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As Oil Plummets, How Much Pain Still Looms For US Energy Firms?

URL: http://www.rigzone.com/news/oil_gas/a/136705/As_Oil_Plummets_How_Much_Pain_Still_Looms_For_US_Energy_Firms With nearly a quarter of US energy shares’ value wiped out by oil’s 6-month slide, investors are wondering if the sector has taken enough punishment. NEW YORK, Jan 12 (Reuters) – With nearly a quarter of U.S. energy shares’ value wiped out by oil’s six-month slide, investors are wondering if the sector has taken enough punishment and whether it is time to pile back in ahead of earnings reports later this month. The broad energy S&P 1500 index gained more than 4 percent over the past month, suggesting many believe markets have already factored in the pain caused by oil prices tumbling by more than half since June below $50 a barrel. Yet since the start of this year, most energy stocks have given up some of those gains, revealing anxiety that some nasty surprises might still be lurking somewhere and that last month’s bounce may not […]

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Enbridge tapped for Gulf of Mexico pipeline

Enbridge tapped to build pipeline system for Hess Corp. developments in the Gulf of Mexico. (UPI/Shutterstock/tcly) HOUSTON, Jan. 13 (UPI) — Midstream company Enbridge said it was working with its upstream partners at Hess Corp. to oversee pipeline developments from a Gulf of Mexico oil field. Enbridge said it will build, own and operate the $130 million project that will start in the deepwater Stampede project and terminate 16 miles away with a connection to a third-party pipeline system. "This project is an attractive investment opportunity for Enbridge and we are pleased to be working with Hess and the other producers on this development," Greg Harper, president of pipeline and processing systems for Enbridge, said in a Monday statement. Hess Corp. launched development plans for its deepwater Stampede project in the Gulf of Mexico in late October. The company said it expects to pull at most 80,000 barrels of […]

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As Oil Slips Below $50, Canada Digs In for Long Haul

ENLARGE A machine works at the Suncor Energy Inc. mine near Fort McMurray, Alberta, on June 19, 2014. Bloomberg News CALGARY—In the escalating war of attrition among top oil-producing nations, Canada’s biggest oil-sands mines have a message for the market: Don’t look to us to cut production. Long the unloved stepchild of so-called unconventional crude production, the oil sands have lured some of the world’s top energy producers to a remote corner of Northern Alberta where the heavy oil deposits are richest. There, they have plowed billions of dollars into building up a sprawling industrial complex amid the surrounding forests. And even as oil prices settled below $50 a barrel Monday for the first time in nearly six years, those companies are unlikely to shut off the tap anytime soon thanks to those huge upfront costs, combined with long-term break-even points and lengthy production lives. Unlike shale oil, which […]

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Oil States’ Budgets Face Crude Awakening

ENLARGE Energy-producing U.S. states are paring budget forecasts and planning spending cuts amid a plunge in prices that is testing their reliance on revenue from the oil patch. From Texas to North Dakota, states that benefited from a surge in domestic oil production in recent years are now bracing for reduced collections of extraction levies known as severance taxes and royalties as prices fall and companies cut back on drilling. In turn, income- and sales-tax growth could slow as producers cut jobs. While most energy-rich states have amassed ample rainy-day funds in anticipation of the oil industry’s historic booms and busts, the falling prices have budget writers scrambling to adjust earlier fiscal projections that had assumed much higher crude-oil prices. In Texas, the country’s top oil producer, officials on Monday said the windfall from the recent oil-shale boom will carry over to the budget for the next two fiscal […]

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NREL enzyme enables conversion of biomass to sugar up to 14x faster than current alternatives; changing the economics of conversion

« Lufthansa Group aircraft will fly from Oslo on biokerosene beginning in March; deal with Statoil | Main | Toyota introduces all-new Tacoma with new 3.5L non-hybrid Atkinson cycle engine » Scientists at the US Department of Energy’s (DOE) National Renewable Energy Laboratory (NREL) have developed an enzyme that can enable the conversion of biomass to sugars up to 14 times faster and more cheaply than competing catalysts in enzyme cocktails today. The enzyme called CelA, a cellulase from the bacterium Caldicellulosiruptor bescii , could thus could change the economics of biofuel conversion. In one scenario, the best commercially used enzyme converted sugars at a 30% extent in seven days. CelA converted to double that extent. And while it took the alternative enzyme seven days to achieve that conversion, CelA, with a small boost from an extra beta glucosidase, achieved double in just about two days. Among CelA’s many […]

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Tight oil boom can explain only part of drop in US oil product imports

We continue to look at what impact US tight oil has on global oil markets, in this post the reduction of US petroleum product imports. This analysis shows that only around one quarter of a drop of 1.7 mb/d since 2005/06 can be explained by the tight oil boom. Fig 1: US product imports The graph shows that US product imports peaked already in 2005/06, long before the tight oil boom started. The drop between that peak and 2010 was around 1 mb/d. Remember that the US went into recession end 2007.  A further drop of 700 kb/d happened during the tight oil boom. (1)    US product imports from Venezuela The biggest drop came from Venezuela and Virgin Islands. Fig 2: US product imports from Venezuela Product imports from Venezuela are in long-term decline since 1997.  In 1999 el Comandante  Chavez came to power, re-instating quotas and trying to […]

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Why Europe no longer fears the Russian gasman

Why Europe no longer fears the Russian gasman thumbnail A MILD winter and robust European Union policy have blunted the edge of what was once Vladimir Putin’s most effective foreign-policy weapon: the politicised export of gas. Contrary to some expectations, Russian gas has been flowing to Europe across all four main export pipelines this winter, while the Kremlin’s flagship new pipeline project, South Stream, has come to a mysterious and embarrassing end. Now the focus is on the EU to see if it will push ahead with the prosecution of Gazprom, Russia’s main gas exporter, for years of anti-competitive practices. Why has Russia lost its hold on European gas? European policymakers still remember the shocks of 2006 and 2009, when Russia cut gas supplies to Ukraine amid a row about prices and debts, leading to heating crises and factory closures in countries such as Slovakia and Hungary, and making […]

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Oil price crash bankrupting ‘small oil’

Sherri McDaniel is already feeling the sting of the drop in crude oil prices from more than $115 per barrel in June to less than $50 in early January. She is president of ATEK Access Technologies, a small Minneapolis firm that owns TankScan, a wireless monitoring system that keeps track of fluid levels in oil tanks. Oil companies that use the system are starting to postpone orders, as they take a cautious approach to spending. “In the oil fields, they are starting to pull back pretty heavily,” McDaniel said. “They are literally taking tanks and laying them down on their sides.” As a result, she explained, “we have a number of big orders that are temporarily on hold.” A derrick hand works on an oil rig drilling into the Bakken shale formation outside Watford City, North Dakota. Getty Images ATEK Access Technologies is one of many small and midsize […]

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North Dakota oil output forecast tabulated using internal model

WILLISTON, N.D. Jan 12 (Reuters) – A stark breakdown from North Dakota projecting how falling oil prices could affect production was formulated using proprietary corporate data and a state official’s personal model. Late last Thursday, the Department of Mineral Resources caused a stir in world oil markets by releasing slides from a presentation to the state legislature that included a range of output forecasts based on different oil price scenarios, including one showing production would begin to decline by the middle of this year if crude prices remained at current levels. The projections presented by Lynn Helms, head of the state’s energy regulatory agency, cut to the quick of a pivotal question for global oil traders and executives: How quickly will U.S. shale producers, particularly those in the booming Bakken of North Dakota, respond to the collapse in oil prices? While consultants and analysts have been frantically reviewing and […]

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Nissan CEO Says Leaf Electric Car Is Due for Upgrade

The self-proclaimed king of electric vehicles is welcoming General Motors Co. to the party, saying the more the merrier. Nissan -Renault Chief Executive Carlos Ghosn , speaking to media at the Detroit Auto Show Monday, said the auto maker’s Leaf electric car is in line for an upgrade. Currently capable of traveling less than 100 miles on a charge, the Leaf is far behind what’s coming — GM’s Chevy Bolt, for instance, is slated to launch in 2017 with a 200-mile range. Mr. Ghosn said there are big things in store for the little Leaf, but didn’t elaborate on details. “You can expect us to come along with a lot of enhancements.” The Leaf has been on the market for several years, selling over 75,000 units in the U.S. since 2011. Mr. Ghosn expects sales to grow in 2015 by double-digit margins. In the meantime, as BMW AG, Audi […]

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North Sea oil and gas up against wall

Low oil prices means the future of North Sea oil and gas is uncertain, Wood Mackenzie finds. File Photo by Casey J. Ranel/UPI LONDON, Jan. 12 (UPI) — Low oil prices are a growing cause for concern in the exploration and production sector of the North Sea, analysis published Monday by Wood Mackenzie finds. The analytical group said the region brought in $19 billion in capital spending last year, making the British North Sea sector one of the top 10 for upstream spending. With oil prices falling more than 50 percent since June, data show exploration and production activity was slowing down . Erin Moffat, a senior research analyst at Wood Mackenzie, said exploration activity in 2014 was off 18 percent from the previous year. Only four fields were brought online. "The current oil price means 2015 will unsurprisingly bring further budget cuts, with exploration spending at the top […]

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Russian economy in crisis mode

Russian Prime Minister Dmitry Medvedev signals economy is on the verge of a major crisis. File Photo by Anatoli Zhdanov/UPI MOSCOW, Jan. 12 (UPI) — Russian Prime Minister Dmitry Medvedev said Monday all government hands were called upon to help an economy damaged by low oil prices and sanctions. The Russian currency, the ruble, was trading near historic lows Monday at 61 per U.S. dollar. Dual strains from Western sanctions imposed in response to the Kremlin’s policies in Ukraine and the low price of oil is pushing the Russian economy toward recession. Medvedev told his deputies there should be regular meetings to discuss the looming economic crisis . "The economic situation is quite problematic to say the least," he said. "Therefore, all of the members of the government must hold key meetings in the areas that they coordinate, as we have already agreed," Medvedev said. Analysis from the World […]

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Hopes for Ukraine Peace Talks Fade After Summit

ENLARGE German Foreign Minister Frank-Walter Steinmeier, second left, welcomes his counterparts from France, Laurent Fabius, right, Russia, Sergey Lavrov, left, and Ukraine, Pavlo Klimkin, second right, for a meeting in Berlin Monday on the Ukraine situation. Michael Sohn/Press Pool BERLIN—Hopes for a Ukraine peace summit this week faded after top diplomats from France, Germany, Russia and Ukraine late Monday failed to reach agreement on how to resolve the conflict amid heightened fighting there. German Foreign Minister Frank-Walter Steinmeier met with Laurent Fabius, Pavlo Klimkin and Sergei Lavrov —the foreign ministers of France, Ukraine and Russia, respectively—in the latest effort to resolve the Ukraine conflict, which began almost a year ago and set off the worst diplomatic crisis between Russia and the West since the fall of the Iron Curtain. The ministers couldn’t find sufficient common ground for holding a peace summit, which Ukraine had hoped would take place in […]

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Hungary Restarts Natural Gas Transport to Ukraine via Pipeline

BUDAPEST—After a three-month break while it filled up its own reserves, Hungary restarted natural gas transport to Ukraine on Saturday via a pipeline connecting the neighboring countries, the foreign affairs and trade ministry told The Wall Street Journal. Ukraine is highly dependent on gas imports, especially amid ongoing conflicts with Russia. Hungary transported 2.6 million cubic meters of gas so far to Ukraine, and will continue to sell about 2.5 million cubic meters a day in the coming days. In comparison, Ukraine received around 3.5 million a day cubic meters of gas from Hungary in September before Hungary ceased shipping to its eastern neighbor. Ukraine continues to receive gas from Slovakia, but not from Poland, the ministry added. Write to Veronika Gulyas at [email protected]

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Brent Crude Falls Below $50 On Nagging Oversupply Fears

ENLARGE A petro-chemicals factory in Kawasaki, Japan, photographed last month. Oil prices fell lower in Europe Monday after tumbling below $50 a barrel in Asian trading. Reuters LONDON—Oil prices started the week deep in the red, falling to fresh 5½ year lows as analysts took an even more bearish outlook on crude. Over the weekend, Goldman Sachs and Société Générale joined the list of analysts who have slashed their oil-price forecasts projecting that crude’s dramatic slide since last summer could continue well into 2015. Crude futures have fallen more than 50% since a peak in June on the back of strong global supply and lackluster demand. Brent crude for February delivery on London’s ICE Futures exchange fell 2.5% to $48.86 a barrel, trading near its lowest levels since April 2009. On the New York Mercantile Exchange, front-month WTI futures shed 2.3% to trade at $47.25, after losing 8.2% last […]

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Surplus fears send oil further below $50

Oil prices slid further below the $50 a barrel mark on Monday to a near six-year low amid growing concerns of an oil surplus in the coming months. Ice February Brent, the international oil marker, dropped $1.43 to $48.68 a barrel in morning trading, while Nymex February West Texas Intermediate, the US benchmark, fell $1.22 to $47.14 a barrel. Both hovered at levels last seen in April 2009. Opec’s November decision to maintain output at 30m barrels a day, rather than cut production to shore up prices, has lubricated a plunge that started in June. Relentless production from the US and output from countries such as Libya and Iraq that surpassed estimates coincided with a demand slowdown in Europe and Asia amid economic weakness, all putting pressure on prices. More On this topic IN Commodities David Hufton, chief executive at London-based broker PVM, said there seemed to be “no […]

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Venezuela’s Maduro seeks support from Saudi Arabia on oil prices

(Adds Venezuela government comments) RIYADH Jan 11 (Reuters) – Venezuelan President Nicolas Maduro met Saudi Arabia’s Crown Prince Salman in Riyadh on Sunday as part of a diplomatic tour of OPEC members to discuss falling oil prices, which have hit its economy hard. The Saudi side in the meeting included Oil Minister Ali al-Naimi and several princes including Deputy Crown Prince Muqrin, intelligence chief Prince Khaled bin Bandar and three sons of King Abdullah, who is in hospital, state media reported. No details of the meeting were given by the official Saudi Press Agency and there was no indication that the world’s biggest oil exporter was any closer to taking action to stem the over 50 percent rout in oil prices. The Venezuelan government said in a statement that "we agreed to work to recover the market and oil prices with state policies between the two energy powerhouses." It […]

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Goldman Sachs slashes oil price forecasts

LONDON (Reuters) – U.S. bank Goldman Sachs slashed it oil forecasts on Monday, saying fuel prices needed to stay low for much longer in order to curb production and end a global supply glut. Goldman Sachs oil analysts led by Jeffrey Currie said the collapse in oil prices over the last six months, which has brought North Sea Brent crude down almost 60 percent to below $50 a barrel, would eventually balance the market. But they said crude oil prices could come down much further in the short term, possibly into the high $30s a barrel before the market saw a rebound. Goldman Sachs is one of the most influential U.S. banks in commodities markets. In 2008, when oil prices were racing up toward their all-time high at almost $150 a barrel, the bank forecast crude could hit $200. The bank said on Monday it had cut its 2015 […]

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Goldman Sees Need for $40 Oil as OPEC Cut Forecast Abandoned

Goldman Sachs said U.S. oil prices need to trade near $40 a barrel in the first half of this year to curb shale investments as it gave up on OPEC cutting output to balance the market. The bank reduced its forecasts for global benchmark crude prices, predicting inventories will increase over the first half of this year, according to an e-mailed report. Excess storage and tanker capacity suggests the market can run a surplus far longer than it has in the past, said Goldman analysts including Jeffrey Currie in New York . The U.S. is pumping oil at the fastest pace in more than three decades, helped by a shale boom that’s unlocked supplies from formations including the Eagle Ford in Texas and the Bakken in North Dakota. Prices slumped almost 50 percent last year as the Organization of Petroleum Exporting Countries resisted output cuts even amid a global […]

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Oil Falls as Goldman Cuts Outlook While Venezuela Seeks Recovery

Oil extended losses from the lowest level in more than 5 1/2 years as Goldman Sachs Group Inc. reduced its price forecasts and Venezuela called on OPEC producers to work together to spur a recovery. Futures slid as much as 3.1 percent in London after a seventh weekly drop. Crude has to “stay lower for longer” if investment in shale is to be curtailed to re-balance the global market, according to Goldman analysts. Prices need to return to $100 a barrel for economic equilibrium, Venezuelan President Nicolas Maduro said in Iran during a tour of Middle Eastern members of the Organization of Petroleum Exporting Countries. Oil slumped almost 50 percent last year, the most since the 2008 financial crisis, amid a supply glut estimated by Qatar at 2 million barrels a day. OPEC is battling a U.S. shale boom by resisting production cuts, signaling it’s prepared to let prices […]

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Oil Producers Betting on Price Drop With OPEC Not Curbing Output

A visitor passes oil barrels stored at the Emirates National Oil Co. lubricants and… Read More The oil industry was listening as OPEC talked down crude prices to a more than five-year low. Drillers, refiners and other merchants increased bets on lower prices to the most in three years in the week ended Jan. 6, government data show. Producers idled the most rigs since 1991, with some paying to break leases on drilling equipment. Companies are hedging more and drilling less amid concern that the biggest slump in prices since 2008 will continue. Oil dropped for a seventh week after officials from Saudi Arabia , the United Arab Emirates and Kuwait reiterated they won’t curb output to halt the decline. “Producers are desperately hedging their production in a drastically falling market,” Phil Flynn , a senior market analyst at the Price Futures Group in Chicago , said by phone […]

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Earnings Pessimism Jumps as Oil Threatens S&P 500 Growth

While stock investors wait for the benefits of cheaper oil to seep into the economy, all they can see lately is downside. Forecasts for first-quarter profits in the Standard & Poor’s 500 Index have fallen by 6.4 percentage points from three months ago, the biggest decrease since 2009, according to more than 6,000 analyst estimates compiled by Bloomberg. Reductions spread across nine of 10 industry groups and energy companies saw the biggest cut . Earnings pessimism is growing just as the best three-year rally since the technology boom pushed equity valuations to the highest level since 2010. At the same time, volatility has surged in the American stock market as oil’s 55 percent drop since June to below $49 a barrel raises speculation that companies will cancel investment and credit markets and banks will suffer from debt defaults. “Either there is nothing to worry about and crude is going […]

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Oil to Put Chill on U.S. Earnings Season

As fourth-quarter earnings season gets under way, investors are bracing for the softest U.S. profit growth in years, pinched by collapsing oil prices and a strong dollar. That double whammy, coupled with the highest valuations for stocks since the financial crisis, will test the market’s ability to prolong its extended bull run and will likely make for continued bumpy trading in the weeks ahead. Over the past few months, the Dow Jones Industrial Average and S&P 500 have carved out new record highs, while suffering frequent setbacks. Both indexes hit fresh peaks in the final sessions of last year but have since experienced two straight weeks of declines. Some prominent hedge funds are cutting back their exposure to stocks and reducing their use of borrowed money to amplify their bets, according to fund managers and a confidential memo Morgan Stanley sent to clients last week that was viewed by […]

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U.S., Iran eye progress in next round of nuclear talks: Kerry

GANDHINAGAR, INDIA (Reuters) – U.S. Secretary of State John Kerry said on Monday that he and his Iranian counterpart would seek at their meeting on Wednesday to lay the ground for negotiations on Tehran’s nuclear program to make greater progress. Kerry meets Iranian Foreign Minister Mohammad Javad Zarif in Geneva in a bid to revive the search for an elusive nuclear accord after negotiators failed for the second time in November to meet a self-imposed deadline. "The meeting is calculated to take stock, number one, and to provide direction to our teams, number two, and to hopefully be able to accelerate the process to make greater progress," Kerry told reporters on a visit to India. Zarif has also struck a conciliatory tone ahead of the new push to end the 12-year-old dispute over Iran’s nuclear program, which Tehran insists is peaceful. The West fears it is seeking to develop […]

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Saving the Nuclear Deal With Iran

Twice recently, Iran’s president, Hassan Rouhani, has acted boldly in support of his biggest political gamble, pursuit of a nuclear agreement with the major powers. In a speech last Sunday on Iran’s troubled economy, he argued that Iran will never enjoy sustained growth if it is isolated from the rest of the world. Three weeks earlier, he made clear that he would confront Iran’s hard-liners in his efforts to clinch a deal in which Iran would agree never to produce a nuclear weapon in return for the lifting of crippling international sanctions. But Mr. Rouhani is not the only leader trying to keep a potential agreement from being savaged by domestic opponents. President Obama has a similar problem in Congress, where Senators Robert Menendez, a Democrat from New Jersey, and Mark Kirk, a Republican from Illinois, are expected to introduce legislation that could torpedo any deal by imposing new […]

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Iraq Raises Basrah Crude Price for Asia, Follows Saudi Lead

Iraq , OPEC’s second-largest producer, raised the selling price for February shipments to Asia of its main Basrah Light crude by 30 cents a barrel, after Saudi Arabia boosted its pricing to the region. Iraq set Basrah Light at a discount of $3.70 a barrel to the average of Middle Eastern benchmark Oman and Dubai grades, the country’s Oil Marketing Co. said yesterday in an e-mailed statement. The announcement followed increases Jan. 5 by Saudi Arabia, the biggest producer in the Organization of Petroleum Exporting Countries, for its main grades to Asia. Iran raised its February prices to Asia last week. The Basrah Light discount for February, while narrower than the January discount of $4 a barrel, was greater than for any other month since at least August 2003, when Bloomberg began compiling data. “It’s in line with the Saudi move,” Robin Mills, the head of consulting at Manaar […]

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OPEC price war in Asia intensifies as oil falls below $50

SINGAPORE (Reuters) – Even as Saudi Arabia and its Gulf OPEC allies appear united in their refusal to cut output to boost global oil prices, they are becoming locked in an increasingly fierce battle to secure market share in Asia. Oil prices have slumped below $50 a barrel, the weakest since 2009, triggering a price war between producers to secure customers in Asia. And the price outlook remains grim with Goldman Sachs slashing its three-month benchmark crude forecasts to just above $40.[O/R] The United Arab Emirates (UAE) last week joined Kuwait and Iraq in pricing crude they sell to Asia below that of OPEC’s top producer Saudi Arabia. The discounts show how Gulf members, who account for more than half of OPEC output, are prepared to take on each other to retain market share and, in so doing, put more pressure on global oil prices. "It’s a fight for […]

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China auto sales slow in 2014 but reach 19.7 mln vehicles

BEIJING (AP) — Growth in auto sales in China, the biggest market by number of vehicles sold, slowed last year but reached 19.7 million vehicles. An industry group, the China Association of Automobile Manufacturers, said Monday sales for the full year rose 9.9 percent. That was down 5.8 percentage points from 2013. Global automakers are looking to China to drive sales growth despite its cooling economy. They are investing heavily in trying to appeal to Chinese tastes. Sales in December rose 16 percent to just over 2 million vehicles.

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China to Raise Consumption Tax on Oil Products, Cuts Prices

BEIJING–China said Monday that it would raise the consumption tax on a range of oil products for the third time in less than two months, as global oil prices remained under pressure. At the same time, the state economic planner said it would cut the official retail prices on gasoline and diesel, adding that the two moves effectively result in a net reduction of domestic oil prices. The moves are aimed at promoting energy conservation and cutting pollution, the Ministry of Finance said in statements on its website. China would raise the consumption tax on gasoline, lubricants and naphtha by 0.12 yuan (about US$0.02) a liter to 1.52 yuan, while the tax on diesel, jet fuel and fuel oil would rise by 0.1 yuan a liter to 1.2 yuan, effective Tuesday, the finance ministry said. The ministry said the additional tax revenue will be used to clean up the […]

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At least one major oil company will turn its back on fossil fuels, says scientist

The oil price crash coupled with growing concerns about global warming will encourage at least one of the major oil companies to turn its back on fossil fuels in the near future, predicts an award-winning scientist and former industry adviser. Dr Jeremy Leggett, who has had consultations on climate change with senior oil company executives over 25 years, says it will not be a rerun of the BP story when the company launched its “beyond petroleum” strategy and then did a U-turn . “One of the oil companies will break ranks and this time it is going to stick,” he said. “The industry is facing plunging commodity prices and soaring costs at risky projects in the Arctic, deepwater Brazil and elsewhere. “Oil companies are also realising it is no long morally defensible to ignore the consequences of climate change.” Leggett, now a solar energy entrepreneur and climate campaigner, points […]

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North Dakota county feels Bakken boom ebb away as oil falls

CROSBY, N.D. (Reuters) – Just over a decade ago, this sleepy farming community on the fringe of North Dakota’s Bakken shale formation hosted the state’s first horizontal oil well to be hydraulically fractured, or fracked, helping set in motion an economic revolution that shook the world. Today, Divide County may be another vanguard for the state, this time ominous, as the first to feel the full effect of a collapse in prices that has lopped more than 50 percent off the price of oil since the summer. Only five oil rigs were drilling in Divide County this week, down from 12 last August, according to state data. While those only account for a handful of the more than 162 rigs still drilling in North Dakota, the drop has been much steeper than elsewhere in the state and could signal trouble across the No. 2 U.S. oil producer behind Texas […]

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$50 Oil Kills Bonanza Dream That Made Greenlanders Millionaires

Greenland, an island that may be sitting on trillions of dollars of oil, has had to acknowledge that its dream of tapping into that wealth looks increasingly far-fetched. Back when oil was headed for $150 a barrel, Greenlanders girded for a production boom after inviting in some of the world’s biggest explorers, including Chevron Corp. and Exxon Mobil Corp. (XOM) Now, with Brent crude dipping below $50 last week, Deputy Prime Minister Andreas Uldum says Greenland’s hope of growing rich quickly on fossil fuels was “naïve.” “I myself believed back when I was first elected” to parliament in 2009 “that billions from oil and minerals would start flowing to us the next year or the year after that,” he said in an interview in Copenhagen. “However, that’s just not the reality. I don’t know any politician in Greenland today who won’t admit to having fueled the hysteria.” The nation […]

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U.S. Drivers Start 2015 With Cheapest Gas in Six Years

Retail gasoline fell after crude oil prices dropped below $50 for the first time since… Read More Photographer: Luke Sharrett/Bloomberg Drivers paid an average of $2.2021 a gallon for regular gasoline at U.S. pumps last week, the lowest level for this time of year since 2009, according to Lundberg Survey Inc. Prices dropped 26.92 cents in the three-week period to Jan. 9 and are $1.14 a gallon below year-ago levels, according to the survey, which is based on information obtained at about 2,500 filling stations by the Camarillo, California-based company. Retail gasoline fell after crude oil prices dropped below $50 for the first time since 2009 as OPEC members said they wouldn’t reduce output to bolster prices that have dropped by more than half since June. U.S. stockpiles of gasoline at 237 million barrels were the highest since 2011 in the week ended Jan. 2, according to government data. […]

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GM’s Plan to Gain on Tesla Rides on Two Electric Cars

ENLARGE GM promises that its redesigned 2016 Chevrolet Volt will go 30% farther on an single electrical charge than the current model. Bloomberg News General Motors Co. is readying a one-two punch in the electric-car market, hoping to emerge from the shadow of Tesla Motors Inc. Later this year, GM plans to introduce a next-generation Chevrolet Volt that sports a new exterior design and room for five passengers. More important, it promises that the redesigned 2016 Volt will go 50 miles on a full charge, 30% farther than the current model. Like its predecessor, the new Volt automatically switches to gasoline when its charge is depleted. The total range of the new model, using gas and electricity, will be 420 miles. The auto maker also intends to launch a $30,000 all-electric vehicle in 2017 called the Chevrolet Bolt, which would be capable of driving 200 miles on a single […]

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Electric-Car Pioneer Elon Musk Charges Head-On at Detroit

ENLARGE Tesla Motors CEO Elon Musk, shown last year, is pushing hard to sell 500,000 vehicles a year by 2020. Getty Images When Elon Musk , who loudly disdains the traditional auto industry, makes his first public appearance in Detroit in two years on Tuesday, it will be easy to see how much has changed since then. Mr. Musk’s Tesla Motors Inc. is worth six times more in stock-market value. He is pushing hard to sell 500,000 vehicles a year by 2020, up from 90 a day in the third quarter. And giant auto makers are on a collision course with Tesla like never before, with General Motors Co. showing off a new electric car at the Detroit auto show on Monday. Mr. Musk’s response? He says he doesn’t plan to change a thing, from his proclivity for F-bombs to double duty as chief executive of rocket maker Space […]

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Next-gen Chevy Volt EREV is more efficient, with 50-mile electric range

« BNL/Stony Brook study provides insight into optimized electrode architectures | Main | VW unveils Cross Coupe GTE plug-in hybrid concept SUV at Detroit show; 70 mpge; previewing 7-seater SUV in 2016 » The new Chevy Volt has a decidedly more sculpted look than its predecessor. Click to enlarge. Chevrolet unveiled the second-generation Volt extended range EV at the North American International Auto Show. With a sportier design and an entirely new drive system ( earlier post ), the 2016 Volt electric car features a higher capacity battery pack and 50 miles of all-electric range (MY 2015 = 38 miles); greater efficiency; and stronger acceleration. GM estimates fuel economy to be 41 mpg combined (MY 2015 = 37 mpg) with 102 mpge (MY 2015 = 98 mpge). The 2016 Volt goes on sale in the second half of 2015. The new propulsion system will offer a General Motors’-estimated total […]

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Keystone XL and the faulty concept of peak oil

Posted:   01/10/2015 05:01:00 PM MST Gas prices are displayed at a gas station in Boston last week. (Steven Senne, The Associated Press) In Denver, gasoline dipped below $2 per gallon after Christmas, and I’ve heard rumors of $1.75. Most of us like this immensely. Not so the stock market, which has stumbled as oil prices have dipped below $50 per barrel. Cheap oil has also gummed up a variety of political arguments. Keystone XL is at the top of the news today, as it was last fall when many political candidates, from statehouse to Congress, ran on platforms seeking "energy security." This sounds suspiciously like code for giving drilling companies and pipeline transport companies just about everything they want. The argument on behalf of Keystone XL is that it will, with the help of the Canadians, deliver us from the capriciousness of "people who don’t like us," as […]

Posted On : Published By : ASPO-USA
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What Will 2015 do for Peak Oil?

The Cornucopians are exuberant, they believe that collapsing of oil prices dealt the death knell for peak oil. An oil glut, they say, is what we have, not peak oil. But an oil glut is exactly what we would expect at the very peak. After all, that is what peak oil is, that is the the point in time when the world produces more oil than ever in history… and the most it ever will produce. I am of the firm conviction that the world is at the peak of world oil production right now, or was at that point three or four months ago. I think history will show that the 12 months of September 2014 through August 2015 will be the one year peak. Whether the calendar year peak is 2014 or 2015 is the only thing still in question, or that is my opinion anyway. The […]

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Top Russian Ruble Forecaster Sees Fresh Run at Record Low

The world’s top ruble forecaster is unimpressed by the currency’s 30 percent rebound from a record low. The analyst — Danske Bank A/S’s Vladimir Miklashevsky — says the ruble could be testing new lows again this quarter as the plunge in oil, Russia ’s top export, threatens to cost the country its investment-grade credit ratings and turns Russians away from their currency. The ruble traded at 62.7805 per dollar at 10:36 a.m. in Moscow, after reaching 80.1 on Dec. 16, the weakest on record. “We can easily see new records as the oil price is much lower,” Miklashevsky said by phone from Helsinki, last week. Concern over a rating cut and the loss of confidence among Russians “are the ingredients for a further bout of weakness,” he said. Depreciation would exacerbate the challenges facing President Vladimir Putin as the economy teeters on the edge of a recession and investors […]

Posted On : Published By : Tom Whipple
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Scotland draws low-carbon fire

Friends of the Earth says Scottish air pollution levels creating a regional health crisis. UPI/Maryam Rahmanian EDINBURGH, Scotland, Jan. 12 (UPI) — Though Scotland has one of the most ambitious renewable energy programs in the world, Friends of the Earth said the country’s pollution is a health concern. Friends of the Earth said its review of 2014 government data show air pollution is responsible for as much as $2.5 billion in annual healthcare costs for the Scottish people. "Scotland’s streets are shown to have dangerous levels of toxic pollution which are breaking legal limits that were due to be met in 2010," campaigner Emilia Hanna said in Saturday statement. Scotland aims to draw more on renewable energy to power its economy, while looking toward oil and gas reserves in the North Sea as a source of revenue . Renewable electricity capacity has grown at an average rate of 660 […]

Posted On : Published By : Tom Whipple
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The Oil Price Fall: An Explanation in Two Charts

Don’t worry.  It’s not complicated. I offer a simple explanation for the recent fall in oil prices in just two charts.   Oil prices move up and down in response to changes in supply and demand.   If the world consumes more oil than it produces, the price goes up.  If more oil is produced than the world consumes, the price goes down. That’s where we are right now.  The world is producing more oil than it is consuming. The price of oil goes down.  It’s that simple. The chart below shows when the world has been in a production surplus and a production deficit since 2008. Right now, we are in a production surplus so the price of oil is going down. (Click image to enlarge) The important thing to take away from this chart is that the production surplus is smaller so far than the last time […]

Posted On : Published By : Tom Whipple
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Carbon Counterattack

Around the world, carbon-based fuels are under attack.  Increasingly grim economic pressures, growing popular resistance, and the efforts of government regulators have all shocked the energy industry.  Oil prices are falling , colleges and universities are divesting from their carbon stocks, voters are instituting curbs on hydro-fracking, and delegates at the U.N. climate conference in Peru have agreed to impose substantial restrictions on global carbon emissions at a conference in Paris later in the year.  All this has been accompanied by what might be viewedas a moral assault on the very act of extracting carbon-based fuels from the earth,in which the major oil, gas, and coal companies find themselves portrayed as the enemies of humankind. Under such pressures, you might assume that Big Energy would react defensively, perhaps apologizing for its role in spurring climate change while assuming a leadership position in planning for the transition to a post-carbon […]

Posted On : Published By : Tom Whipple
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The oil price collapse: what’s so special about it?

As I said in a previous post of mine, strong price oscillations are expected at or near the production peak. Prices can go up and down, but the drops don’t last for long and the overall trend is clear: it goes up. Graph by Frances Coppola. 10 Comments on "The oil price collapse: what’s so special about it?" Jerry McManus on Sun, 11th Jan 2015 2:01 pm  Perhaps Mr. Bardi could be bothered to answer his own fucking question rather than wasting everyone’s time by tossing off a totally pointless one-liner that only appears to short stroke himself. What a useless git. Bandits on Sun, 11th Jan 2015 2:06 pm  Oh boy comparing the past with now in this instance is a trifle naïve I’d say. Right now we have crippling debt, not yet peaked. We have peak oil, we have peak cheap oil, we have a couple of […]

Posted On : Published By : Tom Whipple
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Saudi prince: $100-a-barrel oil ‘never’ again

Saudi prince: $100-a-barrel oil ‘never’ again thumbnail Saudi billionaire businessman Prince Alwaleed bin Talal told me we will not see $100-a-barrel oil again. The plunge in oil prices has been one of the biggest stories of the year. And while cheap gasoline is good for consumers, the negative impact of a 50% decline in oil has been wide and deep, especially for major oil producers such as Saudi Arabia and Russia. Even oil-producing Texas has felt a hit. The astute investor and prince of the Saudi royal family spoke to me exclusively last week as prices spiraled below $50 a barrel. He also predicted the move would dampen what has been one of the big U.S. growth stories: the shale revolution. In fact, in the last two weeks, several major rig operators said they had received early cancellation notices for rig contracts. Companies apparently would rather pay to cancel […]

Posted On : Published By : Tom Whipple
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NYMEX crude settles down, bounces off US rig count-induced intraday lows

New York (Platts)–9Jan2015/445 pm EST/2145 GMT The NYMEX February crude futures contract settled lower Friday, but the close was firmer than looked likely early in the New York afternoon following the release of the weekly US rig count data. Front-month NYMEX crude settled 43 cents lower at $48.36/barrel Friday after trading as low as $47.16/b. The ICE February Brent futures contract ended Friday down 85 cents at $50.11/b, but managed to settle above the psychological mark of $50/b, rebounding from an intraday low of $48.90/b. The difference between ICE Brent and NYMEX crude narrowed 42 cents to settle at $1.75/b, its smallest margin since August 2013. The spread has been shrinking since December 18 when it stood at $5.16/b. "North America has backed out enough imports to put pressure on Atlantic Basic crude, narrowing the spread," said Andy Lipow, president of Lipow Oil Associates. "Enough pipeline space also exists […]

Posted On : Published By : Tom Whipple
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Oil Tumbles to Seventh Straight Weekly Loss

Oil prices tumbled to their seventh straight weekly loss on Friday as concerns about a global crude glut intensified. Crude-oil futures have plunged more than 50% since June amid rising world output coupled with lackluster demand growth, and the latest losing streak is the biggest since the 2008 financial crisis. Brent crude, the global benchmark, fell 1.7% to a new more-than five-year low of $50.11 a barrel on Friday. Prices fell 11.2% in the week, the biggest weekly drop since late November, when the Organization of the Petroleum Exporting Countries opted to maintain its production quotas. Brent fell below $50 a barrel during intraday trading on Friday. Traders and investors said there wasn’t a specific driver behind Friday’s selloff. Market experts say oil output needs to be sharply curtailed for prices to stabilize. “We still have plenty of oil around the world,” said Carl Larry, director of oil and […]

Posted On : Published By : Tom Whipple
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Oil Set for Seventh Weekly Drop as OPEC Reaffirms Supply Stance

Oil headed for a seventh weekly decline in New York and London amid speculation that OPEC won’t pare output to reduce a global surplus. West Texas Intermediate was little changed in New York after erasing a gain of 1.7 percent. The United Arab Emirates has no plans to reduce output no matter how low prices drop, according to Yousef Al Otaiba , the nation’s ambassador to the U.S. Representatives from Saudi Arabia, Kuwait and the U.A.E. stressed a dozen times in the past six weeks that OPEC won’t curb output to halt the biggest drop in crude since 2008. WTI’s discount to Brent shrank to its narrowest since October. “So far, there is no indication that OPEC will waver from its decision made at the meeting last year to maintain production,” Harry Tchilinguirian , head of commodity markets strategy at BNP Paribas SA in London, said by e-mail. Oil […]

Posted On : Published By : Tom Whipple
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Oil Traders Seen Storing Millions of Barrels at Sea on Slump

Oil companies are seeking supertankers to store 20 million barrels of crude as a collapse in the price of the commodity creates a trading opportunity last seen during the 2008-09 recession, a Greek shipping company said. Companies inquired about booking 10 very large crude carriers for storage in the past several days, Odysseus Valatsas, the chartering manager for Dynacom Tankers Management Ltd. near Athens , said by e-mail today. A “handful” have already been hired for the trade, he said, citing discussions with shipbrokers and others working in the shipping market. Dynacom’s fleet can carry about 65 million barrels of oil. Oil collapsed 48 percent in 2014 and prices for later this year are now so far above current costs that traders can make money from buying cargoes and storing them on ships, according to JBC Energy GmbH. As many as 60 million barrels could be held offshore within […]

Posted On : Published By : Tom Whipple
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Kerry to Meet Iranian Counterpart Next Week Before Nuclear Talks Resume

WASHINGTON — Secretary of State John Kerry plans to meet with his Iranian counterpart next week in Geneva to try to advance the negotiations over Iran ’s nuclear program , the State Department said on Friday. Mr. Kerry’s meeting with Mohammad Javad Zarif, Iran’s foreign minister, will take place on Wednesday, a day before the American negotiating team is scheduled to resume formal talks in Geneva with Iranian officials. Mr. Kerry and Mr. Zarif will “provide guidance to their negotiating teams before their next round of discussions,” a senior State Department official said. Mr. Kerry is leaving Friday night for a long-planned trip to India but plans to stop in Munich on Saturday to meet with Sultan Qaboos bin Said of Oman, who has served as a conduit to Iranian officials. Talks on constraining Iran’s nuclear program have been extended twice, and a deadline for achieving a breakthrough is […]

Posted On : Published By : Tom Whipple
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Saudi Arabia’s Cure for Shale Could Entail Shock Therapy

ENLARGE Workers use machinery to move drill sections near the Bazhenov shale formation in Salym, Russia. Bloomberg News In a price war, what counts is your ability to dish out pain and withstand it. Unfortunately for those counting on a rapid rebound in oil prices, Saudi Arabia’s capacity looks ample on both fronts. Leaving aside geopolitical considerations, Saudi Arabia’s apparent unwillingness to cut production to shore up oil prices reflects rational market strategy. With triple-digit oil having unleashed the genies of shale and demand conservation, artificially supporting prices would simply curb demand and shrink Saudi Arabia’s market share further. Letting the price fall, while painful, at least plays to its key strength: low per-barrel production costs. For many oil-exporting countries, though, the more important price is the one it takes to cover swollen public budgets. In the wake of the Arab Spring, this isn’t just an economic consideration. So […]

Posted On : Published By : Tom Whipple