Trends
Arctic: great potential and interest, but huge challenges
1 September 2008
Security of energy supply is high on the political agenda. Soaring energy prices and technological advances have made it possible to exploit petroleum resources in areas that were previously inaccessible. Policymakers are increasingly interested in the potential of the Arctic. By Morten Anker, advisor, and Eivind Magnus, director, The Petroleum Group, Econ Pöyry
Opec cuts and prices rise
1 September 2008
During Tuesday trading, Brent futures fell below $100 a barrel for the first time since April, as the dollar's gradual recovery and weaker global oil demand continued to depress prices. On Wednesday, however, following a surprise decision by Opec to cut crude production, Brent was back above that level, the October contract rising by $0.02/b to $100.36/b. WTI October futures, meanwhile, were up by $1.07/b at $104.33/b.
What goes up ...
1 September 2008
Oil prices fell by 5% today amid renewed turmoil on financial markets. With Lehman Brothers seeking bankruptcy protection, Merrill Lynch being sold to Bank of America, and concerns about the stability of insurer AIG mounting, Brent futures for November delivery were down by $4.55/b, at $89.69/b. WTI futures for October delivery were $4.35/b lower, at $91.36/b. Both Brent and WTI are at their lowest points since February.
The ever-deflating oil bubble
1 September 2008
A few months ago, the prospect of $100 a barrel oil was real and frightening. It is a real prospect once again, but this time it is a point that would be reached with relief, not trepidation. Last week, oil prices rose to almost $120/b as markets fretted about the threat Hurricane Gustav posed to US offshore oil infrastructure.
Caught short
1 September 2008
CRUDE oil prices surged on Monday as a squeeze on short positions in New York triggered an intra-day rise of $16/b. The spike in the afternoon session on Nymex was the largest dollar gain and second-highest percentage rise ever seen on the board, and left the front-month contract at almost $121/b. On Tuesday afternoon in London, Brent had softened to just over $103/b, while in the morning session in New York the price was around $107/b.
Highly volatile
1 September 2008
Oil prices started the week with a near 10% fall, as the prospect of a significant contraction in energy demand grew, following the US House of Representatives' shock rejection of the government's $0.7 trillion Wall Street rescue package.
Iraq: Two steps forward, one step back
1 September 2008
SHELL became the first western energy major to strike a significant post-war hydrocarbons deal with the country last month, following the cabinet's decision to approve a project to process and market all the associated gas that is flared in the Basra governorate, an area covering some 19,000 square km. That followed another cabinet decision to approve a deal with China National Petroleum Corporation (CNPC) that will lead to development of the Al-Ahdab oilfield.
Speculators in the frame as Wall Street shudders
1 September 2008
THE SEPTEMBER crisis on Wall Street coincided with a slump in oil prices to around $90 a barrel. That brought into question the claim of the US Commodity Futures Trading Commission (CFTC) that institutional investors' investment in energy futures was not the primary reason for the rise in oil prices in 2007 and the first half of 2008. Indeed, the fall in oil prices in the face of bullish physical fundamentals – with most US Gulf of Mexico oil production unavailable because of Hurricanes Gustav and Ike (see p12) – appears to support Opec's view that speculators are largely to blame for oil-price inflation.
Fundamentals of the Global Oil & Gas Industry, 2008 - Intelligent Energy
5 August 2008
The oil and gas industry can learn from other global industries as it faces up to the challenge of meeting rising energy demand. Technological advances and human-resource development can bridge the gap between the vision and reality of intelligent energy. By Andrew Gould, chairman and chief executive, Schlumberger
Oil hits three-month low
5 August 2008
Crude futures have fallen to a three-month low as better news for oil prices outweighed the negative news. But views are split on whether the trend is set to continue or will reverse. On Monday, Nymex's light, sweet crude futures contract for September delivery fell by $3.69/b to $121.41/b, while, in London, August Brent was down by $3.50/b, at $120.68/b, on Ice. This means crude futures have fallen around $27/b, or 18%, since Brent hit a record high of $147.50 on 11 July.
The downward correction continues
1 August 2008
The market price of anything is always a case of balancing the positives and negatives. But with the added impetus that an oil price of near $150/b was never considered to be fundamentally sound, the continued trending down of the price of crude has come as little surprise to many analysts.
Angola: First ultra-deep development starts
1 August 2008
SONANGOL has given BP the go-ahead for the country's first oil development in an ultra-deep-water block – and, in a new move for Angola, has extended the approval to a series of subsequent developments in the block. BP is to develop a four-field complex in the northeast of Block 31, covering the Plutão, Saturno, Vênus and Marte (PSVM) fields. Plans call for first oil in 2011, with the plateau production rate of 150,000 barrels a day (b/d) due to be reached the following year.
Nigeria: Output lifted by Agbami start-up
1 August 2008
THE CHEVRON-operated Agbami field – the country's largest deep-water discovery – came on stream at the end of July, providing an initial 100,000 barrels a day (b/d) lift to the country's troubled oil production. Output is expected to build quickly to 230,000 b/d and, by the end of next year, to have reached its plateau rate of 250,000 b/d of high-quality (43°-45°API) crude and natural gas liquids.
High prices dampening demand
1 August 2008
Oil prices have continued to drop as the bearish factors mount. By midday on Tuesday, Nymex's light, sweet crude futures contract for September delivery was down by $0.77/b to $112.10/b. The close-Monday price of $112.87/b was the first time crude had dipped below $113/b since 1 May. In London, October Brent futures were down to $111.86/b, on Tuesday afternoon, having settled at $111.94/b on Monday evening.
Hurricane Gustav blows to bulls rescue
1 August 2008
The weather, this time in the form of now-Hurricane Gustav, is keeping a floor under the oil price, though few are predicting it can reverse the downward trend that oil appears stuck in.
Biofuels: Next generation progressing
1 August 2008
Despite recent adverse publicity, the biofuels industry has a bright future, writes Ian Lewis
Opec on the attack
1 August 2008
Opec is annoyed. In interviews last month with Petroleum Economist, the group's secretary-general, Abdulla El-Badri, and its president, Chakib Khelil, explained why
Ecopetrol: Ready for Wall Street
1 July 2008
ECOPETROL plans to offer shares on the New York Stock Exchange (NYSE) by the end of the year, giving foreign investors their first chance to buy directly into Colombia's largest oil company.
Prices firm amid supply worries and dollar weakness
1 July 2008
Oil futures held firm above $145 a barrel on Tuesday as weakness in the US economy triggered another drop in the dollar's value, pushing crude prices up in its wake. News about supply disruptions added to the bullish momentum.
Challenged in the near term, but too early to write off
1 July 2008
GTL has the potential to be a viable alternative to LNG for monetising gas reserves, especially in today's high oil-price environment. But an essential prerequisite to rekindle interest in the industry will be to address the issue of technical risk. By Rajnish Goswami, vice-president, gas and power consulting, Asia and Middle East, and Alan Gelder, vice-president, downstream oil consulting, Europe, Middle East and Africa, Wood Mackenzie
Putting a premium on marketing
1 July 2008
GTL products have properties that make them more valuable than conventional refinery products. So how do you persuade customers that a premium price is worth paying, asks Petroleum Economist's Alex Forbes?