Halliburton Rejects Blame for BP Cement Job

Halliburton, whose failed cement job on the BP well in the Gulf of Mexico was identified as a contributing factor to the deadly blowout by a presidential investigative panel on Thursday, is defending its work and assigning the blame for the accident to BP. Panel Says Firms Knew of Cement Flaws Before Spill (October 29, 2010) Inquiry Puts Halliburton in a Familiar Hot Seat (October 29, 2010) In a six page statement issued Thursday night, Halliburton questioned tests that showed its cement mixture to be unstable and incapable of holding back the oil and the gas in the well, saying the tests were conducted on formulas other than what was eventually used on BP’s Macondo well. It said that a sample of the cement mixture it planned to use on the well, tested shortly before pumping began on April 19, had produced a positive result.

But Halliburton admitted that no stability test was conducted on the actual recipe for the cement used on the well. The company said that BP had ordered a change in Halliburton’s customary formula for cement by adding a higher proportion of a chemical that slows the hardening of the mixture. The well blew out on April 20, killing 11 workers and eventually releasing nearly five million barrels of oil into the gulf. Since then, BP, Halliburton, Transocean and other partners in the well have traded accusations of blame as civil and criminal investigations have proceeded.......Read the entire article.


Share

Oil N'Gold: Crude Oil Weekly Technical Outlook For Saturday Oct. 30th

Crude oil continued to be bounded in choppy sideway trading between 79.25 and 84.45 last week. Outlook remains unchanged. With 78.04 support intact, there is no confirmation of reversal yet. The consolidative price actions from 84.43 also suggests that recent rally is not over. An upside break out will be in favor. Though, in case of another rise, we'll continue to focus on reversal signal inside resistance zone of 82.97/87.15. On the downside, break of 78.04 support will indicate that rise from 70.76 is over and deeper decline should be seen to retest this support level first.

In the bigger picture, after all, we're still favoring the case that medium term rally from 33.2 is already completed at 87.15. Recovery from 64.23 is treated as a correction and should be near to completion, if not finished. Even in case of another rise, strong resistance should be seen as crude oil enters into resistance zone of 82.97/87.15 and bring reversal. We're still expecting another fall to 60 psychological level (50% retracement of 33.2 to 87.15 at 60.18). However, decisive break of 87.15 will put focus on long term fibo level at 50% retracement of 147.27 to 33.2 at 90.24.

In the long term picture, current development suggests that rebound from 33.2 is finished at 87.15, inside 76.77/90.24 fibo resistance zone as expected. Price actions from 147.27 are treated as consolidation in the larger up trend and with 90.24 fibo resistance intact, a test of 33.2 eventually is in favor. Though, decisive break of 90.24 will bring stronger rally to above 100 psychological level as a relatively powerful second wave of the consolidation continues.

Nymex Crude Oil Continuous Contract 4 Hour, Daily, Weekly and Monthly Charts.


Share

Commodity Corner: Crude Oil Settles Lower; Natural Gas Breaks $4.00 Mark

Crude oil for December delivery settled lower Friday after the U.S. Commerce Department reported a lower than expected gross domestic product (GDP) estimate for the third quarter of 2010. Oil ended Friday's trading session $81.43 a barrel, a 75 cent decline from the previous day. The Commerce Department stated earlier in the day that Real GDP grew 2.0 percent at an annual rate during the third quarter, below the 2.1 percent that the private sector anticipated. During Friday's session, oil peaked at $82.12 and bottomed out at $80.56. The commodity is down 1.3% compared to Monday's settlement price.

Natural gas continued to benefit from predictions of colder temperatures for much of the Central and Eastern U.S. through next week. The December futures price settled at $4.04 per thousand cubic feet Friday, a 15 cent gain from the previous day and a 21.7% improvement from Monday's settlement price; note that the November contract was still being traded Monday. Gas traded within a range from $3.83 to $4.035 Friday. The price of gasoline for November delivery fell by a penny Friday, settling at $2.10 a gallon. Gasoline, which is up nearly 1% for the week, traded from $2.07 to $2.13.

Courtesy of Rigzone.Com

Share

Why Producers Aren't Hedging Natural Gas

Natural gas prices in Canada are so low that end users are now trying to seduce producers to hedge, so they can lock in longer term low prices. But few producers are keen to lock in long term losses. RBC, Canada’s largest brokerage firm, suggested in a weekly comment that producers still have many reasons to hedge at $3.27 a gigajoule (GJ) now, and $4.11/GJ in April 2011. For context, the full cycle cost for new gas in North America is $5.60/mmcf and in Canada is $6.85/mmcf, according to independent analysts Ziff Energy. So producers would be selling at a significant loss.

But some quick calls to the energy desks of the major Canadian firms showed that few producers are biting, and even one of my contacts at RBC said these “hedging strategies are geared more towards the end user market; the end users are trying to lock in really good prices. But nobody’s hedging.”

RBC lists several potential reasons for hedging, which often mirror the Ziff Energy white paper from June 2010 on the state of Canadian natural gas (a GREAT read – not too technical).

1. Strengthening Canadian Dollar

2. US Production Growth

3. Reduced Canadian Imports

4. Heightened Pipeline Delivery Competition in the US

5. Abundance of Canadian Storage

6. Material Expansion of Canadian Shale Gas Production

7. Growth in Marcellus Shale Gas Production – Production has increased by over 1 bcf/d since January 2010

That’s a big list! And it’s not good news for producers or their investors – especially the junior ones who either have high gas weightings or are close to their debt limit.

But despite producers losing money on every mmcf out of the ground, some may be inclined to hedge, says Ralph Glass of AJM Consultants.

“The bigger producers are still drilling and they can afford to (hedge); it’s part of their long term plan and their economics of scale allow it. The only advantage I can see is that if you’re making positive cash flow at $3.50/mmcf, this gives you stability to hang in for one more year. But it’s not an investment strategy.”

He added even small producers may consider it: “A small producer that has limited cash flow cannot afford to pay for capacity costs without actually producing the volumes.” This means they may have “take or pay” like provisions, where the producer must pay the pipeline companies their transportation tolls even if they don’t produce the gas.

For producers, it comes down to the same issue it always does, are prices going lower or higher? By not hedging, major producers are saying that despite all the gloomy market data, they see prices stable or higher.

Long term dated future gas prices are now below $5/mmcf for a full two years out now. With such a low, and flat futures pricing curve, producers are saying they would rather take their chances in the spot market then, rather than lock in losses now.

Keith Schaefer's Hottest Investment Plays in North America: Crude Oil and Natural Gas Bulletin


Share

Phil Flynn: Spooky QE2

Oil, boil, toil and trouble, we’re going to print more money. Count Bernanke is out to suck more blood out us poor turnips as the Fed looks like QE2 might be a whopper after all! Hey wait a minute! What? Is it possible that the Fed and the upcoming Mid-Term elections are not scaring the oil bear anymore? Well at least for a day the oil market seemed more spooked about mounting supply and decreasing demand then any spell that the Fed was going to cast upon the economy. Despite weakness in the dollar and the most impressive gold rush in weeks, oil struggled to close higher on the day.

Perhaps the market is still coming to grips with the horror of this week’s big build in U.S. supply which, according to the Energy Information Agency, is the highest level ever ending the month of October sitting at 366.2 million barrels. Now that’s scary! Not only that, the supply numbers are daunting with concern that demand from Asia is weakening. Dow Jones news wires reported that India's crude oil imports fell 21.9% to 10.94 million tons in September, or 2.67 million barrels a day, from 14.01 million tons a year earlier. Crude imports were up 14% from 9.57 million tons in August.

But there is still some concern about Indian demand. India imports about three quarters of its crude oil for its demand needs. We know that the global oil market feeds off of China and India feeds off of China and in China this week they took more steps to slow energy demand. After increasing interest rates, the Chinese attacked oil demand directly by increasing the cost of diesel and gasoline by 3%. Now we do not know whether or not a 3% increase will significantly slow demand but it might. Now take into account rising OPEC production and a glut of spare production capacity around the globe and it is no wonder why the oil upward momentum has been limited.

Check Phil out on the Fox Business Network! And sign up for his trade buy and sell points by calling him at 800-935-6487 or emailing him at pflynn@pfgbest.com.



Share

Total Profits Soar on Higher Oil, Refining

French oil company Total posted a 54 percent profit rise on Friday as higher oil and gas prices and strong refining margins lift industry earnings worldwide. Finnish refiner Neste Oil also reported improved profits after similarly strong performances from sector heavyweights Exxon Mobil and Shell on Thursday. Total said net income, excluding unrealized gains related to changes in the value of inventories, was 2.875 billion euros in the third quarter, boosted by gains from selling oil fields.

Stripping out one offs, the result was up 32 percent and in line with analysts' average forecasts. Neste said fatter refining margins lifted its operating profit, excluding inventory gains or losses, by 36 percent to 57 million euros ($79 million), in line with a mean forecast in a Reuters poll. The world's largest non government controlled oil company by market value, Dallas based ExxonMobil, reported a 55 percent jump in net income on Thursday, while industry No. 2, Royal Dutch Shell reported an 18 percent rise, which would have been higher but for non cash charges......Read the entire Reuters article.


How To Find Winning Trades In Any Market

Share

Crude Oil Daily Technical Outlook For Friday Morning Oct. 29th

Crude oil was lower overnight as it extends this week's decline. Stochastics and the RSI are turning neutral to bearish signaling that sideways to lower prices are possible near term.

If December renews last week's decline, trendline support drawn off the August-September lows crossing near 78.72 is the next downside target. Closes above Monday's high crossing at 83.28 are needed to confirm that a short term low has been posted.

First resistance is Monday's high crossing at 83.28
Second resistance is the reaction high crossing at 84.80

Crude oil pivot point for Friday morning is 82.11

First support is last Wednesday's low crossing at 79.90
Second support is the uptrend line drawn off the August-September lows crossing near 78.72


Jump Start Your Trading, Get Market Club Today

Share

Crude Oil Pares Monthly Gain as Asian Shares Decline, Dollar Rebounds

Crude oil fell in New York, trimming a second monthly gain, as Asian equities dropped and the dollar’s rebound curbed investor demand for raw materials. Crude gave up yesterday’s 0.3 percent increase as equities declined, driving the MSCI Asia Pacific Index toward its second weekly drop. Crude stockpiles in the U.S., the world’s biggest oil consuming nation, reached the highest in 17 months after surging 5 million barrels in the week ended Oct. 22, according to Energy Department data. Futures have climbed 2.2 percent this month after an 11 percent rally in September.

“There’s no real consensus in markets so that’s why you’re getting this choppy trading where people are changing their view quite regularly, and that’s creating volatility,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “It does seem to be more sentiment driven and currency driven.” Crude for December delivery declined as much as 55 cents, or 0.7 percent, to $81.63 a barrel in electronic trading on the New York Mercantile Exchange. It was at $81.71 at 1:50 p.m. Singapore time. Yesterday, the contract added 24 cents to $82.18. Prices, little changed this week, have gained 3 percent since the start of the year.

The dollar climbed 0.4 percent to $1.3876 against the 16 nation euro, damping the appeal of commodities as a hedge against inflation. The yen rose against all major currencies......Read the entire article.


Every Once in a While, You Find Something Amazing....Check out Trend TVShare

Sharon Epperson: Where is Crude Oil and Gold Headed on Friday?

CNBC's Sharon Epperson discusses the day's top business and financial stories, and looks ahead to where oil and gold are likely headed tomorrow.



John Murphy is one of the best technical analysts out there....check out this exclusive seminar for free

Share

Live SP500 Trading Video & Analysis

From Chris Vermeulen at The Gold And Oil Guy.com.....

Many have been wondering what the newly upgraded service The Gold And Oil Guy.com provides so I have put together this report so you can see the pre-market morning video, updates, charts and trades.

Watch "Live SP500 Trading Video & Analysis"



Share