|Day's range||55.72 - 56.84|
(Bloomberg) -- The U.S.-China trade war and the growth of American oil supply will keep crude prices in check, notwithstanding Middle East tensions, according to the head of one of India’s biggest refiners.Brent crude will likely remain in a range of $60 to $70 a barrel and could fall toward $60 if demand worsens, said Mukesh Kumar Surana, the chairman and managing director of Hindustan Petroleum Corp. The global benchmark was trading at around $63 a barrel on Monday.“Oil-producing countries have to ensure that crude remains relevant,” he said in an interview in Mumbai. “So prices have to be kept in a reasonable range.”Brent has fallen around 15% from a high in late-April amid a deterioration in the global economy, with the International Energy Agency cutting its 2019 forecast for worldwide oil-demand growth for a second month in June. Rising tension in the Persian Gulf has only given prices a relatively small boost as supply, particularly from North American shale, remains ample.See also: India in Firing Line From a U.S.-Iran War Due to Gulf Oil HabitThe U.S. is growing faster as an oil producer than a consumer, which is adding a new dimension to the market and eroding the dominance of the Middle Eastern producers, Surana said. India imported 84% of its crude in the last financial year, according to government data, and two of every three of those barrels was sourced from the Middle East.Indian refineries started buying American oil after the U.S. reversed a decades-old law that restricted exports of unrefined crude in late 2015. Some infrastructure constraints in the U.S. Permian Basin are likely to be removed later this year, which will increase supply and may result in India being able to reduce its reliance on the Middle East, Surana said.Hindustan Petroleum is expanding and modernizing its refineries to give it greater flexibility to process more varieties of crude in the next couple of years and is also planning a new plant in northern India, he said. This will mean the company can reduce its purchases of petroleum products from other refiners, Surana said.To contact the reporters on this story: Debjit Chakraborty in New Delhi at firstname.lastname@example.org;Dhwani Pandya in Mumbai at email@example.comTo contact the editors responsible for this story: Serene Cheong at firstname.lastname@example.org, Abhay Singh, Andrew JanesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The string of incidents in the world’s most important shipping lane for crude, the Strait of Hormuz hasn’t led to significant spikes in oil prices for a number of reasons
(Bloomberg) -- Philadelphia Energy Solutions filed for bankruptcy protection and reached a financing agreement with debt holders as the fuel-making company grapples with the aftermath of a June explosion and fire at its oil refinery that forced it to shut operations.The company submitted Chapter 11 petitions at the U.S. Bankruptcy Court for the District of Delaware on Sunday. It also entered into a proposed debtor-in-possession financing agreement with holders of its outstanding term loan debt for up to $100 million, the company said in a statement.The moves provide the company “with the additional financing and liquidity necessary to ensure we can safely wind down our refining operations,” Chief Executive Officer Mark Smith said in the statement.It will be the company’s second trip to bankruptcy court in less than two years, after emerging from Chapter 11 in August 2018. Estimated liabilities for this round are as high as $10 billion, according to the recent filings. The East Coast’s largest oil refiner said in June that it was dismissing more than 1,000 workers and shutting its plant, which could process 335,000 barrels of crude oil a day. There’s been little impact on gasoline prices in the eastern U.S. from the fire, with European refiners filling the gap.A unit of Dallas-based Trinity Industries Inc. holds the largest unsecured claim, of almost $4.1 million, the court filings show. CSX Transportation Inc. and BNSF Railway Co. are the next biggest, at $3.9 million and $3.5 million, respectively.Last month, a leak at an alkylation unit, which is used to make high-octane gasoline, triggered explosions and fire that stopped the refinery’s Girard Point section. The Point Breeze section -- which had been running at a reduced rate and was on track to run out of crude by Sunday night -- received about 500,000 barrels of crude over the weekend, enough to keep operating for another 6 days, according to a person familiar with the matter.However, the company has told some employees it plans to shut the plant Tuesday, according to a different person.The loan would allow the company to shut down safely, after which it would pursue claims under its $1.25 billion of insurance coverage, a person familiar with the matter said earlier this month.The company referred to the shutdown of the refinery as a suspension, and said in the statement it will “work on a comprehensive resolution with its stakeholders and insurers in the weeks ahead with the goal of rebuilding the damaged facilities.”(Updates with crude supply in sixth paragraph, insurance coverage in eighth paragraph)\--With assistance from Niluksi Koswanage, Finbarr Flynn, Barbara Powell and Allison McNeely.To contact the reporter on this story: Stephen Stapczynski in Singapore at email@example.comTo contact the editors responsible for this story: Ramsey Al-Rikabi at firstname.lastname@example.org, David Marino, Mike JeffersFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
At 2:44 AM ET on Monday, US crude oil prices rose by 58 cents. The standoff between Iran and the United Kingdom might help oil prices rise this week.
(Bloomberg Opinion) -- The capture of the Stena Impero shows just how easy it is for Iran to hamper shipping through the Strait of Hormuz. At the moment, this is a particularly British problem, but were it to widen, the implication for oil flows could be huge.Why was a U.K. flagged vessel attempting to transit the waterway without close naval escort after specific threats had been made against British ships? It appears on the face of it to have been a very rash decision, although whether HMS Montrose could have prevented the Iranian action without opening fire remains an unanswered question. The use by Iran's Republican Guard of airborne forces as well as boats suggests that this was a much more serious attempt than the one against the British Heritage, which now looks more like a probing mission intended to assess the nature of a British response.The capture of the Stena Impero was a direct tit-for-tat response to the impounding of Iranian supertanker Grace 1 off Gibraltar earlier this month, but other actions haven't been. The MT Riah, a small oil tanker that was taken last week, was either towed into Iranian waters for repair after suffering technical difficulties, according to Iran’s foreign ministry, or it was arrested for smuggling Iranian fuel, according to the Revolutionary Guards. Iraqi-owned, Panamanian-flagged and chartered by a company based in the U.A.E. to carry fuel to Somaliland, that ship has no British connection.Iran's actions are understandable, though not forgivable, in response to the unilateral rejection of the nuclear deal by the U.S. and, more importantly, President Donald Trump's decision to force everybody else to toe his line. Although the other parties to the Iran nuclear deal – the European Union, Russia and China – want to keep it alive, they have been almost powerless to preserve it in any meaningful way. By imposing extra-territorial sanctions on all buyers of Iranian crude with the threat of denying them access to U.S. dollars and the American banking system on which international trade depends, Trump has effectively forced everyone else to stop buying Iran’s oil. To expect Iran to abide by its side of the nuclear deal without receiving any of the benefits of trade and investment that it was due to receive in return is naive. But this creates a problem for the European and Asian countries that depend on the flow of oil through the Strait of Hormuz. By joining a proposed U.S.-led coalition to protect shipping through the waterway they would, from Iran’s perspective, be driving another nail into the coffin of the nuclear deal. And that may provoke Iran to respond by widening its harassment of shipping in the Strait of Hormuz.That would jeopardize all of the oil exports from southern Iraq, Kuwait and Qatar, along with a significant proportion of those from Saudi Arabia and the United Arab Emirates. These have averaged about 14.7 million barrels a day in the first six months of the year and most of that volume can’t be exported any other way.Iraq no longer has the ability to move crude from oil fields in the south to its northern export routes after its Strategic Pipeline was destroyed during the U.S.-led invasion of 2003. Saudi Arabia could use its East-West Pipeline to move crude to export terminals on the Red Sea. It has a nameplate capacity of 5 million barrels a day, but last year carried only around 2.1 million barrels, much of which was delivered for processing at refineries at Yanbu. The spare capacity in the line is not enough to divert even half of Saudi Arabia’s crude exports from the Persian Gulf.An escalation of tanker harassment could also impact liquefied natural gas exports from Qatar, which accounts for about a quarter of global LNG supplies. This is a bit less likely, as Qatar has good relations with Iran, but it can’t be ruled out.Putting private armed guards on tankers and signalling their presence may have deterred some of the piracy off the east coast of Africa, but it is unlikely to have a similar effect on Iran’s Revolutionary Guard. Furthermore, any such forces would be foolish to open fire on an Iranian patrol boat. Should Iran’s harassment of tankers escalate, the oil importing and shipping countries may have little option other than to align themselves with the Americans, at least as far as protecting vessels is concerned. But if they’re going to use naval ships to protect tankers, they’ll have to be prepared to use their weapons, and that is an escalation that everyone wants to avoid.With nearly 15 million barrels a day of crude flows at risk, it is a step that may have to be taken, unless both sides step back from the brink and work to find a diplomatic solution. Iran may not close the Strait of Hormuz, but will probably step up its harassment of ships passing through it, raising both the cost and the risk of carrying oil from the Persian Gulf. President Trump is not going to starve Iran to the negotiating table, so he’s going to have to find a way to entice them, if he wants to avoid this conflict escalating.(Corrects spelling of Stena Impero in first, third paragraphs. )\--With assistance from Elaine He.To contact the author of this story: Julian Lee at email@example.comTo contact the editor responsible for this story: Jennifer Ryan at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Julian Lee is an oil strategist for Bloomberg. Previously he worked as a senior analyst at the Centre for Global Energy Studies.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
If you want to know who really controls Permex Petroleum Corporation (CNSX:OIL), then you'll have to look at the...
(Bloomberg) -- Libyan oil production is set to recover from a five-month low as the North African supplier’s biggest field restarts following a brief halt.A valve in the pipeline that carries crude from the Sharara field to the Zawiya refinery has been reopened and tested, said the state-run National Oil Corp. The stoppage occurred Friday night, and authorities lifted a short-lived force majeure on loading Sharara crude at Zawiya on Monday.Production at Sharara, in Libya’s southwest, had returned to its normal level later Monday, according to a person familiar with the situation who asked not to be identified because the information isn’t yet public.The field had been producing 290,000 barrels a day and its shuttering had reduced overall daily production in the country with Africa’s largest proven oil reserves to about 1 million barrels, the OPEC member’s lowest since February.An oil tanker, Monterey, has been waiting at Zawiya port to load 700,000 barrels once force majeure is lifted, a person with direct knowledge of the matter said before the announcement by the NOC, asking not be identified because he isn’t authorized to speak to the media.The NOC condemned the “as yet unclaimed deliberate act of sabotage” that had stopped Sharara’s oil and said authorities were continuing to hunt the perpetrators. Sharara has experienced brief shutdowns in recent years as some of Libya’s myriad armed groups press political or financial demands.(Updates with field back up to normal level in third paragraph.)To contact the reporters on this story: Salma El Wardany in Cairo at email@example.com;Hatem Mohareb in Benghazi at firstname.lastname@example.orgTo contact the editors responsible for this story: Nayla Razzouk at email@example.com, Michael Gunn, Amanda JordanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Oil prices never stay quiet for too long. While Iran and China are making the most headlines when it comes to risks to oil, Bank of America sees a few other less-publicized factors as just as important
With financial stress setting in for U.S. shale companies, some are trying to boost production in order to improve cash flows, while others are cutting costs, but neither strategy seems to work out
Slowing oil demand growth and a persistent global glut will cap oil prices and keep them from rising too much, barring serious escalations in geopolitical tensions, Fatih Birol, the executive director of the International Energy Agency, said on Friday
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According to the IEA, any large upside in crude oil prices isn't likely due to a possible economic slowdown dragging the demand and rising oil exports.
Disturbances in Iran intensified on Jul 18 after President Donald Trump declared that the U.S. Navy destroyed an Iranian drone in the Strait of Hormuz in a defensive action.
Investing.com - Oil prices jumped on Friday in Asia after the U.S. reportedly shot down an Iranian drone in the Strait of Hormuz in what Trump described as "defensive action".
David Chen is the CEO of Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Limited (HKG:1938). This analysis aims...
(Bloomberg) -- The downing of an Iranian drone in the Strait of Hormuz wasn’t enough to lift oil prices, which slid to the lowest in almost a month amid pessimism about the global economy.Futures tumbled 2.6% on Thursday in New York, the fourth consecutive daily loss. Prices managed to climb about 60 cents after President Donald Trump said the U.S. had downed an Iranian drone in the Persian Gulf, but even that wasn’t enough to push the market up. Instead, crude joined a decline for tech and consumer stocks amid a spate of disappointing corporate earnings, alongside signs that Beijing and Washington are making little progress on a trade deal.Russian pipeline operator Transneft PJSC, meanwhile, said it resumed full flows from the country’s largest crude producer, Rosneft PJSC, after imposing restrictions due to contamination concerns.“The market is waking up to the fact that global oil demand is wilting and the possible prompt that could improve the situation is still remote,” said Judith Dwarkin, chief economist at Calgary-based consultant RS Energy. “There’s been no improvement in the U.S.-China trade dispute even though they say they are coming back to the table.”Oil has fallen about 8% since Monday, on track for its worst weekly performance since late May. The specter of a renewed U.S.-China conflict dented the demand outlook, while American fuel stockpiles jumped. That’s overshadowed worries that Iran may shut down the Strait of Hormuz, a key chokepoint for much of the world’s oil shipments.West Texas Intermediate for August delivery closed down $1.48 to $55.30 on the New York Mercantile Exchange, falling to the lowest since June 19. It was at $55.63 at 4:05 p.m., after Trump announced the drone incident.September Brent lost $1.73 to close at $61.93 a barrel on the ICE Futures Europe Exchange, before rebounding to $62.44.In an interview with Bloomberg Wednesday, Iran’s Foreign Minister Javad Zarif said the U.S. “shot itself in the foot” by pulling out of its nuclear accord with his nation. Crude briefly rallied on Thursday after Iran confirmed the seizure of an oil tanker in the Persian Gulf this week.Iran’s state-run Press TV news channel later aired footage of a tanker that disappeared from global satellite tracking systems four days ago. The ship was smuggling fuel out of the country, the Iranian Revolutionary Guard Corps said.(An earlier version of this story misspelled the name of RS Energy’s chief economist.)\--With assistance from Sharon Cho and James Thornhill.To contact the reporters on this story: Alex Nussbaum in New York at firstname.lastname@example.org;Alex Longley in London at email@example.comTo contact the editors responsible for this story: Simon Casey at firstname.lastname@example.org, Carlos Caminada, Christine BuurmaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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The newest numbers showed that daily crude output remained above one million barrels for the 28th month, further confirming North Dakota as one of the hottest shale plays in the United States.
Investors have sold equities across the globe and headed back towards the safety of government bonds and Gold. After spending several weeks pricing in the impact of expected monetary easing by major central banks, bullish investors took a pause as fundamentals began to show signs of cracks.
(Bloomberg) -- China will tighten its grip on coal imports in the second half and keep full-year shipments at similar levels as 2018, according to an executive from the national industry group.The latest customs clearance halt at some mainland ports is because imports have exceeded quotas in the first six months, said Su Chuanrong, executive director-general of China National Coal Association. Overseas purchases are also set to weaken because domestic demand has faltered, Su said Thursday.The association’s outlook chimes with a chorus of predictions including from trading house Noble Resources International Pte that China’s coal imports are bound to slump in the second half. Inbound cargoes have gained 6% on-year in the first six months despite curbs in place. In the latest sign of a clampdown, the port of Caofeidian has decided to suspend clearance of coal for traders as regulators seek to cap annual imports. “Demand isn’t booming as it’s supposed to,” Su said in an interview. The current period tends to be a key consumption season as households and businesses crank up air conditioning use, but cooler temperatures have cut demand for cooling, she added.Thermal coal futures on the mainland have slipped 4% this month. Daiwa Capital Markets said earlier this week that recent heavy rainfalls in southern China could lead to higher hydropower output, which squeezes coal-fired generation, while lower temperatures may hurt power consumption as well.To contact Bloomberg News staff for this story: Feifei Shen in Beijing at email@example.comTo contact the editors responsible for this story: Ramsey Al-Rikabi at firstname.lastname@example.org, Jasmine Ng, Aaron ClarkFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The Zacks Analyst Blog Highlights: Callon Petroleum, Carrizo Oil & Gas, McDermott International and Occidental Petroleum
(Bloomberg) -- India may spin off units of Coal India Ltd., the world’s largest coal miner, into separate listed companies to boost competition and raise government funds, according to people with knowledge of the matter.The state-run company and the coal ministry are studying a proposal by the finance ministry’s Department of Investment & Public Asset Management to list four of Coal India’s biggest production units, as well as its exploration arm, said the people, who asked not to be named as the plan isn’t public. The development is in an early stage and it was unclear how long it may take, the people added.Prime Minister Narendra Modi’s government has sought to sell some state assets to raise funds, and these divestments will continue to remain a priority, Finance Minister Nirmala Sitharaman said July 5, setting a record target of raising 1.05 trillion rupees ($15 billion) in the current fiscal year. Spinning off Coal India subsidiaries would also lead to greater competition in the domestic coal market and improve corporate governance, the people said.A spokesman at Coal India didn’t respond to requests seeking comment, while press officials at the coal and finance ministries declined to comment.The four units -- Mahanadi Coalfields, South Eastern Coalfields, Northern Coalfields and Central Coalfields -- account for more than three-fourths of the company’s output, while constituting less than half of its workforce. The fifth unit would be Central Mine Planning & Design Institute.India’s state run coal giant has been unable to meet growing demand despite abundant resources. Coal India produced a record 607 million metric tons in the last fiscal year to March, falling short by 22% of a target proposed in 2017. The goal has been revised a few times since then, but output was still just below a revised target. Meanwhile, imports of the fuel surged to a record over the same period.Shares in the miner declined 1.2% to 230.00 rupees in Mumbai. Kolkata-based Coal India has a market cap of about $20.6 billion, with the government holding almost 71% of the company.India, the world’s second-largest coal consumer after China, depends on Coal India for about 83% of the domestic production. The miner has consistently fallen short of production targets, while an overworked railway network has hampered transport of the fuel.The government’s top planning body, NITI Aayog, proposed in 2017 that Coal India be broken up so its units can compete against each other. It was dismissed at the time by Coal Minister Piyush Goyal, who said the plan doesn’t reflect government policy.(Updates shares in seventh paragraph and adds chart.)To contact the reporters on this story: Debjit Chakraborty in New Delhi at email@example.com;Rajesh Kumar Singh in New Delhi at firstname.lastname@example.org;Siddhartha Singh in New Delhi at email@example.comTo contact the editors responsible for this story: Ramsey Al-Rikabi at firstname.lastname@example.org, Unni Krishnan, Alpana SarmaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.