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Ukraine Crisis Means Drill Baby Drill

Page added on March 6, 2014 Russia’s invasion of the Crimea is a tipping point event that will further spur the North American oil boom.  The European Union (EU) and United Statesin 2008 threatened toslap economic sanctions on Russia for invading Georgia.  But after a while the criticism faded and sanctions threats were quietly dropped, because the EU is almost entirely reliant on Russia for energy supplies. A similar situation is unfolding today as the EU and U.S. are again making false threats they will to stop exports of Russian oil and gas as punishment for invading the Ukraine.  But due to the latest humiliation by the Russians, a consensus is emerging that will demand the United States and its North American partners “drill baby, drill” for national security. Twenty years ago on January 1st the United States, Mexico, and Canada implemented the North American Free Trade Agreement. The […]

Posted On : Published By : ASPO-USA
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Peak oil demand: maybe here, but not there

For years, meaning until the arrival of U.S. shale production, much ink was spilled on the concept of “peak oil” — the argument that the world was fast approaching an absolute maximum of crude oil that can be produced on a  daily basis. Shale production has put the kabosh on that for the time being, but there’s another “peak” to argue about, and it’s peak demand. Oil consumption in Western Europe, Japan and the United States has  been declining since about 2005. Have we hit “peak demand?” Not hardly, at least not worldwide, agreed three panelists at the ongoing IHS/CERAWeek energy conference in Houston. Demand from Asia and the developing world will more than offset declines in OECD nations, said the panelists, all refiners. Bill Klesse, CEO of San Antonio-based Valero Energy, said world crude oil demand can be expected to grow about 1 million barrels per year through 2025. […]

Posted On : Published By : ASPO-USA
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Reasons for our Energy Predicament: An Overview

Quiz: What will cause world oil supply to fall? Too little oil in the ground Oil prices are too low for oil producers Oil prices are too high for oil consumers leading to recession, debt defaults, and ultimately a cut back in credit availability and very low oil prices Oil exporters are subject to civil unrest and overthrow of governments, due to low prices and/or depleting reserves Lack of money (and physical resources that might be purchased with this money) to pull oil out of the ground. Pollution related issues–too much smog in China; too many problems with fracking; too many problems with CO2. The financial current system fails, and can only be replaced by one that allows much less debt. Oil prices remain too low under such a system. In my view, any answer other that the first one is likely to be at least partially right. Ultimately, […]

Posted On : Published By : Tom Whipple
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WTI Falls for Third Day as U.S. Crude Stockpiles Gain

West Texas Intermediate declined for a third day after U.S. crude inventories increased while tension in Ukraine continued to ease. Brent was little changed. Futures dropped as much as 0.6 percent in New York , extending a 1.8 percent loss yesterday, the most in two months. Crude stockpiles gained for a seventh week while supplies at Cushing in Oklahoma , the delivery point for WTI contracts, slid to the lowest level in two years with the opening of a new pipeline. U.S. and Russian ministers met yesterday in Paris to try and resolve the stand-off in Ukraine. “Crude has been falling since Monday as the geo-political risk drops off,” Thina Saltvedt, an analyst at Oslo-based Nordea Markets, said by phone. “The Ukraine risk premium has disappeared for now as we are at least getting dialogue between Russia and the West.” WTI for April delivery dropped as much as 59 […]

Posted On : Published By : Tom Whipple
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Demand Fears Dent Oil Futures

Crude-oil futures were mixed in Asian trading hours Thursday after a sharp overnight drop on the lack of big headlines from Ukraine and signs of slowing oil demand in the U.S. On the New York Mercantile Exchange light, sweet crude futures for delivery in April traded at $100.96 a barrel at 0612 GMT–down $0.49 in the Globex electronic session. April Brent crude on London’s ICE Futures exchange rose $0.18 to $107.94 a barrel. Both Nymex and Brent crude have fallen sharply for two straight sessions after the surge in prices earlier this week when Russian troops took control of the Crimean peninsula. U.S. domestic oil inventories rose by 1.4 million barrels in the week ended Feb. 28, data from the U.S. Energy Information Administration showed. Analysts expected an overall increase of 1 million barrels. However, the real surprise for markets was the 1.4 million-barrel build-up in distillate stocks compared […]

Posted On : Published By : Tom Whipple
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Natural Gas Slides as End of Winter Approaches

Natural-gas futures extended a weekslong slide with a 3.1% decline Wednesday, as traders unwound bullish positions with the end-of-winter heating season approaching. Gas futures for front-month April delivery fell 14.4 cents to $4.5230 on the New York Mercantile Exchange, nearly eliminating all of their prior-day gains. Prices have slid more than 25% since hitting a high of $6.15 Feb. 19. Natural gas fires home heating for more than half of the U.S., and the gas market surged more than 50% in the early months of the year amid an extraordinarily cold winter season. Prices are beginning to decline since the March contract expired and contracts for warmer months take over most of the volume in the market. "We’re facing lower demand levels coming […]

Posted On : Published By : Tom Whipple
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Iraq returns as world's fastest-growing oil exporter

* Iraq boosts February exports to 35-year high * Oil execs say more Iraqi growth possible in 2014 * OPEC delegates relaxed, for now, about extra Iraqi oil By Alex Lawler and Peg Mackey LONDON, March 5 (Reuters) – Iraq is reclaiming its rank as the world’s fastest-growing oil exporter, cushioning consumers from Libyan supply outages for now and, perhaps, reviving OPEC market share rivalries down the road. Despite worsening violence due to spillover from the war in Syria, Iraq – already OPEC’s second-largest producer – is likely to post one of the biggest annual output jumps in its history as BP, Exxon Mobil and other companies tap its southern fields, which are untouched by the unrest. With many export bottlenecks now cleared at the southern Basra terminals – from which almost all of Iraq’s crude is shipped – Baghdad is expected to keep up, or even exceed, the […]

Posted On : Published By : Tom Whipple
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Iraq returns as world’s fastest-growing oil exporter

* Iraq boosts February exports to 35-year high * Oil execs say more Iraqi growth possible in 2014 * OPEC delegates relaxed, for now, about extra Iraqi oil By Alex Lawler and Peg Mackey LONDON, March 5 (Reuters) – Iraq is reclaiming its rank as the world’s fastest-growing oil exporter, cushioning consumers from Libyan supply outages for now and, perhaps, reviving OPEC market share rivalries down the road. Despite worsening violence due to spillover from the war in Syria, Iraq – already OPEC’s second-largest producer – is likely to post one of the biggest annual output jumps in its history as BP, Exxon Mobil and other companies tap its southern fields, which are untouched by the unrest. With many export bottlenecks now cleared at the southern Basra terminals – from which almost all of Iraq’s crude is shipped – Baghdad is expected to keep up, or even exceed, the […]

Posted On : Published By : Tom Whipple
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Gazprom Neft ties Iraqi oil fields to main pipeline network

Russian oil company Gazprom Neft said Wednesday it connected two oil fields in eastern Iraq to the country’s central pipeline network. The company said it completed laying, testing and connecting a 100-mile oil pipeline from the Badra oil field in Wasit province to the Gharraf oil field in neighboring Nassariya province. "With infrastructure already in place at Gharraf, completion of the pipeline from Badra means that the field is now connected to the main Iraqi pipeline system," the company said in a statement. Gazprom Neft said the new system can support about 204,000 barrels of oil per day for an export terminal at the southern port city of Basra. Gazprom Neft serves as the operator at Badra in a consortium that includes Korean and Brazilian counterparts. The company is operating under the terms of a 2009 agreement with the Iraqi government to develop the […]

Posted On : Published By : Tom Whipple
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Gunmen seize city council in Iraq's Samarra

An armed group in military uniform has seized the city council headquarters in the Iraqi city of Samarra and taken employees hostage, the second such attack in recent months. Two fighters, possibly wearing explosives-rigged vests or belts, seized the Samarra city council building on Tuesday morning with an unknown number of employees inside, security officials said. "The gunmen are in the council building," Police Lieutenant Dhafir Ahmed said, according to Reuters news agency. "Local council employees and court employees are trapped inside." Clashes broke out between the fighters and security forces, and a suicide bomber detonated an explosives-rigged vehicle near police and militia forces when they arrived at the scene. The blast wounded 24 people, most of them police, a doctor and an officer said, according to AFP news agency. The doctor also said that the deputy head of the city council […]

Posted On : Published By : Tom Whipple