Free Republic

The future for the coal industry is looking “increasingly bleak,” according to an investor’s note from Macquarie Research. The analysis firm also said that “a wave of bankruptcies” appear to be just over the horizon as coal mining companies deal with mounting debt and a shrinking market. The coal markets have collapsed in spectacular fashion over the last few years due to a perfect storm of factors. U.S. coal producers first had to compete ferociously with shale gas in America’s electric power sector as fracking took off about a decade ago. That forced an array of coal plants to shut...

Citigroup Inc.,Goldman Sachs Group Inc.,UBS AG and other large banks face tens of millions of dollars in losses on loans they made to energy companies last year, a sign of investor jitters in a sector battered by the oil slump. The banks intended to sell the loans to investors but have struggled to unload them even after cutting prices, thanks to a nine-month-long plunge that has taken Nymex crude futures to their lowest level since 2009. The losses mark a setback for Wall Street, after global banks earned $31 billion in fees over the past five years by financing energy-company...

While Congress and the White House continue to wrangle over the Keystone XL pipeline extension, the oil industry is taking matters into its own hands. Markets are primed for an influx of Canadian crude oil, but with pipeline transport off the table for the foreseeable future, producers have built alternative modes to meet the demand. The problem is, recent disasters have soured legislators and environmentalists on road and rail for moving oil. Alongside political uncertainties are other wild cards like extreme weather and the unknowns that arise from an emerging logistics infrastructure, which can all impact the flow of goods....

OPEC has no choice but to keep its market share and shun oil output cuts, Kuwait's oil minister said on Thursday, reiterating the view from the emirate that the group will hold its course when it meets next in June. "Of course we are concerned because the price of oil will affect our budget ... within OPEC we don't have any other choice than keeping the ceiling of production as it is because we don't want to lose our share in the market," Ali al-Omair told reporters in Kuwait city. Many OPEC oil ministers, including Saudi Arabia's Ali al-Naimi, have...

Saudi Arabia is investing heavily in its downstream business and developing captive markets to enter global oil market domination and counter the threat of U.S. tight oil. Saudi Arabia has been crafting the strategy for a few years, but it has come in sharp focus after the kingdom convinced other OPEC producers to maintain oil production at a meeting last November despite a collapse in crude prices. Oil prices have fallen 50% since June 2014, but Saudi officials have been unmoved as they see their strategy working. That suggests that the country has effectively handed over the role of swing...

rowth in new U.S. oil production is slowing, though additional barrels continue to come onto the market, according to the latest index from the research and data firm Drillinginfo. Drillinginfo’s latest index shows 794,000 new barrels of oil equivalent per day were reaching the U.S. market in February. That’s down 9 percent over the number of new barrels of oil equivalent added by U.S. producers in January. Drilling permits across the U.S. were down 4 percent from January to February, to 3,101. And the number of drilling rigs working continues to fall. But that number – 1,208 U.S. rigs in...

This time a year ago, the oil industry's biggest problem was finding a way to deal with the “retirement tsunami” about to crash down on it as older oilfield workers hung up their cork boots to enjoy freedom-55. Now, with oil prices still in the doldrums, many of those same workers are lucky to be hanging onto their jobs, while others have been booted from the payroll as an ugly wave of layoffs takes hold. One of the worst-affected areas is the Canadian oil sands, where a higher per-barrel cost of production than conventional sources has oil companies scrambling to...

The collapse in crude oil prices may have reduced revenues of oil exporters, but it has not soured their appetite for U.S. government debt. Saudi Arabia and other major oil exporters have increased their holdings of U.S. Treasuries to record levels in an effort to counter the effect of the 60 percent drop in oil prices in the last nine months. Global financial assets such as U.S. Treasuries, corporate debt, and equities have benefited from soaring oil prices over the last decade as producers funneled their oil windfall into these markets. With the dollar hovering near a 12-year peak against...

Rules governing the hydraulic fracturing method for drilling natural gas are expected to take effect Tuesday, creating the potential for drilling to start later in the year. The set of 120 rules that govern issues including well construction, water testing and buffer zones was developed by the state Mining and Energy Commission over nearly two years and approved in December by a separate state panel. With the fracking rules in place, companies interested in finding natural gas can begin applying for fracking permits. A member of the Mining and Energy Commission, James Womack, said a company interested in fracking would...

Federal regulators seeking to boost the safety of moving oil by rail should focus on improving the integrity of the nation’s train tracks, not just the tank cars that carry crude, a top refining industry representative says. Charles Drevna, head of the American Fuel and Petrochemical Manufacturers, questioned “how strong a role prevention is playing in the Department of Transportation’s comprehensive strategy” for combating crude-by-rail derailments, in a letter to Transportation Secretary Anthony Foxx. “Any effort to enhance rail safety must begin with addressing track integrity and human factors, which account for 60 percent of derailments,” Drevna said in his...

Record-high crude-oil supplies in the U.S. pushed the benchmark U.S. crude-oil contract, known as West Texas Intermediate, to fresh six-year lows Monday. But Brent crude, the global benchmark, is still about $7 a barrel above its own recent lows. Much of the world’s excess oil has ended up in the U.S., which has the most available on-land storage, weighing on domestic prices. At the same time, Brent prices have been boosted in recent weeks by bad weather, which hampered Iraqi exports, and concerns that violence in Libya could interrupt the country’s oil output. The two contracts are trading about $10...

Consistently low oil prices will hamper Nigeria's bid to boost output to 4 million barrels per day (bpd), Oil Minister Diezani Alison-Madueke was quoted as saying on Tuesday at an oil and gas conference in the capital Abuja. "Flexibility in capex and funding in general will be further constrained in the year 2015," the minister said in a speech read out by Joseph Dawha, group managing director of the Nigerian National Petroleum Corp. Africa's biggest oil producer has been hit hard by global oil prices that have around halved since June, because it accounts for up to 80 percent of...

Libya's internationally recognized government said on Tuesday that any sales of the country's oil should be arranged through a state firm based in Benghazi under its leadership to prevent fraud. If implemented, the decision would escalate a battle for control that is raging, four years after the ousting of Muammar Gaddafi, between the official government based in the east and a rival administration in Tripoli. Oil markets have been wondering who is owning Africa's largest oil reserves. But so far customers have continued paying for exports worth hundreds of millions of dollars each month through state National Oil Corp (NOC)...

Lifting a 40-year-old U.S. ban on crude exports would create a wide range of jobs in the oil drilling supply chain and broader economy even in states that produce little or no oil, according to a report released on Tuesday. Some 394,000 to 859,000 U.S. jobs could be created annually from 2016 to 2030 by lifting the ban, according to the IHS report, titled: "Unleashing the Supply Chain: Assessing the Economic Impact of a U.S. crude oil free trade policy." Only 10 percent of the jobs would be created in actual oil production, while 30 percent would come from the...

EIA's most recent Drilling Productivity Report (DPR) indicates a change in the crude oil production growth patterns in three key oil producing regions: the Eagle Ford, Niobrara, and Bakken. The DPR estimates, which were issued on March 9 and cover the months of March and April, include the first projected declines in crude oil production in these regions since publication of the DPR began in October 2013. However, with production gains continuing in other regions, particularly the Permian, overall crude oil production in regions tracked by the DPR rose slightly in March to 5.6 million barrels per day. Total production...

None of the workers on strike at 15 refineries and plants in seven states has yet returned to work. And it could be days before any do as the union and individual companies hammer out individual contracts. Last week, negotiators for Shell, which was representing the industry, and the union, agreed on a deal that provides a national framework for contracts. It outlined pay increases and an agreement to review safety and staffing levels, among other provisions. But local issues must be worked out and a contract ratified at each facility before employees return to work. The Steelworkers called the...

The IEA (International Energy Agency) made the following statement in its Oil Monthly Report on Friday that supposedly sent oil prices lower by $2.41 per barrel for Brent and $2.21 per barrel for WTI: “Steep drops in the US rig count have been a key driver of the price rebound. Yet US supply so far shows precious little sign of slowing down. Quite to the contrary, it continues to defy expectations. Output estimates for 4Q14 North American supply have been revised upwards by a steep 300 kb/d.” IEA’s comments on U.S. oil production trends are misleading. When IEA says “oil”...

The Department of Energy is planning to buy up to 5 million barrels of oil to replenish the Strategic Petroleum Reserve after a test sale last year. The planned purchase of sweet crude between June 1 and July 31 is required by federal laws forcing the Department of Energy to buy back petroleum products within one year, using the proceeds from a test sale. In this case, the recent collapse in crude prices means the government is set to make money on the two transactions — effectively buying low now after selling high last year. During the March 2014 test...

In a far corner of North Dakota, just a few hundred miles from the proposed path of the Keystone XL pipeline, 84,000 barrels of crude oil per day recently began flowing through a new line that connects the state’s sprawling oilfields to an oil hub in Wyoming. In West Texas, engineers activated a new pipeline that cuts diagonally across the state to deliver crude from the oil-rich Permian Basin to refineries near Houston. And in a string of towns in Kansas, Iowa and South Dakota, local government officials are scrutinizing the path of pipeline extensions that would pass nearby. While...

Fiery explosions from North DakotaÂ’s Bakken oil in recent weeks are raising questions about the safety of the light, sweet crude, even with new oil conditioning standards to take effect April 1, at the same time that a major North American railroad is questioning whether it even wants to be in the crude transport business (see story below). But North DakotaÂ’s top industry regulator says the new standards are only one part of the solution to eliminate rail car explosions, so heÂ’s urging the federal government to hurry with its new rail safety rules. In December, the North Dakota Industrial...