How far can oil rally?

June 14, 2016 0 Comments

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Investors are betting on an oil rally beyond $100. Should we all be hopeful or is it too early to say? Given the recent strength in price and signs of growing activity, it is hard not to be cautiously optimistic.

Call it a lottery ticket, but someone in the oil market has been busy making a bold bet  by buying contracts that will be profitable if crude rises again at $ 100 a barrel. The $ 100 buyout option in December 2018 – a contract that gives you the right to purchase December 2018 futures at $ 100 a barrel – was the most traded contract on Tuesday in the entire ICE Brent market, which is the strongest signal of renewed optimism in oil.

The deal does not mean that the market believes that the value of $ 100 per barrel will materialize, but that with its bullish bets some are increasingly confident that the Organization of Petroleum Exporting Countries will be able to rebalance supply and demand

Options are likely to cost just over a million dollars, according to data compiled by Bloomberg. They will be worth several times that amount if the prices of futures contracts rise in the short term. It is also possible that the negotiations have been part of a broader coverage program.

The confidence in higher prices has returned since OPEC, Russia and other producers subscribed earlier this month their first agreement to reduce production in 15 years.

The International Energy Agency says that if producers meet their commitments, oil demand could exceed supply in the first half of next year, a significant change after three consecutive years of oversupply.

 

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AER building database of Oil & Gas Infrastructure

April 26, 2016 0 Comments

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With the entry of Inactive Well Compliance Program (IWCP) in its second year, the Alberta’s Energy Regulator (AER) is working on a database of pipelines and wells that will need attention. Taking into account the amount of energy equipment scattered throughout the province, a database and a plan make a lot of sense.

The aging of the oil and gas infrastructure in Alberta is a serious problem for this region. The AER has created a database that analyzes and locates miles of abandonment wells in Alberta. But it continues with this work concerning pipes and compression stations.

In addition to the database to all the pipelines and the entire structure of the underground and surface of what will take some time, is a century of accumulated scrap and industrial infrastructure that is unused. The

information will be gathered from the agencies that preceded the current regulator, which brought together three different organizations in 2013.

This compilation ends in early 2018; the database detailed the time, location and location of some 415,000 kilometers of pipeline and precisely 50,000 kilometers of oil and gas competing for pipelines. They are detailed and classified according to the risk they pose to human health and the normal environment.

The AER has made a significant effort to clean wells and pipes abandoned until January of this year have cleaned 6,800 oil wells and works well on a base of 37,000 wells which is what has been counted until now.

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Floating Storage in decline-will WTI increase?

March 21, 2016 0 Comments

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Floating storage is in less demand than it has been. Is the supply glut over and what will this mean for West Texas Intermediate (WTI) prices? The reduction in storage needs points to stabilization in the WTI market. Are we on an upswing?

Although stockpiling of oil on the ground is far from exhausted, the cost of storage at sea has risen, making it no longer profitable to use this type of alternative when storing excess oil.

It is because the price of rental and storage on these ships has increased substantially due to high demand for crude oil, the daily rate on the route from Japan to Saudi Arabia increased according to data from the London Stock Exchange to 66.64 dollars,

This means an increase of 30% compared to the previous month. According to Bloomberg and Gibson Shipbrokers LTD, an oil company would lose about 7.6 million dollars if they wanted to protect for six months at sea in a ship two million barrels.

The WTI basket is increasing its monetary value since US oil production is finally falling and threatening to fall to less than 9 million bpd for the first time since November 2014, which makes the oil market no longer so flooded with that commodity.

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$40 Oil, will it keep climbing?

March 8, 2016 0 Comments

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Oil is trying to make a race upwards of $ 40 per barrel, is the goal of all oil countries included and not included in the Organization of the Petroleum Exporting Countries (OPEC). Many companies are associated with this vital nonrenewable resource for life in the modern world; we will see if it can sustain the trend.

Independently, it is positive for the world economy (private and public) to see the rise in prices. We may still be looking for an abundance of supply, but any upward movement is refreshing.

The rise in oil prices drives stock markets, given the optimism generated by the cut in global output. There is a world commission made up of five oil producing countries: Kuwait, Algeria, Venezuela, India, and Oman, which are members of OPEC. They are responsible for monitoring compliance with the agreement to reduce world oil production by 1.2 million barrels per day.

These company and country-driven tactics seem to bear fruit and rescue prices from below $ 29.80 per barrel per OPEC basket just as it was a little more than a year ago in the first quarter of 2016, to more than $ 40 a barrel as it stands currently.

It means they're doing things right to avoid another downturn and continue on an upward trend and to break financial barriers steadily.

By the end of 2017 the price of all the oil baskets: West Texas Intermediate (WTI), OPEC and Brent is expected to exceed the $ 50 barrier.

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5 things to know about Alberta’s inactive wells-IWCP

February 12, 2016 2 Comments

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Since April 1st, 2015 Alberta has implemented its Inactive Well Compliance Program – IWCP to get control of non-compliant wells in Alberta. What exactly does this mean and is this the kind of project that could help stimulate a lagging industry?

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El Nino may have positive affect for oilpatch!

December 10, 2015 0 Comments

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If we see in the sky any sign that is positive for oil exploitation, it’s possibly the El Niño. It is, after all, a year in which this phenomenon of the recurrent climate cycle must warm the Pacific Ocean and make the winter warmer in North America, although with inclement weather in several places.

As with El Niño, this is accompanied by some startling predictions. One of the primary news sources in the United States recently announced that "it could trigger floods, famine, and disease in much of the world.

It is true that the entrance of this climatic phenomenon has been promoted to a great extent (and yes, I know it is contradictory because El Niño means “little boy” since ocean water temperatures are higher than they have been in previous years.

As for oil, a recent working paper published by the International Monetary Fund (IMF) found that El Niño strikes tend to have a positive effect on prices for this type of non-renewable energy.

One reason is that drought in Asia leads to lower production of hydroelectric power stations and a greater dependence on fossil energy supply, which increases the demand for oil.

These positive impacts are not insignificant. According to the IMF, Canada enjoys an accumulated GDP increase of 0.85% in the four quarters after El Niño. This growth, in turn, leads to greater demand for oil, raising prices. The study found that oil prices rose nearly 14 percent a year after El Niño made an appearance.

Right about now any news is good news!

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TransCanada announces $570M project in NW AB.

November 16, 2015 0 Comments

15000 psi well head to monitor hydraulic fracture

Despite the tough year the natural gas in NW Alberta and NE-BC needs to have a reliable path to market. TransCanada and other pipeline operators are expanding to meet the demands of the market. They must expect a bounce back where extra capacity will be needed. Or do I have that all wrong?

Trans Canada Group Corp., one of Canada's largest gas companies based in Calgary, has announced a promising $ 570 million investment to increase capacity to the already installed gas pipeline to transport 2.7 billion cubic feet per day Thanks to its Nova Gas Transmission LTD system.

It results in significant relief for all of the country's gas producers as they will have an efficient and effective service when it comes to supplying large volumes of gas. The company TransCanada announced that its expansion project for 2018 only means the minimum expression that the system requires to cover contracts and additional increases in gas demand that can be planned in the future.

The National Energy Board is expected to finance the development of projects by 2018, which will annex 88 kilometers of 20-48- inch diameter piping, thirty-five new stations, and a new compressor.

If the gas market at the export level is to grow in Canada, a good and sustained investment is necessary both in repairing, maintaining and increasing the pipelines that transport it.

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Offset Frac Monitoring-Sensible Insurance

October 20, 2015 0 Comments

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The AER (Alberta’s Energy Regulator) introduced directive 83 in May of 2013 with a few purposes in mind; Protect well integrity from unintended frac communication, protect freshwater aquifers and avoid surface impacts.

The United States does not have the same guidelines as Canada to protect our people and the environment. Look at what happened in the state of North Dakota where an oil well about 15 miles south of White Earth exploded in Mountrail County, one of the country's most prolific oil producing regions, owned by Oasis Petroleum Inc., losing more than 67,000 gallons of oil, causing an affluent flow of the Missouri River.

Authorities believe it was caused by a hydraulic fracture in a nearby well resulting in the explosion of the neighboring well performing "communication" between them. The Helling Trust 11-15H well, which is more than 4 miles long, has produced almost 10 million gallons of oil since its launch in 2011, where many types of equipment arrived to clean the place and try to stop it Still dripping raw with a mixture of very thick mud.

Oasis tried different methods to try to have control of the well again which was not possible. Thanks to God, this time the explosion of the well did not throw oil through the skies, but it did send oil that was carried by the wind to the White Earth River which reaches the Missouri River, and 84,000 gallons of water was filtered from the well with used brine Commonly in shale gas extraction.

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AER Inactive Well Compliance Program

October 7, 2015 1 Comments

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The AER (Alberta’s Energy Regulator) Inactive Well Compliance Program has been in effect for six months already. Are you 50% done your updating for this year? If not you’re behind schedule.

The expectation is becoming compliant on 20% of inactive wells per year for five years. Falling behind initially puts added pressure on plans, when more expensive work overs are demanded. According to AER 2014-9, the goal of the IWCP (Inactive Wells Compliance Program) is to address the accumulation of inactive wells conforming to Directive 013: Well Suspension Requirements, introduced in December 2014.

The purpose is to put in order the inventory of IWCP of each licensee within a period of 5 years. Each licensee and co-owner must fill out their IWCP inventory, update it with recent information; each one will be responsible for their stock to be met at least 20% each year, it involves reactivation of the wells or abandonment of the wells following the abandonment of wells guide.

Each March 31 will be formally evaluated the annual performance of its performance by making the inventory of the IWCP, and each licensee will have access to its annual compliance report. Every first of April of each year the holders will be informed of their existing inventory and their target for that year. All this is necessary to maintain a program update according to the reality, to know for sure that well is active or inactive, also, to inform potential buyers of these wells about their availability.

Failure to comply with these rules will result in actions against the AER.

 

 

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