Category:

Exclusive: BNSF to take bids to buy up to 5,000 safer oil railcars

BNSF Railway Co plans to buy its own fleet of up to 5,000 new crude oil tank cars with safety features that exceed the latest industry standards, the company, a unit of investor Warren Buffett’s Berkshire Hathaway Inc, said on Thursday. The unusual step by one of the largest U.S. railroads aims to further the industry’s push for safer movement of crude by rail after several recent accidents, including one involving a BNSF train in North Dakota in December. The company, a major mover of crude by rail throughout the United States, plans to seek bids from railcar makers for up to 5,000 new tank cars with thicker walls and ends, increased protection of safety and pressure valves, and other features that go beyond industry standards adopted two years ago. The news sent shares of several U.S. railcar makers higher. BNSF’s plan is atypical for […]

Posted On : Published By : Tom Whipple
Category:

Peak Oil is Real and the Majors Face Challenging Times

Page added on February 19, 2014 The idea that global oil production was nearing its peak , only to plateau and then decline was a common view in the energy world for many years. The geophysicist M. King Hubbard predicted in the 1950’s that US oil production would peak in the 1970’s, a forecast that held true until technology allowed companies to economically extract oil and gas from tight geologic formations like shale. The recent surge in US liquids output – crude plus natural gas liquids (NGLs) – quieted the peak oil community. A well-known, largely peak oil-focused website – The Oil Drum – shut down in 2013, an event some considered the death knell of the peak oil theory. But not so fast says Steven Kopits from energy business analysis firm Douglas-Westwood. Total global oil supply growth since 2005 – 5.8 million barrels per day – came from […]

Posted On : Published By : ASPO-USA
Category:

Peak oil is not a myth

One might have the impression that hydraulic fracturing (fracking) of shale deposits is the answer to world energy security. Certainly fracking has received much attention and investment, but its prospects must be considered in a broader context. In the US, where practically all such operations have been conducted to date, fracking now accounts for 40% of domestic gas production and 30% of oil production. The price of natural gas has plummeted, and overall US oil production has increased for the first time since 1970, which had otherwise been falling in accordance with the predictions M King Hubbert made in 1956.  © Shutterstock However, this last point is the salient one. Sources of unconventional oil (listed below) such as tight oil (or ‘shale oil’ in popular discourse) are only commercially viable because the need to match the declining rate of conventional oil production has raised oil prices. It is the […]

Posted On : Published By : Tom Whipple
Category:

Weak China Data Halts Surge in Crude

Weaker-than-expected manufacturing data from China put pressure on crude oil futures in Asian trading hours Thursday, reversing gains after oil benchmarks touched their highest levels this year. On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at $103.07 a barrel at 0454 GMT, down $0.24 in the Globex electronic session. April Brent crude on London’s ICE Futures exchange fell $0.59 to $109.88 a barrel. The preliminary HSBC China Manufacturing Purchasing Managers’ Index, a gauge of nationwide manufacturing activity, fell to 48.3 in February from 49.5 in January. The data will contribute to short-term downside in crude oil today, largely due to negative sentiment, but the impact on actual physical crude demand is limited as China’s long-term oil fundamentals remain intact, analyst Tan Chee Tat at Singapore-based Phillip Futures said. China is the world’s second-largest oil consumer and diesel fuel is a major fuel […]

Posted On : Published By : Tom Whipple
Category:

WTI Falls From Four-Month High on China’s Manufacturing

West Texas Intermediate crude retreated from the highest price since October after a Chinese manufacturing index declined to a seven-month low, signaling demand may slow from the world’s second-biggest oil consumer. Futures for April, the most-active contract, dropped as much as 0.4 percent in New York. The preliminary February reading of 48.3 for a Purchasing Managers’ Index in China released today by HSBC Holdings Plc and Markit Economics compares with 49.5, January’s final figure and the median estimate in a Bloomberg News survey. A technical indicator shows WTI’s 3 percent gain since Feb. 14 may have been excessive. “The poor Chinese manufacturing PMI data triggered further concerns over a slowdown in the oil demand from China,” Myrto Sokou, senior analyst at Sucden Financial Ltd. in London , said in an e-mail. WTI for April delivery slid as much as 39 cents to $102.45 a barrel in electronic trading on […]

Posted On : Published By : Tom Whipple
Category:

U.S. Natural Gas Drops From Five-Year High Seen as Unsustainable

Natural gas futures dropped from a five-year high in New York amid speculation that the biggest gain in 20 months wasn’t sustainable. Futures for March delivery fell as much as 4.2 percent to $5.892 per million British thermal units in electronic trading on the New York Mercantile Exchange and were at $5.942 at 3:38 p.m. Singapore time. The contract rose 11 percent yesterday to $6.149, the highest close since Dec. 3, 2008. The volume of all futures traded was about 116 percent above the 100-day average. “It’s profit taking,” said Stephen Schork , president of Schork Group Inc., a consultant in Villanova, Pennsylvania . “The bulls are locking in to free up cash to send this market higher tomorrow.” Natural gas posted the biggest gain yesterday since June 14, 2012. Prices are up 40 percent so far this year as waves of arctic air boosted demand for heating fuel, […]

Posted On : Published By : Tom Whipple
Category:

Natural-gas prices hit a five-year high on Wednesday. Above, the scene in Washington last week.

The approach of yet another severe winter chill sent natural-gas prices soaring to a five-year high, as investors bet the brutal weather across the U.S. will put further strain on supplies of the heating fuel. Prices have climbed 45% this year as homes and businesses across the Midwest and Northeast consume record amounts of the fuel to get through a series of cold snaps. That demand is rapidly depleting U.S. gas inventories, which entered the winter near highs. January had the highest average natural-gas demand on record, according to energy-analytics firm Bentek Energy. Buyers piling into the market this week are worried that there won’t be much gas left in storage by the end of winter. They are willing to pay extra to make sure they secure supplies now, before the cost possibly increases even more. Meanwhile, investors have put on big wagers that prices will rise further. The […]

Posted On : Published By : Tom Whipple
Category:

Analysts See 249-Billion-Cubic-Foot Drop in U.S. Natural Gas Inventories

Analysts and traders expect government data scheduled for release Thursday to show that natural-gas inventories fell by more than usual for this time of year. The U.S. Energy Information Administration is expected to report that 249 billion cubic feet of gas were withdrawn from storage during the week ended Feb. 14, according to the average forecast of 13 analysts and traders surveyed by The Wall Street Journal. For the Feb. 14 week, the median estimate is for a decline of 248 bcf. Estimates range from a fall of 235 bcf to a drop of 267 bcf. The estimate for Feb. 14 is above last year’s 127-bcf withdrawal from storage for the same week. If the storage estimate is correct, inventories as of Feb. 14 will total 1.437 trillion cubic feet, 40% below the year-ago level and would be the lowest level for February since 2004. Write […]

Posted On : Published By : Tom Whipple
Category:

Iran nuke talks end, next round March 17

Iran and six world powers on Thursday announced that they have agreed on a plan meant to produce a comprehensive deal that reduces concerns about Tehran’s nuclear ambitions. Officials of both sides described their plans as "very productive." In a joint statement, they said the next round of negotiations would begin in Vienna on March. 17. "We’ve identified the issues we need to address for a comprehensive and final agreement," said Catherine Ashton, the EU’s top diplomat who convened the talks between Iran and the six powers – the United States, Russia, China, Britain, France and Germany . "It won’t be easy, but we’ve gotten off to a good start," she said in a statement later read in Farsi by Iranian Foreign Minister Mohammad Javad Zarif. Expectations of major progress from the three days of talks in Vienna were modest because the two sides […]

Posted On : Published By : Tom Whipple
Category:

World powers and Iran make "good start" towards nuclear accord

Six world powers and Iran made a "good start" during talks in Vienna towards reaching a final settlement on Tehran’s contested nuclear program, the European Union’s foreign policy chief Catherine Ashton on Thursday. Speaking to reporters after three days of negotiations, Ashton said the two sides had identified the ingredients of an accord that could put an end to years of hostility between the West and the oil producing nation. But she cautioned that future negotiations, which western governments want to wrap up by late July, would not be easy. "We have had three very productive days during which we have identified all of the issues we need to address in reaching a comprehensive and final agreement," she told reporters. "There is a lot to do. It won’t be easy but we have made a good start." Senior diplomats from the six powers – the United […]

Posted On : Published By : Tom Whipple