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Oil, Gasoline Drop; U.S. Fuel Output Set to Recover From Storm

Sept. 26 (Bloomberg) -- Crude oil declined to a two-week low after refineries around the Houston oil hub said they escaped serious damage from Hurricane Rita and may resume fuel production as soon as this week. Gasoline plunged as much as 7 percent.

Royal Dutch Shell Plc yesterday said it found ``only minor damage'' at its Deer Park plant in Texas. Valero Energy Corp. said its Houston and Texas City plants may restore processing this week, while Exxon Mobil Corp. said damage to its Houston-area refineries isn't severe and plants are starting. The U.S. Coast Guard said offshore platforms are in ``good'' condition.

``There's relief that the worst-case scenario has been avoided,'' said Simon Wardell, an oil analyst with Global Insight in London. Output at some refineries near Houston may resume in ``just one or two weeks because people are going to be able to return to the area earlier than expected. We may just be able to tip into next year without the threat of a shortage.''


Crude oil for November delivery dropped as much as $1.54, or 2.4 percent, to $62.65 a barrel on the New York Mercantile Exchange, where it was down 58 cents at 10:07 a.m. London time. Oil has declined 10 percent from a record $70.85 on Aug. 30, the day after Hurricane Katrina struck Louisiana.

Today's session began yesterday at both Nymex and London's International Petroleum Exchange, as they offered trading earlier than usual because of Rita.

Brent crude for November settlement slid 49 cents, or 0.8 percent, to $61.95 on the IPE. It reached a record $68.89 after Katrina hit last month.


Stocks, Bonds

Katrina, which may cost insurers as much as $60 billion, the most expensive natural disaster in U.S. history, also sent the average price of gasoline at the pump in the U.S. to a record $3.057 a gallon on Sept. 2, according to the AAA motorists' group.

The price today rose to $2.80 a gallon from $2.748 yesterday, according to the AAA.

Gasoline prices on Nymex have tumbled 32 percent to $1.99 a gallon from a record $2.92 at the end of August.

European stocks advanced, lifting the Dow Jones Stoxx 600 Index to a three-year high, as oil fell. The benchmark gained as much as 1.1 percent to 295.45.

U.S. Treasury notes fell for a third day. The yield on the benchmark 10-year note rose 2 basis points, or 0.02 percentage point, to 4.27 percent at 9:28 a.m. in London, according to bond broker Cantor Fitzgerald LP. Yields move inversely to prices.

Rita, may lead to claims of up to $6 billion, according to Eqecat Inc., a storm modeler. Katrina struck land before the Labor Day weekend, the end of the peak season for gasoline demand. Refiners now are preparing to meet heating-fuel requirements in the fourth quarter, while replenishing gasoline supplies.

Starting Repairs

At least 15 refineries in Texas and Louisiana, accounting for about 24 percent of U.S. capacity, shut as Rita approached. Another 5 percent of the nation's refining capacity remains closed from Katrina, with four plants scheduled to resume output in November or December.

Exxon, the world's largest publicly traded oil company, said repairs are starting to be made. The company said with terminals and pipelines reopened, it has resumed delivering gasoline from its Baytown refinery, the largest in the U.S. Exxon said initial assessments of the Beaumont refinery and chemical-plant operations don't show any significant damage.

``The path of Rita really spared most of the damage to refineries that was the concern in the lead-up'' to the storm, said Gerard Burg, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. ``There's still a lot of pressure on the market particularly due to tight capacity.''

`Significant' Damage

Valero said it had ``significant'' damage to two cooling towers and a flare stack at its Port Arthur, Texas, refinery, which is close to where Rita made landfall. It will take two to four weeks to repair the refinery. Motiva Enterprises LLC's refinery in Port Arthur was also damaged by wind, the company said. Motiva didn't say when it would resume operations.

The entire 1.5 million barrels of oil a day that the U.S. pumps in the Gulf of Mexico was shut down as of yesterday because of Rita, according to the Minerals Management Service. That's equivalent to about 30 percent of the nation's total output. For natural gas, 80 percent of the region's production was halted. The Gulf usually accounts for a quarter of the gas the country extracts.

To contact the reporters on this story:
Alejandro Barbajosa in London at  abarbajosa@bloomberg.net;

Last Updated: September 26, 2005 05:13 EDT


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  • 10 months later...
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  • 1 year later...

Tech traders

Because of rise in Oil/fuel price buy sigs in this sector have risen, some but not all are;

If sp rise today on

 

CEY 4.96 stop 4.80 Target 5.29

PDN 6.75 St 6.59 Tar 7.45 then 9.35

VPE* 0.14 St 0.13 Tar 0.163/0.1848

CUE* 0.225 St 0.22/0.21 Tar 0.24/0.27

AOE* 2.53 St 2.40 Tar 3.00

SEA 0.50 St 0.40 Tar 0.68

STU 1.12 St 1.07 Tar 1.21/1.36

LNG 0.83 St0.79 Tar 0.93

 

* = Prefer

Fundermentals not checked at this stage

Comments plse

In this scared and volitile market it is becoming hard to find rising/trending stock that dont drop again after one or two days, tight stops may help but there is no one answer other than not trade or paper trade until XAO changes to an upward direction

 

aroon

 

 

Do not consider my postings as investment advice. I am here to share research and to speculate on what might be. The boundary between fact and conjecture might not always be clear - best to treat all my comments as speculation

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In reply to: aroon on Tuesday 08/01/08 07:36am

OK lets look at the CBM players.AOE market cap $1,603,000m and QGC $2,411,000 and then we have VPE one of the most exciting new entries into the CBM game with two successful wells so far market cap $27m. Therefore I rest my case on the possible future gains that could be ahead for VPE during 2008. Dont take my word for it just check out the BOW/VPE recent announcements.

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In reply to: aroon on Tuesday 08/01/08 08:36am

aroon,

Under normal circumstances I would like VPE & SEA but these are not normal times and it will require a good announcement to get me to invest in a particular share. Holding SAU & NWE in these sectors and now we wait and see. I think this market will continue to deteriorate until a major shift. My betting is down. Keeping my powder dry for now. My SMSF has a majority gold. Boring but so far it is the best of my holdings over the last 6 months.

 

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In reply to: rickhb on Tuesday 08/01/08 02:11pm

rickhb.. Cash is king good thinking,

Reading the posts it would seem there are many who have not heeded sell sigs and sit and sit with sideways or worse dropping shares, I see stocks being ramped with hopless charts It is hard to bite the bullet and sell especially when there is a small loss then the loss gets bigger and it gets harder and harder to sell. When as you say cash is king to await another day.

Since 21jan 2007 VPE has and still is in steady decline, that is a year when money could have been invested so many times in other possibilities yet .....

For me a buy signal is just the start of a long process before a stock is purchased and a sell sig is acted on with out emotion thats how I earn my living.

On my system SAU and NWE (positive trend line reversal 27/12/07) are both holds

Of the stocks in my post for today

down and so out.. CEY, CUE, AOE, SEA(no Vol), STU

Still in LNG (no vol but in an up trend) PDN good vol, VPE stuck?

aroon

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In reply to: rickhb on Tuesday 08/01/08 02:11pm

If you have a close look at what VPE has on the go for 2008 you will hit the buy button.

 

Carnarvon-1 will cement VPE as a big potential CBM player .

 

This opportunity isnt going to last long.

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In reply to: bermuda on Tuesday 08/01/08 07:39pm

Like Aroon - i am following AOE & LNG closely, i think LNG will go great in 2009

 

Holding OEL & like SXP, LNC, NXS, PSA & BOW

 

OEL & SXP to do great things in 2008 & ESI as a roughie

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BUR may be a good one. http://www.sharescene.com/html/emoticons/biggrin.gif

They are currently down a lot in sp, although they have been bringing in some great results http://www.sharescene.com/html/emoticons/icon13.gif

BUR have wells that are all producing good amounts of gas-Jet 3 (recent drill) has been briefly tested as part of an initial clean-up phase, involving expelling drilling fluids while the testing crew adjusts controls and equipment. Gas flows of 10.8 million cubic feet per day (MMCFD) through a 26/64ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ choke were recorded, with flowing pressures continuing to build during this operation.

 

BUR are brining lots of money per year!!!!! Marlin 1 is soon to be drilled http://www.sharescene.com/html/emoticons/king.gif

If you have a look at the figures of the money they are bringing in you will see what i mean...atm the sp looks like good value to me.

 

dyor, not advise just information,

salts (son)

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  • 6 years later...

Oil drilling slowdown to last 12-18 months: Maersk

 

The current slowdown in offshore oil and gas drilling will last 12 to 18 months, and the market for rigs will rebound in 2015, Maersk Drilling said, providing a more optimistic forecast than other drilling firms.

 

Oil companies are only delaying projects, Claus Hemmingsen, the chief executive of Maersk Drilling, a unit of Danish shipping conglomerate A.P. Moller-Maersk, told Reuters on Friday.

 

"I would rather call it a short-term softness than anything dramatic," Hemmingsen said in a telephone interview. "We see postponements, not cancellations, and I think that distinction is important."

 

Activity in the deep waters off West Africa and Brazil will suffer the most, he said. "There's two regions when you talk about deep water that stand out - that is West Africa and Brazil."

 

Other drilling companies have warned that the market could be slow for the next two years as oil majors delay projects and cut capital expenditure to save cash for dividends, while drilling companies add new vessels, creating overcapacity.

 

Analysts expect oil and gas capital spending to rise by 4-6 per cent this year, a big drop from years of double-digit growth as the biggest offshore drillers such as Shell, Chevron and Statoil cut their budgets the most.

 

Transocean, which owns the world's biggest drilling fleet, predicted on Thursday it would take 18 to 24 months for demand to recover. Seadrill, the world's biggest offshore driller by market capitalisation, warned this week that the sector would slow over the next two years.

 

But Hemmingsen foresaw that the dip in the market would last for 12 to 18 months. "I actually think it's (going to be) shorter, because I see some activity and interest," he said.

 

"We'll see the market returning to a strong balance of supply and demand," Hemmingsen said. "These projects that are being postponed will come back. In 2015 and beyond, we'll see the market continuously on the strong side."

 

Hemmingsen said Maersk, which take delivery of six new rigs this year, will need several more units to meet its 2018 target for a $US1 billion net profit but that no newbuild orders were imminent.

 

Reuters

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