Well beneath sunken rig U.S. has serious oil leak

(Reuters) - An oil well on the ocean floor beneath a drilling rig that exploded and sank into the Gulf of Mexico began spewing oil on Saturday, the U.S. Coast Guard said.

U.S. | Green Business | Mexico

The well, 5,000 feet beneath the ocean surface, was leaking about 1,000 barrels per day of oil, a Coast Guard spokeswoman said, in what the agency called a "very serious spill." Remote underwater vehicles detected oil leaking from the riser and drill pipe, the spokeswoman said.

"We are classifying this as a very serious spill and we are using all our resources to help contain it," Coast Guard Petty Officer Connie Terrell said.

Transocean Ltd's Deepwater Horizon sank on Thursday after burning since Tuesday following an explosion while finishing a well for BP Plc 42 miles off the Louisiana coast. The Coast Guard on Friday suspended a search for 11 missing workers from the rig, who are presumed dead.

BP has deployed an armada of ships and aircraft to contain the oil slick, which could threaten Louisiana's fragile coastline if it is not contained. Cleanup operations are currently on hold due to stormy seas, Terrell said.

So far, the spill is not comparable with the Exxon Valdez disaster, which spilled about 11 million gallons (50 million liters) of oil into the Prince William Sound in Alaska when it ran aground in 1989. The Transocean well is spewing about 42,000 gallons (190,900 liters) of oil a day into the ocean, the Coast Guard estimates.

The explosion came almost three weeks after President Barack Obama unveiled plans for a limited expansion of U.S. offshore oil and gas drilling. The explosion did not affect U.S. oil markets.

The blast occurred about 10 p.m. CDT on Tuesday (0300 GMT Wednesday) as the rig was capping a discovery well pending production, company officials said. Some 115 of the 126 workers on board at the time of the explosion were rescued.

It was the worst oil rig disaster since 2001, when a rig operated by Petrobras off the Brazilian coast exploded and killed 11 workers. The Piper Alpha rig in the North Sea off Scotland exploded in 1988, killing 167.

(Reporting by Chris Baltimore; Editing by Peter Cooney)
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Saturday, April 24, 2010

Oil Inventories Surged Unexpectedly

After a week of draw, oil inventory resumed the uptrend and gained +1.89 mmb to 355.9 mmb in the week ended April 16. The market had anticipated a draw of -0.3 mmb. Gasoline and distillate stockpiles also surged, by +3.58 mmb and +2.1 mmb, respectively. The set of data was disappointing and indicated US energy market remained fragile.

Decline in WTI crude oil price accelerated after the report. Currently trading at 83.4, the front-month contract erased all gains made yesterday. It will probably record a loss today. Heating oil and gasoline also pared gains and traded close to yesterday's settlement prices. Continue Reading ... Oil N' Gold Focus Reports
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Wednesday, April 21, 2010

Gold Surged Despite Weaknesses in Euro and Oil

Gold surged on Wednesday despite and weakness in the euro and decline in oil prices. Endless concerns over Greek sovereign crisis, as well as IMF's comments on financial stability and inflation outlook helped boost gold price. The benchmark contract soared to as high as 1151.2 before settling at 1148.8, up +0.84%. Other precious metals also rallied.

The euro slid another -0.4% against the dollar amid deterioration in Greece's debt situation. Greece's 10-year Treasury yield surged over 8% as price plummeted for a 7th day. The spread between the 10-year Greek bonds and equivalent German bunds widened to more than 500 bps. Investors speculated Greece will tap the EU-IMF loans at the Athens talks despite harsh conditions. Default risks in peripheral European countries also increased with CDS rates of Spanish and Hungarian debts surging.

In light of the heightened sovereign risk in the Eurozone and even the US and the UK, the IMF warned in its semiannual 'World Economic Outlook' that 'Sovereign risks in advanced economies could undermine financial stability gains and extend the crisis. The rapid increase in public debt and deterioration of fiscal balance sheets could be transmitted back to banking systems or across borders'.

Concerns about a Greek default have weakened the single currency and strengthened the dollar. The situation has limited gold's rally end even caused it to drop. However, in recent months, we observed the situation has changed - gold rose despite euro's weakness. We believe sovereign crisis in Greece, if persisted, will be positive for gold and investors eventually realize the precious metal's safe-haven property.

Crude oil price plunged as US oil inventory disappointed. The front-month contract for WTI crude oil ended the day at 83.68, down -0.2%. Price fell to as low as 82.92 shortly after the report showed increases in crude and oil product inventories.

After a week of draw, oil inventory resumed the uptrend and gained +1.89 mmb to 355.9 mmb in the week ended April 16. The market had anticipated a draw of -0.3 mmb. Cushing stock increased for a 5th week, by +1.85 mmb, to 34.1K barrels. The massive increase was a drag on WTI crude.

Gasoline stockpile surged +3.58 mmb as production and iimports rose +1.6% and +32.4% respectively. Demand slipped -1.86% to 9.152M bpd during the week. Distillate inventory also soared +2.1 mmb. Although imports reduced -42.4%, this was offset by -2.4% increase of production and -3.27% decline in demand.

Economic data to be released today includes Eurozone's PMIs in April and UK's retail sales in March. In NY session, the US government will report PPI, initial jobless claims, existing home sales and house price index.
ONG Focus - Insights
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CNX Gas Achieves Record Production From Latest Marcellus Shale Well

CNX Gas Corporation, a leading Appalachian gas producer, announced production results from its latest horizontal well targeting the Marcellus Shale, the GH2BCV well in central Greene County, PA. This well has been producing for 16 days, at an average production rate of 4.9 MMcf per day. The peak daily production rate was 5.7 MMcf, and the current daily production rate is 5.5 MMcf. The well was drilled with a horizontal lateral of 2,035 feet and was hydraulically fractured with a 7-stage frac.

“Our latest horizontal Marcellus Shale well is achieving record company results,” commented J. Brett Harvey, chief executive officer.

The previous highest producing well was the CNX 3 well, which came on line in October 2008. That well had cumulative production of 1 Bcf through February 2010.

CNX Gas’s current daily net Marcellus Shale production is 21 MMcf from 16 horizontal wells. The Company has budgeted $110 million in 2010 for Marcellus Shale drilling out of a total capital budget of $400 million. A second horizontal drilling rig for the Company’s Marcellus Shale program will be arriving in April. CNX Gas has an option to obtain a third rig later in the year.

Chief Oil and Gas, CNX Gas Corporation, Drilling rig, Energy, gas producer, Geology, horizontal wells, Marcellus Formation, natural gas fields, Oil well, Oilfield terminology, Petroleum, shale gas

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Saturday, April 10, 2010