Husky Oil to proceed with West White Rose project off Newfoundland

The Newfoundland and Labrador government was exultant Monday as Husky Energy announced it will finally proceed with the multimillion-dollar West White Rose project, with first oil five years away. The company said it will use a fixed wellhead platform tied to the SeaRose floating production, storage and offloading vessel, known as an FPSO. First oil […]

OPEC underpins oil markets into 2018

If success is measured in averting a looming supply glut & bolstering OPEC budget deficits, then the 9 month extension of production cuts is a triumph of pragmatism. But the firmer oil price we expect can only embolden the US tight oil industry.

Yedlin: Supercluster initiative brings opportunity for economic diversification

The Trudeau government’s announced “supercluster” initiative presents tremendous opportunity for Alberta in three important areas — energy, agriculture and health care. The $950-million program will focus on growing innovation and employment in key sectors of the Canadian economy, with bids awarded to as many as five centres across the country. Alberta already has a competitive advantage in energy, agriculture […]

Shell Starts Production At New FPSO In Pre-Salt Brazilian Field

Royal Dutch Shell’s Brazilian subsidiary BG E&P Brasil and partners began production in a deepwater field in the Santos Basin on Friday, according to a new report by World Oil. The floating production storage and offloading vessel (FPSO) P-66 sits at a depth of 2,150 meters and can extract 150,000 barrels of oil and six million cubic meters of natural gas per day. The vessel is the first in a series commissioned by Petrobras to exploit the BM-S-11 block within a consortium. “Achieving production at Lula South is an important accomplishment…

1.2 Million BPD Capline Pipeline Could Be Retired by 2021

New pipelines with similar routes may drive Plains All American LP’s Capline pipeline, from Louisiana-to-Illinois, obsolete, according to a new report by Reuters. The 1.2-million-barrel-per-day pipeline, was once the nation’s largest, but a bank report from the company’s latest investor presentation shows steep drops in volume over the past few years as competing facilities siphon off the line’s demand. Capline will be “idled as redundant pipeline capacity,” which also transfers crude supplies from Cushing, Oklahoma,…

The Top 10 Nations Exporting Oil To The U.S.

U.S. has brought crude oil from 80 nations into its refineries In the past 30 years, the U.S. has imported more than 91 billion barrels of oil, drawing from a large variety of sources. The EIA began carefully tracking American oil imports in 1986, meaning there is now a significant amount of historical data. From 1986 to 2016 the U.S. imported 91.2 billion barrels of crude oil, in just under 244,000 individual records. In total, the EIA lists 80 different countries from which the U.S. has imported crude oil. The top ten countries are listed below…

Saudi Arabia To Trim Oil Exports To US To Force Inventories Lower

Riyadh plans to purposely reduce exports to the United States to force a reduction in the latter’s sizeable inventories, which are preventing a greater rise in global oil prices, according to Saudi Oil Minister Khalid Al-Falih. Just one day after OPEC announced a nine-month extension to its November production cut deal, the top oil official told reporters on Friday that “exports to the U.S. will drop measurably.” Two sources close to the matter told Bloomberg that starting next month, Saudi crude supplies to American importers…

The Big Data Revolution In Oil Is Accelerating

It was about time big data entered the lives of Big Oil. Yet it’s not happening exactly as expected. Oil companies are not making a mad dash to collect and process unstructured data in order to make sense of it and use it to expand or improve their business. No, it’s individuals and startups that are leveraging the potential of these unstructured data to supply it in a structured and useful way to oil traders. The oil industry is notoriously opaque, especially those parts of it that are grouped in the Organization of Petroleum Exporting…

Texas Shows No Sign Of Slowing Production Growth

(Click to enlarge)The Chart above compares several different combinations of past (vintage) data to estimate output. The dotted line is based on the most recent 8 months (August 2016 to March 2017) of data saved from the RRC website, the blue solid line is based on the past 12 months of data, and the yellow line is based on the most recent 3 months of data. Each estimate uses the most recent 24 months of data from each month. A significant change in the size of the correction factors began in August 2016, which is the basis of the 8 month Corrected…

Uzbekistan To Increase Its Refining Capacity By 50%

Uzbekistan revealed in late April that it had begun building a new $2.2 billion oil refinery that would produce fuel for sale domestically and abroad. Official news sources stated perfunctorily that oil supply agreements had already been reached with Kazakhstan and Russia, although the finer details still in fact need to be decided. The ambition is formidable. The refinery being built in the Jizzakh province, which lies adjacent to the South Kazakhstan Region, is being designed to process up to 5 million tons of oil annually, an almost 50 percent…

It’s Not Over For OPEC Just Yet

OPEC extended production cuts that were originally agreed in December 2016 for another 9 months, delivering both OPEC members and Russian discipline that will last well into the Spring of 2018. And still the Saudis and OPEC continue to get no respect at all, like Rodney Dangerfield. The oil markets, in fact, after a two-week boom in prices, used the actual date of the meeting to retreat from their highs, ending the day below $50 a barrel. This could be a reaction to the very late speculative players trying to take advantage of a decision that was…

The Reaction To The OPEC Deal Extension Is Logical, But Flawed

Those new to financial markets, and energy trading in particular, were probably somewhat puzzled by the price action in oil futures this week following the announcement by OPEC and some influential non-OPEC nations that they are extending the production cuts agreed last year for another nine months, until the end of Q1 2018. The logical reaction to that news would have been a spike in oil, but instead we saw a dramatic decline of around five percent once the announcement was made. That is easily explained in terms of trading dynamics, but one question…

The OPEC Elixir Wasn’t Potent Enough

Friday May 26, 2016 In the latest edition of the Numbers Report, we’ll take a look at some of the most interesting figures put out this week in the energy sector. Each week we’ll dig into some data and provide a bit of explanation on what drives the numbers. Let’s take a look. 1. Oil market unimpressed with OPEC extension (Click to enlarge) – OPEC extended their cuts for another nine months, and put on a display of unity both amongst each other and with non-OPEC countries like Russia. – However, because OPEC has routinely tried…

Global Energy Advisory May 26th 2017

The biggest oil news of the week was certainly the OPEC announcement of an extension of the crude oil production cuts until March 2018. This additional 9-month lifeline is – according to the Saudi Energy Minister – “the safe bet that should do the trick” of rebalancing the market. It also gives another 9-month ‘reprieve’ to U.S. shale as well. The initial November agreement has failed to restore global market balance. There were doubts over the past month as to whether the extension would happen, but more and more OPEC members…

Expect Choppy Oil Markets As Markets Digest OPEC’s Decision

July Natural Gas Weekly Recap Natural gas prices continued this week’s price slide on Thursday after U.S. government data showed that natural gas supplies in storage rose more than expected last week. According to the U.S. Energy Information Administration, natural gas storage rose by 75 billion cubic feet in the week-ended May 19. This was slightly above the pre-report forecast for a build of 71 Bcf. Last week’s report showed a build of 68 Bcf. The EIA also said that natural gas in storage currently stands at 2.444 trillion cubic feet.…

Goldman: OPEC Needs To Do More To Restrain Shale Oil

Goldman Sachs analysts have warned that OPEC’s job is not over with the announcement of an extension to its November agreement. Now the group needs to convince markets that even with the cut, U.S. shale output growth can maintain the global glut, with a view to curbing capital inflows into shale production. “OPEC needs to create a credible threat that the oil market may return into surplus to finally slow the capital inflows into shale. This could be achieved by both expressing the goal of growing future production, and gradually ramping…

Pipemakers in Regina vote to give union executive power to call strike

Hundreds of unionized workers at Evraz North America’s steel plant in Regina have voted overwhelmingly in favour of strike action to back contract demands. The vote by members of United Steelworkers Local 5890 took place Thursday at a special meeting to discuss the company’s contract proposals. The union’s website says more than 99 per cent […]

Restructured Penn West proposes name change to Obsidian Energy

Penn West Petroleum Ltd. wants to change its name to Obsidian Energy Ltd. after surviving an accounting scandal, debt crisis and commodity price crash over the past three years. David French, who took over as CEO of the Calgary oil and gas company in October, says shareholders will be asked to approve the change because […]

Naive Hedge Funds Bet Too Big On An OPEC Cut

It seems that hedge funds and money managers had built up too big a bullish position before the OPEC deal, send oil prices down when the 9-month extension was announced. Friday, May 26, 2017 (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge)OPEC and non-OPEC members secured a nine-month extension of their deal, pushing the combined 1.8 million barrels per day in reductions through to the first quarter of 2018. The cohesion among the disparate members was notable,…

China Teapot Refiners Overflow, Slow Crude Oil Imports

Chinese independent refiners, the so-called ‘teapots’, are expected to import less crude at least until August, as high inventories, changing import quota policies, and stricter tax scrutiny are squeezing their refining margins—a move that could raise concerns over China’s oil demand growth. Some independent refiners are pausing for maintenance, while others are cutting run rates because of squeezed margins, Reuters reported on Friday, citing managers at teapots. “There will be more shutdowns in June, July and…

Analysts Say Oil Industry Needs $45 Oil Price To Break Even

Technological advances and deflationary pressure from the downturn have resulted in an 8-percent drop in global average unit production cost to US$30 per barrel of oil equivalent in 2016, which implies that the industry needs the price of oil at US$45 to break even in aggregate, according to a Bernstein Research survey of the 50 biggest listed global oil and gas companies. Global marginal cost, that is, the cost to replace reserves, for non-OPEC oil producers dropped by 12 percent annually to US$63 per barrel in 2016, according to the survey,…

Falling OPEC Exports Create Upside For Oil Prices

No sooner had the dust settled after the conclusion of the latest OPEC meeting (with oil traders selling the market like hot cakes), we got Saudi oil minister Khalid Al-Falih saying that exports to the US were dropping measurably. While this has caused a good degree of excitement in the market, we here at the good ship ClipperData had already highlighted at the beginning of this month that Saudi Arabia had slashed export loadings in April, which would translate into lower deliveries to key demand hubs into June. (Also discussed here on CNBC…

Unstoppable: U.S. Adds Oil, Gas Rigs As OPEC Extends Deal

The number of active oil and gas rigs in the United States rose for the nineteenth straight week, Baker Hughes reported on Friday by 7, signaling that the US Shale patch is, for OPEC, an unstoppable force. The number of oil rigs in operation increased by 2, and gas rigs increased by 5. Combined, the total oil and gas rig count in the US now stands at 908 rigs, or 504 above the count a year ago. This is on top of drilled but uncompleted wells in the US, which are also on the rise, swelling from 5,534 in March 2017 to 5,721 in April 2017, according…

U.S. rig count up in 19th straight weekly increase

Drillers dispatched another seven oil and gas rigs to U.S. fields over the past week, Baker Hughes said Friday, marking the rig count’s 19th consecutive weekly increase. That increase brought the nation’s active rig count up to 908, up from a record low of 404 this time last year. Five of the rigs added this …

Iran Sees $50B Oil Deals Enter Operational Phases In 2018

Iran expects around US$50 billion worth of oil contracts to launch their operational phases next year, according to Fardad Daliri, director of investment at the Industrial Development and Renovation Organization (IDRO) of Iran. The Islamic Republic is inviting local and foreign companies to take part in oilfield development projects that Iran wants to launch soon, Daliri said at an international exhibition in Tehran, as reported by Trend news agency. “We are hopeful to be able to sign huge oil deals on the development of shared oil fields…

Fire at Anadarko oil tank site kills worker, injures three others

A fire at an oil tank battery owned by Anadarko Petroleum Corp. killed one worker and injured three others in Colorado on Thursday afternoon, authorities and the company confirmed. Contracted workers were doing maintenance work at an oil tank facility near Mead, Colorado, when an oil tank battery ignited, the Woodlands-based Anadarko said. Local authorities …

Saudi Arabia’s Motiva plans for billions in Texas growth

Saudi Arabia’s Motiva Enterprises said it plans to spend billions of dollars more to expand its Port Arthur Refinery — already North America’s largest — and grow more in the petrochemical and refining sectors. Motiva, which finalized its divorce from Royal Dutch Shell in the beginning of May, said it plans to spend close to …

Market Currents: OPEC – The Hangover

No sooner had the dust settled after the conclusion of the latest OPEC meeting (with oil traders selling the market like hot cakes), we got Saudi oil minister Khalid Al-Falih saying that exports to the US were dropping measurably. While this has caused a good degree of excitement in the market, we here at the good …

Petrobras, Shell fire up pre-salt oil field off Brazil

A first-of-its-kind vessel owned by Petrobras and Shell has begun pumping oil off Brazil in one of the world’s most lucrative deep-water basins. Shell said Friday the companies fired up their first cloned offshore vessel assembled with standard parts and equipment in the pre-salt Santos Basin, a prolific region where some wells produce three times …

Kinder Morgan moving forward with Trans Mountain through IPO

Houston’s Kinder Morgan said it plans to start construction in September on its massive Trans Mountain pipeline project in Canada. The plans though are contingent on Kinder Morgan successfully taking its Canadian public business public next week through an initial public offering to help fund the nearly $5.5 billion pipeline expansion. The project will funnel …

Kinder Morgan makes final investment decision on Trans Mountain pipeline

Kinder Morgan says it will proceed with the $7.4-billion Trans Mountain pipeline expansion as long as it secures satisfactory financing for the project through its initial public offering. The Texas-based company, in conjunction with its indirect subsidiary Kinder Morgan Canada, announced Thursday its final investment decision on the project, which is conditional on the successful completion of […]

Liberals to make announcement on oil tanker moratorium on Friday

Joyce Murray, the Liberal member of parliament for Vancouver Quadra, is scheduled to make an announcement Friday morning regarding the Oil Tanker Moratorium Act.  The legislation, which was tabled by Transport Minister Marc Garneau earlier this month, will ban tankers carrying crude oil and so-called persistent oils from stopping, loading or unloading at any ports or marine installations from the […]

What Is Behind The Surge Of Russian Oil Exports To India?

In the first five months of 2017, Indian companies have purchased more than 1 million tons of Russian crude supplied from Black Sea ports. In and of itself, there would be nothing extraordinary about it, were it not for the almost complete lack of supplies before 2017. India already surpassed its average Urals imports twentyfold (the past few years’ annual import volumes lingered around a mere 50ktpa) and is on course to increase the ratio higher still. On one hand, Indian companies that acquired minor stakes in Rosneft’s Siberian assets…

Oil Crashes To $48 Handle As Iran Says It Won’t Cut Output

Iran’s current crude oil output level will not be reduced under the extension of the OPEC production cuts, Iranian Oil Minister Bijan Zanganeh was quoted as saying on Thursday. “Iran’s oil output would stand at 3.8 mb/d,” Zanganeh said in Vienna – as quoted by Trend news agency – where OPEC meets to discuss the details of the output cut extension. OPEC agreed to extend the current cuts for nine months until March 2018 in what was a widely expected decision that sent oil prices plunging as investors hoped for more.…

Texas Claims Victory As OPEC Forced To Roll Over Oil Production Cuts

“Texas shale producers forced OPEC this morning to extend its oil production cuts for 9 months,” Texas Railroad Commissioner Ryan Sitton said on Twitter on Thursday, shortly after OPEC agreed to extend the oil production cuts for nine months until March 2018. On Wednesday, Sitton said that “OPEC meets tomorrow and is expected to cut oil production again thanks to the resiliency of Texas shale drillers.” “Less OPEC oil on the market enhances the opportunity for American energy to fill needs around the world,…

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