Easy Wall Street cash is leading U.S. shale companies to expand drilling, even as most lose money on every barrel of oil they bring to the surface. Despite a 17% plunge in prices since April, drillers are on pace to break the all-time U.S. oil production record, topping 10 million barrels a day by early next year if not sooner, according to government officials and analysts.

Wall Street Cash Pumps Up Oil Production Even as Prices Sag - WSJ

Brent crude could potentially drop to $40 a barrel 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 a barrel, 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 - Bloomberg

Royal Dutch Shell plc, through its subsidiary BG E&P Brasil Ltda. (Shell) and consortium partners in Lula South, announce today that deepwater production has started at the FPSO P-66, which is located in the Brazilian pre-salt of the Santos basin. Positioned in 2,150-m water depth, the P-66 can process up to 150,000 bbl of oil and 6-million m3 of natural gas per day. The unit is the first in a series of standardized vessels operated by Petrobras to begin production within the BM-S-11 block consortium and the seventh to produce within the consortium overall.

Shell announces start of deepwater production at newest FPSO in Santos basin

DDriverless cars will drastically reduce accidents because they will replace reckless drivers, they will never speed, and they will be equipped to see and hear better than any of us. As previously explained here, this social gospel will be partly offset by massive layoffs, first in the auto-repair industry and then also in auto production, because a car’s ability to drive independently between a couple’s workplaces will make them shed their second car, and the subsequent emergence of an autonomous cab might make many shed the first car as well..

How driverless cars will kill the oil business - MarketWatch

OPEC members can’t take all the credit for oil’s rally Tuesday, which saw prices score their biggest single-session gain of the year. News of cuts to oil-and-gas exploration spending and signs of a potential slowdown in U.S. output also played roles in the bullish shift in sentiment. On Tuesday, September West Texas Intermediate crude CLU7, +1.15%  rallied by $1.55, or 3.3%, to settle at $47.89 a barrel on the New York Mercantile Exchange, marking the strongest single-day climb since late last year, according to FactSet data.

Here’s why oil just scored its biggest one-day rally of 2017 - MarketWatch

Suncor Energy Inc. says Total SA has cut off funding for the partners' massive Fort Hills project, a new sign of anxiety by a major international oil company over high costs in Alberta's oil sands. Suncor said the mine is still on track to start production by the end of the year, but chief executive officer Steve Williams said Thursday that Total had chosen not to approve or provide additional funds for the project, sparking a commercial dispute between the companies.

French oil giant Total cuts off funding for Fort Hills project, Suncor says - The Globe and Mail

Total said it’s ready and able to make acquisitions and pursue growth, shrugging off uncertainties about oil prices as its financial position strengthens. Europe’s second-largest oil and gas company has the firepower to buy up fields on the cheap and press ahead with new developments, taking advantage of lower levels of debt, rising profit and surging cash flow, according to a statement Thursday.

Total ready to make acquisitions as financial strength grows

The shifting dynamics of the liquefied natural gas (LNG) industry have been neatly encapsulated by two recent decisions: the scrapping of a major new development and the expansion of an existing large-scale project. Malaysia's state-owned Petronas announced this week it was cancelling its $29 billion Pacific Northwest LNG venture in Canada's western British Columbia province, citing low global prices for the super-chilled fuel. The decision not to proceed came after Qatar said on July 4 it planned to raise its LNG capacity by 30 percent, which would allow it to defend its title as the world's largest producer against Australia, which is due to claim the crown once the last of its eight new projects is completed.

Qatar's LNG brownfield trumps Petronas' greenfield hopes: Russell

Exxon Mobil Corp. wrecked the oil industry’s perfect streak of upside profit surprises as the biggest U.S. oil explorer disclosed second-quarter results that failed to live up to analyst forecasts. Chevron Corp., the second largest U.S. driller behind Exxon, said it earned 77 cents a share, a dime less than the average of 21 estimates relying on generally-accepted accounting principals. Excluding non-cash costs related to unidentified asset impairments and other items, the per-share result was 91 cents, on an adjusted basis.

Exxon misses estimates as cuts fail to offset output declines

Caution lights are flashing for the oil industry. Facing lower-than-expected commodity prices, drillers from ConocoPhillips to Hess to Statoil have slashed their capital spending plans in recent days, as companies lay out their plans to cope with oil prices stuck below $50/bbl. The budget cuts won’t necessarily mean less oil or natural gas on the market, with some of the companies saying they can now do more with less and expect to produce just as much oil and gas in 2017. But they speak to an investor community that’s grown anxious as a global rally in crude prices has stalled out this year.

Oil companies slim drilling budgets as caution takes hold

Canada’s oil-sands operators are making progress in shedding their image as high-cost producers destined to fail in a low-price world. Suncor Energy, Cenovus Energy and MEG Energy all rose on Thursday after showing advances in cutting costs in their operations in northern Alberta. Those reductions helped their second-quarter results weather crude’s plunge into bear-market territory during the period.

Oil sands seen attacking costs amid crude slump

Royal Dutch Shell Plc said it hasn’t written off its Canadian liquefied natural gas project in Kitimat, British Columbia, yet as a global supply glut killed off a competing project earlier this week. LNG Canada, which is also backed by Mitsubishi Corp., PetroChina Co. and Korea Gas Corp., is still weighing an investment decision that’s expected by early 2019, Shell’s CEO Ben Van Beurden said on a conference call Thursday.

Shell still thinks Canada LNG project could be a go, says CEO

The specter of tighter U.S. sanctions is pushing up the perception that Venezuela is getting closer to defaulting on its bonds. Venezuela is awaiting possible further restrictions from the U.S., its largest trading partner, after President Nicolas Maduro held elections Sunday for a new assembly that will rewrite the constitution. The implied probability of Venezuela missing a payment over the next 12 months rose to 62% Monday, according to credit-default swaps data compiled by Bloomberg. That’s the highest level since March 2016. The odds of a credit event over the next five years increased to 95%.

Potential U.S. oil sanctions increase risk of Venezuelan default

Representatives of some OPEC and non-OPEC nations will meet in Abu Dhabi on Aug. 7-8 to discuss why some of them are falling behind in their pledges to cut production, according to an OPEC statement. The meeting, co-chaired by Kuwait and Russia, will examine reasons why some countries aren’t fully implementing their cuts, it said. Some nations will argue that the independent sources used by OPEC to assess compliance overestimate their production, according to two people familiar with the matter, who asked not to be identified because the discussions aren’t public.

OPEC to meet with non-OPEC nations to discuss weaker cuts compliance

As pessimism over oil dissipates and investors flirt with $50/bbl again, short-sellers are getting out of the way. Hedge funds are the most upbeat about WTI in three months after bets on declining prices shrank. Meanwhile, signs that the shale boom is slowing and the market is moving closer to balance set the mood for futures to jump 8.6% last week.

Oil skeptics exit as market dispels gloom to flirt with $50

Iraq’s crude oil output could hit 5 million barrels daily by the end of the year, the country’s Oil Minister Jabar al-Luaibi told Iraqi media, adding that these projections “will not be affected by any fluctuations”. According to OPEC’s latest Monthly Oil Market Report, in June Iraq pumped 4.5 million barrels of crude daily, up from 4.44 million bpd in May, according to secondary source data.

OPEC’s No.2 Goes Rogue, Plans To Pump 5 Million Bpd | OilPrice.com

OPEC Has a Crippling Problem: Its Members Can’t Stop Pumping Eight months after a landmark deal to cut oil output to force prices up, big budget obligations drive members to keep producing

OPEC Has a Crippling Problem: Its Members Can’t Stop Pumping - WSJ

OPEC oil output has risen this month by 90,000 barrels per day (bpd) to a 2017 high, a Reuters survey found, led by a further recovery in supply from Libya, one of the countries exempt from a production-cutting deal. A dip in supply from Saudi Arabia and lower Angolan exports helped to boost OPEC's adherence to its supply curbs to 84 percent. While this is up from a revised 77 percent in June, compliance in both months has fallen from levels above 90 percent earlier in the year.

OPEC oil output jumps to 2017 high on further Libya recovery

Saudi Arabia is considering a flexible tax system for state-owned oil company Aramco that would increase royalty payments when crude prices rise, according to people familiar with the deliberations. Riyadh is mulling a proposal from Saudi Aramco to replace the current fixed royalty on revenues, the same people said, asking not to be named discussing government policies. Aramco has proposed to initially set the royalty at 20 percent -- the same rate as today’s fixed rate -- and increase it automatically if oil prices rise significantly.

Saudis Weigh Oil-Price Linked Tax for Aramco Before IPO - Bloomberg

Canada's struggling oil market has found something of a lifeline as traders scramble for heavy crude due to OPEC production cuts and sinking Latin American output. Output has fallen in Organization of the Petroleum Exporting Countries and non-OPEC Latin American countries such as Mexico and Colombia, leading refiners as far away as China to look to Alberta's oil sands to fill the gap.

Canadian heavy oil plugs gap left by OPEC, Latam

Europe’s oil industry is once again pumping out cash even as crude languishes at half the price of three years ago. Yet companies remain vulnerable to a renewed downturn. The region’s top three -- Royal Dutch Shell Plc, Total SA and  BP Plc -- can now cover spending from cash flow with oil at $50/bbl. But BP predicts prices will drop this year, while Shell talks of a “ lower forever” view. A fresh slump could put dividends at risk, and investors know it.

Oil majors seen vulnerable to fresh slump despite growth at $50

BP Plc moved to calm investor concerns after debt rose to a record, saying lower oil-spill payments for the rest of the year and funds from asset sales will ease the burden. “This year debt is going up exactly in line with payments going out for Macondo,” CFO Brian Gilvary said Tuesday by phone. “And it will come back down commensurately in the second half of the year when disposal proceeds come in.”

BP breaks even in tough environment after debt hits record

McKinsey Energy Insights (MEI), the data and analytics specialist that provides distinctive insight and support to the global energy industry, has released its latest Global Gas Market Outlook, in which the company predicts that natural gas will represent 23%—up from 22% in 2016—of the global energy mix by 2030. The company also expects total natural gas demand to grow 1.4% p.a. from 3,500 Bcm in 2016 to 4,300 Bcm in 2030.

McKinsey Energy Insights forecasts global gas supply to grow 1.4% by 2030

Since LNG exports first began in March of 2016, feedgas deliveries to Cheniere Energy's (LNG) Sabine Pass Liquefaction Plant on the Texas/Louisiana border have been an important and ever-increasing source of temperature-independent demand. Until the past week, three Trains, or individual liquefaction plants and their associated processes, had been active at Sabine Pass, each providing around 0.8 BCF/day in natural gas demand, of which most was liquefied and exported and the remainder burned to drive the liquefaction processes. As a result, daily deliveries, other than a few brief outages, had averaged between 2.1 BCF/day and 2.3 BCF/day since February of 2017, as shown in Figure 1 below.

LNG Exports Rise To All-Time High: Here Is Why It Is So Bullish For Natural Gas | Seeking Alpha

Look under the hood of the oil market and one thing becomes apparent -- shale producers seem to be hedging again. Demand for the contracts that producers use to guarantee price levels soared after 2018 West Texas Intermediate crude returned to $50/bbl. At the same time a raft of trades were reported to U.S. regulators last week that showed some producers hedging at levels as low as $45/bbl, according to data compiled by Bloomberg.

Oil market's hidden signals show shale producers hedging again

Venezuela’s state-owned oil company and its partners have quietly started working on a Plan B to find markets for the country’s crude oil if the White House ratchets up sanctions and bans imports.

Venezuela to prepare workaround if U.S. bans oil imports

Oil majors are raking in more cash now than they did in the heyday of $100 oil, according to Goldman Sachs Group Inc. Integrated giants like BP Plc and Royal Dutch Shell Plc have adapted to lower prices by cutting costs and improving operations, analysts at the bank including Michele Della Vigna said in a research note Wednesday. European majors made more cash during the first half of this year, when Brent averaged $52/bbl, than they did in the first half of 2014 when prices were $109.

Who needs $100 oil? Majors seen making more cash at $50, Goldman says

The failure of a $27-billion project last week may offer a lesson to natural gas exporters: Go small or go home. With a global glut dragging down prices, liquefied natural gas suppliers including Cheniere Energy Inc. and Tellurian Inc. are looking to build smaller and cheaper. Such projects -- a third of the size and a fraction of the cost of most existing terminals -- offer a competitive edge for supplying emerging markets like the Middle East and Latin America, where customers are seeking intermittent deliveries of small amounts of the heating fuel.

Global glut has LNG suppliers looking to build smaller and cheaper

The tanker Paramount Helsinki docked in Pascagoula, Mississippi, last week bearing the lifeblood of Chevron’s refinery there: 532,000 bbl of thick Venezuelan oil. Its arrival on July 23, as Venezuela’s democracy slid into what may be its final crisis, underscores the uneasy partnership that the American oil industry has entered with a nation some fear is marching toward dictatorship.

As Venezuela spirals, U.S. oil confronts a $10-billion threat

The frantic shale race may be causing some long-term damage to assets in the Permian and other major U.S. oilfields. As production from wells rapidly declines, drillers are rushing to add new ones at a faster pace in order to keep increasing output. The problem is that drilling multiple wells closer together is contributing to the drop in established ones, and sometimes causing harm that can’t be fixed.

Wild shale race may be harming the Permian's oil trove

The “magic” of $50 oil is now in the sights of deep-sea drillers as they try to lure customer spending from shale wells on land. And after more than three years of pain, that prospect has some investors excited. Transocean Ltd. rose the most in more than eight months after the world’s biggest provider of offshore rigs predicted explorers could soon shift their spending from land to sea as crude futures inch closer to the key level. Shares of other deepwater service providers like Diamond Offshore Drilling Inc. and Noble Corp Plc also surged on the heels of Transocean’s rally.

$50 oil "magic" boosts offshore drillers' hopes of competing with shale

Indonesia wants Chevron Corp. and ConocoPhillips to submit proposals to renew their licenses to operate oil and gas fields as the former OPEC member seeks to reverse a decline in energy investments. Energy and Mineral Resources Minister Ignasius Jonan asked Chevron executives last week to inform the ministry about the explorer’s plans for Indonesian operations beyond 2021, he said in an interview. The government expects Chevron to make a proposal within this year, he said. Jonan also told Conoco executives to prepare a proposal if they wished to seek an extension for a block set to expire in 2020.

Indonesia seeks Chevron, ConocoPhillips proposals in investment push

Banks have cut their forecasts on oil prices for a third consecutive month, doubting that the recent fall in stockpiles will last. The brimming oil inventories that have pressured prices for three years had started to decline in recent weeks as U.S. demand rose and OPEC production was reduced. But some analysts say this decline in stockpiles could reverse later in the year as U.S. crude production continues to grow.

Oil Price Forecasts Again Cut by Banks - WSJ

Oil prices rose on Friday after a strong U.S. jobs report bolstered hopes for growing energy demand, but crude prices declined for the week, pressured by rising OPEC exports and strong U.S. output. U.S. employers hired more workers than expected in July and raised their wages, the Labor Department reported.

Oil prices rise on strong U.S. jobs data

If an oil trader so good that he was known as “God” can’t win in today’s markets, it’s hard to imagine who can. Andy Hall is closing down his main hedge fund after big losses in the first half of the year, according to people with knowledge of the matter. His flagship Astenbeck Master Commodities Fund II lost almost 30 percent through June, a separate person with knowledge of the matter said, asking not to be identified because the details are private.

The Oil Trader Known as ‘God’ Is Closing Down His Main Hedge Fund - Bloomberg

China is on pace to overtake the United States as the world's biggest oil importer this year, cementing its status as Asia's most pivotal oil market actor that will increasingly dominate the region's fuel trade. For the first time, China imported more crude oil in the first half of the year than the U.S., government statistics showed. China averaged 8.55 million barrels per day (bpd) versus 8.12 million bpd in the U.S., a trend that is expected to last.

Global refiners brace themselves as China cements its oil market dominance

The main U.S. energy regulator can get back to the business of approving multi-billion-dollar natural gas pipelines after the Senate moved to fill two of four vacancies at the long-crippled agency. Senators on Thursday confirmed the nominations to the Federal Energy Regulatory Commission of Robert Powelson, former chairman of the Pennsylvania Public Utility Commission, and Neil Chatterjee, a senior aide to Senate Majority Leader Mitch McConnell.

U.S. energy agency to take on $50-billion pipeline backlog as Senate acts

Norway’s oil industry has been salivating for years over the Arctic Lofoten islands, which could hold billions of barrels of crude. It will likely have to keep dreaming. The general election next month is unlikely to lift a deadlock that’s keeping a ban on drilling off the environmentally sensitive archipelago as more and more Norwegians are turning their backs on the industry that helped make the country one of the world’s richest.   “It’s a dead issue,” said Frank Aarebrot, a professor of political science at the University of Bergen.

Dream of $65 billion hidden off Norway is fading away

Russia’s largest oil company disclosed another advance payment to Venezuela’s state producer after the U.S. sanctioned President Nicolas Maduro on Monday. Rosneft PJSC paid $1.02 billion to Petroleos de Venezuela SA in April for future crude supplies, the state-run Russian producer said in an earnings statement on Friday. That follows advance payments of about $1.5 billion in 2016 and comes a day after Rosneft CEO Igor Sechin pledged to stick with investment plans in the crisis-torn Latin American nation.

Russian oil giant lends support to Venezuela oil company

BP announced today it has brought online a highly productive natural gas well in the Mancos shale, highlighting the potential of the New Mexico field to be a significant new source of U.S. natural gas supply. Early production rates at the NEBU 602 Com 1H well in San Juan County are the highest achieved in the past 14 years within the San Juan basin, a large oil and gas producing area spanning southwest Colorado and northeast New Mexico that includes the Mancos shale. The well achieved an average 30-day initial production rate of 12.9 MMcfgd.

BP announces Mancos shale discovery in New Mexico