Investments ensure that the market remains close to balance and that prices are as stable and as fair for both producers and consumers as can ever be possible in such a dynamic industry (image © Graphic Obsession)

The issue that currently dominates the outlook for the oil market is the outcome of OPEC’s ministerial meeting in Vienna on 30 November. It has only been two months since OPEC last met in Algiers and announced it would examine how to set up a production ceiling of between 32.5 mb/d and 33.0 mb/d. OPEC also said it would seek to bring leading non-OPEC producers into the process. We can’t predict the outcome of the 30 November meeting, but we can see the scale of the task ahead. In this report we estimate that OPEC members pumped 33.8 mb/d in October, well in excess of the high end of the proposed output range. This means that OPEC must agree to significant cuts in Vienna to turn its Algiers commitment into reality.

Whatever the outcome, the Vienna meeting will have a major impact on the eventual - and oft-postponed - re-balancing of the oil market. But it is not the only factor at play. Unfortunately for those seeking higher prices, an analysis of the other components provides little comfort. The world’s biggest crude oil producer Russia will see its output increase by 230 kb/d in 2016, and sustained production at current record levels would result in growth of nearly 200 kb/d next year. With production also expected to grow in Brazil, Canada and Kazakhstan, total non-OPEC output will rise by 0.5 mb/d next year, compared to a fall of 0.9 mb/d in 2016. This means that 2017 could be another year of relentless global supply growth similar to that seen in 2016.

On the demand side of the oil balance, our outlook for world oil demand growth at 1.2 mb/d in 2016 and 2017 remains unchanged. There is currently little evidence to suggest that economic activity is sufficiently robust to deliver higher oil demand growth, and any stimulus that might have been provided at the end of 2015 and in the early part of 2016 when crude oil prices fell below $30/bbl is now in the past.

If the OPEC countries do implement their Algiers resolution the resultant production cut will see the market move from surplus to deficit very quickly in 2017, albeit with a considerable stock overhang that will take time to deplete. On the other hand, if no agreement is reached and some individual members continue to expand their production then the market will remain in surplus throughout the year, with little prospect of oil prices rising significantly higher. Indeed, if the supply surplus persists in 2017 there must be some risk of prices falling back.

It is not the role of the IEA to urge any oil industry player to take one course of action rather than another, and we are not doing so now. Over time, market forces will do their job and the oil price will respond to the signals provided by demand and supply. What the IEA has argued for consistently is the need for investments necessary to meet rising oil demand. Such investments ensure that the market remains close to balance and that prices are as stable and as fair for both producers and consumers as can ever be possible in such a dynamic industry.

http://www.iea.org/newsroom/news/2016/november/omr-holding-the-line.html?utm_content=buffer48982&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

 - Growth in daily hydrocarbon production by 1.4% to 5.21 mmboe for 9M 2016
 - Daily liquid hydrocarbon production increased by 1.0%, compared to Q2 2016 positive dynamics of cumulative production for 9M 2016
 - Planned launch of new production facilities at the East Messoyakhskoye field
 - Growth in development drilling by 42% over 9M 2016
 - Gas production increased by 7.4% to 49.3 bcm for 9M 2016 due to the commissioning of new capacities
 - Refining depth increased by 5 pp to 71% followed by the 21% reduction in fuel oil output for 9M 2016

Upstream

Hydrocarbon production continued improving steadily in Q3 2016. Average daily hydrocarbons production grew by 1.4% to 5.21 mmboe for 9M 2016.

Development drilling footage increased by 42% to 7.0 mln meters for 9M 2016. The number of new wells commissioned grew by 49% compared to 9M 2015 to reach 1.9 thousand wells, while the share of horizontal wells remained at c. 30% in line with the annual target. The share of in-house services in the total drilling volumes consistently exceeds 50%.

Average daily liquid hydrocarbon production in Q3 2016 grew by 1.0% vs. Q2 2016 and by 1.3% vs. Q3 2015 to 4.15 mmbpd despite ongoing turnarounds at production projects in Sakhalin. First of all, it is worth highlighting the successive improvements at Yuganskneftegaz (+4.2% vs Q3 2015 and by +1.8% vs Q2 2016), advances at Samaraneftegaz, Tomskneft and projects of the Vankor group vs. Q2 2016, as well as the start of production at the East Messoyakhskoye field. By the end of 9M 2016, the average daily liquid hydrocarbon production grew by 0.3% to 152.2 mbpd

In preparing for the 1st phase of the Suzun field development, the Company started comprehensive testing of oil treatment and transportation facilities: final operations at the 1st Start Up Complex of Oil Treatment Facility with a rated capacity of 4.5 mmtpa, pipeline from Suzun OTF to Vankor OTF, and continued infrastructure setup at 6 well pads. In September, production reached 243 kt of oil (c. 60 kbd), thus improving the overall dynamics of the Company's liquid hydrocarbon production in Q3 2016. This year oil production forecast of the Suzun field is c. 1.2 mmt (expected oil production in 2017 - 4.5 mmt).On September 21, the East Messoyakhskoye field (the northernmost onshore Russian field) was put on stream. The command to start oil shipment from the East Messoyakhskoye field was given by the President of the Russian Federation Vladimir Putin, via video link-up. Thanks to the implementation of modern technical and engineering solutions, the East Messoyakhskoye field infrastructure was built within less than 3 years. The operating stock of producing wells at the end of Q3 was 65 units, a supply pipeline of 98 km connects with the main pipeline Zapolyarie-Purpe, a gas turbine power plant (GTPP) with a capacity of 84 MW was put into operation.

As part of new program to introduce new technological solutions, the Company is successfully implementing a program of drilling multilateral wells (MLW). Thus, 4 MLWs were commissioned at the Samotlor field with an average initial flow rate of over100 tpd of oil, which is 1.5 times higher than the average flow rates of new wells of the field since the beginning of the year. At the Yurubcheno-Tokhomskoye gas condensate field, the first multilateral well was completed with an expected production rate of about 200 tpd. MLW construction is aimed at obtaining additional oil production by increasing productivity and reducing projected well stock by increasing the reservoir sweep area. This technology enables us to put on stream a greater volume of reserves per well and increase the economic benefit.

Gas production for 9M 2016 amounted to 49.33 bcm, 7.4% up from the same period of 2015. Production growth was mainly due to running in comprehensive testing mode in Q4 2015 of the 2nd stage of Rospan's Novo-Urengoy gas and condensate treatment plant, launch of the 4th and 5th wells in the northern tip of Chayvo, offshore Sakhalin, the commissioning of a gas treatment facility in December 2015 at Barsukovskoye field of Purneftegaz, and execution of the project to increase gas production at Sibneftegaz's Khadyryakhinskoye field.

In Q3 2016 gas production declined by 2.5% against Q2 2016 and amounted to 16.10 bcm. The production decrease was a result of the planned preventive maintenance and was partially offset by increased production at Rospan.

Associated petroleum gas (APG) utilization rate over 9M 2016 rose to 89.8% compared to 86.8% over 9M 2015).

In the 9M 2016, over 2,500 km of onshore 2D seismic surveys and over 5,900 sq km of onshore 3D seismic surveys were acquired, exceeding the results of 9M 2015 by 17% and 10%, respectively. 30 E&A wells were tested with a success rate of 83%. 47 new deposits and 7 new fields were discovered with ??1?1+B2?2 reserves of about 47 mmtoe.

Following the drilling of exploratory wells in Verkhneichersky license area in the Irkutsk region, Rosneft discovered a deposit with 61 mmtoe of C1 + C2 reserves.

The Company has a large-scale program underway for offshore seismic exploration. 2D seismic acquisition was completed in the Pechora Sea covering 1,150 km, 2D and 3D offshore seismic surveys are continuing in the license areas of the Barents, Kara, East Siberian, Chukchi and Laptev seas. Over 9M 2016, about 22 thousand km of 2D seismic acquisition and more than 1,600 sq. km of 3D seismic surveys were completed, which is more than twice those in 9M 2015.

Downstream

In Q3 2016, the oil refining throughput at Russian refineries rose by 11.1% to 21.55 mmt compared to Q2 2016 caused by seasonal demand increase on the domestic market. Meanwhile, the Company continues to optimize refining capacity utilization in order to ensure an efficient level of feedstock processing taking into account the capacity of secondary processes to minimize the output of heavy oil products. As a result, in 9M 2016, the oil refining throughput of Russian refineries declined by 5.9% to 60.42 mmt, while fuel oil output dropped by 20.9%.

Thanks to improved efficiency and optimized operation of Russian refineries, light product yield increased by 0.8 pp reaching 56.1% in 9M 2016, while the conversion rate increased by 5 pp reaching 71.3% compared to the respective period of 2015, The Company built up the production of Euro-5 gasoline and diesel fuel to 20.8 mmt for 9M 2016 exceeding the level of 2015 by 1.5 times.

Rosneft continues to successfully implement the refinery upgrade program in Russia: new FCC and MTBE units' construction were completed at the Kuibyshev refinery in 2016. The new facilities will enable the refinery to meet the demand for high-octane components for gasolines by producing them at their own facilities, and to increase the production of high-quality motor fuels.

As part of the import substitution program undertaken by the Company in Q3 2016, an improved catalyst produced by the Angarsk Catalysts and Organic Synthesis Plant was launched for the kerosene fraction hydrotreatment unit, which will enable the Company to meet the requirement for the catalyst by own production.

The company successfully continues to diversify supplies between the western and eastern routes. Supplies eastwards grew by 8% to almost 31 mmt for 9M 2016 compared with the same period of 2015.

In 9M 2016, small wholesale and retail sales of refined products remained almost unchanged compare to the level of last year. The main focus in the retail business is to improve the efficiency of operations, i.e. optimize assets, reduce losses and cut costs. Thanks to these efforts, the segment's sales profit margin grew by 6% in the reporting period compared to the same period last year. As part of the effort to expand the retail business, a new loyalty program continues for customers of the retail network, which is already in operation across 20 regions of Russia, covering more than 1.5 million active members.

International operations and asset acquisitions

On October 12, Rosneft completed the acquisition of the Government stake in Bashneft. The Company as well as the market in general highly values the potential synergies from the transaction, including optimization of mutual oil supplies, transportation and logistics costs, reduced drilling costs, joint use of production assets infrastructure, advanced technologies and know-how. Rosneft's successful track-record in the integration of major oil and gas assets is a guarantee of its speedy and efficient monetization. Following the transaction, the liquid hydrocarbon production of the combined company will grow by 10%, refining - by 20%, strengthening its position as the largest publicly traded oil and gas company globally.

With the signing of the sale and purchase agreement for 49% stake in Essar Oil Limited, Rosneft has entered the Indian market, one of the world's most promising and fastest growing. Upon the deal completion, the Company will get a stake in the Vadinar refinery with a 20 mmtpa capacity and a comprehensive infrastructure, which is one of the largest and most technologically advanced refineries not only in India but also in the world, as well as a large retail network with 2,700 gas stations in India. The company expects to gain synergies from processing heavy Venezuelan crude and cross-supplies of petroleum products to the Asia-Pacific markets that will enhance the refinery's economic efficiency.

Within short timeframes Rosneft completed the creation a unique international energy hub on the basis of the Vankor cluster: in October, the Company successfully closed the deal to sell 23.9% of Vankorneft shares to a consortium of Indian companies, consisting of Oil India Limited (the leader of the consortium), Indian Oil Corporation Limited and Bharat PetroResources Limited, as well as an additional 11% to the Indian ONGC Videsh Limited. As a result, ONGC Videsh Limited increased its stake in Vankorneft to 26%, while the share of the Indian state-owned companies as a whole increased to 49.9%. Meanwhile, Rosneft retained a majority equity stake, the majority on the Vankorneft board of directors, control over the company operating activities, as well as a 100% control of the overall infrastructure of the cluster.

Furthermore, with a consortium of Indian companies consisting of the Oil India Limited (leader of the consortium), Indian Oil Corporation Limited and Bharat PetroResources Limited, a deal was closed to sell a 29.9% stake in Taas-Yuryakh project. With the deal close the consortium of Indian companies has entered the joint project between Rosneft and BP on the basis of Taas-Yuryakh Neftegasodobycha. The share of Rosneft will remain at 50.1%.

In order to implement the project for the construction of the Tuban refining and petrochemical complex with a starting capacity of 15 mmtpa in the eastern part of Jawa (Indonesia), Rosneft and Pertamina signed a Joint Venture Agreement. The parties are currently developing a feasibility study of the project. The final investment decision on the project will be made upon the results of the feasibility study, basic engineering design (BED) and front-end engineering design (FEED). Besides, the companies Signed Memorandums of Understanding for cooperation within the northern tip of Chayvo project (Sakhalin island) and Russkoye Field Development project, including a possible acquisition by Pertamina of 20% and 37.5% stakes in these projects, respectively.

As part of the Head of terms crude and oil products supplies, Rosneft and Hellenic Petroleum reached an agreement for the first direct deliveries to Greece refineries in the amount of 85 th. tons of CPC blend and up to 90 th. tons of fuel oil produced by the Tuapse refinery in September-November.

Rosnefteflot, a Rosneft subsidiary, and Zvezda Shipyard signed the contracts for the supply of tankers. These tankers will be of a new type of vessels operating on gas motor fuel, meeting high environmental standards and new rules for the limits of emissions of sulfur oxides and greenhouse gases in the area of the Baltic and North Seas, which will be introduced starting from 2020.

Furthermore, Rosneft and the Far Eastern Shipbuilding and Ship Repair Center (FESRC) have signed contracts for the delivery of two unique multi-purpose supply vessels of reinforced ice-class Icebreaker 7. The document provides that the first two ships built by the Zvezda shipyard will be delivered at the end of 2019 and during the first half of 2020.

Rosneft and PDVSA expand their strategic cooperation. The Parties concluded an agreement on the feasibility study of the project for the development and operations at the Patao, Mejillones, and Rio Caribe Blocks offshore Venezuela. New key contract terms were also signed for cross-deliveries of crude and products, based on which the necessary binding documents will be executed for Rosneft to supply crude and products in exchange for Venezuelan crude and products produced by PDVSA. The parties expect that supplies will start as soon as 2016.

http://www.oilvoice.com/n/Rosneft-announces-results-for-the-third-quarter-of-2016/455f57db4975.aspx

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Attached Files

Japanese LNG buyers paid an average $6.10/MMBtu for spot cargoes contracted in October, up 7% from $5.70/MMBtu in September, data released by the Ministry of Economy, Trade and Industry showed Thursday.

The ministry gathers data from utilities and other LNG buyers in Japan to publish a simple average of contract prices. The delivery months of the cargoes are not disclosed.

METI also said the average price of cargoes delivered to Japan in October stood at $5.70/MMBtu.

The ministry last month did not publish the delivered price for September.

Platts JKM averaged $6.535/MMBtu in October, reflecting spot deals concluded for November and December deliveries to Japan and South Korea.

The Platts JKM for October delivery averaged $5.470/MMBtu.

The assessment period for cargoes to be delivered in October ran from August 16, when the JKM was $5.45/MMBtu, to September 15, when it was again at $5.45/MMBtu.

http://www.platts.com/latest-news/natural-gas/tokyo/japan-lng-buyers-pay-average-610mmbtu-for-spot-27707518

South Korea’s Kogas, the world’s second-largest buyer of LNG, said its sales volume rose 1o percent in October as compared to the corresponding month a year ago.

Kogas sold 2.43 million mt of LNG in October, it said in a filing to the stock exchange on Thursday.

Sales into the power sector were at 1.35 million mt, a rise of 17.3 percent as compared to October last year.

City gas sales increased by 2 percent to 1.08 million mt, Kogas said.

http://www.lngworldnews.com/kogas-oct-sales-rise-10-pct-yoy/

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Attached Files

Brazilian state-controlled oil company Petróleo Brasileiro SA posted an unexpected third-quarter loss on Thursday after drastically reducing the value of oil fields and other assets amid a severe downsizing and weak oil prices.

Petrobras lost a net 16.458 billion reais ($4.9 billion) last quarter, five times more than a year earlier. Despite that, operational and cash flow trends improved and, without an impairment, profit could have totaled 600 million reais, Chief Financial Officer Ivan Monteiro told reporters.

The numbers came as Chief Executive Officer Pedro Parente cleaned up a balance sheet with unrealistically priced investments, whose losses were magnified by a stronger currency and a rising cost of capital. The company shaved the value of assets by 15.292 billion reais and of investments by 417 million reais last quarter.

"The message we want to convey is that these impairments are non-recurring, and that we don't expect them to happen, not at least in this magnitude, in the coming future," Monteiro said at an event to discuss the results in Rio de Janeiro.

Petrobras, the world's most indebted major oil firm, faces several hurdles including the lowest oil prices in a decade, a corruption scandal highlighting governance flaws and losses incurred over many years because of government-mandated fuel subsidies and money-losing investments.

Analysts expected on average profit of 1.517 billion reais. U.S.-traded common shares in Petrobras (PBR.N) slumped on the news, shedding 8.7 percent and reaching their lowest level since June.

Management will further discuss results on Friday in a conference call with investors.

MITIGATING STEPS

Parente's steps to grow output in some offshore fields, cut debt and keep expenses in check helped mitigate the company's loss. Asset sales and a sharp reduction in capital spending commitments also allowed Petrobras to cut gross debt by about 19 percent since the end of last year to 398.2 billion reais.

According to Monteiro, progress in a voluntary dismissal plan for workers, as well as a faster pace of divestitures, could help recoup part of the ground lost with the impairment. At this point, it is uncertain whether Petrobras will lose money for a second straight year or if dividends will be paid, he said.

Net revenue fell 1 percent to 70.443 billion reais on a quarterly basis, missing consensus estimates of 74.520 billion reais.

Capital spending fell 9 percent, in line with the 8 percent that analysts estimated for the quarter. Gross profit rose above expectations, while operational profit suffered as a consequence of the impairments.

Free cash flow, the money left for holders of bonds and shares after all operating and financial expenses are paid, posted positive readings for the sixth straight quarter. Free cash flow generation is key for Petrobras's goal to reduce debt.

Monteiro reiterated that Petrobras is committed to meeting a $15.1 billion two-year goal for asset sales by the end of this year, even if only 65 percent of it has been completed so far.

http://www.reuters.com/article/us-petrobras-results-idUSKBN1352RE

Nov 10 Royal Dutch Shell Plc will invest $10 billion in Brazil over five years now that the country has increased opportunities for foreign companies in its oil industry, its chief executive officer said on Thursday.

Already the largest foreign investor in Brazil, Shell is particularly encouraged by recent legislation that increases the role of private oil companies in the tapping of vast off-shore oil deposits in the subsalt layer, Chief Executive Officer Ben van Beurden said.

"This was a good move by the government and it will open up opportunities for more players to invest in Brazil," Van Beurden told reporters after meeting with President Michel Temer.

Temer took office this year after the impeachment and removal of leftist Dilma Rousseff, whose Workers Party was opposed to reducing the central role of state-controlled oil company Petrobras in the subsalt region.

Shell is already a major subsalt player as a Petrobras partner in the massive Libra oil field, and acquired more assets in Brazil through its merger with rival BG Group.

New investments could be made by Shell in oil industry auctions planned next year, Van Beurden said, and the company will look at opportunities in distribution at a time that Petrobras is considering selling a big stake in its subsidiary BR Distribuidora.

"If there are opportunities, we will also look at the possibility of deepening our portfolio in the downstream area, he said.

http://www.reuters.com/article/shell-brazil-idUSL1N1DB2GG

ConocoPhillips, the largest U.S. independent oil producer, said on Thursday it would reduce its capital budget by 4 percent to $5 billion next year due to technology gains, cost cuts and other improvements.

The cut reflects not only the energy industry's increasing push for efficiency gains that reduce the cost of drawing oil and natural gas from the earth but also low commodity prices, which have hampered Conoco and peers over the past two years.

The spending reduction comes after the company more than halved its budget last year. Indeed, Conoco's 2015 capex had eclipsed $10 billion.

"During the past two years, we have significantly transformed ConocoPhillips to succeed in a lower, more volatile price environment," Chief Executive Officer Ryan Lance said in a statement.

Most of the budget next year will be spent on shale projects in the contiguous United States, with some focus on Alaska and Europe, as well as maintenance of existing operations.

The spending should result in 2017 production of 1.54 million to 1.57 million barrels of oil equivalent per day, which would be a slight increase from 2016 estimates, executives said.

The company also announced a $3 billion share repurchase program and said it would sell $5 billion to $8 billion in assets, mostly from its North American natural gas operations.

Conoco is set to host analysts and investors on Thursday morning at a presentation in New York.

Shares of the Houston-based company have fallen about 2 percent this year, closing on Wednesday at $45.73.

http://www.reuters.com/article/us-conocophillips-analyst-idUSKBN1351EA

Following Donald Trump's victory in Tuesday's presidential race, Congressman Kevin Cramer, a North Dakota Republican and a top Trump energy advisor, spoke with S&P Global Platts about what impact the election will have on US oil producers, energy markets and stalled pipeline projects.

Cramer has called for a federal government probe of potential oil price manipulation by OPEC and said that he plans to re-introduce a bill in the next Congress to mandate that investigation.

Here's a partial transcript from the interview which took place late Wednesday:

Q: What impact do you think the Trump victory will have on US oil and gas producers?

A: Well, there's tremendous renewed optimism, I can tell you that. The commitment to rolling back regulations and returning more oversight back to states, things like the fracking rule, methane emissions rules, for example. There's just a renewed optimism that [US producers] are going to be unshackled from over-regulation. It doesn't do much for the price [of oil] but it does reduce the cost of doing business.

Q: What does the Trump White House plan to do about OPEC?

A: That fits right in with [Trump's] 'America first' energy policy and he has spoken a little bit of the concept of making sure that we're less dependent... on OPEC for oil. He likes to use the word independent, I tend to use the term security. I would expect a little more proactive engagement from the White House and the new administration.

Q: What do you mean by that? Would Trump try to put import restrictions in place?

A: I don't want to say no because I don't know and he's talked about tariffs on manufactured products so I suppose it's possible. That's not something I would advise. I'm more interested in a close observation and oversight of potential unfair trading practices by OPEC and whatnot so that we can attempt to avoid doing anything proactive on our side. Q: Now that US oil is so entrenched in the global market how much could the White House do, though?

A: What they could do is, they could unleash some of the production potential of our federal resources on our federal lands and, obviously, offshore and [Trump's] talked pretty openly about that. Now, that still means that the producers themselves that have to have markets to sell to, it would just open up more opportunities for them to choose the best play. I think that's all good because it just gives more options on the supply side. It is somewhat limited about what [Trump] could do about price, but making more of it available and reducing the cost of getting it by rolling back some regulations could go a long ways to more production.

Q: How much of Obama's efforts to combat climate change will Trump try to weaken or eliminate?

A: I think he'll be able to do a lot, hopefully, and return that kind of oversight to states where it belongs. Some of that he can do, maybe, by simply eliminating certain rules or regulations or taking them back from the courts where they're in limbo.

Q: You've said that you don't even know if Trump is aware of the controversy surrounding the Dakota Access Pipeline. Is Trump aware of it now?

A: He may be, I know it's got a lot more publicity... but I still don't know for sure if he's been talked to about it. I certainly haven't spoken to him about it because so much of the focus the past couple weeks has been on, obviously, these battleground states. I'm of the opinion that this thing's going to be permitted, finished off. I don't mean the pipeline completely built, but I believe that the permit that was issued and rescinded at the Missouri River will be reissued and I think the easement to work there will be as well and I think that's going to all happen under Barack Obama. And I don't have any special insights into that other than just looking at the law and looking at the objections and realizing there's just no legal reason for the court to withhold this any longer or at least much longer. The president said that the [Army Corps of Engineers] is looking at potentially rerouting it, but the Corps doesn't have any authority to reroute a pipeline. They don't do routing for pipelines, they do permits. And they've done 230 permits on this pipeline and it'd be pretty difficult to reroute a pipeline they've already permitted all over the country. I just think that's an issue that's going to resolve itself before Donald Trump becomes president. And if it doesn't he'll become very aware of it.

Q: And you think Trump will approve it?

A: I do and, again, I haven't talked to him about it, but he's been so clear about his commitment to transportation infrastructure and to energy infrastructure development... not just to move product, which is the fundamental purpose, but to getting America back to work. I just don't see him letting the federal government continue to slow walk something that should have been done a long time ago.

Q: What about Keystone XL?

A: That ball is going to be in the hands of TransCanada obviously. He's been very clear that he'd like it to be reapplied for and he'll issue the permit. As long as it's the same route and corridor and whatnot... there's no real reason not to do it. I expect that will be done very, very quickly.

Q: Do you see other energy legislation now moving through this Republican Congress now that we have a Republican president?

A: I think there will be a real collaborative effort with the White House to determine what requires legislation and what can be done with better administrative policy. How do we legally deal with, for example, the Waters of the US or the Clean Power Plan, given where they are in the legal process? Not to mention the [Paris climate change agreement]. There are a lot of these kinds of things that may not require a lot of legislation. Whatever the outcome of that process of reviewing all the regulations which Mr. Trump has been very clear about and doing what can be done with executive orders and doing what needs to be done with promulgation of rules and legislation and whatnot. Then we need to take a good, hard look at the big laws, like Clean Water Act, like Clean Air Act and then say what was Congress' intent? What is the appropriate modern application of those bills? What kind of proscriptive things should be added so that we don't run into this kind of confusion... like what exactly is the definition of the waters of the US or what exactly is the definition of a pollutant and what do we intend and not intend? Some of those kinds of things require a real good, detailed look at the broad authorizations in those kinds of bills. I see that as very important for Congress to be doing.

Q: What will his administration look like? Who will make up his cabinet?

A: I don't know any specific people, but Mr. Trump's been very clear that he likes very successful business people serving in high positions with close access to him and I think that would certainly apply to places like [the Department of] Interior and [Department of Energy]. He obviously is going to have a good policy team around all that and I would hope people with technical experience as well. So, I think he's been pretty clear he's looking to the business community to help him shape a government that runs a little bit more like a business and understands the ramifications and the consequences of regulation on business. I think it's a noble goal.

http://www.platts.com/latest-news/oil/washington/interview-trump-advisor-sees-end-of-federal-oil-26592893?hootpostid=e6192bd746f37e977a125721e4183973

The International Energy Agency increased its estimate of oil production from countries outside OPEC next year, citing an improved outlook for Russia.

Supply growth from nations outside the Organization of Petroleum Exporting Countries will be “just shy” of 500,000 barrels a day, an increase of 110,000 from the agency’s forecast last month, it said Thursday. Russian production is likely to grow by 190,000 barrels a day, building on a 230,000-barrel increase in 2016.

Swelling output from non-OPEC countries including Russia, Brazil and Kazakhstan presents a challenge for the 14-member exporters’ group, which meets at the end of November to hammer out the details of a production cut to buoy prices. While Russia has said it will consider joining an OPEC agreement, its own output has climbed to a post-Soviet record.

Brazil is set to increase production by 280,000 barrels a day next year, while Canadian output will rise by 225,000 barrels and Kazakh supply by 160,000, the Paris-based IEA forecast in its monthly report. Non-OPEC supply will total 57.2 million barrels a day.

“This means that 2017 could be another year of relentless global supply growth similar to that seen in 2016,” IEA said.

While non-OPEC production is likely to drop by 900,000 barrels a day this year, it rose by almost 500,000 a day last month as new fields started, according to the agency. Maintenance and unscheduled shutdowns, especially in the North Sea, had curbed production in September. Kazakhstan’s giant Kashagan field boosted output in October after coming online the previous month, and oil-loading schedules suggest North Sea production also rebounded.

OPEC Policy

OPEC, led by Saudi Arabia, decided in November 2014 against curtailing production to support oil prices and instead pump at capacity to increase market share. This drove crude to a 12-year low in January this year and pushed high-cost U.S. production down. Following more than two years of low prices, OPEC reversed its policy in September, saying it would cut production for the first time in eight years.

The consequent rally in prices brought back some U.S. drilling. In October, 14 out of a total 25 oil rigs returning to service were added in the Permian shale basin, where production rates are beating expectations, the IEA said. Output in the Bakken and Eagle Ford shales isn’t as strong, and the IEA sees U.S. crude supply declining “modestly” in 2017.

Total U.S. oil and natural-gas liquids production will shrink by 465,000 barrels a day this year to 12.5 million barrels, and stay around this level in 2017, the agency forecasts.

http://www.bloomberg.com/news/articles/2016-11-10/iea-raises-forecast-for-non-opec-oil-production-growth-next-year?cmpid=socialflow-twitter-business&utm_content=business&utm_campaign=socialflow-organic&utm_source=twitter&utm_medium=social

Independent oil and natural gas company WildHorse Resource Development Corp filed with securities regulators on Thursday to raise up to $650 million in an initial public offering.

The company, which operates in the Eagle Ford basin in southeast Texas and the Terryville Complex in North Louisiana, said it intends to list its common stock on the New York Stock Exchange under the symbol "WRD". (bit.ly/2eGeTDb)

Houston-based WildHorse said proceeds from the offering will be used to fund the remaining portion of the Burleson North acquisition.

The company did not mention the size of the offering.

Barclays, Bofa Merrill Lynch, BMO Capital Markets, Citigroup and Wells Fargo Securities are the lead underwriters, the company said.

The amount of money a company says it plans to raise in its first IPO filing is usually a placeholder.

http://www.reuters.com/article/us-wildhorse-resource-ipo-idUSKBN1352Y6

The big trade in natural-gas is looking like a big bust.

The market has long been notorious for a trade called the “widow maker.” It is a bet on whether the difference between March and April natural-gas prices at the end of heating season will widen or narrow. Playing it wrong can help sink a fund, as it did with Amaranth Advisors LLC when it lost more than $6 billion in 2006.

That spread for 2017 has lost 87% in less than a month, falling to an all-time low of just 3.8 cents at Tuesday’s settlement. When the March and April 2017 futures contracts debuted in 2008, that spread quickly reached a high of 93 cents, but the world of natural gas has changed since then.

The shale-gas boom has kept supplies heavy even during the height of winter-heating demand. If supplies are still healthy at the end of winter, there is little reason to pay more for winter gas than spring gas. Production to start this month is holding at a near-record pace of about 71 billion cubic feet a day that is common for this time of year. And extreme temperatures have become a norm, with many traders now fearing a second exceptionally warm winter in a row will kill heating demand.

That flipped the gas market in recent weeks. Weather has been historically warm in both October and November, and meteorologists say it could continue. That has forced traders out of speculative bets the market might have a supply shortage this winter. Both the widow-maker spread and futures had hit nearly two-year highs before recent collapses, with futures losing 21% in less than a month.

Data provider Genscape Inc. on Tuesday said natural-gas stockpiles are likely to end the upcoming winter at 1.64 trillion cubic feet, about in line with recent averages. Production is likely to keep growing through the winter, despite a fleet of working rigs that had fallen to historic lows in recent months.

Storage levels are already nearing a record above 4 tcf, still bloated from last winter’s record warmth and low demand that sent Nymex gas prices to their all-time, inflation adjusted low. Enough gas is in storage that prices could keep falling unless cold weather arrives, said J. Alexander Blackman, an executive at Standard Delta LLC, a commodities trading company.

“There is no floor here,” he added.

Many gas traders are waiting for next week when two-week weather forecasts start to cover early December and the government releases its official 30-day forecast going into that month, too, said Teri Viswanath, managing director, natural gas, at PIRA in New York. It becomes harder to stay bullish without a burst of winter cold by the end of November, said Tim Pickering, president at Auspice Capital Advisors Ltd., which manages $250 million in assets.

One of the widely-watched private forecasters, Commodity Weather Group LLC in Bethesda, Md., has been talking to clients about possibly warming up its forecast, which had been among the coldest. It had predicted a cold winter would start this month and last through March, but conditions have clearly changed.

A strong Pacific jet stream is blocking Arctic air from flowing south into the U.S., sweeping it instead off toward Europe, said Matt Rogers, Commodity Weather Group’s president and a meteorologist. And it is rare that extremely warm Novembers precede cold winters, he added.

“Things have changed dramatically in the last two weeks. And everything is becoming uncertain,” Mr. Rogers said.

Mr. Pickering, however, still believes the long-term trend for natural-gas prices is going higher. Weather-adjusted demand is outpacing supply now, from increases in both industrial consumption and from a power grid becoming more reliant on natural gas as coal-fired power plants close.

“While November may be a write off, there’s a lot of winter left in play,” Mr. Pickering said.

http://blogs.wsj.com/moneybeat/2016/11/09/traders-betting-on-another-historic-winter-for-gas/