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Release oil from US reserve to hurt Russia

Russia’s seizure of Crimea has prompted political leaders in Europe and North America to seek meaningful measures to convince Russia to pull back its troops. In particular, they seek measures that would affect Russia immediately, putting internal pressure on the country’s leaders to stop their aggression while leaving the rest of the world unharmed. Some propose accelerating natural gas exports from the US to Europe. However, this is no better than computer “vapourware” because the gas would not arrive for years. A viable alternative to gas exports is releasing oil from the US Strategic Petroleum Reserve (SPR). These stocks are available today and could have a speedy impact on Russia. Given that the country depends on oil and natural gas exports for its survival, such an action would have a quick and significant effect if the release depresses oil prices. The SPR now holds 694m barrels of crude. The […]

Posted On : Published By : Tom Whipple
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Ukraine works to protect gas infrastructure

The Ukrainian government said Monday it was taking special security precautions to ensure gas pipeline infrastructure was protected during conflict with Russia. Ukrainian opposition leader Dmitry Yarosh said Sunday he’d destroy the Soviet-era gas transmission network through Ukraine in response to Russian "occupiers," Russian news agency RT reported. European consumers get about a quarter of their natural gas from Russia, though the bulk of that heads through Ukraine’s pipeline system. The Ukrainian Interior Ministry said Monday it was taking the necessary security precautions. "The National Guard and Security Service of Ukraine have put in place special protective measures concerning the gas transmission and distribution system of Ukraine," a statement carried by Russian news agency RIA Novosti said. "This decision was made to ensure the safety and smooth operation of critical infrastructure in the country." Conflict erupted in Ukraine in November when ousted President Viktor Yanukovych , a Kremlin ally, […]

Posted On : Published By : Tom Whipple
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Commodities Cushioned From Crimea Crisis by Ample Supply

Unprecedented natural gas reserves in Europe , record global grain output and the threat of mutual economic calamity from oil sanctions are cushioning commodity prices even as the Ukraine-Russia conflict spurs a gold rally. While U.K. gas prices, a European benchmark, rose 5.1 percent since the crisis began at the end of February, they are still the lowest for this time of year since 2010. Brent crude fell 1 percent. After wheat advanced 15 percent and corn 4.6 percent, both remain about a quarter below the peaks in 2010, the last time Russia and Ukraine curbed shipments. Gold reached a six-month high on March 14 as demand for a haven grew. Abundant supply is limiting some price swings caused by Russia ’s incursion into Crimea, where a majority in a disputed vote yesterday chose to join Russia, preliminary results show. Europe gets about a third of its gas from […]

Posted On : Published By : Tom Whipple
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Oil Futures in Narrow Range

On the New York Mercantile Exchange light, sweet crude futures for delivery in April traded at $99.14 a barrel at 0558 GMT–up $0.25 in the Globex electronic session. May Brent crude on London’s ICE Futures exchange rose $0.07 to $108.28 a barrel. The U.S. and the European Union have rejected the results of the Crimean referendum and the looming threat of additional sanctions on Russia raised some concerns about Russia’s energy exports. "With the overwhelming pro-Russian vote in the region clashing with the West’s assertions that the referendum is not valid expect further geopolitical risk-related support this week," ANZ said in a note. The market already reflects a slightly bullish sentiment priced in last week and any big reactions are unlikely unless there is a large military escalation or announcement of large-scale economic sanctions, oil traders said. Meanwhile, the slowing pace of economic growth in China and rising oil […]

Posted On : Published By : Tom Whipple
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WTI Trades Near Three-Day High After Crimea Vote; Brent Steady

West Texas Intermediate crude traded near the highest price in three days amid speculation that Crimea’s vote to split from Ukraine may heighten tensions between Russia and the West. Brent was steady in London . Futures were little changed in New York after rising for a second day on March 14. The U.S. and the European Union warned Russia not to annex Crimea after the referendum, setting the stage for sanctions against the world’s biggest energy producer. Libya ’s production fell after protesters closed a pipeline carrying crude from Sharara, the country’s second-largest field, according to state-run National Oil Corp. “With the overwhelming pro-Russian vote in the region clashing with the West’s assertions that the referendum is not valid, expect further geopolitical risk-related support this week,” Mark Pervan , the head of commodity research at Australia & New Zealand Banking Group Ltd., said in a note today. WTI for […]

Posted On : Published By : Tom Whipple
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Shale gas and oil boom not sustainable

How much faith can we put in our ability to decipher all the numbers out there telling us the US is closing in on its cornering of the global oil market? There’s another side to the story of the relentless US shale boom, one that says that some of the numbers are misunderstood, while others are simply preposterous. The truth of the matter is that the industry has to make such a big deal out of shale because it’s all that’s left. There are some good things happening behind the fairy tale numbers, though—it’s just a matter of deciphering them from a sober perspective.   In a second exclusive interview with James Stafford of  Oilprice.com , energy expert Arthur Berman discusses:   Why US gas supply growth rests solely on Marcellus When Bakken and Eagle […]

Posted On : Published By : ASPO-USA
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Blinkered to threat of rising oil prices

Oil production in Australia peaked in 2000. It would have peaked worldwide too by now, had it not been for the shale oil boom in the US. Some interesting work by this country’s most unrelenting peak oil proponent, retired engineer Matt Mushalik, shows that without shale oil – which accounts for 1.5 million barrels a day – world oil production last year was back at 2005 levels. It seems a monumental economic crisis may have been averted. Still, the price of crude oil has stubbornly hovered around its present mark of $US108 a barrel for the past three years even as shale oil production has ramped up. For motorists in Australia, should consensus predictions of a falling Australian dollar come to pass, prices will head higher at the petrol pump in coming years. This currency effect, however, is a sideshow compared with the big question of world oil prices […]

Posted On : Published By : Tom Whipple
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Star Wars Adds Fighting Spirit as Iran Urged to Resist Sanctions

A Iranian demonstrator holds a photo of Supreme Leader Ayatollah Ali Khamenei during a rally to mark the 34th anniversary of the 1979 U.S. embassy takeover in Tehran, Iran, on November 4, 2013. Close Close Open Photographer: Majid Saeedi/Getty Images A Iranian demonstrator holds a photo of Supreme Leader Ayatollah Ali Khamenei during a rally to mark the 34th anniversary of the 1979 U.S. embassy takeover in Tehran, Iran, on November 4, 2013. Red-hot furnaces, oil rigs that glint in the sun, tankers carving through silver seas, all set to the Star Wars soundtrack. This, suggests ’s state television, is what an “economy of resistance” looks like. While the music is Hollywood, the four-minute broadcasts reflect the vision of Supreme Leader Ayatollah Ali Khamenei, who authored a defiant February decree that sought the overhaul of an economy that remains crippled by global sanctions . Buccaneering […]

Posted On : Published By : Tom Whipple
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Easing Sanctions Drive Iran's Petrochemical Sales to Asia

Easing sanctions on Iran are already driving up Iran’s petrochemical sales to Asia, a top Iranian oil official said Thursday. The news is the latest sign that an interim nuclear deal between six world powers and Iran is giving a breather to Iran’s battered economy. "We have [made] some progress" in selling petrochemicals to Asia. Petrochemicals are one of the country’s main sources of exports revenue after crude oil, Mohammad-Hossein Peyvandi, the deputy head of the state-owned National Iranian Petrochemical Co., said in an interview with The Wall Street Journal. As part of the nuclear deal, the U.S. suspended sanctions on 14 major Iranian petrochemical companies, making it less risky both politically and legally for Asian buyers to purchase their products. Still, Mr. Peyvandi said the domestic industry could further benefit from the return of European Union companies—which are still banned from providing technology to Iran. The official said […]

Posted On : Published By : Tom Whipple
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Easing Sanctions Drive Iran’s Petrochemical Sales to Asia

Easing sanctions on Iran are already driving up Iran’s petrochemical sales to Asia, a top Iranian oil official said Thursday. The news is the latest sign that an interim nuclear deal between six world powers and Iran is giving a breather to Iran’s battered economy. "We have [made] some progress" in selling petrochemicals to Asia. Petrochemicals are one of the country’s main sources of exports revenue after crude oil, Mohammad-Hossein Peyvandi, the deputy head of the state-owned National Iranian Petrochemical Co., said in an interview with The Wall Street Journal. As part of the nuclear deal, the U.S. suspended sanctions on 14 major Iranian petrochemical companies, making it less risky both politically and legally for Asian buyers to purchase their products. Still, Mr. Peyvandi said the domestic industry could further benefit from the return of European Union companies—which are still banned from providing technology to Iran. The official said […]

Posted On : Published By : Tom Whipple