Hedge funds reduced both bullish and bearish bets on oil for a fourth week as rising OPEC output was met with forecasts for a contraction in U.S. supply. Money managers trimmed their short wagers in West Texas Intermediate oil by 4.3 percent and long bets by 0.2 percent, leading to a 0.8 percent gain in the net-long position, U.S. Commodity Futures Trading Commission data for the seven days ended June 16 show.
Sinopec, the world's second-biggest oil refiner, is on the hunt for minority investments in U.S. shale oil and gas projects as it seeks to diversify China's supply sources, a senior company official said. The Chinese state energy firm is keen to take a 10-15 percent stake in projects to export liquefied natural gas (LNG), said Jack Yu, managing director of Sinopec D.C., which handles government relations in the U.S. Previous talks over investing in Freeport LNG's project in Texas fell through, he said. New deals, if they materialize, would come more than two years after Sinopec made waves with two big U.S. investments, spending more than $3 billion buying various shale stakes from Devon Energy and Chesapeake Energy.
The US has a more than 50 percent chance of lifting the ban on most crude oil exports within the next two years, potentially narrowing the gap between domestic and international crude prices, according to Bank of America Corp. The collapse in domestic gasoline prices has reduced the political cost of tackling the issue, while the prospect of economic sanctions imposed on Iran being removed while the US’s self-imposed ban remains in place seems an unlikely pairing, the bank said in a report dated Thursday.
SK Innovation, which owns South Korea's biggest refiner, said it plans to raise investment in US shale fields. The company said in a statement it wanted to expand its shale gas fields in both Oklahoma and Texas, which it acquired last year, into nearby areas.
Questerre Energy has signed an MOU (Memorandum of Understanding) with the Ministry of Energy and Mineral Resources of the Hashemite Kingdom of Jordan. The agreement is for the appraisal and development of oil shale acreage in Jordan. It encompasses two blocks covering 388km in the Isfir-Jafr area, which is 200km south of the capital, Amman.
The UK's new Conservative government could take control of planning decisions to speed up the development of shale gas and prevent investor money from drying up, lawyers say.
An oil industry geologist from Aberdeen has told Church of Scotland members that they must fight the threat of fracking on moral grounds. Hannah-Mary Goodlad, moderator in-waiting of the National Youth Assembly, said technology was advancing so quickly that it would be safe to extract unconventional oil and gas from underneath the ground from an environmental perspective in about five years. The 25-year-old, who was speaking in a personal capacity and not on behalf of her employer Statoil, told ministers and elders yesterday that they must argue that future energy needs must be met through renewables, not fossil fuels.
A study says fracking has the potential to unlock 140billion barrels of global oil supplies. The amount would be equivalent to Russia's known reserves, according to analysis by IHS. According to the report, countries such as Iran, Mexico, China and Russia are likely to benefit most from exploiting techniques in the US shale revolution.
Decisions will be made on two controversial fracking applications in Lancashire in late June, the county council has said. Lancashire County Council’s development control committee had originally been due to make decisions in January on applications by shale company Cuadrilla to drill, frack and test gas flows at two sites on the Fylde Coast between Preston and Blackpool.
The rally in crude oil is reviving the US shale boom, threatening speculators who are the most bullish on prices since July. Money managers increased their net-long position in West Texas Intermediate crude by 3.9 percent in the seven days ended May 5, US Commodity Futures Trading Commission data show. That’s a level last seen toward the start of last year’s price crash. Short positions declined to the lowest this year. A 37 percent rebound in WTI since March has encouraged companies including EOG Resources Inc. to lay out plans to resume drilling. The shale boom had stalled amid a record decline in rigs seeking oil, and the government is predicting lower output this month. Any acceleration in drilling will raise concern that the US supply glut could worsen.
Most of the country’s national parks are unsuitable for fracking because of their geology, a report has found. Scientists from Durham University’s Department of Earth Sciences have reviewed existing data for each of our 15 national parks and found only four where it could be considered. The briefing document found the four parks with geology to interest companies looking to exploit shale gas, shale oil or coalbed methane were the North York Moors, the Peak District, the South Downs and the Yorkshire Dales.
Half of the 41 fracking companies operating in the US will be dead or sold by year-end because of slashed spending by oil companies, an executive with Weatherford International Plc said. There could be about 20 companies left that provide hydraulic fracturing services, Rob Fulks, pressure pumping marketing director at Weatherford, said in an interview Wednesday at the IHS CERAWeek conference in Houston. Demand for fracking, a production method that along with horizontal drilling spurred a boom in US oil and natural gas output, has declined as customers leave wells uncompleted because of low prices.
In a quest to overturn the decades-old restrictions on exporting American crude, the oil industry is seeking the help of an unlikely ally: consumers. ConocoPhillips Chief Executive Officer Ryan Lance wants to convince the public that allowing exports would actually help push US gasoline prices down. Existing policy hurts consumers because, while it keeps U.S. oil prices lower than the global crude benchmark, it doesn’t do much to pass that savings on at the pump, he said. Instead, refiners capable of processing the oil produced by the shale boom profit from lower prices, and then can sell their refined products overseas. “The ban on exports is anti-consumer,” Lance told reporters after giving a speech at the IHS CERAWeek conference in Houston. The industry “needs to educate people that it is better for consumers to be exporting our crude.”
Oil prices are likely to stay low for a long time after falling more than 40 percent in the past year, said officials from two OPEC nations. Nigeria and Algeria both warned that oil prices, currently at around $60 a barrel, probably won’t recover to the 2011-2013 level of more than $100 a barrel. “You forecast at your own risk, but it seems to me that we should be regarding this as a permanent shock,” Ngozi Okonjo-Iweala, the Nigerian finance minister, said on a panel discussion Sunday in Washington near the end of the International Monetary Fund’s spring meetings. “We should prepare our economies for that eventuality.”
With OPEC ceding control for the first time since the 1980s, US shale oil has been anointed the world’s new “swing producer” by everyone from ConocoPhillips and Goldman Sachs Group Inc. to former Fed Chairman Alan Greenspan. But can America’s oil really swing it? Producers cut billions in spending, idled half the country’s rigs and kept more than 3,000 wells off the market, and it still took five months for US production to start dropping. Analysts and banks say a recovery in production will also prove slower and more difficult than it would be for a single producer like Saudi Arabia.
Oil traded near the highest price this year amid speculation a slowdown in the US shale boom will ease the biggest supply glut since 1930. Futures were little changed in New York after a 5.8 percent gain on Wednesday that capped a five-day rally. Crude production declined by 20,000 barrels a day to 9.4 million last week, according to the Energy Information Administration. US Secretary of State John Kerry reassured world powers that a nuclear deal with Iran would hold up to congressional scrutiny.
The International Energy Agency (IEA) has warned it could take longer than anticipated for global oil markets to strengthen caused by a potential increase in Iranian exports and the surge in OPEC supply. The forecast of 2015 global oil demand has been raised for April by 90,000 barrels per day to 93.6million barrels per day. The IEA also said global supply rose by an estimated 1mb/d during March to 95.2 mb/d, as OPEC production recorded its highest monthly increase in nearly four years.
Shale drillers will see production drop sooner than expected under a US government forecast, a momentum change that hints at an eventual price rally. Just five months after Saudi Arabia put the market into a tailspin by refusing to cut supply despite a global glut, the shale oil industry will record its first monthly dip since US officials began weighing output in 2013. The projected production drop is small, just 1 percent. Yet investors took note, pushing oilfield stocks to the top five spots in the Standard & Poor’s 500 Index on Tuesday, led by rig operators Ensco Plc and Diamond Offshore Drilling Inc.
Labour has pledged it would create a robust and regulatory regime before fracking for shale gas could go ahead. The political party made the vow as it unveiled its election manifesto just weeks before voters go to the polls. There was also a nod to the North Sea oil and gas sector, with a promise to provide long-term strategy for the industry, with more certainty on tax rates and measures to help exploit the potential for storing carbon emissions in offshore oil and gas fields. Labour has also pledged to freeze fuel bills until 2017.
The US shale gas and oil revolution is a key reason behind the current oil price crisis that is now proving such a huge challenge for the North Sea. In the UK, where shale gas exploration is in its infancy, the fracturing of wells (fracking) has become highly contentious and is now a general election issue. But what of China? After all, based on current knowledge, the world’s most populous country also possesses the largest shale gas reserves. And there is production. The Ministry of Land and Resources of the People’s Republic of China (the MLR) published a decision on November 3 last year, following the expiry of the exploration rights of the first of two shale gas bidding areas.
Nearly a third of people would be less likely to vote for a candidate who supports fracking in their constituency, according to polling for Greenpeace. The environmental group said the poll showed that backing the shale industry, which hopes to explore for and extract gas and oil through fracking in a number of areas in the UK, could be “political suicide” for candidates in key marginal seats. The ComRes poll of 2,035 people found that 31% would be less likely to vote for a candidate who backed fracking in their local area, compared with 13% who said they would be more likely to vote for them. Some 44% said it would have no impact on the way they voted.
A US farmer stunned the audience of a Nebraskan Oil & Gas Conservation committee hearing when he called upon members of the board to drink water which he said had been contaminated by fracking. James Osborne,who lives in the Midwestern state, brought with him a water bottle and cup containing fresh water as well as water he claimed had been affected. A public hearing is currently being held on a proposal by an oil company to ship fracking wastewater from out of state into Nebraska.
The Obama administration issued the first federal regulations for fracking since the drilling technique fueled a domestic energy boom, requiring extensive disclosures of the chemicals used on public land. After years of debate and delay, the Bureau of Land Management on Friday said drillers on federal lands must reveal the chemicals they use, meet certain well construction standards and safely dispose of contaminated water that flows back from fracked wells. The oil and gas industry said the rule isn’t necessary because state regulations already govern hydraulic fracturing.
The next big threat to oil prices isn’t from OPEC or Bakken shale. It’s Russian samovars, or teapots. Simple refineries that process crude into fuel oil are scaling back, because when oil prices slump, the government reduces the discount that these refiners -- known as teapots to those in the industry -- get for exporting fuel. They use less crude, freeing it up for sale abroad, which in turn adds to the global glut. Russia may increase oil exports by as much as 250,000 barrels a day this year, according to James Henderson, a senior research fellow at the Oxford Institute for Energy Studies who’s followed the country’s energy industry for more than 20 years. That would equate to 5% growth in shipments, the most in at least a decade. “The pain Russia is feeling from low oil prices has made more crude available for export,” Henderson said by phone March 18. “Quite a few of Russia’s simple refineries could reduce their runs.”
Workers fired from US shale fields after the collapse in oil prices could soon have a new boss: the nation some blame for driving that decline. The state-owned Saudi Arabian Oil Co., also known as Saudi Aramco, is posting new job ads online aiming to snap up experts in extracting oil from shale as the country seeks to become a leader in that rapidly expanding effort. Tens of thousands of US workers have been fired since November as oil prices plunged because of oversupplies, driven in part by an OPEC decision supported by Saudi Arabia. That’s now giving Saudi Aramco a better chance to lure experienced workers to its own shale formations. Difficult living conditions had previously made the country a hard sell, said Tobias Read, chief executive officer of Swift Worldwide Resources, a recruiting firm.