Oil Prices

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Brent oil hits 9-month low
DOW JONES NEWSWIRES AUGUST 12, 2014 10:45PM

Brent crude oil futures hit a nine-month low in Europe on Tuesday as dealers shrugged off fresh tensions in Iraq.

Iraq's president has appointed a new candidate as prime minister, but the incumbent, Nouri al-Maliki, refused to step aside, setting up a standoff as the government struggles to combat a rapidly advancing Sunni insurgency.

September Brent crude on London's ICE Futures exchange was down 0.8 per cent at $US103.88 a barrel, a level not seen since last November. On the New York Mercantile Exchange, light, sweet crude futures for delivery in September were down 0.7 per cent at $US97.35 a barrel.

In June, oil prices had spiked close to $US117 as the Islamist offensive picked up. This time around, analysts feel that there is only a limited risk that Iraqi oil supplies to the global market will be disrupted.

"Evidently, the majority of market participants still do not expect any supply outages in Iraq," said Commerzbank, especially given the ample supplies of oil globally.

The market will get some cues from the monthly oil-market reports of the International Energy Agency and US Energy Information Administration due later Tuesday. The American Petroleum Institute, a trade body, will also publish its weekly US oil inventory report later in the day.

ICE gas oil for August changed hands at $US875.25 a metric ton, down 0.9 per cent from Monday's settlement.

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Oil extends losses, Brent crude hits 13-month low
DOW JONES NEWSWIRES AUGUST 13, 2014 9:45PM
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Brent crude oil futures hit a 13-month low in Europe on Wednesday as markets remain well supplied despite geopolitical tensions.

Brent crude traded at its lowest since early July 2013 after the International Energy Agency cut global demand forecasts Tuesday for both 2014 and 2015 and said markets remain well supplied, despite events in the Middle East and Ukraine.

The US Energy Information Administration also cut its forecast for global oil consumption in 2014 and 2015 in its monthly short-term energy outlook published on Tuesday, although it noted slowing oil production growth by countries outside the OPEC cartel.

September Brent crude on London's ICE Futures exchange was down 0.4 per cent at $US102.60 a barrel. On the New York Mercantile Exchange, light, sweet crude futures for delivery in September were flat at $US97.30 a barrel.

"The IEA's monthly report certainly did not help already downbeat sentiment on Tuesday," said Andrey Kryuchenkov, an analyst at VTB Capital. "Market participants still do not expect significant supply-side shocks despite all the geopolitical jitters in Iraq."

ICE gas oil for August changed hands at $US871 a metric ton, down 0.4 per cent from Wednesday's settlement.

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UK solar deployments hit 5GW
FINLAY COLVILLE AUGUST 14, 2014 9:15AM

Solarbuzz

Solar photovoltaic (PV) capacity installed in the United Kingdom has now reached 5 gigawatts (GW), making the UK just the sixth country to hit this landmark figure.

Of the other five leading solar-PV countries, Germany remains the undisputed leader, with more than 37 GW. China, Japan, Italy and the United States each have more than 10 GW installed.

The 5 GW of solar PV capacity in the UK can be segmented as follows:

– 90% of the 5 GW capacity has been installed in the past three years

– 46% of the capacity is located in the South West and South East regions

– Small-scale feed-in-tariffs (FITs) have accounted for 42%

– Ground-mounted Renewable Obligation Certificates (ROCs) have incentivised 39%

– Residential installations represent one-third of the 5 GW capacity

Large-scale ground-mounted solar farms, occupying 50 acres (20ha) or above, have grown in popularity in the past 18 months, and are responsible for 20% of the total

At 5 GW, solar PV capacity in the UK can now power nearly 6% of all UK households. The cumulative PV capacity is expected to continue to grow strongly until March 31 next year, before pending policy changes take effect to slow down the large ground-mounted PV segment.

The UK government is seeking to shift growth to the large rooftop market; however, rooftop solar PV capacity from systems above 250 kilowatts (kW) represents only 3% of the market today, and is still lacking clear policy and incentive drivers.

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If the next US president doesn't focus on cutting oil demand, from using renewable energy to energy efficient cars, they would have missed a great window of opportunity and regret it later.

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http://www.cnbc.com/id/101917371

Why some investors think oil's bull run is done
Jackie DeAngelis | @JackieDeAngelis
7 Hours Ago
CNBC.com


The crude oil market has seen dramatic spikes starting with the Arab Spring in 2010 and continuing into this past June, but some investors are betting that the bull market for oil is over.

"We had a situation in oil where we were in a prolonged bull market," Stephen Schork, editor of the Schork Report, told CNBC's "Futures Now," pointing out that oil started the year at $89.09 and rallied to $106.64 during the worst of the headlines out of Iraq. But he said he thinks the bull run has peaked.

"As my mentor ... taught me 15 years ago: good news, bad action," Schork said. "That is to say, the Iraq news was supposed to be good for the bull ... but instead, that trend ended shortly after—a clear tell-tale that the bull market has run its course," he said.

Read MoreGeopolitics posing 'uneasy comfort' for oil markets

Crude inventories rose 1.4 million barrels last week, according to Department of Energy. That added more downward pressure on domestic benchmark West Texas Intermediate, which dropped below $97 immediately after the release of Wednesday's report. It was still trading below $97 on Thursday.

Domestic crude prices have dropped almost 4 percent in the last month and roughly 10 percent from recent highs, as traders have shrugged off geopolitical concerns and focused more on the supply-demand equation both in the United States and globally.

In fact, the International Energy Agency said Tuesday that the global market is well supplied, citing OPEC production hitting a 5-month high in July as one reason.


Getty Images
European economic growth certainly is not pointing to any increase in demand for internationally priced oil. The euro zone's second-quarter gross domestic product, released Thursday, showed flat growth, with the economy of European powerhouse Germany actually contracting.

"Clearly, demand hasn't been nearly as good as what we had expected," chief oil analyst Amrita Sen of consulting firm Energy Aspects told CNBC's "Squawk Box Europe" on Thursday. "The Q2 numbers were very bad, to be honest. We still had growth in oil demand ... but potentially some of the months came in a million barrels a day lower than what our expectations were, based on GDP guidance."

Read More10 countries likely to be hit hard by climate change

Global demand appears to be waning elsewhere, as evidenced by a report Wednesday that China's implied demand for crude fell 2 percent year over year in July. This recent figure supported other weak demand data from the country.

The United States is experiencing a seasonal drop in demand as the summer driving season comes to a close. That's pressuring crude prices and lowering gasoline prices. According to the latest AAA survey, the national average for a gallon of regular gasoline was $3.47, down from $3.61 a month ago.

With respect to geopolitics, Iraq is definitely on oil traders' minds, but the response to the crisis in northern Iraq has been rational, as there have been no reports of supply disruptions in the region.

To put northern Iraq's production in perspective, it's about 360,000 barrels a day, which is only 12 percent of the country's overall output of roughly 3 million barrels a day. And of that 360,000 barrels, only a third is exported—so even if there were a supply disruption in the north, it probably wouldn't impact the well-supplied international market.

Read MoreThe oil spike that wasn't: Prices defy turmoil

In addition, North American production is ramping higher. Schork said the United States is producing so much that refineries can't handle the capacity.

"We have too much of it, our refineries can't use it, so we're sitting on [it]," Schork said.

—By CNBC's Jackie DeAngelis

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Oil prices sink 2% on growth fears
AFP AUGUST 15, 2014 6:30AM

Oil prices have tumbled, with the US benchmark dropping 2.1 per cent, as investors weighed a mounting batch of weak economic data from around the world.

The main US futures contract, West Texas Intermediate for September delivery, tumbled $US2.01 on Thursday to close at $US95.58 a barrel, its lowest level since January.

European benchmark Brent North Sea crude for delivery in September dropped $US2.27 to settle at $US102.01 in London trade. That marked its lowest closing level since late June 2013.

The market reacted to data showing growth in the 18-country eurozone stalled in the second quarter.

Analysts had expected a 0.2 per cent expansion, and the flatlining raised questions about the strength of demand in the single-currency bloc.

Germany, Europe's largest economy, shrank by 0.2 per cent, and France, the second-largest, had zero growth for the second consecutive quarter.

"The data predated the imposition of tighter sanctions against Russia that are seen as weighing further on Germany's overall economic performance," Phil Flynn of Price Futures Group said.

"The reopening of the Forties pipeline in the North Sea and an uptick in Libyan oil production may also be contributing something to the market's sense that supply is abundant, and demand in question."

Earlier, too, there were more signs of economic weakness elsewhere that weakened oil price support: bank lending in China sank in July; Japan's economy shrank at an annualised rate of 6.8 per cent in the second quarter; and US retail sales were flat in July compared with the prior month.

"We are falling off the cliff again," James Williams of WTRG Economics said.

"If there is anything that causes lower (oil) prices it is weak economies."

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Apache makes huge oil discovery
AUGUST 18, 2014 1:15PM

Mitchell Neems

Business Spectator Reporter
Melbourne
US energy company Apache has made an historic discovery of a new oil field offshore Western Australia state, which may hold as much as 300 million barrels of crude.

The Phoenix South-1 well, drilled 180 kilometers north of Port Hedland in 133 meters of water, is the company's first oil discovery in Australia's offshore Canning Basin.

Shares in Carnarvon Petroleum, one of three junior partners in the venture, more than doubled to a three-year high on the news.

"This is the most significant new oil play in the North West Shelf since the Enfield discovery opened up the Exmouth Basin almost 20 years ago," said Adrian Cook, managing director of Carnarvon, which has a 20 per cent stake in the project.

"The implications on the rest of our acreage are still being assessed, but the potential is extraordinary," he said.

At 1215pm (AEST) Carnarvon shares were 119 per cent higher at 17.75c, against a benchmark index lift of 0.04 per cent. It is the highest point the shares have reached since August 2011, when they traded above 20c.

Apache is the operator of the WA-435-P block where the discovery was made, and owns a 40 per cent stake in the license and the adjacent WA-437-P permit. Executive vice president and chief operating officer Thomas E. Voytovich said although evaluation is at an early stage, Phoenix South-1 was an exciting result.

"The oil and reservoir quality we have seen point to a commercial discovery," he said.

If these results are borne out by further appraisal drilling, Phoenix South may represent a new oil province for Australia."

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Apache announces major new WA oil find
STEPHEN BELL DOW JONES AUGUST 18, 2014 4:51PM

IN what would be one of Australia’s largest oil discoveries in decades, US energy company Apache said an exploration well offshore Western Australia had found as much as 300 million barrels of crude.

The drilling result from the Phoenix South-1 well in the offshore Canning Basin could reopen a frontier for oil exploration that some international energy companies abandoned decades earlier after wells turned up dry.

“The oil and reservoir quality we have seen point to a commercial discovery,” said Thomas Voytovich, a senior executive at Apache’s international arm. “If these results are borne out by further appraisal drilling, Phoenix South may represent a new oil province for Australia.”

Australia is in need of new sources of oil to replace fast diminishing reserves from existing fields.

According to BP, Australia’s oil production last year fell by 17 per cent to 416,000 barrels a day — its lowest level since 1972 — as conventional fields became depleted.

That is in contrast to natural gas where several big discoveries by companies including Chevron PLC and Royal Dutch Shell have paved the way for investments totalling tens of billions of dollars in export infrastructure to feed Asian demand for cleaner-burning fuels.

Early estimates that Phoenix South-1, drilled 180 kilometres north of Port Hedland in 133 meters of water, found up to 300 million barrels of oil in place compare favourably to recent discoveries in Australia.

For example, Woodside Petroleum’s 1999 Enfield discovery, which led to a wave of new drilling in the nearby Exmouth Basin, started production in 2006 with reserves of 127 million barrels of oil.

Further to the North West, Chevron’s Barrow Island field has produced an estimated 322 million barrels of oil since it came online in the 1960s, according to Western Australian government data.

Simon Andrew, an energy analyst at Perth-based broker Hartleys, said the full significance of the Phoenix South discovery would not be known for some time.

“It will take two to three months to work out the actual recoverable volumes from the discovery,” he told The Wall Street Journal.

Apache said testing had confirmed at least four distinct oil “columns” in the seabed rocks ranging in thickness between 26 meters to 46 meters, with six light oil samples recovered from three intervals so far.

Apache is the operator of the WA-435-P block where the discovery was made, and owns a 40 per cent stake in the license and the adjacent WA-437-P permit.

Other investors include Carnarvon Petroleum, a unit of Japan’s JX Holdings, and closely held Finder Exploration.

News of the discovery led to Carnarvon’s stock tripling in value today.

“This is the most significant new oil play in the North West Shelf since the Enfield discovery opened up the Exmouth Basin almost 20 years ago,” said Adrian Cook, managing director of Carnarvon, which has a 20 per cent stake in the project.

“The implications on the rest of our acreage are still being assessed, but the potential is extraordinary,” he said.

Apache said the area around Phoenix South includes several large structures, including the Roc prospect on WA-437-P, that could also contain lots of oil.

The company is planning to drill more wells next year.

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Brent crude price slips below $US103 a barrel
DOW JONES NEWSWIRES AUGUST 18, 2014 9:00PM

Crude oil futures fell in Europe on Monday as ample global supply kept prices in check.

In Libya, where production has held well below capacity in recent months due to labour unrest and port closures, exports are increasing. Libya has exported the first shipment of oil from the Ras Lanuf terminal since last year, and the state-owned National Oil Co. is planning to restart exports at the country's largest oil port, Es Sider, this week.

The prospect is keeping Brent in a contango structure -- where the front-month contract is cheaper than future contracts -- triggering demand for temporary, floating storage as traders look to build up stocks.

"Reopening of the biggest oil ports in the East could raise Libyan oil supplies further in the next few weeks, adding to the existing oversupply on the European market. These developments make an imminent Brent recovery unlikely," Commerzbank analysts said.

October Brent crude on London's ICE Futures exchange were lower at $US102.12 a barrel. On the New York Mercantile Exchange, light, sweet crude futures for delivery in September were down 1 per cent at $US96.37 a barrel.

ICE gas oil or September changed hands at $US859.75 a metric ton, down 0.8 per cent from Friday's settlement.

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Oil price points to slow growth
NICOLE FRIEDMAN THE AUSTRALIAN AUGUST 20, 2014 12:00AM

WONDERING where global growth is headed this year? It might help to keep an eye on today’s oil prices.

A sharp drop in global oil demand that began in May was a “leading indicator” of slowing global growth, as the latest round of gross domestic product data from Europe and Japan have confirmed, says London consulting firm Energy Aspects.

The price of Brent crude, the global benchmark, is down 12 per cent from its mid-June peak, the result of tepid demand from European and Asian refineries as well as a perception of reduced geopolitical risk.

While prices trawl 14-month lows near $US101 ($108) a barrel, they are still too high to lure more demand from drivers and other consumers, Energy Aspects says.

“Overall weakness in global oil prices signal that demand has not really picked up” yet, the firm says. “This raises the question of whether the global economy and stock markets are due for a lurch downwards” later this year.

The Brent futures market points to sluggish demand. In July, the futures market for global benchmark Brent crude flipped out of backwardation — when the front-month contract is more expensive that contracts for delivery in later months. Brent is now in contango, meaning that the front-month October contract is cheaper than contracts for later this year and next.

Contango indicates that traders are buying near-term supplies at a discount because there are enough barrels to go around.