Jan 2017

Exxon misses estimates as $2-billion writedown erodes cash (31 January 2017): By JOE CARROLL - IRVING, Texas (Bloomberg) -- Exxon Mobil Corp. missed analyst estimates after a $2-billion writedown in the value of U.S. natural gas fields. The fourth-quarter profit of $1.68 billion, or 41 cents a share, compared with a profit of $2.78 billion, or 67 cents, a year earlier, the Irving, Texas-based oil producer said in a statement on Tuesday. That was below the lowest of 21 estimates of analyst surveyed by Bloomberg.

Algeria to open bids for petrochemical plants for $6 B (30 January 2017): ALGIERS (Reuters) -- Algeria's state energy firm Sonatrach on Monday launched invitations for international engineering firms to bid on four major petrochemical plants worth a total of up to $6 billion, a source at state energy firm Sonatrach told Reuters. The firms selected will carry out construction work on the four refineries located in Tiaret, Hassi Messaoud, and two in Skikda, including a fuel oil cracking plant, and another Nafta processing plant.

Why Oil Can’t Pull Higher In The Near Term (27 January 2017): By Evan Kelly - Oil prices are set to close out the week slightly up after a bumpy ride, seesawing on the usual headlines regarding OPEC compliance and U.S. production figures, plus some influence from currency movements. Not much has changed in the market over the past week regarding fundamentals, although another week of EIA data continues to indicate rising activity in the U.S. shale patch, with production figures, crude stocks and gasoline stocks all on the rise. Oil production in the U.S., at least according to weekly surveys, is now just slightly below the 9 million barrel per day mark, a level that it has not hit since March of last year.

Chevron’s first loss in decades signals hard time for giants (27 January 2017): By JOE CARROLL - CHICAGO (Bloomberg) -- Chevron Corp. posted its first annual loss since at least 1980, signaling the difficulties faced by the world’s biggest oil companies as they struggle to emerge from the worst collapse in a generation. The company had a $497 million loss last year and failed to replace all of the crude and natural gas it pumped with new reserves, San Ramon, California-based Chevron said in a statement on Friday. Shares slumped the most in five months.

Trump Angers Buffett – To Sign Executive Orders On Keystone, Dakota Pipelines (24 January 2017) By ZeroHedge - It is just day two of his presidency, and already Trump is taking a sledgehammer to the Obama legacy: in his latest move reported moments ago by Bloomberg, president Trump intends to sign two executive actions today that would advance construction of the controversial Keystone XL and Dakota Access pipelines, putting a spoke, so to say, in the train wheels of Warren Buffett's train-based oil transportation quasi-monopoly.

TransCanada Receives FERC Approval to Construct Leach XPress and Rayne XPress Projects (21 January 2017): HOUSTON, Texas -- TransCanada Corporation announced the Federal Energy Regulatory Commission (FERC) has issued an order approving the construction of the Leach XPress and Rayne XPress projects. The combined $1.8 billion investments will provide additional outlets to transport domestic, clean burning natural gas from the Marcellus and Utica production areas to higher-value Midwest and Gulf Coast markets.

Can Saudi Arabia Survive With Oil Below $60? (18 January 2017) By Gregory Brew - With the OPEC production deal holding, at least for the moment, questions have now arisen over how prospects look for the cartel’s biggest producer. It’s been a strange few years for the Kingdom of Saudi Arabia, as its endured budget deficits for the first time in its modern history, stagnation in oil prices and rising competition from other OPEC members and the American shale boom. Recently, talk has centered on the Saudi monarchy’s glimpse of the future: the Vision 2030 plan, whereby it hopes to diversify its economy and end its dependence on the mercurial oil and gas market. But can the world’s biggest oil producer and OPEC’s de facto leader pull it off?

Oil falls as IEA chief sees ‘significant’ boost to U.S. output (18 January 2017) By GRANT SMITH: LONDON (Bloomberg) -- Oil fell in New York, reversing earlier gains, after the head of the International Energy Agency (IEA) predicted a rebound in U.S. supply. Futures dropped 1.7% after IEA Executive Director Fatih Birol said that higher oil prices will trigger a “significant” increase in U.S. shale output as OPEC and other producers rein in supply. A day earlier, OPEC’s biggest exporter, Saudi Arabia, said deeper-than-planned production cuts and robust demand were helping the market re-balance.

Oil’s Surprise Strength Is Speeding OPEC Goal, Saudi Arabia Says by Javier Blas (17 January 2017): The surprising strength of the oil market is the main reason why OPEC could end output cuts by the middle of the year, Saudi Arabia’s energy minister said. OPEC and Russia may not need to extend the curbs when they expire in June, Khalid Al-Falih said in an interview at the World Economic Forum in Davos, characterizing his view as a “bullish sign.” The market is re-balancing as demand proves unexpectedly robust and OPEC’s Gulf members and Russia cut supply by more than they promised, he said.

IHS: Where does the USA stand in the new geopolitics of oil? (17 January 2017): As the global powers prepare for the World Economic Forum Annual Meeting to commence on 17 January, IHS Markit Senior Vice President Carlos Pascual analysed the new geopolitics of oil in 2017. Oil prices could go up in 2017, thanks to geopolitical events such as instability in the Middle East, a resurgent Russia, and political transitions in the United States and Europe. But North American oil production has the potential to mitigate these geopolitically driven spikes.

ADNOC shuts half capacity at Ruwais refinery after fire (16 January 2017): SINGAPORE/DUBAI (Reuters) -- Abu Dhabi National Oil Company (ADNOC) has shut half the capacity at its 800,000 barrels-per-day Ruwais refinery after a fire there last week, three industry sources familiar with the matter said on Monday. ADNOC has closed the newer section of the refinery, which doubled its capacity when it started operating in 2015, the sources said, declining to be identified as they were not authorized to speak with media.

Crude oil halts four-week gain as OPEC cuts yet to be verified (13 January 2017): By GRANT SMITH - NEW YORK (Bloomberg) -- Oil headed for its first weekly decline since December as traders waited for proof that OPEC and other producers would follow through on promises to cut production. Futures slipped 1.2% in New York and were headed for a weekly drop of 3%. Saudi Arabia reduced output to less than 10 MMbopd and will consider renewing its pledge to trim supply in six months, according to Energy Minister Khalid Al-Falih. Still, until monthly production data is released, “these claims cannot be verified,” according to Commerzbank AG.

Takreer reports fire at Ruwais refinery (11 January 2017): OGJ Downstream Technology Editor - Abu Dhabi Oil Refinery Co. (Takreer), the refining arm of state-owned Abu Dhabi National Oil Co., has confirmed a fire broke out on Jan. 11 at its recently expanded Ruwais refining complex in the UAE, about 240 km west of Abu Dhabi City. The fire, which occurred at an unidentified processing unit, was quickly contained, and no casualties have been reported, Takreer said in a series of posts to its official Twitter account.

Russia has Started Cutting Oil Output: Kremlin (10 January 2017): By Irina Slav - Russia has started to cut oil production in accordance with its agreement with OPEC to aid the group’s efforts to restore the international oil market to balance, said the spokesman for the Kremlin, Dmitry Peskov. Peskov’s statement was quite general but was void of any figures. “Without question Russia is carrying out all the points of the agreement and all the obligations that it took upon itself,” he said.

Oil Drops As Signs Of Rising U.S. Output Offset OPEC Optimism (9 January 2017) By Tsvetana Paraskova: Oil prices were down in early Monday trade after Baker Hughes reported on Friday yet another rise in the U.S. rig count, which, coupled with a stronger dollar, was more than offsetting optimism that OPEC and non-cartel nations would be honoring their deal to cut global supply. As of 7:04am EST, WTI Crude was down 1.78 percent at US$53.05, while Brent Crude was trading down 1.8 percent at US$56.07.

Saudi Aramco raises oil pricing to Asia and U.S. as OPEC cuts output (5 January 2017): By SERENE CHEONG, SHARON CHO, ANTHONY DIPAOLA - DAMMAM (Bloomberg) -- Saudi Arabia raised pricing for February oil sales to Asia and increased premiums for light grades to the U.S. as the world’s largest crude exporter prepares to reduce output to help counter a global oversupply. State-owned Saudi Arabian Oil Co., known as Saudi Aramco, increased its official pricing for Arab Light crude to Asia by $0.60/bbl to 15 cents below the regional benchmark, it said in an emailed statement. The company had been expected to increase the pricing for shipments of Arab Light crude by $0.50/bbl, according to the median estimate in a Bloomberg survey of five refiners and traders.

Why Russia Expects $40 Oil This Year (4 January 2017): By Irina Slav - Budget deficit is a fascinating thing. It can turn around economies if it’s large enough or it can highlight their resilience, if it turns out to be not as large as expected. The thing is, no government can be 100 percent certain in advance what budget deficit it will have to contend with in any future fiscal year. Russia is a case in point as it recently approved its 2017 budget, which envisages a deficit of 3.2 percent of GDP – a figure comparable to the United States’ 2.6 percent estimated for 2017. According to some analysts, however, such as Mauldin Economics’ Jacob Shapiro, this 3.2 percent is enough to make life difficult for Moscow over the next 12 months, which is why the Kremlin should hope for higher oil prices.

2017 – A Quiet Year For Oil? (4 January 2017): After several years of turmoil, 2017 could provide investors with the mercy of a relatively quiet year for oil prices. There are reasons to be optimistic about prices going into the start of the year. The OPEC production cuts have shored up sentiment and set the stage for restrained production in the first half which could draw down oil stocks considerably. Yet it’s not clear that oil prices will continue to rocket higher either. For one thing, many analysts are skeptical about OPEC commitment to cuts, while others point to the rebounding rig count used for unconventional U.S. production.

Oil hits 18-month high as Kuwait, Oman fulfill OPEC cuts (3 January 2017) By GRANT SMITH - NEW YORK (Bloomberg) -- Oil climbed to an 18-month high in New York as output cuts by Kuwait and Oman signaled OPEC and its partners are delivering on their agreement to stabilize the market. Futures rose as much as 2.8% after adding 45% last year, the biggest annual gain since 2009. Officials from Oman and Kuwait told local media they’re cutting oil production in January, fulfilling pledges that they and 22 other producers made on Dec. 10. Prices also advanced as China’s manufacturing purchasing managers index stabilized near a post-2012 high, signaling demand may be supported in the world’s second-biggest oil user.

What drives crude oil prices: Demand OECD: The Organization of Economic Cooperation and Development (OECD) consists of the United States, much of Europe, and other advanced countries. At 53 percent of world oil consumption in 2010, these large economies consume more oil than the non-OECD countries, but have much lower oil consumption growth. Oil consumption in the OECD countries actually declined in the decade between 2000 and 2010, whereas non-OECD consumption rose 40 percent during the same period.