REPOST: Oil, gas prices increase among mixed economic data

This Oil and Gas Journal article talks about the changes in oil and gas prices considering various aspects in oil production and mixed economic data.

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Oil prices continued to advance Jan. 30, and natural gas prices rebound with a new front-month contract in the New York market among mixed economic indicators.

“Crude inched higher on recent momentum and European optimism despite the report of a large build in [US crude] inventories,” said analysts in the Houston office of Raymond James & Associates Inc. Energy stocks were mixed, with the Oil Service Index falling 0.8% but the SIG Oil Exploration & Production Index rising 0.2%.

“The oil market’s reaction to gross domestic product data was different from the likes of the markets for gold and the other precious metals, with participants appearing more concerned about the oil demand ramifications of a fragile US economy than what the data implied about the Federal Reserve System’s commitment to monetary accommodation,” said Marc Ground at Standard New York Securities Inc., the Standard Bank Group. “However, later in the day after the Federal Open Market Committee announcement, the market regained its composure, and bolstered by the prospect of continued quantitative easing, prices were pushed higher to close the day firmly in the black.”

At the close of a 2-day meeting, the FOMC said it will maintain its monthly $85 billion bond-buying stimulus plan, claiming the recent stall in the tepid US economy is likely temporary. Esther George, the first woman president and chief executive officer of the Kansas City Federal Reserve Bank, voted against that policy in her first ballot as one of four new members of the 12-member FOMC. Long-time observers reported no new committee member in decades had cast a dissenting first-time ballot. However, George expressed concern that “continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations,” the FOMC reported.

Since 2008, the Fed has held overnight interest rates near zero. Through its purchases of securities to force longer-term borrowing costs lower, it has tripled its balance sheet to $3 trillion. Yet the US economy remains week and unemployment high.

On Jan. 31, the dollar showed little reaction to an increase in US jobless claims as the euro weakened against it. The US Department of Labor reported first-time applications by US residents for unemployment benefits unexpectedly increased by 38,000 to a seasonally adjusted 368,000 in the week ended Jan. 26. Officials were expecting a drop in new applications following decreases in the previous 2 weeks to a 5-year low. More than 5.9 million US residents received benefits in the week ended Jan. 12, the latest data available, an increase of 250,000 from the previous report.

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US inventories

The Energy Information Administration reported Jan. 31 the withdrawal of 194 bcf of natural gas from US underground storage in the week ended Jan. 25, less than the Wall Street consensus of a 204 bcf decrease. That left 2.8 tcf of working gas in storage, 202 bcf less than the comparable period in 2012 but 304 bcf above the 5-year average.

EIA earlier said commercial US crude inventories escalated 5.9 million bbl to 369.1 million bbl that same week, more than double Wall Street’s consensus for a 2.5 million bbl increase and surpassing the aggregate gain reported in the previous 3 weeks. However, gasoline stocks fell 1 million bbl to 232.3 million bbl last week, opposite analysts’ expectations of a 1 million bbl gain. That’s on top of a 1.7 million bbl decline in the week ended Jan. 18. Finished gasoline inventories increased last week while blending components decreased. Distillate fuel stocks fell 2.3 million bbl to 130.6 million bbl last week, surpassing the outlook for a 500,000 bbl decline.

The total increase in “Big Three” inventories of crude, gasoline, and distillates “was a bit smaller relative to consensus estimates,” Raymond James analysts said. “Other petroleum products increased sizably in aggregate, with a large build in unfinished oils. Refinery utilization also bounced back to 85% after three consecutive declines.”

Ground said, “Highlighting concerns over off-take from the Seaway Pipeline, Cushing, Okla., crude oil inventories rose 285,000 bbl: this was an added drag to the West Texas Intermediate price.”

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Energy prices

The March contract for benchmark US sweet, light crudes increased 37¢ to $97.94/bbl Jan. 30 on the New York Mercantile Exchange. The April contract gained 39¢ to $98.38/bbl. On the US spot market, WTI at Cushing was up 37¢ to $97.94/bbl.

Heating oil for February delivery inched up 0.81¢ to $3.12/gal on NYMEX. Reformulated stock for oxygenate blending for the same month escalated 6.53¢ to $3.04/gal.

The new front-month March contract for natural gas regained 7.7¢ to $3.34/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., took back 4.7¢ to $3.24/MMbtu.

In London, the March IPE contract for North Sea Brent rose 54¢ to $114.90/bbl. Gas oil for February was up $4.50 to $990.75/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes advanced 91¢ to $111.43/bbl.

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REPOST: US oil company donated millions to climate sceptic groups, says Greenpeace

This Guardian.co.uk article talks about the controversy between Koch Industries and global warming sceptics.

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 A Greenpeace investigation has identified a little-known, privately owned US oil company as the paymaster of global warming sceptics in the US and Europe.

The environmental campaign group accuses Kansas-based Koch Industries, which owns refineries and operates oil pipelines, of funding 35 conservative and libertarian groups, as well as more than 20 congressmen and senators. Between them, Greenpeace says, these groups and individuals have spread misinformation about climate science and led a sustained assault on climate scientists and green alternatives to fossil fuels.

Greenpeace says that Koch Industries donated nearly $48m (£31.8m) to climate opposition groups between 1997-2008. From 2005-2008, it donated $25m to groups opposed to climate change, nearly three times as much as higher-profile funders that time such as oil company ExxonMobil. Koch also spent $5.7m on political campaigns and $37m on direct lobbying to support fossil fuels.

In a hard-hitting report, which appears to confirm environmentalists' suspicions that there is a well-funded opposition to the science of climate change, Greenpeace accuses the funded groups of "spreading inaccurate and misleading information" about climate science and clean energy companies.

"The company's network of lobbyists, former executives and organisations has created a forceful stream of misinformation that Koch-funded entities produce and disseminate. The propaganda is then replicated, repackaged and echoed many times throughout the Koch-funded web of political front groups and thinktanks," said Greenpeace.

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"Koch industries is playing a quiet but dominant role in the global warming debate. This private, out-of-sight corporation has become a financial kingpin of climate science denial and clean energy opposition. On repeated occasions organisations funded by Koch foundations have led the assault on climate science and scientists, 'green jobs', renewable energy and climate policy progress," it says.

The groups include many of the best-known conservative thinktanks in the US, like Americans for Prosperity, the Heritage Foundation, the Cato institute, the Manhattan Institute and the Foundation for research on economics and the environment. All have been involved in "spinning" the "climategate" story or are at the forefront of the anti-global warming debate, says Greenpeace.

Koch Industries is a $100bn-a-year conglomerate dominated by petroleum and chemical interests, with operations in nearly 60 countries and 70,000 employees. It owns refineries which process more than 800,000 barrels of crude oil a day in the US, as well as a refinery in Holland. It has held leases on the heavily polluting tar-sand fields of Alberta, Canada and has interests in coal, oil exploration, chemicals, forestry, and pipelines.

The majority of the group's assets are owned and controlled by Charles and David Koch, two of the four sons of the company's founder. They have been identified by Forbes magazine as the joint ninth richest Americans and the 19th richest men in the world, each worth between $14-16bn.

Koch has also contributed money to politicians, the report said, listing 17 Republicans and four Democrats whose campaign funds got more than $10,000from the company.

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Greenpeace accuses the Koch companies of having a notorious environmental record. In 2000 the Environmental Protection Agency (EPA) fined Koch industries $30m for its role in 300 oil spills that resulted in more than 3m gallons of crude oil leaking intro ponds, lakes and coastal waters.

"The combination of foundation-funded front groups, big lobbying budgets, political action campaign donations and direct campaign contributions makes Koch Industries and the Koch brothers among the most formidable obstacles to advancing clean energy and climate policy in the US," Greenpeace said.

A spokeswoman for Koch Industries today defended the group's track record on environmental issues. "Koch companies have consistently found innovative and cost-effective ways to ensure sound environmental stewardship and further reduce waste and emissions of greenhouse gases associated with their operations and products," said a statement sent to AFP by Melissa Cohlmia, director of communication. She added: "Based on this experience, we support open, science-based dialogue about climate change and the likely effects of proposed energy policies on the global economy."

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REPOST: Crude prices advance modestly

This Oil and Gas Journal article talks about the modest increase of crude prices caused by the hostage takeover in Algeria.
 

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 Crude prices continued rising Jan. 18 for the third consecutive trading session largely because of increased political tension caused by a hostage takeover by Islamic militants at a gas processing plant in Algeria (OGJ Online, Jan. 16, 2013). Algerian special forces stormed the plant Jan. 19 to end the 4-day siege. Initial reports indicated 32 rebels and 23 hostages died, but the death count later climbed to 81 with the discovery of more bodies and the subsequent death of one wounded hostage who had been freed. Bomb squads continued to sweep the facility for hidden explosives (OGJ Online, Jan. 18, 2013). 


On Jan. 21, Walter de Wet at Standard New York Securities Inc., the Standard Bank Group, reported, “The front-month Brent crude contract is moving largely sideways today” in line with the US dollar “that has also done very little since markets opened.” He said, “The Brent market has failed to break convincingly above the $112/bbl level since mid-November, and we maintain that the bias from current price levels lies to the downside. We believe that demand growth would not be strong enough this year to offset growing supply from non-OPEC members.”

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In the US futures market, the front-month contract for benchmark crudes “continued to benefit from post-Seaway pipeline interest as well as some growing optimism over the US economy,” Ground said. “The market still looked confident, adding 7.6 million bbl to speculative longs and once again shedding speculate shorts for the fifth consecutive week, although only 2.3 million bbl were shed this past week (compared with the 7.9 million bbl of the previous week).”

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Energy prices

The February contract for benchmark US light, sweet crudes made a modest advance of 7¢ to $95.56/bbl Jan. 18 on the New York Mercantile Exchange. The March contract increased 10¢ to $96.04/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., followed the front-month futures contract up 7¢ to $95.56/bbl.

Heating oil for February delivery gained 3.13¢ to $3.05/gal on NYMEX. Reformulated stock for oxygenate blending for the same month rose 2.84¢ to $2.80/gal.

The February natural gas contract continued to rally, up 7.2¢ to $3.57/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., rebound by 8.5¢ to $3.51/MMbtu.

In London, the March IPE contract for North Sea Brent was up 79¢ to $111.89/bbl. Gas oil for February regained $3.25 to $955.75/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes increased 91¢ to $108.92/bbl. So far this year, OPEC’s basket price has averaged $108.56/bbl.

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REPOST: Good policies crucial to US refining success, API official says

This Oil and Gas Journal article written by Nick Snow features the said importance of refining reliable motor fuels to the energy future of the United States." 

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A strong US energy future heavily depends on being able to refine reliable motor fuels, suggested Cindy Schild, refining senior manager at the American Petroleum Institute. Sound decisions on the proposed Keystone XL crude oil pipeline, the Renewable Fuels Standard, and refinery regulations could make a major positive difference, she maintained.

“Our nation’s energy future has never looked better, in large part because of our rapidly advancing ability to tap into vast new oil and natural gas resources right here in the United States,” Schild told reporters during a Jan. 15 teleconference. “But a strong energy future for our nation depends also on our ability to refine and distribute the fuels from these resources.”

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Her comments coincide with API’s launch of a new television commercial highlighting the refining industry’s importance in the US.

Refiners have contributed significantly to US air quality improvement over several decades, Schild observed. “Since 1990, they have invested more than $137 billion meeting environmental requirements,” she said. “Over that time, pollution levels for the six common air pollutants, including ozone, have substantially declined, as have total emissions of toxic pollutants.”

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US refiners compete globally, and need commonsense operating and regulatory policies to do so effectively, she continued. “With such policies, we can continue creating cleaner fuels and products in technologically advanced facilities here in the US where it means jobs for Americans, and security and revenue to our government,” Schild said.

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