Australia to lead global LNG market, Paris-based energy agency says.
By Daniel J. Graeber | June 11, 2014 at 10:15 AM | 0 Comments (Leave a comment)
PARIS, June 11 (UPI) --The United States and Canada will account for about 8 percent of the global liquefied natural gas market by 2019, the International Energy Agency said.
"While demand growth is driven by the Asia-Pacific region, and especially China, supply growth for the international gas trade is dominated by private investments in LNG in Australia and North America," IEA Executive Director Maria van der Hoeven said Tuesday.
Global demand for natural gas is expected to increase by more than 2 percent by the end of this year. By 2019, LNG, a super-cooled form of gas, will meet about 40 percent of world's demand.
Australia, van der Hoeven said, is expected to account for half of the new LNG exports expected on the international market by 2019, with the United States and Canada combining to represent 8 percent of the market.
LNG is less constricted by the geopolitical issues that may influence pipeline deliveries. Van der Hoeven sand LNG provides benefits in terms of energy security, but without investments, coal could dominate the energy mix of growing economies in Asia.
"Unless we see timely investment in new production and LNG facilities and the reversal of the recent cost inflation of LNG, only a very strong climate policy commitment could redirect Asia's coal investment wave to gas," she said.
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By Lananh Nguyen Jun 13, 2014 3:00 PM GMT+0700
The Islamist insurgency in Iraq highlights the risks to oil supply from a nation forecast to provide about 60 percent of OPEC’s output growth in the rest of this decade, the International Energy Agency said.
Iraqi Oil Minister Abdul Kareem al-Luaibi speculated yesterday that U.S. planes may bomb his nation’s north as militants linked to al-Qaeda, who captured the city of Mosul this week, moved south toward Baghdad. The country’s crude output capacity will increase by more than 1.2 million barrels a day in the six years through 2019, the Paris-based IEA estimated in its monthly oil market report today.
“While Iraq’s production potential is huge, so are the political hurdles it is facing – and nothing provides a clearer example of that risk than the military campaign,” the IEA said. “Concerning as the latest events in Iraq may be, they might not for now, if the conflict does not spread further, put additional Iraqi oil supplies immediately at risk.”
Benchmark North Sea crude rallied to an nine-month high as violence escalated in Iraq, the second-largest producer in the Organization of Petroleum Exporting Countries. The 12-member group, which supplies about 40 percent of the world’s oil, kept its production target unchanged at a meeting in Vienna this week.
Brent futures for July delivery climbed as much as 1.5 percent to $114.69 a barrel in London on the ICE Futures Europe exchange. That’s the highest since Sept. 9. It traded at $114.59 as of 8:49 a.m. in London.
OPEC Call
OPEC pumped 29.99 million barrels of crude a day in May, up from 29.91 million in April, according to the IEA. Of that, Iraqi crude output accounted for 3.37 million barrels a day versus 3.32 million the previous month.
Demand for OPEC’s crude will rise to 30.9 million barrels a day in the second half of this year, an increase of 150,000 barrels a day from the IEA’s estimate last month.
Worldwide oil consumption will increase 1.3 million barrels a day, or 1.5 percent, to 92.8 million barrels a day this year. Supplies from outside of OPEC are projected to climb to 56.2 million barrels a day. Both forecasts are little changed from last month.
The report was shorter than normal because the agency is publishing its annual medium-term oil market report on June 17.
To contact the reporter on this story: Lananh Nguyen in London at lnguyen35@bloomberg.net
To contact the editors responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net James Herron
By Sarah Kent
LONDON--The International Energy Agency said Friday Iraqi oil supplies aren't at immediate risk, though the return of oil exports from the country's north look increasingly elusive.
The oil market has been focused on events in Iraq since Islamist militants seized control of the northern city of Mosul Tuesday. Crude prices shot higher this week, climbing to their highest level since September as news emerged that the militants had made rapid gains across northern Iraq, raising concerns about oil supply.
Iraqi oil supply is crucial to meeting growing global oil demand in the coming years, with the IEA predicting roughly 60% of the growth in oil production capacity from the Organization of the Petroleum Exporting Countries in the next decade will come from Iraq.
However, in its closely watched oil market report, the IEA said that provided the conflict in Iraq doesn't spread further, it is unlikely to put additional oil supplies at risk.
Iraq hasn't exported any oil from its north since March due to repeated attacks on its pipeline to Turkey, but the bulk of its oil production is concentrated in the far south of the country and has been on the rise in recent months.
The turmoil in Iraq adds to the challenges already facing OPEC as it contends with chronic supply disruptions in several of its members. Political unrest in Libya has cut the country's oil output to a fraction of its pre-civil war levels and Iranian output remains constrained by western sanctions.
Until now, the supply disruptions have been offset by record growth in non-OPEC supply, but the IEA said pressure on OPEC to pump more oil will ratchet up in the second half of the year.
The Paris-based energy watchdog increased its forecast for the demand for OPEC's oil in the second half of the year by 150,000 barrels a day to 30.9 million barrels a day, nearly 1 million barrels a day more than the oil cartel produced in May.
In its semi-annual meeting in Vienna earlier this week, the producer group elected to keep its oil output quota unchanged at 30 million barrels a day.
Write to Sarah Kent at Sarah.Kent@wsj.com
By Dow Jones Business News, June 13, 2014, 04:25:00 AM EDT
LONDON--The International Energy Agency said Friday Iraqi oil supplies aren't at immediate risk, though the return of oil exports from the country's north look increasingly elusive.
The oil market has been focused on events in Iraq since Islamist militants seized control of the northern city of Mosul Tuesday. Crude prices shot higher this week, climbing to their highest level since September as news emerged that the militants had made rapid gains across northern Iraq, raising concerns about oil supply.
Iraqi oil supply is crucial to meeting growing global oil demand in the coming years, with the IEA predicting roughly 60% of the growth in oil production capacity from the Organization of the Petroleum Exporting Countries in the next decade will come from Iraq.
However, in its closely watched oil market report, the IEA said that provided the conflict in Iraq doesn't spread further, it is unlikely to put additional oil supplies at risk.
Iraq hasn't exported any oil from its north since March due to repeated attacks on its pipeline to Turkey, but the bulk of its oil production is concentrated in the far south of the country and has been on the rise in recent months.
The turmoil in Iraq adds to the challenges already facing OPEC as it contends with chronic supply disruptions in several of its members. Political unrest in Libya has cut the country's oil output to a fraction of its pre-civil war levels and Iranian output remains constrained by western sanctions.
Until now, the supply disruptions have been offset by record growth in non-OPEC supply, but the IEA said pressure on OPEC to pump more oil will ratchet up in the second half of the year.
The Paris-based energy watchdog increased its forecast for the demand for OPEC's oil in the second half of the year by 150,000 barrels a day to 30.9 million barrels a day, nearly 1 million barrels a day more than the oil cartel produced in May.
In its semi-annual meeting in Vienna earlier this week, the producer group elected to keep its oil output quota unchanged at 30 million barrels a day.
Write to Sarah Kent at Sarah.Kent@wsj.com
06-13-140425ET
Copyright (c) 2014 Dow Jones & Company, Inc.
A file picture taken on February 7, 2012 shows pipes being put in place as the land is cleared from mines laid down during the Iraq-Iran war 1980-1988, in the massive Majnoon oil field.
A file picture taken on February 7, 2012 shows pipes being put in place as the land is cleared from mines laid down during the Iraq-Iran war 1980-1988, in the massive Majnoon oil field. AFP Photo
A lightning advance by jihadists across northern Iraq has rekindled concern on oil markets, but the IEA cautioned June 13 that supplies from leading exporter Iraq may not be at immediate risk.
In the past week militants have swept across northern Iraq and were closing in on the capital Baghdad, sparking fears that OPEC's number two producer could be hit and sending oil prices to their highest levels of the year.
"Concerning as the latest events in Iraq may be, they might not for now, if the conflict does not spread further, put additional Iraqi oil supplies immediately at risk," the Paris-based International Energy Agency said on a cautionary note in its monthly oil market report.
It pointed out that Iraq's relatively small output from the north of the country has been off the market since March due to violence while output from the south has been on the rise and production has hit a 30-year high. However the IEA, the energy monitoring and policy arm of the OECD group of advanced nations, pointed to the long-term importance of Iraq for the global energy market.
It calculated that "roughly 60 percent of the growth in OPEC crude production capacity for the rest of this decade will come from Iraq."
The 12-nation oil cartel, which supplies one third of the world's crude, earlier this week decided to hold their collective production target at 30 million barrels per day (bpd), where it has stood since late 2011, as they said the oil market was stable. Oil producing nations have expressed their satisfaction with oil prices slightly above $100 a barrel - where they have been for most of this year - as it brings them in sufficient revenue while not crimping growth in consuming nations.
But oil prices rose to nine-month highs in Asian trading on June 13 as militants closed in on Iraq's capital Baghdad, with Brent North Sea crude gaining 28 cents to $113.30 per barrel after shooting up $3.07 in London trade on June 12. U.S. benchmark West Texas Intermediate advanced 47 cents to $107.00 in afternoon trade after surging $2.13 in New York on Thursday to reach its highest level since September.
The IEA put Iraq's daily oil production in May at 3.37 million barrels per day, up from 3.32 mbd in April.
That put it behind Saudia Arabia at 9.75 mbd, and which has spare capacity estimated at 3.31 mbd which could be used to calm markets in case supplies are cut off elsewhere. OPEC-member Libya has been rocked by violence that has slashed the North African nation's output to less than 100,000 barrels per day in early June according to the IEA, down from output of 1.4 mbd one year ago.
Overall OPEC supplies edged up to 29.99 mbd in May. The IEA also noted that the stability in oil markets has been due to record gains in non-OPEC output.
"Perception of heightened political risk in North Africa and the Middle East and chronic disruptions in Libyan exports have been a feature of the market for some time, but so far have been largely offset by record growth in non-OPEC supply," it said.
The IEA said global supplies rose by 530,000 barrels per day in May, to 92.6 mbd, mostly due to increases in non-OPEC output. It kept its global oil demand forecast at a rise of 1.3 mbd in 2014 to 92.8 mbd
June/13/2014
Global oil output up 1 million barrels, agency says.
By Daniel J. Graeber | June 13, 2014 at 9:34 AM | 0 Comments (Leave a comment)
http://cdn.ph.upi.com/sv/em/upi/UPI-7791402665542/2014/1/7c1dc75e90f115c50008aa28adcbb55c/Non-OPEC-production-gaining-IEA-says.jpg
New oil coming largely from producers outside OPEC, International Energy Agency says. UPI/Gary C. Caskey
PARIS, June 13 (UPI) --The Paris-based International Energy Agency said Friday global oil supplies rose largely because of output from countries outside of OPEC.
The IEA said in its market report for June global oil supplies rose 530,000 barrels per day to 92.6 million bpd. The increase was due to production from countries outside the Organization of Petroleum Exporting Countries.
"On a yearly basis, world output was up 1.0 million for [May], as non
OPEC members are reacting to production from the United States and Canada. The United States in particular is importing less oil as it relies more on domestic supplies.
On the demand side, IEA said it expected a modest increase this year to 92.8 million bpd as the global economy continues to move past recession.
"Global oil demand is set to increase sharply from a low of 91.4 million bpd in the first quarter to a high of 94 million bpd in the fourth [quarter]," IEA said.
OPEC in its monthly report for June said the global oil market should be well-supplied.
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© 2014 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
Jun 13 2014 16:40
Paris - A lightning advance by jihadists across northern Iraq has rekindled concern on oil markets, but the International Energy Agency (IEA) cautioned on Friday that supplies from leading exporter Iraq may not be at immediate risk.
In the past week militants have swept across northern Iraq and were closing in on the capital Baghdad, sparking fears that the organization of the petroleum exporting Countries (Opec) number two producer could be hit and sending oil prices to their highest levels of the year.
"Concerning as the latest events in Iraq may be, they might not for now, if the conflict does not spread further, put additional Iraqi oil supplies immediately at risk," the Paris-based IEA said on a cautionary note in its monthly oil market report.
It pointed out that Iraq's relatively small output from the north of the country has been off the market since March due to violence while output from the south has been on the rise and production has hit a 30-year high.
However the IEA, the energy monitoring and policy arm of the OECD group of advanced nations, pointed to the long-term importance of Iraq for the global energy market.
It calculated that "roughly 60% of the growth in Opec crude production capacity for the rest of this decade will come from Iraq."
The 12-nation oil cartel, which supplies one third of the world's crude, earlier this week decided to hold their collective production target at 30 million barrels per day (bpd), where it has stood since late 2011, as they said the oil market was stable.
Oil producing nations have expressed their satisfaction with oil prices slightly above $100 a barrel - where they have been for most of this year - as it brings them in sufficient revenue while not crimping growth in consuming nations.
But oil prices rose to nine-month highs in Asian trading on Friday as militants closed in on Iraq's capital Baghdad, with Brent North Sea crude gaining 28 cents to $113.30 per barrel after shooting up $3.07 in London trade on Thursday.
US benchmark West Texas Intermediate advanced 47c to $107.00 in afternoon trade after surging $2.13 in New York on Thursday to reach its highest level since September.
China imports jump
The IEA put Iraq's daily oil production in May at 3.37 million barrels per day, up from 3.32 mbd in April.
That put it behind Saudia Arabia at 9.75 mbd, and which has spare capacity estimated at 3.31 mbd which could be used to calm markets in case supplies are cut off elsewhere.
Opec-member Libya has been rocked by violence that has slashed the North African nation's output to less than 100 000 barrels per day in early June according to the IEA, down from output of 1.4 mbd one year ago.
Overall Opec supplies edged up to 29.99 mbd in May.
The IEA also noted that the stability in oil markets has been due to record gains in non-Opec output.
"Perception of heightened political risk in North Africa and the Middle East and chronic disruptions in Libyan exports have been a feature of the market for some time, but so far have been largely offset by record growth in non-Opec supply," it said.
The IEA said global supplies rose by 530 000 barrels per day in May, to 92.6 mbd, mostly due to increases in non-OPEC output.
It kept its global oil demand forecast at a rise of 1.3 mbd in 2014 to 92.8 mbd.
The IEA also pointed to a surge in imports by China, likely for expanding the country's strategic reserves, as supporting oil prices.
The additional crude demand of up to 1.2 mbd in April and May, was roughly equivalent to the current losses in Libyan production, the IEA noted.
London, 1 days ago
The Organisation for Petroleum Exporting Countries (Opec) will have to produce a million barrels per day (bpd) more oil on average in the second half of 2014 to balance the global market, which will see a steep seasonal spike in demand, the West's energy agency said.
The International Energy Agency said in its monthly report it had raised its estimate of the demand for Opec crude oil in the second half of this year by 150,000 bpd from its forecast last month to an average of 30.9 million bpd.
That is almost a million bpd day more than the group was producing in May, when its production rose by 85,000 bpd to 29.99 million bpd on the back of Saudi production increases offsetting declines in Libya.
Earlier this week Opec agreed to keep its output targets unchanged until the next meeting in November at 30 million bpd.
The IEA said it was keeping its global oil demand growth forecast broadly unchanged from last month at 1.3 million bpd for 2014.
But the agency added that it expected a seasonal spike in demand to drive global oil use to a peak 94 million bpd in the fourth quarter of the year from a low of 91.4 million bpd in the first quarter.
"The loss of supplies from Iraq and Libya, where volumes have fallen below 100,000 bpd in early June from 1.4 million bpd a year ago, have combined to shift market attention to Saudi Arabia, the group's largest holder of spare capacity and widely acknowledged as the reliable 'central banker' of the oil market," the IEA said.
"'Effective' spare capacity was estimated at 3.31 million bpd, with Saudi Arabia holding 80 percent of the surplus volumes," it added.
The Saudi supply cushion is becoming particularly important as unrest mounts in Iraq, Opec's second largest producer.
But the IEA downplayed concerns over the possible loss of oil supply from Iraq, where insurgents have taken several towns and cities this week.
"Concerning as the latest events in Iraq may be, they might not for now, if the conflict does not spread further, put additional Iraqi oil supplies immediately at risk," the IEA said.
The agency said it did not believe supplies along the Kirkuk crude oil pipeline to the Mediterranean would return to the market any time soon after being disrupted since early March. However, much larger supplies from the south of Iraq from the Gulf were probably safe for now, it said.
By Mark Shenk Jun 16, 2014 12:27 AM GMT+0700
Brent crude was projected by Wall Street analysts to average as much as $116 a barrel by the end of the year. Now, with violence escalating in Iraq, how far the price will rise has become anyone’s guess.
The international benchmark surged above $114 on June 13 for the first time in nine months as militants routed the Iraqi army in the north and advanced toward Baghdad, threatening to ignite a civil war. The Islamic State in Iraq and the Levant, known as ISIL, has halted repairs to the pipeline from the Kirkuk oil field to the Mediterranean port of Ceyhan in Turkey.
The conflict threatens output in OPEC’s second-biggest crude producer. The Persian Gulf country is forecast to provide 60 percent of the group’s growth for the rest of this decade, the International Energy Agency said June 13. Global consumption will “increase sharply” in the last quarter of this year and OPEC will need to pump more oil to help meet the demand, according to forecasts from the Paris-based IEA.
“We’ve been waiting for the other shoe to drop in this tightly balanced market and now it’s happened,” Katherine Spector, a commodities strategist at CIBC World Markets Inc. in New York, said June 13 by phone. “There have been lurking risks but nobody was projecting how quickly things would turn worse.”
Rising Prices
Brent for July settlement increased 39 cents to $113.41 a barrel on the London-based ICE Futures Europe exchange on June 13, the highest close since Sept. 9. Vikas Dwivedi of Macquarie Group Ltd. predicts Brent will average $116 in the fourth quarter. He was the best forecaster of Brent prices in the first quarter, according to Bloomberg Rankings.
West Texas Intermediate crude, the U.S. benchmark, rose 38 cents to $106.91 on the New York Mercantile Exchange, the most since Sept. 18. U.S. regular gasoline at the pump rose 0.8 cent to an average of $3.657 a gallon on June 13, the third consecutive daily gain, according to AAA in Heathrow, Florida, the largest American motoring group.
Oil-price volatility rebounded from the lowest on record as the violence escalated in Iraq. The 20-day historical volatility of Brent futures rose as high as 13 percent on June 12, according to exchange data compiled by Bloomberg. It was at 7.2 percent on June 3, the least since the contract began trading in 1988. The volatility is a reflection of market uncertainty, according to Olivier Jakob, managing director of Switzerland-based researcher Petromatrix GmbH.
Market Movements
“The market is going to be whipsawed by headlines from Iraq,” Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said June 13 by phone. “If there’s shooting on the streets of Baghdad, we’ll get a spike in prices, but I don’t see WTI passing $120.”
ISIL has control of the pipeline to the 310,000 barrel-a-day Baiji refinery, the country’s biggest. The insurgents also took Mosul, the country’s second-largest city. Kurdish forces moved into
Kirkuk to protect the northern oil fields from the militants. The main pipeline from that field to Turkey hasn’t operated since early March because of attacks.
The fighting hasn’t spread to the south, which the U.S. Energy Information Administration says is home to three-quarters of Iraq’s crude output. The country’s three biggest oilfields -- Rumaila, West Qurna-2 and Majnoon -- lie in the south, and crude production there has been increasing. The region has a Shiite majority opposed to ISIL’s Sunni militants.
Export Impact
“The immediate impact on Iraq’s crude oil exports is limited for now as the conflict in northern and western Iraq is far from the southern -- and Shiite-controlled -- oilfields and export terminals from where all current oil exports originate,” Goldman Sachs Group Inc. analysts Damien Courvalin, Anamaria Pieschacon and Jeffrey Currie said in a report received by e-mail yesterday and dated June 13.
If the conflict reached the southern oil fields and the port of Basra, it would “likely have a significant impact on crude prices given current supply disruption in other OPEC members, in particular Libya,” the Goldman analysts said.
Iraq’s armed forces have attacked positions held by Sunni Muslim militants to try to halt their advance, while Prime Minister Nouri al-Maliki deployed the air force to defend his Shiite-led government.
U.S. Carrier
The U.S. has dispatched an aircraft carrier to the Persian Gulf as President Barack Obama weighs options to help Maliki repel ISIL attacks. The U.S. withdrew its forces from Iraq in 2011. Obama said on June 13 that the conflict can’t be resolved unless Iraq’s leaders bridge political differences.
Iraqi crude output capacity will increase by more than 1.2 million barrels a day in the six years through 2019, the IEA estimated. Production rose to 3.3 million barrels a day last month, according to data compiled by Bloomberg. Output surged to 3.4 million in February, the highest level since 2000. Neighboring Saudi Arabia had 2.83 million barrels of spare production capacity in May.
“A disruption of Iraqi supply would represent a global energy crisis,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone on June 13. “This isn’t hyperbole.”
The increase in concern about Iraqi supply comes as fighting in Libya has curbed production in the North African country, international sanctions against Iran for its nuclear program have cut its exports and sabotage reduced the flow of Nigerian barrels.
Libyan Output
Libyan output fell by 35,000 barrels a day to 180,000 in May, the lowest level since September 2011. Production was down 87 percent from a year earlier.
“The roughly 3 million barrels a day that Iraq is producing accounts for about 10 percent of OPEC’s overall production,” Kilduff said. “The Libyan outage and the up and down in Nigerian output leave OPEC with limited spare capacity. Saudi Arabia can’t make up for a loss of Iraq.”
The 12-member Organization of Petroleum Exporting Countries, which supplies about 40 percent of the world’s oil, kept its production target unchanged at 30 million barrels a day when ministers gathered in Vienna last week.
The conflict has the potential to push U.S. crude and gasoline prices higher, Andy Lipow, president of Lipow Oil Associates LLC in Houston, said by phone yesterday.
Retail Prices
“Given the current unrest in Iraq, I expect oil prices to reach $110 here for WTI, which would mean that the national average would go towards $3.80 for gasoline,” he said. “Should we see a significant supply disruption in exports, then I expect oil prices to go to $125 and the national retail average to exceed $4 a gallon.”
It’s been almost six years since U.S. retail gasoline averaged more than $4 per gallon, in the week of July 21, 2008, according to data from the EIA.
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net
To contact the editors responsible for this story: Dan Stets at dstets@bloomberg.net Bill Banker
Oil Volatility Rebounds From Record Low as Iraq Violence Worsens
By Lananh Nguyen Jun 13, 2014 9:53 PM GMT+0700
Oil-price volatility rebounded from the lowest on record as violence escalated in Iraq, the second-largest crude producer among the Organization of Petroleum Exporting Countries.
The 20-day historical volatility of Brent crude futures rose as high as 13 percent yesterday, according to exchange data compiled by Bloomberg. It fell to 7.2 percent on June 3, the lowest since the contract began trading in 1988. Islamist fighters extended their advance in Iraq, entering two northeast towns as government forces failed to halt an offensive that triggered concern over a civil war and prompted the U.S. not to rule out airstrikes.
“Volatility is a reflection of uncertainty,” Olivier Jakob, managing director of Switzerland-based researcher Petromatrix GmbH, said by phone today. “Up until last Friday, we were in a period where uncertainty in the market was low. Libya was out, and we knew, and nobody was expecting it to come back quickly. The market was pretty well supplied. This week we are back to having some uncertainty” because of Iraq.
North Sea Brent crude rallied to a nine-month high today as the unrest worsened in Iraq. The violence highlights the risk to production in a nation that’s forecast to provide about 60 percent of output growth among OPEC members, according to the International Energy Agency in Paris.
Fighters from a militant group known as the Islamic State in Iraq and the Levant, or ISIL, took over the nation’s western city Mosul and moved south toward Baghdad.
North of Baghdad
Iraqi Oil Minister Abdul Kareem al-Luaibi speculated yesterday that U.S. planes may bomb the country’s north as Islamist fighters battle for control of Tikrit, about 80 miles north of Baghdad.
“It’s fair to say that, in our consultations with the Iraqis, there will be some short-term, immediate things that need to be done militarily,” U.S. President Barack Obama said yesterday. He is under increased pressure to launch airstrikes to support Iraq’s army amid ISIL’s rapid advance.
“The recent spike in oil commodities has to do with Iraq,” Hakan Kocayusufpasaoglu, chief investment officer at Archbridge Capital AG, a Zug, Switzerland-based hedge fund, said by phone. Any reduction in Iraqi supply would mean more demand for Saudi oil, a curtailment of spare capacity and increased volatility, he said.
Implied volatility, used to gauge the cost of options, increased to 16.3 percent on June 9, the highest since May 6, according to data compiled by Bloomberg. The Chicago Board Options Exchange’s crude oil volatility index rose to 31 percent to 19.17 yesterday, the biggest gain since
To contact the reporter on this story: Lananh Nguyen in London at lnguyen35@bloomberg.net
To contact the editors responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net Rachel Graham
By Nidaa Bakhsh Jun 13, 2014 11:23 PM GMT+0700
Gulf Keystone Petroleum Ltd. (GKP), an oil producer in Iraq’s Kurdistan region, gained the most in two weeks after saying production from its key asset was proceeding as planned.
The company advanced 1.9 percent to 81.5 pence at the close in London. That’s the biggest gain since May 30, valuing the company at 724 million pounds ($1.2 billion).
Gulf Keystone expects production from Shaikan to rise to 40,000 barrels of oil a day by the end of the year, the Hamilton, Bermuda-based company said today in a statement. The shares had lost 14 percent this week through yesterday, amid concern violent unrest in Iraq could spread toward the region.
The company’s operations “are progressing in line with our previous guidance, whilst we remain alert to the current security situation in Iraq, which has recently escalated outside the Kurdistan region,” Todd Kozel, chief executive officer, said in the statement.
Eight cargoes have so far been sold into the international market, it said.
To contact the reporter on this story: Nidaa Bakhsh in London at nbakhsh@bloomberg.net
To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net Alex Devine, Reed Landberg
By Joe Carroll Jun 14, 2014 12:21 AM GMT+0700
Chevron Corp., the world’s third-largest energy producer by market value, sold its stakes in an African oilfield and pipeline for $1.3 billion.
Chevron sold a 25 percent stake in an oil concession in southern Chad that produced about 18,000 barrels of crude daily, the San Ramon, California-based company said in a statement today. That equated to less than 1 percent of Chevron’s worldwide output last year, according to data compiled by Bloomberg.
The transaction also involved divestiture of Chevron’s interest in a pipeline that connects the Chadian oilfield to a port on Cameroon’s coast.
To contact the reporter on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net
To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net
By Matthew Monks Jun 14, 2014 11:01 AM GMT+0700
Williams Cos. (WMB) is in advanced talks to buy control of Access Midstream Partners LP (ACMP) for about $3 billion, according to people with knowledge of the matter, in a move to boost growth for the fourth-largest U.S. pipeline firm.
Williams would buy the stake from Global Infrastructure Partners, which owns almost one-third of Access Midstream as well as half of its general partner, the people said, asking not to be identified discussing private information. An agreement could be announced as soon as next week, the people said.
The deal is intended to accelerate Williams’ expansion prospects, four months after the company avoided a potential proxy fight by giving board seats to activist investors Keith Meister and Eric Mandelblatt, who had urged it to consider “strategic combinations.”
In 2012, Williams bought about 25 percent of Tulsa, Oklahoma-based Access and half of its general partner -- called Access Midstream Partners GP LLC. The latest deal would have it buying the other 50 percent of the general partner, which manages Access’s operations, determining how it will borrow and invest, among other things, the people said.
Access, with a market capitalization of about $13.2 billion, provides oil and natural gas gathering services to Chesapeake Energy Corp., Anadarko Petroleum Corp. and other major exploration companies, according to its 2013 annual report. Its shares are up about 16 percent this year.
MLP Structure
Jack Cowell, a spokesman for Global Infrastructure Partners and Chris Callahan, a spokesman for Access Midstream, declined to comment. Tom Droege, a spokesman for Williams, didn’t respond to phone or e-mail messages seeking comment.
Access is structured as a master-limited partnership, so it pays no federal income taxes as long as it pays out most of its cash to shareholders. The stake in Access’s general partner means Williams is entitled to an increasing share of cash flow as it grows and can collect dividends on the partnership’s common units.
In addition to its stake in the closely held general partner, Global Infrastructure owns more than 31 percent of Access -- including Class B shares -- according to Access’s annual report.
To contact the reporter on this story: Matthew Monks in New York at mmonks1@bloomberg.net
To contact the editors responsible for this story: Mohammed Hadi at mhadi1@bloomberg.net Ben Livesey
By Daryna Krasnolutska, Volodymyr Verbyany and Ewa Krukowska Jun 15, 2014 7:55 PM GMT+0700
Negotiators in Kiev will attempt to revive talks to avert a Russian gas shutoff tomorrow as Ukraine observes a day of mourning for 49 people killed in the country’s worst military loss in the months-long conflict.
Russia, Ukraine and the European Union may resume talks this evening, Ukrainian Energy Minister Yuri Prodan told reporters today before holding consultations with the EU. Ukraine hasn’t changed its position in talks with Russia, which could turn off fuel supplies tomorrow at 10 a.m. Moscow time without a deal.
The showdown over fuel heaps pressure on Ukraine’s new president, Petro Poroshenko, who’s struggling to fulfill an election pledge to halt an uprising by rebels in the country’s eastern regions. Russia and Ukraine are trading accusations over yesterday’s attack on a military plane near Luhansk and an attack on the Russian Embassy in Kiev, damaging the prospects for a breakthrough in the gas talks.
“I’m not optimistic about the talks at all,” Dmytro Marunich, co-chairman of the Energy Strategies Fund research institute, said today by telephone from Kiev. “In the best case scenario, the sides will agree on temporary terms of cooperation between Naftogaz and Gazprom with some guarantees on stable transit to the EU while the case is heard in Stockholm arbitration.”Mourning Attack
Poroshenko declared a day of mourning in a statement yesterday, vowing to punish the people behind the “terrorist” attack. U.K. Foreign Secretary William Hague condemned the downing of the plane, saying it “underlines once again the urgency and importance of Russia taking further measures to prevent the escalation of violence.”
The incident came after the U.S. State Department said Russia sent heavy weapons, including old-model tanks and rocket launchers, to the rebels, who say they are fighting a war against fascism and to join Russia.
Ukraine has intensified an offensive against the insurgents since it battled a rebel convoy of armored vehicles two days ago, including the first reported separatist tanks. NATO warned that reports of an armored column entering from Russia would mark a “serious escalation” in the conflict.
Protesters gathered near the Russian Embassy in Kiev yesterday, demanding Russia stop sponsoring the rebels. Demonstrators threw firecrackers and eggs, broke some of the building’s windows with stones, and turned over and torched at least three embassy cars.
Putin Call
German Chancellor Angela Merkel, French President Francois Hollande and Russian President Vladimir Putin discussed the crisis and gas supplies before the talks started yesterday, according to presidential offices in Paris and Moscow. Russian Foreign Minister Sergei Lavrov followed up with his German and French counterparts in phone calls today, the ministry said on its website.
EU Energy Commissioner Guenther Oettinger is attempting to broker a deal in Kiev after talks in Brussels last week led to Russia pushing back its deadline from June 10. The EU is dependent on Russian gas piped through Ukraine for about 15 percent of its supplies.
Ukrainian Prime Minister Arseniy Yatsenyuk instructed authorities on June 13 to prepare for a gas cutoff once OAO Gazprom’s debt payment deadline tomorrow expires. By then, Ukraine must pay $1.95 billion to partially cover its debt for past supplies, according to Gazprom.
Gas Price
Ukraine refused to pay after Russia raised the price of the fuel by 81 percent in April. Putin stripped the country of a 2010 export-duty break that it exchanged for a lease on its Black Sea Fleet’s port in Crimea, which Russia annexed in March. Gazprom rescinded a price discount granted to Ukraine in December, citing mounting debt.
The gas conflict reflects the broader political crisis between two former Soviet partners as Russia took Crimea after Ukraine’s Kremlin-backed president was ousted in street protests in February. Ukraine, along with the U.S and the EU, accuses Russia of stoking turmoil in Ukraine by supporting pro-Russian separatists, including supplying them with weapons.
Russia has denied providing such support, while urging Ukraine’s new government to do more to protect the rights of Russian speakers in the country.
Three separatists were killed and two others captured when they tried to break through a checkpoint near Slovyansk in eastern Ukraine, the country’s National Guard said in a website statement. That follows the death of five border guards yesterday in an attack on a convoy near the coastal town of Mariupol.
Ukraine’s hryvnia, this year’s worst-performing currency against the dollar with a 30 percent plunge, fell 0.2 percent last week in Kiev, data compiled by Bloomberg showed. The ruble was little changed.
To contact the reporters on this story: Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net; Volodymyr Verbyany in Kiev at vverbyany1@bloomberg.net; Ewa Krukowska in Brussels at ekrukowska@bloomberg.net
To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net; Andrew J. Barden at barden@bloomberg.net Scott Rose, Andrew J. Barden
Tripoli, 16 hours, 13 minutes ago
Libya's western El Feel oilfield has resumed production after security guards ended a protest at a connecting pipeline, an oil ministry official said on Sunday.
Production will reach 80,000 barrels a day within 24 hours, said Ibrahim Al-Awami, head of the ministry's inspection and measurement department. The field is jointly operated by state-owned National Oil Corp and Italy's ENI.
Protesters blocking the pipeline to the western Mellitah port shut down the field late in March, part of a nationwide disruption of oilfields and ports to pressure the weak central government over a range of political and financial demands.
The field used to produce around 85,000 bpd before the shutdown.
Oil output had fallen to less than 200,000 bpd in the past few weeks, down from 1.4 million bpd in July when a wave of protests started.
Three years after a Nato-backed revolt toppled leader Muammar Gaddafi, Libya's oil infrastructure is vulnerable to new and continued protests, given that opposition groups are fractured and lack a joint leadership.
TEHRAN (FNA)- Managing Director of the Petroleum Engineering and Development Company (PEDEC) Abdolreza Haji Hosseinnejad said drilling operations of two new wells in the North Yaran oilfield in the Southern Province of Khuzestan will be completed in the near future.
“In total, 19 oil wells are scheduled to be drilled within the framework of development project of North Yaran oilfield. Except for Well No. 1 (which is already producing oil), three more wells, including two production and an appraisal well, are to be drilled,” Haji Hosseinnejad said.
North Yaran’s first well is currently producing 1,500 barrel per day b/d of oil. Completion of two more wells will bring the production to 4,500 b/d.
Haji Hosseinnejad said the field production will reach 30,000 b/d next year.
He said three drilling rigs are already operating in this field, adding that one more rig is likely to be added.
North Yaran field, holding more than 900 million barrels of oil in place, is located in the Southwestern province of Khuzestan. It is shared with Iraq.
TEHRAN (FNA)- Iran exported approximately $8.154bln of non-oil commodities in the first two months of the current Iranian calendar year (March21- May21), a report by Iran's Customs Organization said.
Iran's non-oil trade in the first two month of the current Iranian year totaled $15.824bln, out of which $ 8.154bln were exported goods and the rest $7.688bln were imported items.
Iran's non-oil exports rose 27.22 and 29.18 percent respectively in terms of weight and value comparing to similar period last year.
Iran's non-oil trade rose 31.8 percent in the two months comparing to similar period last year.
Out of the whole non-oil exports, $3.30bln were gas condensations, $1.991bln were petrochemical products and $3.132bln were other goods.
In April, a customs office report said that Iran's trade balance with 83 world countries surpassed $92bln last year.
The report said Iran's imports of non-oil goods amounted to $50.818bln last year.
The share of gas condensates in Iran's non-oil exports hit $10.295bln in the same period, it added.
Iran also imported $3bln worth of cars which showed an increase in comparison to the year before. The country imported 78,785 cars last year, according to the report.
Clyde RussellSunday, June 15, 2014
LAUNCESTON: Have Asia’s oil buyers and traders become so inured to supply disruptions that the potential disintegration of the world’s fourth-largest crude exporter barely causes a ripple in regional markets?
The stunning victories of the Islamic State in Iraq and the Levant (ISIL) in capturing Iraq’s second city Mosul and advancing on the capital Baghdad have grabbed headlines and moved prices, yes, but do not yet appear to have raised long-term supply worries.
Global oil benchmark Brent gained 3.2 percent from June 10 to close at $113.02 a barrel on Thursday, indicating some level of concern about developments in Iraq.
The key Middle East marker, the Dubai Mercantile Exchange’s Oman futures, rose by 2.8 percent over the same period.
The DME contract is more relevant for Asian crude buyers, given their reliance on heavier, more sour grades from the Middle East, as opposed to light, sweet crudes such as Brent.
And with the forward DME curve remaining in backwardation, it seems evident that there is little concern in Asia that supplies from Iraq will be at risk in months to come.
The Oman curve has steepened at the front in line with the price increases, but further out it remains in a fairly normal pattern of mild backwardation, a sign that traders don’t expect significant supply disruptions in the next 12 months.
If they did, the curve would be tending towards contango, where prices for longer-dated contracts exceed those for shorter-dated futures.
The question is whether the market is correct in being relatively sanguine about the risks of supply disruptions from the developing conflict in Iraq.
Certainly the speed at which the ISIL fighters were able to capture Mosul and move on Baghdad, and the capitulation so far of the Iraqi army has caught most observers by surprise.
The case for a limited threat to Iraqi oil supplies rests on the view that the vast majority of its exports come from the southern part of the country, which is still in government hands and is home to many supporters of the Shia Prime Minister Nuri al-Maliki.
This assumes that if ISIL, which aims for a Sunni Islamic caliphate straddling Iraq and Syria, tries to capture the south, it will face more serious resistance.
Iraq exported 2.582 million barrels per day (bpd) in May, an 8 percent gain from April but below the government’s target for 3.4 million bpd.
That target includes 400,000 bpd from the autonomous Kurdish region and a northern pipeline to Turkey - although the pipeline is currently out of commission after being damaged by militants.
The Kurds are also able to ship 100,000 bpd through a separate pipeline to Turkey, although the Iraqi government is in dispute with the Kurdish authorities over who has the right to sell the oil.
The crisis in Baghdad over the threat posed by ISIL may actually boost oil exports from the north, as the Kurds are likely to push for, or assume, more independence.
Their forces have occupied Kirkuk, an oil-rich city in the north of Iraq, and it is possible that the Kurds will seek control over the currently inoperable pipeline from the city to Ceyhan in Turkey.
The Baghdad government is probably now entirely focused on its own survival and is thus unlikely to be able to challenge the Kurds, or devote time and energy to boosting supplies from the south of Iraq.
A possible scenario for Iraq is that it becomes a failed state, effectively split into autonomous Shia, Sunni and Kurdish areas, with ongoing clashes between them.
Such a scenario is hardly bullish for Iraq’s oil exports, and just maintaining current levels may become a challenge.
Thus it will fall to Saudi Arabia, and possibly Iran, to make up any shortfall to Asian refiners.
The Saudis are still able to ramp up output if needed, but probably not by enough to handle any major outage of Iraqi shipments.
Iran stands as the major beneficiary, assuming it can negotiate a further relaxation of Western sanctions imposed on its disputed nuclear programme that are currently supposed to hold its crude exports at around 1 million bpd.
This level is being breached - with Asian buyers of Iranian oil importing 1.25 million-1.3 million bpd in the first six months of the year - although US officials say Tehran is just inside ambiguous limits placed on its shipments since most of the overage is condensate.
Iranian Oil Minister Bijan Zanganeh said on June 10 that his country could raise oil exports by 500,000 bpd “very quickly” if sanctions were eased further.
So far, Asian crude buyers appear to be adopting a wait and see approach to the conflict in Iraq, confident that the beleaguered nation will continue to ship cargoes, and even if it doesn’t, that others can make up the shortfall.
The risk is that while there is still enough oil globally to deal with any Iraqi disruption, much of it is lighter oil from the US shale boom, and not the heavier grades preferred by Asian refiners.
It’s not just that there has to be enough oil to go around, it has to be of the right type, too, and it’s here where the main risks lie for Asian crude buyers.
June 15, 2014 6:11 pm
MOSCOW: Energy chiefs and political titans gather in Moscow this week for a major conference that will highlight the West’s desire to pursue oil investments in Russia despite the Ukraine crisis.
With oil prices hitting nine-month peaks on Friday owing to violence in Iraq, the 21st World Petroleum Congress, which occurs every three years, takes on even greater prominence.
Moscow, which is locked in its worst standoff with the West since the Cold War, is expected to use the week-long event to emphasize its leading presence on the world energy scene.
In Moscow, Organization of the Petroleum Exporting Countries (OPEC) Secretary General Abdullah El-Badri will be joined by about 5,000 delegates, including the chief executive of British energy giant BP Bob Dudley and bosses at Russia’s Gazprom and Rosneft.
The Kremlin will host a reception on Sunday at the congress organized by the World Petroleum Council. Russian President Vladimir Putin will make a speech on Monday at the event that will bring public and private companies together with government agencies from 65 nations representing more than 95 percent of the world’s crude oil production and consumption.
While the various scheduled conferences and round tables present classic sector issues such as obstacles to financing and competition from renewable energy sources, developments linked to current geopolitical strains look set to grab the attention of markets.
On Saturday, the Pentagon said the US was sending its aircraft carrier the USS George H.W. Bush to the Gulf in response to the crisis in Iraq, with spokesman Rear Admiral John Kirby saying the carrier would provide “flexibility should military options be required to protect American lives, citizens and interests.”
With the Iraqi government battling to regain control of the cities taken by militants from the Islamic State of Iraq and the Levant (ISIL) earlier in the week, Iran’s President Hassan Rouhani indicated his country could consider cooperating with the US to repel the extremists.
Iraq is the second biggest oil exporter in the 12-nation OPEC after kingpin Saudi Arabia, and the cartel pumps about one-third of the world’s oil.
In Kiev, meanwhile, an urgent round of European Union-brokered gas talks between Russia and Ukraine ended on Saturday night without an agreement.
The countries have been locked in a dispute over gas prices since a popular uprising ousted Kiev’s Kremlin-backed president Viktor Yanukovych in February.
Negotiations will resume Sunday under a looming threat by Moscow to cut off supplies as early as Monday if no deal is reached.
Gas giant Gazprom has said Kiev has until Monday to pay the Russian state firm $1.95 billion (1.45 billion euros) or face a gas cutoff.
Russia has warned that European energy supplies could be interrupted and urged the West to help cover Ukraine’s bill.
BP, Total in Russia
Despite rising tension, Western energy companies are expected to use this week’s event in Moscow to reiterate their desire to invest in exploration projects across Russia.
BP, which on Monday will release its annual energy market study, has insisted that it remains committed to Rosneft, despite the latter’s chief executive Igor Sechin being named among officials facing punitive measures over Putin’s stance on Ukraine.
BP retains a near 20-percent stake in Rosneft after the British firm sold its 50 percent holding in joint venture TNK-BP to the Russian company.
French energy giant Total, meanwhile, announced in May that it had signed a deal with Russia’s second biggest oil firm Lukoil to explore and develop shale oil deposits in western Siberia.
While Western energy companies are looking to Russia to help them secure new sources of oil and gas to meet rising global demand, Russian firms are benefiting from their partners’ technological expertise, especially in the field of uncovering energy from shale rock.
Saudi Arabia last week said the oil market was experiencing a good supply-demand balance as it joined fellow OPEC members in maintaining the cartel’s crude output ceiling.
Dubai, 9 hours, 39 minutes ago
Abu Dhabi-listed energy firm Dana Gas, one of the largest oil and gas investors in Iraqi Kurdistan, said on Sunday its operations there had not been affected by fighting elsewhere in the country in recent days.
The insurgent offensive that has threatened to dismember Iraq spread to the northwest of the country on Sunday, after fighters belonging to the Islamic State in Iraq and the Levant and other Sunni Muslim armed groups seized Mosul and stormed several towns on the road to Baghdad last week.
Shares in Dana Gas dropped 4.8 percent on Sunday as part of a wider rout in Gulf stock exchanges that was partly due to the news from Iraq. Abu Dhabi's bourse slumped 2 percent.
"Dana Gas' operations in the Kurdistan Region of Iraq continue uninterrupted in light of recent events in Iraq. All our facilities and people are safe and there have been no incidents affecting our operations," Dana said in a statement to Reuters.
Iraqi Kurdistan provided 29,300 barrels of oil equivalent per day (boepd) to Dana Gas in the first quarter of 2014 out of the company's total production of 68,800 boepd, according to company data.
However, the company has struggled to secure payments from its Kurdistan business, with non-payment prompting it to file an arbitration case in London last October against the regional government.
We Are So Not Prepared For Another Crude Oil Price Shock
Commodities / Crude Oil Jun 15, 2014 - 06:04 PM GMT
By: John_Rubino
Commodities
In one sense, energy doesn’t matter all that much to what’s coming. Once debt reaches a certain level, oil can be $10 a barrel or $200, and either way we’re in trouble.
But the cost of energy can still play a role in the timing and shape of the next financial crisis. The housing/derivatives bubble of 2006 -2008, for instance, might have gone on a while longer if oil hadn’t spiked to $140/bbl in 2007. And the subsequent recovery was probably expedited by oil plunging to $40 in 2008.
With the Middle East now lurching towards yet another major war, it’s easy to envision a supply disruption that sends oil back to its previous high or beyond. So the question becomes, what would that do to today’s hyper-leveraged global economy? Bad things, obviously. But before looking at them, let’s all get onto the same page with a quick explanation of why everyone seems so mad at everyone else over there:
The story begins in 570 A.D. in what is now Saudi Arabia, with the birth of a boy named Muhammad into a family of successful merchants. After having some adventures and marrying a rich widow, around the age of 40 he begins having visions and hearing voices which lead him to write a holy book called the Qur’an. More adventures follow, eventually producing a religious/political system called Islam that comes to dominate a large part of the local world.
In 632 Muhammad dies without naming a successor, creating a permanent fissure between the Shi’ites, who believe that only descendants of the Prophet Muhammad should run Islam, and the Sunnis, who want future leaders to be chosen by consensus.
Now fast forward to the end of World War I: British leader Winston Churchill sits down with some other old white guys to draw a series of rather arbitrary lines through the Middle Eastern territories recently captured from the Turkish Ottoman Empire. They name their creations Jordan, Syria, and Iraq and appoint kings to rule them. Unfortunately, the new borders enclose both Sunnis and Shi’ites, along with Kurds and Christians who don’t get along with either kind of Arab Muslim. Shortly thereafter, Israel is tossed into the mix and massive but unequally-distributed oil fields are discovered, pretty much guaranteeing instability for as far as the eye can see.
Since then, the Western powers have been trying to keep the oil flowing by periodically deposing/replacing leaders and making/breaking alliances. All without the slightest idea of what they’re doing. So the situation has gone from really bad in the 1960s and 1970s to potentially catastrophic today as various Middle Eastern dictatorships and terrorist groups plot to create a pan-Islamic “New Caliphate” while secretly developing weapons of mass destruction.
Which brings us to the present crisis: The US, having deposed Iraqi dictator Saddam Hussein and spent a trillion or so dollars trying to create a functioning democracy, has pulled out, only to see the new Shi’ite government oppress the Sunni minority into rebellion. With the help (or leadership, it’s not clear) of Syrian Islamists trained in that country’s ongoing civil war, the Sunnis are on the verge of taking over Iraq, and both the US and (Shi’ite) Iran are being pulled back in — apparently on the same side.
It’s a mess, in other words, and the flow of oil, of which Iraq and Iran produce a lot, is now threatened.
So what would $150/bbl oil mean today? Several things:
Another recession. The US economy contracted at an annual rate of about 2% in the first quarter and isn’t nearly as strong as analysts had predicted going forward. Let gas go to $5 a gallon, and the consumer spending on which the US economic model depends would dry up. Put another way, we might spend the same amount but it will be mostly for gas and not much else. So much for the recovery.
Equity bear market. Stock prices depend on corporate profits, which in turn depend on sales. If Americans buy less, corporations earn less. With blue chip equities currently priced for perfection, major companies faced with a sales slowdown will, if they want to keep their stock prices from tanking, have to borrow even more money and buy back even more shares, which will only work until interest costs start consuming what’s left of their profits. Then US stocks fall hard.
Currency crisis. If Saudi Arabia manages to stay out of this latest conflict, it will see its revenues surge as it sells the same amount of oil at higher prices. But it’s not happy with the US (something about us recently tilting towards Iran) and apparently no longer feels obligated to accept only dollars for its oil. Let it start accepting euros, yen and yuan, and the result will be lessened demand for dollars, a falling dollar exchange rate and all manner of turmoil in global bond markets.
Derivatives implosion. Derivatives — basically private bets on the behavior of interest rates, currency exchange rates and corporate bond defaults — on the books of major banks have actually increased in the five years since those instruments nearly destroyed the global financial system. There are between half a quadrillion and one quadrillion dollars face value of derivatives out there, and a spike in financial market volatility would cause a lot of them to blow up.
There are other possible consequences of a major Middle East war, but the preceding is enough to make the point that the more leveraged a system is, the more vulnerable it is to external shocks. And no one has ever been as leveraged as we are right now.
By John Rubino
dollarcollapse.com
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
By John Rubino
dollarcollapse.com
Copyright 2014 © John Rubino - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.
Abu Dhabi, 15 hours, 42 minutes ago
The Middle East will drive global energy security for the next 30 year, according to experts set to attend at conference in Abu Dhabi this year.
The 17th edition of the Abu Dhabi International Petroleum Exhibition & Conference (Adipec 2014) will run from November 10 to 13 at the Abu Dhabi National Exhibition Centre (Adnec).
Adipec will mark its 30th anniversary this year, with the sponsorship of the UAE Ministry of Energy, Abu Dhabi National Oil Company (Adnoc) and the Abu Dhabi Chamber, said a statement.
More than 60,000 visitors including global energy leaders, policy makers, innovators, technicians and scholars are expected to attend the event to drill into its theme ‘Challenges and Opportunities for the Next 30 Years.’
Ali Khalifa Al Shamsi, Adipec 2014 chairman and strategy and co-ordination director – Adnoc, said: “As we mark Adipec’s 30th anniversary, we have grown from a small exhibition in an emerging energy producer, to one of the world’s top three energy exhibitions. With Abu Dhabi now one of the world’s leading oil and gas producers, we are dedicated to supporting the next generation of leaders and technologies, driving the UAE further forward to become an innovation hub for energy, and securing the world’s energy supplies for the next 30 years and beyond.”
According to the Organisation of Petroleum Exporting Countries (Opec), the UAE is the world’s second largest exporter of petroleum products by value, with Abu Dhabi hosting more than 90 per cent of the UAE’s oil reserves.
Adnoc, the show’s main sponsor, is one of the world’s top 10 oil and gas companies, producing more than 2.7 million barrels per day. Boosting energy production capacity, it is set to complete a $40 billion investment in crude, natural gas, petrochemical, and refinery projects in 2014.
As a result, the UAE is slated to more than triple crude oil production from 30 years ago.
The Adipec 2014 will sponsor a regional roadshow promotional campaign covering 10 countries.
The organisers are expecting an increase over last year’s record of more than 51,000 visitors, along with 1,362 exhibitors from 108 countries, including 16 country pavilions.
The exhibition space is also to be expanded from 35,000 sq m in 2013 to 40,000 sq m this year.
Christopher Hudson, senior vice president, dmg events, said: “To celebrate Adipec’s 30th anniversary, Adipec 2014 will be the largest and most engaging edition of Adipec yet. We’re building on the success of the Adipec 2013 Conference - which saw the debut of Young Adipec and Women in Industry to connect the industry with tomorrow’s leaders -and we’re providing more interactive features and activities.”
Organised by the Society of Petroleum Engineers, the Adipec 2014 Technical Conference will feature new insights on nine key industry topics: Exploration and Production geoscience, unconventional resources, field development, drilling and completion technology, projects engineering and management, operational excellence, HSE, gas technology, and people and talents.
‘Young Adipec’ will feature field trips, projects and experiencing a day-in-the-life of the industry at the Young Adipec Zone, while ‘Women in Industry’ will feature panel sessions from leading women in the energy field, encouraging women to enter a variety of energy-related careers.
The 2014 Adipec Awards will recognise best practices across the energy field, with entries open until August 1.
Meanwhile, the Middle East Petroleum Club is set to strengthen networks that exist between oil and gas executive across the region and forge new connections, in a private setting, and the HSE Zone will bring together the health, safety and environment sector of the oil and gas industry, featuring exhibitors and open conference sessions. - TradeArabia News Service
Vienna, 3 days ago
Iran's Oil Minister Bijan Zanganeh said he had met on Wednesday with Austrian oil and gas group OMV and other foreign oil companies as Tehran prepares to offer oilfields, projects and its final investment contract in November.
Zanganeh was in Vienna for an Opec meeting. He declined to name the other firms involved in the talks, held on the executive floor of an international hotel cleared of reporters.
"The companies are coming and visiting. At least they are showing that they are keen on exploring these possibilities, to get prepared for what they want to do," a source close to the matter said.
Zanganeh had met some Western oil executives at Opec's previous meeting in December, including Italy's Eni and Royal Dutch Shell.
The main priority for Iran will be rehabilitation of aging oilfields - Ahwaz, Aghajari, Gachsaran, Marun and Bibi Hakimeh which together make up more than 80 percent of its total output, Zanganeh had said.
Iran's talks with six major powers on curbing its nuclear programme in exchange for an end to Western sanctions could be extended for six months if no deal is reached by a July 20 deadline agreed by all parties, a senior Iranian official said. in Geneva.
When asked how Iran would react if sanctions were not lifted, Zanganeh replied: "We entitle ourselves to increase our output with any way we can."
Abu Dhabi, 3 days ago
Japan has confirmed its participation at the 2015 edition of the World Future Energy Summit (WFES) and International Water Summit (IWS) next January.
The events which take place during Abu Dhabi Sustainability Week – hosted by Masdar – will offer Japanese companies a window into the UAE and GCC region’s growing clean energy and water industries.
The announcement was made following a visit to Tokyo this week by a UAE delegation that included Matthew Griffiths, director of water strategy and reuse at Abu Dhabi’s Regulation and Supervision Bureau, and Naji El Haddad, WFES show director.
The delegation outlined the commercial opportunities for inward investment as the region diversifies its energy mix, water resources and steps up its sustainability ambitions, a statement said.
In a presentation to the Japanese Ministry of Economy, Trade and Industry and Japanese corporations, the delegation highlighted that the GCC region is expected to spend $300 billion on water technology and desalination projects between now and 2022. Similarly, the Middle East and North Africa (Mena) region has allocated $50 billion to renewable energy deployment until 2020.
Tadashi Mitsugi, director of the Japan Cooperation Center for the Middle East (JCCME) said: “The Mena region is one of the most exciting markets for clean technology development, water treatment and natural resources management in the world. Rising energy and potable water demands, combined with huge solar and wind potential and strong leadership in the move towards sustainability, make it an attractive market for Japanese environmental technology companies.
“Nowhere is this truer than in Abu Dhabi, and we look forward to exploring the emerging opportunities the region’s flagship future energy event offers us.”
Riyadh, 1 days ago
Saudi Arabia has suggested the Organisation for Petroleum Exporting Countries (Opec) meet just once a year, rather than twice, a sharp reduction from the days when the group met for up to seven times a year in the early 2000s.
The Opec meetings since 2012 have produced no policy change and Wednesday's gathering in Vienna was no exception, sticking with its production target of 30 million barrels per day (bpd).
The 12-member group used to give traders more to worry about, meeting several times a year, convening emergency meetings at short notice and sometimes making surprise decisions as it tried to micro-manage the oil market.
But with the biggest consumer, the US, experiencing an oil boom and prices comfortably anchored around $110 a barrel, Opec meetings have dropped down the list of supply risks for oil traders.
Top Opec producer Saudi Arabia suggested in the meeting on Wednesday that Opec meet just once a year, three Opec delegates said, but other countries rejected the idea and the next gathering is scheduled for November 27.
"The meetings are quiet and there is nothing much to discuss except for the issue of the secretary general," said a delegate. "But it can't be changed as internal policy says Opec has to meet twice a year."
The delegate was referring to Opec's Statute, which says the group shall hold two ordinary meetings a year, and its long-running deadlock over who should succeed Abdullah Al Badri as Opec's secretary general.
The unchanged 30 million bpd output target leaves the door open for Saudi Arabia to tweak output unofficially depending on demand or in response to supply outages in other producer countries.
Saudi Arabia holds most of Opec's idle production capacity and its Gulf allies the UAE and Kuwait smaller amounts, giving them more influence. Most other Opec members cannot raise output and outages in Libya, Nigeria, Iraq and Iran have cut their supply.
London, 1 days ago
Oil producer Gulf Keystone Petroleum said plans to increase production from its Shaikan oil field in Iraqi Kurdistan were on track despite escalating violence in the region.
The London-listed oil firm said on Friday three wells at Shaikan PF-1 were producing steadily at a rate of 16,000 gross barrels of oil per day (boed), a level that was set to rise to 20,000 later this year.
The oil field is located north of Kirkuk, the oil city in Iraqi Kurdistan which was taken over by Iraqi Kurdish forces on Thursday.
Brent crude prices have jumped to a nine-month high over fears oil production in the region could be disrupted after the U.S. threatened military action against Sunni Islamists in Iraq.
"Our operations in the Kurdistan Region of Iraq are progressing in line with our previous guidance, whilst we remain alert to the current security situation in Iraq, which has recently escalated outside the Kurdistan Region," said Gulf Keystone Chief Executive Officer Todd Kozel.
He added that the whole Shaikan complex reached a record daily flow rate of 25,000 boed on June 4.
The company has sold a total of 1.85 million gross barrels of Shaikan crude to the international market.
Iraq and Kurdistan have been trying to reach political agreement over oil sales from the autonomous region. Two cargoes of crude from Iraqi Kurdistan have already been exported via Turkey.
Doha, 1 days ago
Stork Oryx Turbo Machinery Services said it has won a seven-year contract from Qatar Shell for the overhaul of rotating equipment at the Pearl GTL site situated in Ras Laffan Industrial City.
Stork Oryx Turbo Machinery Services will be responsible for the overhaul of rotating equipment installed at the Pearl GTL plant.
The contract includes minor and major overhauls of steam turbines, compressors, pumps, blowers, expanders and fans from various manufacturers, which are scheduled to be done during turnaround events.
As an independent service provider, Stork Oryx Turbo Machinery Services has experience with servicing almost all brands of steam turbines, compressors and pumps.
Stork offer comprehensive experience in the overhaul of rotating equipment and the ideal location of the ultramodern Oryx Engineering Solutions Centre, situated in Ras Laffan, Qatar.
At this centre, state-of-the-art tools and machines deliver outstanding services on a wide variety of equipment, with effective responses and short lead times enabling customers to maximise their productivity and keep downtime of their installations to an absolute minimum.
On the project win, Richard Janmaat, the VP for Turbo Machinery Services at Stork said: "I am confident that this contract award reflects Stork’s commitment to developing our relationship with Qatar Shell and to successfully delivering a service at the highest levels of productivity, fastest response times, and with maximum attention to HSSE and quality standards."
Stork has been a supplier to Shell for over 30 years. Over time, Stork has offered Shell a range of services and gained extensive experience in the turnaround of rotating equipment and fully understands the complexities and challenges of these projects.
As part of Oryx Energy Projects & Services, Oryx Engineering Solutions (OES) has built a market leading platform to deliver world class services through combining local knowledge, outstanding infrastructure, technical capability and partnering with leading specialists.
Rob Sherwin, the deputy country chair for Qatar Shell said: "We are extremely proud to include Stork Oryx Turbo Machinery Services as a local supplier to the Pearl Gas to Liquids facility in Qatar. I am delighted to see Stork bring their global experience and expertise to Qatar in a joint venture with Oryx."
"Such a transfer of knowledge and technology is in line with our ambition, shared by our partner Qatar Petroleum, to increase the local content of our contracting. This directly supports the Economic Development pillar of the Qatar National Vision 2030," he stated.
Abdulla Mannai, the founder and managing director at Oryx, said: "By supporting local companies Qatar Shell is creating a sustainable environment for local industry to further develop, ensuring that world class standards and know-how are transferred and available locally to the industry."
"We are committed to work with Qatar Shell in delivering on this trust and growing our relationship," he added.
