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U.S. Gas Is No Cure-All for Europe

Energy was the talk of the town during President Barack Obama’s visit to Brussels this week, raising expectations that U.S. gas exports could help loosen Russia’s energy stranglehold on Europe. European leaders would love to cut their energy imports from Russia, which supplies 30% of Europe’s gas and whose economy is heavily reliant on sales to Europe. But for now, many European countries depend on that gas. Mr. Obama said in a press conference Wednesday that a new trade deal with the European Union could make it easier for U.S. firms to export liquefied natural gas, or LNG, to the continent. But many obstacles stand in the way of that goal, and it’s unclear how, and if, the U.S. can really help. European worries about energy security have soared since Russian troops took control of the Crimea from Ukraine this month. Moscow in recent years has cut gas supplies during regional […]

Posted On : Published By : Tom Whipple
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Data deepen eurozone deflation fears

The cost of borrowing for crisis hit countries in the eurozone is tumbling amid expectations that the European Central Bank will be forced to start buying government bonds to fend off the spectre of a damaging period of deflation. Yields on 10-year Portuguese government bonds, which move inversely with prices, dropped below 4 per cent for the first time since early 2010 on Friday while Spanish 10-year yields tumbled to a near decade-low. Fears that the eurozone is drifting towards a Japanese-style bout of deflation were stoked further on Friday after prices fell in Spain this month and inflation edged down in Germany. The unexpected dip in Spanish prices capped a week that saw yields on peripheral countries’ debt tumble and the euro edge lower after Germany’s powerful central bank radically scaled back its opposition to the possibility of the ECB embarking on a government bond buying programme. […]

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New UN Report Is Cautious On Making Climate Predictions

The draft of the latest report from the Intergovernmental Panel on Climate Change warns that the world faces serious risks from warming and that the poor are especially vulnerable. But it avoids the kinds of specific forecasts that have sparked controversy in the past. Batten down the hatches; fill the grain stores; raise the flood defenses. We cannot know exactly what is coming, but it will probably be nasty, the latest report from the UN’s Intergovernmental Panel on Climate Change (IPCC) will warn next week. Global warming will cause wars, displace millions of people, and do trillion-dollar damage to the global economy. But careful readers will note a new tone to its discussion of these issues that is markedly different from past efforts. It is more humble about what scientists can predict in advance, and far more interested in how societies can make themselves resilient. It also places climate […]

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Ex govt adviser: "global market shock" from "oil crash" could hit in 2015

In a new book, former oil geologist and government adviser on renewable energy , Dr. Jeremy Leggett, identifies five "global systemic risks directly connected to energy" which, he says, together "threaten capital markets and hence the global economy" in a way that could trigger a global crash sometime between 2015 and 2020. According to Leggett, a wide range of experts and insiders "from diverse sectors spanning academia, industry, the military and the oil industry itself, including until recently the International Energy Agency or, at least, key individuals or factions therein" are expecting an oil crunch "within a few years," most likely "within a window from 2015 to 2020." Interconnected risks Despite its serious tone, The Energy of Nations: Risk Blindness and the Road to Renaissance , published by the reputable academic publisher Routledge , makes a compelling and ultimately hopeful case for the prospects of transitioning to a clean […]

Posted On : Published By : Tom Whipple
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Ex govt adviser: “global market shock” from “oil crash” could hit in 2015

In a new book, former oil geologist and government adviser on renewable energy , Dr. Jeremy Leggett, identifies five "global systemic risks directly connected to energy" which, he says, together "threaten capital markets and hence the global economy" in a way that could trigger a global crash sometime between 2015 and 2020. According to Leggett, a wide range of experts and insiders "from diverse sectors spanning academia, industry, the military and the oil industry itself, including until recently the International Energy Agency or, at least, key individuals or factions therein" are expecting an oil crunch "within a few years," most likely "within a window from 2015 to 2020." Interconnected risks Despite its serious tone, The Energy of Nations: Risk Blindness and the Road to Renaissance , published by the reputable academic publisher Routledge , makes a compelling and ultimately hopeful case for the prospects of transitioning to a clean […]

Posted On : Published By : Tom Whipple
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WTI Crude Rises to Two-Week High on Cushing Supplies

West Texas Intermediate crude advanced to the highest level in more than two weeks after supplies at Cushing, Oklahoma , the delivery point for the contract, reached a two-year low. Brent gained in London . WTI rose 1 percent. Cushing supplies fell 1.33 million barrels last week to 28.5 million, the Energy Information Administration said yesterday. President Barack Obama said yesterday that the crisis in Ukraine may escalate and warned that sanctions on Russia may include the energy sector. WTI’s gain also narrowed the discount to Brent. “The continuing depletion of supplies at Cushing is on everyone’s mind,” said John Kilduff , a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “We’re seeing the WTI-Brent spread come in as a result. There’s speculation that Cushing supplies could get below operational rates.” WTI for May delivery gained $1.02 to $101.28 a barrel on the […]

Posted On : Published By : Tom Whipple
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NYMEX crude settles up after pushing through key technical levels

NYMEX May crude settled up $1.02 at $101.28/barrel Thursday after key technical levels were breached, helping to narrow the spread to ICE May Brent. ICE May Brent settled 80 cents higher at $107.83/b. This pulled the Brent-WTI spread down to $6.55/b, in from a settle of $6.77/b Wednesday. Earlier, however, the front-month spread narrowed to $6.03/b, its tightest since trading at $5.85/b on March 7. Article continues below… Products were higher as well, led by NYMEX April RBOB, which rose 3.37 cents to settle at $2.9426/gal. April ULSD settled 2.83 cents higher at $2.9477/gal. "We broke through a key technical level, with some fresh buying as market starts to rally," Tradition Energy analyst Gene McGillian said. Front-month NYMEX crude broke through its respective 30-day and 200-day moving averages, with the 100-day moving average appearing to offer a floor. Bollinger Bands, a technical analysis […]

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Tight oil production pushes U.S. crude supply to over 10% of world total

U.S. tight oil production averaged 3.22 million barrels per day (MMbbl/d) in the fourth quarter of 2013, according to U.S. Energy Information Administration estimates. This level was enough to push overall crude oil production in the United States to an average of 7.84 MMbbl/d, more than 10% of total world production, up from 9% in the fourth quarter of 2012. The United States and Canada are the only major producers of tight oil in the world. In recent years, North American producers have developed technologically advanced drilling and completion processes to produce oil from tight formations. Tight oil refers to oil found within reservoirs with very low permeability, including but not limited to shale. Permeability is the ability for fluid, such as oil and gas, to move through a rock formation. In February 2014, 63% of U.S. tight oil production came from two basins: the Eagle Ford in South […]

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Frigid US winter converts analysts, investors into natural gas bulls

Washington (Platts)–27Mar2014/456 pm EDT/2056 GMT The coldest winter since 1977 in the US has made natural gas analysts and investors more bullish about gas prices in 2014. Bank of America’s commodities team raised its average price forecast for 2014 by 50 cents to $4.40/MMBtu Thursday and predicted storage would end the injection season at 3.46 Tcf, 14 Bcf shy of the 3.6 Tcf benchmark. "Given the unexpectedly strong first quarter, we [are raising] our average price forecast for 2014 from $3.90 to $4.40/MMBtu," the analyst said. "We do not see a major acceleration in gas output despite higher prices, we now project $4.40/MMBtu in 2015 as well, two dimes above the current forward" curve. Article continues below… Request a free trial of: Gas Daily Gas Daily offers the most detailed coverage of natural gas prices at interstate and intrastate pipeline and pooling points in major U.S. markets. Gas Daily […]

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Iraq Oil Income to Jump on Decades-High Output

Iraqi oil income is set to surge in April as Basrah Light crude to Asia sells at the highest rate in more than a year against Saudi prices and shipments expand. The CHART OF THE DAY shows a tightening discount for Basrah Light, Iraq ’s biggest export, relative to Saudi Arabia ’s Medium grade for Asian customers. Iraq is set to export the most Basrah Light in at least two years next month, at the same time as the grade’s discount to Saudi crude is the narrowest in 17 months. “It looks optimistic for them,” Alexander Poegl, a JBC Energy GmbH analyst in Vienna, said by phone. “They should be on track for a good April. There’s great export capacity available and that will help boost confidence among customers that they’ll get their crude when they want it.” Oil producers in the Persian Gulf sell the bulk of their […]

Posted On : Published By : Tom Whipple