Category:

Mexico Cuts Spending Saying Oil Price May Stay Low for Years

(Bloomberg) — The Mexican government will cut 2015 spending by 0.7 percent of gross domestic product on the expectation that oil prices may remain low for years, Finance Minister Luis Videgaray said. Stocks extended declines. President Enrique Pena Nieto’s administration will reduce spending by 124.3 billion pesos ($8.3 billion) this year from the level approved by lawmakers in November, Videgaray said at news conference in Mexico City. The government is canceling plans for a passenger train in the Yucatan peninsula and suspending a high-speed rail project meant to connect Mexico City and Queretaro, Videgaray said. The reductions will allow Mexico to avoid raising additional debt or increasing taxes, Videgaray said. Mexico’s state-owned oil and electricity companies will cut their own outlays, and all the reductions will have a marginal effect on 2015 growth, Videgaray said. “We will take measures not only addressing the current situation, but rather we’ll take […]

Posted On : Published By : Tom Whipple
Category:

97% of fracking now operating at a loss at current oil prices

 If the Saudis wanted to crush America’s shale oil industry they are certainly doing a good job of it.  West Texas Intermediate reached a 2014 peak of $107.73 in June before dropping as low as $49.77 today on the New York Mercantile Exchange. The grade settled at $50.04 a barrel. That’s below the break-even price for 37 of 38 U.S. shale oilfields , according to Bloomberg New Energy Finance. Shale oil fracking and Canadian tar sand is some of the most expensive (and dirty) oil production on the planet, while conventional Persian Gulf oil is the cheapest to produce. Warren Henry, the spokesman for Continental, one of the frackers who have been spending money faster than they can make it, says that current oil prices are “not a sustainable long-term trend.” However, Bob Tippee, Editor of Oil & Gas Journal, has a different take .  “The Saudis have no […]

Posted On : Published By : Tom Whipple
Category:

Millions Of Gallons Of Oil Settled At The Bottom Of The Gulf After BP Oil Spill

Millions Of Gallons Of Oil Settled At The Bottom Of The Gulf After BP Oil Spill thumbnail Millions of gallons of oil from the Deepwater Horizon oil spill didn’t get cleaned up, and instead settled in the sediment of the Gulf of Mexico’s floor, a new study has found. The study , published in the journal Environmental Science and Technology, found that 6 to 10 million gallons of oil from the spill are buried in the seafloor. The researchers measured the amount of carbon 14 — a radioactive carbon isotope that’s found in organic material but not found in oil — in an approximately 24,000 km² area of sediment near the spill site, a process which allowed them to see what parts of the sediment were low in carbon 14 and thus contained oil. The study sought to determine two things: whether oil had, in fact, settled on the […]

Posted On : Published By : Tom Whipple
Category:

Most Republicans Say They Back Climate Action, Poll Finds

WASHINGTON — An overwhelming majority of the American public, including half of Republicans, support government action to curb global warming , according to a poll conducted by The New York Times, Stanford University and the nonpartisan environmental research group Resources for the Future. In a finding that could have implications for the 2016 presidential campaign, the poll also found that two-thirds of Americans said they were more likely to vote for political candidates who campaign on fighting climate change . They were less likely to vote for candidates who questioned or denied the science that determined that humans caused global warming. Among Republicans, 48 percent say they are more likely to vote for a candidate who supports fighting climate change, a result that Jon A. Krosnick, a professor of political science at Stanford University and an author of the survey, called “the most powerful finding” in the poll. Many […]

Posted On : Published By : Tom Whipple
Category:

American CEOs Most Bearish on Earnings Since 2008 Crisis

Drilling for oil in the Bakken shale formation on July 23, 2013 outside Watford City, North Dakota. (Bloomberg) — U.S. chief executive officers are more pessimistic about corporate earnings than any time since the financial crisis, according to research from Bespoke Investment Group LLC. The percentage of companies cutting profit forecasts during this earnings season has outpaced those with upward revisions by 8.6 percentage points, the widest margin in six years, according to data compiled by Bespoke. Consumer companies and drugmakers are the most bearish among 10 major industries, with at least 18 percent of each group providing lower guidance, the data show. Plunging oil and a strengthening dollar are wreaking havoc on earnings this month as Procter & Gamble Co. to Caterpillar Inc. and Pfizer Inc. joined an increased number for companies to announce disappointing forecasts. While the reduction in projections sets a lower bar for companies to […]

Posted On : Published By : Tom Whipple
Category:

Savings at the Pump Are Staying in Wallets

ENLARGE Americans are keeping, not spending, much of the cash saved as gas prices fall. Above, shoppers in Texas. Photo: The Odessa American/Associated Press Americans are taking the money they are saving at the gas pump and socking it away, a sign of consumers’ persistent caution even when presented with an unexpected windfall. This newfound commitment to frugality was illustrated this past week when the nation’s biggest payment-card companies said they aren’t seeing evidence consumers are putting their gasoline savings toward discretionary items like travel, home renovations and electronics. Instead, people are more often putting the money aside for a rainy day or using it to pay down debt. That more Americans are saving their bounty at the pump comes as a surprise, because the personal savings rate, after rising during and after the recession, has declined steadily over the past two years. “We haven’t seen the extra savings […]

Posted On : Published By : Tom Whipple
Category:

Congress Gets Busy On Oil, Gas Issues

Republicans are wasting no time in taking on some of the energy issues that have been waiting in Congress for years, Alex Mills says. This opinion piece presents the opinions of the author. It does not necessarily reflect the views of Rigzone. For the first time since Barack Obama became President, Republicans took control of the U.S. House and Senate, and they wasted no time in taking on some of the energy issues that have been languishing in the Congress for years. Senate Republicans made good on a pledge to pass the long-pending Keystone XL oil pipeline on Jan. 29. Senators voted 62-36 on the bill to bypass the Obama administration’s delaying tactics on the Keystone XL, only 5 short of the number needed to override a presidential veto, which is expected. All Republicans present voted for the bill, as did nine Democrats. Approving the Keystone XL has been […]

Posted On : Published By : Tom Whipple
Category:

China’s Louisiana Purchase: New Orleans’ own Battle of Algiers

This article is the final installment of a three-part series on China’s role in redeveloping southern Louisiana called China’s Louisiana Purchase. The  first part  investigated links between Chinese government officials, Chinese gas giant Shandong Yuhuang and Gov. Bobby Jindal. The second part explored allegations of environmental racism from the predominantly black community where the plant will be built.  ALGIERS, New Orleans — A New Orleans government–contracted company stands accused of stealing millions of dollars from foreigners who sought citizenship through the U.S. investor immigrant — or EB-5 — system by investing in a cluster of would-be businesses in an underserved black community devastated by Hurricane Katrina. But even with litigation pending in that case, municipal authorities are continuing to seek EB-5 investments. Under  the EB-5 system , individuals from overseas — a vast majority of applicants hail from China — have a shot at a green card if they […]

Posted On : Published By : Tom Whipple
Category:

US growth slows to 2.6% in fourth quarter

Personal spending rose to the highest level since 2006 in the first quarter America’s growth lost momentum at the end of 2014 as weak exports highlighted the risks the US recovery faces from sagging overseas demand. Gross domestic product rose by an annualised 2.6 per cent in the fourth quarter — sharply below Wall Street expectations for an increase of at least 3 per cent and a marked slowdown from the 5 per cent pace set in the third quarter. More On this story On this topic IN US Economy While consumer spending — the main driver of America’s economy — surged at its fastest pace since 2006, overall growth was dragged down by poor trade numbers and falling government spending. Stocks slipped on Wall Street in response and bond traders pushed back expectations of interest-rate increases by the Federal Reserve’s Federal Open Market Committee. Separate data showed US […]

Posted On : Published By : Tom Whipple