Oil producers have picked up the pace in hedging against further production in 2019, with an average price at about $60 a barrel, which limits upside but protects against volatility, according to Goldman Sachs. For 2018, about 48 percent of oil production is hedged at an average price of $57 a barrel, Goldman said in a note late on Monday. Sixteen percent of 2019 oil production is hedged at $60 a barrel, versus 9 percent at the end of the fourth quarter, in line with the historic average for hedging ...

As oil and natural gas production continues to boom in the Permian Basin, producers such as WPX and Laredo Energy are pursuing efforts to develop infrastructure in an effort to avoid low basin differentials. WPX Energy, like so many other exploration-and-production companies lately, have shifted the bulk of their capital expenditures to the Permian, prompting prolific growth in the basin. The Tulsa-based company increased its oil and gas production a staggering 149% from a year ago. But it doesn’t come without some growing pains as Permian Basin crude and gas ...

Hedge funds are rolling forward long positions in the Brent futures contract, and in the absence of offsetting factors this is depressing the value of expiring contracts, pushing futures prices into contango. Since the end of June 2017 hedge funds and other money managers have built up a near-record net long position in Brent in the expectation that prices will continue to rise. Hedge funds held long futures and options positions equivalent to almost 615 million barrels on May 15, according to position reports published by the Intercontinental Exchange. These ...

Will this latest bull run in oil prices trigger a new phase of upstream M&A? The sector is feeling emboldened again – a confidence that’s justified up to a point. Oil and gas companies cleaned up their own act well before oil prices recovered to today’s lofty levels, reducing the sector’s cash flow breakeven to US$53/bbl. At US$70/bbl plus, there’s money to spend on organic investment, dividends, buybacks – perhaps even M&A. A hiatus in M&A activity followed in the immediate aftermath of the 2014 price crash, reflecting general uncertainty, ...

Indian Oil Corp Ltd, the country’s top refiner, on Tuesday posted a 40 percent jump in fourth-quarter net profit, but missed analysts’ expectations. Net profit rose to 52.18 billion rupees ($766.82 million), in the quarter ended March 31, from 37.21 billion rupees a year earlier, the state-run company said on Tuesday here Analysts on average expected a profit of 56.42 billion rupees, Thomson Reuters data showed. Average gross refining margin improved to $8.49 per barrel in the financial year ended March, compared with $7.77 per barrel in the previous year. ...

State-run Oil and Natural Gas Corporation Ltd. and Oil India Ltd. face the increasing risk of the government requiring them to share the fuel subsidy burden as oil prices rise, according to Moody’s Investors Service. The rating agency projects that fuel subsidies could be Rs 34,000-53,000 crore in this financial year—the highest since the year ended March 2015—if Brent crude ranges between $60 and $80 a barrel. Last week, oil prices hit $80 a barrel, the highest in four years. Rising prices increase the government’s import bill as India relies ...

Geopolitical tensions such as the U.S. withdrawal from the Iran nuclear deal may have sent the prices of crude oil to record highs, but this hasn’t affected the order book of Petronet LNG Ltd., India’s largest importer of liquefied natural gas. The company says its customers haven’t defaulted on buying committed volumes from its terminals. That’s because there is a small differential between spot prices and prices for long-term contracts, both of which are on the upswing, Prabhat Singh, managing director of Petronet, told BloombergQuint. “We are picking up all ...

Top investors in Royal Dutch Shell on Tuesday put pressure on the oil and gas giant to commit to hard targets to reduce greenhouse gas emissions to battle climate change. Shell has set out “ambitions” to halve carbon emissions by 2050 and expand in renewables, goals Chief Executive Officer Ben van Beurden said were ground breaking for the oil industry. But he clashed with shareholders who had pushed climate to the forefront of the annual general meeting (AGM) and demanded Shell give specifics on how it would turn promises into ...

Mexican state oil company Pemex is going through a radical change, shifting from volumetric goals to profit margins while protecting its market share in Mexico’s liberalizing fuel market. Pemex will use gasoline refining margins as the main component of its operational strategy, Carlos Murrieta Cummings, Pemex’s downstream director, spoke with S&P Global Platts last week at the Onexpo 2018 conference in Cancun. If the gasoline margin increases, Pemex will process more crude oil and if it decreases it will favor imports, he said. “We have models that optimize how much ...

Brent crude prices settled slightly higher on Tuesday after a volatile session in which potential supply concerns surrounding Venezuela and Iran jockeyed with comments from President Donald Trump saying he was not pleased with U.S.-China trade talks. Brent crude LCOc1 futures rose 35 cents to settle at $79.57 a barrel, a 0.44 percent gain. Last week, the global benchmark topped $80 for the first time since November 2014. U.S. West Texas Intermediate (WTI) crude CLc1 futures fell 11 cents to settle at $72.13 a barrel, a 0.15 percent loss. They ...

British oil giant BP Plc said it plans to cut 3 percent of jobs in exploration and production, as part of a restructuring of its global upstream business to make the division more efficient and competitive. A BP spokesman said the cuts of around 540 jobs from the company’s 18,000-strong total upstream workforce will be carried out by the end of the year. The move is part of an ongoing process to simplify the company’s structure and increase efficiency, following the $50 billion worth of divestments over recent years, BP ...

According to the Iranian government spokesman, Iran’s oil revenues nearly doubled during the first month of Iranian year. In his weekly address to reporters on Tuesday, the government spokesman Mohammad Bagher Nobakht said the country’s oil income increased by 99 percent in the month of Farvardin (the first month in the Iranian calendar year beginning on March 21 and ending on April 20, 2018), compared to the same month last year. “During Farvardin, we sold each barrel of oil at $63 while the price was $51/b last year,” he said. ...

Indonesia is mulling a change to the formula for its Indonesia Crude Price (ICP) to bring it closer to global oil benchmark Brent, an energy ministry official said on Tuesday. Such a move would encourage local oil contractors to sell crude oil to state energy company Pertamina, rather than export their production, said Djoko Siswanto, director general of oil and gas at the ministry. “If the ICP approaches the market price, (contractors) wouldn’t need to sell it overseas, they could just sell it to Pertamina,” Siswanto said. The move, being ...

Ecuador will continue to support OPEC if it decides to maintain output cuts because the Andean country is producing below its set limit, Oil Minister Carlos Perez said in a press conference on Tuesday. “Today we are producing below the limit set by OPEC of 520,000 barrels-per-day,” Perez told journalists, adding production in May was around 513,000 bpd. Source: Reuters (Reporting by Alexandra Valencia Writing by Alexandra Ulmer Editing by Chizu Nomiyama)

For all the bullish commentary about oil prices at the moment, hedge fund managers have continued to take profits after the recent rally and are trimming their net long positions rather than adding to them. Focusing on what people do rather than what they say is one of the most important lessons for any good analyst (actions always speak louder than words). Hedge funds and other money managers cut their net long position in the six most important petroleum futures and options contracts by 16 million barrels in the week ...