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Ukraine's Naftogaz Files Lawsuit in Stockholm Over Russia Gas

Ukrainian gas monopoly Naftogaz said Monday it is suing Russia in the Stockholm arbitration court to get a fair price for the natural gas it receives and to recoup $6 billion in what Kiev said was overpayment for gas deliveries over the past four years. After Moscow and Kiev failed to resolve a long-running dispute over Russian gas supplies to Ukraine, Russian gas giant Gazprom said Monday it would only ship fuel to Ukraine if it pays in advance. Naftogaz said in a statement it had filed a claim in the Stockholm court demanding a "fair and market price" for the gas that Gazprom ships to Ukraine. Kiev had been asking for a gas price of $268.5 per 1,000 cubic meters, the level that was agreed in late 2013 between Russian President Vladimir Putin and his ousted Ukrainian counterpart Viktor Yanukovych. On Friday, Kiev said it was ready to […]

Posted On : Published By : Tom Whipple
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Ukraine’s Naftogaz Files Lawsuit in Stockholm Over Russia Gas

Ukrainian gas monopoly Naftogaz said Monday it is suing Russia in the Stockholm arbitration court to get a fair price for the natural gas it receives and to recoup $6 billion in what Kiev said was overpayment for gas deliveries over the past four years. After Moscow and Kiev failed to resolve a long-running dispute over Russian gas supplies to Ukraine, Russian gas giant Gazprom said Monday it would only ship fuel to Ukraine if it pays in advance. Naftogaz said in a statement it had filed a claim in the Stockholm court demanding a "fair and market price" for the gas that Gazprom ships to Ukraine. Kiev had been asking for a gas price of $268.5 per 1,000 cubic meters, the level that was agreed in late 2013 between Russian President Vladimir Putin and his ousted Ukrainian counterpart Viktor Yanukovych. On Friday, Kiev said it was ready to […]

Posted On : Published By : Tom Whipple
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China Won the Oil War, and the Shale Oil Revolution Is about to Shrivel up

Wall Street is the government, and the New York Times is right across town.  Maybe that’s all you need to know to understand what’s happened. In January, 2011, this writer published a four-part article entitled “ The War: Did We Sacrifice a Million Lives and a $Trillion Cash Just to Hand Our Jobs to China? ”  It was long (around 40 pages) and I must admit a little confusing, because the information was so stunning that I had a difficult time understanding what I was reading. The gist of the article was that Big Oil had asked Congress in 1998 to remove the Taliban so as to allow the building of a pipeline that would let Mideastern oil go to “the right markets.”  “The right markets”?  Guess. The US and Europe, of course.  Wrong. India and China. Those, it was explained, were “the right markets” because the oil market was stagnating in the US […]

Posted On : Published By : ASPO-USA
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This is what Peak Oil looks like

When they got you over barrel — what are you gonna do? You pull up, and you pay their latest price … petro, you gotta have it. The turmoil in Iraq pushed up U.S. and world oil prices about 4% this week . The U.S. benchmark crude oil, West Texas Intermediate, closed at $106.91 a barrel, up 38 cents on Friday. Brent, the international benchmark, rose 31 cents to $113.41.The IEA [International Energy Agency] has forecast that Iraq, which has the world’s fifth-largest proven oil reserves, would account for 60% of production growth from the Organization of Petroleum Exporting Countries for the rest of this decade. Iraq , now producing about 3.3 million barrels a day, has become OPEC’s second-largest producer , after Saudi Arabia. Even if the fighting stays in Iraq’s north, the IEA sees an […]

Posted On : Published By : ASPO-USA
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We will never run out of oil (which is entirely beside the point)

Harvard economist Morris Adelman , famous for saying that we will never run out of oil, died last month. What followed the announcement of his death was a predictable set of encomiums like this one from defenders of the oil industry extolling Adelman’s infinite wisdom. Some (including my father, it seems) were so caught up in the odd celebratory mood–one that resurfaces every time people contemplate just how much stuff there is in the universe–that Adelman’s rather narrow and almost meaningless dictum was being offered as the basis for a complete energy policy. (And, never mind that that energy policy makes absolutely no mention of climate change.) All of this makes sense only if you keep yourself from […]

Posted On : Published By : Tom Whipple
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Pickens: Without Iraq’s oil, prices could hit $200

There has been considerable discussion regarding what price crude would advance to if Iraq were to be taken offline, and no substitution occurred. Using the ETP model we have built the chart below. The left hand column gives the loss in mb/d, the right what the price would advance to if that occurred. Prices may advance over the short term to higher levels, but will settle at the values below. Prices are rounded to the nearest dollar. mb/d loss Price $ 1……………….$139 2…………………159 3…………………178 3.3 ……………..185 Perk Earl on Sat, 14th Jun 2014 12:09 pm  Pickens two hundred seems wildly high. We have to keep in mind that as price rises from here, those that can deliver spare capacity will, even if they only can short term, to take advantage […]

Posted On : Published By : Tom Whipple
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Crude Records Year’s Biggest Weekly Gain on Iraq Unrest

West Texas Intermediate and Brent crudes charted the biggest weekly gains this year as Islamist fighters extended their advance in Iraq , triggering concern of a return to civil war. Futures in New York climbed 4.1 percent this week while they added 4.4 percent in London. Government forces in Iraq, OPEC’s second-biggest oil producer, are seeking to dislodge Islamist militants from cities north of Baghdad after they overran army positions in Mosul this week. U.S. President Barack Obama said yesterday he won’t rule out using airstrikes to help the government. “Prices have jumped to nine-month highs as the upsurge of violence in Iraq has raised additional risk of supply disruption,” said Gene McGillian , an analyst and broker at Tradition Energy in Stamford, Connecticut. “The situation in Iraq is going to continue to guide the market for a while.” WTI for July delivery rose 38 cents today, or 0.4 […]

Posted On : Published By : Tom Whipple
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Iraqi Violence Roils Markets as Oil Prices Rise

Oil futures posted their largest weekly gain since December as a Sunni insurgency in Iraq jolted the market, fueling fears of reduced oil output from one of the world’s largest crude producers. Light, sweet crude for July delivery settled up 38 cents, or 0.4%, at $106.91 a barrel on the New York Mercantile Exchange, the highest settlement price since Sept. 18, 2013. Prices climbed 4.1% this week. Brent crude for July delivery rose 39 cents, or 0.4%, to settle at $113.41 a barrel on the ICE futures exchange, the highest settlement since Sept. 9. Prices rose 4.4% for the week. The July contract expired at settlement Friday, and the more-actively traded August contract settled up 4 cents at $112.46 a barrel. Insurgents seized Iraq’s second-largest city this week and have threatened to march on Baghdad. The country’s Shiite leaders called on their followers Friday to defend the government. President […]

Posted On : Published By : Tom Whipple
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Investors Unconvinced Oil’s Price Gains Will Last

A surge in oil prices has been a boon to energy and commodity funds this week, but many investors say they aren’t ready to shift their portfolios yet in response to violence in Iraq. Concerns that a Sunni insurgency could spread to southern Iraq and threaten the nation’s 2.5 million barrels a day in oil exports sent global crude prices to nine-month highs on Thursday. Brent, the international benchmark, rose 4.4% for the week. The energy sector of the S&P 500 has climbed 1.4% for the week, while the stock index as a whole is down 0.8%. But investors said without an actual supply disruption, they aren’t convinced oil’s price gains will last. “I didn’t do anything today,” said David Ginther, senior vice president at Ivy Investment Management Co., who manages […]

Posted On : Published By : Tom Whipple
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Non-OPEC production gaining, IEA says

The Paris-based International Energy Agency said Friday global oil supplies rose largely because of output from countries outside of OPEC. The IEA said in its market report for June global oil supplies rose 530,000 barrels per day to 92.6 million bpd. The increase was due to production from countries outside the Organization of Petroleum Exporting Countries. "On a yearly basis, world output was up 1.0 million for [May], as non‐OPEC growth of 2.1 million bpd compensated for OPEC declines," the market report said. OPEC members are reacting to production from the United States and Canada. The United States in particular is importing less oil as it relies more on domestic supplies. On the demand side, IEA said it expected a modest increase this year to 92.8 million bpd as the global economy continues to move past recession. "Global oil demand is set to increase sharply from a low of […]

Posted On : Published By : Tom Whipple