Commodity Corner: Oil Crosses Century Mark

- Commodity Corner: Oil Crosses Century Mark

Friday, July 22, 2011
Rigzone Staff
by Matthew V. Veazey

Light sweet crude oil for September delivery peaked at $100.19 a barrel Friday, buoyed by news of a draft bailout plan for Greece and other debt-laden EU countries as well as optimism that the U.S. will raise its debt ceiling by August 2.

The WTI ultimately settled at $99.87, representing a 74-cent gain from Thursday. The Brent futures contract, meanwhile, gained $1.16 to end the day at $118.67 a barrel.

On Thursday, eurozone leaders emerged from a meeting in Brussels to unveil a preliminary debt restructuring plan for Greece, Portugal, Ireland, and perhaps other EU countries facing crushing sovereign debts—namely, Spain and Italy. Under the new plan, the countries will have access to European Financial Stability Facility loans at lower interest rates and will have more time—15 years or more—to repay them.

Also boosting crude oil Friday was optimism that the Obama Administration and lawmakers in the Democrat-controlled Senate and GOP-controlled House will be able to reach a deal on raising the U.S. debt ceiling from its current $14.3 trillion level. The U.S. Department of the Treasury has warned that the government could default on its debt obligations beginning August 2 if it does not obtain authority to take on more debt above the current borrowing limit. The Senate did vote Friday to table a House-passed "Cut, Cap, Balance" bill. The bill, which President Obama opposes, would require actual spending cuts in the Fiscal 2012 federal budget, implement a statutory spending cap, and advance a Balanced Budget Amendment to the U.S. Constitution.

The WTI bottomed out at $98.43 during Friday's session while Brent futures fluctuated from $117.59 to $118.78.

The eastern half of the U.S. has been under a so-called heat dome of sizzling temperatures for much of the past week, stoking demand for gas-fired electricity to power air conditioners and fans. The dome is expected to "deflate" somewhat this weekend, and the relatively mild forecast help natural gas futures remain largely unchanged Friday. Natural gas for August delivery gained 0.4 cent to end the day at $4.40 per thousand cubic feet Friday.

Also keeping gas futures in check was a U.S. Energy Information Administration report Thursday showing that working natural gas in storage rose to 2.67 trillion cubic feet as of July 15. The latest figures represents a 60-Bcf net build from the previous week, which fell within analysts' expectations. A Platts survey of analysts had projected a build for the period ranging from 58 to 62 Bcf.

Front-month natural gas traded within a range from $4.37 to $4.47 Friday.

Gasoline for August delivery gained three cents to settle at $3.13 a gallon. The futures price fluctuated from $3.10 to $3.14.

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Facebook Officially Announces Partnership with Skype

- Facebook Officially Announces Partnership with Skype



Jul 6, 2011

Facebook CEO, Mark Zuckerberg announced today at its company's headquarters in Palo Alto, CA the new features of Facebook which will include group chat and video chat run by Skype.

During the press conference, Facebook's Product Manager Peter Deng discussed group chat that will have a "Add friends to chat" feature to traditional chat. He also demoed the new Facebook design that will get hold of your account and browser size and a streamlined contacts bar to the right of your page. The video chat feature was demonstrated by a Facebook team member in Seattle.

Afterwards, Mark Zuckerberg invited the CEO of Skype, Tony Bates, onstage where he said, "Skype's mission has really been to make communications as pervasive as possible."

Zuckerberg also confirmed that Facebook now 750 million users.

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Barclays: Worldwide Spending to Pass Half Trillion Mark in 2011

- Barclays: Worldwide Spending to Pass Half Trillion Mark in 2011

Monday, June 13, 2011
Rigzone Staff
by Karen Boman

Worldwide exploration and production (E&P) spending in 2011 is expected to rise to 16 percent to $529 billion, compared with $458 billion in 2010, with strong year-over-year improvement in spending driven by large increases inside and outside North America, Barclays Capital today reported in its global E&P capital spending update.

E&P spending in North America is now forecast to be up 16.2 percent in North America and 15.5 percent outside of North America, compared with forecast increases in December 2010 of 11 percent globally, including seven percent in North America and 12 percent outside of North America. Barclays reports budgets have been revised dramatically higher in the U.S. and internationally for U.S. and European based independents, Southeast Asian companies and companies focused on the Middle East.

Spending increases this year will be led by North America, where high oil prices and the continued shift towards drilling in oil and liquids rich plays have resulted in solid growth. E&P capital spending for North America is expected to increase by 16.2 percent from $127.6 billion in 2010 to $148.3 billion in 2011.

Latin America, Europe and the Middle East are expected to be the strongest regions internationally for E&P spending. Petrobras' multi-year pre-salt development offshore Brazil and ambitious plans by Colombian state energy company Ecopetrol are driving the forecast increase in capital spending by Latin American companies, with spending in the region expected to be up 26 percent in 2011 to $65.5 billion from $52.1 billion in 2010, Barclays reported.

Spending increases of roughly 23 percent are anticipated both in Europe and the Middle East, with spending estimated at $39.9 billion this year in Europe and $22.1 billion in spending in the Middle East. India, Asia and Australia spending will be up 15 percent this year to $79.3 billion. Russian spending is expected to rise by three percent to $36.1 billion this year from 2010.

Capital expenditures for North Africa, where the "Arab Spring" of political demonstrations and civil war across the region has affected government and the economy, are anticipated to be down by over 16 percent to $25.2 billion this year due to sizable spending reductions by Egyptian General Petroleum Corp. and National Oil Corporation, as well as a reduction by Sonangol and lower spending for Nigeria National Petroleum Corp. as an election cycle concludes in Nigeria.

The U.S. continues to attract the majority of worldwide E&P spending at 21 percent; however, this percentage has continued to fall each cycle. Internationally, the India, Asia and Australia region absorbs the largest share of spending, which is being driven by large investments by Chinese national oil companies and Southeast Asian companies such as Malaysia's Petronas and Indonesia's Pertamina. In India, ONGC and Reliance are making significant investments in the region.


U.S. and European independents are stepping up spending internationally, with U.S.-based independents now forecasting international spending increases of 23 percent, up from four percent in December, while the European independents are anticipating spending growth of 23 percent versus 12 percent at the end of 2010. "We believe this is in part due to higher oil prices, higher cash flows, new exploration programs, and recent exploration success," Barclays said.

Spending among supermajors is expected to rise by 16 percent this year, led by Total, BP and Shell, compared with average spending growth of eight percent over the past five years. This increase is due to engineering and construction-related spending for several large liquefied natural gas projects, increasing Iraq spending, and increased deepwater drilling, especially in West Africa and Brazil.

While ExxonMobil remains the largest capital spender worldwide for oil and gas this year, Petrobras is quickly catching up; Petrobras and PetroChina may overtake ExxonMobil in spending in the next few years. Ninety percent of the top 20 spenders are expected to increase capital expenditures this year, with the exception of Russia-based Gazprom, which Barclays believes is primarily currency-related due to currency fluctuations in 2012, and Sonangol in Angola.

Barclays noted that the correlation between increased E&P spending and inflation-adjusted oil prices is significant, and expects a higher oil price environment to persist over the next several years driven by accelerating decline curves, continued difficulty finding and developing large reserves, increased demand in emerging markets, and tight spare capacity.

"Based on our view of a continued high oil price environment, we expect 2011 to mark the first year of multi-year double-digit spending growth internationally," Barclays said.

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