Oil and financial sanctions on Iran will probably be lifted within the first three months of 2016, according to four western diplomats familiar with the nuclear monitoring process.
Under the terms of a July 14 accord between world powers and Iran, sanctions imposed internationally on the Persian Gulf nation will be lifted in return for restrictions on nuclear work. The Vienna-based International Atomic Energy Agency will assess when Iran has fulfilled the terms of deal, paving the way for the removal of restrictions.
The monitoring necessary for that to happen will probably be in place by January or February, according to three of the envoys. A fourth saw restrictions lasting as late as March. All of the officials have knowledge of the IAEA’s verification regime in Iran and asked not to be named discussing confidential estimates.
Iraq’s semi-autonomous Kurdistan Regional Government plans to start making its first regular payments to oil producers including DNO ASA, Genel Energy Plc. and Gulf Keystone Petroleum Ltd. within seven days. The companies’ shares rallied.
The Ministry of Natural Resources authorized the allocation of $75 million of revenue from the KRG’s direct sale of crude oil as payments, the ministry said in an e-mailed statement on Monday. Operators of the Taq Taq oil field including Genel Energy will receive $30 million, Tawke field operator DNO will get $30 million and Gulf Keystone, the operator at Sheikhan, will receive $15 million over the next seven days, it said.
“Regular payments will be needed to allow the exporting companies to cover their ongoing expenses and plan for further investment in the oil fields, which will in turn boost production and thus help the people of the Kurdistan region,” according to the ministry statement. Additional payments will be made as Kurdish shipments rise in 2016, it said.
The payments would be the first schedule compensation to companies that have been caught for years in a dispute over revenue sharing between authorities in the northern Kurdish enclave and Iraq’s federal government. Genel’s shares gained 6.1% percent, while DNO and Gulf Keystone Petroleum also rallied.
Oil declined for a second day as Venezuela proposed an OPEC summit to stabilize prices amid a global glut.
Futures slid as much as 2 percent in New York. Producers from outside of the Organization of Petroleum Exporting Countries including Russia will be invited to the meeting, Venezuelan President Nicolas Maduro told state-owned broadcaster Telesur. Cutting output for a short-term price gain isn’t the cure for the “sickness” affecting global markets, Russian Energy Minister Alexander Novak said Friday.
Oil has fluctuated the past three weeks as concerns overs slowing demand in China fueled volatility in global markets. Prices are down more than 25 percent from this year’s closing peak in June on signs the surplus will persist. OPEC members are sustaining output and U.S. crude stockpiles remain almost 100 million barrels above the five-year seasonal average.
Angola risks losing investment from foreign oil companies as costly government regulations and low world prices make the country, vying to be Africa’s largest producer, less attractive to operate in, an industry executive said.
A series of measures introduced by Angola’s government in recent years has pushed production costs up as much as $500 million annually, said Jean-Michel Lavergne, general manager for Total E&P Angola, the country’s biggest driller.
Oil companies want talks with the Angolan government to press home the threat posed by regulatory costs, Lavergne told reporters on Friday at a monthly business forum in Luanda.
Russia will assume that crude prices will stay near their present level in calculating next year’s budget as the world’s largest energy exporter adjusts to a downturn on the oil market, according to President Vladimir Putin’s top economic aide.
The budget will be based on an average oil price of $50 a barrel, Andrey Belousov told reporters in Vladivostok on Friday. Putin said he’s asking parliament to support a shift to a one- year fiscal plan in 2016 because it’s “impossible” to predict the direction of global markets.
Non-OPEC member Russia, whose currency has plunged 45 percent in the past 12 months, is growing resigned to slumping oil, which together with gas accounts for about half of budget revenue. The country is seeking to cooperate with members of the 12-member Organization of Petroleum Exporting Countries to stabilize the market after the Finance Ministry said that the turmoil is forcing Russia to shorten its budget-planning horizon to one year.
Andy Hall, one of the best-known oil traders who’s bullish on prices, said the decline in the oil market isn’t a repeat of 1998 or 2008.
The absence of “extreme contango,” which occurs when commodities prices close to delivery are cheaper than those to be delivered at later dates, suggests that “the world, whilst moderately oversupplied, is not awash in oil,” Hall said in a letter to investors.
Oil prices, which plunged 32 percent in 1998 and 54 percent in 2008, are down more than 50 percent in the past year. Hall, who runs hedge fund firm Astenbeck Capital Management, said U.S. crude output through the remainder of 2015 will decline 6 percent from the first half’s average. He said he expects to see a decline in production forecasts by the International Energy Agency.
The last place oil producers want to be when prices plummet to profit-demolishing lows is midstream on a billion-dollar project in one of the costliest parts of the planet to extract crude.
Yet that’s exactly where half a dozen oil sands operators from Suncor Energy Inc. to Brion Energy Corp. find themselves with prices for Canadian oil now hovering around $30 a barrel. While all around them projects have been postponed or canceled, their investments were judged too far along when the oil game suddenly moved from offense to defense.
These projects will add at least another 500,000 barrels a day -- roughly a 25 percent increase from Alberta -- to an oversupplied North American market by 2017. For companies stuck spending billions in a downturn, the time required to earn back their investments will lengthen considerably, said Rafi Tahmazian, senior portfolio manager at Canoe Financial LP.
Oil pared a second weekly advance amid a persistent global glut while Venezuela and Russia agreed to a plan to address the slide in prices.
Futures fell as much as 1.3 percent and were 2.2 percent higher for the week in New York. OPEC member Venezuela and Russia, the largest oil exporter outside the group, reached an agreement on “initiatives” to bring stability to the market, Venezuelan President Nicolas Maduro said, according to the nation’s state- run news agency AVN. The world’s crude surplus will last longer than predicted, Societe Generale SA reported this week.
Oil has fluctuated after capping the biggest three-day rally in 25 years on Monday. Crude is still down more than 20 percent from this year’s closing peak in June as leading members of the Organization of Petroleum Exporting Countries sustain output and U.S. crude stockpiles remain almost 100 million barrels above the five-year seasonal average.
OAO Rosneft will sell a stake in one of its largest oil-producing projects to ONGC Videsh Ltd., the overseas arm of India’s biggest explorer.
The unit of state-owned Oil & Natural Gas Corp. will take a 15 percent share in Vankorneft, Russia’s second-largest oil producing development, the companies said at a signing ceremony Friday in Vladivostok, in Russia’s Far East. ONGC will have a right to two directors on Vankorneft’s board and Rosneft will keep control of the project operations, including the Vankor- Purpe pipeline, the companies said. The deal is pending regulatory approval.
Saudi Arabia, the world’s largest crude exporter, cut pricing for all October oil sales to the U.S. and Northwest Europe and reduced the premium on its main Light grade to Asia by 30 cents a barrel.
State-owned Saudi Arabian Oil Co. cut its official selling price for October sales to Asia of Arab Light crude to 10 cents a barrel more than the regional benchmark, the company said in an e-mailed statement. The discount for Medium grade crude for buyers in Asia widened 50 cents to $1.30 a barrel less than the benchmark.
Nigeria’s sovereign wealth fund doesn’t expect any major payments from the government as the finances of Africa’s largest oil producer have been hit by a halving in crude prices in the past year.
“The weakness in crude oil prices might persist for the foreseeable future, thereby potentially impacting on new contributions from the federation,” Nigerian Sovereign Investment Authority Chairman Mahey Rasheed said in its 2014 annual report released on Thursday.
REC Solar ASA has signed a deal with O Capital, the renewable energy arm of Orascom Telecom Media and Technology Holding SAE, forming a partnership to sell solar panels and related services in the Middle East and Africa.
O Capital will manage tenders and turnkey installations while REC will be responsible for the engineering side, it said in a statement. The companies are seeking to provide REC’s solar panels to residential, commercial and utility-scale projects.
Emirates Nuclear Energy Corp., the company developing the Gulf Arab region’s first nuclear power plant, is reviving plans to borrow from banks and other financial institutions to help fund the $25 billion project, four people with knowledge of the matter said.
Export-Import Bank of Korea will provide about $1.5 billion for the project, the people said, asking not to be identified as the information is private. Enec, as the company is known, is also in talks with five banks to provide about $250 million for the project, they said. HSBC Holdings Plc is advising Enec on the deal, and Standard Chartered is advising Korea Electric Power Corp., which will build and operate the nuclear plant, the people said.
Congress is set to begin consideration of a measure to lift the decades-old ban on U.S. crude exports after a government study concluded the move wouldn’t raise gasoline prices for consumers, people familiar with the plan said.
A panel in the House of Representatives is planning to vote on a measure to lift the ban, which dates back to the Arab oil embargo of the 1970s, as early as next week, according to three lobbyists working on the matter, who asked not to be named because the markup hasn’t been announced yet. The full House may vote on it later in September, leaving ahead the more difficult task of gaining enough support for repeal in the Senate, they said.
Repealing the ban has gained new political potency as hydraulic fracturing has triggered a boom in domestic oil and natural gas output. Oil companies such as Exxon Mobil Corp. have called for its end, while some refiners say that lifting the ban would lead them to pay more for crude.
Saudi Arabia and its Gulf allies are at odds with Iran and other OPEC members over whether the organization should include oil-price forecasts in its long-term strategy report, according to three of the group’s delegates.
The Gulf kingdom, which has led the Organization of Petroleum Exporting Countries in a battle against rival producers, is seeking to exclude price assumptions from the report, according to the delegates, who asked not to be identified because the document isn’t public. The disagreement reflects internal divisions over whether OPEC policy should focus on prices or the stability of the oil market, one of the delegates said.
Crude dropped below $45 a barrel before U.S. government data forecast to show stockpiles expanded in the world’s biggest oil consumer.
Futures slid as much as 3.4 percent in New York, extending Tuesday’s 7.7 percent decline. Inventories probably increased by 900,000 barrels last week, according to a Bloomberg survey before a report from the Energy Information Administration Wednesday. Iran will boost output by 1 million barrels a day as sanctions on its exports are removed, Oil Minister Bijan Namdar Zanganeh said.
Oil has faltered after the biggest three-day rally in 25 years amid speculation a global glut that drove prices into a bear market will be prolonged. Crude will trade at $40 to $60 a barrel into 2016 as rising supplies overwhelm demand, according to Ian Taylor, chief executive officer of Vitol Group BV, the biggest independent oil trader.
Any plan by OPEC to trim oil production to stem falling prices faces a major obstacle: Iran wants it’s market share back.
Prices fell for a second session Wednesday as doubts mounted over any coordinated response by the Organization of Petroleum Exporting Countries after Iran reiterated its commitment to boosting supply. The Persian Gulf nation will increase output by as much as 1 million barrels a day after sanctions are lifted, Oil Minister Bijan Namdar Zanganeh said in Tehran.
ConocoPhillips, the fourth-largest U.S. oil company, plans to reduce its workforce by 10 percent in the latest sign that the energy industry is preparing for a longer downturn.
OPEC signaled that it might cut production in the future and the U.S. lowered output estimates, propelling oil back into a bull market less than a week after hitting a six-year low.
Prices surged 8.8 percent Monday in New York, capping the biggest three-day gain in 25 years.
The Energy Information Administration changed the way it calculates how much oil comes out of the ground, using a survey of producers in key states instead of relying on data from state agencies and computer models. As a result, 13.2 million barrels of oil production vanished with a government blog post.
Oil’s biggest three-day rally in 25 years stalled before U.S. government data forecast to show crude stockpiles expanded in the world’s largest oil consumer.
Futures dropped as much as 4 percent in New York after surging 27 percent in the three days through Monday, the most since August 1990. Inventories probably rose by 700,000 barrels last week, according to a Bloomberg survey before an Energy Information Administration report Wednesday. A drop in a Chinese factory gauge to the lowest in three years prompted speculation the economy in the world’s second-biggest oil user is slowing.
Crude advanced in August to post the first monthly gain since May as concerns eased over a slowdown in the U.S. and amid signs the global glut may diminish. The Organization of Petroleum Exporting Countries won’t agree to carry the burden of propping up prices by cutting supply and non-member nations would have to contribute, according to the bulletin.
Shares of the natural-gas exploring units of Delek Group Ltd. plunged the most in 14 years in high volume on concern the discovery of the Mediterranean’s largest field off the coast of Egypt will curtail their exports.
Delek Drilling LP and Avner Oil Exploration LLP, partners in the Leviathan field, declined the most since 2001 in above- average trading volumes at the close in Tel Aviv after Eni SpA discovered the “super giant” field that it says may hold 30 trillion cubic feet of gas, enough to contribute to Egyptian supply for decades.
Delek Group dropped 12 percent, the biggest loss since Dec. 23. Ratio Oil Exploration 1992 LP fell 23 percent. The companies are jointly drilling Leviathan, Israel’s largest offshore field, with Houston-based Noble Energy Inc.
Saudi Arabian stocks were poised for the biggest monthly drop in almost seven years after Brent crude resumed its decline.
The Tadawul All Share Index fell 2 percent to 7,536.78 at 1:57 p.m. in Riyadh, the steepest slide among the Middle East’s major equity gauges. The retreat extends the Tadawul’s drop to 17 percent in August, the most in a month since October 2008, according to data compiled by Bloomberg. Brent, the benchmark for half the world’s oil, slipped 2.5 percent to $48.80 per barrel.
Alaska Governor Bill Walker has a message for President Barack Obama: Fill the Trans-Alaska Pipeline System while you still can.
The U.S. agreed earlier this month to allow Royal Dutch Shell Plc to resume Arctic oil exploration, yet state officials say it may not be enough to save the 800-mile (1,300-kilometer) pipeline, Alaska’s economic lifeline for the past 40 years. Efforts to limit drilling and dwindling volumes on the line may eventually make it difficult to move crude at all.
“We have an oil pipeline that’s two-thirds empty,” Walker, a Republican-turned-independent, said in a telephone interview from Anchorage. “It’s easy for people to predict what will or won’t happen, but as governor I can’t take that chance. Right now, about 75 percent of our revenue comes from that oil pipeline.”
Oil headed for a third monthly decline as U.S. drillers showed no signs of letting up even as a supply glut persists.
Futures fell as much as 2 percent in New York after the biggest two-day rally since 2009. The number of active rigs seeking oil in the U.S. increased for a sixth week to 675, the most since the start of May, according to Baker Hughes Inc. A measure of oil-price fluctuations rose Friday to a five-month high.
Oil is holding losses after a slide this month below $40 a barrel, the lowest since February 2009, on concern slowing demand in the U.S. and China will leave the global market oversupplied. While crude has swung higher amid a rebound in commodities and equities, prices are still down more than 25 percent from this year’s peak in June.
Forget the printing press. In readying for the rollout of Islamic State’s new money, goldsmiths and silver smelters have been toiling away.
The jihadist group on Saturday touted “the return of the gold dinar” in an hour-long video issued by its media wing, al Hayat. Islamic State’s policy-making Shura Council last year tasked its Beit al Mal, or treasury, with minting the coins, which come in several denominations made of gold, silver and copper.
The currency is meant to break the shackles of “the capitalist financial system of enslavement, underpinned by a piece of paper called the Federal Reserve dollar note,” the group said in the video. It didn’t explain where the coins were being minted, nor how they’ll be distributed or replace currencies circulating in the territory the group occupies in parts of Iraq and Syria.
