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Shell blames high refining costs for warning

Royal Dutch Shell blamed continuing woes in refining, fuel theft in Nigeria and higher exploration costs for its first profit warning in 10 years. The company said fourth-quarter earnings would be “significantly lower” than last year in the first update under new chief executive Ben van Beurden, who took over as chief executive from Peter Voser at the beginning of the year. Shell said it would take a $700m charge related to its exploration and production activities and added that its upstream American business, which has been hurt by falling natural gas prices, would continue to make a loss. It also said that its downstream earnings in the fourth quarter of last year had been hit by “significantly weaker” industry refining conditions, in particular in Asia-Pacific and Europe. Shares in the company, which fell 3.3 per cent to £21.19 in early trading, have underperformed the European […]

Posted On : Published By : Tom Whipple
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Sluggish Economy Prompts Europe to Reconsider Its Intentions on Climate Change

Some officials are disappointed by the lack of binding goals for renewables. Gordon Welters for The New York Times The European Union, which for years has sought to lead the world in addressing climate change, is tempering its ambitions and considering turning mandatory targets for renewable energy into just goals. The union’s policy-making body is also unlikely to restrict exploration for shale gas using the disputed technique known as hydraulic fracturing. A deep and lasting economic slowdown, persistently high prices for renewable energy sources and years of inconclusive international negotiations are giving European officials second thoughts about how aggressively to remake the Continent’s energy-production industries. The details are still being negotiated in Brussels, but officials said the European Commission’s energy and climate proposal will probably include a binding target of reducing emissions by 35 percent to 40 percent by 2030. Some officials wanted […]

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BNK Petroleum upbeat about Polish shale

BNK Petroleum, which has headquarters in California, said it was upbeat about the shale potential in Poland following the start of a drilling campaign. BNK said it started a horizontal drilling program at Polish shale well Gapowo B-1 and expects to spend the next 30 days on the operation. The company said it was targeting gas deposits encountered in similar operations, where "the average and maximum total gas readings were much higher than those seen in the company’s other Baltic Basin wells." New drilling technologies like horizontal drilling and hydraulic fracturing, dubbed fracking, are used in shale deposits to access oil and gas reserves previously out of reach. That helped put the United States in a leadership position in terms of production of those resources. Poland is one of the Eastern European countries thought to be rich in shale gas, though the U.S. […]

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Earth May Already Be Running Out of Grain

Page added on January 15, 2014 We have all heard of peak oil, but peak grains? A study released by the Institute of Agriculture and Natural Resources at the University of Nebraska-Lincoln suggests we may be heading in that direction — if we’re not already there. The UNL study indicates that about 30% of major global cereal crops — including rice, wheat and corn — may have already reached their maximum yields. In fact, yields of these crops seem to have already hit a plateau and some are already decreasing, especially in eastern Asia, Europe and the United States. “We found widespread deceleration in the relative rate of increase of average yields of the major cereal crops during the 1990-2010 period in countries with greatest production of these crops,” says an article based on the study in Nature Communications . The article notes that there was a noticeable plateau […]

Posted On : Published By : ASPO-USA
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Coming ‘oil glut’ may push global economy into deflation

Page added on January 16, 2014 OPEC spare capacity set to reach levels last seen in the depths of the financial crisis in 2009, analysts say One piece of the jigsaw puzzle is missing to complete the deflation landscape across the West: a slide in oil prices. This is becoming more likely each month. Turmoil across the Middle East and parts of Africa has choked supply over the past two years, keeping Brent crude near $110 a barrel despite a broader commodity slump. Cotton and corn prices have halved, as has the UBS (Xetra: UB0BL6 – news ) index of industrial metals. Such anomalies rarely last. “We estimate that crude oil is now the mostly richly priced commodity in the world,” says Deutsche Bank (Xetra: DBK.DE – news ) in a fresh report. Michael Lewis, the bank’s commodity strategist, said markets face an “new oil supply glut” as three […]

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U.N. Says Lag in Confronting Climate Woes Will Be Costly

Gains in renewable energy are being swamped by rising emissions from fossil fuels in fast-growing countries like China, according to a new report on climate change. Agence France-Presse — Getty Images Nations have so dragged their feet in battling climate change that the situation has grown critical and the risk of severe economic disruption is rising, according to a draft United Nations report. Another 15 years of failure to limit carbon emissions could make the problem virtually impossible to solve with current technologies, experts found. A delay would most likely force future generations to develop the ability to suck greenhouse gases out of the atmosphere and store them underground to preserve the livability of the planet, the report found. But it is not clear whether such technologies will ever exist at the necessary scale, and even if they […]

Posted On : Published By : Tom Whipple
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The case for exporting crude oil

Looking over the numbers, and knowing the way the North American oil market works, it’s becoming increasingly apparent to me that current US crude oil production cannot be sustained unless the Department of Commerce begins to permit exports beyond Canada. The surge in US crude oil production, led by Texas and North Dakota, which account for more than 45% of all domestic production, can only be sustained if there are new processing facilities — refining capacity or possibly condensate splitters to take care of the higher-gravity oil — a change in US refiners’ crude slate, or the final option, exports. There is some new refining and splitting capacity being added which will consume about 750,000 b/d of light sweet crudes and condensates, according to industry estimates. (OPEC & IEA estimates are at 500,00 b/d but US sources say this excludes condensate splitting capacity, so if you add condensate splitting […]

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Peak Oil: Clear As Mud # 2

As I mentioned in the first post of this short series, we are once again being subjected to differing interpretations of the same set of facts. It does make planning and strategizing a bit more challenging…. YES? NO? UP? DOWN? LEFT? RIGHT? Global oil demand will expand by 14 million barrels to average 101 million a day in 2035, according to the IEA report. The share of conventional crude will drop to 65 million barrels by the end of the period because of growth in unconventional supplies, the IEA said without providing current data. [1] How much of the decline in crude production has been counterbalanced by the new US shale oil production to date? The answer is barely 2 million barrels per day — which required more than half the world’s oil rigs outside Russia and China to produce. Worse, detailed studies […]

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Oil Futures Ease in Asia After Overnight Gains

Crude-oil futures slipped in Asian trade Thursday, with Brent crude posting a sharper decline than the U.S. oil benchmark. On the New York Mercantile Exchange, light, sweet crude futures for delivery in February traded at $94.12 a barrel at 0649 GMT, down $0.05 in the Globex electronic session. February Brent crude on London’s ICE Futures exchange fell $0.42 to $106.71 a barrel. U.S. weekly crude stocks fell for the seventh consecutive week–by 7.7 million barrels to 350.2 million barrels–in the week ended Jan. 10, data showed, compared with an expected decline of 800,000 barrels, boosting oil prices overnight. Strong growth in domestic oil production had driven up oil supply in the U.S. for most of last year, but inventories declined toward the year-end due to seasonal factors and have now fallen by 41 million barrels since November. "Refinery operators are taking advantage of superior refining margins that are being […]

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Oil prices ease after sharp gains

Oil prices eased Thursday but remained above $94 a barrel after sharp gains a day earlier on improved demand in the U.S. Benchmark U.S. crude oil for February delivery was down 8 cents at $94.09 a barrel at midafternoon Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. The contract surged $1.58 to settle at $94.17 in New York on Wednesday. Brent crude, used to set prices for international varieties of crude, was down 44 cents at $105.83. The U.S. Energy Department reported that oil supplies fell bigger than expected by 7.7 million barrels last week, the seventh straight decline. It was sharply above market expectations of a 1.6 million barrels decline. The news pushed oil above $94 a barrel on Wednesday for the first time in two weeks. Oil prices have been weak this year amid concerns that ample crude […]

Posted On : Published By : Tom Whipple