Crude Falls to Lowest Since April Amid Risk of Greek Euro Exit

30 Jun 2015 | Author: | No comments yet »

Crude Falls to Lowest Since April Amid Risk of Greek Euro Exit.

Oil dropped to the lowest level in more than two months in London amid concern Greece’s failure to reach a deal with international creditors will prompt its exit from the euro – – Crude oil futures sold off on Monday, after emergency bailout talks between Greece and its international creditors broke down over the weekend, pushing Athens to the brink of a debt default and possible euro zone exit.Oil prices tumbled Monday as Greece officials reportedly said the country wouldn’t pay its debts to the International Monetary Fund a day before its deadline to avoid a default that could slam European financial markets and upset the oil market’s recent calm. On the ICE Futures Exchange in London, Brent oil for August delivery hit a session low of $61.36 a barrel, the weakest level since May 28, before trading at $61.85 during U.S. morning hours, down $1.42, or 2.25%.

French Foreign Minister Laurent Fabius said Iran’s top diplomat, Mohammad Javad Zarif, left nuclear talks in Vienna for discussions with the country’s leaders on removing sanctions, suggesting the issue remains a major hurdle to a deal. A weakened euro, which lost value against the dollar Monday, helped send crude close to monthly lows, as a stronger dollar makes it more expensive for international buyers to purchase dollar-denominated crude.

Greece’s bailout is due to expire on Tuesday, the same day that Athens is due to repay €1.6 billion to the IMF, but without a rescue package in place Greece will almost certainly default. Greek Prime Minister Alexis Tsipras abandoned negotiations with creditors on Saturday and called for a referendum to be held on July 5 on the terms proposed by lenders for extending the country’s bailout.

Meanwhile, oil traders were also absorbing reports that Iran and western nations have made progress in negotiations that could put Iranian crude back into circulation, which could deepen a global crude glut that has sent prices down since last summer. Crude’s 10 percent advance this year has encouraged U.S. producers and OPEC’s biggest members to pump at a record pace, signaling a global glut may persist. “Today’s move is all about the Greek situation,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone. “Investors are trying to sort it all out and react accordingly.

We’re going to see episodes of intense selling until there’s a resolution.” Brent for August settlement decreased $1.25, or 2 percent, to end the session at $62.01 a barrel on the London-based ICE Futures Europe exchange. The market is keeping an eye on Iran, where Tuesday’s deadline for the Persian nation to reach an agreement over its nuclear program is likely to be extended. European stock markets sank on Monday and the yields on Italian, Spanish and Portuguese bonds spiked amid mounting fears that Greece would become the first country to exit the euro zone. Analysts say Greece risked overcoming the growing rift between it and the rest of Europe when it scheduled a referendum next Monday on concessions and capital controls that its creditors want the Greek government to make to ensure its financial stability. “The crisis in Greece is weighing on the oil market even though Greece’s participation in the oil market is small,” said Andy Lipow, president of Lipow Oil Associates in Houston. “The concern is as the economy falters further in Greece, it could have a knock-on effect in other places in Europe.” In Vienna, United Nations Security Council and Iranian negotiators are getting closer to finalizing a potential deal to put constraints on Iran’s nuclear program in exchange for the lifting of three-year oil export sanctions, a European Union official said Sunday, according to Bloomberg. According to an April 2 U.S. fact sheet on a framework for an agreement, Iran will need to cut its nuclear capacity by two-thirds, stop enriching uranium at a facility built into a mountain, swear off plutonium production and reduce its fuel stockpile by 97 percent.

An Iranian nuclear deal could knock down oil prices by about $5 a barrel and make it tougher for U.S. producers to recover from the past year’s oil slump, Lipow said. In return, the country will receive sanctions relief that will let it boost oil exports and tap international financial markets. “There is always the possibility that you’ll have a sudden agreement at the last minute and that it will cause a noticeable bump down in prices,” Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said in a June 25 interview. Oil supply has exceeded demand globally for the past five quarters, already the most enduring glut since the 1997 Asian economic crisis, International Energy Agency data show. OPEC kept its production target at 30 million barrels a day earlier this month at a meeting in Vienna, maintaining the strategy of defending its share of the global oil market rather than prices.

Iranian officials have repeatedly called for all sanctions — which have halved Iran’s oil exports since 2012 and cut it off from investment and the global financial system — to be lifted once a deal is agreed. Crude stockpiles in the Amsterdam, Rotterdam and Antwerp area rose to 60.6 million barrels in the week ended June 19, according to data from Genscape Inc., a firm that monitors supplies. Output has surged as a combination of horizontal drilling and hydraulic fracturing unlocked supplies from shale formations. “Production numbers have stayed strong,” said Phil Flynn, senior market analyst for the Price Futures Group Inc. in Chicago. “Traders are thinking that maybe production in the U.S. won’t fall as quickly as people hope.”

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UPDATE 1-Western Refining to buy rest of Northern Tier

20 Jan 2016 | Author: | No comments yet »

JPMorgan Chase & Co. Upgrades Northern Tier Energy LP (NTI) to “Neutral”.

Under the deal, Northern Tier unit holders would receive $15 a unit in cash and 0.2986 Western Refining share for each common unit held, or roughly $26.21 a unit based on Monday’s close. EL PASO, Texas and TEMPE, Ariz., Dec. 21, 2015 (GLOBE NEWSWIRE) — Western Refining, Inc. (NYSE:WNR) and Northern Tier Energy LP (NYSE:NTI) today jointly announced that they have entered into a merger agreement whereby Western will acquire all of NTI’s outstanding common units not already owned by Western. Northern Tier Chief Executive Dave Lamp in prepared remarks Monday said that the MLP model “has not been rewarded by the equity market, as evidenced by the historical disconnect between NTI’s high yield and low unit price.” “With a simplified corporate structure and diverse geographic base, the new Western will be well positioned to unlock additional value for shareholders,” Mr. As an alternative to the cash and stock consideration, each NTI unitholder may elect to receive, per NTI unit, either $26.06 in cash or 0.7036 of a share of WNR.

Assuming completion of the proposed transaction, NTI will become a wholly-owned subsidiary of WNR and NTI common units will cease to be publicly traded. Jeff Stevens, President and CEO of WNR said, “The merger of Western and NTI will result in the combined entity owning three of the most profitable independent refineries on a gross margin per barrel basis, with direct pipeline access to advantaged crude oil combined with an integrated retail and wholesale distribution network. The terms of the merger agreement were approved by the WNR Board of Directors and the Conflicts Committee of the Board of Directors of NTI’s general partner, which negotiated the terms on behalf of NTI. Four investment analysts have rated the stock with a hold rating, five have assigned a buy rating and one has issued a strong buy rating to the stock.

The call and slide presentation can be accessed on the Investor Relations section of Western’s website,, and on the Investor Relations section of Northern Tier’s website at The Company has refining, retail and logistics operations that serve the Petroleum Administration for Defense District II (PADD II) region of the United States. Goldman Sachs & Co. acted as financial advisor to Western, and Vinson & Elkins, Davis Polk & Wardwell and Richards Layton & Finger acted as legal counsel to Western. This press release includes “forward-looking statements” by Western (which are protected as forward-looking statements under the Private Securities Litigation Reform Act of 1995) and by NTI.

The Company’s retail segment operated 165 convenience stores under the SuperAmerica brand and also supported 89 franchised convenience stores, which are also operated under the SuperAmerica brand. These statements are subject to the risk that the merger is not consummated at all, including due to the inability of Western or NTI to obtain all approvals necessary or the failure of other closing conditions, as well as to the general risks inherent in Western’s and NTI’s businesses and the merged company’s ability to compete in a highly competitive industry.

If you are reading this article on another website, that means this article was illegally copied and re-published to this website in violation of U.S. and International copyright law. In addition, Western’s and Northern Tier’s business and operations involve numerous risks and uncertainties, many of which are beyond Western’s and NTI’s control, which could materially affect their respective financial condition, results of operations and cash flows and those of the merged company.

The forward-looking statements are only as of the date made, and neither Western nor NTI undertake any obligation to (and each expressly disclaims any obligation to) update any forward-looking statements to reflect events or circumstances after the date such statements were made, or to reflect the occurrence of unanticipated events. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval in any jurisdiction where such an offer or solicitation is unlawful. Any such offer will be made only by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, pursuant to a registration statement filed with the SEC. The retail segment includes retail service stations, convenience stores, and unmanned fleet fueling locations in Arizona, Colorado, New Mexico, and Texas. Beyersdorfer (602) 286-1530 Michelle Clemente (602) 286-1533 Northern Tier Investor and Analyst Contact: Paul Anderson (651) 458-6494 Alpha IR Group (651) 769-6700 Media Contact: Gary Hanson (602) 286-1777

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