OPEC, for some quiet moments..

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The number of active oil and gas rigs in the United States fell this week by 3 rigs as drillers in the United States proceed more cautiously as oil prices fail to sustain any significant increase. Combined, the total oil and gas rig count in the US now stands at 946 rigs, up 455 rigs from the year prior, with oil rigs in the United States decreasing by 5 and gas rigs increasing by 1. Oil rigs in the United States now number 763—357 rigs above this time last year.

Oil Prices Climb As Oil Rig Count Drops | OilPrice.com

Citi sees U.S. crude likely trading in a range of $40 to $60 the next five years, down from its prior view of $40 to $65. Prices could spike above $70 and below $40 if supply disruption rises or falls dramatically, the bank said. U.S. shale oil can balance out the impact of supply disruptions in about a year, according to Citi.

Oil stuck between $40 and $60, but price shocks possible, says Citi

Goldman Sachs Group Inc. lost more than $100 million in a wrong-way bet on regional natural-gas prices this spring, a setback that played a large role in the New York bank’s subpar second-quarter trading performance. Goldman wagered that gas prices in the Marcellus Shale in Ohio and Pennsylvania would rise with the construction of new pipelines to carry gas out of the region, said people familiar with the matter.

Wrong-Way Gas Bet Fueled Goldman’s Second-Quarter Swoon - WSJ

An unassuming confluence of pipelines here in the heart of Cajun Country is becoming the most important place in the world for natural gas prices. The Henry Hub has for years been a benchmark for U.S. contracts. Now it is helping to set prices from Mozambique to Japan, as a wave of U.S. natural gas being unlocked by shale drillers reaches Europe, South America and Asia.

Henry Hub Emerges as Global Natural Gas Benchmark - WSJ

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The market for physical barrels of crude from places as far apart as Oman and Colombia is strengthening beyond the traditional seasonal peak in demand, a positive indicator for global benchmark futures prices that remain stuck near $50.

Crude market shows enduring strength beyond usual seasonal peak

Russian scientists and local oil field services companies claim to have created a technology for thermochemical gas fracturing that could be an alternative to hydraulic fracturing and could increase oil production by between 1.7 and 6 times, Russia’s news agency RIA Novosti reports, citing the University of Tyumen’s press service. In hydraulic fracturing, rocks are fractured with high-pressure injection of fluids, while the new breakthrough technology, as claimed by Russian scientists and media, is creating chemical reactions in the strata that contain oil.

Russia claims to have invented an alternative to fracking - Business Insider

Royal Dutch Shell Plc is seeking creative solutions to bring gas from Israel and Cyprus to market, a step that could help turn the Mediterranean region into a major gas-producing hub. Shell is in talks to buy natural gas from Israel’s Leviathan field, combine it with output from Cyprus’s Aphrodite field, in which it owns a 35% stake, and pump it to a liquefied natural gas plant in Egypt, according to people with knowledge of the matter. Talks are at an early stage and some of Aphrodite’s gas could be sold locally, said the people, who asked not to be named because the discussions are private.

Shell said to mull buying Israel, Cyprus gas for Egypt plant

Blackstone Group LP’s reach for $10 billion in energy assets is the firm’s latest bet that the U.S. shale boom is just hitting its stride. The world’s largest alternative-asset manager agreed to buy Harvest Fund Advisors for an undisclosed amount, adding the firm’s 18-member team led by Eric Conklin to an investment empire that spans private equity, real estate, credit and hedge funds.

Blackstone bets on shale boom lasting with Harvest deal

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Total agreed to buy the oil and gas unit of A.P. Moller-Maersk, the French company’s biggest acquisition since 1999 and another sign of the accelerating pace of energy deals after a long downturn. Total will pay Maersk with $4.95 billion of its own shares and assume $2.5 billion of the Copenhagen-based company’s debt, according to a statement on Monday. The full transaction value of $7.45 billion is above what some analysts were expecting and Maersk shares jumped as much as 5.7% following the announcement.

Total chases growth with $5-billion purchase of Maersk

Oil in London slipped, with the U.S. benchmark joining the decline, as traders betting on higher prices were seen closing out positions after Friday’s rally. West Texas Intermediate crude fell 0.7% in New York, while Brent dropped 1.2% from near a three-month high on Friday. While Libya halted loadings from its Sharara oil field, the nation’s Petroleum Facilities Guard said it’s working to reopen the pipeline linking the field to the Zawiya export terminal. Sharara has experienced several brief shutdowns caused by different groups this year.

Oil drops in New York, London as bulls charge for exits

The rapidly disappearing glut of natural gas in the U.S. is scaring the bears away. Last week, hedge funds staged their biggest retreat from short gas bets since September 2016 as futures rallied on a shrinking supply surplus. They cut their bearish positions in seven U.S. gas contracts by 19%, U.S. Commodity Futures Trading Commission data show. Bullish bets were meanwhile little changed.

Natural gas bears stage biggest retreat in 11 months amid rally

While enthusiasm in the U.S. oil market dwindles, things are looking a little brighter across the pond. For a second week, hedge funds refrained from making big bets on West Texas Intermediate prices stuck below $50/bbl in New York as American output keeps rising. Meanwhile in London, Brent surged to a 12-week high as global physical markets tighten. The gap between the two benchmarks hasn’t been so wide in almost two years.

Brent oil steals show as hedge funds leave U.S. crude aside

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Oil Search Ltd., the Papua New Guinea-focused energy explorer, raised its full-year production target because of record output from the country’s liquefied natural gas project. The company lifted the lower end of its 2017 production guidance to 29 MMboe from the previous 28.5 MMboe, while leaving the upper end at 30.5 MMboe, citing record output at PNG LNG, the company said Tuesday in a statement. "Lifting of the bottom end of production guidance is positive, although we suspect given strong first-half production performance most had baked in top-of-the-range estimates," Sydney-based RBC Capital Markets analyst Ben Wilson said in a note.

Oil Search raises output goal on record Papua New Guinea gas

After oil giant BHP Billiton sold off the rest of its U.S. shale holdings, CNBC's Jim Cramer did not shy away from the massive impact he thought it would have on the overall industry. "From our point of view, is that these held-for-sale oil and gas assets will be the determinant of the entire pricing environment for domestic acreage going forward, and therefore for the stocks themselves," the "Mad Money" host said. And as crude teeters on the brink of either collapse in the price of oil or collapse in the value of U.S. shale properties, Cramer said this deal would be monumental in determining oil's fate.

Cramer Remix: Why these US oil fields may be about to make a big market impact

To provide more complete coverage of U.S. crude oil and natural gas production, EIA is expanding the Drilling Productivity Report (DPR) to cover the Anadarko region, which covers most of the production from the Anadarko Basin in 24 counties in Oklahoma and 5 counties in Texas. Two other regions—the Marcellus and the Utica—have been combined into one Appalachia region.
The Anadarko Basin has a long history of hydrocarbon production and, in recent years, has seen an increase in activity mainly from two areas commonly known as the STACK (Sooner Trend Anadarko Canadian and Kingfisher) and the SCOOP (South Central Oklahoma Oil Province) plays.

EIA’s Drilling Productivity Report adds Anadarko region, aggregates Marcellus and Utica - Today in Energy - U.S. Energy Information Administration (EIA)

Lithuania received its first spot shipment of liquefied natural gas (LNG) from the United States on Monday, the result of a deal aimed at reducing dependence on Russia and consolidating relations with Washington amid increased tension in the region. Russia's annexation of Crimea in 2014 has spooked the Baltic states, once ruled from Moscow but now members of both NATO and the European Union.

Lithuania receives first LNG from the United States

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OPEC oil supply is set to fall by 419,000 barrels per day (bpd) this month, a company that tracks OPEC shipments forecast on Monday, reflecting plans for lower exports by Saudi Arabia and reductions by other producers. The 14-member Organization of the Petroleum Exporting Countries has agreed to cut output by about 1.2 million bpd until March 2018 in an effort to reduce inventories and support prices.

OPEC oil supply set for sharp drop in August: PetroLogistics

Canadian oil sands producers such as Cenovus and MEG Energy impressed investors in the second quarter as prices of heavy crude rose, but those gains are expected to be short-lived. Most of these companies are expected to book losses or post sharp drops in profit in the coming quarters as prices take a hit from a spike in oil sands production and costs rise due to a lack of pipeline capacity.

Canadian oil sands producers: Heady days may not last long

Mark Fisher forecast natural gas prices will break $4 or $5 per mmbtu once a streak of warm winters breaks. Fisher says general investors could buy into natural gas drillers rather than trying to time commodity price moves. Fisher is less bullish on oil drillers and thinks crude will remain stuck in a range between $40 and $50 a barrel for some time.

Mark Fisher: Natural gas will break out above $4 or maybe $5

The U.S. shale industry has had a rough few weeks, with a growing number of reports suggesting that the industry is facing much more financial trouble than many analysts had expected. Now, a new report adds further evidence to the notion that shale is losing its luster in a $50 per barrel market, with producers forgoing shale in favor of older wells. U.S. shale was thought to be the most competitive source of oil out there, and indeed the industry appears to be ramping up production at today’s prices. Shale had adapted to a $50 per barrel market, producers had streamlined operations to make them almost resemble an assembly line, and in a volatile and unpredictable market, the short-cycle nature of shale drilling made it one of the least risky options for drillers.

The Latest Red Flag For U.S. Shale | OilPrice.com

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Two diametrically opposed views dominate the current debate about where the oil price is heading. On the one hand, there is the view that the price of oil will be “lower for longer”, or even “lower forever”, as the electrification of transport will eat away at oil demand more and more while, at the same time, technological innovation (shale in particular) will greatly increase economically recoverable resources. On the other hand, however, there is the view that the price of oil is set to explode, primarily due to underinvestment in the upkeep of brownfields, development of greenfields, and exploration for new resources.

The Next Oil Price Spike May Cripple The Industry | OilPrice.com

Colombia’s oil production has been falling for the last four years. It’s not just the 2014 price crash that pressured output: The country’s fields are depleting and new discoveries are hard to come by because of high production costs, security challenges, and opposition from the population.

Colombia Looks At Shale As Oil Reserves Plunge | OilPrice.com

In a bid to increase oil revenues and possibly setting the stage for its own benchmark crude grade, Iraq has told customers it may change the way it prices Basra crude for the Asian market, Reuters reported on Monday, quoting a letter by Iraq’s state oil marketing company SOMO it had seen.

In Breakaway Move From Saudis, Iraq May Change Oil Pricing | OilPrice.com

Hardly a day goes by without another media report about the impending demise of the Internal Combustion Engine (ICE) as petroleum powered cars and trucks are replaced by uber-clean Electric Vehicles (EV). It is just a matter of time before EVs start to materially reduce global oil demand thereby capping a meaningful oil price recovery now and creating an ever-shrinking industry in the future. EVs are yet another reason why the decline of petroleum production and consumption is inevitable.

Electric Vehicles No Threat To Oil Prices Anytime Soon | OilPrice.com

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Oil markets were happy to hear that summer isn’t over just yet, as the U.S. government reported another decline in crude and gasoline stockpiles. Futures in New York gained 1.2% after the Energy Information Administration said America’s crude inventories shrank for an eighth straight week, with gasoline supplies also falling. Price gains have been largely undercut by production increases in past weeks.

Oil climbs as stockpile drop allays worries over summer's end

Sizable year-over-year improvements in the rig count, drilling permits, and the value of Texas-produced crude oil and natural gas, along with renewed industry employment growth combined to push the Texas Petro Index upward in July to 176.9, the eighth straight monthly increase since a punishing 24-month contraction, which ended in November 2016 with a revised TPI of 149.2. (Monthly TPI values were revised modestly over the entire history of the analysis, due to a shift in the way industry employment estimates are factored into the calculation of the TPI.)

Texas oil producers driving oil markets, leaving OPEC confounded

Despite a slowdown in the number of rigs being added in the shale basins, output targets will be met or exceeded as producers are adding to their hedged positions, according to ESAI Energy’s recently released North America Watch. Total 2017 shale output will average 5.2 MMbpd, 580,000 bpd higher than last year. Producers will seek to increase their hedges for 2018, but will need to cover their full-cycle costs for sustainable growth. Even with a slowdown in rig count, shale production, led by the Permian basin, will rise roughly 450,000 bpd to average 5.6 MMbpd in 2018. Hedging will increase and support further growth if the forward curve for WTI moves over $50.

Shale producers are dropping rigs and adding hedges, ESAI Energy says

Total agreed to buy the oil and gas unit of A.P. Moller-Maersk, the French company’s biggest acquisition since 1999 and another sign of the accelerating pace of energy deals after a long downturn. Total will pay Maersk with $4.95 billion of its own shares and assume $2.5 billion of the Copenhagen-based company’s debt, according to a statement on Monday. The full transaction value of $7.45 billion is above what some analysts were expecting and Maersk shares jumped as much as 5.7% following the announcement.

Total chases growth with $5-billion purchase of Maersk

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The good news for U.S. producers: the chief executive officer of Europe’s second-biggest oil and gas company thinks American shale assets are “quite expensive” following a recovery in the price of crude. The bad news: they’re growing more affordable. Assets tied to shale producers, particularly those in America’s most-coveted oil field, have fallen this August thanks to concerns about oversupply that have emerged as the firms announced second-quarter results. The anxiety is evident across stocks, bonds and in the words and actions of major energy players who now say they’re eschewing the once-popular sector.

It's been a tough month for some of America's most-loved oil plays

While other offshore rig operators are still struggling to survive the worst oil-market slump in a generation, one Norwegian company has managed to turn things around. Odfjell Drilling Ltd., which owns four rigs and specializes in drilling in harsh environments, has seen its stock rise almost 300 percent in the last year to trade near a three-year high even as rivals such as Transocean and Ensco continued to lose billions in market value. “It’s completely unique,” said Sondre Stormyr, an analyst at Danske Bank.

Oil slump no obstacle to 300% return for Norwegian driller

Harvey became the strongest hurricane to hit Texas in more than 50 years, making landfall in the heart of the U.S. energy sector and bringing the danger of a life-threatening storm surge.

Harvey hits U.S. oil hub with massive winds, torrential rain

Two more oil fields in Libya are being closed after an armed group took over pipelines to both deposits, further disrupting the OPEC nation’s plan to boost crude production. El Feel, or Elephant, stopped production, Wessam Al-Messmari, an office manager for the Petroleum Facilities Guard that is protecting the field, said Sunday by phone. State-run National Oil Corp. declared force majeure at the deposit, according to a person familiar with the situation who asked not to be identified because the information isn’t public.

Libya's oil disruptions widen as two more fields halt output

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Hedge funds lost faith in oil just before the worst storm to hit the U.S. since 2004 struck the heart of energy production in Texas. Short-sellers boosted bets on declining West Texas Intermediate prices by the most since June in the week ended Aug. 22 as futures chopped around $47/bbl without a clear direction. Harvey smashed ashore on Friday as a Category 4 hurricane, flooding a region whose refineries process 5 MMbpd. Anticipation that the storm would pare crude demand pushed prices down a day after declining U.S. stockpiles had triggered a rebound. Futures ended the week 1.3% lower, without enough conviction from bears or bulls to break out of a tight range.

Hedge funds lose faith in oil before Harvey hits demand center

Ricardo Darre, CEO of YPF SA, has resigned as Argentina’s largest oil producer prepares to sell at least $1 billion in assets and focus on developing the world’s second-biggest reserve of shale gas. A six-person committee will lead the company after Darre resigned, according to a filing by YPF on Monday. Darre didn’t immediately respond to a call seeking comment. Alejandro Bianchi, a spokesman for the Energy Ministry, declined to comment by phone. EconoJournal, a local website focused on energy, reported the resignation earlier.

YPF CEO resigns as oil company readies asset sales, shale focus

Gasoline surged to the highest in two years and oil declined as flooding from Tropical Storm Harvey inundated refining centers along the Texas coast, shutting more than 10% of U.S. fuel-making capacity. Motor fuel prices rose as much as 6.8%, while New York oil futures slipped 0.9%. Harvey, the strongest storm to hit the U.S. since 2004, made landfall as a hurricane Friday, flooding cities and shutting plants able to process some 2.26 MMbpd.  Pipelines were closed, potentially stranding crude in West Texas and interrupting gasoline supply.

Gasoline surges, oil declines as Harvey shutters refineries

In a note released this morning, Goldman's Damien Courvalin calculated the estimate near-term impact from the "devastating" fallout from Harvey. As Courvalin writes, data available so far point to sizably larger refining than production disruptions: as of Sunday, August 27, nearly 3 mb/d of refinery capacity was offline (16.5 percent of the 18.2 mb/d US capacity) vs. c.1 mb/d of crude production (11 percent of 9.3 mb/d current production) and 2 Bcf/d of gas production (3 percent of 72 Bcf/d current production).  Should these levels of outages remain in place, and using past hurricanes as proxies for the impact on oil demand, Goldman estimates that the impact of Harvey on the U.S. oil market would be to increase domestic crude availability by 1.4 mb/d while removing 615-785 kb/d of gasoline and 700 kb/d of distillate supplies. Larger refinery outages would increase these long crude and short product impacts.

Goldman: U.S. Oil Sector Could Take Months To Heal From Harvey | OilPrice.com

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The mutual dependency of pipeline companies and refiners is being magnified as Tropical Storm Harvey takes its toll on the Gulf Coast, putting at risk the U.S. shale boom. With a number of refineries in the region closed by the storm, pipelines have fewer places to deliver oil carried from prolific West Texas shale basins. When pipelines close, the refineries still open have less oil to process. Ultimately, producers may find their oil stranded with their route to the coast limited.

Prolonged shutdowns from Harvey could strand shale output

It keeps getting deeper for Houston, the epicenter of the U.S. oil industry. As floods inundated the nation’s fourth-largest city Monday, with more than a foot of rain likely still to come through Friday, predictions of damage ranged as high as $100 billion. Wall Street and Washington braced for the repercussions of the costliest U.S. natural disaster since Hurricane Sandy in 2012.

Oil's epicenter faces more flooding

OPEC’s second-largest producer is stepping up the campaign to get more for its oil by looking to revamp the way it sells crude to its biggest customers. Iraq is considering plans to use a new reference price for sales to Asia, according to traders, who received a notice from the state oil company SOMO. The producer is proposing to use a contract traded on the Dubai Mercantile Exchange as a benchmark for pricing Basrah crude, replacing the formula it currently uses along with competitors such as Saudi Arabia, Kuwait and Iran.

Iraq braves break with tradition to get oil's true worth

China has become the world’s third-largest shale gas producer, after only the U.S. and Canada, Iran’s PressTV reports, adding that last year, China pumped almost 8 billion cubic meters of shale gas. The annual result was a 76.3-percent improvement on 2015, China’s Ministry of Land and Resources said – a record amount. Investments in shale gas exploration reached US$1.3 billion.

China Becomes World’s Third-Largest Shale Gas Producer | OilPrice.com