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Oil Abundance? Not So Fast – Drilling holes in the energy boom story

The story of America’s new energy abundance has been accepted uncritically by too many people.  A closer look at the realities of today and the last decade, coupled with a better understanding of our energy and oil systems, reveals risks that must be discussed and included in planning for the years ahead.  This brief paper presents key information on the role of oil in the economy, the fact that world oil production has not increased meaningfully since 2005, the failure of high prices to create new supplies, the nature and limits of the oil being produced through fracking, the global challenges to oil supplies, and the likelihood that the United States will never be a net oil exporter again or truly “energy independent.” People who are part of the energy or economic debate – whether as policy makers, […]

Posted On : Published By : ASPO-USA
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Tech Talk – Here we go again, again

A couple of posts or so ago I mentioned that there are three major problems sitting relatively un-noticed as we head into the mess of Peak Oil. Of these, perhaps the one that gets the least attention is the steady decline in production from existing wells. We are just about at the point where the Alaskan Pipeline will tip over into feeding less than half-a-million barrels a day down from the North Slope. (It sent 501 kbd down the pipe in June with a 98.6% reliability factor). At the same time those in control of the oilfields in the Russia are reporting that Russian exports have fallen to the lowest level in 6 years . This brings back the relatively unrecognized reality of the Export Land Model which Jeffrey Brown first introduced on The Oil Drum back in 2007. It is […]

Posted On : Published By : Tom Whipple
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Oil Futures Choppy as Markets Weigh Geopolitical Risks

Crude-oil futures swung between gains and losses in Asian trading hours Monday after declining for three consecutive weeks, while analysts warned that geopolitical risks to oil supply shouldn’t be completely overlooked. On the New York Mercantile Exchange, light, sweet crude futures for delivery in August traded at $100.50 a barrel at 0624 GMT, down $0.33 in the Globex electronic session. August Brent crude on London’s ICE Futures exchange fell $0.08 to $106.58 a barrel. "There are bearish risks from Libya and potentially Iran, but with Iraq on edge and Russia/Ukraine still simmering, oil prices are expected to find support," Edward Morse, head of commodities at Citi Research, said. Over the weekend, Iraq’s parliament failed to agree on a new speaker, prolonging a political impasse and delaying measures to address the country’s deteriorating security situation. In Vienna, U.S. Secretary of State John Kerry warned of "very significant […]

Posted On : Published By : Tom Whipple
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WTI Heads for $100 as Supply Risks Ease; Brent Near 3-Month Low

West Texas Intermediate crude headed toward $100 a barrel for the first time since May amid signs that Libyan output is continuing to increase. Brent crude traded near the lowest price in three months. Futures declined as much as 0.6 percent in New York, after capping a 3.1 percent decrease last week. Production from Libya, the holder of Africa ’s biggest crude reserves, climbed to 470,000 barrels a day, state-run National Oil Corp. said yesterday. Exports from Iraq , OPEC’s second-largest producer, remain undiminished by an insurgency that flared last month. “Oil supply in Iraq remains unaffected, Libya is returning, which means the supply risks are receding,” Carsten Fritsch , an analyst at Commerzbank AG in Frankfurt , said by e-mail. “It seems that speculators are leaving the market and exacerbating the downtrend. But the supply risks are not gone for good, so the downside is rather limited from […]

Posted On : Published By : Tom Whipple
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Oil edges lower after big drop on Libyan supplies

The price of oil edged lower Monday after its biggest one-day drop since April on expectations Libyan oil will soon return to the market. Benchmark U.S. crude for August delivery was down 39 cents to $100.44 per barrel at 0535 GMT in electronic trading on the New York Mercantile Exchange. It fell 3.1 percent last week and is down 4.3 percent so far in July. Brent crude, a benchmark for international oils, gained 19 cents to $107.45 on the ICE exchange in London. Oil prices shot up in June to a 10-month high over concerns violence in Iraq might disrupt supplies from OPECs second-largest exporter. Prices then drifted lower over the past two weeks as the advance by Iraqi insurgents stalled and oil exports were not threatened. Friday’s decline of $2.10, or about 2 percent, in the U.S. price was the biggest one-day loss since oil fell 2.2 percent […]

Posted On : Published By : Tom Whipple
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Natural Gas Supply Gains Keep Driving Bulls From Market: Energy

Twelve weeks of above-average gains in U.S. natural gas supply are easing concern over winter fuel shortages and spurring speculators to cut their bets on rising prices. Hedge funds reduced net-long positions by 8.1 percent in the week ended July 8, the U.S. Commodity Futures Trading Commission said. Bullish wagers have fallen 43 percent from February and gas dropped last week to a six-month low, wiping out an advance of as much as 53 percent after frigid weather pushed consumption to a record. Stockpiles more than doubled from an 11-year low in March as mild weather curbed power-plant demand and output expanded for the ninth straight year. Storage rose more than 100 billion cubic feet for eight weeks in a row, the longest streak of triple-digit increases in government data going back 20 years. “It looks like the market is going to be in balance heading into the winter,” […]

Posted On : Published By : Tom Whipple
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Iraq Fails to Agree on Parliament Speaker

Iraq’s newly elected legislature failed to agree on a new parliament speaker during its second seating on Sunday, further extending a political impasse that has dashed hopes of reaching a political resolution to the worst security crisis to afflict the country since the U.S.-led invasion in 2003. Parliamentarians met briefly on Sunday morning but adjourned almost immediately after Mehdi Hafez, the legislature’s interim speaker, announced that deputies hadn’t yet reached an agreement on a new speaker. The next session will be held on Tuesday, he said. Iraqi Prime Minister Nouri al-Maliki met with U.S. Secretary of State John Kerry in Baghdad on June 23. Agence France-Presse/Getty Images U.S. diplomats and other international observers have urged Iraqi politicians to reach a hasty agreement over the parliament speaker, the president and the prime minister—the so-called "presidencies" who are traditionally split between Sunni Arabs, Kurds and Shiite Arabs, respectively. But the abiding […]

Posted On : Published By : Tom Whipple
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Kerry Cites 'Significant Gaps' as Foreign Ministers Join Iran Talks

U.S. Secretary of State John Kerry, right, meets with EU foreign policy chief Catherine Ashton and members of her delegation, during talks between the foreign ministers of the six powers negotiating with Tehran on its nuclear program on Sunday in Vienna. Agence France-Presse/Getty Images VIENNA—U.S. Secretary of State John Kerry warned of "very significant gaps" in nuclear talks with Iran, as he arrived in the Austrian capital to join the negotiations. With a week left to a July 20 deadline to complete a final nuclear deal, foreign ministers from the U.S., Germany and France arrived in Vienna in a bid to inject fresh momentum into the negotiations, which have progressed slowly in recent weeks. U.K. Foreign Secretary William Hague is due in Vienna Sunday afternoon. "Obviously, we have some very significant gaps still. So we need to see if we can make some progress and I really look forward […]

Posted On : Published By : Tom Whipple
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Kerry Cites ‘Significant Gaps’ as Foreign Ministers Join Iran Talks

U.S. Secretary of State John Kerry, right, meets with EU foreign policy chief Catherine Ashton and members of her delegation, during talks between the foreign ministers of the six powers negotiating with Tehran on its nuclear program on Sunday in Vienna. Agence France-Presse/Getty Images VIENNA—U.S. Secretary of State John Kerry warned of "very significant gaps" in nuclear talks with Iran, as he arrived in the Austrian capital to join the negotiations. With a week left to a July 20 deadline to complete a final nuclear deal, foreign ministers from the U.S., Germany and France arrived in Vienna in a bid to inject fresh momentum into the negotiations, which have progressed slowly in recent weeks. U.K. Foreign Secretary William Hague is due in Vienna Sunday afternoon. "Obviously, we have some very significant gaps still. So we need to see if we can make some progress and I really look forward […]

Posted On : Published By : Tom Whipple
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Iran Sends Rouhani Brother to Nuclear Talks

Iran has for the first time sent President Hassan Rouhani’s younger brother as a special observer to the nuclear talks in Vienna, signaling the importance of the final week of negotiations before a July 20 deadline. The presence of Hossein Fereydoun, who also serves as a special adviser to the president, came to light after he was photographed in one of the sessions between Iran and European foreign ministers. Fereydoun’s presence was also reported by Iran’s state-run Islamic Republic News Agency . “He’s the president’s eyes and ears,” Ali Vaez, an Istanbul-based analyst for the International Crisis Group , said in an e-mailed reply to questions. Thirteen days into negotiations between world powers and Iran, significant gaps remain over the Persian Gulf nation’s uranium-enrichment capacity. U.S. Secretary of State John Kerry arrived in the Austrian capital yesterday along with his counterparts from France, Germany and the U.K. Kerry is […]

Posted On : Published By : Tom Whipple