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Why doesn't the 'long emergency' feel like an emergency?

In 2006 when James Howard Kunstler published his breakthrough book The Long Emergency , the next two years seemed to vindicate his warning that the oil age was coming to an end with perilous consequences. Oil soared to $147 a barrel in mid-2008. A few analysts suggested that it was headed for $200; but that was not to be. By autumn the stock market had collapsed and with it the world economy. Oil, too, then collapsed, trading in the mid-$30 range by December as demand for oil fell off a cliff with the economy. It seemed for months that the world was headed for an economic depression. But extraordinary stimulative spending by governments around the world and emergency measures by central banks reversed the trend and led to a weak, but extended recovery of sorts that […]

Posted On : Published By : Tom Whipple
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Why doesn’t the ‘long emergency’ feel like an emergency?

In 2006 when James Howard Kunstler published his breakthrough book The Long Emergency , the next two years seemed to vindicate his warning that the oil age was coming to an end with perilous consequences. Oil soared to $147 a barrel in mid-2008. A few analysts suggested that it was headed for $200; but that was not to be. By autumn the stock market had collapsed and with it the world economy. Oil, too, then collapsed, trading in the mid-$30 range by December as demand for oil fell off a cliff with the economy. It seemed for months that the world was headed for an economic depression. But extraordinary stimulative spending by governments around the world and emergency measures by central banks reversed the trend and led to a weak, but extended recovery of sorts that […]

Posted On : Published By : Tom Whipple
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Tech Talk – Changes in global supply and demand

Tech Talk – Changes in global supply and demand At the beginning of the month I pointed out that there are three components to the coming Energy Mess. The first of these is the steady increase in global demand for oil and its products, the second is the decline in production from existing wells and fields, and the third is the shrinking pool of places from which new oil can be recovered to make up the difference between the first two. Internal demand gnaws away at that available for export, as the situation in Saudi Arabia clearly illustrates: Figure 1. Changing relation between Saudi production, internal demand and thus available exports. ( Energy Export Databrowser ) Internal consumption has now reached 3 mbd – out of a production of around 10 mbd, a trend bound to go higher, as the country’s population continues to grow , having risen from […]

Posted On : Published By : Tom Whipple
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5 Industries Worried About Peak Oil

The debate over the impact of peak oil has been raging for decades. Although few deny that the end of mass oil consumption is drawing nearer, educated estimates now range between 2020 and 2030. But more important than the timeframe of peak oil are its consequences. Some seek to spell the end of life as we know it, so reliant is the world upon black gold. Others, equally extreme in their views, embrace the news, looking forward to a time when humanity will magically clean up its act. The truth is somewhere in the middle. Clean energy sources are making major advances as they become cheaper and easier to implement while almost all OEMs have launched lavish research programs into vehicles powered by other means. But the consequences of peak oil are not to be underestimated. Society would undergo a difficult time, given the sheer spread of oil on […]

Posted On : Published By : Tom Whipple
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Brent Oil Prices Rise to Two-Week High

Global oil prices rose to a two-week high on Friday as investors prepared for more market-roiling headlines from Ukraine and the Middle East over the weekend. Brent crude for September delivery rose $1.32, or 1.2%, at $108.39 a barrel, the highest closing price since July 10 on the ICE Futures Europe exchange. It was the largest one-day gain for the global benchmark since June 12. Light, sweet crude on the New York Mercantile Exchange ended almost flat, up 2 cents to $102.09 a barrel. European officials met Friday to discuss ratcheting up economic pressure on Moscow for what they say is Russia’s support for militants in eastern Ukraine. A decision to impose new sanctions could limit access to the country’s oil supplies, cutting off the world’s second-largest crude exporter behind Saudi Arabia. In the Middle East, Palestinians in the West Bank protested Israel’s military operation in the Gaza Strip […]

Posted On : Published By : Tom Whipple
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Brent Gains on Russia Tension as WTI Trades Near $102

Brent oil climbed to a two-week high, widening its premium to West Texas Intermediate, as the intensifying conflict in eastern Ukraine raised tension between Russia and the West. Russia, the world’s biggest energy exporter, disputed U.S. accusations that it supplied anti-aircraft weapons to rebels in neighboring Ukraine. President Barack Obama said he expects the downing of the Malaysian Air (MAS) jet in Ukraine to push European countries to enact tougher sanctions against Russia. WTI ended the week down 1 percent on speculation that rising U.S. fuel supplies will prompt refineries to use less crude. “We’re moving on the headlines about the crisis in Ukraine ,” said Rob Haworth, a senior investment strategist in Seattle at U.S. Bank Wealth Management, which oversees about $120 billion of assets. “I’m skeptical that there will be any disruption of supply unless there was a major intensification of the crisis, which is unlikely.” Brent […]

Posted On : Published By : Tom Whipple
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Natural-Gas Prices Fall Near Eight-Month Low on Soft Demand

-Natural-gas prices closed near their eight-month low, resuming the market’s sluggish July as unseasonably cool weather keeps damping demand. Prices for the front-month August contract settled down 6.6 cents, or 1.7%, to $3.781 a million British thermal units on the New York Mercantile Exchange. Traders refocused on the big-picture supply-demand dynamic that has shrunk the market by 20% since June, halting a one-day rally that had come from a report that showed a smaller-than-expected addition to storage. The market finished down 4.4% for the week. Weather forecasts have been cool all summer, limiting demand for air conditioning and the gas-fired electricity that fuels it. Forecasts still show mild weather, including temperatures as much as eight degrees Fahrenheit below normal, lingering over the center of the country through the first week of August. The weather has already allowed producers to put a record […]

Posted On : Published By : Tom Whipple
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Oil Market Weighs Fear and Reality

Earlier this week the wise oil-market watchers at PVM, a brokerage  and consultancy, summed up the state of the market. “Not a day goes by without a political, economic, international or data event that adds further color and often confusion to an already very complex scene,” said analyst David Hufton. “Who needs the distraction of fiction when real life constantly throws up twists and turns that would stretch credibility if written in any novel?” Iraqi security forces are on high alert as the country braces for more violence in Baghdad. Reuters Too true. Life moves pretty fast. If you don’t stop to look around once in a […]

Posted On : Published By : Tom Whipple
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Iraqi oil exports dip for June

Iraqi oil exports were down in June in part because of terrorist activities targeting a northern pipeline, the Ministry of Oil announced. Iraqi Ministry of Oil spokesman Assim Jihad said oil exports from southern ports at 72.8 million barrels for June. No oil marketed by the State Organization for Marketing of Oil left from a northern oil pipeline. "Export from the Kirkuk- Ceyhan pipeline was stopped because of the terrorist actions," he said in a statement Thursday. Iraqi oil exports so far this year peaked at 80 million barrels in May. A Sunni-led insurgency emerged shortly afterward, putting pressure on the central government in Baghdad. In June, the militants with the Islamic State of Iraq and Syria said they took control over the Baiji oil refinery north of Baghdad, a facility that feeds the local market. Marketing data show oil exports from the Kirkuk-Ceyhan oil pipeline peaked in November […]

Posted On : Published By : Tom Whipple
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Iraqi Oil In Context: 60% Of OPEC Growth Expectations

While Iraqi crude represents about 4.4% of world production , or around 3.4 mmbd (5th largest in the world); enabling investors to shrug at any fears that ISIS will spread to the South and interrupt this supply (since it will be ‘contained’); what many do not comprehend is that in such a tight oil market as we currently have, Goldman warns that as much as 60% of OPEC’s expected capacity growth over the next five years to come from Iraq . Production losses so far have been fairly small, and have only been felt domestically. However, the larger impact of the conflict potentially lies in the medium to long term. Goldman explains the long-term implications for Iraq’s oil potential Production losses so far have been fairly small, and have only been felt domestically. However, the larger impact of the conflict potentially lies in the medium to long term. The […]

Posted On : Published By : Tom Whipple