OPEC, for some quiet moments..

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Hedge Funds covered their short oil bets by the most in 11 months last week. CFTC data shows managed-money short positions dropped 25,639 contracts last week, sustaining a 26% rally off February lows. In April 2015, WTI rallied over 20% off its lows amid the same short-covering squeeze, only to collapse 40% in the next 3 months (despite OPEC hope and calls for stability). Oil ETF shorts have also capitulated back to "normal" long-short ratios suggesting oil has seen "peak" short-covering.

Peak Oil Squeeze? Hedgies Capitulate On Bearish Oil Bets | Zero Hedge

The oil-price collapse will compel all producers to freeze output and no early OPEC meeting can take place without such a move, the United Arab Emirates’ energy minister said. “This is the reality," Suhail Al Mazrouei said Tuesday in Abu Dhabi. "Current prices will force everyone to freeze production; stubbornness doesn’t make sense."

Oil collapse will force all producers to cap volumes, says U.A.E.

Weinberg has calculated that a $100 drop in the price of a barrel of crude would reduce global income from extraction alone by $3.2 trillion, or about 4.5% of world gross domestic product. That’s to say nothing of the impact on global economic activity from oil sales, transportation and exploration. The U.S. benchmark now trades close to $31, or about $76 below its all-time high. It isn’t wrong to assume that those losses would rebound to the benefit of oil consumers, Weinberg says. But the rub lies in the fact that consumers in oil-importing countries may be more likely to stash those savings away while workers in oil-exporting countries would have been more likely to spend that lost income.

Here’s why oil rout is hurting the global economy instead of helping - MarketWatch

Oil extended gains above $36/bbl as U.S. drillers cut the number of active rigs to the lowest in more than six years amid a global glut. Futures advanced as much as 2.2% in New York and oil in London extended its longest run of gains since November. Rigs targeting oil fell by 8 to 392, the smallest level since December 2009, according to Baker Hughes Inc. That is the 11th week of declines. Hedge funds unwound bearish bets at the fastest pace in 10 months, according to U.S. Commodity Futures Trading Commission data, as the prospect of prices sinking to $20/bbl faded.

Oil extends advance above $36 as U.S. explorers idle more rigs

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The United Arab Emirates foresees a “correction” in crude prices by the end of the year, and the OPEC member has yet to receive an invitation to a possible meeting of oil-producing nations seeking to rein in a global supply glut, Energy Minister Suhail Al Mazrouei said. Markets are poised to re-balance as many oil-producing assets outside the Organization of Petroleum Exporting Countries lose money at current prices, Al Mazrouei told reporters Monday in Abu Dhabi. Declining output at fields that need higher prices to break even is “good news” that points toward a more stable market, he said.

Oil price ‘correction’ seen by year-end by U.A.E. energy minister

U.S. crude production will fall to its lowest since 2013 next year as battered shale drillers idle rigs to conserve cash, according to a government report. Producers from Texas to Alaska will pump 8.19 MMbopd in 2017, down from 8.67 MMbopd this year and less than the 8.46 MMbopd previously forecast, the Energy Information Administration said in its monthly Short-Term Energy Outlook Tuesday. The forecast for crude output in 2016 was also cut, from 8.69 MMbopd estimated in February. The decline won’t be enough to boost crude prices beyond last year’s level, though, according to the EIA estimates.

U.S. oil production headed to four-year low as shale boom wanes

Chevron has started producing LNG and condensate at the Gorgon Project on Barrow Island off the northwest coast of Western Australia. The first LNG cargo is expected to be shipped next week. “We expect legacy assets such as Gorgon will drive long-term growth and create shareholder value for decades to come,” said Chairman and CEO John Watson. “The long-term fundamentals for LNG are attractive, particularly in the Asia-Pacific region, and this is a significant milestone for all involved.”

Chevron achieves first LNG production at Gorgon

China’s crude imports rose to a record as oil’s crash to the lowest in more than 12 years boosted buying. The world’s biggest energy user increased inbound crude shipments in February by 19 percent from the previous month to 31.8 million metric tons, according to data from the Beijing-based General Administration of Customs on Tuesday. That’s equivalent to about 8.04 million barrels a day, the highest daily average on record. Oil product exports slid a second month to 2.99 million tons, the lowest since May.

China Crude Imports Hit Record as Price Crash Boosts Buying - Bloomberg Business

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Oil rose to the highest level in three months after a government report showed stronger demand for gasoline reduced fuel inventories. West Texas Intermediate futures climbed 4.9%. Gasoline supplies fell by 4.53 MMbbl last week, the Energy Information Administration said. Analysts surveyed by Bloomberg had expected a drop of 1.5 MMbbl. Four-week average demand for the fuel increased to the highest in six months.

Oil ends at three-month high as gasoline demand cuts supplies

France’s Total SA is weeks away from drilling one of its most important offshore exploration wells in the Americas this year as it hunts for a giant oil field in Uruguayan waters. "There could be an elephant out there. This is what we’re chasing," Christian Tichatschke, Total’s exploration director in Uruguay, said in an interview in Montevideo on Friday. "It’s a very risky project but we believe we can find something."

Total plans hunt for 'elephant' oil find off Uruguay's coast

Ben Van Beurden staked his reputation on Royal Dutch Shell Plc’s $53-billion acquisition of BG Group Plc as crude slumped. Analysts are rewarding the CEO by putting the enlarged company in pole position to exploit a market upturn.  Shell’s shares will rise about 12.2% in the next 12 months, the most among the world’s six biggest non-state oil companies, according to the target prices of analysts compiled by Bloomberg. More than 65% of analysts who cover Europe’s largest oil producer recommend buying the stock, the highest share among its peers.

Shell seen as best oil major wager by analysts after BG deal

Saudi Arabia is beginning to see the geopolitical limitations of its oil strategy. The country can afford to produce at a level that's guaranteed to keep prices low. But the cost of covering the country's budgetary needs becomes steeper the longer oil remains in a price trough. And the costs become steeper the longer Saudi Arabia maintains such a confrontational regional stance — a strategy that might actually explain oil's low price in the first place.

Saudi Arabia's oil strategy and risk - Business Insider

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Oil prices may have passed their lowest point as shrinking supplies outside OPEC and disruptions inside the group erode the global surplus, the International Energy Agency said. Production outside the Organization of Petroleum Exporting Countries will decline by 750,000 bopd this year, or 150,000 bopd more than estimated last month, the agency said. Markets are also being supported by output losses in Iraq and Nigeria, and as Iran restores production more slowly than planned following the end of international sanctions, it said.

Oil price may have bottomed as high-cost producers cut, says IEA

Iran plans to boost crude output to 4 MMbpd before it will consider joining other suppliers in seeking ways to rebalance the global oil market. “They should leave us alone” until then, Oil Minister Bijan Zanganeh said, according to the Iranian Students News Agency (ISNA). “After that we will work with them.”

Iran on oil freeze: ‘Leave us alone' until output higher

Rystad Energy’s latest analysis shows that wellhead break-even price has decreased considerably across all main shale plays in North America over the last three years. While depressed oil prices have hit shale production in the U.S., shale wells have become more efficient every year.

Shale wells are getting more profitable every year: Rystad

Using its proprietary Global Gas Model, Wood Mackenzie has undertaken sensitivity analysis to determine the outlook for U.S. LNG exports. Contrary to mounting speculation over the impact of Russian action to protect market share, Wood Mackenzie’s analysis reveals that other factors may be more influential. These include U.S. gas prices, which are forecast to rise from recent levels, the price of oil and the price of coal, which will determine European spot prices through coal-gas switching in the power sector.

Up to half of U.S. LNG at risk of shut-in over next five years: Wood Mac

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Oil advanced as Gulf OPEC delegates said major producers are likely to meet in April to discuss a proposal to freeze output at January levels to stabilize the market. Futures rose as much as 0.6 percent in New York after falling 3.4 percent on Monday. The talks over freezing production are most likely to occur in Qatar’s capital Doha, three delegates said. Iran may join the alliance after restoring its own output to levels before sanctions were imposed, Russian Energy Minister Alexander Novak said after meeting with his Iranian counterpart.

Oil Gains as Producers Said to Plan Output Freeze Meet in April - Bloomberg Business

Shale wells pump out a lot more oil right up front, and deplete much faster than conventional wells. It’s a bit of technical mathematics that doesn’t work well in the current oil price environment—but what we’re seeing now is a finely tuned new balancing act that gives US shale players another way to play the waiting game, and possibly win. The new trend is to conserve shale, so to speak, and use new technology such as artificial lifts, to ramp up production in mature wells that don’t pump out as much, but neither do they deplete as rapidly. By doing this, the key players in the shale patch are preserving precious shale wells—the less up front pumping they do, the longer they prolong the life of the shale well, saving it for a time when prices are more attractive.

Choking And Lifting Preventing The Decline In U.S. Shale? | OilPrice.com

If oil prices were to drop to the lower $20s/barrel, the Saudis, Russia and OPEC wouldn’t survive for long. Shale oil would take a hit as well, but would be back in production whenever prices rise again; hence, prices will remain fairly volatile with a mid-point of $50/barrel for the next few years, as forecast by many experts.

Don't blame Saudi Arabia for oil crash - Business Insider

China’s biggest energy company joined India in seeking to renegotiate long-term liquefied natural gas supply contracts amid a global glut that’s driving spot prices to the lowest in more than five years. China National Petroleum Corp. is looking for opportunities to rework the pricing method on its LNG supply contract with Qatar, Chairman Wang Yilin said in Beijing Wednesday. That follows a successful renegotiation by Petronet LNG Ltd. in December with Qatar’s RasGas Co., resulting in a drop by almost half of the prices the Indian importer was paying.

China Joins India Seeking Better LNG Terms as Contracts Weaken - Bloomberg Business

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Iran may join other oil suppliers in freezing production after restoring its own output to levels before sanctions were imposed, Russian Energy Minister Alexander Novak said after meeting with the Persian Gulf nation’s oil minister. Iran has “reasonable arguments” not to be constrained by the freeze for now, Novak told reporters Monday at the Russian embassy in Tehran. “Iran may join us in the freeze with time,” he said. “This is a normal, constructive position from our Iranian partners.”

Iran may join oil freeze after boosting output, Russia says

Oil maintained gains after a government report showed a smaller-than-anticipated U.S. crude inventory increase. Crude inventories rose 1.32 MMbbl to 523.2 MMbbl last week, according to the Energy Information Administration. That kept supplies at the highest level since 1930. A 3.2 MMbbl supply gain was projected by analysts surveyed by Bloomberg. Supplies of gasoline and distillate fuel, a category that includes diesel and heating oil, slipped.

Oil holds gains on less-than-projected U.S. inventory rise

The National Energy Board (NEB), the British Columbia Oil and Gas Commission, the Yukon Geological Survey, the Northwest Territories Geological Survey and the British Columbia Ministry of Natural Gas Development today released the first detailed study estimating the marketable unconventional natural gas resources in the Liard basin.

Assessment shows Liard basin among largest shale gas resources in the world

U.S. crude production will fall to its lowest since 2013 next year as battered shale drillers idle rigs to conserve cash, according to a government report. Producers from Texas to Alaska will pump 8.19 MMbopd in 2017, down from 8.67 MMbopd this year and less than the 8.46 MMbopd previously forecast, the Energy Information Administration said in its monthly Short-Term Energy Outlook Tuesday. The forecast for crude output in 2016 was also cut, from 8.69 MMbopd estimated in February. The decline won’t be enough to boost crude prices beyond last year’s level, though, according to the EIA estimates.

U.S. oil production headed to four-year low as shale boom wanes

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A revised production schedule for Gazprom Neft’s Prirazlomnoye field, recently approved by Russia’s Federal Subsoil Resources Management Agency, has seen the field’s peak production period increased from three years to five. Sustainable drilling over this period means oil production will be increased by a factor of 1.8, to 23.1 million tonnes.

Oil production from Russian Arctic field set for significant rise, Gazprom Neft says

U.S. regulators rejected Veresen Inc.’s multibillion-dollar proposal to build a terminal in Oregon that would export as many as two tankers of natural gas a week. They also denied its plan to a build a pipeline with Williams Partners LP to supply gas to the terminal. Williams and Veresen failed to demonstrate that the pipeline’s benefits would outweigh the “adverse effects on landowners,” the Federal Energy Regulatory Commission said Friday in an order denying authorization. And without a pipeline supplying gas, the Jordan Cove export terminal “can provide no benefit to the public to counterbalance” the impacts associated with its construction, the agency said.

U.S. regulators reject Oregon LNG export project - Fuel Fix

Total SA has funds to build a pipeline linking oil fields in landlocked Uganda with a port on Tanzania’s Indian Ocean coast, the Tanzanian government said, after its president met with an official from the French company. Total’s Vice President for East Africa, Javier Rielo, “assured President John Magufuli that the company will begin construction of the crude-oil pipeline project from Uganda to the Tanga port as quickly as possible because there is money for the project,” the presidency said Monday in an e-mailed statement. A Total spokesman declined to comment on today’s meeting. He referred to a December statement in which France’s oil major expressed its preference for a pipeline transporting crude through Tanzania, based on cost, reliability and safety assumptions for the infrastructure.

Total to Begin Ugandan Pipeline Construction Soon, Tanzania Says - Bloomberg Business

The top of the oil market may be closer than you think. With Brent futures having bounced back to $40/bbl, the International Energy Agency sees “light at the end of the tunnel,” and Goldman Sachs Group Inc. is spotting “green shoots.” Even so, many analysts warn that, like the failed rally last year, this recovery will sputter once prices go high enough to keep U.S. crude flowing. “If prices keep going up, U.S. production from shale producers is extremely responsive,” Jamie Webster, V.P. of crude markets at IHS Energy, said in a Bloomberg Television interview. “Falling U.S. production is the key dynamic you need to get supply to equal demand, and that might not actually happen,” meaning prices could fall again.

If oil prices have hit bottom, the top may not be too far away

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Oil surged above $40/bbl in New York for the first time since December as central banks from the U.S. to Norway signaled they will continue to provide economic stimulus to support demand. The Bloomberg Dollar Spot Index fell a second day after the Federal Reserve scaled back expectations for the pace of interest-rate gains. A weaker dollar bolsters investor demand for commodities priced in the currency. U.S. crude output slid to the lowest level since November 2014 and supplies expanded by 1.32 MMbbl, the smallest gain in five weeks, according to an Energy Information Administration report on Wednesday.

WTI closes above $40 for first time since December

Saudi Arabia will join a meeting of producers from within and outside OPEC in Doha next month, adding weight to the campaign by financially stricken crude exporters to freeze output and overcome the glut that’s weighing on the market.

Saudis said to join April’s oil freeze meeting in Doha

In the Mideast, it's all about the national oil companies, or NOCs, that have a near monopoly over their country's resources. For Saudi Arabia, it's Saudi Aramco. In Iran, it's the National Iranian Oil Company. For Kuwait, it's the Kuwait Petroleum Corporation, and many other countries outside the Middle East -- such as Brazil, Venezuela, Norway, and Malaysia -- also have NOCs. To differing degrees, these companies are auxiliary, for-profit units of the national government, sending billions of dollars annually into their nation's treasuries from oil production. The way each NOC operates regarding exploration is specific to each country, but many contract with major Western oil companies and oil-service firms using a version of a Production Sharing Agreement service contract first popularized in the 1960s. These agreements allow private firms to recover their capital and operational expenditures first and split the profits with the NOC afterward, thus putting most of the business risk onto the private companies. The NOC structure allows a state-owned company to operate in the marketplace and still give the national government overall control of its direction.

Making Sense of the Mideast Oil Muddle | RealClearWorld

On Wednesday, something surprising and strange happened in Brazil: The president, Dilma Rousseff, appointed former President Luiz Inácio Lula da Silva, her political mentor, to her own Cabinet. That same day, a Brazilian judge ordered the government to release a wiretap recording of Rousseff — yes, the government is listening in on its own president — speaking to Lula, as he's commonly known. The recording seemed to reveal that Rousseff had appointed Lula to save him from prosecution in a multibillion-dollar corruption scandal involving the state-run oil company Petrobras. (Under Brazilian law, ministers go to special courts that have historically never prosecuted them.) Subsequently, a separate judge ordered a pause on Lula's appointment, suggesting it may have been illegal. This is just the latest House of Cards–style twist in the Petrobras scandal — the largest corruption scandal, in dollar terms, in any democracy ever.

Brazil's Petrobras scandal, explained - Vox

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Crude extended gains from a three-month high as U.S. oil production dropped, while central-bank policies put pressure on the dollar and improved the outlook for demand growth. Futures rose as much as 2.5% in New York. U.S. crude output fell to the lowest since November 2014, according to an Energy Information Administration report on Wednesday. Baker Hughes Inc. data Friday may show that the number of oil rigs in the U.S. fell from the lowest since 2009

Oil extends gain from three-month high on falling U.S. output

Statoil ASA and BP Plc said there is no information to suggest anyone was injured after a gas facility they run in Krechba, Algeria, was hit by a rocket attack from outside the site’s perimeter. The central processing facility has been shut down as a safety precaution, BP said in an emailed statement on Friday. All its staff in Algeria have been accounted for, it said.

Statoil, BP gas facility in Algeria hit by rocket attack

As early as 2012, the IEA published a study detailing why India was bound for an energy crisis—protectionist instincts had hobbled the country’s efforts to fully liberalize its energy sector, leaving a local market unable to deliver and a growing dependence on fuel imports. But while efforts to streamline and improve capacity in India’s energy market could certainly help improve access, it cannot ensure universal access—and it cannot address climate change concerns. The MIT study suggests that India could conceivably wriggle its way out of both the access and the climate bind by undertaking radical changes in how it produces and distributes energy. But even if a greater proportion of India’s energy comes from low or even zero-carbon energy sources, India’s overall carbon emissions are still projected to double by 2040.

India’s Looming Energy Crisis | Observer

Eni SpA, Italy’s largest oil producer, plans additional asset sales valued at $7.9 billion by 2019 and deeper cost cuts, as it seeks to offset the impact of the plunge in oil prices. The explorer targets production growth of 13% to 2019, while reducing upstream capital expenditure by a further 18% compared with last year’s plan, Rome-based Eni said in a strategy update Friday. Savings from measures including contract renegotiations and synergies with existing assets have brought down break-even costs for new projects to $27/bbl of oil equivalent from $45, it said.

Eni plans deeper cost cuts, asset sales to weather oil plunge

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Andrew J. Hall, the head of commodity hedge fund Astenbeck Capital believes that the price of crude oil has bottomed, and the only way is up for the commodity. In Astenbeck’s March 1 letter to investors, which has been reviewed by ValueWalk, Hall writes, “we believe the global oil market is already close to being balanced yet prices are at a level that will continue to destroy supply. The longer they stay at current levels the greater the risk that the world will face a significant supply shortfall in 2017.”

Andy Hall says $80 possible in 12 months - Business Insider

One of the warning lights that there’s too much oil around is no longer flashing, adding to signs that global crude markets are finally on the mend. Just a month ago, oil traders were weighing up whether to park unwanted crude aboard tankers while BP Plc CEO Bob Dudley joked that swimming pools might be needed to hold the excess. Yet instead of offering bumper profits, as in previous market gluts, stockpiling barrels on ships would result in a financial loss, just as it has done for the past six months, in a sign the current surplus may not be as big as feared.

Why the global oil glut might not fill swimming pools after all

The 800,000 barrels a day of crude production unaccounted for in the International Energy Agency’s estimates of oil supply and demand for last year are a “poor explanation” for the recent rally in prices, according to Morgan Stanley. The “missing barrels” -- which result from the difference between the IEA’s estimate of oil supply and demand -- are probably present in stockpiles outside the 34 members of the Organization for Economic Cooperation and Development, Morgan Stanley said in a note Monday.

`Missing Barrels' Don't Explain Oil Rally, Says Morgan Stanley - Bloomberg Business

Oil prices will increase by the end of this year but won’t rebound to levels reached in 2013 and 2014, according to Amin H. Nasser, president and CEO of Saudi Arabian Oil Co. Prices will gain as “the gap between supply and demand in the oil market is shrinking,” Nasser said at an event in Beijing on Monday. Oil exceeded $100/bbl in 2013 and 2014 before dropping amid a global glut. Benchmark Brent crude was trading on Monday at $40.21/bbl in London.

Saudi Aramco sees oil rising as demand catches up with supply