IEA: Oil Market Near Balance But US Production Could Rise Again

04/15/17 •lweb.es/f2772 •bit.ly/2oO1aQs

gas, Oil, production, World

Now is the halfway point for the 6-month oil production cuts agreed by OPEC and the 11 other oil producing countries, and the market is very close to balance. The International Energy Agency has observed that “Even at this midway point, we can consider what comes next … extending their output cuts beyond the 6-month mark would be bigger implied stock draws. This would provide further support to prices, which in turn would offer further encouragement to the US shale oil sector and other producers.”

Venezuela: Oil Production Decreases Make Life Difficult

04/14/17 •lweb.es/f2771 •bit.ly/2pBsnd9

Loans, Oil, production, Venezuela

A turnaround for Venezuela’s oil industry, which provides about 95% of the country’s foreign currency earnings, would take at least two years under the best of circumstances. Any hope of reversing Venezuela’s decline as an oil supplier would mean that the country would have to settle debts with oil-service providers, fix fraying infrastructure and, potentially, get foreign companies to operate some fields. Venezuela has depended on loans from China and Russia in recent years for liquidity, but is finding it harder and harder to obtain financing, and debt service is becoming more burdensome.

North Sea: 30 Crude & Natural Gas Projects To Start Operations By 2020

04/13/17 •lweb.es/f2766 •bit.ly/2pjWUch

gas, North Sea, Oil

30 crude and natural gas projects are expected to start operations in the North Sea by 2020. The UK will lead with a total of 19 projects, followed by Norway with 10 and Denmark with a single project, according to GlobalData. The total recoverable reserves for these projects are expected to stand at 5.2 billion barrels of oil equivalent. The planned projects in the North Sea They are expected to require a total capital expenditure of $56.7 billion, of which over half (54%) is expected to be spent between 2017 and 2020.

Citgo: PDVSA Made Lien In Exchange For $1.5 Billion Loan From Rosneft

04/11/17 •lweb.es/f2761 •bit.ly/2q96AJR

Default, Oil, USA, Venezuela

A deal to give Russia’s Rosneft 49.9% ownership of US refiner Citgo if Venezuela’s cash-strapped national oil company PDVSA defaults on its loans threatens US national security and should be investigated by the Committee on Foreign Investment in the United States, two US congressmen have said. “This would give Russia clear control over the sixth-largest refinery in our country, the ability to impact gas prices for the American people, and a strategic advantage over US freedom of action globally,” Representative Jeff Duncan, Republican-South Carolina, said in a statement.

MENA Region: Pushing Through Critical Energy Projects This Year

04/08/17 •lweb.es/f2700 •bit.ly/2oTUalv

Clean Energy, gas, Middle East, Oil, Power

In the Middle East North Africa region $622 billion worth of development is planned in the energy sector for the next five years. The power sector accounts for the largest share at $207 billion, with the oil and gas sector at $195 billion and $159 billion respectively. Leading the drive will be Saudi Arabia, and Iraq and Iran will play catch-up. Algeria will pump billions into its upstream sector, and much is expected from Egypt’s recent gas. Renewable-energy projects will be at the forefront of efforts to meet rising power demand in Morocco, Tunisia and Jordan.

Is a Russia-Saudi ​d​eal on the ​h​orizon?

04/07/17 •lweb.es/f2685 •bit.ly/2oar6WZ

Military, Oil, prices, Russia, Saudi Arabia

Russian president Vladimir Putin met with Saudi Defense Minister in Sochi on October 11th, while Russian Foreign Minister Sergei Lavrov was holding a meeting with his Saudi counterpart. The parties discussed Syria and agreed upon the necessity to prevent the creation of a terrorist caliphate. The levers of a hypothetical Russian-Saudi deal would be: a rise in oil prices, possibly accompanied by Saudi arms purchases, and on the Russian side, the guarantee that Assad will leave after a transition period, along with some kind of a Saudi “right of scrutiny” on Russian arms sales to Iran.

China To Import Record Amounts Of Crude Oil From West Africa

04/06/17 •lweb.es/f2759 •bit.ly/2qfYdIN

China, crude, Nigeria, Oil

West African producers led by Angola and Nigeria are set to send crude to China at the rate of 1.48 million barrels a day in April, the most since Bloomberg began compiling the data in August 2011, according to loading programs and traders. Overall Asian imports of West African crude are poised to reach 2.4 million barrels a day this month, also a record. Asia’s increasing purchases of West African crude provides a valuable source of income for Angola and Nigeria, both of which rely heavily on oil revenues to fund government spending.

The Americas Has The Potential To Become A Global Oil Trading Hub

04/06/17 •lweb.es/f2758 •bit.ly/2oxu3EB

Asia, China, Oil, Trader

China’s largest crude oil refiner Sinopec aims to ship more cargoes from Brazil, the United States and Canada to help ensure stable crude supplies. Asia, which will account for a third of the world’s refining capacity by 2020 will have to look beyond the traditional markets Middle East and Africa for crude supplies. China will soon import its first Southern Green Canyon and Thunderhorse crude from the United States, and Brazil overtook Venezuela as the top South American crude supplier to China in the first two months of this year.

Rosneft Loans To Venezuela: Default Would Involve Citgo In U.S.

04/05/17 •lweb.es/f2757 •bit.ly/2oKx3Z9

Debt, Oil, Venezuela

Venezuela’s economy is in slow collapse, accelerated by the fall in oil prices; oil service companies such as Schlumberger are cutting back activities because they are not being paid; and Russia has become the leading foreign oil investor. Russia is also the country’s key financier. Venezuela has pledged half the shares of its subsidiary Citgo – an important US refiner and fuel-retailer – as collateral for the loans from Russia’s Rosneft. If Venezuela were to default, the prospect of the Russian state firm owning American refineries would be political dynamite in Washington.

South China Sea: Beijing’s Military Bases Are Ready For Use

03/30/17 •lweb.es/f2695 •bit.ly/2ojz8Po

China, Military, Oil

According to the Center for Strategic and International Studies’ Asia Maritime Transparency Initiative, major construction at three of China’s large man-made islands in the disputed South China Sea is wrapping up, allowing Beijing to deploy fighter jets and mobile missile launchers to the area at any time. China has continued to militarize the waters as it seeks to reinforce effective control of much of the waterway, through which $5 trillion in trade passes each year. The Philippines, Vietnam, Malaysia, Taiwan and Brunei also have overlapping claims.

PetroChina: Record-Low Profit But Capex To Rise Over 40%

03/30/17 •lweb.es/f2687 •bit.ly/2nOos7y

China, Oil, Uncategorized

PetroChina’s profit fell 78% to the lowest on record as the oil price crash punished the country’s biggest oil and gas producer for a third year. Net income dropped to 7.86 billion yuan (US$1.1 billion). While PetroChina expects its crude production to fall a second year in 2017, it sees gas sales rising 10% this year and to be its main growth driver to the end of the decade. PetroChina expects its 2017 global crude production to be 879 million barrels, down 4.5%.

More Export Destinations For U.S. Crude In 2016

03/29/17 •lweb.es/f2697 •bit.ly/2oQhXFR

Oil, prices, USA

Due to a surge in oil hedges, the oil-price weakness will not prompt US producers to pull back on drilling. The producers rushed to lock in oil prices above $50 a barrel after the OPEC production cuts announcement in November, and will use hedging gains to help plug any budget deficits caused by sub-$50 spot prices. However, most of the hedges expire by 2018, and oil futures prices must recover before producers can lock in prices over $55 a barrel for next year – a level needed for significant tight-oil production growth.

Trump’s “Energy Independence” Order: Both Uncertainty And Opportunity

03/28/17 •lweb.es/f2693 •bit.ly/2ocvx54

Clean Energy, USA

President Trump has issued an executive order to dismantle the Obama administration’s Clean Power Plan. The “Energy Independence” order lifts a moratorium on federal coal leasing, triggers a review of methane and hydraulic fracturing restrictions, and eliminates use of the Environmental Protection Agency’s “social cost of carbon” in policymaking. From a climate action perspective, there is widespread agreement that the order is bad news for U.S. emissions. Interestingly, 62 percent of Trump voters support taxing and/or regulating pollution causing global warming, and nearly three-quarters think the U.S. should use more renewable energy in future.

Russia Sticking To $40 Oil Scenario: Protection Against Worst-Case

03/24/17 •lweb.es/f2698 •bit.ly/2nWvh7E

Oil, prices, Russia

Policy makers in Moscow see Urals oil at an average of $50 a barrel this year, but falling to $40 at end-2017 and then staying near that level in 2018-2019. Russia’s Finance Ministry similarly highlighted the $40 level in January when it announced that the central bank would start buying foreign currency on its behalf when crude exceeds that level in order to insulate the exchange rate from oil volatility. The price of $40 is additionally being used to calculate the country’s budget in 2017-2019.