Oil Prices

[old friend]

Oil weaken further to USD43.75 today.

http://www.livecharts.co.uk/MarketCharts/crude.php

[specuvestor]

The Scots were that close to disaster... I think shale total E&P cost is close to if not higher than North Sea cost of around $75 per barrel.

(Bloomberg) -- The North Sea, which brought upheaval to
global oil markets in the 1980s just as shale has in this
decade, is desperately seeking tax relief in Wednesday’s British
budget.
As international oil prices continue their downward spiral,
North Sea producers are among the biggest victims. Production is
less than half its peak in the 1990s and a quarter to a third of
its U.K. fields are uneconomic at current prices, BP Plc Chief
Executive Officer Bob Dudley said in February.
Royal Dutch Shell Plc, Europe’s largest oil company and a
pioneer in developing the North Sea, signaled the region was
entering its twilight when it announced last month it was
planning to dismantle one of its four Brent platforms.
Brent, one of the largest fields discovered in the North
Sea, which has produced about 4 billion barrels since 1976,
gives its name to the grade of oil that provides the price
benchmark for two-thirds of the world’s crude.
“If things stay as they are, the short- to medium-term
outlook for the North Sea, in terms of maximizing the recovery
of the U.K.’s oil and gas resources, will remain negative,”
London-based broker Peel Hunt LLP said in a note to clients.
The industry is counting on Chancellor of the Exchequer
George Osborne to help with tax cuts on Wednesday when he
delivers the government’s last budget before May’s general
election. The group that represents oil and gas companies wants
the tax on North Sea profits cut and a simpler and more generous
tax break for investment.

Vital Changes

“Tax changes are vital,” Malcolm Webb, CEO of lobby group
Oil & Gas UK, said in a statement on Monday. Action “is
urgently needed in order to help re-establish the
competitiveness of the U.K. oil and gas industry.”
Investment in the North Sea is on the verge of collapse
with oil futures in New York dipping below $43, its lowest level
in six years. The area is already beset by sky-high costs,
rapidly depleting fields and uncertainty about who pays to
decommission old platforms.
Production costs mixed with the tax burden meant cash flows
for North Sea operators were a negative 5.3 billion pounds ($7.8
billion) last year, Webb said.
As oil continues to test new lows, companies are lining up
to sell assets, only to find there are no buyers.

BG Group

BG Group Plc, Apache Corp. and Marathon Oil Corp. are among
companies that have explored a sale of their North Sea assets.
The Financial Times reported Russian billionaire Mikhail Fridman
is preparing to sell a dozen gas fields in the North Sea to
avoid problems that would prevent LetterOne Group from buying
RWE AG’s Dea.
In total, assets worth as much as 20 billion pounds are
currently for sale in the North Sea, according to investment
bank Evercore Partners Inc.
The North Sea as victim of low oil prices marks a sharp
contrast from its glory days. In the oil rout of the 1980s, when
new oil coming onto the market also prompted the Saudis to hold
the line on their own production, the North Sea, Alaska and
several smaller new entrants, were responsible for upsetting the
established balance in the market.
Now weakened by time, the North Sea operators will be
raptly watching Osborne’s budget. Oil producers pay a total of
60 percent tax on profits: a supplementary levy of 30 percent in
addition to the regular corporation tax at 30 percent.
In December, the government announced several measures to
encourage North Sea investment, including reducing the
supplementary tax to 30 percent from 32 percent on producers and
adding incentives to carry out seismic surveys in under-explored
areas. Last month, Osborne promised to take further action to
help the North Sea after oil prices fell by more than half in
less than six months.
“It’s offshore and a harsh operating environment,” said
Jason Gammel, an analyst at Jefferies LLC in London. “You can
see operating expenses at particular fields as high as $50 a
barrel, clearly not generating much profit in the the current
oil price environment.”

[henryjohn]

Nymex Oil prices weakened to USD42.26 just now.

http://www.livecharts.co.uk/MarketCharts/crude.php

[Petertan]

Now with FED chairwomen statement to go slow and steady, the dollar may set to weaken, and this may causes a short term rally in oil. But I do not think it will last. So far with all stimulus, most of them hardly improve. Oil demand is set to dim and price set to go down further.

[BlueKelah]

Now with FED chairwomen statement to go slow and steady, the dollar may set to weaken, and this may causes a short term rally in oil. But I do not think it will last. So far with all stimulus, most of them hardly improve. Oil demand is set to dim and price set to go down further.

This could be due to Iranian oil flooding into the market as well.

More Iran Oil May Flow Within Months of Deal, Officials Say

[greengiraffe]

Woodside, Chevron to shed 2000 jobs as oil price fall hits industry
THE AUSTRALIAN MARCH 25, 2015 12:00AM

Matt Chambers

Resources Reporter
Melbourne
2000 jobs to go at Chevron, Woodside
The Wheatstone project platform under construction at the DSME shipyard in Okpo, South Korea. Picture: Chevron Source: Supplied

THE future for Western Australia’s oil and gas workers is becoming bleaker as the two biggest Perth-based operators, Woodside Petroleum and US oil giant Chevron, announced their first job-slashing programs since oil prices took a big turn for the worse in the middle of last year. The pair are expected to slash nearly 2000 jobs in the next couple of years, with 300 of those cuts, at Woodside, happening quickly.

Woodside has told staff it would make nearly 10 per cent of its workforce redundant as it stepped up cost-cutting that had previously been limited to natural attrition and the removal of positions that had not been filled.

Meanwhile, Chevron notified staff that it would make positions redundant, on top of the removal of contractors, as its got ready to switch from a builder to an operator of the $US54 billion Gorgon LNG project and $US29bn Wheatstone LNG project over the next two years.

While the Chevron workforce was always going to shrink as the big LNG projects in WA reached completion, the cost-cutting will be more severe because of the oil price downturn that will slash oil-linked LNG revenue.

It is thought about 1500 of Chevron’s 4000-strong workforce stand to lose their jobs as the project starts, on top of the 8000 or so contract construction workers whose prospects of finding work in new projects seem few and far between. The west coast cuts follow the flagged cuts of more than 500 workers from the Adelaide-based Santos last month and show the fortunes of the oil and gas sector are rapidly following those of the mining sector, where tens of thousands of jobs have been lost.

Last month, Woodside chief Peter Coleman said he was targeting staff cuts in line with 320 positions reduced last year. But the 2014 job losses were the result of natural attrition. The company’s sustainability report released last week showed workforce numbers only fell by 86, to 3803. This time, redundancies are in order.

“The price of oil has effectively halved over the past year, putting pressure on our bottom line,” Mr Coleman said in an email to staff.

“It is clear that we must accelerate existing plans to improve ­efficiency and effectiveness throughout the business.”

He said about 300 positions would be made redundant.

Chevron would not comment on how big its planned staff cuts would be, only to say that there would be a significant reduction.

“As we transition, we are undertaking a review to have the right skills and competencies in place to meet our future operations requirements,” a spokesman said.

[BlueKelah]

http://www.bloomberg.com/news/articles/2...e-runs-out

Getting comical now...


sent from my Galaxy Tab S

[CityFarmer]

One more view on oil price trend, from a local private banker, Bank of Singapore.

The 12-moth price target is US$65 for Brent.

Oil prices near bottom but supply has to fall to lift prices: Bank of Singapore

SINGAPORE (March 25): Conditions are in place for oil prices to bottom out but supply has to be reduced in order for prices to recover, says Bank of Singapore.

While the Organization of the Petroleum Exporting Countries (OPEC) has resisted calls to cut output to boost oil prices, some producers in the US have halted production as lower prices have made it no longer viable to continue operation, Bank of Singapore's chief economist Richard Jerram noted in a report today.

That said, supply may not contract as much as expected as the drilling rigs that have stopped work in the US are the "less productive ones", and improved technology has allowed oil companies to achieve more from existing wells even though fewer new wells are being drilled, he wrote.

"It is clear that the supply adjustment has begun, but rising inventories show that it is still not aggressive enough," he said.

"It could be that a lengthy period of low interest rates has allowed firms to bolster their balance sheets so that they can withstand lower prices for longer than usual, but in the end inefficient producers must exit."

Oil prices have pulled back in recent weeks after a rally in February. Bank of Singapore has a 12-month price target of US$60 a barrel for West Texas Intermediate and US$65 for Brent.
...
http://www.theedgemarkets.com/sg/article...-singapore

[koh_52]

BE A CONTRAIAN, as warren buffet said, be greedy when other fearful.
to me oil is more important than gold.
my 12 mths target price too will touches above $60 usd.

[Petertan]

Oil current strong showing is due to weakness of the dollar. And if dollar really heading below 85, then there is chance that we see oil at close to $60.
And with that, oil n gas counter may soar higher.