Quotes: US MENA   Enter Symbol: NewsLetter: Search: advanced

Saudi - Oil boom in US upends markets as drilling spreads  Join our daily free Newsletter

MENAFN - Arab News - 13/01/2014
No. of Ratings : 0
Add to Mixx!



(MENAFN - Arab News) The US oil boom has put European refineries out of business and undercut West African crude suppliers.



Now domestic drillers threaten to roil Asian markets and challenge producers in the Middle East and South America



Fifteen European refineries have closed in the past five years, with a 16th due to shut this year, the International Energy Agency said, as the US went from depending on fuel from Europe to being a major exporter to the regio



Nigeria, which used to send the equivalent of a dozen supertankers of crude a month to the US, now ships fewer than three, according to the US Energy Information Administratio



And cheap oil from the Rocky Mountains, where output has grown 31 percent since 2011, will soon allow West Coast companies to cut back on imports of pricier grades from Saudi Arabia and Venezuela that they process for customers in Asia, the world's fastest-growing marke





"I don't really think anyone saw this coming," said Steve Sawyer, an analyst with FACTS Global Energy in Londo



"The US shale boom happened much faster than people though



We're in the middle of a new game.



There's nothing in the past that predicts what the future will be.

Advances in extracting oil from shale rock drove a 39 percent jump in US production since 2011, the steepest rise in history, and will boost output to a 28-year high this year, according to the EI



While drilling in shale is more expensive than other methods and poses environmental challenges, the prospect of a growing supply is encouraging analysts to predict a more energy-independent nation

With US exports of gasoline and other refined products hitting a record last month and the country on pace to become the world's largest oil producer by 2015, five years faster than the IEA's earlier predictions, industry advocates such as Sen. Lisa Murkowski of Alaska are calling for an end to 39- year-old restrictions on US crude exports

In a measure of just how quickly the oil market has changed, President Barack Obama unveiled in March 2011 a goal considered so outrageous that correspondent Christopher Mims wrote on the environmental news website Grist that it could be accomplished only by "an economic crash bigger than any ever seen in US history, or perhaps an alien race forcing all of us to take to our bicycles." Obama said that by 2025 the US would cut crude imports by one-third

It didn't take 14 year



It took less than three

The country is so flush with crude that imports are plunging and drillers are challenging export limits imposed after the 1973 Arab oil embarg



Murkowski, the top Republican on the Senate Energy Committee, has called on Obama to end restrictions and vowed to introduce legislation if he doesn't

Easing controls would have been unthinkable just three years ago, when uprisings in Arab countries such as Libya pushed crude prices over 100, said Philip Verleger, a former director of the office of energy policy at the Treasury Department and founder of the Aspen, Colo,-based consultant PKVerleger

The boom has been led by drilling in the Permian Basin in West Texas and the oil-rich Bakken shale, which stretches from North Dakota into Montana and Canada

North Dakota and Texas have more than doubled crude output since Obama's 2011 speech, with Texas pumping more than Iran, according to the EIA, the statistical arm of the US Energy Department, and a Bloomberg survey of producers, oil companies and analysts

Drilling is spreading in emerging oil fields in the Rocky Mountain region such as the Niobrara in Colorado and the Bone Springs in New Mexico and spurring a revival of crude extraction around Wyoming's Teapot Dome formation, home of the first US reserves and the namesake of a 20th century political scanda



Colorado's production jumped 17 percent in the first 10 months of 2013, Wyoming rose 16 percent and New Mexico added 10 percent, according to the EIA

A record amount of crude is already riding the rails from oil fields in North Dakota, Colorado and New Mexico to California's fuel makers, according to the California Energy Commissio



Companies looking to ship even more include Tesoro Corp., Valero Energy Cor



And Plains All American Pipeline, which are planning to build train terminals in California and Washington state, according to company statements and regulatory filing



Plans are awaiting permits or in the planning stages to handle capacity roughly equal to the amount of crude sent to the region by Saudi Arabia

If the railway networks on the West Coast are completed, the region's refiners will be able to use domestic crude supplies to boost exports to meet rising needs in Asia, where demand for new cars, electricity and air conditioning is boosting energy consumptio





China, already the world's largest importer, will rely increasingly on crude from the Middle East and refined fuels from the US.to meet its consumers' growing demand

An increase in the number of US cargoes to Asia might force Saudi Arabia to cut its output to head off a worldwide glut, Verleger sai





As the de facto leader of the Organization of Petroleum Exporting Countries, Saudi Arabia is monitoring signs of potential oversupply as Iraq and Libya try to boost output and Iran increases exports as international sanctions are loosened, he said

"It's another outlet for North American oil products and means more supply for the rest of the world," said Andy Lipow, president of Lipow Oil Associates, an energy consultant in Housto





"The West Coast is behind the rest of America as far as getting crude by rai



It will increase supply and help the consumer.

The US gains were made possible by innovations in horizontal drilling and hydraulic fracturing, or fracking, that have unlocked fuel trapped in underground roc





The technology allows producers to bore horizontally, then use explosives and a high-pressure stream of water, sand and chemicals to blast open fractures that free the oil

 






  MENA News Headlines
 Sep 2 2014 - Dubai's Maritime sector contributed 4.6% to GDPMENAFN
(MENAFN) Maritime sector in Dubai contributed 4.6 per cent to Dubai's GDP, or the equivalent of USD3.91 billion, Gulf News reported.The local maritime industry is considered to be a key cornerstone ...

 Sep 2 2014 - Bahraini EDB, Japanese JISA sign MoCMENAFN
(MENAFN) The Economic Development Board of Bahrain (EDB) signed a memorandum of co-operation with Japan Information Technology Services Industry Association (JISA), Gulf Daily News reported.The ...

 Sep 2 2014 - Kia Motor's sales drop 3 percent in AugustMENAFN
(MENAFN) Kia Motors Corporation, South Korea's second largest automaker, announced that its August sales dropped 3 percent compared to the same month last year, QNA reported.The automaker attributed ...

 Sep 2 2014 - Emirates has no interest in Qantas sharesMENAFN
(MENAFN) Emirates Airlines said they are not interested in investing in the international operations of Qantas, The Peninsula Qatar reported. In the most drastic restructuring step since Qantas was ...

 Sep 2 2014 - Qatar prepare to take on MoroccoThe Peninsula
(MENAFN - The Peninsula) Players of the Qatar national football team in action during a training session in Casablanca, Morocco, yesterday. Qatar take on Morocco in a friendly on Wednesday and play ...

 Sep 2 2014 - Qatar- Rally of LebanonThe Peninsula
(MENAFN - The Peninsula) Qatar's Abdulaziz Al Kuwari (extreme right) raises trophy during the presentation of the 37th Rally of Lebanon in Beirut. Al Kuwari finished third in the race won by local ...

 Sep 2 2014 - Qatar- QFA fines Al Arabi coach QR30,000The Peninsula
(MENAFN - The Peninsula) Qatar Football Association's Disciplinary Committee handed a warning and a QR30,000 fine to Al Arabi head coach Dan Petrescu for his behaviour during his side's game against ...

 Sep 2 2014 - US, UK deplore Israel's West Bank land grabThe Peninsula
(MENAFN - The Peninsula) The UK and US governments have condemned in unusually strong language Israel's decision to greenlight one of the largest appropriations of Palestinian land for settlement in ...

 Sep 2 2014 - Celebrations in IraqThe Peninsula
(MENAFN - The Peninsula) Iraqi Shia militia fighters fire their weapons as they celebrate breaking a long siege of Amerli by Islamic State militants, yesterday. ...

 Sep 2 2014 - Qatar- Second batch begins National ServiceThe Peninsula
(MENAFN - The Peninsula) The second batch of Qataris who have enrolled for the mandatory National Service seen at the Al Shamal training camp on Sunday. The military service is for four months and ...

more...


 






Google

Click to Apply

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country

IPO News
Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

US Markets Details

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Investment Game
Economic Calendar
Financial Glossary

My MENAFN
Portfolio Tracker

Voting

Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2000 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help