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Oil at $100 Loss Warning Rejected by Norges Bank: Nordic Credit

Oeystein Olsen, Norway’s central bank governor, rejected industry warnings that oil at about $100 a barrel is too cheap to support growth in western Europe ’s biggest crude exporter. “We have been quite lucky and we have benefited from relatively high oil prices, $100 per barrel or just above,” Olsen said in a Feb. 28 interview after a press conference in Oslo. “Given other developments all over the world, we should be relatively content if this level remains.” Statoil ASA (STL) , Norway’s biggest crude producer, said last month it would cut planned investments by 8 percent over the next three years as the stagnant price of oil weighs on cash flow . The decision triggered a warning from the government, which owns 67 percent of Statoil, and has said that planned projects must go ahead and that it may seek to attract more competitors. While […]

Posted On : Published By : Tom Whipple
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Russia Gas Threat Shows Putin Using Pipelines to Press Ukraine

OAO Gazprom (OGZD) ’s threat to end natural gas discounts for Ukraine adds to the financial burden on the near-bankrupt government in Kiev and makes Europe’s energy supply part of the escalating crisis. Russia ’s gas-export monopoly said on March 1 it may end last year’s agreement to supply Ukraine at a cheaper rate unless it’s paid $1.55 billion owed for fuel. It’s the first time since the otherthrow of pro-Moscow president Viktor Yanukovych last month that Russia has directly used its position as Ukraine’s dominant energy supplier to pressure the new regime. Vladimir Putin , who has permission from lawmakers to deploy troops to Ukraine, has repeatedly used gas to strong-arm his western neighbor, cutting off supplies twice since 2006 over payment disputes. Because Ukraine hosts a network of Soviet-era pipelines that carry more than half of Russia’s gas exports to the European Union, any […]

Posted On : Published By : Tom Whipple
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U.S., Europe Threaten to Punish Putin

The U.S. and its European allies vowed Sunday to isolate Russian President Vladimir Putin and punish his nation’s economy, demanding he withdraw what they called an occupation force from Ukraine’s Crimean region. Washington began canceling joint economic and trade initiatives with Moscow, including preparations for the summit of the Group of Eight leading nations scheduled to be held in Sochi, Russia, in June. Senior U.S. officials said the administration was also beginning discussions with Congress on implementing targeted economic and financial sanctions on Russian companies and leaders if the Kremlin didn’t begin pulling back from Crimea. "Russian forces now have complete operational control of the Crimean peninsula, some 6,000-plus airborne and naval forces, with considerable materiel," a senior official said. "There is no question that they are in an occupation position in Crimea, that they are flying in reinforcements, and they are settling in." Officials in Washington and around […]

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Waltzing in the dark. Will Russia shut off gas supplies to Europe?

With the successful Ukrainian uprising underway, Europe must start thinking about coping strategies if the conflict were to escalate. What would happen if Russia decides to up the ante and retaliate with higher gas prices or even a cutoff of supplies, in an effort to strong-arm the new administration in Kiev? What is the status of Europe’s energy security strategy? Map of the major existing and proposed Russian natural gas transportation pipelines to Europe (15 November 2009). Source:  Samuel Bailey via Wikiimedia Commons . [Added by Resilience editor.] It takes two to tango. But what about when there are 28 dance partners, each trying to show off their own dance moves, while pretending to follow the same tune? This is how one can begin to interpret the uncoordinated steps coming from the principal dance hall of Europe, Brussels. Take energy security for example. Since the start of 2014, Gazprom […]

Posted On : Published By : Tom Whipple
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Did Natural Gas Debt Trigger the Ukraine Crisis?

Defending Moscow’s December 18, 2013 agreement to provide Ukraine with an aid package estimated at about $15 billion, and cheaper natural gas through discounts and “gas debt forgiveness” estimated as able to save Ukraine $7 bn in one year, Vladimir Putin said the decision to invest $15 bn in ‘brotherly slavic’ Ukraine, and grant the gas discount was “pragmatic and based on economic facts”. At the time, the “investment” in Ukraine was already conditional – not only on the political issue of Ukrainian loyalty to Moscow – but on Ukraine complying with previous longstanding, often revoked, modified or extended commitments to repay gas debts dating from as far back as the early 1990s.  In December, Russia’s Finance minister Anton Siluanov said payment of the “aid or investment” funds to Ukraine, in tranches of about $2 bn each, would need Ukraine making a serious […]

Posted On : Published By : Tom Whipple
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Global riot epidemic due to demise of cheap fossil fuels

Earth insight badge A pro-European protester swings a metal chain during riots in Kiev A protester in Ukraine swings a metal chain during clashes – a taste of things to come? Photograph: Gleb Garanich/Reuters If anyone had hoped that the Arab Spring and Occupy protests a few years back were one-off episodes that would soon give way to more stability, they have another thing coming. The hope was that ongoing economic recovery would return to pre-crash levels of growth, alleviating the grievances fueling the fires of civil unrest, stoked by years of recession. But this hasn’t happened. And it won’t . Instead the post-2008 crash era, including 2013 and early 2014, has seen a persistence and proliferation of civil unrest on a scale that has never been seen before in human history. This month alone has seen riots kick-off in Venezuela , Bosnia , Ukraine , Iceland , and […]

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Global riot epidemic due to demise of cheap fossil fuels

Venezuela protests February 2014 image via aandres/flickr. Creative Commons 2.0 license . If anyone had hoped that the Arab Spring and Occupy protests a few years back were one-off episodes that would soon give way to more stability, they have another thing coming. The hope was that ongoing economic recovery would return to pre-crash levels of growth, alleviating the grievances fueling the fires of civil unrest, stoked by years of recession. But this hasn’t happened. And it won’t . Instead the post-2008 crash era, including 2013 and early 2014, has seen a persistence and proliferation of civil unrest on a scale that has never been seen before in human history. This month alone has seen riots kick-off in Venezuela , Bosnia , Ukraine , Iceland , and Thailand . This is not a coincidence. The riots are of course rooted in common, regressive economic forces playing out across every […]

Posted On : Published By : Tom Whipple
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New Spy Technology to Spawn Oil Revolution

The future of oil exploration lies in new technology–from massive data-processing supercomputers to 4D seismic to early-phase airborne spy technology that can pinpoint prospective reservoirs. Oil and gas is getting bigger, deeper, faster and more efficient, with new technology chipping away at “peak oil” concerns. Hydraulic fracturing has caught mainstream attention, other high-tech developments in exploration and discovery have kept this ball rolling. Oil majors are second only to the US Defense Department in terms of the use of supercomputing systems, which find sweet spots for drilling based on analog geology . These supercomputing systems analyze vast amounts of seismic imaging data collected by geologists using sound waves. What’s changed most recently is the dimension: When the oil and gas industry first caught on to seismic data collection for exploration efforts, the capabilities […]

Posted On : Published By : Tom Whipple
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WTI Crude Caps Monthly Gain on Cushing Supply

West Texas Intermediate crude capped a monthly gain as inventories at Cushing, Oklahoma , dropped and the euro strengthened against the dollar. Brent advanced. WTI closed above $100 for a 12th day. Stockpiles at the futures’ delivery point slid 7.04 million barrels in the four weeks ended Feb. 21 as the southern leg of TransCanada Corp. (TRP) ’s Keystone XL pipeline moved oil to Texas from the hub. The euro surged to a 2014 high against the dollar. Brent’s increase in February was the biggest since August. “Crude prices have reached a lofty plateau and I don’t see them weakening,” said Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC. “There is no reason for Cushing inventories to build in the near term. The dollar looks very bad against the euro and that supports the prospect for stronger crude prices.” WTI for April delivery climbed 19 cents to […]

Posted On : Published By : Tom Whipple
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Brent-WTI spread settles at 5-month low; US GDP keeps futures contained

New York (Platts)–28Feb2014/413 pm EST/2113 GMT The front-month Brent-WTI spread settled at a fresh five-month low of $6.48/barrel Friday, as steady drawdowns in crude stocks at the Cushing, Oklahoma, delivery hub have lent upside support to WTI, while Brent remains subdued. NYMEX April crude settled 19 cents higher at $102.59/b on moderate support from a firm US equities market, but upside gains were limited by a disappointing revision to the fourth quarter US GDP estimate. ICE April Brent settled 11 cents higher at $109.07/b. The front-month Brent-WTI spread dropped as low as $6.29/b during the session. Article continues below… Request a free trial of: Oilgram Price Report Oilgram Price Report Oilgram Price Report is a daily report that covers market changes, market fundamentals and factors driving prices. Oilgram Price Report also brings a vast array of Platts international prices for crude and products, netback tables, and market critical data. […]

Posted On : Published By : Tom Whipple