OPEC, for some quiet moments..

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As oil prices sag despite OPEC’s renewed efforts to shore up world crude markets, Wall Street banks have more bad news for the producer group: the outlook for next year isn’t great either. Oil futures have lost 8% since the Organization of Petroleum Exporting Countries and its allies agreed on May 25 to keep output constrained through the first quarter of 2018 in a bid to clear a global glut. While Goldman Sachs Group Inc. expects their strategy to ultimately succeed, they warn the surplus may re-appear once the curbs end. Morgan Stanley and JPMorgan Chase & Co. say the group will have little choice but to stick with the cuts even longer.

Wall Street has bad news for OPEC: 2018 doesn't look great

BP Trinidad & Tobago (BPTT) today announced that it has made two significant gas discoveries with the Savannah and Macadamia exploration wells, offshore Trinidad. The results of these wells have unlocked approximately 2 Tcf of gas in place to underpin new developments in these areas.

BP announces two significant gas discoveries, offshore Trinidad

The biggest winners in President Donald Trump’s decision to walk away from the Paris climate accord are oil, coal and natural gas producers. And even they aren’t popping Champagne corks. The president, who has called climate change a hoax, cast aside any lingering doubts about his commitment to fossil fuels Thursday when he announced the U.S. would quit the global agreement to cut greenhouse gas emissions.

Trump's Paris adieu is a win for coal and oil

Russia’s most powerful oil boss said the deal between OPEC and its partners to curb output won’t stabilize the crude market over the long term as U.S. shale fills the supply shortfall. “A decrease in production under an agreement between OPEC and non-OPEC could largely be balanced out by an increase in U.S. shale oil production by the middle of 2018,” Rosneft Oil Co. PJSC CEO Igor Sechin said at the St. Petersburg International Economic Forum.

Russia's top oil boss sees risk of shale crippling OPEC deal

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Saudi Arabia and three other Arab countries cut off most diplomatic and economic ties to Qatar, in an unprecedented move designed to punish one of the region’s financial superpowers for its ties with Iran and Islamist groups in the region. Oil gained and Qatari stocks plunged after Saudi Arabia, Bahrain, the United Arab Emirates and Egypt said they will suspend air and sea travel to and from the Gulf emirate. Saudi Arabia will also shut land crossings with its neighbor, potentially depriving the emirate of imports through its only land border. Qatar called the accusations “baseless” and said they were part of a plan to “impose guardianship on the state, which in itself is a violation of sovereignty.”

Saudi-led alliance moves to isolate Qatar over Iran tensions

Qatar, the world’s biggest seller of liquefied natural gas, can still access shipping routes to deliver oil and gas to buyers after Saudi Arabia and other neighboring states barred the emirate from exporting through their territorial waters. State producer Qatargas told Japan’s Jera that it would keep supplying LNG as normal in spite of the Saudi-led severing of diplomatic ties with Qatar, Jera spokesman Atsuo Sawaki said by phone. Jera is Japan’s biggest buyer of Qatari LNG under long-term contracts, according to data compiled by Bloomberg.

OPEC's LNG giant keeps exporting O&G as Saudis cut ties

Oil erased earlier gains as a diplomatic clash involving OPEC members Saudi Arabia and Qatar was seen having limited impact on the group’s policy. Futures slipped 0.3% in New York, erasing an earlier gain of 1.6%. Saudi Arabia, Bahrain, the United Arab Emirates and Egypt said they will suspend air and sea travel to and from Qatar, escalating a crisis that started over its relationship with Iran. The nation still has access to shipping routes to deliver oil and gas to buyers around the world.

Oil steadies as limited impact seen from Gulf diplomatic crisis

The good news from OPEC wasn’t good enough. Hedge funds trimmed bets on rising crude prices to the lowest level since November as oil futures dipped below $50/bbl amid skepticism an OPEC-led campaign to cut output will soon curb a worldwide supply glut. Speculators also fled bearish positions for a second week.

OPEC deal extension isn't enough to rope in crude-oil bulls

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The biggest Middle East oil and container ports banned all vessels sailing to and from Qatar from using their facilities amid a diplomatic crisis gripping the world’s main energy-exporting region. Saudi Arabian and Bahraini authorities closed off all of their ports to Qatari-flagged vessels or ships traveling to or coming from the Persian Gulf state, according to a notice posted on the website of Inchcape Shipping Services Tuesday. Container and oil terminals in the United Arab Emirates also closed off traffic to any ships touching Qatar, according to separate statements from three port operators.

Biggest Middle East ports shun Qatar as Saudis tighten isolation

Repsol has uncovered its largest volume of gas of the last five years offshore Trinidad and Tobago, where the find is the most significant in a decade for the country. The company estimates the finds made in two wells at 2 Tcf. The discoveries were made in two wells, Savannah and Macadamia, located in the East Block within the Columbus basin east of the island of Trinidad at a depth of 150 m.

Repsol uncovers its largest gas volumes in five years offshore Trinidad and Tobago

Upstream oil and gas development in Texas rallied for the fifth straight month in April, according to the Texas Petro Index, which improved to 164.8 to post its first year-over-year increase in 27 months. Among TPI indicators logging big year-over-year gains in April were wellhead prices for crude oil and natural gas, the number of drilling rigs at work, well-permitting activity, and the value of Texas-produced oil and gas.  Joining those positive signs was total upstream oil and gas employment-which registered the first year-over-year increase since February 2015-and the volume of oil produced in Texas, which was up more than 2% compared to April 2016.

Texas oil and gas expansion frustrates OPEC production cuts

The biggest question in oil markets is what OPEC should do once its deal to cut output ends next spring. Goldman Sachs Group Inc. has an answer, but it requires a bit of balancing. Oil prices have slipped 8% since OPEC and its allies agreed on May 25 to keep production reduced until next April amid uncertainty about what they will do after that. For Goldman Sachs, the organization’s challenge is to reduce supplies enough in the short term without boosting prices so much that rival producers get back to work.

For Goldman Sachs, OPEC's exit strategy is a high-wire act

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An agency instrumental to America’s surge in energy production would lose half its funding in President Donald Trump’s proposed federal budget. The Energy Department’s Office of Fossil Energy, whose research helped push the U.S. closer to self-sufficiency, is slated for a 58% cut for next year, to $280 million. The shale innovations the office develops are available to any company that can use them, including industry giants that keep results of their own studies, but they’re most beneficial to independent drillers that might otherwise find it tough to compete with behemoths such as Exxon Mobil and its $1.06 billion annual research-and-development budget.

Key shale-boom booster threatened by Trump's spending-cut plans

U.S. crude production will average more than 10 MMbopd for the first time in 2018, breaking a record almost five decades old and keeping prices from rising as much as previously estimated, government forecasts showed Tuesday. Output will average 10.01 MMbopd next year, topping the previous high of 9.6 million in 1970, according to the Energy Information Administration’s monthly Short-Term Energy Outlook. That’s up from 9.96 MMbbl projected in May. The agency cut its 2018 forecast for West Texas Intermediate crude, the U.S. benchmark, by 2.7% from May.

U.S. sees crude output breaking 48-year-old record in 2018

The worst crisis in decades among the Gulf’s Arab monarchies intensified on Wednesday, with a Saudi-led alliance imposing more punitive sanctions against Qatar and a senior UAE official playing down the chances of a quick diplomatic resolution. The United Arab Emirates said it would no longer grant visas on arrival for foreigners living in Qatar, while Qatari nationals were barred from transiting through the country. Both decisions were relayed through state-run media. UAE residents who express support or sympathy for Qatar on social media could face a jail term of up to 15 years, the public prosecutor said.

Middle East crisis builds as UAE downplays chance of quick fix

Equatorial Guinea, OPEC’s newest member, called on fellow African producers to band together to protect the value of their oil resources and join the group. As more discoveries are made across the continent, cooperation among producers is key, the nation’s Minister of Mines, Industry and Energy Gabriel Obiang told a conference in Cape Town. “Have a principle and defend your base,” he said, wryly referencing a strategy of U.S. President Donald Trump.

OPEC's newest member urges African nations to join group, protect resources

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When it comes to natural gas shipments, the United Arab Emirates needs Qatar more than Qatar needs the UAE. The UAE joined Saudi Arabia in cutting off air, sea and land links with Qatar on Monday, accusing the gas-rich sheikhdom of supporting extremist groups. But the UAE, which depends on imported gas to generate half its electricity, avoided shutting down the pipeline supplying it from Qatar, which has the world’s third-largest gas deposits. Without this energy artery, Dubai’s glittering skyscrapers would go dark for lack of power unless the emirate could replace Qatari fuel with more expensive liquefied natural gas.

UAE needs Qatari natural gas to keep Dubai's lights on

As Brent crude oil closed on Wednesday at its lowest level since before OPEC and other nations agreed to cut output, someone bet half a million dollars on prices surging to $80 by year-end. Options to buy 10 MMbbl of Brent crude for $80/bbl in December traded Wednesday, far exceeding the next-largest contracts, according to exchange data compiled by Bloomberg. Placed in two trades, the transactions were especially large given they were to purchase crude at 66 percent above the day’s closing price.

As oil falls, someone sees $80/bbl by December

Forbes has estimated that the 25 biggest oil and gas companies on the Global 2000 list generated a combined US$2.2 trillion in sales during the 12-month measurement period, down compared to US$2.6 trillion in sales for the previous year. In terms of profits, the combined earnings of the top 25 oil and gas firms dropped to US$73 billion in the 2017 ranking from US$81 billion in the previous ranking. The unsurprising leader of the oil firms ranking, ExxonMobil, doubled profits in Q1 2017, beating analyst expectations as higher commodity prices and cost cuts boosted earnings.

Has Big Oil Regained Its Pre-Crash Position? | OilPrice.com

But there are a lot of factors outside of OPEC’s control. High up on that list is the role of China, a country that has received little attention in the oil world as of late amid all the furor over the OPEC vs. U.S. shale debate. But China could make or break the oil market this year and next, depending on what happens with its economy. "If you wanted to know where the downside risk is, it is not in OPEC's decision or in U.S. driving demand or in global inventories rebalancing. I think China is the big source of concern," Prestige Economics President Jason Schenker told CNBC.

Not OPEC, China Dictates The Oil Prices | OilPrice.com

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Market observers pegged Wednesday's 5-percent plunge on the unexpected increase in oil and gasoline storage tanks, which overshadowed tensions in the Middle East, the attack in Iran and disastrous economic conditions in Venezuela, an OPEC producer. But some analysts note that even over the past few weeks, with U.S. oil inventories steadily declining – a bullish new development – oil prices had trouble staying above $50 a barrel for long. They're beginning to interpret the bearish sentiment as a broader message about rising oil production in the U.S. shale plays.

Oil's plunge hints at broader market signal: Slow down, shale drillers - Houston Chronicle

The Trump administration is considering possible sanctions on Venezuela’s vital energy sector, including state oil company PDVSA, senior White House officials said, in what would be a major escalation of U.S. efforts to pressure the country’s embattled leftist government amid a crackdown on the opposition. The idea of striking at the core of Venezuela’s economy, which relies on oil for some 95 percent of export revenues, has been discussed at high levels of the administration as part of a wide-ranging review of U.S. options, but officials said it remains under debate and action is not imminent.

Exclusive: U.S. considers possible sanctions against Venezuela oil sector - officials | Reuters

The oil market has all but abandoned the hope of a re-balancing any time soon, with the re-emergence of a pricing structure that signals investors expect a glut to endure into next year. The return of a deep contango -- when oil prices for immediate delivery are lower than forward contracts -- comes days after several Wall Street banks warned investors of a deteriorating outlook for 2018 because of strong U.S. shale production growth and the rising output in Nigeria and Libya.

Oil market abandons 2017 re-balancing hope as contango returns

Qatar and Saudi Arabia square off in a major diplomatic feud. Suicide bombers strike at the heart of the Iranian capital. Kurdistan moves toward independence, and war rages on in Syria and Yemen. And in the oil market? Prices just kept sliding.

Oil snoozes while Mideast smolders, as glut keeps price in check

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His Saudi counterpart, Khalid Al-Falih, said at a joint news briefing in Astana, Kazakhstan, that inventories were declining worldwide and reductions would accelerate in the next three to four months. Inventories will settle to their five-year historical average -- OPEC’s target -- before the end of the year, though Saudi Arabia, the group’s biggest producer, may modify its policy if output cuts don’t have the desired effect, he said.

Russia, Saudis see oil inventories falling after price drop

A boom in natural gas exports from the U.S. Gulf Coast is raising the prospect of traffic jams at one of America’s busiest ports. Weather delays from fog and storms are nothing new at the Houston Ship Channel, which links the prolific oil and gas fields of Texas and Louisiana to the rest of the world. But as more cargoes of liquefied natural gas and petrochemicals head across the globe from newly built plants, the tanker bottlenecks are poised to get worse, according to Poten & Partners.

Gas boom snarling traffic at one of America's busiest ports

Investors are pulling money out of exchange-traded funds tracking oil producers for the first time in two years, reversing a pattern in which price declines were invariably met with buying. Capitulation is in the air as energy stocks post the worst start of a year on record relative to the market. The industry’s weighting in the S&P 500 Index has dwindled to the smallest since 2004.

Once stalwart oil stock bulls starting to say enough is enough

Iran signed an agreement with Russia under which it has broken free from the petrodollar, and will "sell", or rather barter crude oil to Russia in exchange for products. The announcement was made by Iran’s Oil Minister Bijan Zanganeh, as reported by Russia’s RIA and TASS news agencies.

Iran Signs Oil For Goods Deal With Russia: Breaks Free Of Petrodollar | OilPrice.com

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As Qatar grapples with deepening diplomatic isolation, Japanese liquefied natural gas buyers are pushing the world’s largest seller for cheaper supplies. Both Jera Co., one of the biggest LNG purchasers, and Tokyo Gas haven’t decided if they’ll sign new deals with Qatar to replace current contracts that begin expiring in 2021, according to executives from both companies. The buyers are insisting on less-expensive cargoes and greater purchasing flexibility from the Middle East nation, which relies on oil and gas for about half its gross domestic product.

As Qatar prepares for isolation, gas buyers seek better deals

Oil steadied after a third weekly loss as predictions by Saudi Arabia and Russia that crude markets will rebalance vied with signs that U.S. companies are drilling even more wells. Futures added 1.4% in New York after sliding 3.8% last week. Inventories are declining and reductions will accelerate in the next three to four months, Saudi Energy Minister Khalid Al-Falih said at a briefing in Kazakhstan with his Russian counterpart, Alexander Novak. Russia is committed to doing everything it can to balance the market, Novak said.

Oil rises after third weekly loss as Saudi Arabia sees recovery

Crude markets are taking oil optimists by surprise yet again. Hedge funds boosted bets on a rally just before West Texas Intermediate prices tanked from a report showing surging American stockpiles. Wagers rose 7.3% to the highest since April in the week through June 6, U.S. Commodity Futures Trading Commission data show. The next day, futures fell the most since March and are lingering near this year’s lows.

America's stubborn oil-supply glut catches funds off guard

Oil’s gains over the past two days faded as OPEC reported rising production, offsetting expectations that U.S. crude stockpiles fell again. Futures slipped 0.5% in New York after advancing 1% in the previous two sessions. OPEC said its output climbed the most in six months in May amid a recovery in Libya and Nigeria, members exempt from the group’s accord to lower production. U.S. crude inventories are forecast to have slid by 2.25 MMbbl last week, according to a Bloomberg survey before an EIA report Wednesday.

Oil slips as increase in OPEC supply offsets projected U.S. drop

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Annual reports of 67 publicly traded oil companies indicated that their aggregate proved liquids reserves declined in 2016 for the second consecutive year. The decline in proved reserves was heavily concentrated in a few companies that reduced their estimated reserves from Canadian oil sands projects. Downward revisions of existing resources, relatively low extensions and discoveries, and relatively high production also contributed to a decline in proved reserves.

Reporting oil companies’ proved reserves in 2016 decline for second consecutive year - Today in Energy - U.S. Energy Information Administration (EIA)

The Nigerian government's attempt to end disruption in the oil producing Niger delta region faces renewed threat from rebels and criminal groups. Shell declared force majeure on 200,000 b/d of Bonny Light crude on 8 June after the discovery of a hole drilled by "unknown persons" into the Trans Niger Pipeline (TNP) in the Bodo area of Ogoniland, in Rivers state. Nigeria produced a six-month high of 1.79mn b/d of crude in May, up from 1.66mn b/d the previous month. The country is exempt from production restraints agreed at the 25 May meeting in Vienna between Opec and 10 non-Opec countries.

News - Argus Media

Mexico has taken the first step in its annual oil hedging program, asking Wall Street banks for price quotes on the put options it buys to lock in prices for the following year, according to people familiar with the matter. Mexico usually buys put options from a small group of investment banks, starting as early as May but sometimes as late as July, in what’s considered Wall Street’s largest -- and most secretive -- annual oil deal.

Mexico Said to Take First Steps in Annual Oil Hedging Program - Bloomberg

OPEC's battle against an oil glut is under threat as unsold crude from members Nigeria and Libya, which are exempt from a global production-cutting deal, is swamping the Atlantic Basin. Nigeria has more than 60 million barrels of unsold crude, traders of its oil said, surpassing the level reached when global oversupply peaked two years ago. More export plans are a week away, likely bringing more than 50 million extra barrels.

Oil comeback for cut-exempt producers threatens to swamp OPEC | Reuters

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Cash-strapped U.S. shale firms scaled back their hedging programs in the first quarter, leaving them more vulnerable to tumbling spot market prices just after OPEC reached a landmark deal to curb global supply. The pullback in hedging was driven by rising service costs and expectations that prices would continue to rally after the Organization of the Petroleum Exporting Countries extended those cuts in May, analysts said.

U.S. shale firms more exposed to falling oil prices as hedges expire | Reuters

Rising US shale oil production has put short-term supply concerns centre stage as the oil market downturn enters its third year. But for Opec producers, worries about when demand for their crude will peak is only gathering pace and India is in focus. The south Asian nation is tipped to be the world’s fastest-growing oil consumer over the next two decades. Its population of 1.3bn people holds the hopes of global oil producers as rising incomes and the rapid uptake of motorcycles and cars boost petrol and diesel, offsetting fading demand in the west.

India is Opec’s litmus test on oil demand growth

Oil companies are applying new hydraulic fracturing techniques to early Bakken wells, a process industry leaders say has the potential to recover more oil without increasing the footprint on the land. Operators are targeting wells drilled between 2008 and 2010, the early years of Bakken development before fracking technology advanced to where it is today. Companies are refracturing the older wells using today’s technology and getting promising results, said Justin Kringstad, director of the North Dakota Pipeline Authority, who recently analyzed the wells.

New technology could recover more oil from early Bakken wells | North Dakota News | bismarcktribune.com

The two biggest shale gas deposits in the U.S. are producing a record amount of the power-plant fuel, signaling that a fight for market share will intensify as supply outstrips demand. As natural gas prices rebound from last year’s historic lows, output from the Marcellus shale basin in the U.S. East and the Permian reservoir in Texas is driving a rebound in America’s production of the fuel. Low-cost supply from the Marcellus is surging as new pipelines are built to shuttle gas to markets across the U.S. and Canada. Meanwhile, Permian output is rising as a recovery in oil prices boosts the production of gas that’s extracted alongside crude.

Shale Gas Giants Battle for Dominance as U.S. Supplies Surge - Bloomberg