• 1 hour South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 4 hours Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 5 hours Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 6 hours Iraq Steps In To Offset Falling Venezuela Oil Production
  • 8 hours ConocoPhillips Sets Price Ceiling For New Projects
  • 3 days Shell Oil Trading Head Steps Down After 29 Years
  • 3 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 3 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 3 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 3 days Venezuela Officially In Default
  • 3 days Iran Prepares To Export LNG To Boost Trade Relations
  • 3 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 4 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 4 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 4 days Rosneft Announces Completion Of World’s Longest Well
  • 4 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 4 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 4 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 4 days Santos Admits It Rejected $7.2B Takeover Bid
  • 5 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 5 days Africa’s Richest Woman Fired From Sonangol
  • 5 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 5 days Russian Hackers Target British Energy Industry
  • 5 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 5 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 5 days Lower Oil Prices Benefit European Refiners
  • 5 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 6 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 6 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 6 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
  • 6 days Shell: Four Oil Platforms Shut In Gulf Of Mexico After Fire
  • 6 days OPEC To Recruit New Members To Fight Market Imbalance
  • 6 days Green Groups Want Norway’s Arctic Oil Drilling Licenses Canceled
  • 7 days Venezuelan Oil Output Drops To Lowest In 28 Years
  • 7 days Shale Production Rises By 80,000 BPD In Latest EIA Forecasts
  • 7 days GE Considers Selling Baker Hughes Assets
  • 7 days Eni To Address Barents Sea Regulatory Breaches By Dec 11
  • 7 days Saudi Aramco To Invest $300 Billion In Upstream Projects
  • 7 days Aramco To List Shares In Hong Kong ‘For Sure’
  • 7 days BP CEO Sees Venezuela As Oil’s Wildcard
Alt Text

New Battery Design Could Crush Tesla

Elon Musk’s old rival, Henrik…

Alt Text

Oil Survives Bearish Backlash

Crude benchmarks posted steep losses…

Oil Markets Don’t Buy The OPEC Deal Just Yet

OPEC

We begin with a look at the key figures in the energy market this week, with oil prices falling on Friday morning as a result of OPEC infighting and traders doubting OPEC's ability to cut output. 

(Click to enlarge)

(Click to enlarge)

(Click to enlarge)

(Click to enlarge)

(Click to enlarge)

(Click to enlarge)

(Click to enlarge)

Friday, October 28, 2016

Oil prices faltered in the second half of this week, on deteriorating expectations of an OPEC deal. Prices regained some ground on Thursday following EIA data showing a surprise drawdown in crude oil stocks after the market predicted an increase. Gasoline stocks also fell by more than expected. Adding a bit more buoyancy to the market were comments from OPEC officials suggesting that the cartel would be willing to cut production by 4 percent.

The markets initially took the announcement as positive news, but in what has become a familiar script from the oil cartel, the lack of details or hard commitments ultimately meant the price impact wore off. OPEC is meeting today and tomorrow to discuss the technical details of the Algiers accord, ahead of its official meeting at the end of November. Investors should take every OPEC utterance with a giant grain of salt, and wait to see what happens in a month’s time. WTI hovered slightly below $50 per barrel in early trading on Friday.

Third quarter earnings start coming in. The quarterly earnings reports started this week, with Statoil (NYSE: STO) posting a hugely negative result. The Norwegian firm lost $432 million in the third quarter, worse than the $307 million it lost a year earlier. The figure was also much worse than expectations, and Statoil said that it would cut spending by an additional $1 billion. ConocoPhillips (NYSE: COP) did not fare much better, reporting a $1 billion loss for the three months ending in September, although those figures beat estimates. The company lowered its full-year spending forecast from $5.5 billion to $5.2 billion. ExxonMobil (NYSE: XOM) reported earnings of $2.7 billion, or $0.63 per diluted share, down 35 percent from a year earlier. Eni (NYSE: E) lost 484 million euros in the third quarter, compared to a 317 million euro loss in the third quarter of 2015.

Exxon considers setting up trading division. The FT reports that ExxonMobil (NYSE: XOM) is looking into setting up an oil trading unit, which would mark a dramatic shift in its strategic focus. Struggling to find and produce large volumes of new oil reserves at a time of low oil prices, the oil major is looking to branch out. The trading division would buy and sell other producers’ crude, as well as its own. Exxon’s peers, including BP (NYSE: BP) and Royal Dutch Shell (NYSE: RDS.A), already have trading units within their companies, but Exxon has had a more conservative approach that focuses on upstream and downstream activity, viewing trading as a riskier form of business. Related: Can Saudi Arabia Scramble Out Of The Pit It Dug for Itself?

Iraq angles for data revision, eyes higher output. Iraqi officials are not only demanding that they be exempt from any OPEC production cut, but they are also pushing the cartel and energy watchers to see its side of the story. OPEC uses data from “secondary sources” to calculate each member’s production levels, and Iraq is disputing the accuracy of that data. It is not an academic argument – Iraq does not want its production to be restrained by inaccurate production figures. Iraqi officials rolled out the red carpet for energy reporters this week, Bloomberg reports, in order to convince them that Iraq is not getting fair treatment. The dispute threatens to sink the OPEC deal.

Meanwhile, Iraq is also soliciting bids from international oil companies to develop 12 “small and medium-sized” oil fields, Reuters reports. The details of the tenders consist of incentives to rapidly increase output, a sign that Baghdad has no intention of limiting its oil production.

Protests heat up in Venezuela. After Venezuelan President Nicolas Maduro cancelled a public referendum to recall him, the opposition took to the streets. Hundreds of thousands of people protested on Wednesday, and the fracas took a disturbing turn. A policeman was shot dead during the protests, and the atmosphere is one of chaos in the capital. The economy is in a tailspin and although the President is trying to crackdown to maintain control, he has left the opposition no other avenue to protest than through direct confrontation in the streets, surely a worrying sign for the country’s stability. Oil production is down more than 10 percent on the year and will continue to fall.

Nigerian militants hit Chevron pipeline. The Niger Delta Avengers proved that they have not gone dormant, announcing the successful attack against the Escravos pipeline, a 100,000 barrel-per-day oil export pipeline operated by Chevron (NYSE: CVX) in Nigeria. The attack puts an end to a three-month ceasefire, and threatens to derail Nigeria’s efforts to bring back lost oil production. Nigeria’s oil minister said recently that output is up to 1.9 million barrels per day, not far off from the 2.2 mb/d the country produced before the attacks started earlier this year. Separately, ExxonMobil (NYSE: XOM) announced a new discovery off the Nigerian coast, which could hold between 500 million and 1 billion barrels of oil. Exxon holds a 27 percent stake in the project, along with Chevron Nigeria Deepwater, Total E&P Nigeria, Nexen Petroleum Deepwater Nigeria, and Nigeria Petroleum Development Company. Related: Full Scale Oil Price Recovery Unlikely As 5000 DUC’s May Come Online

Dakota Access pipeline protest turns violent. On Thursday, more than 200 police officers forced protestors of the Dakota Access pipeline in North Dakota away from a barricade along the pipeline’s construction route. Authorities arrested more than 140 people. The controversial pipeline, owned by Energy Transfer Partners (NYSE: ETP), is quickly becoming the sequel to the Keystone XL saga.

GE considers merging oil unit with Baker Hughes. GE (NYSE: GE) has reportedly approached Baker Hughes (NYSE: BHI) about merging their oil and gas units, a deal that could be worth around $20 billion. The idea would be that the merged company would be spun off from GE’s core business. However, details have not been released and the talks are not guaranteed to lead to a deal. Baker Hughes was the target of a takeover effort from Halliburton (NYSE: HAL), but that acquisition ran into a brick wall of antitrust opposition from the U.S. government earlier this year.

By Evan Kelly of Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News