unit Pan American Energy LLC announced a $1.15-billion joint investment on Tuesday to increase shale gas production. The investment is the largest specific project announcement since March in Vaca Muerta, one of the world's largest shale formations, as Argentine President Mauricio Macri's government tries to reduce reliance on gas imports that have strained Argentina's finances.

Total, BP unit, YPF announce $1.15-billion investment in Argentina's Vaca Muerta

Oil edged up to about $49/bbl on Monday after fewer drilling rigs were added in the United States last week, helping ease concerns that surging shale supplies will undermine OPEC-led production cuts. U.S. drillers added two oil rigs in the week to July 14, bringing the total to 765, Baker Hughes said on Friday. Rig additions over the past four weeks averaged five, the slowest pace of growth since November.

Oil edges up towards $49 amid U.S. drilling slowdown

Oil was steady amid mixed signals on U.S. crude inventories, with industry data showing supplies increased last week while government statistics were expected to indicate a decline. Futures were little changed in New York after adding 0.8% on Tuesday. U.S. inventories rose by 1.63 MMbbl last week, according to people familiar with the American Petroleum Institute data. That contrasts with a Bloomberg survey before an Energy Information Administration report Wednesday that forecasts a 3.5 MMbbl decline, which would be the 13th drop in 15 weeks.

Oil steadies amid mixed signals on U.S. crude inventories

OPEC producers are finding that shale oil drillers aren’t their only adversaries in their battle to drain a three-year crude glut. As oil rigs in the U.S. jumped 45% this year, north of the border, oil-sands companies including Devon Energy, Suncor Energy Inc. and Cenovus Energy Inc. have ramped up operations as well. Their thermal production sites are running as much as 30% above capacity this year, squeezing barrels from existing production sites to maximize revenue.

Oil sands seen helping shale counter OPEC efforts to rebalance market




RE: OPEC, for some quiet moments.. - admin - 07-22-2017

OPEC and Russia’s plan to clear the global oil glut hasn’t worked as they hoped, but there’s little expectation the world’s largest producers will act more aggressively when they meet this weekend. Oil has slumped into a bear market and inventories remain stubbornly high despite a deal between OPEC and 10 countries outside the group to cut output. The implementation of supply curbs is faltering as Libya and Nigeria restore lost production. The trouble for ministers meeting in St. Petersburg to review the progress of the deal is the alternatives look little better than the status quo.

Oil Producers Don’t Have a Plan to End the Glut - Bloomberg

Oil prices slid on Friday, settling about 2.5 percent lower after a consultancy forecast a rise in OPEC production for July despite the group's pledge to curb output, reigniting concerns the global market will stay awash with crude. Benchmark Brent crude futures LCOc1 settled down $1.24 or 2.52 percent at $48.06 a barrel. U.S. West Texas Intermediate (WTI) crude futures CLc1 settled down $1.15 or 2.45 percent, at $45.77 a barrel.

Oil dives about 2.5 percent; OPEC crude output rise forecast

Saudi Arabia is making good on promises to curtail oil shipments to the United States with the likely intention to drain visible inventories and support prices. The United States imported an average of 524,000 barrels per day (bpd) of crude from Saudi Arabia in the week ending July 14, the lowest volume for more than seven years (tmsnrt.rs/2vI1iE2). Imports from Saudi Arabia averaged just 810,000 bpd over the last four weeks, according to the U.S. Energy Information Administration (EIA), the slowest rate since January 2015.

COLUMN-Saudi Arabia curtails crude flow to United States: Kemp

A steady clip of shale gas discoveries is behind a new estimate that the country has 3,141 trillion cubic feet (Tcf) of future natural gas supplies, 10 percent more than analysts knew of just two years ago.

NATURAL GAS: U.S. gas supplies up 10 percent in 2 years — assessment -- Thursday, July 20, 2017 -- www.eenews.net E&E News -- Start a free trial




RE: OPEC, for some quiet moments.. - admin - 07-24-2017

OPEC and Russia’s plan to clear the global oil glut hasn’t worked as they hoped, but there’s little expectation the world’s largest producers will act more aggressively when they meet this weekend. Oil has slumped into a bear market and inventories remain stubbornly high despite a deal between OPEC and 10 countries outside the group to cut output. The implementation of supply curbs is faltering as Libya and Nigeria restore lost production.

Oil Producers Don’t Have a Plan to End the Glut - Bloomberg

When Bob Dudley, chief executive officer of British oil giant BP Plc, was asked at a recent conference when oil demand will peak, he had a precise answer: June 2, 2042.

Remember Peak Oil? Demand May Top Out Before Supply Does - Bloomberg

Russia's top oil producer Rosneft is negotiating to swap its collateral in Venezuelan-owned, U.S.-based refiner Citgo for oilfield stakes and a fuel supply deal - a move to avoid complications from U.S. sanctions, two sources with knowledge of the negotiations told Reuters. State-owned Rosneft holds a 49.9 percent stake in Citgo as collateral for a loan last year of about $1.5 billion to the OPEC nation, which is reeling from low oil prices and a severe recession.

Exclusive: Russia, Venezuela discuss Citgo collateral deal to avoid U.S. sanctions - sources

Energy-rich Gulf Arab nations have scrambled to adjust to the slump in oil prices since 2014. Three years on, their economies are mired in weak growth and largely just as dependent on crude as they ever were. The six members of the Gulf Cooperation Council have curtailed subsidies and introduced new taxes to bolster non-oil revenue and reduce ballooning budget deficits. Much of the savings, however, have been due to spending cuts and the pace of reforms has slowed across the region, said Monica Malik, chief economist at Abu Dhabi Commercial Bank. Overall progress in economic diversification has been limited, she said.

Three years into cheap oil, Gulf Arab nations are still depending on rebound




RE: OPEC, for some quiet moments.. - admin - 07-24-2017

The U.S. government began stockpiling oil July 21, 1977. It started with just 412,000 bbl of Saudi Arabian light crude stashed in a Southeast Texas salt dome. In the wake of the Arab oil embargo in the first half of the 1970s, which sent prices through the roof and forced Americans to ration gasoline, creating a national reserve seemed like an obvious way to protect U.S. consumers from global supply shocks. “It’s hard to imagine if you weren’t there,’’ said John Herrington, the Energy secretary under President Ronald Reagan, who pushed to expand the reserve in the 1980s. “We were lining up at gas stations. We were turning down our thermostats.’’

U.S. owns 700 MMbbl of oil and Trump wants to sell it

Key OPEC and non-OPEC oil nations will discuss the situation involving producers Libya and Nigeria at a meeting on Monday, Russian Energy Minister Alexander Novak told reporters on Sunday. Speculation has been swirling in oil markets that the meeting might ask Libya and Nigeria to join a production cutting deal from which they are currently exempt. Six OPEC and non-OPEC ministers will meet on Monday in St. Petersburg to discuss the market outlook and compliance with output cuts.

OPEC, non-OPEC nations may ask Libya, Nigeria to join output cuts

Almost two years after the biggest gas leak in U.S. history sprung from a Sempra Energy natural gas storage field in Southern California, the state is ready for the complex to reopen. Sempra Energy’s Aliso Canyon field near Los Angeles is safe to operate at about 28% of capacity, with the ability to store as much as 23.6 Bcf, the state Division of Oil, Gas and Geothermal Resources and Public Utilities Commission said Wednesday in a joint statement. The long-anticipated finding follows months of extensive inspections and well tests by engineers.

After biggest gas leak in U.S. history, Aliso Canyon field set to reopen

Conflict-torn Libya, divided between rival factions in the east and the west, recently reached 1 million bpd of crude oil output—for the first time since 2013. The oil production recovery has put in the spotlight the chairman of Libya’s National Oil Corporation (NOC), Mustafa Sanalla, whom analysts see as a central figure in the oil sector, wearing the hats of both a diplomat and an oil minister. It will be Sanalla who will lead Libya’s delegation at the upcoming meeting of the Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC) in Russia, at which he will argue his country’s position and share production plans for the immediate future.

Libya’s Oil King Won’t Be Stopped By OPEC | OilPrice.com




RE: OPEC, for some quiet moments.. - admin - 07-25-2017

Saudi Arabia, OPEC’s biggest oil producer, plans to step up pressure on nations that aren’t complying with their commitment to cut output, including a proposal to start monitoring exports. “Some countries continue to lag” in their compliance, Saudi Oil Minister Khalid Al-Falih said Monday in St. Petersburg, Russia, where he’s attending a meeting of OPEC and non-OPEC producers. It’s “a concern we must address head on.”

Saudis to tackle lagging compliance with oil cuts "head on"

OPEC may need to consider extending its oil-cuts agreement when the group meets in November, as crude markets are taking too long to recover, United Arab Emirates Energy Minister Suhail Al Mazrouei said. The Organization of Petroleum Exporting Countries, which already prolonged its cuts accord with other major producers through the first quarter of next year, may have to discuss a further extension, Al Mazrouei said in an interview with Bloomberg TV’s Francine Lacqua. Increased output from Libya and Nigeria, which are both exempt from cutting, is complicating OPEC’s effort to re-balance the market, he said.

UAE sees OPEC considering oil-cuts extension in November

Higher vehicle efficiency and electric cars penetration, higher fuel prices, and lower economic growth may lead to a global oil demand peak as soon as in 2024, Goldman Sachs said on Monday in a research note on refining. “In our extreme case, we project peak oil demand in 2024,” Goldman Sachs analysts said in the note, as quoted by Reuters.

Goldman Sachs Warns Of Global Oil Demand Peak | OilPrice.com

While OPEC is trying to ‘fix’ the supply side of the oil market, demand at one of the world’s top refiners is faltering in the summer—a season on which the cartel is pinning its hopes to speed up the drawdown in global oversupply. China’s state refiner China Petroleum & Chemical Corporation, also known as Sinopec, is reducing its oil refining output by around 240,000 bpd between June and August—the peak season—due to weaker fuel demand and stiffer competition from privately owned independent Chinese refiners, Bloomberg reports, citing people in the know.

Falling Chinese Demand May Be OPEC’s Biggest Dilemma | OilPrice.com




RE: OPEC, for some quiet moments.. - admin - 07-26-2017

After a brief respite at the start of the year, the world's top oil and gas companies are set to double down on cost cutting as a recovery in crude prices after a three-year slump falters. Corporate hopes were raised by a deal between members of the Organization of Petroleum Exporting Countries and other non-OPEC producers to cut production, which lifted oil prices above $58 a barrel in January, after they had slid to as low as $27 in 2016.

After false dawn, Big Oil to double down on cost cuts

Energy markets might need to be regulated to put a brake on widespread financial speculation that is distorting crude prices, the head of Italian oil major Eni told Il Sole 24 Ore newspaper. Eni (ENI.MI) CEO Claudio Descalzi said OPEC and Saudi Arabia were not in a position to push prices higher by cutting output, adding that geopolitical tensions, growing U.S. shale oil production and heavy speculation in crude futures were hurting the sector.

Oil markets need regulator in face of speculators: Eni CEO

Hedge funds are still holding large bearish bets against oil and OPEC, yet out in the real world traders and refiners buying and selling actual barrels say it’s starting to look somewhat more bullish. "The market is looking a bit better," Ian Taylor, chief executive officer of Vitol Group, the world’s largest oil trader, said in an interview. "Physical differentials are improving across the world.”

Traders Think Hedge Funds Are Missing a Trick With Oil - Bloomberg

U.S. investors are driving down the price of oil by shoveling too much money into American shale companies, the chief executive of Schlumberger Ltd., the world’s largest oil-field service firm, said Friday.

Schlumberger CEO Blames U.S. Investors for Stagnant Oil Prices - WSJ




RE: OPEC, for some quiet moments.. - admin - 07-27-2017

Halliburton Co. reported impressive second-quarter results on Monday, but warned the growth in North American rig count was "showing signs of plateauing," sending shares down as much as 4.2%. Oilfield services providers such as Halliburton have been helped by a boom in North American drilling even though oil has stayed below $50.

Halliburton sees North American customers "tapping the brakes"

Oil-weighted exploration and production (E&P) companies operating in the prolific Permian basin have 65% of their oil production hedged at an average strike price of approximately $50/bbl. This supports their aggressive production targets for 2017, according to new analysis from IHS Markit. The IHS Markit hedging analysis “Company Peer Group Analysis—Oil-weighted U.S. E&Ps: Permian operators’ lofty production targets supported by strong hedging,” evaluated the oil and gas hedging in place for a group of 18 oil-weighted U.S. E&Ps in the IHS Markit coverage universe, including a subgroup of 10 Permian basin-focused operators.

Permian operators’ lofty production targets supported by strong hedging, IHS Markit says

The United Arab Emirates reiterated its commitment to the OPEC agreement on production cuts and said it would deepen its own curbs. The Abu Dhabi National Oil Co.’s shipments of Murban, Das and Upper Zakum crudes will be 10% lower from September, Minister of Energy Suhail Al Mazrouei said in a tweet on Tuesday. “The UAE is committed to its share in the OPEC production cut,” he said.

UAE pledges further oil output cuts starting in September

At the meeting of OPEC and non-OPEC producers in St. Petersburg on Monday, Saudi Arabia announced its intention to take further action to bolster flagging oil prices. Saudi oil minister Khaled al-Falih declared Saudi oil exports would be limited to 6.6 million bpd, a decline of almost a million bpd from the country’s export level last year. The oil minister reported that global inventories had fallen by 90 million barrels, crediting the OPEC production cuts. Yet he also said that stocks remained at historically-high levels and additional action by producers would be needed for levels to recede.

Saudis To Take ‘Significant’ Measures To Bolster Oil Prices | OilPrice.com




RE: OPEC, for some quiet moments.. - admin - 07-28-2017

Brent crude could potentially drop to $40/bbl or below in the first quarter of 2018 without deeper output curbs by OPEC, according to an oil analyst at industry consultant JBC Energy GmbH. The benchmark for more than half the world’s oil may end 2017 between $45 and $47/bbl, after which the market may turn “very tricky,” said Richard Gorry, managing director at JBC Asia. While prices are being supported by recent U.S. inventory draws amid the summer driving season when fuel demand typically peaks, that trend will reverse from early-September as consumption weakens, he said.

Oil's surge masks risk of Brent slumping to $40 after summer

Oil extended gains from the highest close in seven weeks as industry data showed U.S. crude stockpiles plunged, easing a glut. Futures climbed as much as 1.5% in New York after rising 4.6% in the previous two sessions. Inventories tumbled by 10.2 MMbbl last week, the API was said to report. If the decline is replicated in government data Wednesday, it would be the biggest decrease since September. The United Arab Emirates reiterated its commitment to the OPEC agreement on production cuts and said it would deepen its own curbs.

Oil climbs from seven-week high on signs U.S. stockpiles plunged

Major oil companies are starting to beat the crude-market slump as the industry rediscovers how to make money at lower prices. Exxon Mobil and Royal Dutch Shell are forecast to more than double second-quarter profit from a year earlier, far outstripping the 8% gain in benchmark Brent crude, according to analyst estimates compiled by Bloomberg. Chevron will return to profit, while France’s Total is expected to report a third consecutive quarter of higher year-on-year earnings.

Major oil companies beating slump as CEOs learn to live with $50 crude

The tight oil sector has struggled to generate positive cash flow since 2010. Last year, only one company in the sector posted positive cash flow. But there is light at the end of the tunnel. Wood Mackenzie’s new report, "When will tight oil make money?"calculates that the five largest tight oil players could become cash flow positive by 2020.

Wood Mac: Shale sector to be cash flow positive by 2020