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Wednesday, 27 July 2016

Today's ENERGY News - 27 July 2016






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Oil Heads Back To $30, And Probably Lower



Financial players are now bailing out of their bullish positions in oil markets. The US dollar’s recovery means they have no need for a “store of value”. They are leaving behind mounting chaos. Prices will probably need to go well below $30/bbl to enable the market to rebalance. There was never any fundamental reason why oil prices should have doubled between January and June this year. There were no physical shortages of product, or long-term outages at key producers. But of course, there was never any fundamental reason for prices to treble between 2009 – 2011 in the Stimulus rally, or to jump nearly 50% between January – May last year. Instead, prices once again rose because financial players expected the US$ to decline They realised this meant they could make money by buying oil on the futures market as a “store of value” Now, as the US$ has […]

How Much Oil Is in Storage Globally?

The waterways surrounding this island nation have become home to one of the world’s biggest oil-storage sites. The problem: It is unclear how much oil is in the tankers anchored there. The historic fall in oil prices has created a pileup of inventories, much of it stashed in tanks in the U.S. and other industrialized countries that are committed to disclosing the latest tally. But millions of barrels are also flowing to locations outside the scope of industry trackers. Some countries, such as Russia and China, choose not to report their oil-storage levels. And traders and oil companies that park supertankers have no obligation to make public their supply. Their decision to keep this information private doesn’t violate any international laws or agreements. But it makes for a more-cryptic and volatile oil market, analysts say. How much crude is in these locations, and how quickly it can be resold […]

Low Oil Prices Kill Off 7 Billion Barrels Of Oil Production

Offshore Oil Rig The Trent Capital expenditure cuts of $150 billion for 2016 and 2017 by U.S. exploration and production companies are expected to result in average production losses of 4.2 million barrels per day in the Lower 48 through 2020, according to Wood Mackenzie. This is not only a trend in the U.S., with upstream companies around the world trimming capex by more than $370 billion for 2016 and 2017. Wood Mackenzie believes that this will impact oil production and the world will result in 7 billion fewer barrels of oil through 2020. “The plays that saw the highest proportion of their capital expenditure cut were Eagle Ford and the Bakken,” said Jeanie Oudin, Wood Mackenzie Senior Research Manager, Lower 48. “That’s because the two plays were in full-scale development, with most operators’ acreage held by production at the time oil prices began to fall, allowing for a […]

Climate change risk threatens 18 U.S. military sites: study

Rising sea levels due to hurricanes and tidal flooding intensified by climate change will put military bases along the U.S. East Coast and Gulf Coast at risk, according to a report released on Wednesday. Nonprofit group the Union of Concerned Scientists analyzed 18 military installations that represent more than 120 coastal bases nationwide to weigh the impact of climate change on their operations. Faster rates of sea level rises in the second half of this century could mean that tidal flooding will become a daily occurrence for some installations, pushing useable land needed for military training and testing into tidal zones, said the report titled “The U.S. Military on the Front Lines of Rising Seas.” By 2050, most of these sites will be hit by more than 10 times the number of floods than at present, the report said, and at least half of them will experience daily floods. […]

Oil Majors Lost One Engine; Now the Second One Is Sputtering


BP says second-quarter refining margins drop to 6-year low Downstream business was key last year in cushioning cheap oil If Big Oil was a two-engine airplane, you could say it’s been flying on a single engine since energy prices crashed in 2014. Now, the second motor is sputtering. The major integrated oil companies, including Exxon Mobil Corp., Total SA and BP Plc, have relied on their so-called downstream businesses, which include refining crude into gasoline, oil trading and gas stations, to cushion the losses on their upstream units, which pump crude and natural gas. “The crash in oil prices in late 2014 brought refineries worldwide a pleasant surprise: booming margins,” said Amrita Sen, chief oil analyst at consulting firm Energy Aspects Ltd. in London. “But now, the market is changing.” BP, the first major to report second-quarter results, showed the impact on Tuesday. The British company said its downstream […]


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