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IEA Executive Director Maria van der Hoeven on peak oil

With the introduction of unconventional oil sources, predicting peak oil has become almost impossible, the executive argues “The global energy map is quickly being redrawn,” says Maria van der Hoeven, Executive Director of the Paris-based International Energy Agency. “What we are seeing is an oil boom that shows no sign of slowing” she adds. For energy analysts across the world, the IEA is the premiere source of industry intelligence, producing market reports and events that address all segments of the energy sector. This 360-degree viewpoint, coupled with the agency’s fervent relationships with the world’s biggest energy players, gives its staff unequalled insight into the world’s energy markets. According to van der Hoeven, global energy demand will increase by around 30% by 2035, with oil contributing to around 27% of total energy usage by this date. While she admits increased use of natural gas will result in a slight fall […]

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The deteriorating economic outlook

The third and final estimate (until the annual GDP revisions) of first quarter 2014 real GDP growth released June 25 by the US Bureau of Economic Analysis was a 2.9% contraction in GDP growth, a 5.5 percentage point difference from the January forecast of 2.6% growth. Apparently, the first quarter contraction was dismissed by those speculating in equities as weather related, as stock averages rose with the bad news. Stock market participants might be in for a second quarter surprise. The result of many years of changes made to the official inflation measures is a substantially understated inflation rate. John Williams ( www.shadowstats.com ) provides inflation estimates based on previous official methodology when the Consumer Price Index still represented the cost of a constant standard of living. The 1.26% inflation measure used to deflate first quarter nominal GDP is unrealistic, as Americans who make purchases are aware. A reasonable […]

Posted On : Published By : Tom Whipple
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WTI Tumbles Below $101 as Supply Risks Ease; Brent Drops

West Texas Intermediate fell below $101 a barrel and Brent tumbled to a three-month low as supply risks eased in Iraq and Libya while stockpiles gained at Cushing, Oklahoma , the U.S. benchmark’s delivery point. Both oils capped their third weekly drops. Kurdish forces took over the Bai Hassan and Kirkuk oilfields today, Iraq’s Oil Ministry said in a statement. Libya’s supply rose as the Sharara field resumed output and two oil-export terminals reopened. Cushing supplies rose 447,000 barrels last week, U.S. government data show. WTI broke through technical support at the 100-day moving average. “Libyan barrels are coming back and the trouble in Iraq turned out to have minimal impact on oil output,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “There are also technical factors sending us lower. This has turned into a toxic brew for oil prices.” WTI […]

Posted On : Published By : Tom Whipple
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IEA: Oil prices pulling back on eased supply concerns, softening demand

On the back of rapid territorial gains by militants of the Islamic State of Iraq and Syria (ISIS) in northern Iraq, ICE Brent oil futures surged in mid-June to a 9-month high of more than $115/bbl. However, according to the International Energy Agency’s most recent Oil Market Report, future prices pulled back in early July on confidence that Baghdad’s southern fields would remain largely insulated from the turmoil and improved prospects for a recovery in Libyan exports. Brent futures last traded at $108/bbl, and West Texas Intermediate futures at $102/bbl. In the US, WTI prices were supported in mid-June by Washington’s decision to issue permits to certain firms to export stabilized condensate. “The front-month ICE Brent and NYMEX WTI spread contracted in June, averaging $6.82/bbl compared with $7.45/bbl in May, partly on the possibility that the export of distilled condensate could remove some of the overhang along the […]

Posted On : Published By : Tom Whipple
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IEA: US Oil Boom To Extend Into 2015, Risks High

Global oil demand growth will accelerate next year as the world economy expands and will again be met by rising supplies from the United States and Canada, further eroding OPEC’s market share, the West’s energy watchdog said on Friday. But the International Energy Agency (IEA) said in its monthly report that risks to oil production in several regions remained acute. "Supply risks in the Middle East and North Africa, not least in Iraq and Libya, remain extraordinarily high," the IEA said. "Oil prices remain historically high and there is no sign of a turning of the tide just yet." "Whether in crude or product markets, there is little room for complacency," it added. North Sea Brent crude oil hit a nine-month high above $115 a barrel in June as a Sunni Islamist insurgency swept across northwestern Iraq, taking control of large parts […]

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Goldman Sachs on Oil Companies’ $700 Billion Problem

Oil companies like nothing more than spending big money drilling for new resources around the world. Unfortunately, more and more of that activity is looking like it might prove redundant. Indeed, Goldman Sachs ’s head of European energy research Michele della Vigna reckons around $700 billion’s worth of capital spending in the pipeline may no longer be needed. The reason? Yet another side effect of the shale revolution in the U.S. Watch the video for the lowdown. Goldman estimates that the big discoveries of shale oil in recent years have added around 66 billion barrels of crude oil resources; at its peak, that could add 8 million barrels per day to daily output. That extra production should prove enough to meet oil demand growth in the coming years, Goldman thinks. In the jargon, it means shale oil provides the oil market with its marginal supply. In turn, […]

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OPEC output steady, IEA says

Lower oil production from Iraq was offset by gains elsewhere from members of OPEC, the International Energy Agency said Friday. The Organization of Petroleum Exporting Countries said in its monthly market report for June production from Iraq had declined. IEA, based in Paris, said it saw little overall change from the 12 members that combine to represent about 60 percent of the total petroleum traded internationally "OPEC supplies were virtually unchanged in June at 30.03 million barrels per day, as lower Iraqi production offset gains in Saudi Arabia, Iran, Nigeria and Angola," IEA said in its monthly market report . Libya, a once-major North African oil producer, has struggled to return to a pre-war production level of around 1.4 million barrels of oil per day. A Sunni-led insurgency in Iraq, meanwhile, is threatening the country’s oil sector. OPEC in a June statement said there is sufficient oil production from […]

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Global oil exploration nears $1 trillion – where are the finds?

* New oilfield development drop to lowest since 1999 * Global reserve replacement ratio falls steeply * Enhanced oil recovery from mature field is partial solution Two years ago Total (NYSE: TOT – news ) ‘s chief Christophe de Margerie launched a “high risk, high reward” oil exploration strategy, betting he could hit a bonanza, even though his rivals had failed to make big discoveries. But Total risks joining the industry trend of making only smaller and fewer finds, despite global investments in oil exploration heading to a record $1 trillion by 2017. This week, Margerie told Reuters he gives himself until the year-end to find a major deposit or cut the exploration budget next year following several disappointing drilling campaigns. Top players are struggling to find enough conventional oil. Majors are caught between growing pressure from investors to cut spending and boost profits and the increasingly costly need […]

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Rift With Kurds Widens as Iraqi Leader Ousts Foreign Minister

The dangerous struggle between the leadership of Iraq and the country’s Kurdish minority intensified Friday, as the Kurds seized two oil production facilities in Kirkuk Province and the prime minister announced that he was appointing a temporary replacement for the foreign minister. The prime minister, Nuri Kamal al-Maliki, a Shiite, moved to replace the current foreign minister, Hoshyar Zebari, a Kurd, with Hussain Shahristani, a Shiite from Mr. Maliki’s bloc. Mr. Maliki was responding to a decision by Mr. Zebari and other Kurdish cabinet members to boycott cabinet meetings in protest of Mr. Maliki’s searing criticism of the Kurds this week. In a televised address on Wednesday, Mr. Maliki charged that the Kurds were harboring Sunni militant opponents of the central government and were even allowing members of the group known as the Islamic State in Iraq and Syria, which swept through northern Iraq in June, to […]

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Iraq Kurdistan Oil Output Rose Over 50% in June – IEA

Oil production from the Kurdistan region of Iraq increased by more than 50% last month, despite violence in the country’s north and as logistical problems at the port of Basra cut exports from the south. The shifting nature of Iraq’s oil sector reflects political developments in the country. In a bid to gain greater independence, the Kurdistan Regional Government has taken advantage of its relative stability to increase oil exports in the past two months, infuriating Baghdad which claims sovereignty over the country’s natural resources. Meanwhile, the federal government is struggling to contend with a Sunni extremist insurgency in the north and west, led by the group that calls itself Islamic State, that has shut the country’s largest refinery and cut output from the giant Kirkuk field to a trickle. Production from Iraqi Kurdistan rose to 360,000 barrels a day in June, an increase of 130,000 […]

Posted On : Published By : Tom Whipple