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Peak Oil: Investment Issues # 3

CAPEX, AGAIN   [T]he 2013 WEO has the oil industry’s upstream capex [see this and this ] rising by nearly 180 per cent since 2000, but the global oil supply (adjusted for energy content) by only 14 per cent. The most straightforward interpretation of this data is that the economics of oil have become completely dislocated from historic norms since 2000 (and especially since 2005), with the industry investing at exponentially higher rates for increasingly small incremental yields of energy. [1] I pretend no expertise whatsoever in any and all economic matters … never have. But I understand just enough to realize that those numbers (from that excellent article by energy analyst Mark Lewis) suggest that the oil industry isn’t getting anywhere near its expected “bang for the buck.” And since those increased investments are made possible courtesy of the […]

Posted On : Published By : Tom Whipple
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Oil Futures Narrow Ahead of U.S. Data

A lack of significant cues and a mixed U.S. oil inventory saw narrow movement only in oil futures in Asian hours on Thursday. On the New York Mercantile Exchange light, sweet crude futures for delivery in March traded at $97.61 a barrel at 0620 GMT–up $0.23 in the Globex electronic session. March Brent crude on London’s ICE Futures exchange rose $0.03 to $106.28 a barrel. U.S. crude-oil supplies rose by 400,000 barrels in the week ended Jan. 31, according to the U.S. Energy Information Administration. Analysts expected supplies to have risen by 2.2 million barrels, according to a survey by The Wall Street Journal. The increase was more than offset by a 5.8 million-barrel drop in refined-product stocks, BNP Paribas said. "Essentially this was a mixed bag that elicited a mixed and limited price response. Upcoming refinery maintenance in the face of crude production increases is likely to become […]

Posted On : Published By : Tom Whipple
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WTI Trades Near Three-Day High as Distillate Supply Drops

West Texas Intermediate crude advanced for a third day after a U.S. government report showed distillate stockpiles shrank as freezing weather boosted demand for heating fuels. Futures gained as much as 0.5 percent in New York . Distillate supplies , including heating oil and diesel, fell by 2.36 million barrels to 113.8 million in the seven days ended Jan. 31, data from the Energy Information Administration showed yesterday. A second winter storm of the week swept into the Northeast, dumping snow as temperatures dropped. The U.S. is the world’s biggest oil consumer. “It’s mostly due to cold weather and high demand in heating oil in the U.S.,” Gerrit Zambo, an oil trader at Bayerische Landesbank in Munich, said by phone. “Sooner or later it will come down but I wouldn’t bet on falling oil prices in the coming days.” WTI for March delivery rose as much as 52 cents […]

Posted On : Published By : Tom Whipple
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Iran May Halve Fuel Oil Exports in March on Abadan Maintenance

Iran may reduce fuel oil exports by 50 percent next month as maintenance work at the Persian Gulf state’s Abadan refinery cuts output, according to an official at National Iranian Oil Co. The country may ship about 200,000 metric tons of fuel oil in March, compared with as much as 400,000 this month and 350,000 tons in January, said the official, who asked not to be identified because of internal company rules. The state-run company, known as NIOC, plans to shut half of its 390,000 barrel-a-day Abadan refinery for 20 to 30 days next month, said the official. The maintenance plan isn’t final and may change, according to the official. The Middle East nation reduced fuel oil exports to an average of 200,000 tons a month in the quarter ended Dec. 31 from about 600,000 tons earlier in the year as demand from domestic power plants climbed during winter, […]

Posted On : Published By : Tom Whipple
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Iran Willing to Modify Its Arak Reactor, Official Says

An Iranian official said for the first time that Iran may modify a heavy-water reactor near Arak, signaling a willingness to compromise on one of the most contentious issues in efforts to curtail its nuclear program. “We can do some design change — in other words, make some change in the design in order to produce less plutonium in this reactor and in this way allay the worries and mitigate the concerns,” Ali Akbar Salehi, head of the Atomic Energy Organization of Iran, told Iran’s official English-language Press TV in an interview today. The uncompleted Arak heavy water reactor was a stumbling block that almost derailed nuclear talks between Iran and other nations last November, when France ’s Foreign Minister Laurent Fabius insisted that Iran agree to halt work there before world powers would sign onto a six-month deal to ease some of the sanctions that have hobbled Iran’s […]

Posted On : Published By : Tom Whipple
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Iran's president regrets food ration problems

In a rare move, Iran’s President Hassan Rouhani said Thursday that he regrets any troubles with the distribution of a food ration to the poor, following reports that three people have died waiting for the goods in subzero weather. Local media have reported that the three died in recent days while standing in line in freezing temperatures. Authorities were quoted as saying that they had pre-existing heart problems. Most provinces in Iran have experienced unusually low temperatures in recent days. Rouhani told state TV that he "as the president expresses regret if people have faced trouble in receiving the commodity basket." It’s unusual for an official in Iran to take responsibility for problems in a governmental plan. The ration for the poor includes eggs, cooking oil, chicken, rice and cheese. The program was instituted under Rouhani’s predecessor, Mahmoud Ahmadinejad, originally just for government workers. Rouhani’s […]

Posted On : Published By : Tom Whipple
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Iran’s president regrets food ration problems

In a rare move, Iran’s President Hassan Rouhani said Thursday that he regrets any troubles with the distribution of a food ration to the poor, following reports that three people have died waiting for the goods in subzero weather. Local media have reported that the three died in recent days while standing in line in freezing temperatures. Authorities were quoted as saying that they had pre-existing heart problems. Most provinces in Iran have experienced unusually low temperatures in recent days. Rouhani told state TV that he "as the president expresses regret if people have faced trouble in receiving the commodity basket." It’s unusual for an official in Iran to take responsibility for problems in a governmental plan. The ration for the poor includes eggs, cooking oil, chicken, rice and cheese. The program was instituted under Rouhani’s predecessor, Mahmoud Ahmadinejad, originally just for government workers. Rouhani’s […]

Posted On : Published By : Tom Whipple
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Iraqi Tribes to Take Lead in Falluja Fight, U.S. Says

The Iraqi Army is planning to cordon off a key Sunni city now occupied by jihadists so that Sunni tribes can lead the mission to secure it one neighborhood at a time, a senior State Department official told Congress on Wednesday. “The plan is to have the tribes out in front, but with the army in support,” said Brett McGurk, the State Department’s top official on Iraq, describing preparations to try to oust the jihadists from the city of Falluja, in Anbar Province. The Iraqi strategy to take on the militants has been developed with advice from American military officers, including General Lloyd J. Austin III, the head of the United States Central Command, who met in Baghdad last week with Iraqi officials and military […]

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48 killed, 119 wounded in Iraq violence

A total of 48 people were killed and 119 others wounded in violent attacks across Iraq on Wednesday, mostly in the capital city of Baghdad, officials and police said. A series of bomb explosions rocked the Iraqi capital from morning to evening on Wednesday, killing at least 37 people and wounding 91 others. In the morning, a car bomb went off at a parking lot outside the Iraqi Foreign Ministry building in the city center, which is adjacent to the heavily fortified Green Zone that houses some government offices and the U.S. embassy, an Interior Ministry source told Xinhua […]

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Jihadist Return Is Said to Drive Attacks in Egypt

In just the last two weeks, Islamist militants have detonated a car bomb at the gates of the capital’s security headquarters, gunned down a senior Interior Ministry official in broad daylight and shot down a military helicopter over Sinai with a portable surface-to-air missile. But perhaps most alarming to officials in Cairo and Washington are the signs that the swift increase in the scale and effectiveness of the attacks may come from a new influx of fighters: Egyptians returning from jihad abroad to join a campaign of terrorism against the military-backed government. “Egypt is again an open front for jihad,” said Brian Fishman, a researcher in counterterrorism at the New America Foundation in Washington. “The world is being […]

Posted On : Published By : Tom Whipple