OIL EDGED UP AHEAD OF U.S. DATA RELEASE
Crude futures edged up on Wednesday but still hovered around bear-market lows ahead of the release of official U.S. oil stock data, reports The Wall Street Journal.
Brent crude, the global oil benchmark, rose 0.17% to $46.09 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were up 0.18% at $43.58 a barrel.
The price of Brent has fallen by 19.8% since January, while WTI is down 21.8%—tipping it into bear-market territory.
“A persistent glut has weighed on prices for most of the past three years, a blow to investors who believed that the Organization of the Petroleum Exporting Countries’ move this year to limit production would provide relief,” write Stephanie Yang, Alison Sider and Timothy Puko.
RAMPAGING OIL BEARS ARE MISSING HALF THE PICTURE
Worried traders should keep in mind that an oil price collapse back toward last year’s lows below $30 a barrel is unlikely because Chinese demand remains strong and there are signals that U.S. output is slowing, writes Nathaniel Taplin.
FRACKERS COLLIDE WITH TRADITIONAL OIL DRILLERS
The U.S. oil patch is heating up as new oil drillers with supersized wells are running into existing wells, triggering complaints, writes Erin Ailworth.
“The emerging problem is known as a “frack hit,” and it has flared up in Oklahoma, where a group of small oil and gas producers say more than 100 of their wells have been damaged by hydraulic-fracturing jobs done for companies like Chesapeake Energy Corp. , Devon Energy Corp. and Newfield Exploration Co.,” the Journal reports.
Some owners of older wells have filed reports with state regulators claiming their wells were flooded with water as neighboring drillers crashed into their wells while using a method called hydraulic fracturing, where they inject water and sand into wells to find oil.
TOTAL PLEDGES $1 BILLION INVESTMENT IN IRAN GAS FIELD
France’s Total SA is moving ahead with plans to invest $1 billion to develop a giant gas field in Iran, reports Sarah Kent.
Total’s deal with Iran represents the first time a Western company has pledged funds to a project in Iran since the Islamic Republic emerged from international sanctions connected to its nuclear work in January 2016.
“Total reached a preliminary agreement late last year with China National Petroleum Corp. and an Iranian company to invest $4.8 billion to develop parts of a giant gas field in the Persian Gulf, but the deal is still being completed,” the Journal reports.
Total confirmed that the $1 billion investment gives the firm a 50.1% share of the joint venture with CNPC. Total is the project’s operator, with CNPC taking a 30% stake and Iranian firm Petropars a 19.9% stake.