OPEC, for some quiet moments..

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The global oil industry is caught in a self-feeding downward spiral as falling prices cause producers to boost output even further in a scramble to service $3 trillion of dollar debt, the world’s top watchdog has warned. The Bank for International Settlements fears that a perverse dynamic is at work where energy companies in Brazil, Russia, China and parts of the US shale belt are increasing production in defiance of normal market logic, leading to a bad “feedback-loop” that is sucking the whole sector into a destructive vortex.

Oil market spiral threatens to prick global debt bubble, warns BIS - Telegraph

China’s output in 2016 will decline between 3% and 5% from last year’s record 4.3 MMbopd, according to analysts from Nomura Holdings Inc. and Sanford C. Bernstein & Co. That would be the first decline in seven years and the biggest drop in records going back to 1990. The country is the world’s fifth-largest producer and biggest consumer after the U.S.

China output seen cracking under pressure of price collapse

Oil tycoon T. Boone Pickens, who made and lost fortunes targeting some of the largest U.S. explorers over the past 40 years, has cashed out as the worst crude market downturn in decades drags on. Pickens has sold all his oil holdings and is waiting for the best moment to get back in, he said Thursday in an interview on “Bloomberg Go.” With prices low, mid-size U.S. oil companies, such as Pioneer Natural Resources Co., Anadarko Petroleum Corp. and Apache Corp., are acquisition targets for larger firms like Exxon Mobil Corp., he said.

T. Boone Pickens cashes out on oil, awaits time to get back in

2015 actually wasn’t all that bad for Gazprom. The giant state gas company posted strong European delivery figures and it saw sizeable growth in both net sales and profit. Of course, for Gazprom, ‘bad’ – as a subjective and cursory metric of appraisal – has an entirely different meaning than it did, say a decade ago, when the company’s market valuation was more than $320 billion higher than it is today. Between the lines, Gazprom’s reliance on Europe has probably never been greater and the broader state of Russia’s economy looms large. To be sure, Gazprom has market-moving capabilities, but its largely reactive strategy leaves little room for error in an increasingly competitive 2016.

Defending Gazprom’s Market Share Will Cost $25 Billion | OilPrice.com

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Iran will start sending 300,000 bpd of crude to Europe, 54% of the total it shipped before authorities on the continent put an embargo in place. Paris-based Total SA has agreed to buy about 160,000 bpd starting on Feb. 16, the ministry of oil’s Shana website reported, citing Oil Minister Bijan Namdar Zanganeh. The company also expressed interest in developing the South Azadegan oil field in western Iran near the border with Iraq and in a liquid natural gas project, Shana reported. Total asked for the necessary information to submit a proposal for the LNG plant.

Iran sees oil exports to Europe at 54% of pre-sanctions level

Total has started production from the Laggan and Tormore gas and condensate fields, located in 600 m of water in the West of Shetland area. The fields will produce 90,000 boed. “Laggan-Tormore is a key component of our production growth in 2016 and beyond. The innovative subsea-to-shore development concept, the first of its kind in the United Kingdom, has no offshore surface infrastructure and benefits from both improved safety performance and lower costs,” said Arnaud Breuillac, president of E&P at Total.

Total starts production at Laggan-Tormore in the West of Shetland

Oil prices will stay low for as long as 10 years as Chinese economic growth slows and the U.S. shale industry acts as a cap on any rally, according to the world’s largest independent oil-trading house. "It’s hard to see a dramatic price increase," Vitol Group CEO Ian Taylor told Bloomberg in an interview, saying prices were likely to bounce around a band with a mid-point of $50/bbl for the next decade. "We really do imagine a band, and that band would probably naturally see a $40 to $60 type of band," he said." I can see that band lasting for five to ten years. I think it’s fundamentally different."

World’s largest energy trader sees a decade of low oil prices

On the bullish side of things, the current oil price level is untenable, something that has been true for some time. An estimated 3.4 million barrels per day (mb/d) of oil production is currently “cash negative,” a situation that cannot carry on indefinitely. With the glut in oil production estimated to be only somewhere around 1 mb/d, today’s prices are clearly not sustainable.

In Spite Of Oil Price Slump, Speculators Drive Bets To Record Levels | OilPrice.com

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Moreover, the entire industry is taking a heavier axe to spending and upstream investment. Out of 18 large oil and gas companies that have reported earnings, spending was slashed by 40 percent on average, according to a Reuters survey. The top 30 U.S.-based oil and gas companies slashed their 2016 spending plans by 70 percent over the past year.

In Spite Of Oil Price Slump, Speculators Drive Bets To Record Levels | OilPrice.com

Lower oil prices for longer could result in a new epoch of dominance for the Organization of the Petroleum Exporting Countries. That could increase risks that non-OPEC countries again will become dependent on oil from the volatile region, according to comments on Tuesday from officials at the International Energy Agency.

Cheap oil may trigger a new era of OPEC dominance, warns IEA - MarketWatch

The depressed oil price environment is painting a gloomy outlook for North American E&P companies, and further, significant CAPEX cuts are needed in order for the group to demonstrate real financial discipline and align spending more closely with cash flow, according to new analysis from IHS. According to the IHS Energy Comparative Peer Group Analysis of North American E&Ps, which assessed the impact of lower oil and gas prices on 2016 cash flow estimates for the North American E&P peer group, under the IHS low-case scenario, to maintain a capital spending-to-cash-flow ratio in the historical range of approximately 130%, spending for the E&Ps would need to be cut by a further $24 billion, or 30%, from the most recent estimates.

Billions more in cuts needed from North American drillers: IHS

U.S. oil and gas pipeline companies including Williams Companies Inc and Kinder Morgan Inc have contracts worth billions of dollars that might be at risk as Chesapeake Energy Corp aims to slash its debts amid collapsing energy prices. Chesapeake said on Monday it had no plans to file for bankruptcy after sources told Reuters the firm, whose debt is eight times its market value, had asked its longtime counsel to look at restructuring options.

Chesapeake Energy woes cast shadow on U.S. pipeline companies | Reuters

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OPEC revised estimates of production from rival suppliers, indicating a steeper drop in non-OPEC supply than previously anticipated. Production outside the Organization of Petroleum Exporting Countries will fall by 700,000 bopd in 2016, or 40,000 bopd more than the group estimated last month. OPEC’s output increased by 130,700 bopd in January to 32.34 MMbopd. That’s about 600,000 bopd more than the average required for this year.

OPEC sees steeper drop in rivals’ supply as price curbs spending

Shale patches in the U.S. are pumping out more oil and gas than the government previously thought. A total 184,000 bpd of shale oil output were added to the Energy Information Administration’s estimate for February in its monthly Drilling Productivity Report released Monday. The agency also raised its estimate for natural gas production from the Marcellus region by 4.2%.

EIA raises shale production estimates in monthly report

BP is planning for oil prices to stay low for the first six months of the year and expects surplus production to only start diminishing when storage tanks fill up in the second half. “We are very bearish for the first half of the year,” CEO Robert Dudley said at the IP Week conference in London Wednesday. “In the second half, every tank and swimming pool in the world is going to fill and fundamentals are going to kick in. The market will start balancing in the second half of this year.”

BP CEO ‘very bearish’ on oil as storage tanks are filling up

Of all the things that could throttle Iranian oil exports--from geopolitics and high-level diplomatic game-playing to bloody conflict--at the end of the day, it’s seemingly innocuous insurance that threatens the plans of both buyers and sellers. The U.S. and European nations may have lifted oil and financial sanctions against Iran last month, but the insurance companies covering the tankers that would have to transport Iranian oil pose entirely new challenges in the form of red tape.

Insurance Concerns Could Throw Wrench In Iranian Oil Exports | OilPrice.com

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One for the home crowd..

Ireland beaten by Papua New Guinea in final T20

Ireland beaten by Papua New Guinea in final T20 - BBC Sport

Explorers in U.S. oil fields stung by the quick rise and fall in the market last year are expected to move cautiously when crude prices begin to climb again. Bill Thomas, chief executive at EOG Resources Inc., the largest landholder in Texas’s Eagle Ford shale formation, told attendees at an industry conference in Houston on Wednesday that his company won’t start boosting output the first time oil hits $60/bbl.

It’ll take more than an oil rally to restart shale boom

After testing a 12-year low, the price of oil simply has to go up. That’s according to the CEO of shipping and oil giant A.P. Moeller-Maersk A/S, who says 2015’s average crude price of $54/bbl is too low for the industry to produce enough oil to satisfy global demand. “In order for the world to be supplied with oil, it’s not enough that Saudi Arabia produces,” Nils Smedegaard Andersen said in a phone interview on Wednesday. “The world will need oil from places where production costs are higher. And therefore we expect the price of oil must go up.”

Oil above $55 is a long-term inevitability, Maersk CEO says

Do the Saudis have an oil market strategy beyond pumping crude to defend their market share? Are they indifferent to which countries’ oil industries survive? Or, alternatively, are they targeting specific global competitors and specific national markets? Did they start with a particular strategy in November 2014 when Saudi Petroleum and Mineral Resources Minister Ali al-Naimi announced the new market share policy at the OPEC meeting in Vienna and are they sticking with it, or has their strategy evolved with the evolution of the global markets since?

The Hidden Agenda Behind Saudi Arabia’s Market Share Strategy | OilPrice.com

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Crude oil surged the most in seven years, rebounding from the lowest in more than a decade as equities rallied. Volatility jumped. Futures rose 12% in New York and 11% in London. U.S. stocks halted a five-day slide that dragged global equities into a bear market. Producers are ready to work together and won’t make cuts unless there’s complete cooperation, United Arab Emirates Oil Minister Suhail Al Mazrouei said on a Sky News Arabia report posted online Feb. 10. The rebound follows speculators’ record short positions in West Texas Intermediate crude last month.

Crude oil surges the most in seven years as volatility soars

U.S. drillers pulled 28 oil-directed rigs from the field this week, according to the latest data from Baker Hughes. Since the end of last year, drillers across the country have idled 97 oil rigs, with the Permian basin, Eagle Ford and Williston basin accounting for 40, 15 and 14 rigs, respectively. Over the course of the past two weeks, 59 oil-directed rigs have been removed from service, with just 439 still seeking oil.

U.S. drillers pull 28 oil rigs as rout deepens

The thousands of attendees seeking reasons for optimism didn’t find them at the annual International Petroleum Week. Instead they were greeted by a cacophony of voices from some of the largest oil producers, refiners and traders delivering the same message: There are few reasons for optimism. The world is awash with oil. The market is overwhelmingly bearish.

The oil industry got together and agreed things may never get better

BNP Paribas, France’s largest bank, announced that it would no longer lend money to struggling oil and gas companies in the United States. "Given the current environment in the oil and gas markets and the short to medium term outlook, BNP Paribas has decided to halt the redevelopment of its reserve-based lending business," BNP said in a statement. The bank will continue to work with its existing borrowers, but won’t lend to new ones.

U.S. Banks Growing Hesitant To Loan Money To Energy Firms | OilPrice.com

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Oil ministers from three Opec countries, Saudi Arabia, Qatar and Venezuela, as well as Russia, agreed to freeze oil output at January levels, as long as others follow suit. The announcement came after the four ministers met in Doha on Tuesday. The move is designed to support the oil price, which has dropped sharply in recent months.

Four oil producing nations agree to freeze output - BBC News

Saudi Arabia and Russia, the world’s two largest crude producers, agreed to freeze output after talks in Qatar. The deal to fix production at January levels will be “adequate” and Saudi Arabia still wants to meet the demand of its customers, Oil Minister Ali Al-Naimi said in Doha after the talks with Russian Energy Minster Alexander Novak. Qatar and Venezuela also agreed to participate, Al-Naimi said. The freeze is conditional on other nation’s agreeing to participate, Russia’s Energy Ministry said in a statement. Oil pared gains in London, after rising before the meeting amid speculation the countries would discuss production cuts. “This is an announcement of a production freeze among countries whose production didn’t even grow recently,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “If Iran and Iraq are not a part of the agreement, it’s not worth much—and even then there is still a question of compliance.”

Saudi Arabia, Russia agree to freeze oil output

The growth of unconventional gas is spreading across the world with major implications over many years for markets and prices, according to a new World Energy Council study. The study, developed with project partner Accenture Strategy, says that despite an uncertain price environment, the magnitude and speed of change is not only influencing the U.S. market, but also other markets including countries such as China, Argentina and Algeria, which have similar potential as the U.S. in shale gas production. Also, countries such as Mexico, Saudi Arabia, South Africa, Poland and Turkey are mentioned in the study as having significant potential for shale gas development.

Unconventional gas is changing structure of global gas markets, report says

The closed-door meeting indicates the mood may be shifting among producers, especially Saudi Arabia, which has been determined to defend market share rather than prices in the face of competition from US shale oil producers. Opec's plan to drive out higher-cost producers has proved largely ineffective. City Index analyst Fawad Razaqzada said the move had disappointed the market slightly because many had hoped for a cut rather than a production freeze.

Four oil producing nations agree to freeze output - BBC News

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Saudi Arabia and Russia, the world’s biggest crude oil producers, joined Venezuela and Qatar in an agreement to freeze output in an effort to revive prices from a 12-year low. Whether the deal succeeds will depend on Iran, Iraq and other large exporters joining in. This is what some of the world’s biggest producers said after the deal:

Oil freeze: Iraq ready to cap output, Iran to maintain share

Saudi Arabian Oil Minister Ali Al-Naimi said the output freeze agreed with Russia and two other countries on Tuesday might be followed be more action to improve the oil market. “The reason we agreed to a potential freeze of production is simply the beginning of a process to to asses in the next few months and decide whether we need other steps to stabilize the market,” Ali Naimi said after meeting the Russian, Qatari and Venezuelan oil ministers in Doha. “We want a stable oil price.”

Saudi oil minister signals more action may follow output freeze

The average new well in each of these regions produces more oil than previous wells drilled in the same region, a trend that has continued for nine consecutive years. The increasing prevalence of hydraulic fracturing and horizontal drilling, along with improvements in well completions and the ability to drill longer laterals, has greatly improved well productivity. This trend can be seen in the continued increase in initial production rates since 2007, and it has allowed production in major shale basins to be fairly resilient despite high decline rates common to drilling and producing in tight formations and, since 2014, the declining number of rigs drilling for oil.

Initial production rates in tight oil formations continue to rise - Today in Energy - U.S. Energy Information Administration (EIA)

American liquefied natural gas is poised for a monumental breakthrough into international markets. For an economy struggling with the realities of low crude prices, U.S. LNG is a bright spot with an even brighter future. By the end of next month, the first ever LNG tanker from the southern United States will depart for Europe. This is all made possible with the completion of Cheniere Energy’s Sabine Pass LNG terminal on the Gulf Coast.

U.S. LNG Set To Hit Global Market | OilPrice.com

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Rather than fretting about whether the oil price has yet to find a bottom, several investment banks have started turning bullish on certain oil majors. These producers have suffered with a 70 percent plunge in the price of the commodity since mid-June 2014. But, many majors have been busy slashing costs and it appears France's Total has come out on top. "We think Total is less at risk than most of the rest of the sector," Jason Gammel, an equities analyst at Jefferies, told CNBC Wednesday.

Oil rebound? The 'compelling' case to jump back in

Iran supported an accord by Saudi Arabia and Russia to steady global oil markets by capping their supply, without saying whether it would curb its own production. Iran backs any measures to stabilize global oil markets including the plan outlined by the world’s two largest crude producers Tuesday to cap output at January levels, Iranian Oil Minister Bijan Namdar Zanganeh said after talks with fellow OPEC members Qatar, Iraq and Venezuela, according to a report from Oil Ministry news service Shana. While the deal hinges on the cooperation of Iran, Zanganeh didn’t say whether the Persian nation would deviate from plans to restore exports after international sanctions were removed last month.

Iran backs oil producer freeze without pledging supply curbs

The first coordinated decision on oil output between OPEC and producers outside the group in fifteen years isn’t going to revive crude prices, according to Goldman Sachs Group Inc. The agreement between Saudi Arabia and Russia to freeze production will have “little impact on the oil market as proposed, while there remains high uncertainty that it even materializes,” analysts including Jeffrey Currie said in a note emailed Wednesday. The bank reiterated its call for prices to remain volatile while being bound to a range in the coming months until inventories stop increasing.

Freezing oil output won’t help prices, Goldman says

Iran’s crude oil exports will reach 1.5 MMbpd next month as Tehran moves to benefit from sanctions relief. "Today, our oil exports have reached 1.3 MMbpd, which will reach 1.5 MMbpd by March," Iran's first Vice President, Es’haq Jahangiri, said on Saturday.

Iran’s crude exports to reach 1.5 MMbpd next month

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Devon Energy is to cuts its workforce by a fifth this quarter, the company said Tuesday as it announced a 75% cut to its E&P capital budget. According to an SEC filing, Devon will “provide notices of termination to approximately 1,000 employees” during February. An additional 600 employees will be impacted when Devon’s planned U.S. asset divestitures are completed later in the year, the company said.

Devon Energy to cut 1,000 staff, slashes E&P capital budget by 75%

Marathon Oil has set this year’s capital program at $1.4 billion, which is more than 50% below last year and more than 75% below 2014. The Houston-based company is allocating $1.15 billion to activity in North America, with the majority focused on the company's three U.S. resource plays. The company has also earmarked $170 million for international assets, primarily to complete long-cycle projects in Equatorial Guinea and Kurdistan.

Marathon Oil cuts capital budget more than 50%

The U.S. shale industry must come up with $1.2 billion in interest payments by the end of March as $30/bbl oil makes it harder for companies to scrape up the cash needed to stay current on their debts. Almost half of the interest is owed by companies with junk-rated credit, according to data compiled by Bloomberg on 61 companies in the Bloomberg Intelligence index of North American independent oil and gas producers. Energy XXI Ltd. said in a filing Tuesday that it missed an $8.8 million interest payment. The following day, SandRidge Energy Inc. announced that didn’t make a $21.7 million interest payment.

Shale faces March madness as $1.2 billion in interest comes due

North America’s natural gas resource base is more abundant and lower cost than ever, according to a new assessment by IHS. The findings show a considerable growth of the low-cost segment of the resource base since 2010. The study, Shale Gas Reloaded: The Evolving View of North American Natural Gas Resources and Costs, concludes that approximately 1,400 Tcf of natural gas in the U.S. Lower 48 and Canada is recoverable at a current break-even Henry Hub price of $4/MMBtu or less (in real terms). This is a 66% increase over 2010 estimates.

North America’s unconventional natural gas resource base continues to expand: IHS