Nigerian Oil Output Below 1.8 Million BPD Quota

Nigerian oil production remains below 1.8 million barrels per day, in compliance with a quota set on the African nation by OPEC earlier this year in response to its explosive output growth through 2017. Oil Minister Emmanuel Ibe Kachikwu made the announcement in Vienna, where the Organization of Petroleum Exporting Countries’ headquarters is located. The bloc has already agreed to extend output cuts through March 2018, although another extension may be in the works. Nigeria and Libya had both been exempt from the agreement when it was first…

Colorado Landfills Contain Radioactive Substances From Oil Sector

Landfills in Colorado have begun to fill their space with low-level radioactive substances from oil and gas activities, state health officials have said, according to the local news site the Daily Camera. After a series of meetings with local officials, state authorities have concluded that unknown amounts of radioactive material have been stored at landfills throughout the state. Local authorities are currently trying to prohibit the practice altogether by strengthening their oversight mechanisms. “There is some of it that is just going to solid…

Eagle Ford Sees Surge In Production

Sanchez, Chesapeake dominate Dimmit County with 210 permits in 2017 While it has been recently eclipsed by the Permian, the Eagle Ford in South Texas remains one of the most important shale basins in the world. According to the EIA, the basin will produce 1,280 MBOPD in September, making it the second-largest oil-producing basin in the U.S. Despite temporary interference from Hurricane Harvey there are currently 71 rigs active in the basin, making the Eagle Ford second in drilling activity as well. Just like any other area of Texas, these rigs…

What A Fed Rate Hike Means For U.S. Shale

North American shale oil and gas companies have proven that they can adapt their business model through the lower crude oil prices cycle. Now, the new challenge for shale producers is how to adjust their financial strategy when the Federal Reserve (Fed) raises interest rates. Since the 2007 financial crisis, the Fed interest rate has declined from 5 to 1.25 percent, having hit the record low of 0.25 percent in December 2008, just four months after the Lehman Brothers bankruptcy that triggered a domino effect across…

Heavy Crude Production Hit Hard By OPEC Cuts

Heavy crude becoming more expensive, light crude becoming cheaper Crude oil is not all created equal, and many major producing locations have their own grades. One of the most important and commonly used attributes for comparing crude is its density. More dense oil generally requires more complex refineries to process and often trades at a discount to lighter grades. Source: EIA OPEC cuts mostly bring heavy oil offline Recent supply developments have begun to change this, though. One of the most important oil supply developments at present is the…

The Secret Of Jordan’s Energy Reform Success

While the public sector continues to play a prominent role in Jordan, the privatization process it has successfully implemented for over two decades has seen a surge over the past 18 months, and shows no signs of slowing. Jordan’s economy continues to grow with the support of development financial institutions—such as the World Bank and the European Bank for Reconstruction and Development (EBRD)—despite the regional security environment. This is reflected in an accumulative portfolio of projects worth over $1 billion. Impact Points:…

Phillips 66 Partners To Buy Phillips 66 Assets In $2.4B Deal

Phillips 66 Partners (NYSE:PSXP), the master limited partnership of Phillips 66, said on Friday that it would buy assets from Phillips 66 (NYSE:PSX) in a deal valued at US$2.4 billion including debt, in the largest acquisition the partnership has ever made. Oil firms in the U.S. form master limited partnerships (MLPs) to buy and operate midstream assets. MLPs distribute excess cash to unitholders in the form of tax-deferred dividends. Phillips 66 Partners has reached a deal with Phillips 66 to buy the refiner’s 25-percent stake in each of…

Was Goldman Sachs Wrong About Oil Demand?

In my last two columns for Oilprice.com premium subscribers, I was first very clear in the opportunity I thought I saw coming in oil stocks. First, I outlined how oil companies had finally retreated from full-speed-ahead capex increases, looking to raise production into an oil environment that hadn’t been able to support it for the last two years. I also pointed out that this retrenchment had come in a unified way from oil companies, continuing their lemmings-like behavior of rather bad decision making during this entire oil bust. The opportunity…

Long-Term Implications Of Fed Action Could Backfire On Oil

There are many things about my career in interbank forex for which I am thankful. I can swear in multiple languages for example, and feel only amused when I see others in apoplectic rage. I can also still drink a lot without falling over, and hold a conversation while listening to two other things. There are also some more practical lessons that I learned, including that too narrow a focus on the news about one market is not a good idea. That seemed to be the case in energy this week, when the thing that was the focus of most other markets, the…

How Strong Is Bullish Sentiment?

Friday September 22, 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. Inventories decline in second quarter, but next steps uncertain (Click to enlarge) – Global oil inventories declined at a rate of 0.9 million barrels per day in the second quarter, a steep drop after several years of increases.- Refined product…

Global Energy Advisory 22nd September, 2017

China’s belligerence towards its neighbors in the South China Sea is hampering oil and gas exploration in the basin, analysts are warning. A couple of months ago, China threatened Vietnam with a military response after the country gave Spain’s Repsol the go-ahead to start drilling in a disputed block. Now, Indonesia, which has an exclusive economic zone in the South China Sea, has said it will use its military to secure oil and gas exploration in the zone. China shares the basin with Vietnam, the Philippines, Malaysia, Brunei, and Taiwan,…

Failed OPEC Meeting Could Drive Oil Prices Lower

November West Texas Intermediate crude oil futures traded mostly sideways this week as investors shrugged off production and inventories numbers in anticipation of a decision on Friday to extend or perhaps deepen production cuts by OPEC and non-OPEC producers. Oil ministers from OPEC and other producers led by Russia are currently discussing a possible extension to the current agreement under which producers are cutting output by 1.8 million barrels per day (bpd) until March 2018. Some traders also believe the group will discuss deepening the production…

Expert Commentary: An Oil Price Correction Is Due

– Oil markets appeared to be firing on all cylinders this week. Flat price brent reached a 5-month high on Friday at $56.91 and is +28% since June, Brent Dec’17/Jun’18 reached a 7-month high and Dated vs. Front Line Brent traded to its highest mark since mid-2014. OPEC compliance remains strong, global refined product stocks are drawing aggressively and COT positioning on brent, gasoline and heating oil shows funds continuing to pile into the long side of the market. – In our view the current strength in flat price, spreads and refined…

Japan Court Slams Tepco With Fukushima Damages Bill

The Chiba District Court in Japan has ordered Tokyo Electric Power Company Holdings, or Tepco, to pay damages to a group of Fukushima prefecture residents who were forced to flee their homes after the 2011 nuclear disaster at the Fukushima Daiichi nuclear power plant. This is the second damages ruling against the utility, but unlike the first one, which came out in March, the Chiba court ruling did not find the Japanese government guilty of negligence. The court estimated the damages at US$3.36 million (376 million yen). The plaintiffs had asked…

5 Big Gainers In Oil & Gas This Week

Energy has been the worst-performing S&P 500 sector so far this year, losing 10.8 percent year-to-date. The top 15 U.S. oil companies by market capitalization have felt the sting of the failed oil price recovery. (Click to enlarge)Oil prices have risen less than initially anticipated this year, partially due to the continuous U.S. crude oil production gains. In recent weeks, a weaker dollar has been propping up oil prices more than OPEC’s cuts, and efforts to convince the market that rebalancing is well under way. This week, the U.S.…

Oil Prices Plateau After OPEC Meeting

Oil markets had a neutral reaction to OPECs uneventful meeting, suggesting that, as Stephen Brennock suggested, the “bull market may be running out of steam.” Friday, September 22, 2017 (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge)Oil prices firmed up this week, holding onto gains ahead of OPEC’s monitoring meeting on Friday. OPEC gathers in Vienna. OPEC met on Friday to consider the possibility of extending the production cuts beyond March 2018. The meeting…

Oil Spills From Pipeline After Syria Army Retakes Oil Field From ISIS

Oil spilled from a pipeline at the al-Teym oil field in the oil-rich desert south of Deir al-Zor in Syria after the Syrian Arab Army and its allies had recaptured the oil site from ISIS, video footage uploaded on Friday on YouTube by Berlin-based video news agency Ruptly shows. Earlier this month, Syrian state TV reported that the Syrian army and its allies had retaken the Teym oil field as forces were advancing to clear the city of Deir al-Zor from Islamic State militants. According to the Syrian Observatory for Human Rights, the army also seized…

Total Joins Chevron In Gulf Of Mexico Development

French Total has expanded its presence in the Gulf of Mexico by closing a farm-in agreement with Chevron for the development of seven prospects covering 16 blocks in the deepwater section of the gulf. The French company said the prospects it will develop are located in the Wilcox play in the central Gulf of Mexico, next to the Anchor discovery, and in the Norphlet area, close to the Appomattox discovery. Total will take stakes of between 25 and 40 percent in the prospects, to add to its already existing interests in producing fields in the GOM:…

Oil Steady At $50 Amid Falling U.S. Oil Rig Count

The number of active oil and gas rigs in the United States fell this week by 1 rig.   The total oil and gas rig count in the United States now stands at 935 rigs, up 424 rigs from the year prior, with the number of oil rigs in the United States decreasing by 5 this week and the number of natural gas rigs increasing by 4.  Canada’s rig count additions appears to be leveling off, and despite its large swings in the number of active rigs on a weekly basis, has roughly the same number of oil rigs in operation that it had back at the…

OPEC’s Strategy To Clamp Down On Cheating

The latest chapter of the “what will OPEC do next” saga unfolded on Thursday as reports emerged that the cartel and the non-OPEC producers led by Russia may discuss a proposal to consider informal monitoring of crude oil exports, in addition to supervising compliance to production cuts. The OPEC/non-OPEC joint panel on monitoring the cuts, which consists of OPEC’s Kuwait, Venezuela, and Algeria, as well as non-OPEC Russia and Oman, is expected to discuss on Friday in Vienna a recommendation for monitoring exports, Bloomberg reports,…

Oil Exempt In Fresh Sanctions On North Korea

U.S. President Donald Trump announced additional sanctions on North Korea today, but the sanctions do not include crude oil. The announcement came after word that oil would be exempt in the new round of sanctions, a senior administration official told Reuters earlier on Thursday. “We will be putting more sanctions on North Korea,” Trump told reporters in New York, Bloomberg reported earlier today. In the new sanctions, Trump gave the U.S. treasury the authority to target specific companies and financial institutions conducting business…

Sudan, South Sudan Sign Deal To Boost Oil Output

Sudan and South Sudan have signed a deal to open direct trade along the border and increase production in the oil fields in South Sudan that are currently not functioning, in an agreement that will serve as an economic lifeline to both countries. Both Sudan and South Sudan desperately need the oil and revenues, so the agreement would likely work, analysts told Al Jazeera. South Sudan gained independence from Sudan in 2011, but it has been a bloody road to establishing a stable government whose budget is dependent almost entirely on oil. In December…

U.S. Shale: Water Is the New Oil

Texas has a water problem, and this one isn’t due to Hurricane Harvey… Rising U.S. shale output has led to increased amounts of the water that inadvertently flows out of wells together with oil. For now, drillers use trucks to transport this dirty water—which exceeds the amount of oil produced—to disposal sites, creating heavy traffic on roads. But now, at the heart of the shale boom in Texas, water management companies are thinking about new ways to move this water, creating a new opportunity in the onslaught of U.S. shale—and…

The EV Boom Is Dead Without Proper Support

Frankfurt’s car show, one of the most important in the world, this September spotlighted electric vehicles (EVs). France and the United Kingdom have already decreed an end to sale of cars with internal combustion engines by 2040. Norway is looking to do the same by 2025. And China has begun the push to electrify its vehicle fleet. In the process putting pressure on foreign manufacturers to share technology if they want to gain entry to the potentially enormous Chinese market. Politicians, eager to claim credit for factories and jobs, have…

This Overlooked Shale Play Just Reported A Huge Rise In Output

The Americas continue to be the world’s top jurisdiction for oil and gas investment. With Chinese super-E&P Cnooc saying this past week it is seeking farm-in deals in newly-opened plays in the Gulf of Mexico.  And in onshore shale, activity is just a frenetic. With new data showing a surprising surge in drilling for one play that few observers have been watching of late.  The Haynesville shale of Arkansas, Louisiana and Texas.  Unconventional drilling in this play has largely been overshadowed by higher-profile…

Peruvian Villagers Shut Down 50 Oil Wells In Protest

Villagers in the Peru Amazon have shut down 50 oil wells in protest against the negotiations of a new oil field development contract between Lima and Canadian Frontera Energy Group. The Amazon communities, who have been complaining for years about the environmental pollution from oil production are now angered that the government of the country, led by President Pedro Pablo Kuczynski, has ignored an indigenous rights law passed in 2011. The law stipulates that the government must consult indigenous communities before it approves any plans that…

Hurricane Damage To Trigger Fuel Glut

Damage from hurricanes in the Caribbean, which sends a substantial amount of fuel oil to the U.S. Gulf Coast, could lead to a glut of the fuel, S&P Platts reported, citing sources with knowledge of the situation. Hurricanes Irma and Maria, which made landfall in the Caribbean over the last two weeks, damaged several fuel storage terminals in the region, which are used to store fuel oil coming from the U.S. Atlantic coast, Europe, and Latin America. The fuel is then sent on to the Gulf Coast, Panama, and Asia. After the damage, however, a lot…

Bay Area Sues Big Oil For Billions

The cities of San Francisco and Oakland have filed lawsuits against Chevron, Exxon, ConocoPhillips, BP, and Shell for the effect of their activities on climate change: higher sea levels. The cities seek billions in damages to counteract the effects of the changing climate. Reuters quoted San Francisco officials as saying that the five oil companies “knowingly and recklessly created an ongoing public nuisance that is causing harm now and in the future risks catastrophic harm to human life and property.” The companies themselves were…

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