SandRidge (NYSE:SD) is up nearly 12% after raising its oil production guidance for the first time in six quarters.
It plans to produce 23.3 million barrels in 2011, up from the original 21.6 million.
The raised outlook came out with its fourth-quarter earnings release yesterday which reported a slightly narrower loss than analysts had expected.
It posted a net loss of $208.02 million or $0.53 per share, smaller than the $434.24 million in the same quarter in 2009.
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Showing posts with label Oil Production. Show all posts
Showing posts with label Oil Production. Show all posts
Friday, February 25, 2011
Monday, February 7, 2011
BP (NYSE:BP) And Russia Entering Energy 'Cold War'?
There is no doubt the entirety of the story surrounding the battle between BP (NYSE:BP) and their Russian billionaire partners, who each own 50 percent of TNK-BP, has been told, as the situation, while tempered for the moment, appears to be still boiling underneath the surface.
It's unknown as to the real level of the conflict between the entities, as it isn't known what the actual issues are, other than the obvious irritation by the billionaires over BP attempting to deal with Russia's state-owned Rosneft.
One important narrative that has emerged from the event is what position of strength BP has in Russia, and whether or not they're caught in the middle of a power struggle between the Russian government and the Russian energy billionaires.
It appears the public face of the battle isn't what is at issue, referring to a proposed deal with Rosneft to drill in the Arctic, while also retaining their current Arctic-drilling deal with the billionaires via TNK-BP, although that is what launched the battle.
Is it as simple as the Russian billionaires contend, that BP has snubbed them for another partner? Are the Russian billionaires wanting to take a bigger position in TNK-BP, or own it altogether? Or is it, as some believe, a battle between the Russian government and the billionaires over the energy resources of the country? Nobody outside knows at this time.
For now is seems a lot of the feathers have been smoothed, but as mentioned, there are too many rumbles beneath the surface to believe the issue has been taken care of to the satisfaction of the participants.
More than likely this isn't the end of the fight, and some believe there has been irreparable harm between BP and the billionaires, something that could do a lot of damage to the value of BP if it escalates further, as the partnership accounts for about 33 percent of BP's oil production.
If BP is able to maneuver itself into working with both, it could be an extraordinary deal for them, which could result in billions of dollars in revenue and profits if they find the amount of oil they believe resides in the region.
It's unknown as to the real level of the conflict between the entities, as it isn't known what the actual issues are, other than the obvious irritation by the billionaires over BP attempting to deal with Russia's state-owned Rosneft.
One important narrative that has emerged from the event is what position of strength BP has in Russia, and whether or not they're caught in the middle of a power struggle between the Russian government and the Russian energy billionaires.
It appears the public face of the battle isn't what is at issue, referring to a proposed deal with Rosneft to drill in the Arctic, while also retaining their current Arctic-drilling deal with the billionaires via TNK-BP, although that is what launched the battle.
Is it as simple as the Russian billionaires contend, that BP has snubbed them for another partner? Are the Russian billionaires wanting to take a bigger position in TNK-BP, or own it altogether? Or is it, as some believe, a battle between the Russian government and the billionaires over the energy resources of the country? Nobody outside knows at this time.
For now is seems a lot of the feathers have been smoothed, but as mentioned, there are too many rumbles beneath the surface to believe the issue has been taken care of to the satisfaction of the participants.
More than likely this isn't the end of the fight, and some believe there has been irreparable harm between BP and the billionaires, something that could do a lot of damage to the value of BP if it escalates further, as the partnership accounts for about 33 percent of BP's oil production.
If BP is able to maneuver itself into working with both, it could be an extraordinary deal for them, which could result in billions of dollars in revenue and profits if they find the amount of oil they believe resides in the region.
Monday, January 31, 2011
Strong Oil Demand Drives Exxon's (NYSE:XOM) Profits
Exxon Mobil (NYSE:XOM) beat expectations in the fourth quarter, as strong demand for oil pushed up the revenue and earnings for the company.
Revenue surged 17 percent in the fourth quarter, jumping to $105.2 billion, or earnings of $1.85 a share, a huge 23 cents a share better than the $1.62 a share analysts had estimated. Analysts had an estimate of $99.1 billion on revenue.
Exxon's Chairman Rex Tillerson said in a statement, “ExxonMobil continues to deliver strong financial and operating results. The full year 2010 earnings, excluding special items, were $30.5 billion, up 57 percent from 2009, driven by higher crude oil and natural gas realizations, stronger refining margins and record Chemical performance. Fourth quarter earnings were $9.3 billion, an increase of 53 percent."
Oil prices in the quarter rose by 12 percent, while Exxon's production grew 19 percent.
For all of 2010, revenue soared to $383 billion, a gain of 32 percent. Earnings for the year came in at $30.5 billion, or 6.22 a share, a huge increase over the $19.3 billion, or 3.98 a share in 2009.
Exxon was trading at $80.26, up $1.30, or 1.61 percent, as of 12:24 PM EST.
Revenue surged 17 percent in the fourth quarter, jumping to $105.2 billion, or earnings of $1.85 a share, a huge 23 cents a share better than the $1.62 a share analysts had estimated. Analysts had an estimate of $99.1 billion on revenue.
Exxon's Chairman Rex Tillerson said in a statement, “ExxonMobil continues to deliver strong financial and operating results. The full year 2010 earnings, excluding special items, were $30.5 billion, up 57 percent from 2009, driven by higher crude oil and natural gas realizations, stronger refining margins and record Chemical performance. Fourth quarter earnings were $9.3 billion, an increase of 53 percent."
Oil prices in the quarter rose by 12 percent, while Exxon's production grew 19 percent.
For all of 2010, revenue soared to $383 billion, a gain of 32 percent. Earnings for the year came in at $30.5 billion, or 6.22 a share, a huge increase over the $19.3 billion, or 3.98 a share in 2009.
Exxon was trading at $80.26, up $1.30, or 1.61 percent, as of 12:24 PM EST.
Tuesday, November 30, 2010
BP's (NYSE:BP) Oil Production in Azerbaijan to Reach 850,000 BPD in 2011
Oil production in Azerbaijan by BP (NYSE:BP) is expected to reach 850,000 barrels a day in 2011, similar to levels of production in 2010, according to BP-Azerbaijan president Rashid Jevanshir.
Jevanshir said, "According to preliminary estimates, production at Azeri, Chirag and Guneshli next year will be 850,000 bpd, almost the same level as in 2010."
Chirag, Azeri and Guneshli are oilfields in the Caspian Sea.
For full year 2010, oil production in the country should reach 42.1 million tons, up from the 40.3 million tons in 2009.
Production in the first nine months of 2010 has increased to $32.2 million tons, up from 31.4 million in the same period last year.
Jevanshir said, "According to preliminary estimates, production at Azeri, Chirag and Guneshli next year will be 850,000 bpd, almost the same level as in 2010."
Chirag, Azeri and Guneshli are oilfields in the Caspian Sea.
For full year 2010, oil production in the country should reach 42.1 million tons, up from the 40.3 million tons in 2009.
Production in the first nine months of 2010 has increased to $32.2 million tons, up from 31.4 million in the same period last year.
Thursday, October 21, 2010
Chevron (NYSE:CVX) Pursuing Deepwater Gulf Drilling
The affect of the BP (NYSE:BP) oil spill on the attitude of competitors like Chevron (NYSE:CVX) is little if any, as far as continuing operations in the area, as the oil giant will continue to open up drilling projects in the area, including Jack field and Malo field.
Chevron has a 50 percent working interest in the Jack field and a 51 percent stake in Malo field.
Initial capital expenditure for the two fields is $7.5 billion. The fields sit in 7,000 feet of water, a little less than 300 miles south of New Orleans.
Oil demand isn't going to go away for a long time, and those that think the Gulf oil disaster will affect that are only fooling themselves.
That doesn't mean changes won't be made to improve safety, but demand is what is driving the market, nothing else.
Net daily production by Chevron in the Gulf is about 149,000 barrels of oil and 484 million cubic feet of natural gas for 2009.
Production for the two fields is expected to launch in 2014. Recoverable barrels of oil equivalent are estimated to be about 500 million.
Chevron has a 50 percent working interest in the Jack field and a 51 percent stake in Malo field.
Initial capital expenditure for the two fields is $7.5 billion. The fields sit in 7,000 feet of water, a little less than 300 miles south of New Orleans.
Oil demand isn't going to go away for a long time, and those that think the Gulf oil disaster will affect that are only fooling themselves.
That doesn't mean changes won't be made to improve safety, but demand is what is driving the market, nothing else.
Net daily production by Chevron in the Gulf is about 149,000 barrels of oil and 484 million cubic feet of natural gas for 2009.
Production for the two fields is expected to launch in 2014. Recoverable barrels of oil equivalent are estimated to be about 500 million.
Wednesday, September 15, 2010
Chevron (NYSE:CVX) Increasing Production at Frade in Brazil
Chevron (NYSE:CVX) announced it is increasing production at its Frade field off the coast of Brazil.
The oil giant will increase production to about 65,000 barrels a day at Frade, which is about 45 percent complete, with approximately another year and a half left to drill the area.
Estimates for the oil field, are recoverable reserves of up to 300 million barrels, although it could be as low as 200 million barrels.
Peak production by Chevron should eventually reach close to 90,000 barrels a day at the project.
Chevron has began production at Frade in the middle of 2009.
The oil giant will increase production to about 65,000 barrels a day at Frade, which is about 45 percent complete, with approximately another year and a half left to drill the area.
Estimates for the oil field, are recoverable reserves of up to 300 million barrels, although it could be as low as 200 million barrels.
Peak production by Chevron should eventually reach close to 90,000 barrels a day at the project.
Chevron has began production at Frade in the middle of 2009.
Thursday, September 9, 2010
China North East Petroleum Holdings (Amex:NEP) Downgraded by Rodman & Renshaw
Rodman & Renshaw has downgraded China North East Petroleum Holdings (Amex:NEP) from "Market Outperform" to "Market Perform."
The Oil producer and oilfield services company just came off a strong quarter, generating revenue of $27.7 million, an increase of 144 percent over the same quarter last year.
Gross profit rose to $16.9 million, or 60.9% of revenue, from $7.4 million last year.
The problem is they didn't drill any new wells in the quarter, shown in its drop in production to 198,776 barrels, an 11 percent drop.
That will carry forward into the near future, as prices carried the prior quarter, and it doesn't look like they'll be able to repeat that performance going forward.
The Oil producer and oilfield services company just came off a strong quarter, generating revenue of $27.7 million, an increase of 144 percent over the same quarter last year.
Gross profit rose to $16.9 million, or 60.9% of revenue, from $7.4 million last year.
The problem is they didn't drill any new wells in the quarter, shown in its drop in production to 198,776 barrels, an 11 percent drop.
That will carry forward into the near future, as prices carried the prior quarter, and it doesn't look like they'll be able to repeat that performance going forward.
Tuesday, September 7, 2010
BP (NYSE:BP) Raises Assets Sale Target to $40 Billion
With mounting liabilities, BP (NYSE:BP) has reportedly increased its asset sale target from about $30 billion to $40 billion, according to The Sunday Times newspaper.
There is a double-edge sword to the selling of assets by BP, as while they are raising capital to take care of immediate liabilities, they are losing production, which ultimately leads to loss of revenue and profits.
Estimates are after assets sales production will decrease by close to 8 percent. It's uncertain how much that'll increase with an additional $10 billion in asset sales added to the final amount, although if they're similar to estimates based on $30 billion, they could be as high a $11 to $12 billion in lost production, depending on the assets sold.
Although the former talks with Apache over the 26 percent stake BP has in the Prudhoe Bay oil field in Alaska, fell apart, reports are Apache (NYSE:APA)is back in talks again with BP about acquiring at least a portion of the asset, while Occidental Petroleum (NYSE:OXY) has also been named as a potential suitor.
There is a double-edge sword to the selling of assets by BP, as while they are raising capital to take care of immediate liabilities, they are losing production, which ultimately leads to loss of revenue and profits.
Estimates are after assets sales production will decrease by close to 8 percent. It's uncertain how much that'll increase with an additional $10 billion in asset sales added to the final amount, although if they're similar to estimates based on $30 billion, they could be as high a $11 to $12 billion in lost production, depending on the assets sold.
Although the former talks with Apache over the 26 percent stake BP has in the Prudhoe Bay oil field in Alaska, fell apart, reports are Apache (NYSE:APA)is back in talks again with BP about acquiring at least a portion of the asset, while Occidental Petroleum (NYSE:OXY) has also been named as a potential suitor.
BP (NYSE:BP): Tropical Storm Hermine Shouldn't Affect Offshore Operations
BP (NYSE:BP) said they have no expectations Tropical Storm Hermine will have any affect on their offshore oil operations, with no production being impacted at this time.
Hermine began forming on Monday morning, and is expected to hit landfall later on Monday near the Texas, Mexican border.
As Hermine makes landfall it's possible it'll reach hurricane strength.
The good news for the oil and gas companies it is forecast to move far away from the major region of the Gulf of Mexico offshore production areas, which accounts for about 30 percent of all crude oil production in the U.S.
More of a concern would be the impact of Hermine when it reaches areas with refineries on land.
Hermine began forming on Monday morning, and is expected to hit landfall later on Monday near the Texas, Mexican border.
As Hermine makes landfall it's possible it'll reach hurricane strength.
The good news for the oil and gas companies it is forecast to move far away from the major region of the Gulf of Mexico offshore production areas, which accounts for about 30 percent of all crude oil production in the U.S.
More of a concern would be the impact of Hermine when it reaches areas with refineries on land.
Wednesday, July 28, 2010
Berry Petroleum (NYSE:BRY) Demolishes Earnings Expectations in Second Quarter
Berry Petroleum Company (NYSE:BRY) left analysts' earnings expectations in the dust for the second quarter, as they handily blew past the estimated 34 cents a share, to 42 cents a share, based on net income of $89 million.
President and chief executive officer Robert F. Heinemann said, “Performance from Berry’s portfolio of assets was strong in the second quarter. Production for the second quarter of 2010 was 32,854 BOE/D, 67% of which was oil production. While diatomite production declined during the quarter as we awaited new permits and optimized field production, we were able to increase companywide production by 12% during the quarter with meaningful contributions from each of our other operating areas."
Heinemann added, "We are maintaining our full-year 2010 production guidance of between 32,250 and 33,000 BOE/D. In addition, we settled our claim in the Flying J bankruptcy during the second quarter and received proceeds of $60.5 million on July 23, 2010 which we have used to pay down debt."
Oil accounted for 67 percent of production, while natural gas accounted for the other 33 percent. Last quarter oil production was at 70 percent of all production for Berry Petroleum.
President and chief executive officer Robert F. Heinemann said, “Performance from Berry’s portfolio of assets was strong in the second quarter. Production for the second quarter of 2010 was 32,854 BOE/D, 67% of which was oil production. While diatomite production declined during the quarter as we awaited new permits and optimized field production, we were able to increase companywide production by 12% during the quarter with meaningful contributions from each of our other operating areas."
Heinemann added, "We are maintaining our full-year 2010 production guidance of between 32,250 and 33,000 BOE/D. In addition, we settled our claim in the Flying J bankruptcy during the second quarter and received proceeds of $60.5 million on July 23, 2010 which we have used to pay down debt."
Oil accounted for 67 percent of production, while natural gas accounted for the other 33 percent. Last quarter oil production was at 70 percent of all production for Berry Petroleum.
Tuesday, June 15, 2010
Shell (LSE:RDSA) Workers May Stike: Strike Indicators
Shell (LSE:RDSA) oil workers may strike at Statoil Shell Platforms, there are several strike indicators. The strike will start June 17th if mediation fails. The mediated talks are effecting 6,700 workers.
These talks have been going on for two days and are being monitored by the government. Talks conclude at midnight on June 16th, which could begin the strike according to unions and employers. The three unions involved are Industry Energy Safe, the Norwegian Oil Industry Association, and the Norwegian Organization of Managers and Executives. The breakdown of these three unions happened May 6th.
The Shell operated Draugen Platform puts out about 43,000 barrels of oil daily. This is the platform that the unions are calling a strike on. Eli Ane Nedreskaar, a group spokeswoman said, "should negotiations break down, the OLF may choose to announce a lock out, which would enter into force four days later. But this has not been decided yet."
In 2010 Norway's oil production as well as natural gas condensate and liquids is estimated at 1.87 million barrels a day. That puts them as the sixth largest supplier of crude oil as well as the second largest importer of gas. The Industry Energy Union is demanding wages for cleaners be the same as those who work offshore.
These talks have been going on for two days and are being monitored by the government. Talks conclude at midnight on June 16th, which could begin the strike according to unions and employers. The three unions involved are Industry Energy Safe, the Norwegian Oil Industry Association, and the Norwegian Organization of Managers and Executives. The breakdown of these three unions happened May 6th.
The Shell operated Draugen Platform puts out about 43,000 barrels of oil daily. This is the platform that the unions are calling a strike on. Eli Ane Nedreskaar, a group spokeswoman said, "should negotiations break down, the OLF may choose to announce a lock out, which would enter into force four days later. But this has not been decided yet."
In 2010 Norway's oil production as well as natural gas condensate and liquids is estimated at 1.87 million barrels a day. That puts them as the sixth largest supplier of crude oil as well as the second largest importer of gas. The Industry Energy Union is demanding wages for cleaners be the same as those who work offshore.
Monday, May 31, 2010
Chevron (NYSE:CVX) and Conoco Phillips (NYSE:COP) Sign Deal Binding Them For 12 yrs.
There are two deals that have been agreed to by Chevron (NYSE:CVX) and Conoco Phillips (NYSE:COP) , according to Indonesia's energy watchdog BPMIGAS. Chevron is Indonesia's largest oil producer and the final deal entails Chevron purchasing their natural gas from Conoco Phillips.
One of the deals was an amendment to a previous deal, which was meet with resistance by politicians because it was said to be unfair due to the current hike in the prices of oil. The gas supply will come from Conoco Phillips fields in South Sumatra.
The terms are for a four year time period, where Conoco Phillips will be supplying 77.9 trillion British thermal units total. As well as an additional 12 year agreement for 1,177 trillion British thermal units.
This deal will replace a prior deal which entailed swapping crude oil for natural gas among the two companies. Chevron is currently producing 370,000 barrels of crude oil daily from Sumatra.
As production has decreased due to not being able to tap new fields quickly enough, Indonesia has become a net importer of crude oil in recent years.
One of the deals was an amendment to a previous deal, which was meet with resistance by politicians because it was said to be unfair due to the current hike in the prices of oil. The gas supply will come from Conoco Phillips fields in South Sumatra.
The terms are for a four year time period, where Conoco Phillips will be supplying 77.9 trillion British thermal units total. As well as an additional 12 year agreement for 1,177 trillion British thermal units.
This deal will replace a prior deal which entailed swapping crude oil for natural gas among the two companies. Chevron is currently producing 370,000 barrels of crude oil daily from Sumatra.
As production has decreased due to not being able to tap new fields quickly enough, Indonesia has become a net importer of crude oil in recent years.
Tuesday, May 18, 2010
Murphy Oil (NYSE:MUR) EPS Look Solid
Murphy Oil (NYSE:MUR) has had a mixed outlook from analysts, as they have been largely torn between which direction the company is going, and more than likely confusion has been added over the last couple of weeks because of the weakening EU economy and China inflation fears.
Much of what has been expected for a lot of companies has been downwardly revised, or at minimum put on hold, as there are too many macro-variable happening out there which could impact any company providing products for consumers, who seem to be getting skittish again, as the fast run-up in gold price show.
So with that in mind, it's difficult at this time to project where a company will go, as they're still attempting to recover from the great recession which is still lingering, and the possibility of being ravaged by the forces coming from the debt crisis in Europe and probable cutback in imports from China from measures they take to battle inflation.
What Murphy Oil has going for them is a low debt-to-capital ratio, which has positioned them to take advantage of weaknesses in the industry, which could help them to grow organically or through acquisitions.
The Exploration & Production segment of the company exploded in earnings growth over the first quarter last year, generating gains of 391 percent.
Now this quarter that is being challenged by the recent drop in prices, as it seems the higher oil inventories suggest people are still being tight with their wallets, and that could and probably will translate to pressure on their margins, and consequently earnings.
Even so, they may be able to turn product over quicker because of the debt-to-capital ratio, by generating more business, making the margin levels less important than overall sales.
Production is probably the key to their near-term performance, and that is one of the strengths of the company, and even with the economic challenges, they're probably in as good a place as any of their competitors no matter which way the winds blow to put up some pretty good earnings numbers.
Much of what has been expected for a lot of companies has been downwardly revised, or at minimum put on hold, as there are too many macro-variable happening out there which could impact any company providing products for consumers, who seem to be getting skittish again, as the fast run-up in gold price show.
So with that in mind, it's difficult at this time to project where a company will go, as they're still attempting to recover from the great recession which is still lingering, and the possibility of being ravaged by the forces coming from the debt crisis in Europe and probable cutback in imports from China from measures they take to battle inflation.
What Murphy Oil has going for them is a low debt-to-capital ratio, which has positioned them to take advantage of weaknesses in the industry, which could help them to grow organically or through acquisitions.
The Exploration & Production segment of the company exploded in earnings growth over the first quarter last year, generating gains of 391 percent.
Now this quarter that is being challenged by the recent drop in prices, as it seems the higher oil inventories suggest people are still being tight with their wallets, and that could and probably will translate to pressure on their margins, and consequently earnings.
Even so, they may be able to turn product over quicker because of the debt-to-capital ratio, by generating more business, making the margin levels less important than overall sales.
Production is probably the key to their near-term performance, and that is one of the strengths of the company, and even with the economic challenges, they're probably in as good a place as any of their competitors no matter which way the winds blow to put up some pretty good earnings numbers.
Monday, May 17, 2010
Oil Prices Plunge 20 Percent in Two-Week Period
While oil companies may not like it, consumers definitely will, at least when the price of gas starts to move down in unison with the price of oil, as oil has dropped 20 percent just a short two-week period.
Like most other raw materials and products, concerns over the European debt crisis and the inflation China is battling has companies and investors concerned over the demand problem and how it'll effect companies and their exports.
Not just that though, as it's not just the existing European crisis everyone is worried about, but whether or not it's about to become a contagion which brings the global economy down with it.
This will especially have a dramatic impact on commodities and countries and companies producing raw materials, as that will probably take a significant hit in the short- to mid-term if things get worse at all, and probably even if they stay where they're at now, as the fallout from Europe has yet to be revealed outside of Greece, and that information is probably going to be released in stages in an attempt to manage the potential panic that could come with it, which could cause a run on an unknown number of banks, as it did with banks in Greece.
Just a couple of weeks ago oil seemed to be assured of a long and profitable run-up in prices, now it's debatable as to how low prices will go throughout the usually busy summer season, and even further beyond, as more than likely consumers will cut back on travel because of the fears of what could possibly happen to the economy with more negative factors out there that are not small by any means, including the China inflation factor, which has been largely over-shadowed by the EU debt crisis; but it is every bit as real, and could cause numbers projected and expectations to be far too optimistic in light of the new circumstances.
In early May, oil prices had hit 18-month highs of $87.15 a barrel, and on Monday they had plunged to $70.08.
If oil prices stay at around $70 a barrel, it is expected to would drop from between $2.60 to $2.65 a gallon on average, with some places in the U.S. enjoying $2.50 a gallon.
Like most other raw materials and products, concerns over the European debt crisis and the inflation China is battling has companies and investors concerned over the demand problem and how it'll effect companies and their exports.
Not just that though, as it's not just the existing European crisis everyone is worried about, but whether or not it's about to become a contagion which brings the global economy down with it.
This will especially have a dramatic impact on commodities and countries and companies producing raw materials, as that will probably take a significant hit in the short- to mid-term if things get worse at all, and probably even if they stay where they're at now, as the fallout from Europe has yet to be revealed outside of Greece, and that information is probably going to be released in stages in an attempt to manage the potential panic that could come with it, which could cause a run on an unknown number of banks, as it did with banks in Greece.
Just a couple of weeks ago oil seemed to be assured of a long and profitable run-up in prices, now it's debatable as to how low prices will go throughout the usually busy summer season, and even further beyond, as more than likely consumers will cut back on travel because of the fears of what could possibly happen to the economy with more negative factors out there that are not small by any means, including the China inflation factor, which has been largely over-shadowed by the EU debt crisis; but it is every bit as real, and could cause numbers projected and expectations to be far too optimistic in light of the new circumstances.
In early May, oil prices had hit 18-month highs of $87.15 a barrel, and on Monday they had plunged to $70.08.
If oil prices stay at around $70 a barrel, it is expected to would drop from between $2.60 to $2.65 a gallon on average, with some places in the U.S. enjoying $2.50 a gallon.
Saturday, April 10, 2010
Oil Slumps on Higher Inventories
Oil prices dropped after oil inventory has risen for the 10th straight week.
Prices for May delivery fell to $84.92, a 47 percent decline on Friday. After reaching 17-month high of almost $87 a barrel on Tuesday, prices have fallen $2 a barrel since then.
Taking into account the 10 straight weeks of oil inventory rising, and the 17-year high supply of gasoline, and there's sure to be downward pressure on prices in the next week or two, depending on how long the supply remains high and demand low.
Still, refiners continue to pump out crude oil at increased levels, which consumers will ultimately appreciate as they consider how much they're going to travel this year and whether they're going to stay closer to home.
Prices for May delivery fell to $84.92, a 47 percent decline on Friday. After reaching 17-month high of almost $87 a barrel on Tuesday, prices have fallen $2 a barrel since then.
Taking into account the 10 straight weeks of oil inventory rising, and the 17-year high supply of gasoline, and there's sure to be downward pressure on prices in the next week or two, depending on how long the supply remains high and demand low.
Still, refiners continue to pump out crude oil at increased levels, which consumers will ultimately appreciate as they consider how much they're going to travel this year and whether they're going to stay closer to home.
Wednesday, March 10, 2010
Crude Oil Futures Up
Crude Oil Futures
After a report from the U.S. Energy Information Administration that gasoline stocks had fallen last week by 2.9 million barrels, the price of crude oil shot up as high as $83.03 a barrel, its highest levels since early January.
The benchmark contract settled to $80.96 as the day went on, a decrease of 0.5 percent a barrel.
Other news affecting the price of oil was the announcement from OPEC that crude demand per day would rise by over 190,000 barrels a day over its previous estimate of 28.94 million barrels a day.
Crude Oil Futures
After a report from the U.S. Energy Information Administration that gasoline stocks had fallen last week by 2.9 million barrels, the price of crude oil shot up as high as $83.03 a barrel, its highest levels since early January.
The benchmark contract settled to $80.96 as the day went on, a decrease of 0.5 percent a barrel.
Other news affecting the price of oil was the announcement from OPEC that crude demand per day would rise by over 190,000 barrels a day over its previous estimate of 28.94 million barrels a day.
Crude Oil Futures
Saturday, September 26, 2009
Norway Ready to Go to Gates of Hell for Oil
Norway Oil
Having explored the majority of its Norwegian shelf, Norway is looking to other more remote regions in order to remain a major player in the oil industry, which has largely paid for the welfare nation's lifestyle.
One area they're looking toward is a volcanic island in the Arctic with the strange name of Jan Mayen, which was at one time supposedly called the 'Gates of Hell,' based on the possibly true legend of being discovered by Brendan, and Irish monk, who when seeing the vulanic activity thought he had literally discovered the Gates of Hell.
Norway will find it hard to finance its welfare state if oil production continues to fall as it has recently, with estimates in this year alone dropping by 9.7 percent, according to the Petroleum Directorate. Oil and gas accounts for about 25 percent of the economic output of Norway at this time.
The first step will be to drill a shallow well outside of Jan Mayen to make an assessment on the geological structures in the area. Oil drilling in the region won't begin until about 2020.
Norway Oil
Having explored the majority of its Norwegian shelf, Norway is looking to other more remote regions in order to remain a major player in the oil industry, which has largely paid for the welfare nation's lifestyle.
One area they're looking toward is a volcanic island in the Arctic with the strange name of Jan Mayen, which was at one time supposedly called the 'Gates of Hell,' based on the possibly true legend of being discovered by Brendan, and Irish monk, who when seeing the vulanic activity thought he had literally discovered the Gates of Hell.
Norway will find it hard to finance its welfare state if oil production continues to fall as it has recently, with estimates in this year alone dropping by 9.7 percent, according to the Petroleum Directorate. Oil and gas accounts for about 25 percent of the economic output of Norway at this time.
The first step will be to drill a shallow well outside of Jan Mayen to make an assessment on the geological structures in the area. Oil drilling in the region won't begin until about 2020.
Norway Oil
Wednesday, September 2, 2009
BP in Big Oil Discovery in Gulf of Mexico
Oil Discovery BP
Drilling down to over 35,000 feet, BP Plc made a significant oil discovery in the Gulf of Mexico at the Tiper Prospect, with an estimate of over 3 billion barrels of oil found there.
The 35,000 plus foot drill is the deepest exploration well in history.
It is expected to be in production during the latter part of the next decade, and help BP bring oil production to about 600,000 barrels a day sometime after 2020.
According to BP's lead executive for exploration and production, Andy Inglis, this could increase production of the company between one to two percent from between 2013 and 2020. That of course depends upon how long it takes to get the oil field on line.
This is the second material discovery in what is called the Lower Tertiary in the Gulf of Mexico by BP. The other one was a smaller field named Kaskida. Kaskida is estimated to hold about 3 billion barrels of oil, and Tiber is bigger than that, said BP. Plans are in place to drill as second well in Tiber sometime in 2010.
According to BP, they are the largest net leaseholder in the Lower Tertiary area.
Oil Discovery BP
Drilling down to over 35,000 feet, BP Plc made a significant oil discovery in the Gulf of Mexico at the Tiper Prospect, with an estimate of over 3 billion barrels of oil found there.
The 35,000 plus foot drill is the deepest exploration well in history.
It is expected to be in production during the latter part of the next decade, and help BP bring oil production to about 600,000 barrels a day sometime after 2020.
According to BP's lead executive for exploration and production, Andy Inglis, this could increase production of the company between one to two percent from between 2013 and 2020. That of course depends upon how long it takes to get the oil field on line.
This is the second material discovery in what is called the Lower Tertiary in the Gulf of Mexico by BP. The other one was a smaller field named Kaskida. Kaskida is estimated to hold about 3 billion barrels of oil, and Tiber is bigger than that, said BP. Plans are in place to drill as second well in Tiber sometime in 2010.
According to BP, they are the largest net leaseholder in the Lower Tertiary area.
Oil Discovery BP
Tuesday, February 3, 2009
Oil Refinery Workers New Labor Contract
Union negotiators for oil refinery workers have tentatively agreed to a new contract which represents approximately 24,000 union members.
The new contract deals with labor issues like wage and benefit levels, which the details of the agreement weren't released.
If there had been a strike, it would have affected up to 10 percent of the overall refining capacity in America's oil industry. Other reports say the strike could have affected close to two-thirds of the capacity to make fuels in general, gasoline and diesel.
Details of the oil refinery workers deal will be released sometime on Wednesday by their representatives of the United Steelworkers union. Signing off on the deal was the National Oil Policy Committee, which still has to be ratified by local union units.
Some of the large oil and gas companies that would have been affected by the strike were Exxon Mobil (nyse:XOM), Royal Dutch Shell (nyse: RDSA), BP (nyse:BP) PLC, Valero (nyse:VLO), and Chevron (nyse:CVX), of close to 60 oil producers in general.
Besides higher wages, other issues being negotiated for the oil refinery workers were cost-of-living increases and full benefits for medical, dental and vision; both for current and retired oil workers.
The deal was worked out with Shell Oil, which will also be extended to the other plants, including Valero Energy Corp., Exxon Mobil Corp., Chevron and BP Plc. The deal, if approved, will keep up to six refinery plants from closing, and about 1.7 barrels a day from going off line.
Some of the known parts of the contract are a three percent raise for each of the three years of the contract, along with a signing bonus of $2,500 if it is approved before February 16.
Fuel and oil demand has fallen so much that the refineries have slowed production after falling prices put downward pressure on margins. Oil processors have had a record number of days of making gasoline at a loss, measured by futures prices.
The two largest refiners in America, ConocoPhillips and Valero were leading the fuel production cut in oil refinery output.
Gas prices had surged by 10 percent last week as the possibility of a strike loomed over the oil and oil refinery industry.
On the New York Mercantile Exchange, gasoline for March delivery increased 1.68 cents to $1.166 a gallon. Gas prices across the nation grew to $1.89 a gallon according to AAA.
Now that a strike is probably averted, we should see a corresponding fall in gasoline prices as demand continues to fall.
If things do change economically, this new contract could be a diaster for union members, as higher operating costs through increased wages and benefits could put many oil refinery workers out of a job in the months ahead. But that's how unions always work, as they overreach and cause loss of jobs, while benefitting only some of the members.
For the week ending January 16, oil refinery production had operated at 82.5 percent of capacity, down significantly from the 85.2 percent the week before. It'll a long time before gas and oil demand increase in any major way.
Motorists in the U.S. continue to drive much less, as for the second year they've driven at a lower rate than the previous year. According to the Federal Highway Administration, vehicle miles have plunged by 5.3 percent or 12.9 billion miles. We should see that continue on, and oil refineries operating at even less capacity before it turns around.
The new contract deals with labor issues like wage and benefit levels, which the details of the agreement weren't released.
If there had been a strike, it would have affected up to 10 percent of the overall refining capacity in America's oil industry. Other reports say the strike could have affected close to two-thirds of the capacity to make fuels in general, gasoline and diesel.
Details of the oil refinery workers deal will be released sometime on Wednesday by their representatives of the United Steelworkers union. Signing off on the deal was the National Oil Policy Committee, which still has to be ratified by local union units.
Some of the large oil and gas companies that would have been affected by the strike were Exxon Mobil (nyse:XOM), Royal Dutch Shell (nyse: RDSA), BP (nyse:BP) PLC, Valero (nyse:VLO), and Chevron (nyse:CVX), of close to 60 oil producers in general.
Besides higher wages, other issues being negotiated for the oil refinery workers were cost-of-living increases and full benefits for medical, dental and vision; both for current and retired oil workers.
The deal was worked out with Shell Oil, which will also be extended to the other plants, including Valero Energy Corp., Exxon Mobil Corp., Chevron and BP Plc. The deal, if approved, will keep up to six refinery plants from closing, and about 1.7 barrels a day from going off line.
Some of the known parts of the contract are a three percent raise for each of the three years of the contract, along with a signing bonus of $2,500 if it is approved before February 16.
Fuel and oil demand has fallen so much that the refineries have slowed production after falling prices put downward pressure on margins. Oil processors have had a record number of days of making gasoline at a loss, measured by futures prices.
The two largest refiners in America, ConocoPhillips and Valero were leading the fuel production cut in oil refinery output.
Gas prices had surged by 10 percent last week as the possibility of a strike loomed over the oil and oil refinery industry.
On the New York Mercantile Exchange, gasoline for March delivery increased 1.68 cents to $1.166 a gallon. Gas prices across the nation grew to $1.89 a gallon according to AAA.
Now that a strike is probably averted, we should see a corresponding fall in gasoline prices as demand continues to fall.
If things do change economically, this new contract could be a diaster for union members, as higher operating costs through increased wages and benefits could put many oil refinery workers out of a job in the months ahead. But that's how unions always work, as they overreach and cause loss of jobs, while benefitting only some of the members.
For the week ending January 16, oil refinery production had operated at 82.5 percent of capacity, down significantly from the 85.2 percent the week before. It'll a long time before gas and oil demand increase in any major way.
Motorists in the U.S. continue to drive much less, as for the second year they've driven at a lower rate than the previous year. According to the Federal Highway Administration, vehicle miles have plunged by 5.3 percent or 12.9 billion miles. We should see that continue on, and oil refineries operating at even less capacity before it turns around.
Sunday, January 25, 2009
Oil: OPEC Production Cuts
OPEC countries are under increasing pressure to cut oil production as oil prices aren't able to prop up the many countries so reliant on higher prices to take care of their needs.
It's not a stretch to say the leaders of oil producing countries will have their hands full as people start to get edgy over consequences of low prices.
In reality, there's not much OPEC and other oil producing countries can do about it, as the economic crisis has lowered demand for oil, and no matter how far oil production is cut, it's not going to get people to spend their money on gas they're not going to use.
Cutting oil production will only cause people to travel even less, undercutting the very strategy attempted by countries to prop up their crude prices.
If oil prices rise than there will be a high cost of oil that will sit there not being used, as people continue to save rather than spend their money.
Oil storage and reserves are growing while consumers hold back from buying, that isn't going to change for OPEC or oil companies. The oil industry can cut production, and it has already, but that won't solve the problem the market has already decided.
All that corporations and countries should do is get out of the way and let the market figure it out. Intervention into the oil market will cause unintended consequences as government interference always does, and only prolong the economic pain for everyone.
There is nothing driving the oil markets, prices, supply, costs, drilling and production other than consumer demand. Nothing can be done to change that until the economic crisis ends and then money flowing back into consumer goods and services.
The oil industry can only stand by and watch, cut cost, get leaner, and prepare for when the turnaround in the oil market comes.
This will be essential for the industry, as once demand rises, there will probably be a huge surge in buying as pent up demand explodes. Oil companies and refineries need to be ready for that time, as they'll soon forget the bad oil news of today and their profits will again surge ahead.
Oil exploration is another important factor in the mix, as there is plenty of oil out there, and the demand will come back stronger than ever as America, China and other nations will return to their insatiable appetites for oil that they had in the recent past.
So OPEC and oil companies just need to relax a bit. Yes there's problems related to low oil prices, but forcing the issue in attempts to artificially raise the price of oil above market levels never works.
We just have to wait out the tough times and wait for oil demand to rebound.
It's not a stretch to say the leaders of oil producing countries will have their hands full as people start to get edgy over consequences of low prices.
In reality, there's not much OPEC and other oil producing countries can do about it, as the economic crisis has lowered demand for oil, and no matter how far oil production is cut, it's not going to get people to spend their money on gas they're not going to use.
Cutting oil production will only cause people to travel even less, undercutting the very strategy attempted by countries to prop up their crude prices.
If oil prices rise than there will be a high cost of oil that will sit there not being used, as people continue to save rather than spend their money.
Oil storage and reserves are growing while consumers hold back from buying, that isn't going to change for OPEC or oil companies. The oil industry can cut production, and it has already, but that won't solve the problem the market has already decided.
All that corporations and countries should do is get out of the way and let the market figure it out. Intervention into the oil market will cause unintended consequences as government interference always does, and only prolong the economic pain for everyone.
There is nothing driving the oil markets, prices, supply, costs, drilling and production other than consumer demand. Nothing can be done to change that until the economic crisis ends and then money flowing back into consumer goods and services.
The oil industry can only stand by and watch, cut cost, get leaner, and prepare for when the turnaround in the oil market comes.
This will be essential for the industry, as once demand rises, there will probably be a huge surge in buying as pent up demand explodes. Oil companies and refineries need to be ready for that time, as they'll soon forget the bad oil news of today and their profits will again surge ahead.
Oil exploration is another important factor in the mix, as there is plenty of oil out there, and the demand will come back stronger than ever as America, China and other nations will return to their insatiable appetites for oil that they had in the recent past.
So OPEC and oil companies just need to relax a bit. Yes there's problems related to low oil prices, but forcing the issue in attempts to artificially raise the price of oil above market levels never works.
We just have to wait out the tough times and wait for oil demand to rebound.
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