• 2 hours LNG Glut To Continue Into 2020s, IEA Says
  • 4 hours Oil Nears $52 With Record OPEC Deal Compliance
  • 7 hours Saudi Aramco CEO Affirms IPO On Track For H2 2018
  • 9 hours Canadia Ltd. Returns To Sudan For First Time Since Oil Price Crash
  • 10 hours Syrian Rebel Group Takes Over Oil Field From IS
  • 3 days PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 3 days Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 3 days Syrian Rebels Relinquish Control Of Major Gas Field
  • 3 days Schlumberger Warns Of Moderating Investment In North America
  • 3 days Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 3 days Energy Regulators Look To Guard Grid From Cyberattacks
  • 3 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 3 days New Video Game Targets Oil Infrastructure
  • 3 days Shell Restarts Bonny Light Exports
  • 3 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 4 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 4 days British Utility Companies Brace For Major Reforms
  • 4 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 4 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 4 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 4 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 4 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 4 days Rosneft Signs $400M Deal With Kurdistan
  • 4 days Kinder Morgan Warns About Trans Mountain Delays
  • 5 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 5 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 5 days Russia, Saudis Team Up To Boost Fracking Tech
  • 5 days Conflicting News Spurs Doubt On Aramco IPO
  • 5 days Exxon Starts Production At New Refinery In Texas
  • 5 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 6 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 6 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 6 days China To Take 5% Of Rosneft’s Output In New Deal
  • 6 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 6 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 6 days VW Fails To Secure Critical Commodity For EVs
  • 6 days Enbridge Pipeline Expansion Finally Approved
  • 6 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 6 days OPEC Oil Deal Compliance Falls To 86%
  • 7 days U.S. Oil Production To Increase in November As Rig Count Falls

Breaking News:

LNG Glut To Continue Into 2020s, IEA Says

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Trump’s Iran Decision Haunts Big Oil

Donald Trump’s Iran decision has…

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Norway Unfazed By Peak Oil Concerns

Many analysts and industry experts…

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Is The War On Coal Really Over?

Even if the EPA manages…

Have Oil Markets Reached A Turning Point?

Oil

Big Oil has been wheelin' and dealin' across the globe as geopolitical risks mount, and OPEC delivered a sigh of relief to crude markets with a signal that has brought the bulls out to play. 

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• The EIA projects total world energy consumption will rise by 28 percent between 2015 and 2040, with most growth coming from developing countries.

• Non-OECD Asia accounts for nearly two-thirds of the growth, and that category is dominated by China and India.

• All major energy sources will see demand rise except for coal. Renewables post the strongest growth rate at 2.3 percent per year.

Market Movers

Royal Dutch Shell (NYSE: RDS.A) said it began restarting its Deer Park refinery in Texas on Sunday, a facility that has a capacity of 325,000 bpd. ExxonMobil (NYSE: XOM) could restart most of its Beaumont refinery by the end of the week.

Sanchez Energy (NYSE: SN) was downgraded by Piper Jaffray from Overweight to Neutral, on concerns over leverage. Its price target was cut from $14 per share to just $6.

• The Federal Energy Regulatory Commission overruled New York State’s denial of a permit for the Millennium natural gas pipeline, arguing that the state took too long to make a decision. The decision puts the project on path to begin construction, pending more permits. The short distance pipeline will service a 630 MW natural gas plant set to begin operations early next year. The pipeline is owned by TransCanada (NYSE: TRP), DTE Energy (NYSE: DTE) and National Grid (NYSE: NGG).

Tuesday September 19, 2017

WTI and Brent hit fresh highs in early trading on Tuesday, with oil demand looking particularly robust and fears over hurricane damage to the market having receded. Both benchmarks were at their highest levels in months but saw a slight drop off as trading continued.

Refiners profit on hurricane outages. After a quarter of U.S. refining capacity was knocked offline, fuel shortages cropped up, creating a unique opportunity for unaffected refiners. “You’ve got a lot of refiners running at full tilt, and they’re going to make better margins,” Sandy Fielden, an energy analyst with Morningstar Inc., told the WSJ. “Supply and demand is effectively telling the market that there’s a big incentive to produce more.” Refining margins for some East Coast and Midwestern processors have jumped by as much as a third, the WSJ says. PBF Energy (NYSE: PBF), a company with refining assets in the Northeast and the Midwest, has seen its stock price surge by as much as 26 percent since August 21. Related: Reserves vs Valuations: Exxon’s Permian Predicament

Conflicting reports on U.S. withdrawal from Paris climate agreement. The WSJ reported over the weekend that the U.S. might not actually withdraw from the Paris climate accord, despite President Trump’s decision to do so in June. The Trump administration denied any change in policy, and the President’s top economic adviser, Gary Cohn, met with climate ministers from around the world on Monday. He told them that the U.S. would only stay in the Paris climate pact if the terms of doing so were more favorable. However, the administration routinely fails to recognize the fact that the pact consists of voluntary, not mandatory, targets. In theory, the administration could revise its commitments and stay in the pact.

OPEC considering longer cuts. Iraq’s oil minister hinted that OPEC might consider deeper and longer cuts, pushing the current output limits out through the end of 2018. Jabbar al-Luaibi said the group could take an additional 1 percent off of global supply, which would help to further rebalance the market. Still, he said there is “no firm decision yet.”

Russia’s Rosneft to invest in Kurdish pipelines. Rosneft said that it will invest in gas pipelines in Kurdistan, a crucial source of investment for the semi-autonomous region in Iraq ahead of its independence referendum next week. The investment could exceed $1 billion and grow Rosneft’s gas business.

Trump admin works to open up drilling in Alaska’s ANWR. The Washington Post reported that the Trump administration is trying to allow drilling in the Arctic National Wildlife Refuge (ANWR), a hotly contested region in Alaska that has been off limits for oil and gas drilling for decades. Permitting drilling would require an act of Congress, but the Post reports that the Department of Interior is working on draft rules to allow seismic testing in ANWR, a necessary precursor to drilling. It is not clear how interested oil and gas companies would be in ANWR, given its remote (i.e., expensive) location.

U.S. shale production to grow more slowly. The EIA said that U.S. oil production from its top shale basins will rise by 79,000 bpd in October, the first time in seven months that the monthly increase will come in below 100,000 bpd. The Eagle Ford will actually see a decline in output by 9,000 bpd, in part because of outages related to Hurricane Harvey. The Permian will still add a sizable 55,000 bpd in October.

Seadrill files for bankruptcy. Offshore oil drilling company Seadrill filed for bankruptcy last week after coming to an agreement with creditors. The deal will result in a fresh injection of $1 billion while also wiping out existing shareholders, according to the FT.

Energy stocks up, more room to run. Energy stocks just completed their first four-week stretch of gains this year, a sign that they may have bottomed out and could be heading higher. The Energy Select Sector SPDR exchange-traded fund, according to CNBC, is down 12 percent so far this year, a much steeper drop than the price of oil. Some analysts and major investors think that the market overdid the selloff this year, expecting much more shale production, which would have pushed oil prices down further. The rather large decline for the ETF suggests there is a lot of lost ground that could be regained going forward, which might mean stronger stock gains in the near future. "It needs to play a little catch up yet," Rob Thummel, portfolio manager at Tortoise Capital, told CNBC, referring to the ETF.

Iran accuses U.S. of sabotaging nuclear deal. Top Iranian officials have accused the U.S. government of undermining the landmark 2015 nuclear deal. President Donald Trump has suggested that he would decertify Iran’s compliance with the accord in October, a move that could lead to the unraveling of the agreement. At that point, the U.S. Congress could move to re-impose U.S. sanctions. However, the U.S. will probably burn a lot of international good will if it goes down this path, and could be on its own pursuing a heightened confrontation with Iran. The international body that oversees the nuclear deal has said that Iran has in fact complied with its commitments, contrary to what the U.S. President has portrayed. Related: Iran Looks To Ramp Up Production 

Vitol increases cash-for-crude trade with Kazakhstan to $5 billion. The FT reports that the world’s largest independent oil trader, Vitol, has agreed to increase its deal with Kazakhstan to provide cash in exchange for crude oil, a trading relationship that will reach $5 billion. Arrangements of this type have been on the rise since oil prices halved from $100 per barrel in 2014 down to $50 today. Vitol and its peers, such as Glencore and Trafigura, have loaned out billions of dollars to cash strapped oil producers, including Kazakhstan, Russia and Kurdistan.

Norway’s sovereign wealth fund tops $1 trillion. The value of Norway’s sovereign wealth fund just surpassed the $1 trillion mark. The world’s largest sovereign wealth fund has increased in value substantially this year on the back of strong equity markets and a weakening U.S. dollar. The fund has been seeded with oil revenues since it was established decades ago, with the mission to benefit Norway long after the oil is gone.

By Tom Kool for Oilprice.com

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  • Kr55 on September 19 2017 said:
    Does anyone still take those EIA productivity reports seriously? They are just taking wild guesses at this point completely ignoring how their 914 report does not at all align with their weekly reports or productivity reports.
  • EdBCN on September 21 2017 said:
    That EIA chart is laughable. They keep way underestimating the growth of renewables. Here's a graph that shows how bad the IEA's predictions have been, which pretty much parallels the EIA's take. https://c1cleantechnicacom-wpengine.netdna-ssl.com/files/2017/09/IEA-solar-capacity-forecasts-off.png
    Another problem is that the chart undercounts renewables by about a factor of three. For example, for fossil fuel fired electric plants the EIA counts the amount of energy as that contained in the fuel burnt. But typically only about 1/3 of the energy is converted into electricity, the rest is just waste heat. Similarly for nukes the EIA counts as primary energy the amount of energy represented in the heat that the reactor generates, most of which is lost in the conversion to electricity. But for solar and wind, these charts represent the amount of electricity generated and available to the grid.

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