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OPEC delegates say Saudi comments show higher oil price desire
OPEC delegates say comments from top exporter Saudi Arabia, which two years ago led the group to drop its historic role of supporting oil prices, are a change in tone and a sign the kingdom is looking – verbally for now – to prop up the market. Khalid al-Falih, who took over this year from longserving Saudi oil minister Ali al-Naimi, told German newspaper Handelsblatt that an oil price higher than $50 is needed to achieve a balance in oil markets in the long term. There is certainly no sign yet of an actual policy shift by Saudi Arabia, or of the kingdom cutting supplies to support prices. Indeed, Riyadh told OPEC it raised its output in June to within a whisker of a record high reached […]
One Year On, Kerry Satisfied With Iran Nuclear Deal
Secretary of State John Kerry, left, and French Foreign Minister Jean-Marc Ayrault at the Bastille… PARIS—Secretary of State John Kerry said the Iran nuclear agreement “has lived up to its expectations,” marking the first anniversary of the landmark accord reached last year between six world powers and Iran to curb Iran’s nuclear program in exchange for sanctions relief. Since the accord took effect in January, Iran has complied with the key nuclear parameters, according to the International Atomic Energy Agency, the United Nations nuclear watchdog . Tehran has slashed its stockpiles of uranium and heavy water in addition to pouring cement in the core of its Arak reactor as part of a process to convert it to a modified reactor that is seen as posing a much reduced nuclear-proliferation threat. The IAEA has better access to Iran’s nuclear program and overall Iran is under much stricter limits, many of […]
New reserves uncovered in North Sea
The Norwegian government confirmed Wednesday an oil and gas discovery was made in a North Sea area not previously known to contain hydrocarbons. The Norwegian Petroleum Directorate confirmed a discovery was made in a wildcat well about eight miles south of the Brage field in the North Sea. A wildcat well is one drilled into an area not previously known to contain oil and gas and the NPD said a well drilled by Faroe Petroleum may hold between 42 million and 80 million barrels of oil equivalent. According to Faroe, the Brage field is producing around 20,000 barrels of oil equivalent per day. The NPD said oil production in April, the last full month for which data are available, averaged […]
Oil “Death Spiral” Emerges
One week ago, we looked at an epic build up of gasoline inventories on the East Coast, also known as PADD1, which had slammed the crack spread to record lows for this time of the year, and asked if “ This What Finally Drags Crude Oil Lower .” We were referring to the collapsing Crack Spreads, which show that something disturbing is taking place for US refingers who are no longer able to “internalize” the massive crude glut. U.S. gasoline crack spread a proxy for refiner margins, has dropped 34 percent in two weeks. On Wednesday, it hit a five-year low for this time of year below $13 a barrel. That is less than half the crack spread of $28 a barrel at this time last year. As of today, the WTI crack spread was $13.1, largely unchanged from a week ago. We then quoted Andrew Lebow, senior partner […]
In World Of $50 Oil, Shale Beats Deepwater
U.S. shale is the lowest cost option for new oil production and is likely to be more competitive than conventional offshore drilling, according to a new report from Wood Mackenzie. The U.S. shale industry has weathered the oil price downturn, tweaking drilling practices and cutting costs in order to stay in business. A new report from Wood Mackenzie finds that the industry is proving to be resilient and flexible in the face of the worst oil market crisis in three decades. The report concludes that U.S. shale companies have managed to cut costs by as much as 40 percent since 2014. Much of that comes from lower costs from equipment suppliers and oilfield services firms. But it also comes from improved productivity from the average shale well. Instead of drilling anywhere and everywhere, U.S. shale companies are getting better at finding the “sweet spots.” Intriguingly, the […]
