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Oil Plunge Seen Eroding Emissions Ambition: Carbon & Climate

While the falling price of crude oil is giving consumers cheaper energy, it’s threatening long-term global pollution-control efforts. Reduced national income from energy taxes and “a low-growth economic environment” might spur countries to curtail their emissions-curbing pledges for after 2020, leading to more emissions of carbon for a longer time, said Zoe Knight, head of the HSBC Holdings Inc.’s climate change center in London . These proposals will be submitted under a United Nations climate-protection process starting in March. Public money “for funding low-carbon energy scale-up and energy-efficiency retrofits could be scarcer,” Knight said yesterday in an e-mailed note. Reduced government funds “leads to difficult choices on capital resource allocation, which in turn could mean high carbon lock-in over the long run,” she said. The International Energy Agency said in November that the world would probably reach by 2040 an emissions ceiling recommended by a panel of scientists formed […]

Posted On : Published By : Tom Whipple
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Oil Production Vital Statistics – January 2015

This is the first in a monthly series of posts chronicling the action in the global oil market in 12 key charts. The oil price crash of 2014 / 15 is following the same pace of the 2008 crash. The 2008 crash was demand driven and began 2 months ahead of the broader market crash. The US oil rig count peaked in October 2014, is down 127 rigs from peak and is falling fast. Production in OPEC, Russia and FSU, China and SE Asia and in the North Sea are all stable to falling slowly. The bogey in the pack is the USA where a production rise of 4 Mbpd in 4 years has upset the global supply dynamic. It is unreasonable for the OECD IEA to expect Saudi Arabia to cut production of cheap oil in order to create market capacity for expensive US oil [1]. There are likely […]

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U.S. court takes on Iraq oil disputes

A still image from video taken by a U.S. Coast Guard HC-144 Ocean Sentry aircraft shows the oil tanker United Kalavyrta approaching Galveston, Texas July 25, 2014. It carries around 1 million barrels of crude loaded by the KRG, which Baghdad has sued for possession of in U.S. court. (REUTERS/US Coast Guard handout) The Iraqi Oil Ministry has won a procedural legal victory in its long-standing disputes with the autonomous Kurdistan Regional Government (KRG) over oil export rights.The Southern District Court in Texas on Wednesday denied the KRG’s motion to dismiss a case that is preventing the delivery of 1 million barrels of oil to customers in the U.S. The decision forestalls Kurdistan’s attempt to establish a high-profile precedent that might enhance its ability to export oil independently, and keeps…

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Iraq Oil Deal Evokes Churchill in Islamic State Battle

Winston Churchill understood the significance of the black stuff seeping to the surface in the Kurdish plains of Mesopotamia when he included the region within Iraq as the British forged the nation in the 1920s. In doing so, Churchill, the colonial secretary at the time, set in train almost a century of bickering between the Iraqi government and its Kurdish enclave over the area’s estimated 45 billion barrels of crude. While their latest dispute was temporarily resolved last month to help finance the struggle against Islamic State, the accord has not addressed differences between administrations in Baghdad and Erbil that include the future of Kirkuk, northern Iraq’s main oil hub. The Iraqi government started pumping crude from Kirkuk via Kurdish pipes that bypass militant-held territory to Turkey , Al-Mada Press reported Jan. 1. “The need to finance military operations has brought together the Iraqi government and the Kurds,” said […]

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Add Natural Gas Prices to Putin’s Long List of Problems

Employees walk between valve controls near the Ekaterina drilling rig at OAO Gazprom’s… Read More After last year’s plunges in oil and the ruble, Russian President Vladimir Putin now has another thing to worry about: the price of natural gas. While the fuel held up better than oil last year, weakening just about half as much, the average cost on Europe ’s biggest open market will fall 13 percent this year to the lowest since 2010, according to the median of 13 traders, brokers and analyst estimates compiled by Bloomberg. Part of the reason for the drop is that global production capacity of liquefied natural gas will jump the most in four years, boosting competition for Russian pipeline flows that meet almost a third of Europe’s demand. Brent crude , used to help price state-owned OAO Gazprom’s gas sales to Europe, slumped 48 percent last year on global oversupply. […]

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Pemex Asks U.S. for Light Crude Imports to Boost Refining

Petroleos Mexicanos is in talks with the U.S. Department of Commerce to import 100,000 barrels a day of light crude to increase gasoline production and improve refining by Mexico ’s state-owned oil producer. Pemex, as the world’s ninth-largest oil producer is known, would mix the imports with its heavy oil, the Mexico City-based company said today in an e-mailed statement. Negotiations with the U.S. about the proposal, which was presented last year, are continuing, Pemex said. Some companies have called for the U.S. to end its 40-year prohibition on oil exports, saying booming domestic output reduces the need to keep supplies at home. U.S. oil production has increased by 66 percent in the past five years, and a majority of that growth is in light oil from shale rock. The U.S. bans most exports of unrefined crude, with exceptions such as shipments to Canada. The U.S. exported a record […]

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Mexico’s Pemex Files Request to Import Light U.S. Crude

MEXICO CITY—Mexican state-run oil giant Petroleos Mexicanos said Thursday it has requested permission from the U.S. Commerce Department to import light crude to Mexico from the U.S., with the aim of improving output at its Mexican refineries. The significant increase of light crude production in the U.S. presents an opportunity to mix that oil with Mexican heavy crude, and thus boost refining efficiency in Mexico, the company known as Pemex said. Pemex anticipates that it could import up to 100,000 barrels a day of light crude and condensates under the proposal, which it calls a “swap.” America has a long-standing ban on exporting crude-oil pumped in the U.S., but the Commerce Department recently issued new rules clarifying that some ultralight oil can freely flow out of the country to foreign buyers. Dubbed condensate by the energy industry, this light oil no longer needs to be fully processed at a […]

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U.S. Oil Export Ban Poised to Loosen With Mexico Request

The 40-year old ban on most U.S. crude exports is set to be loosened after Mexico’s state-owned oil company asked for an exception. Petroleos Mexicanos is in talks with the U.S. Commerce Department to import 100,000 barrels a day of light crude to increase Mexico’s gasoline production and improve refining. Pemex, as the world’s ninth-largest oil producer is known, would send its heavy oil to U.S. Gulf Coast refineries in exchange. Oil producers including Exxon Mobil Corp. (XOM) and Continental Resources Inc. (CLR) have called for the U.S. to end the restrictions, saying booming domestic output reduces the need to keep supplies at home. U.S. oil supply has increased by 66 percent in the past five years, and a majority of that growth is in light oil from shale rock. It would be another incremental allowed export “that will help relieve the pressure on pricing of domestic light oil, […]

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LNG demand not materializing in Asia

Asian demand for liquefied natural gas not matching output, analysis from Wood Mackenzie finds. UPI/Stephen Shaver SINGAPORE, Jan. 8 (UPI) — Demand for liquefied natural gas in the Asian market hasn’t materialized as expected, analysis published Thursday by Wood Mackenzie finds. Giles Farrer, principal analyst for the global LNG market at Wood Mackenzie, said production of LNG was on the rise , but the demand wasn’t matching the increase as the industry moves past its 50th anniversary. "The big surprise was that Asian LNG demand was much lower than expected. Demand in emerging markets, like China, failed to grow to the extent anticipated and demand in the established South Korean market fell considerably," he said in the report. The International Energy Agency said LNG, a super-cooled and denser product with more deliverability options, represents "a golden opportunity" for Asian economies. Asian demand for natural gas is expected to grow […]

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China PPI suffers biggest fall in 2 years

A construction site is seen in Beijing on December 16, 2014. Foreign investment into China accelerated in November, government data showed December 16, despite a worsening slowdown in the world’s second-largest economy and concerns over business risks. AFP PHOTO / Greg BAKER Chinese factory gate prices recorded their biggest annual fall in more than two years in December, adding to fears that deflation beckons in the world’s second-largest economy. China’s producer price index, which measures wholesale prices, has fallen for 34 consecutive months. December’s 3.3 per cent year-on-year decline, reported by the National Bureau of Statistics on Friday morning, was the largest since September 2012. It was also far sharper than November’s 2.7 per cent fall. Consumer prices, conversely, rose 1.5 per cent year on year in December, up slightly from 1.4 per cent in November. China’s central bank lowered interest rates for the first time in two years […]

Posted On : Published By : Tom Whipple