OPEC, for some quiet moments..

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Saudi Arabia signaled it’s ready to cut oil production more than expected, a surprise announcement made minutes after Russia and several non-other OPEC countries pledged to curb output next year. Taken together, the Organization of Petroleum Exporting Countries’ first deal with its rivals since 2001 and the Saudi comments represent a forceful effort by producers to wrest back control of the global oil market, depressed by persistent oversupply and record inventories.

Saudis signal deeper cuts after deal with non-OPEC countries

Operators in the U.S. added 27 rigs this week, according to the latest data from Baker Hughes. The number of rigs seeking oil rose 21 to 498, the highest level since January. The Permian basin, home to nearly half of the nation’s active oil rigs, saw the addition of 11 rigs for a new total of 246. Meanwhile, the Eagle Ford shale and DJ-Niobrara added three rigs and six rigs, respectively.

U.S. operators put 27 more rigs in the field

Hedge fund manager Pierre Andurand expects the combined output cut agreed to by OPEC and Russia will boost oil to $70/bbl in the first half of next year. Andurand, who correctly called the slump to the mid-$20s in the first quarter of this year and the subsequent recovery, said the agreement will lead to large inventory declines sooner than anticipated, spurring higher prices. Andurand’s fund gained 6.1% in November and is up 14.4% so far this year, according to an investor letter.

Trader who called price slump sees OPEC deal boosting crude to $70

The U.S. shale revolution that turned North American energy markets upside down is finally headed to the world’s largest consumer of LNG: Japan. Jera Co., a joint venture (JV) between Tokyo Electric Power Co. Holdings Inc. and Chubu Electric Power Co., will get its first LNG cargo produced from the formations in early January, spokesman Atsuo Sawaki said. It would be the first supply to reach the Asian nation from Cheniere Energy’s Sabine Pass terminal.

Shale revolution that shocked U.S. markets heads to Japan

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Canadian oil sands producers are finally ready to grow again as Cenovus Energy and Canadian Natural Resources announce they are pushing ahead with expansion projects two years into the worst crude slump in decades.

Canadian oil sands producers turn eyes to expansion

First, he was willing to cut the kingdom’s production even deeper than already promised. Second, Riyadh and Moscow were setting aside their historic rivalry as energy suppliers and the toxic politics of Syria to reassert their authority over the world’s most important commodity. “In coming out with such a strong statement, Khalid al-Falih had something of Mario Draghi’s ‘whatever it takes’ moment,” said Helima Croft, chief commodities strategist at RBC Capital Markets LLC, referring to the ECB president’s pledge to save the single currency at the height of the eurozone crisis in 2012.

Saudi Minister Jolts Oil Market With ‘Whatever It Takes’ Moment - Bloomberg

Global spending on oil and natural gas exploration is set to fall next year to the lowest level in 12 years as the industry cuts costs and shuns more expensive areas, such as the Arctic, according to Wood Mackenzie. Companies will allocate $37 billion to exploration and appraisal in 2017, the lowest level since 2005, the consultants said, with spending starting to recover the following year. More than half the volume of oil and gas discovered in 2017 will come from deepwater exploration, it said.

Oil, gas exploration spend to fall to 12-year low as prices bite

Petronas’ first floating liquefied natural gas facility, PFLNG SATU, achieved an industry breakthrough on Dec. 5 with the successful production of its first drop of LNG from Kanowit gas field, offshore Sarawak. The operational milestone marks a decade long journey for Petronas since conceptualizing a floating LNG facility to maximize the potential of remote and stranded gas reserves to deliver a game changer in the global LNG business.

PFLNG Satu produces first LNG offshore Sarawak

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Saudi Arabia is wrong to think that U.S. shale production won’t respond to higher oil prices in 2017, according to Goldman Sachs Group. While crude may rise to over $60/bbl if OPEC members and other nations cut production as promised, a rebound in U.S. shale output would bring prices back to $55, the bank’s forecast for the first half of next year, it said in a report. Saudi Energy Minister Khalid al-Falih said on Saturday he didn’t expect a big supply response from American shale producers in 2017.

Saudis wrong to rule out U.S. shale oil rebound, Goldman says

Global oil markets will swing from surplus to deficit in the first half of 2017 as OPEC and other producers follow through on an agreement to cut supply, according to the International Energy Agency. Oil stockpiles will decline by about 600,000 bpd in the next six months as curbs by OPEC and its partners take effect, said the agency, which had previously assumed inventories wouldn’t drop until the end of 2017. Russia, the biggest producer outside OPEC to join the deal, will gradually implement the full reduction it promised, according to the IEA.

OPEC deal to create oil-supply deficit in first-half 2017, IEA says

Qatar Petroleum (QP) is to integrate the activities of RasGas and Qatargas operating companies under a single entity, Qatargas, which will operate all of the ventures being operated by both entities. Saad Sherida Al-Kaabi, president and CEO of QP, made the announcement at the company's headquarters in the presence of representatives of the main international shareholders in both companies including Exxon Mobil, Total, ConocoPhillips, and Shell, and the CEOs of Qatargas and RasGas.

Qatar Petroleum to integrate Qatargas, RasGas into single entity

OPEC has two possible mechanisms for stabilizing the market. It can fix the price at which its members sell their oil, letting supply fluctuate, or it can fix the volume sold, letting the price settle where it will. It cannot set both at the same time.OPEC has tried both; neither has worked for any length of time.

OPEC Doomed to Repeat History - Bloomberg Gadfly

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U.S. shale oil production is set to rise next year following the rally in prices since OPEC’s Nov. 30 meeting in Vienna, according to the International Energy Agency, which had predicted a decline in its previous report. “U.S. LTO is expected to continue to decline through the end of the year before rising marginally over 2017,” the IEA said. In November, the agency forecast shale-oil output would decline by about 200,000 bpd next year, following a half a million barrel-a-day decline in 2016.

U.S. shale production seen rising next year amid oil price rally

Crude output at major U.S. shale plays is poised to climb for the first time in six months, as oil prices rise on planned cuts by OPEC and other producers. U.S. shale production could top 4.542 MMbpd, a modest increase from December forecasts, the Energy Information Administration said in its Drilling Productivity report released Monday. The gain is being led by the oil-rich Permian basin of New Mexico and Texas, where production has risen steadily for the past 15 months. EIA projects Permian output to rise by 37,000 bopd in January, reaching a record of 2.13 MMbopd.

U.S. sees higher shale output for first time in six months

Up to $15 billion in increased spending will flow into the non-OPEC shale market in 2017, according to a new analysis from Rystad Energy. This incremental change comes after OPEC’s decision to cut production by 1.2 MMbpd.

Service companies exposed to shale seen as winners of OPEC deal

Oil prices at $60/bbl would be “ideal” for OPEC, as higher levels risk sparking a recovery in competing supplies from the U.S., according to Nigeria’s petroleum minister. The “urgency” felt by the Organization of Petroleum Exporting Countries and its partners to end the oil rout will ensure they adhere to their Dec. 10 agreement to cut supplies, Emmanuel Kachikwu said in a Bloomberg Television interview. The accord should push prices—at about $56 today—a bit higher, yet not enough to trigger a comeback in U.S. shale, according to the minister.

OPEC’s ideal price is $60 to avoid shale revival, Nigeria says

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Thanks, OPEC. U.S. crude oil production surged by about 100,000 barrels a day last week, providing further evidence that American drillers are responding quickly to the higher prices that OPEC created by agreeing to curtail their own production.

US drillers pumped like crazy last week, and that's a 'major concern' for OPEC

The first half. No, the second. Certainly this year. Or next. That’s the range of views you’ll hear if you ask the International Energy Agency, OPEC, Saudi Arabia and the U.S. government when the production cuts announced last week will end the global oil glut.

Nobody Agrees When Oil Market Will Re-Balance After OPEC Deal - Bloomberg

For OPEC, there are few enemies more fearsome than the tiny Oklahoma town of Cushing. With oil inventories at Cushing creeping near an all-time high, U.S. benchmark futures prices are struggling to advance despite the promised production cuts agreed to by OPEC, Russia and other producers. And the storage tanks are likely to stay full as refiners park crude in Oklahoma to lower their tax bills.

OPEC threatened by tiny Oklahoma town with soaring supplies

Statoil has signed an agreement to divest its 100% owned Kai Kos Dehseh (KKD) oil sands projects in the Canadian province of Alberta to Athabasca Oil Corp (TSX: ATH). The transaction covers the producing Leismer demonstration plant and the undeveloped Corner project, along with a number of midstream contracts associated with Leismer’s production. Following this transaction, Athabasca will take over operatorship of Leismer and Corner and Statoil will no longer operate any oil sands assets.

Statoil sells its oil sands business

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The resilience of a deal among global producers to cut oil production and ease a worldwide surplus is already being tested as Libya and Nigeria prepare to sell hundreds of thousands of barrels on to the market. Protesters blockading pipelines to Libya’s Sharara and El Feel oilfields have promised to reopen them, meaning production could restart within days, according to advisers of the Government of National Accord in Tripoli. This comes as crude listings out of the port of Es Sider are slowly restarting.

Libya and Nigeria oil sales to test global production deal

Even as oil has rallied in response to OPEC’s agreement to cut supply, slowing demand could bring the price back down again. After years of healthy growth fueled by low prices and Asia’s expanding appetite, demand for oil next year could increase at its slowest pace since 2014, some analysts say.

Having Addressed Supply, Oil Market Faces New Threat: Low Demand - WSJ

Investment bank Goldman Sachs Friday revised its crude oil price forecast for the second quarter of 2017 on the back of a decision by OPEC members and other countries to cut production amid growing demand from consumers. Goldman Sachs has upped its oil price outlook for the second quarter of 2017 to $57.50 a barrel from $55 a barrel for U.S. West Texas Intermediate crude. It also raised its price forecast for international benchmark Brent crude to $59 a barrel from $56.50 a barrel.

Goldman Sachs hikes oil price outlook, expects high compliance for oil output cuts

The EXPEC Advanced Research Center (EXPEC ARC) TeraPOWERS Technology Team, under the leadership of Saudi Aramco fellow Ali Dogru, has achieved a major breakthrough with the industry’s first trillion cell reservoir simulation run. Saudi Aramco’s cornerstone technology, the parallel oil, gas and water enhanced reservoir simulator (POWERS, deployed 2000) has taken its next evolutionary step from mega-cell to giga-cell (GigaPOWERS, achieved 2010) and now to tera-cell (TeraPOWERS, 2016) simulation capability.

Saudi Aramco in trillion cell reservoir simulation run

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OPEC’s deal to cut production and boost prices gives oil companies the opportunity to shake off two years of layoffs and slumping profits to start investing again—if they still have the risk appetite. Just ask Patrick Pouyanne, CEO of Total SA. Throughout the downturn he’s consistently warned that tens of billions of dollars of investment cuts around the world will create an oil-supply shortfall within a few years. The situation presents an opportunity for the French producer and refiner, which will consider next year whether to start developing expensive new projects.

OPEC deal tests oil majors’ appetite for risk and reward

Oil prices boosted by global output reductions will be capped because of new supply before long, according to Goldman Sachs Group Inc. The cuts by OPEC members and nations outside the group, as well as strong demand growth, will probably help curb inventories by next summer, analysts including Damien Courvalin said in a note dated Dec. 16. While the bank raised its oil-price forecasts for the second quarter of 2017, it decreased its crude estimates for 2018 on concern that new production will enter the market.

Goldman sees oil lower for longer after getting a bump from cuts

Operators in the U.S. put 12 more oil rigs in the field this week, according to the latest data from Baker Hughes. The Permian basin, which saw 12 rigs added for a new total of 258, is now home to more than half of the nation’s 510 active oil rigs.

U.S. operators add twelve oil rigs in Permian basin

OPEC’s quest to end a global crude glut already snapped a two-year slump in oil prices. Now attention is turning to how the group’s surprise decision to cut output will transform international trade flows of the world’s most important commodity. The early signs are that Middle East suppliers will prioritize Asia, pushing competitors in Africa and the Americas to keep cargoes in the Atlantic region. Saudi Arabia has indicated it will initially maintain most flows to fast-growing Asia, while draining more heavily oversupplied Western regions. Kuwait is doing much the same.

What global oil flows might look like after OPEC’s supply shock

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As tax reform and regulatory easing across the U.S. oil and gas industry are anticipated in a new administration, EY expects innovation in financial and operational excellence will be a main driver of value and competitiveness in 2017. Continued advances are especially necessary as abundant supply and resilient shale production are anticipated to cap oil prices — creating a ceiling around $50/bbl to $60/bbl.

Policy, digital and workforce innovation ahead in 2017, says EY

Texas driller Pioneer Natural Resources sees crude prices surging to $70/bbl in a year’s time as the world finally burns through its surplus of oil and drilling in the Permian basin heats up. Pioneer has locked in future sales through hedging contracts for about 85% of its oil and natural gas output next year, COO Tim Dove said in an interview Tuesday in Pioneer’s Midland, Texas office. The company hasn’t hedged much for 2018, as it bets that prices have room to run beyond their jump in the past two weeks, he said.

Pioneer Natural Resources sees oil at $70 in 2018

BP is piling up assets with more than $3 billion of deals in three days as CEO Bob Dudley sees the company emerging from the doldrums after a two-year price slump. Since Saturday, BP has announced a $2.2 billion expansion of output in Abu Dhabi and a $916 million investment in fields in Mauritania and Senegal. That brings its 2016 acquisitions to more than $3.8 billion, the highest in four years, according to data compiled by Bloomberg.

BP piles up assets as the CEO says the worst is over

Wood Mackenzie's global corporate outlook for 2017 forecasts the oil and gas industry will turn cash flow positive for the first time since the downturn, if OPEC production cuts drive oil prices above $55/bbl. Tom Ellacott, senior V.P. of corporate analysis research at Wood Mackenzie, said, "Most oil and gas companies will start 2017 on a firmer footing, having halved cash flow breakevens to survive the past two years. Further evidence of a cautious, U-shaped recovery in investment should emerge.”

New year offers stability and opportunity, WoodMac says

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Heading into the New Year with oil prices above US$50, both OPEC and the U.S. shale industry are claiming victory in the latest oil war battle—and both expect to benefit from higher prices, but there can really only be one winner here.

Who Won The 2016 Oil War? | OilPrice.com

OPEC is not expected to deliver all of its promised cuts, with compliance expected at around 60 to 70 percent, the chief executive of Geneva-based independent tanker tracking company Petro-Logistics told Reuters in an interview published on Thursday.

OPEC Not Expected To Deliver All The Promised Cuts | OilPrice.com

A little over a year ago, it was big news that thousands of people and hundreds of institutions controlling more than $2.6 trillion in total assets had pledged to remove their investments from stocks, mutual funds, and bonds that invest in fossil fuel companies. My colleague at the time wrote that this was an “astonishing figure,” a sign that major investment firms were taking seriously a plan to fight climate change with their wallets. A year later, that number has doubled. According to a report by DivestInvest, a philanthropy helping to lead the movement, more than 688 institutions and 60,000 individual investors worth $5.2 trillion have pulled their investments from fossil fuel companies and have reinvested a portion of their assets into clean energy companies. In September 2015, 436 institutions and 2,040 individuals worth $2.6 trillion had divested. For comparison, the total net worth of investors who had pulled out of the fossil fuel market was just $52 billion in September 2014.

Fossil Fuel Divestment Has Doubled in the Last 15 Months | Motherboard

Oil prices at US$60 or more would lead to even more confidence among U.S. producers—producers who are now ‘leaner and meaner’ and carefully choosing how to invest... Trump’s promised rise of oil and gas production over the years could have several consequences: kill the oil price increase due to more supply available, lessen America’s dependence on foreign oil (especially OPEC oil as pledged by the President-elect), and increase U.S. exports of LNG and oil.

Trump’s Oil Price Dilemma | OilPrice.com

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Call it a pre-Christmas lottery ticket, but someone in the oil market has been busy making a bold bet, buying contracts that will be profitable if oil surges again to $100/bbl. The $100 December 2018 call option -- a contract that gives the right to buy December 2018 futures at $100/bbl -- was the most traded contract on Tuesday across the whole ICE Brent market, the latest sign of resurgent optimism in oil.

Oil seen at $100 by year-end 2018 in lottery ticket options trade

Chesapeake Energy has signed an agreement to sell a portion of the company's acreage and producing properties in its Haynesville shale operating area in northern Louisiana for approximately $465 million to an affiliate of Covey Park Energy LLC.

Chesapeake to sell second Haynesville shale position for $465 million

The man overseeing energy policy in western Europe’s biggest oil-producing nation says the worst downturn in the history of Norway’s offshore industry appears to have bottomed out as this month’s historic OPEC deal continues to reverberate across the globe. Terje Soviknes, who was named as Norway’s next petroleum and energy minister on Tuesday, replacing Tord Lien, said the oil and gas industry has put the worst behind it.

Oil optimism is back as Norway predicts worst is behind us

Oil traded near $53 in New York after a government report showed U.S. crude stockpiles increased for the first time in five weeks. Crude stockpiles rose 2.26 MMbbl last week, according to the Energy Information Administration. A 2.5 MMbbl decrease was forecast by analysts surveyed by Bloomberg. More than half of the gain was on the West Coast, where the distribution system is isolated from the rest of the country. Inventories of gasoline and distillate fuel dropped even as refineries processed more crude and boosted output. Total fuel demand surged to the highest since 2007.

Oil trades near $53 as crude supply gains, fuel stockpiles drop