The Strategic Petroleum Reserve Is Slowly Dying

 

Forty years ago, in the wake of the Arab oil embargo that made the United States acutely aware of just how dependent its economy was on imported crude, the government set up the Strategic Petroleum Reserve in a bid to make sure there were no repeats of the painful shortages the embargo caused.

Now, there are about 700 million barrels in the SPR. The U.S. is producing 9.42 million barrels daily, as of the week ending August 4th, a figure that is set to continue rising as shale producers keep on pumping more. Imports as of last week averaged 7.8 million barrels daily, with the four-week average at 8 million bpd. This means that the SPR holds crude oil equal to 40 days of local production plus imports. Continue reading

U.S. To Be A Top-Ten Oil Exporter In Three Years

US

 

PIRA Energy has predicted that U.S. crude oil exports will top 2 million barrels by 2020, reaching 2.25 million bpd. That’s more than what most OPEC members export, the FT notes, citing the research company’s figures. As of 2016, the U.S. average daily export rate was just 520,000 bpd, although in May, the average daily was 1.02 million barrels, after the 1-million-bpd mark was passed early in the year. Continue reading

The Next Big U.S. Shale Play

Oil Rigs

 

Media coverage of the U.S. shale oil and gas industry makes it sound like the Permian is the only place where things are happening. Everybody is buying acreage in the Permian, selling acreage in other shale plays, and production costs are falling the fastest in that same Permian.

True as this may be, this shale play is by no means the only one where production is growing. In fact, oil and gas output across the shale patch has been growing, as the Energy Information Administration’s latest drilling productivity report shows. And that’s not all because there is a new actor on stage: Powder River Basin in Wyoming. Continue reading

OPEC calls for ‘collective efforts’ to counter US oil boom

Crude oil storage tanks are seen from above at the Cushing oil hub, in Cushing, Oklahoma, March 24, 2016. REUTERS/Nick Oxford/File Photo

 

On Thursday OPEC called for its members to pool ‘collective efforts’ to counter increasing U.S. Oil production

(WASHINGTON, DC) While decreased stocks and an improving global economy were supporting oil demand, “continued rebalancing in the oil market by year-end will require the collective efforts of all oil producers to increase market stability,” Organization of the Petroleum Exporting Countries (OPEC) said.

Amid this announcement, oil prices rose on Thursday, with benchmark Brent crude trading comfortably above $50 a barrel after a fall in U.S. inventories and a bigger-than-expected cut in Saudi supplies to Asia helped tightened the market. Continue reading

Russia Regains Status As China’s No.1 Crude Supplier

 

China imported daily average of 4.69 million tons, or 34.38 million bpd, of crude oil from Russia last month. That’s 9.3 percent more than the February average, putting Russia back at the top spot of China’s foreign oil suppliers, above Angola, which sits at number 2. Saudi Arabia fell to number 3 in March, as it cuts output deeper than it was expected to under the OPEC agreement from November.

The shuffle comes amid talks in OPEC about extending the six-month production output cut to further strengthen prices, which turned out to be less responsive to the international effort than expected. Continue reading

Is A Russian-Iranian Energy Pact In The Making?

Oil Rigs

 

In the lead-up to President Rouhani’s visit to Moscow, expected to take place in late March, a plethora of news regarding joint Russo-Iranian energy projects has been circulating on the Internet. A three-year long negotiation process regarding a 100,000 barrels-per-day swap contract is believed to be agreed upon, premised on Iran providing Russia (most likely, Rosneft) oil from Kharg Island or other hubs in the Persian Gulf in return for cash and Russian goods that Iran would “require”. Teheran also woos LUKOIL, currently Russia’s only major oil producer in the Caspian, to participate in swap deals bound for Iran’s Neka Port (in return for Iranian crude provided from Kharg Island or other Persian Gulf hubs), albeit on a much smaller scale at 4000 to 5000 barrels per day. To top it all up, numerous Russian oil companies have committed themselves to developing Iran’s hydrocarbon fields. Continue reading

U.S. Shale Faces A Workforce Shortage

 

A problem for the U.S. shale oil and gas industry that analysts and observers have warned about for a long time has materialized: there is a shortage of workers. According to one service provider for E&Ps, trucker jobs remain vacant even with an annual paycheck of $80,000, which is certainly a big change from a couple of years ago when layoffs were sweeping through the shale patch.

This shortage could dampen the prospects of not just shale producers, who are eager to ramp up production as quickly as possible and take advantage of higher international oil prices, but it will also seriously hamper the recovery of the oilfield services segment, which has been hit harder than E&Ps by the price crash. Continue reading

With OPEC deal to cut output, Saudi signals surrender to U.S. shale

Saudi Arabia’s strategy to drive U.S. shale out of the energy market has failed.

“The new OPEC deal to cut oil output – the cartel’s first since 2008 – amounts to nothing less than Saudi Arabia’s surrender to the power of American shale,” John Hulsman wrote for UK business daily City AM on Dec. 5.

OPEC as a whole agreed to cut production by 1.2 million barrels per day (bpd), with Saudi agreeing to cut 500,000 bpd. With the cut, OPEC now accounts for less than half of all energy output in the world. Continue reading

Iran oil exports surpass 2 million barrels per day — minister

Expanded trading in the wake of lifted economic sanctions driving oil prices down some 60% worldwide

TEHRAN — Iran’s oil exports have surpassed 2 million barrels per day following the lifting of sanctions under its nuclear deal with world powers, Oil Minister Bijan Zanganeh said on Sunday.

“Iran’s oil and gas condensate exports are now at more than 2 million barrels per day” after rising by 250,000 bpd since March 1, the ministry’s Shana news service quoted Zanganeh as saying. Continue reading

Worrying Signs For North Dakota’s Oil Industry

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The North Dakota Department of Mineral Resources has reported that the state’s oil production dropped by about 25,000 barrels a day in September. As the chart below via @javierblas2 illustrates, North Dakota oil production has dropped on a year-over-year basis for the first time in over a decade. Continue reading

Saudis Planning For A War Of Attrition In Europe With Russia’s Oil Industry

Russia’s central bank recently warned about the growing financial risks to the Russian economy from Saudi Arabia encroaching upon its traditional export market for crude oil. Russia sends 70 percent of its oil to Europe, but Saudi Arabia has been making inroads in the European market amid the oil price downturn.

The result is a heavier discount for Russia’s crude oil, the so-called Urals blend. Bloomberg reported that the Urals typically lands in Rotterdam, a major European destination, at a discount to Brent of around $2 or less. But the discount has widened to $3.50 lately due to increased competition from Saudi Arabia. “Oil supplies to Europe from Saudi Arabia are probably adversely affecting Urals prices,” the Russian central bank warned in a recent report.

Russian officials have accused Saudi Arabia of “dumping” its oil in Europe, a move that Rosneft chief Igor Sechin said would “backfire.” Continue reading

Iran Likely to Produce 600,000 Barrels of Oil Per Day Upon Sanctions Relief

WASHINGTON (Sputnik) — Iran will likely produce hundreds of thousands of barrels of oil daily by the end of next year once international sanctions on Tehran are fully lifted, the US Energy Information Administration (EIA) said in a report on Thursday.

“Iran is also expected to increase production as sanctions are lifted,” the agency’s report read. “EIA estimates that Iran has the technical capability to increase crude oil production by about 600,000 b/d by the end of 2016.”

Continue reading

US Shale Declining And OPEC Still Climbing

Essentially, OPEC has killed off the U.S. shale industry, which was predicted last year. See the OPEC category for further articles on Saudi Arabia’s economic warfare scheme against the United States.

 

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There is new data out today. The EIA published their International Petroleum Statistics yesterday. The EIA also published their Drilling Productivity Report which gave their expected shale oil and gas production through September. Then this morning OPEC published their Monthly Oil Marketing Report with OPEC crude only production numbers through July.

First the Drilling Productivity Report. Of course most of the Drilling Productivity Report is projection, not history. And that projection goes through September 2015.

The EIA has the Bakken peaking in December and declining 107 thousand barrels per day since that point. A secondary peak was reached in April and declining steadily since then. Continue reading

Oil prices: OPEC plan to strangle US suppliers working

Demand for oil will strengthen this year, according to OPEC, as the cartel said its strategy of pumping oil into the market to squeeze out US producers was taking effect.

The Organisation of the Petroleum Exporting Countries, which pumps a third of the world’s oil, believes demand will average 29.27m barrels per day (bpd) in 2015, representing an increase of 80,000 bpd from its previous prediction.

Continue reading

Global markets sell-off as the world drowns in oil

An upgrade to US oil production and Opec holding firm on output sends the oil price and global markets tumbling

Global financial markets have taken fright at yet more signs that the hammered oil price will not make a swift recovery.

The markets reacted to the US revising its crude oil production upwards for 2015 and signs that the Organization of Petroleum Exporting Countries will maintain production at current levels.

Continue reading