Sharp drop expected in global E&P spending in 2015

Energy security is a topic of growing concern to many EU countries and the Western Balkans, here defined as Albania, Bosnia and Herzegovina, Croatia, FYR Macedonia, Kosovo, Montenegro and Serbia, could play a role in improving that security through possible investment in liquefied natural gas (LNG) terminals and new gas pipelines.

After last year’s plunges in oil and the ruble, Russian President Vladimir Putin now has another thing to worry about: the price of natural gas.

Plunging oil prices are giving a bump to consumer and business spending around the world -- just not enough to increase global growth forecasts.

Oversupply in crude markets could take months or even years to fix depending on when producers outside OPEC cut their output, Abu Dhabi-based The National reported, citing comments by U.A.E. Energy Minister Suhail Al Mazrouei.

December was the sixth consecutive month in which monthly average Brent prices decreased, falling $17/barrel (bbl) from November to a monthly average of $62/bbl, the lowest since May 2009. The December price decline reflects continued growth in U.S. tight oil production, strong global supply, and weakening outlooks for the global economy and oil demand growth.

Robust recovery in the United States, a moribund euro zone and slowing Chinese growth reflect global splits which plunging oil prices are likely to widen.

The market consensus is that the China is buying more oil than they need in order to fill strategic reserves.

The World Bank on Tuesday lowered its global growth forecast for 2015 and next year due to disappointing economic prospects in the euro zone, Japan and some major emerging economies that offset the benefit of lower oil prices.

The European Union could significantly scale back sanctions and resume discussions with Russia on issues ranging from visa-free travel; cooperation with the Moscow-led Eurasian Economic Union; and the crisis in Libya, Syria and Iraq; if Russian President Vladimir Putin moves to end the crisis in eastern Ukraine, according to an EU discussion paper.

The growing uncertainty surrounding oil prices presents a major challenge to all price forecasts. EIA's January Short-Term Energy Outlook (STEO), released yesterday, forecasts Brent crude oil prices averaging $58/bbl in 2015 and $75/bbl in 2016, with annual average WTI prices expected to be $3/bbl to $4/bbl below Brent.

Crude oil markets continue to search for a bottom as prices declined again in December and the first week of January. The North Sea Brent front month futures price settled at $50.96/bbl on January 8, a decline of $21.58/bbl from December 1

In 2015, world oil demand is anticipated to rise by 1.15 mb/d, following an upward revision of 30 tb/d due to expectations of higher oil requirements in OECD America and Other Asia.

China's economic growth may be as high as 7.3 percent this year, partly due to falling commodity prices, the official Xinhua news agency quoted an academic advisor to the central bank's monetary policy committee as saying on Saturday.

Global equity markets rebounded, with U.S. stocks capping five straight sessions of losses. European shares rose on growing expectations of economic stimulus from the European Central Bank.

Any lingering doubt about the depth of the crisis facing the U.S. energy industry is quickly evaporating as even the biggest firms slash spending amid the steepest oil price crash since the recession, sending ripples across the vast sector.

Norway’s oil revenues have been hit hard by a 50% drop in prices over the past six months and oil companies operating in Norway are set to reduce their capital expenditure by 15% on the year in 2015

The number of rigs drilling for oil in the US dropped sharply this week as plunging crude prices hit development of shale reserves, the most-watched survey of industry activity has shown.

Gazpromneft Sakhalin, a subsidiary of JSC Gazprom Neft, has been awarded subsoil-use rights to the Severo-Zapadniy block on the Pechora Sea shelf and the Heysovskiy block on the Barents Sea shelf.

Eni SPA will resume exploration offshore Egypt under concession agreements based on production sharing it has signed covering two deepwater blocks offered in Egyptian Natural Gas Holding Co.’s 2013 bid round