Norway Idea to Exit Oil Stocks Is Shot Heard Around the World – Trending Stuff

Norway’s proposal to sell off $35 billion in oil and natural gas stocks brings sudden and unparalleled heft to a once-grassroots movement to enlist investors in the fight against climate change.

The Nordic nation’s $1 trillion sovereign wealth fund said Thursday that it’s considering unloading its shares of Exxon Mobil Corp., Royal Dutch Shell Plc and other oil giants to diversify its holdings and guard against drops in crude prices. European oil stocks fell.

Norges Bank Investment Management would not be the first institutional investor to back away from fossil fuels. But until now, most have been state pension funds, universities and other smaller players that have limited their divestments to coal, tar sands or some of the other dirtiest fossil fuels. Norway’s fund is the world’s largest equity investor, controlling about 1.5 percent of global stocks. If it follows through on its proposal, it would be the first to abandon the sector altogether.

“This is an enormous change,” said Mindy Lubber, president of Ceres, a non-profit that advocates for sustainable investing. “It’s a shot heard around the world.”

The proposal rattled equity markets. While Norwegian officials say the plan isn’t based on any particular view about future oil prices, it’s apt to ratchet up pressure on fossil fuel companies already struggling with the growth of renewable energy.

Big Oil is under pressure, read more here

Norway’s Finance Ministry, which oversees the fund, said it will study the proposal and will take at least a year to decide what to do. The fund has already sold off most of its coal stocks.

“People are starting to recognize the risks of oil and gas,” said Jason Disterhoft of the Rainforest Action Network, which pushes banks to divest from fossil fuels.

The fossil fuel divestment movement began on college campuses about five years ago and has gained momentum since. The argument is simple: climate change has exponentially increased the risk of backing coal, oil and gas, so investors should put their money elsewhere for the sake of both the planet and their own fortunes.

The Rockefeller Family Fund announced in 2016 that it sold its stake in Exxon and would dump all other fossil-fuel investments. The California State Teachers’ Retirement System board voted to divest from U.S. coal companies. AXA SA, the French insurance giant, said it would sell 500 million euros ($589 million) in coal holdings.

Norway’s fund dwarfs them all.

“The divestment movement just got some new juice,” said Jamie Webster, a fellow at the Center on Global Energy Policy at Columbia University.

While environmentalists heralded the fund’s proposal, the move has more to do with hedging risk than saving the planet. Norway derives about 20 percent of its economic output from oil and gas. Finance officials have long debated whether reinvesting those profits back into petroleum producers leaves Norwegians overly exposed to the volatility of oil prices.

“Our perspective here is to spread the risks for the state’s wealth,” Egil Matsen, the deputy governor at the central bank in charge of overseeing the fund, said in an interview in Oslo Thursday. “We can do that better by not adding oil price risk through the fund.”

It won’t happen quickly, said Per Magnus Nysveen, senior partner and head of analysis at the Oslo-based consulting company Rystad Energy. Norway’s positions in oil companies are vast, and finance ministers will unload their shares gradually if they want to maximize returns, Nysveen said.

“We are taking about years rather than months or quarters,” he said. “This has nothing to do with the environment. It is purely a financial debate.”

That’s true, Lubber said. But the debate, she said, underscores that climate change has made fossil fuels increasingly risky investments — even in the eyes of a petroleum giant like Norway.

“It’s an enormously important statement,” Lubber said. “Once one major player does it, others will follow.”

Read more: http://www.bloomberg.com/

Even If OPEC Gets Deal, It Risks Reviving Battered Oil Rivals

Before an important assembly, OPECs offer to control drilling and ending years of world-wide oversupply hangs in the balance. But if ministers hash out a significant treaty on Wednesday, you will find risks for the petroleum-exporter club.

By flooding the markets with petroleum for a couple of years, OPEC attempted to forget a growing army of companies. Turning class might give the beaten survivors a life-line like Premier Oil Plc that are running to reap the benefits.

The London-listed firm, whose a day of output quantities to a rounding error for OPEC, anticipates barrels 60,000 to use hedges to lock in 20 17 costs of at least $50 a barrel, an amount Brent has just reached briefly this yr. That indicates Premier Oil has adjusted well enough to at least break-even at half the cost it received in 2015 to the forward market.

Throughout the business, to the Siberian tundra from rural America, companies are expecting a rally that could enable them to procure funds to improve oil production will be triggered by the Organization of Petroleum Exporting Countries. With no deal, now at $4-7, costs, could examine the degree that is $30 broken in January, as OPEC and nonmember Russia ramped output up to to protect market share, analysts say.

The petroleum club would like to develop a Goldilocks zone of between $50 and $60, large enough to raise sales for beleaguered oil companies although not overly high to activate a wave of new out-put in the U.S. shale garden, said Walid Khadduri, an OPEC watcher at the Arab Gulf States Institute in Washington.

Its a fine balancing act.

In November 2014, a pump was embraced by the Organization for Petroleum Exporting Countries -at will plan that activated a price fall. The team, which provides about 40% of the worlds petroleum, determined to battle for marketshare through extremely-low-priced, targeting competitors like U.S. shale companies.

Petroleum tumbled to a 10-year low of less than $30 this year from $110, pushing companies all over the world to slash shelve jobs and prices. Several of the 14 of whose members are fighting to meet spending obligations, OPEC, is debating the best way to execute a strategy announced in September to revoke costs by dialing offer again. Brent fell 0.2% to $47.02 a barrel by 4:24 a.m. in London.

The International Energy Agency, shaped following the Arab oil embargo in the 70s, anticipates worldwide production if OPECs cost hallway is exceeded by petroleum to soar.

“If oil prices rise above $60 a barrel we will see significant production coming,” IEA Executive Director Fatih Birol said in an interview this month.

If s O, that could be tantamount to OPEC throwing a lifeline to U.S. shale companies and the other independent companies it attempted to break with low costs.

Saudi Arabias new petroleum leader, Khalid Al-Falih, is wanting to walk the fine-line of reducing on offer only enough without activating a significant production drive by competition to increase costs.

To get a Gadfly column on prospects for next months meeting, click the link.

But at the low end of the cost range, $50 a barrel, funds-battered businesses like London- Premier that is outlined have proven they’re able to live.

Price decreases and improvements in engineering have slice the the typical cost a U.S. oil organization wants to breakeven by a third since 2014, to $5 3 a barrel, Esther George, the president of the U.S. Federal Reserve Bank of Kansas City, mentioned at a power summit in Houston the other day.

U.S. shale drillers have currently gained from OPEC attempts to lift costs. Subsequent to the group summarized its strategy to cut result in Algiers in late September, petroleum rallied to your one-yr most of of nearly $55 a barrel, triggering a wave of hedging.

That shortlived spike let businesses including Pioneer Natural Resources Co., Oasis Petroleum Inc. and Whiting Petroleum Corp. to lock in enough 20 17 sales to grow oil production. Some hedge funds are wagering that U.S. shale out-put will reunite to month-on-month increase as early as April.

And then theres Big Oil.

For the previous two years, Exxon Mobil Corp., Royal Dutch Shell Plc and most other international giants have been active cutting prices and scaling back longterm jobs. But when costs increase enough, multi-billion-dollar, longlife developments might eventually get green-lit, mentioned an analyst at Morgan Stanley in London, Martijn Rats.

Theres a huge stock of jobs that were delayed, Rats mentioned. Break- no one wishes to overlook the ability and evens have dropped significantly.

BP Plc has recently said the final signoff for Mad Dog a job in the Gulf of Mexico using a funding of about $10 billion, 2, is at hand.

Nevertheless, OPEC can maintain some successes in its effort to hamstringing competitors small-scale and huge. The cost fall derailed the U.S. shale growth, at least briefly, and pushed firms to postpone about $1 trillion of new jobs around the globe, creating a potential supply hole in the next decade.

But OPECs guidelines now are misguided, according to Ali Al-Naimi, the former Saudi oil minister who masterminded the pump-atwill the team to coverage embraced a couple of years past. Attempting to drive upward costs will simply result in loss of marketshare, so OPEC should simply get taken care of and permit capitalism operate its program, Al Naimi stated in Out of the Desert, his memoir that is new.

It absolutely was — it’s — an easy circumstance of permitting the marketplace work, Al Naimi mentioned.

Read more: http://www.bloomberg.com//news/articles/2016-11-27/even-if-opec-gets-a-deal-it-risks-reviving-battered-oil-rivals

OPECs Search for an Oil Deal Hangs in the Balance

Three days from an essential conference, OPECs deal to suppress oil production and end years of international oversupply hangs in the balance . Even if ministers hash out a significant accord on Wednesday, there are threats for the oil-exporter club.

For 2 years, OPEC attempted to bury a growing army of upstart manufacturers by flooding the marketplaces with crude. Reversing course may hand a lifeline to the battered survivors like Premier Oil Plc who are hurrying to enjoy the benefits.

The London-listed business, whose 60,000 barrels a day of output total up to a rounding mistake for OPEC, anticipates to utilize hedges to secure 2017 rates of a minimum of $50 a barrel, a level Brent has actually just touched briefly this year. That indicates Premier Oil has actually adjusted all right to the attack to a minimum of break even at half the cost it got on the futures market in 2015.

Across the market, from rural America to the Siberian tundra, manufacturers are hoping the Organization of Petroleum Exporting Countries will set off a rally that would enable them to protect funds to enhance drilling. Without an offer, costs, now at $47, might evaluate the $30 level breached in January, as OPEC and non-member Russia increase output to safeguard market share, experts state.

The oil club wishes to develop a Goldilocks zone of in between $50 and $60, high enough to increase income for beleaguered oil manufacturers however not expensive to activate a wave of brand-new output from the United States shale spot, stated Walid Khadduri, an OPEC watcher at the Arab Gulf States Institute in Washington.

Its a fragile balancing act.

In November 2014, the Organization for Petroleum Exporting Countries embraced a pump-at-will policy that activated a cost collapse. The group, which provides approximately 40 percent of the worlds crude, chose to combat for market share through ultra-low rates, targeting competitors such as U.S. shale manufacturers.

Oil toppled from $110 to a 10-year low of less than $30 this year, requiring manufacturers the world over to slash expenses and shelve jobs. OPEC, much of whose 14 members are having a hard time to satisfy investing dedications, has actually been disputing the best ways to execute a strategy revealed in September to raise costs by calling back supply.

The International Energy Agency, formed after the Arab oil embargo in the 1970s, anticipates international output to rise if unrefined surpasses OPECs rate passage.

“If oil costs increase above $60 a barrel we will see considerable production coming,” IEA Executive Director Fatih Birol stated in an interview this month.

If so, that would amount OPEC tossing a lifeline to U.S. shale companies and the other independent manufacturers it attempted to bankrupt with low costs.

Saudi Arabias brand-new oil chief, Khalid Al-Falih, is attempting to stroll the great line of cutting supply simply enough to raise costs without setting off a significant production push by rivals.

For a Gadfly column on potential customers for next weeks conference, click on this link.

But even at the lower end of the cost variety, $50 a barrel, cash-battered business like London-listed Premier have actually revealed they can make it through.

Cost decreases and advances in innovation have actually cut the typical cost a U.S. oil business has to recover cost by a 3rd given that 2014, to $53 a barrel, Esther George, the president of the United States Federal Reserve Bank of Kansas City, stated at an energy conference in Houston recently.

U.S. shale drillers have actually currently taken advantage of OPEC efforts to raise rates. After the group detailed its strategy to cut output in Algiers in late September, unrefined rallied to a 1 year high of nearly $55 a barrel, setting off a wave of hedging.

That brief spike permitted business consisting of Pioneer Natural Resources Co., Oasis Petroleum Inc. and Whiting Petroleum Corp. to secure sufficient 2017 earnings to broaden drilling. Some hedge funds are wagering that U.S. shale output will go back to month-on-month development as early as April.

And then theres Big Oil.

For the previous 2 years, Exxon Mobil Corp., Royal Dutch Shell Plc and most other worldwide giants have actually been hectic cutting expenses and downsizing long-lasting jobs. If costs increase enough, multibillion-dollar, long-life advancements might lastly get green-lit, stated Martijn Rats, an expert at Morgan Stanley in London.

Theres a huge stock of postponed tasks, Rats stated. Break-evens have actually fallen substantially and no one wishes to miss out on the chance.

BP Plc has currently stated the last sign-off for Mad Dog 2, a task in the Gulf of Mexico with a spending plan of about $10 billion, looms.

Even so, OPEC can still declare some successes in its project to hamstringing competitors little and huge. The cost collapse thwarted the United States shale boom, a minimum of momentarily, and required business to hold off about $1 trillion of brand-new tasks worldwide, developing a possible supply hole in the next years.

But OPECs policies now are misdirected, inning accordance with Ali Al-Naimi, the previous Saudi oil minister who masterminded the pump-at-will policy the group embraced 2 years back. Attempting to own costs up will just cause loss of market share, so OPEC ought to simply get out of the method and let commercialism run its course, Al-Naimi stated in Out of the Desert, his brand-new narrative.

It was– it is– a basic case of letting the marketplace work, Al-Naimi stated.

Read more: http://www.bloomberg.com/news/articles/2016-11-27/even-if-opec-gets-a-deal-it-risks-reviving-battered-oil-rivals

Even If OPEC Gets Deal, It Risks Reviving Battered Oil Rivals

Before a vital conference, OPECs deal to suppress oil production and end years of worldwide oversupply hangs in the balance . Even if ministers hash out a significant accord on Wednesday, there are threats for the oil-exporter club.

For 2 years, OPEC attempted to bury a growing army of upstart manufacturers by flooding the marketplaces with crude. Reversing course may hand a lifeline to the battered survivors like Premier Oil Plc who are hurrying to enjoy the benefits.

The London-listed business, whose 60,000 barrels a day of output total up to a rounding mistake for OPEC, anticipates to utilize hedges to secure 2017 rates of a minimum of $50 a barrel, a level Brent has actually just touched briefly this year. That suggests Premier Oil has actually adjusted all right to the attack to a minimum of break even at half the rate it got on the futures market in 2015.

Across the market, from rural America to the Siberian tundra, manufacturers are hoping the Organization of Petroleum Exporting Countries will activate a rally that would permit them to protect funds to increase drilling. Without an offer, costs, now at $47, might evaluate the $30 level breached in January, as OPEC and non-member Russia increase output to safeguard market share, experts state.

The oil club wishes to develop a Goldilocks zone of in between $50 and $60, high enough to increase profits for beleaguered oil manufacturers however not expensive to set off a wave of brand-new output from the United States shale spot, stated Walid Khadduri, an OPEC watcher at the Arab Gulf States Institute in Washington.

Its a fragile balancing act.

In November 2014, the Organization for Petroleum Exporting Countries embraced a pump-at-will policy that set off a cost collapse. The group, which provides approximately 40 percent of the worlds crude, chose to combat for market share through ultra-low rates, targeting competitors such as U.S. shale manufacturers.

Oil toppled from $110 to a 10-year low of less than $30 this year, requiring manufacturers the world over to slash expenses and shelve jobs. OPEC, a lot of whose 14 members are having a hard time to fulfill investing dedications, has actually been disputing ways to carry out a strategy revealed in September to raise costs by calling back supply. Brent decreased 0.2 percent to $47.02 a barrel by 4:24 a.m. in London.

The International Energy Agency, formed after the Arab oil embargo in the 1970s, anticipates international output to rise if unrefined goes beyond OPECs rate passage.

“If oil costs increase above $60 a barrel we will see considerable production coming,” IEA Executive Director Fatih Birol stated in an interview this month.

If so, that would amount OPEC tossing a lifeline to U.S. shale companies and the other independent manufacturers it aimed to bankrupt with low rates.

Saudi Arabias brand-new oil chief, Khalid Al-Falih, is attempting to stroll the great line of cutting supply simply enough to raise costs without activating a significant production push by rivals.

For a Gadfly column on potential customers for next weeks conference, click on this link.

But even at the lower end of the cost variety, $50 a barrel, cash-battered business like London-listed Premier have actually revealed they can endure.

Cost decreases and advances in innovation have actually cut the typical rate a U.S. oil business has to recover cost by a 3rd considering that 2014, to $53 a barrel, Esther George, the president of the United States Federal Reserve Bank of Kansas City, stated at an energy conference in Houston recently.

U.S. shale drillers have actually currently taken advantage of OPEC efforts to raise rates. After the group detailed its strategy to cut output in Algiers in late September, unrefined rallied to a 1 year high of nearly $55 a barrel, activating a wave of hedging.

That brief spike permitted business consisting of Pioneer Natural Resources Co., Oasis Petroleum Inc. and Whiting Petroleum Corp. to secure adequate 2017 profits to broaden drilling. Some hedge funds are wagering that U.S. shale output will go back to month-on-month development as early as April.

And then theres Big Oil.

For the previous 2 years, Exxon Mobil Corp., Royal Dutch Shell Plc and most other international giants have actually been hectic cutting expenses and downsizing long-lasting jobs. If rates increase enough, multibillion-dollar, long-life advancements might lastly get green-lit, stated Martijn Rats, an expert at Morgan Stanley in London.

Theres a huge stock of postponed jobs, Rats stated. Break-evens have actually fallen substantially and no one wishes to miss out on the chance.

BP Plc has currently stated the last sign-off for Mad Dog 2, a job in the Gulf of Mexico with a budget plan of about $10 billion, impends.

Even so, OPEC can still declare some successes in its project to hamstringing competitors little and huge. The rate collapse hindered the United States shale boom, a minimum of momentarily, and required business to delay about $1 trillion of brand-new tasks worldwide, producing a possible supply hole in the next years.

But OPECs policies now are misdirected, inning accordance with Ali Al-Naimi, the previous Saudi oil minister who masterminded the pump-at-will policy the group embraced 2 years back. Attempting to own rates up will just cause loss of market share, so OPEC needs to simply get out of the method and let industrialism run its course, Al-Naimi stated in Out of the Desert, his brand-new narrative.

It was– it is– a basic case of letting the marketplace work, Al-Naimi stated.

Read more: http://www.bloomberg.com//news/articles/2016-11-27/even-if-opec-gets-a-deal-it-risks-reviving-battered-oil-rivals

Worlds Biggest Wealth Fund Wants Out of Oil and Gas – Trending Stuff

Worlds Biggest Wealth Fund Wants Out of Oil and Gas – Trending Stuff

The $1 trillion fund that Norway has amassed pumping oil and gas over the past two decades wants out of petroleum stocks.  

Norway, which relies on oil and gas for about a fifth of economic output, would be less vulnerable to declining crude prices without its fund investing in the industry, the central bank said Thursday. The divestment would mark the second major step in scrubbing the world’s biggest wealth fund of climate risk, after it sold most of its coal stocks.

“Our perspective here is to spread the risks for the state’s wealth,” Egil Matsen, the deputy central bank governor overseeing the fund, said in an interview in Oslo. “We can do that better by not adding oil-price risk.”

The plan would entail the fund, which controls about 1.5 percent of global stocks, dumping as much as $40 billion of shares in international giants such as Exxon Mobil Corp. and Royal Dutch Shell Plc. The Finance Ministry said it will study the proposal and decide what to do in “fall of 2018” at the earliest.

Big Oil is under pressure, read more here

While the fund says the plan isn’t based on any particular view about the future of oil prices or the industry as a whole, it will likely add to pressure on producers already struggling with the growth of renewable energy supplies. The Stoxx Europe 600 Oil and Gas index reversed gains after the announcement, sliding 0.3 percent as of 3:47 p.m. in London.

Built on the income that western Europe’s largest energy supplier has generated for more than 20 years, the fund’s investment decisions are guided by ethical rules encompassing human rights, some weapons production, the environment and tobacco. Norway’s fossil-fuel investments are coming under increasing scrutiny from a public that aims to be a climate leader without jeopardizing one of the world’s highest standards of living.

The fund has doubled in value over the past five years and was just given the go-ahead to boost its stock holdings to 70 percent of its portfolio from 60 percent to help drive returns.  The government, which also controls Statoil ASA and offshore oil and gas fields, was forced to withdrew cash from the fund for the first time last year to meet spending commitments after oil prices dropped.

‘Good Time’

Matsen said “now is a good time” for the proposal because otherwise the new 70 percent threshold will result in the fund buying even more oil and gas shares because it tracks indexes that include such stocks. The fund has a small amount of leeway to make individual investments and wants to keep oil and gas in its “investment universe,” he said.

The fund said it doesn’t expect returns or market risk to be affected “appreciably” by its proposal, emphasizing that cutting exposure to the energy industry would allow it to crank up investments in other sectors. Finance Minister Siv Jensen said the government will give the plan careful thought.

“This must be thoroughly assessed, I am not prepared to conclude in advance,” said Nikolai Astrup, leader of the finance committee representing the ruling Conservatives. “It’s important that the fund is managed in a way that’s predictable and long-term.”

But environmental groups praised the plan. “The world is changing fast, and it’s very risky to put too many eggs in the same basket,” said Marius Holm, the leader of the Zero Emission Resource Organisation. Sony Kapoor, a former adviser to Norway’s government, said the plan is “a belated victory for common sense over the powerful oil and gas lobby in Norway,” calling on the fund to now boosts its “green” investments at least tenfold.  

The recommendation also received backing from the Conservative-led government’s support parties, the Christian Democrats and Liberals. The Labor Party, the biggest opposition group, said it would like to study the proposal before making a decision.

“The government is responsible for the Norwegian economy as a whole and must take a broad and comprehensive approach to this issue,” Jensen said in a statement.

Read more: http://www.bloomberg.com/