What to Watch

Crude Prices Steady as OPEC Production Ticks Up and Militants Threaten Wells

 The grand plan to cut crude production is still working and the market rebalancing is underway, the Organization of the Petroleum Exporting Countries said Thursday, despite an uptick in the oil cartel’s output last month and mounting supply in the U.S.

OPEC said the main driver behind the surge in crude prices in recent months—global benchmark Brent rose nearly 22% throughout last year—is the deal with Russia and other producers to hold back output, coupled with stronger demand in places like China, writes Christopher Alessi for Dow Jones Newswires.

But the cartel hinted that relentless U.S. shale production remains a thorn in the side of OPEC’s efforts.

The group revised upwards its 2018 forecast for non-OPEC supply to average 58.94 million barrels a day, calling the U.S. the “key driver” of non-OPEC supply growth.

Meanwhile, oil prices steadied below a three-year high  on Thursday, despite bearish OPEC data and threats by militants in Nigeria’s oil-rich Niger Delta to resume attacks on energy facilities.

Brent crude on Thursday rose 0.04% to $69.41 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures rose 0.14% at $63.99 a barrel.

In a press release Wednesday, the main militant coalition, the Niger Delta Avengers, said it “wishes all Niger Deltans a happy New Year.” It also warned a round of attacks in the coming days “will be the most deadly.”

Energy News

Iraq, BP to Sign Deal to Boost Kirkuk Oil Production Capacity

 Iraq aims to sign a deal with BP on Thursday to boost production capacity from the northern Kirkuk oilfields.

Pipeline Builders Try New Growth Strategy: Bigger Pipes

 Executives at some of the biggest pipeline operators in the U.S. and Canada,including Enbridge Inc. and Kinder Morgan Inc., are working around the opposition by local activists to the creation of new pipelines by supersizing old pipes.

“Serving the oil and natural gas industry during this historic time, when an American energy renaissance has made the U.S. the world’s leading producer and refiner of oil and natural gas, has been among the most fulfilling professional experiences of my career”

Jack Gerard, president of the American Petroleum Institute

Exxon Mobil Signs Deal for Deepwater Oil Exploration Off Ghana

Exxon Mobil Corp signed a deal with Ghana on Thursday to explore for oil in the Deepwater Cape Three Point offshore oilfield. The deal was inked following direct negotiations between Ghana and Exxon Mobil without an open competitive tender, Reuters reports.

WSJ Energy In-Depth

Troubled Waters: Egypt and Ethiopia Wrangle Over Nile Dam

 Ethiopia’s ambitious $4.2 billion hydroelectric dam project on the Nile River’s main tributary is raising tensions with Egypt over how to share the waters, exposing the rivalry between Cairo and an ascendant Addis Ababa for regional power.

When it is completed in 2019, the Grand Ethiopian Renaissance Dam, with its 74-billion-cubic-meter reservoir, will be the largest in Africa.

Ethiopia is counting on the dam to power a hydroelectric plant meant to support its fast-growing economy. The country’s economy grew 9% last year, one of the fastest paces in the world, according to the International Monetary Fund.

But Egypt argues the dam project will leave water levels in its downstream floodplain dangerously low.

“Egypt cannot live without the Nile,” Mohamed Abdel-Ati, Egypt’s minister of irrigation and water resources, said last month. “Egypt understands Ethiopia’s right to development but Ethiopia has to prove, practically, that the dam won’t harm Egypt.”

Big Number

$133 billion

Oil theft around the world could be worth as much as $133 billion, Reuters reports.

FutureCurve

Today: The U.S. Energy Information Administration releases its weekly petroleum status report.

Friday: The International Energy Agency releases its closely watched oil market report.

Monday: London-based Chatham House holds its 2018 energy conference Jan. 29-30. Invited speakers include Claudio Descalzi, CEO of Italy’s Eni, Jabar Ali al-Luaibi the minister of oil for Iraq and Mustafa Sanalla, chairman of the National Oil Corporation of Libya.

Reporter’s Notebook

WSJ reporter Dan Molinski on investors pressuring energy firms to show results. Shareholders have been pressuring publicly-traded oil and gas companies to be more disciplined about making real profits just as oil prices are rallying, allowing quick-on-their feet private oil producers to step up. “While public E&P’s are currently under the microscope to increase returns to shareholders, private companies continue to drive forth activity in response to commodity price signals faster than their public counterparts in both a rising and falling price environment,” says BTU Analytics in a new report.

WSJ reporters Eli Stokols and Timothy Puko score a sit-down with the chief for the Environmental Protection Agency. Scott Pruitt plans to use his second year as the agency’s chief  to accelerate efforts to repeal and rewrite Obama-era rules for power plant emissions and make the agency less bureaucratic. “There’s tremendous opportunity to show really significant results to the American people in a really short time frame,” Mr. Pruitt said.