|Day's Range||54.11 - 54.68|
Matt Worner is the CEO of Talon Petroleum Limited (ASX:TPD). This report will, first, examine the CEO compensation...
(Bloomberg) -- OPEC is poised to extend oil-output cuts for the rest of the year when its members meet next month to assess supply and demand for crude.Saudi Arabia, Iraq and the United Arab Emirates -- the group’s three biggest members -- all want to keep restraining production in a bid to buttress crude amid signs of faltering demand. Having resolved a month-long fracas over when to meet, the Organization of Petroleum Exporting Countries and its allies now look likely to roll over the cuts when they gather on July 1-2 in Vienna.“I am not expecting a very difficult process in approving the extension,” United Arab Emirates Energy Minister Suhail Al Mazrouei told reporters on Wednesday in Abu Dhabi. Discussions at the July meeting will focus on the duration of the next agreement, he said.Al Mazrouei’s remarks echoed views expressed over the weekend by Saudi Energy Minister Khalid Al-Falih and earlier in the month by Iraqi Oil Minister Thamir Ghadhban. Russia, the largest producer outside OPEC, remains a question mark as it has yet to clarify whether it will join in any cuts.Market TurmoilThe producer coalition known as OPEC+ agreed earlier Wednesday to meet at the beginning of July. However, the group’s difficulty in picking a date highlighted political differences among its members and stoked turmoil in markets just weeks before their current production cuts expire. West Texas Intermediate for July delivery traded up 1.3% at $54.47 a barrel on the New York Mercantile Exchange as of 9:45 a.m. Thursday in Singapore.The threat of conflict in the Persian Gulf adds to market volatility. Tensions between Iran and the U.S. are escalating after attacks last week on oil tankers near the Strait of Hormuz. A rocket strike on Wednesday near an Exxon Mobil Corp. workers’ camp in Iraq had no effect on that nation’s oil fields or exports, according to a person with knowledge of the matter.OPEC’s Economic Commission Board, which met this week in Vienna, sees global oil inventories contracting by almost 500,000 barrels a day if the group continues to curb supply in the second half, a delegate said. That means that while they’re planning to extend their agreement to trim output, countries like Saudi Arabia -- which are making deeper cuts than promised -- will still have scope to pump more without violating the deal.“We are hoping that we will reach consensus to extend our agreement when we meet in two weeks time in Vienna,” Saudi Arabia’s Al-Falih told reporters on Sunday in Japan. The kingdom, OPEC’s biggest member, is seeking to balance global oil markets before 2020, he said.Iraq, OPEC’s second-largest producer, sees the group and its allies extending production cuts “at least” on current terms without “serious difficulties,” Ghadhban said on June 7 in St. Petersburg.(Updates oil price in fifth paragraph.)To contact the reporters on this story: Mahmoud Habboush in Abu Dhabi at firstname.lastname@example.org;Grant Smith in London at email@example.comTo contact the editors responsible for this story: Nayla Razzouk at firstname.lastname@example.org, Bruce Stanley, Mohammed Aly SergieFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Oil prices rose over 1 percent on Thursday as official data showed U.S. crude stocks fell more than expected and as OPEC and other producers finally agreed a date for a meeting to discuss output cuts. Brent crude futures had risen 82 cents, or 1.3%, to $62.64 by 0026 GMT. U.S. West Texas Intermediate (WTI) crude futures were up 79 cents, or 1.5%, at $54.55 a barrel.
Three key U.S. House of Representatives Democrats on Wednesday asked Marathon Petroleum to disclose any communications between the White House and federal agencies on the Trump administration's proposal to freeze fuel efficiency standards at 2020 levels through 2026. Energy and Commerce Committee Chairman Frank Pallone and two subcommittee chairs asked Marathon for all documents it exchanged between the National Highway Traffic Safety Administration, Environmental Protection Agency and White House and to disclose if the oil company was involved in the controversial rule's development.
Oil prices closed lower as worries about demand outweighed government data showing a decline in U.S. production and crude stockpiles.
WINNIPEG, Manitoba/CALGARY, Alberta (Reuters) - Construction to expand the Trans Mountain oil pipeline could begin in September, assuming the next regulatory steps go smoothly, the project's chief executive said on Wednesday. The C$7.4 billion ($5.56 billion) project was stalled a year ago after a Canadian court ruled the federal government, which also owns Trans Mountain, failed to adequately consult indigenous groups. Prime Minister Justin Trudeau on Tuesday reapproved the expansion, cheering the oil industry but angering environmental groups.
(Bloomberg Opinion) -- Wyoming’s Powder River Basin has been generating some buzz in oil and gas circles as a potential source of new supply (as if oil and gas need that). On Wednesday, though, its real significance was as a strategic signpost.The PRB, as it is known, is more famous for coal; and two of the biggest miners, Peabody Energy Corp. and Arch Coal Inc., are throwing their lot there together. A planned joint venture will combine five mines in Wyoming and Colorado into a single operation producing more than 60% of the basin’s coal. It will be roughly two-thirds owned by Peabody, with Arch taking the rest.The PRB produces a cheaper form of coal, with lower energy content, relative to what comes out of Appalachia – and its market is crumbling. Cheap shale gas, renewable energy and flat consumption have cut coal use in U.S. power plants by almost 40% over the past decade. Despite creative attempts by the White House to reverse that trend, the Energy Information Administration expects it to drop by another 19% through the end of next year. Cloud Peak Energy Inc., which operates several PRB mines, is currently in chapter 11 – from which both Peabody and Arch have only emerged themselves within the past few years. And the combined output of their mines in Wyoming, which constitute the vast majority of the joint venture’s output, has dropped away:So Arch and Peabody want to get those assets together, squeeze out costs and try to be the last guy(s) standing. The two miners expect synergies they value at $820 million, or roughly a fifth of their combined market cap. That alone is reason to try. It also puts some distance between the PRB assets and the companies’ metallurgical-coal operations, where prospects (and profits) are better. This is a textbook deal for two commodity producers faced with terminal decline in their market. For Arch, it continues a strategy of rejecting the growth impulse that pushed much of this industry into chapter 11 within the past decade in favor of a more realistic approach that has shrunk the company. Arch has bought back almost a third of its stock in the past few years, generating healthy returns at odds with the industry’s broader fortunes (see this). The stock jumped as much as 8% on Wednesday morning and is close to its post-bankruptcy peak.Frackers in shale would do well to take this on board. Oil and gas markets aren’t facing the same pressure as U.S. thermal coal, but are also challenged. Natural gas demand isn’t growing quickly enough to absorb surging production; and neither is oil, judging from its comatose state in the face of all sorts of geopolitical provocations. Despite some consolidation, the Permian basin, especially, remains very fragmented, and legacies of poor returns and weak governance keep investors on the sidelines. Having shown some progress on living within their means last year, frackers once again outspent cash flow in the first quarter.Consolidation – especially in the form of nil-premium, all-stock deals – would go a long way to cutting the bloated overhead that comes from having dozens and dozens of companies targeting the same acreage. It’s not often a literal canary in the coal mine shows up, let alone two.To contact the author of this story: Liam Denning at email@example.comTo contact the editor responsible for this story: Mark Gongloff at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Liam Denning is a Bloomberg Opinion columnist covering energy, mining and commodities. He previously was editor of the Wall Street Journal's Heard on the Street column and wrote for the Financial Times' Lex column. He was also an investment banker.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Despite OPEC oil production cuts and Venezuela and Iran sanctions, the world seems to be oversupplied with crude oil, with the excess amounting to some 90 million barrels above the average 2018 level
After two consecutive weeks of crude oil inventory builds, this week the Energy Information Administration offered some respite for prices with a draw, of 3.1 million barrels for the week to June 14
Historic flooding in the Midwest and poor demand from electric utilities are stranding coal hoppers west of the Mississippi, pushing up prices for storing railcars. The American Association of Railroads said last week that weekly coal volumes were down 16 percent from a year earlier to 71,526. The week prior number of 70,737 railcars marked the second-lowest number of weekly loadings this year.
Oil and gas company SM Energy is increasing its yearlong production outlook after test wells it drilled in the Permian Basin and Austin Chalk areas of Texas surpassed company expectations. The Denver-based company (NYSE: SM) on Tuesday upped its second-quarter and full-year guidance, hiking its forecast for oil and gas pumped in the second quarter as much as 4% and its 2019 yearlong production forecast by nearly 1%. “Higher than expected production volumes in the Permian reflect strong early performance from a number of new wells including the Wolfcamp D and Dean tests, as well as completion timing.
Investing.com - Official government data released Wednesday showed a larger-than-expected fall in U.S. crude inventories, sparking a turnaround in oil prices.
The move was a boost to coal companies facing tough competition from natural gas, solar and wind energy suppliers, but infuriated environmentalists and Democratic lawmakers who said the regulation was too weak to significantly reduce emissions and would put public health at risk. The so-called Affordable Clean Energy (ACE) rule gives states three years to devise their own plans to cut emissions mainly by encouraging coal-fired power plants to improve their efficiency, the Environmental Protection Agency said. "Our ACE rule will incentivize new technology which will ensure coal plants will be part of a cleaner future," EPA Administrator Andrew Wheeler said at an event at agency headquarters attended by coal state lawmakers, White House chief of staff Mick Mulvaney and a dozen coal miners in uniform.
Canadian-listed Eco Atlantic said on Wednesday it was not aware of any corruption probe in Guyana that would affect an offshore concession it has with partners Total and Tullow Oil. Guyana's anti-corruption agency launched an investigation into how exploration rights were awarded for Guyana's offshore fields, Bloomberg reported last month. Officials in Guyana have not responded to Reuters requests for comment.
We're definitely into long term investing, but some companies are simply bad investments over any time frame. We don't...
OTTAWA/CALGARY, Alberta (Reuters) - Canada on Tuesday approved as expected a hotly contested proposal to expand the western Canadian crude oil pipeline it bought last year, providing hope for a depressed energy industry but angering environmental groups. Construction on the expansion of the Trans Mountain pipeline is scheduled to resume this year, Prime Minister Justin Trudeau told a news conference. A senior government official, speaking on condition of anonymity, said earlier that Ottawa expected legal challenges to the approval.
(Bloomberg) -- Global oil demand growth is slowing.That is the view of all three major oil forecasting organisations, who have cut their assessments for what they expect in terms of an increase in crude consumption this year. The latest outlooks from the International Energy Agency, the U.S. Energy Information Administration and the Organisation of Petroleum Exporting Countries all show worldwide oil demand growing by less than they did a month ago.Taking the average of the three agencies’ forecasts, they now expect demand for oil to grow by about 1.2 million barrels a day this year, compared with last. That’s down from 1.3 million a month ago and more than 1.4 million in their forecasts made in January.The slowing demand growth is creating a problem for the OPEC+ group of countries, who had hoped to be able to end their oil supply restraint this month. Instead, all three agencies agree that they will need to extend their output cuts at least until the end of the year, and possibly beyond.The IEA, EIA and OPEC all now see global oil stockpiles coming down this year, but only if production restraint continues.Projecting the most recent month’s OPEC crude production forward for the rest of the year gives a global stock draw of 160 million barrels, according to OPEC, but of only 24 million barrels, according to the IEA. Still, that’s better than a month ago, when the IEA still saw a small build in stockpiles this year.But there is a catch.The weakening demand outlook for 2019 is driven to some big downward revisions for the first half of the year, with year on year growth still seen robust in the second half. If assessments for the third and fourth quarters also start being revised down, then the OPEC+ group might need to cut output even further to keep supply and demand balanced.The IEA now says global oil demand expanded by just 250,000 barrels a day in the first quarter compared with the same period last year. That’s the slowest rate of growth since the final three months of 2011, when the initial effect of the post-financial-crash recovery was wearing off. The other two agencies don’t see the first quarter in such bleak terms, although both are moving in the same direction, cutting their assessments of demand growth for the period from last month’s levels.The two consumer-side agencies — the IEA and EIA — also see a much weaker picture emerging for the current quarter, a view that is not shared by OPEC – at least not so far.Temporary factors, such as mild temperatures across the Northern Hemisphere and widespread flooding across the U.S. Midwest hit American oil consumption in the first four months of the year. But demand is expected to recover “on the back of growth in the petrochemical industry and with higher gasoline consumption,” according to the IEA.That expectation of stronger year-on-year demand growth in the second half of 2019 is the only thing holding up the full-year figures. The IEA has raised its forecast of demand growth in the fourth quarter to a heady 1.78 million barrels a day, from the 1.29 million it saw in January. The EIA, which shared the IEA’s view in January, now sees fourth-quarter demand growth at 1.59 million barrels a day. The strength is based, in part, on the mandatory switch to low sulfur bunker fuels for ships that comes into effect at the start of next year.The IEA also published its first forecast for 2020 this month. It makes uncomfortable reading for oil producers, showing that global oil inventories will build at an average rate of 650,000 barrels a day next year, even if the OPEC producers keep output at the current level. That figure is broadly in line with a 550,000 barrels a day build seen by the EIA, which has been publishing 2020 forecasts since January. OPEC will push its own assessments forward to 2020 in its July report. Its outlook may not be any rosier. To contact the author of this story: Julian Lee in London at email@example.comTo contact the editor responsible for this story: Alaric Nightingale at firstname.lastname@example.org, John DeaneFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Investing.com - Oil prices edged up on Wednesday in Asia following reports that OPEC and its allies are close to agreeing on a date for their next meeting.
Oil futures were mostly steady on Wednesday as price support from a larger-than-expected decline in U.S. crude inventories was countered by a lull in equities. After swelling to near two-year highs, U.S. crude stocks fell 3.1 million barrels last week, compared with analysts' expectations for a draw of 1.1 million barrels, the Energy Information Administration (EIA) said. Refined products also posted surprise drawdowns due to a rise in refining and crude exports, as well as a drop in crude production.