Europe is planning on recolonizing Libya, and so it will send in armed forces in the coming months to restore order and stem the flow of migrants coming from Africa. If this expedition army succeeds in securing parts of the country and restoring law and order, Italian and German engineers from ENI and Wintershall will follow suit to help resume the country’s oil production, which will add 1.3 million barrels per day (Libya produced 1.7 million barrels per day before Muammar Gaddafi was toppled in 2011) to the world oil glut . Continue reading
Oil and Gas
Last month we saw the iPath S&P GSCI Crude Oil ETN (USA) making an unusual dive, doing completely the opposite of what it was designed to do. Exchange Traded Funds (ETF) and Exchange Traded Notes (ETN) are mainly designed to follow an index. To explain the basic principles of an ETF real quick, we take the AEX index as an example. The AEX is formed out of 25 funds each with their own weighing. The ETF issuer buys the shares of the companies according to their weighing in the AEX index. One is able to track the index pretty accurately this way. The ETF issuer buys it on a big scale and sells shares of their basket of AEX shares. The share that they are selling are called ETFs. The difference between an ETF and an ETN is the fact that the ETN is a note. The problem is the third party risk, with an ETN you’re facing the risk of the issuing party going bankrupt. If they do, the chances are that you will lose your money. Continue reading
World oil consumption is more than 90 million barrels a day. Between 2009 and 2014 oil was traded for about 110 dollars a barrel; now oil is changing hands for 32 dollars a barrel. Roughly a 7-billion-dollar cash flow a day is vanishing from the global market. Norway’s sovereign wealth fund that has accumulated a stake of 4.5 billion dollars in Apple over the past years1, will turn from an Apple buyer into an Apple seller.
The China Development Bank (a Chinese policy bank) has poured nearly 50 billion dollars into Venezuela in return for oil, with the country now collapsing under the Chinese debt, having no other choice but to drill for more oil. These are just some of the challenges the world is facing in 2016 as oil prices are heading towards 20 dollars a barrel.
Speculators and manipulators were able to manipulate the oil price to more than 120 dollars a barrel, with the production cost being roughly between 20 and 80 dollars. With a huge profit margin the world was digging for more and more liquid gold. Continue reading
Oil price has collapsed and is not going to rebound quickly. But not all the oil-consumer countries benefit from low prices in the same way. And not all oil-producer countries suffer equally.
Oil prices change as the values of currencies do. Purchase or sale contracts for oil are usually long term ones, the price of oil in such contracts does not change very frequently. Fluctuating exchange rates of currencies are still enormously important for the economies. Oil for $40 per barrel does not mean that this barrel is also as cheap in all countries as consumers have to buy dollars in order to purchase a barrel. Or producers sell their barrels for dollars and then exchange these dollars for their own currency. The domestic price based on the exchange rate is not always stable. Continue reading
Ukraine does not plan any additional purchases of gas from Russia by the end of this year. The reversed flow from the EU and the falling consumption have allowed gas storage tanks to be filled up to 53 percent, from about 46 percent last year, according to Gas Infrastructure Europe data. Russia is losing its blackmailing-tool on Ukraine.
Source: Ukrtransgaz statictics
After many years of prosperity, the tough time has come for the US shale industry. Dramatic US oil production decline is inevitable and many shale companies face bankruptcy. Their assets can end up to larger producers, reinforcing market concentration. US energy independence can only be saved by government intervention. US government will remove exports limitation and FED September rate hike suspension is related to the unsustainable debt levels US oil industry is keeping afloat. But that is simply not enough to prevent a collapse of the US oil industry. From our research we learn that cost per barrel declined slightly but decreasing production cost is not enough to compensate for lower oil price. US oil production already declined 400K barrels per day from its April peak. We estimate an other 2 to 3 Million barrels can be wiped out the coming year.
A few months ago, when the oil price rise again before the June crush, the US oil industry seemed to be able to go through the difficult times. „It is too late for OPEC to stop the shale revolution”1, „OPEC can’t stop the shale industry”2 – roared the headlines. However, after last publications of Energy Information Administration (EIA) the OPEC and Saudi Arabia are the only one to triumph. Continue reading
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The United States and Germany reached an agreement on Wednesday on Russia’s Nord Stream 2 gas pipeline, ending a longstanding dispute between the allies, the Washington Post reported. Source Reuters
BP (BP.L) will continue producing hydrocarbons for decades to come and will benefit from rising oil prices even as it reduces output as part of its shift to low-carbon energy, Chief Executive Bernard Looney told Reuters on Tuesday. Source Reuters
Natural gas prices on European spot markets climbed to $360 per 1,000 cubic meters and continue growing on the back of high demand and low reserves in underground gas storages. The price is almost $100 above the February maximum, Gazprom told reporters on Wednesday. Source Tass
Russia’s Nord Stream 2 gas project will start preparations on Friday to fill the first of two pipelines with natural gas within a few months, the Gazprom-led project said on Thursday. Nord Stream 2, which runs on the bed of the Baltic Sea from Russia to Germany, bypassing Ukraine, has faced criticism from the United States, which says it will increase European reliance on Russian gas. Source Reuters
U.S. crude oil was $71.50 a barrel on Monday — its highest price since October 2018 — and Brent crude oil, the international benchmark, topped $73 a barrel.
Crude oil prices have risen steadily since the start of the year as businesses reopen and demand for air and auto travel bounces back. As of Monday, U.S. crude oil is about $23 a barrel more expensive than it was in January. Source MSN
Testing work on Russia’s Nord Stream 2 gas pipeline to Germany will start next week, Alexander Drozdenko, governor of the Leningrad region where the pipeline starts, was cited as saying by the TASS news agency on Wednesday. Source Reuters
Russia has outmaneuvered Kiev by overcoming Western objections to its Nord Stream 2 pipeline, Ukraine’s President Volodymyr Zelensky has said, warning that Moscow could cut his country off from energy supplies once it is complete.
The politician made the claims in an interview with Germany’s Frankfurter Allgemeine Zeitung, published on Monday. He claimed that the pipeline, which will link Siberian gas fields to consumers in Western Europe by means of a conduit under the Baltic Sea, was a “trump card” for Moscow. Now, he claimed, the Kremlin has a “royal flush” because it was supported by leaders in countries like Germany and France. Source RT
The US has partly lifted sanctions on a controversial gas pipeline in a bid to mend relations with Germany and Russia. Source Euobserver
The Biden administration will waive sanctions on the company behind Russia’s Nord Stream 2 pipeline to Europe and its chief executive, a source tells Reuters news agency. Source Aljazeera
Around 100 km of the subsea Nord Stream 2 gas pipeline from Russia to Germany are left to lay, Russia’s ambassador to Germany, Sergei Nechayev, said May 8. In an interview with German media outlet RND, Nechayev also said he was hopeful the pipeline would be completed before the upcoming German election on Sept. 26. Source S & P Global
Already rising ahead of the summer travel season, U.S. gasoline prices could soon approach $3 a gallon depending on how long a major pipeline remains out of commission after a ransomware attack. “AAA forecasts gas prices to climb this week in reaction to the shutdown,” the auto club said on Monday. Source CBS News
A second Russian vessel has now begun laying the almost-complete Nord Stream 2 gas pipeline in Danish waters, the pipeline development company said April 27, in a move likely to accelerate the final work on the Russia-Germany link. The Adakemik Cherskiy — which has dynamic positioning capabilities allowing for speedier pipelaying — has joined the Fortuna pipelayer carrying out work south of the Danish island of Bornholm in the country’s Exclusive Economic Zone (EEZ). Source S & P Global
The Chancellor stressed that Germany had always advocated for Ukraine to remain a transit country in the export of gas from Russia to the European Union Source Tass
The Russian Akademik Cherskiy vessel has arrived at the construction site to lay pipes for the Nord Stream 2 gas pipeline project, Nord Stream 2 AG, project operator company, told reporters. Source Tass
The US State Department called for companies to cease activity on the controversial pipeline or face sanctions. The US has slammed the project as a Russian plan to “divide Europe and weaken European energy security.” Source Deutsche Welle
A second Russian pipelaying vessel is set to join the operation to lay the almost-complete Nord Stream 2 gas pipeline from Russia to Germany in Danish waters, the pipeline development company said March 4. Source S & P Global
Exxon Mobil erased almost every drop of oil-sands crude from its books in a sweeping revision of worldwide reserves to depths never before seen in the company’s modern history.
Exxon counted the equivalent of 15.2 billion barrels of reserves as of Dec. 31, down from 22.44 billion a year earlier, according to a regulatory filing on Wednesday. The company’s reserves of the dense, heavy crude extracted from Western Canada’s sandy bogs dropped by 98%. Source World OIl
German construction and engineering group Bilfinger has withdrawn from work related to the construction of the Nord Stream 2 gas pipeline, German tabloid Bild reported, citing letters it has obtained. Source World Pipelines
Less than a month after a senior politician in Paris asked Germany to put a stop to the controversial Nord Stream 2 pipeline, energy giant Gazprom has revealed that France has bought 43 percent more Russian gas so far this year. The latest financial report from the country’s largest company divulged that France’s underground gas storage facilities are less than 30 percent full. Source RT
Russia’s Gazprom said Feb. 1 its gas sales in Europe and Turkey rose to their highest ever level for the month of January, reaching 19.4 Bcm. European gas demand last month was buoyed by cold weather across the continent, with several countries seeing extremely low temperatures during the month. Source S & P Global
Pars will not put pressure on Berlin to change its plans for the Nord Stream 2 Pipeline, the French foreign minister said. Previously, a junior French minister said Europe should consider stopping the project. Source DW.com
France has urged Germany to scrap a major gas pipeline project — Nord Stream 2 — with Russia. EU members are considering sanctions over the detention of Alexei Navalny and a crackdown against his supporters. Source France24
Russian oil drilling giant Gazprom Neft opened a crypto mining farm running on associated gas energy unlocking the power of Russia’s oil and gas resources for the needs of bitcoin (BTC) mining, reports Yahoo Finance. The venue for cryptocurrency mining is on one of the company’s oil drilling sites in the Khanty-Mansi Autonomous Okrug in Siberia. It is using the associated gas from Gazprom Neft’s oil field as an energy source and has its own power plant to transform this gas into electricity. Source Realnoevremya
Russian natural gas transported to China via the Power of Siberia pipeline touched 28.8 million cubic metres per day, as of Jan. 3, to feed homes and factories as northern China faces frigid weather conditions, national oil and gas pipeline giant PipeChina said. Source Business Recorder
