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New Cold War Would Differ From Old

RUSSIA had some real economic problems even before the Ukrainian crisis led the United States and European countries to threaten sanctions on the country after the Russian flag was raised in Crimea, a part of Ukraine, and troops who spoke Russian appeared to take over a significant part of the region. Russia’s growth had slowed to almost nothing: Its real gross national product in the third quarter of 2013 was just 0.6 percent larger than it had been a year earlier. The ruble was weak. Its manufacturers appeared to be doing much worse than competitors in other countries. Its stock market has trailed markets in most other countries over the last year. If this is a new incarnation of the Cold War, it will be very different from the old one. Back then, the Soviet Union and the members of its empire were in some ways in their own […]

Posted On : Published By : Tom Whipple
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Russia Invokes $2 Billion Ukraine Gas Debt Amid Crimea Crisis

Andrew Wilson, chief executive officer for Europe, the Middle East and Africa at Goldman Sachs Asset Management, talks about investment opportunities in emerging markets, the crisis in Ukraine and the outlook for U.S. and China growth. He speaks with Francine Lacqua on Bloomberg Television’s "On the Move." (Source: Bloomberg) Russia said Ukraine’s natural gas debt climbed to almost $2 billion and signaled supplies may be cut, ratcheting up pressure on its neighbor as they scrap over the future of the Black Sea Crimea region. Ukraine hasn’t made its February fuel payment and owes Russia $1.89 billion, according to gas export monopoly OAO Gazprom (OGZD) , which halted supplies to Ukraine five years ago amid a pricing and debt dispute, curbing flows to Europe. Lawmakers in Moscow said they’d accept the results of a March 16 referendum on Crimea joining Russia as Arseniy Yatsenyuk, Ukraine’s premier, […]

Posted On : Published By : Tom Whipple
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Energy Crunch: Peaks and tipping points

Three things you shouldn’t miss this week Global riot epidemic due to demise of cheap fossil fuels  – From South America to South Asia, a new age of unrest unfolds as industrial civilisation transitions to post-carbon reality.   UK oil and gas production in terminal decline?  Offshore production by field:  http://crudeoilpeak.info/uk-peak   The Energy Transition Tipping Point is Here  – The economic foundations for fossil fuel investment collapse as the business case for renewables builds.   Diplomatic efforts are underway to diffuse tensions between Russia and the West following the overthrow of Ukrainian President Yanukovych. Should tensions escalate, one risk is the disruption of gas supplies from Russia to Europe via the Ukraine.   A standoff between Russia and Ukraine following the Orange Revolution saw gas supplies disrupted in both January 2006 and early 2009. Europe is now better placed to […]

Posted On : Published By : Tom Whipple
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Oil Extends Gains in Asia

On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $101.94 a barrel at 0514 GMT, up $0.38 in the Globex electronic session. April Brent crude on London’s ICE Futures exchange rose $0.37 to $108.47 a barrel. Crude edged higher overnight after Crimea’s Moscow-backed government set a referendum for March 16 to ratify its decision to secede from Ukraine and join Russia, ratcheting up tensions. The U.S. has set the stage for sanctions against people who are destabilizing Ukraine as well as certain visa restrictions. The European Union has said it would impose tough sanctions against Moscow if Russia doesn’t begin negotiations with Ukraine soon. "Short-term disruptions in oil and gas exports due to a possible escalation of the situation in Ukraine would be limited," Johannes Benigni, founder and director of JBC Energy, said in the firm’s monthly report. He said about 310,000 […]

Posted On : Published By : Tom Whipple
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WTI Crude Rebounds on U.S. Jobless Claims

West Texas Intermediate crude rebounded after the biggest drop in two months as fewer Americans than projected filed applications for unemployment benefits last week. Brent advanced. Prices rose for the first time in three days, following gains in U.S. equities. Jobless claims declined to the least since November, the Labor Department said. Crude also climbed as the euro strengthened to a two-month high against the dollar. Brent increased as President Barack Obama said the U.S. and its allies will keep raising pressure on Russia to back down in Ukraine. WTI dropped as much as 1.3 percent earlier on concern that weaker demand is boosting U.S. inventories. “The jobless report is driving up the stock market and oil,” said Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC. “A weak dollar makes for a stronger market. I don’t see oil going below $100. The Ukraine crisis is not over […]

Posted On : Published By : Tom Whipple
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Eni CEO Sees Oil Price Falling to $90 a Barrel

Oil prices are likely to fall to around $90 a barrel as global supply rises and demand falls back thanks to a shift to more natural gas usage and increased fuel efficiency, the chief executive of Italian oil and gas major Eni SpA Paolo Scaroni said Thursday. New oil fields coming onstream in Brazil, the Barents Sea off Norway and onshore in the U.S. will lift the world’s oil supply, Mr. Scaroni said. Concurrently, the U.S. shale boom has lifted demand for natural gas, while Europeans would likely shift from using coal and oil to cleaner-burning gas to meet carbon dioxide emissions targets. Gas demand would also prove high in Asia as the region’s economies expand, Mr. Scaroni said. "I see [the oil price] going down rather than up," he said in an interview with The Wall Street Journal. Mr. Scaroni said it didn’t make sense for the company […]

Posted On : Published By : Tom Whipple
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Amid carnage of war, Syria readies for Assad re-election

After three years of grinding conflict, the destruction of whole city districts and an exodus of refugees all triggered by an uprising against his rule, Bashar al-Assad is quietly preparing to be re-elected. The Syrian president has not yet announced whether he will stand for a third term, in defiance of protesters, rebel fighters and Western foes who have demanded he go; but in state-controlled parts of Damascus preparations for his candidacy are unmistakable. Public gatherings have become platforms to urge the president to nominate himself, despite a continuing civil war that has killed more than 140,000 people, fractured the country and destroyed any chance of a credible vote being held. Authorities are once again organizing demonstrations in support of Assad, accused by opponents of massacres of civilians. Shopkeepers are encouraged to show their support by painting national colors on their store fronts. Some express their […]

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Genel Energy expects more oil from Kurdish north of Iraq

LONDON, March 6 (UPI) — Oil produced from the Kurdish region of Iraq was lower than expected during the fourth quarter, though the trend should reverse, Genel Energy said Thursday. Anglo-Turkish company Genel said net production in 2013 averaged 44,000 barrels of oil equivalent per day, about 6,000 barrels less than expected. A late 2013 fire at the company’s Taq Taq field and "pricing sensitivity in the domestic market" for oil from the Tawke field, both in the Kurdish north of Iraq, were the primary causes of the production shortfall, it said. "Production guidance for 2014 is set at 60,000 – 70,000 barrels of oil equivalent per day, translating into a revenue guidance range of between $500 million – $600 million," the company said in a Thursday report. "Production volumes are expected to grow significantly year-on-year as the new [Kurdish] export pipeline comes into operation." The Kurdistan Regional Government […]

Posted On : Published By : Tom Whipple
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Egypt Tries Harder To Stop Energy Firm Exodus

Egypt is enhancing exploration terms and striving to repay nearly $5 billion it owes to foreign oil and gas producers as it struggles to prevent them fleeing to more promising prospects elsewhere in Africa. Cairo needs them to expand exploration and bring new finds to production if it is to keep the lights on and avoid more civil unrest. But investors are hesitant – Egypt pays them barely enough to cover investment costs. The costing issue has been compounded since the 2011 overthrow of Hosni Mubarak by Egypt’s inability to pay foreign firms for existing output and its decision to divert for domestic use the share of gas they normally get to export. The crisis has left BG Group, a major investor which relies on Egypt for almost a fifth of its output, unable to meet export commitments. The British firm has said it […]

Posted On : Published By : Tom Whipple
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Expanded Panama canal 'should be in operation' by Jan 2016

Tokyo (Platts)–7Mar2014/225 am EST/725 GMT The Panama Canal Authority expects the expanded canal "should be in operation by January 2016" after a trial period, Silvia de Marucci, ACP’s manager of marketing and forecasting, said Friday. Marucci made the comments in response to a question at the International LP Gas Seminar in Tokyo. "In January 2016, we are expecting to be operational" after a period of testing at both the Atlantic and Pacific side of locks, Marucci said. At the moment, the expansion is 65% complete, she added. The latest target is seven months behind a previous estimate of June 2015. The project was originally scheduled for completion this year. Next week, ACP intends to sign a final agreement with its contractor for the expansion project, Marucci told Platts ahead of the conference Friday. "Works were stopped about a month ago but resumed two weeks ago and we are very […]

Posted On : Published By : Tom Whipple