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Oil’s Doomsayer Says Doom … Again

Eddie Seal for The Wall Street Journal Citigroup Inc.’s Ed Morse was the analyst who prominently called $75-a-barrel global oil prices last March, back when it was trading above $100 a barrel and prevailing wisdom had prices rising rather than falling. He was right, of course – Brent crude plummeted through that threshold in late November and has continued to fall, to $53 and change Monday . As such, oil-market watchers tend to listen to what he has to say. And what is his outlook for the foreseeable future? Look out below. Mr. Morse and his team at Citigroup have cut their estimate for global oil prices to average $63 a barrel in 2015, down from $80, and for the U.S. benchmark to average $55 a barrel this year (just FYI, Nymex prices briefly traded below $50 a barrel earlier Monday). They see a confluence of factors — including […]

Posted On : Published By : Tom Whipple
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The Real Cause Of Low Oil Prices: Interview With Arthur Berman

With all the conspiracy theories surrounding OPEC’s November decision not cut production, is it really not just a case of simple economics? The U.S. shale boom has seen huge hype but the numbers speak for themselves and such overflowing optimism may have been unwarranted. When discussing harsh truths in energy, no sector is in greater need of a reality check than renewable energy. In a third exclusive interview with James Stafford of Oilprice.com , energy expert Arthur Berman explores: • How the oil price situation came about and what was really behind OPEC’s decision • What the future really holds in store for U.S. shale • Why the U.S. oil exports debate is nonsensical for many reasons • What lessons can be learnt from the U.S. shale boom • Why technology doesn’t have as much of an influence on oil prices as you might think • How the global […]

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Why water is not the new oil

“Water is the new oil.”Nowhere is this platitude more recited than here in Texas, where homegrown oil-and-gas money — and now even global capital — is flowing into the next resource boom: groundwater. T. Boone Pickens’ Mesa Water, which was the first to acquire groundwater rights from landowners for export to thirsty communities, is just the best-known name in the state’s burgeoning groundwater market. It also includes BlueWater Systems, the Val Verde Water Co., Heritage Commodity and Forestar. In October, Abengoa and BlueWater won approval for a $3.4 billion project to pipe groundwater 140 miles from Burleson and Milam counties to San Antonio. We Texans are by no means alone in commoditizing water. The share price of Cadiz, the sponsor of a project that aims to mine and bank groundwater beneath the Mojave Desert and sell it to parts of drought-stricken California, has more than doubled in the past […]

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Oil Extends Decline From 5 1/2-Year Low as Glut Persists

Oil fell for a third day, extending its drop from the lowest close since 2009, as record supplies from Iraq and Russia bolstered speculation that a global glut that drove crude into a bear market may persist this year. Futures slid as much as 2.1 percent in London , after losing 5.1 percent last week. Iraq, the second-largest producer in the Organization of Petroleum Exporting Countries, plans to boost crude exports to a record this month, the Oil Ministry said. Russia’s output rose to a post-Soviet high in December, according to preliminary Energy Ministry data. Saudi Arabia will probably offer narrower discounts for crude to Asia for February, according to a Bloomberg survey. Brent slumped 48 percent last year, the most since the 2008 financial crisis, as OPEC resisted calls to cut output amid a battle with U.S. shale producers for market share. The 12-member group, which supplies about […]

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Oil prices hits fresh five-and-a-half-year lows; Brent below $56

SINGAPORE (Reuters) – U.S. crude and Brent futures dropped to fresh 5-1/2-year lows on Monday as worries about a surplus of global supplies amid weak demand continued to drag on oil markets. OPEC’s decision in November to maintain output had accelerated oil’s losses earlier, while record-high Russian production and the highest Iraqi exports since 1980 added to the concerns about oversupply. The two oil benchmarks, Brent and West Texas Intermediate, have now lost more than half of their value from peaks hit in the middle of last year. U.S. crude slid as low as $51.40 a barrel, its lowest since May 2009, and at 0312 GMT was just a tick above that at $51.59 a barrel, still down $1.10. February Brent crude dropped as low as $55.36 a barrel, also its lowest since May 2009, before edging back to $55.42, still down a dollar. "Trying to pick a bottom […]

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Iran Leader Suggests Direct Votes on Issues

TEHRAN — Iran ’s president said Sunday that he might invoke a powerful but neglected tool in his fight with hard-liners, suggesting the possibility of organizing direct referendums that would bypass the institutions the conservatives control and give more of a voice to Iranian voters. President Hassan Rouhani, speaking during a conference on the country’s economic problems, said that Iranians were entitled to have major issues put to a nationwide vote, as described in the 1979 Constitution. “It will be good to, after 36 years, even for once, or even every 10 years if we implement this principle of the Constitution, and put important economic, social and cultural issues to a direct referendum instead of to the Parliament,” Mr. Rouhani said. In the opaque world of Iranian politics his remarks are a clear warning to hard-liners, who control the Parliament, key decision-making councils, the state-run media, the security forces […]

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Rouhani threatens to hold referendum

Iranian President Hassan Rouhani President Hassan Rouhani has threatened to hold an unprecedented referendum in Iran as he warned hardline opponents of a nuclear deal with the west that the country must end its international isolation. The Iranian leader said he was looking at the possibility of using his constitutional rights to give power to the people in comments that some analysts took as a warning that he may try to put any nuclear agreement to a public vote. More On this topic Interview transcript Hassan Rouhani IN Iran “Our political experience shows that the country cannot have sustainable growth when it is isolated,” he told a conference on Iran’s economy in Tehran on Sunday. He added that this did not mean Iran’s negotiations with six world powers — the US, UK, France, China, Russia and Germany — were compromising the Islamic regime’s ideals of the 1979 revolution. “Our […]

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Falling Oil Spells Boon for Most of Asia’s Economies

ENLARGE A Shenzhen auto factory. Low oil prices should help China’s economy. Bloomberg News Tumbling oil prices could prove to be a boon for the many Asian economies that depend on crude imports. With oil at its lowest price in more than five years, governments in countries such as India and Indonesia can spend money on much-needed infrastructure and other growth projects without stoking inflation. Falling crude prices also give China’s flagging economy a boost, allowing its central bank—and others in the region—to ease rates even as a recovering U.S. looks to do the reverse, economists say. Combined with loose monetary policy and a gradual recovery in global demand for goods and services, falling oil prices should help lift emerging Asia’s gross-domestic-product growth this year to 4.7% from an estimated 4.3% in 2014, according to Capital Economics, a consulting firm. “The decline in oil prices really took people by […]

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2 dead as unknown aircraft bombs Greek tanker in Libyan port

ATHENS, Greece (AP) — Greek authorities say an unidentified warplane has bombed a Greek-owned tanker ship in the eastern Libyan port of Darna, killing two crew members and injuring two more. Citing a briefing by the ship’s managers, the Merchant Marine Ministry says the Liberian-flagged Araevo was attacked Sunday while it was anchored in the harbor. Darna is a base for Islamic extremists, who have pledged allegiance to the Islamic State group. Widespread militia violence has plunged Libya into chaos less than four years after a NATO-backed uprising toppled and killed longtime dictator Moammar Gadhafi. The Araevo’s crew of 26 consisted of 21 Filipinos, three Greeks and two Romanians. The ministry said Monday the vessel had 12,600 metric tons of fuel on board. Damage is still being assessed.

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Libya: Islamic State Militants Behead 14 Soldiers At Checkpoint

Islamic State and Libya Dawn militants beheaded 17 people, 14 of them soldiers, at a checkpoint in southern Libya on Jan. 2, army sources said, Libyan website Al-Wasat reported Jan. 3. The website also said the attack was carried out on members of Battalion 168, which guard the checkpoint on the Sawknah crossroads in the Bu-Shuwayrif municipality. The attack comes as the Islamic State seeks to establish new footholds throughout the region.

Posted On : Published By : Tom Whipple