Regulation & Environment: Colombia tries to turn its oil business around

Just a few years ago, Colombia was being touted as one of the most successful countries in attracting foreign capital and then in turn boosting its output with that new funding. But things have turned, as Chris Kraul discusses in this week’s Oilgram News column, Regulation & Environment.

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Controversy arises over making sure there’s enough US Northeast electricity capacity

Electricity capacity markets are between a hot and a cold place.

They are bracing for a repeat of last winter’s cold weather while preparing for more stringent emissions restrictions that are, in part, designed to address global warming.

Those strains are nowhere more evident than at the PJM Interconnection, which runs the largest wholesale electric power market in the US.

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Frankly, my dear, I don’t give a damn: oil and Libya this week

It was supposed to be one of the few things that could stop oil prices from falling further: a major producer in the Middle East closing oil export terminals due to heavy fighting in the area.

Last weekend Libya’s state-owned National Oil Corporation declared force majeure from Ras Lanuf and Es Sider, two ports in the eastern part of the country with a combined capacity of 560,000 barrels per day.

What was the response by oil traders? Not much. On Monday, Brent futures dropped 79 cents.

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Colbert, Bordoff and oil

Getting on the final week of The Colbert Report is a real coup, particularly when you’re one of many experts out there talking about oil prices.

Jason Bordoff, who has established a thriving energy center at Columbia University and has written guest posts for The Barrel, scored that very gig on Colbert this week, talking about the oil price collapse. And he tried mightily to stay serious when face-to-face with the Colbert character. You can see it here. 

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Figuring out the proper time to sell a bear market

Guest blogger Jonathan Kingsman is the founder of Kingsman SA, which is now a unit of Platts, and he remains a Platts consultant.

It is never too late to sell a bear market. Or at least so the saying goes.

With the oil markets falling out of bed and the Thomson Reuters/CoreCommodity CRB Commodity Index down nearly 14% from the start of the year — and down nearly 25% from its mid-year highs — the trend in commodity prices is decidedly lower.

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Falling oil prices, new regulations spell trouble for Bakken

Amid falling oil prices, another factor has come into play that could start to curtail North Dakota’s crude production. On December 9th, the state’s three-person Industrial Commission approved an order requiring Bakken crude to be conditioned before it is transported.

The order, to go into effect April 1, will limit Bakken to a vapor pressure of no more than 13.7 per square inch, 1 psi below the national standard of 14.7. It also requires that operators separate light hydrocarbons from the crude and prohibits blending light hydrocarbons back into the oil.

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EIA analysis: Oil futures jump as US crude stocks fall

US commercial crude oil stocks were 847,000 barrels lower for the week ended December 12, helped along by a drop in imports, according to data released Wednesday from the US Energy Information Administration.

It represented a smaller-than-expected draw, but oil futures jumped regardless on a wave of short covering. Read more in the Platts analysis here.

Challenges facing Africa — and some of its oil producing countries — in 2015

Plummeting oil prices coupled with a significant increase in terrorism, and regime instability pose a direct threat to several sub-Saharan African countries the next year.

2015 will ask searching questions for Nigeria’s political climate as the country heads into a crucial election in February. Campaigning comes against a backdrop of sliding crude prices which have crushed an economy which relies on oil for 70% of its income. Opposition in the north to president Goodluck Jonathan’s re-election has deepened because of a deadly insurgency by Boko Haram Islamists in the region.

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At the Wellhead: A model oil contract in India might not be too popular

India is setting up a new model for outside investment in its oil and gas sector. But as Mriganka Jaipuriyar notes in this week’s Oilgram News column, At the Wellhead, it isn’t getting rave reviews just yet.

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Vitol’s CEO sees up-and-down oil prices, but it isn’t an opportunity

The kind of crazy up-and-down movements of the oil markets in recent weeks and months is not a ripe opportunity for a major trading company like Vitol. In fact, its CEO and chairman Ian Taylor says that whipsaw activity is a nightmare for his company.

“A market that is up $3 in the morning, down at lunchtime and then back up again at the close is almost impossible to hedge,” Taylor said in a one-on-one interview this week as part of the Platts Global Energy Forum. “I don’t think the trading companies do particularly well in that environment.” (Full disclosure: I conducted the interview with Taylor at the forum’s luncheon.)

And contrary to some beliefs, a relatively calm market that goes on many months — like the first part of 2014 — isn’t quite as bad as it might seem. “You’re making an assumption that traders speculate,” Taylor said when asked whether the first relatively non-volatile part of the year was a difficult time for a trading company. “Hardly any trading companies in existence today speculate. Shell, BP, Vitol…we don’t do flat price trading. A predictable long-term trend is much easier to handle.”

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