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Monday, 11 April 2016

Today's ENERGY News - April 11, 2016

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Shell under pressure to reduce spending

Royal Dutch Shell is under pressure from shareholders to cut annual spending below $30 billion after buying BG Group to ensure it can maintain its dividend given the slow oil price recovery. Shell and other large oil companies slashed budgets, scrapped huge projects and cut tens of thousands of jobs last year in the face of a slump in oil prices from a June 2014 peak of nearly $116 a barrel to below $40. Shell reduced spending by $8.4 billion to $28.9 billion last year and for the first time in more than three decades global capital spending in the oil and gas industry, known as capex, is set to fall for a second year in a row. After the completion of the $50 billion BG acquisition, the Anglo-Dutch company set 2016 spending for the […]

US Shale Oil Production Costs Fell by 30% from Decade High

Shale oil cost chartCosts associated with shale oil exploration and production decreased by a third in 2015 thanks to implementation of more effective technologies. Experts are certain that this could affect crude oil prices in the short term. Costs beared by US shale producers shrunk by 25-30% last year in comparison to their decade high in 2012. This is attributed to the usage of advanced technology that improved the effectiveness of both well drilling and post-drilling well development, according to research conducted by the energy industry consultant IHS Global Inc. and commissioned by the Energy Information Administration (EIA). IHS has conducted research in the US’s largest shale oil production regions of Eagle Ford, Bakken, Marcellus and Permian. When compared to figures from 2014, the cost of putting a single oil well online decreased by 7-22% last year. The experts at IHS believe that keeping exploration and production costs lower can have an […]

Canadian energy sector in sharp decline

An energy group in Canada said it estimated the two-year spending trends in the oil and gas sector were at their lowest level in more than 60 years. The Canadian Association of Petroleum Producers estimated capital spending in the sector is expected to decline 62 percent from 2014 levels to $24 billion, the largest two-year decline since record-keeping began in 1947. “Canada needs urgent action to remain an attractive market for oil and gas investment, and to be competitive relative to other oil and natural gas producing jurisdictions,” CAPP President and CEO Tim McMillan said in a statement. The organization last year said it estimated more than 4,000 people would lose their jobs as a result of […]

Goldman Sees Russia Oil Output Rising Amid Doha Freeze Talks

Oil and the Doha Meeting Russian oil and condensate production will rise through 2017, even as the nation prepares for talks on an output freeze with other producers, according to Goldman Sachs. Russian output will climb to 11.2 million barrels a day this year from 11.1 million barrels in 2015 due to a weak ruble, low-cost deposits and a tax rate that adjusts to lower prices, Goldman analysts including Geydar Mamedov said in a research note dated April 7. Production is projected to increase to 11.4 million barrels a day […]

Here’s why the markets may be decoupling from oil

oil trains

Well, this is a bit of a disappointment. We have oil flying (up nearly 7 percent!), we have a weak dollar, we have China quiet all week, and we have a dovish Fed that traders believe have put some kind of floor under the market. And this is all we get? The Dow Industrials up 40 points in a lackluster, average-volume session? In the past months, if oil would be up 7 percent and the dollar would be weak, we would have been up 200-250 points. What’s wrong? You can argue oil may be decoupling from the markets. Maybe. But the usual suspects that would benefit from a weak dollar are all up: energy, materials, industrials. In fact, there’s more than four stocks advancing for every one declining. So, why the crummy point action? I think the problem is that the “V” rally is over. Remember, we dropped big […]


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