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Beginning of the End? Oil Companies Cut Back on Spending

Steve Kopits recently gave a presentation explaining our current predicament: the cost of oil extraction has been rising rapidly (10.9% per year) but oil prices have been flat. Major oil companies are finding their profits squeezed, and have recently announced plans to sell off part of their assets in order to have funds to pay their dividends. Such an approach is likely to lead to an eventual drop in oil production. I have talked about similar points previously (here and here), but Kopits adds some additional perspectives which he has given me permission to share with my readers. I encourage readers to watch the original hour-long presentation at Columbia University, if they have the time.>Click here to view full article at ourfiniteworld.com

Posted On : Published By : Tom Whipple
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Checking In On Peak Oil

In last week’s column, The Case of the Missing Propane , I explained how the widespread use of hydraulic fracturing (fracking) of shale oil deposits since 2008 has led to a 30% increase in the production of crude petroleum in the United States. While that statistic makes for snappy headlines, it is not particularly meaningful to the overall world oil supply or the phenomenon known as Peak Oil. If you are not familiar with Peak Oil, I published a column in June of 2011 called Peak Oil in Five Paragraphs or Less . Here are the key points: • Peak Oil refers to the time at which we reach the global maximum rate of oil production, which is followed by decades of declining rates of production. • Due to oil’s pivotal role as a transportation fuel and (as I explained in Everything Comes […]

Posted On : Published By : Tom Whipple
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Ukraine Crisis Stokes Oil Price Surge

Crude-oil futures surged in Asian trading hours Monday after Russia seized Ukraine’s Crimean peninsula by force over the weekend, offsetting any impact from weak manufacturing data from China. On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $103.78 a barrel at 0519 GMT, up $1.19 in the Globex electronic session. April Brent crude on London’s ICE Futures exchange rose $1.62 to $110.69 a barrel. Russia’s parliament authorized President Vladimir Putin to use military force in Ukraine over the weekend, raising fears of an imminent conflict, but analysts say oil and gas supplies from Russia to eastern Europe have not yet been affected. Russia is the second-largest producer of natural gas and third-largest liquid fuels producer in the world, much of it supplied to European countries via Ukraine, according to the U.S. Energy Information Administration. Ukraine is an important transit country for Russian […]

Posted On : Published By : Tom Whipple
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Commodities Climb to Six-Month High as Oil, Corn Rise on Ukraine

Commodities advanced to the highest level in almost six months as escalating tension in Ukraine fueled concern that energy and agricultural supplies will be disrupted while increasing demand for gold as a haven. The Standard & Poor’s GSCI Index (SPGSCI) of 24 raw materials climbed as much as 1.6 percent to 660.26, the highest level since Sept. 9, and was at 659.55 at 8:10 a.m. in London. Brent crude in London jumped 2 percent, wheat in Chicago surged 3.9 percent, while gold futures in New York increased 1.9 percent. Natural gas and corn also advanced. Russia , the world’s largest energy exporter, seized control of the Black Sea region of Crimea in Ukraine, where tension has escalated since Russia-backed Viktor Yanukovych was overthrown as president on Feb. 22. More than half of Russia’s gas exports to the European Union are shipped through Ukraine, which is set to be the […]

Posted On : Published By : Tom Whipple
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Ukraine Tension Seen Stoking Oil, Gas Prices on Supply Risk

Oil and natural gas rose amid investor concern that escalating geopolitical tension over Ukraine could curb energy supplies. Brent crude advanced as much as 2 percent to $111.24 a barrel on the ICE Futures Europe exchange in London today. Gas futures jumped as much as 2.8 percent to $4.736 per million British thermal units in electronic trading on the New York Mercantile Exchange , after sliding 25 percent last week. “The market will be incredibly nervous, and that caution should push prices higher,” Ole Hansen, a Copenhagen-based strategist at Saxo Bank A/S, said yesterday by phone before the resumption of trading today. The standoff over Ukraine, the main conduit for Russian gas to consumers in Europe, intensified over the weekend as the former Soviet state put its forces on combat readiness and Russia ’s President Vladimir Putin threatened to invade. Wholesale gas costs jumped in […]

Posted On : Published By : Tom Whipple
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Speculators Boost Bullish Oil Bets to Record on Cushing: Energy

Hedge funds increased their bullish bets on West Texas Intermediate oil to a record as rising flows of domestic crude to Gulf Coast refineries cut demand for more costly foreign grades. Money managers bolstered net-long positions, or wagers on rising prices, on the U.S. benchmark by 2.2 percent in the week ended Feb. 25, Commodity Futures Trading Commission data show. The positions climbed to the highest level in CFTC data going back to 2006. Shipments to the Gulf from Cushing, Oklahoma , which is the delivery point for New York futures, began to surge in January, when TransCanada Corp. (TRP) started moving oil on the southern leg of the Keystone XL pipeline. The added supplies helped narrow the premium of Brent crude , the international benchmark, over WTI to a 21-week closing low of $6.48 a barrel on Feb. 28 from a 2014 high of $14.88 on Jan. 13. […]

Posted On : Published By : Tom Whipple
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Frustrated With the Pace of Change, Rioters Storm Parliament Building in Libya

Dozens of armed rioters stormed into the Libyan Parliament in Tripoli on Sunday, setting fire to the grounds, looting furniture and wounding a prominent lawmaker in a spasm of anger at the clotted and chaotic transition after the ouster of Col. Muammar el-Qaddafi . Less than two weeks after a vote to elect an assembly charged with writing a new constitution, the bedlam at Parliament dampened hopes of renewed momentum for the transition, or even of a break from the violence. Security guards outside the building encouraged the rioters, witnesses said, and looters running amok suspended the symbolic white chair of the parliamentary leader from a lamppost. Later, they set the chair on fire. In Benghazi, Libya, at least three people were killed by gunshots, according to news reports, adding to an accelerating pattern of assassinations of former Qaddafi security officers and foreigners. Together, the events appeared […]

Posted On : Published By : Tom Whipple
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Deportee in Saudi killed in detention center riot

A Saudi police spokesman says a foreign detainee died and nine others were injured in a riot at a center housing people awaiting deportation. Police spokesman Lieutenant Colonel Ati bin Attiya al-Qarshi said in a statement Monday that some of the foreign detainees at the al-Shemaisi center had rioted Sunday evening and clashed with security men. He did not give the reasons for rioting or reveal the victims’ nationalities. Yemeni online forums reported that 10 Yemenis were killed when police opened fire on rioters demanding that Saudi authorities speed up their deportation. The reports say between 6,000 to 10,000 Yemenis are detained in the prison in Jiddah. Since last year, the government has deported hundreds of thousands of illegal workers after an amnesty period. © 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more […]

Posted On : Published By : Tom Whipple
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For Iraqis fleeing Fallujah, it's 2004 again – but worse

In a trailer relocated from Camp Victory, Eman Rasheed brushes the dust off her clothes and tries to settle her children on thin foam mattresses after fleeing Fallujah for a second time. Children peer out of the stripped-down trailers, once parked in the sand at the main US military base, from behind doors dotted with peeling stickers of American flags and advertisements for energy drinks.  Skip to next paragraph The old signs taped to the door urging energy conservation when using the heaters or air conditioners seem taunting – there are no lights or heating units. There is no running water. At lunchtime a small pickup truck with large platters of rice and chicken cooked by resident s  of the city, Samarra , pulls up. A young volunteer jumps out to deliver a tin platter to each door. For many here, this is their second exodus from Fallujah. Ten years ago, US forces […]

Posted On : Published By : Tom Whipple
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For Iraqis fleeing Fallujah, it’s 2004 again – but worse

In a trailer relocated from Camp Victory, Eman Rasheed brushes the dust off her clothes and tries to settle her children on thin foam mattresses after fleeing Fallujah for a second time. Children peer out of the stripped-down trailers, once parked in the sand at the main US military base, from behind doors dotted with peeling stickers of American flags and advertisements for energy drinks.  Skip to next paragraph The old signs taped to the door urging energy conservation when using the heaters or air conditioners seem taunting – there are no lights or heating units. There is no running water. At lunchtime a small pickup truck with large platters of rice and chicken cooked by resident s  of the city, Samarra , pulls up. A young volunteer jumps out to deliver a tin platter to each door. For many here, this is their second exodus from Fallujah. Ten years ago, US forces […]

Posted On : Published By : Tom Whipple