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The Oil Plunge: The Facts & Why We Should Care

According to The Wall Street Journal four of the five worst stocks in 2014 were oil/energy related and the fifth was Avon .  Gas prices were cheaper and women were opting for more expensive cosmetics? I’m guessing that’s probably not the case. TRANSOCEAN LTD. – DOWN 62% DENBURY RESOURCES INC. – DOWN 50% NOBLE CORP. – DOWN 47% ENSCO PLC – DOWN 46% AVON PRODUCTS INC. – DOWN 44% Prices at the Pump Gas prices at the pumps hit a four year all time low , which is great for us; but, does this savings come at too high of an eventual cost or are we just really looking for problems where there aren’t any?  There is no simple answer if there is one at all.  Economists, environmentalists, scientists and politicians all have theories (often conflicting) but do have one slick concept in common- peak oil. Peak Oil The […]

Posted On : Published By : Tom Whipple
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Brent turns lower, heads towards $57 as supply glut fears prevail

LONDON (Reuters) – Brent crude LCOc1 slipped towards $57 after an early rise above $58 on Friday, as the glut of oil that has halved prices since June overshadowed investors repositioning at the start of the year for an eventual recovery. Brent has fallen to its lowest since 2009 as top exporter Saudi Arabia has declined to cut production in the face of fast-growing U.S. shale oil output, despite pleas from other members in the Organization of the Petroleum Exporting Countries (OPEC). "Nothing has changed on the supply side. Unless there are some supply cuts, oil markets can’t be strong at the moment," said Ken Hasegawa, commodity sales manager at Tokyo’s Newedge Japan. Brent crude LCOc1 for February delivery was down 24 cents at $57.09 at 0843 GMT (0343 ET), almost $1.50 below the day’s high at $58.54, which was hit within 30 minutes of the open of trading. […]

Posted On : Published By : Tom Whipple
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Oil Prices Start Year on Volatile Note

ENLARGE A gas price of $1.94 a gallon for regular gas is shown at a gas station in Cleveland on Wednesday. The average cost of gas in Ohio has dipped below $2 a gallon for the first time in more than five years. Associated Press LONDON—Oil prices began the New Year on a volatile note on Friday as Brent whipsawed between gains and losses after closing 2014 at more-than five-year lows. The price of Brent, the global benchmark, nearly halved in 2014, the steepest fall since the recession of 2008, as fears of global oversupply coupled with lackluster demand engulfed the market. In thin holiday trade on Friday, front-month Brent futures were up 0.5% at $57.63 a barrel on London’s ICE exchange, after dropping to an intraday low of $57. On the New York Mercantile Exchange, light, sweet crude futures for delivery in February traded at $53.65 a barrel, […]

Posted On : Published By : Tom Whipple
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Crude Oil Trades Near 5 1/2-Year Low Amid Manufacturing Weakness

Oil traded near its lowest closing price since mid-2009 amid signs of manufacturing weakness in Europe and China . Futures headed for a sixth weekly loss in New York and London. Euro-area manufacturing expanded less than initially estimated in December as growth rates for output, new orders and employment remained near stagnation. The bloc’s currency weakened to a 4 1/2-year low against the dollar. A manufacturing gauge in China, the world’s second-largest oil consumer, fell to the weakest level in 18 months, government data showed yesterday. “China PMI was more of the same while we are seeing weaker than expected PMI in Europe,” Ole Sloth Hansen, an analyst at Saxo Bank A/S in Copenhagen, said by e-mail. “This adds to the support for the dollar. So we are kicking off 2015 with a strong dollar and weak oil theme.” Oil slumped 46 percent in New York in 2014, the […]

Posted On : Published By : Tom Whipple
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Saudi Arabia’s Half-Off Sale On Crude Oil

Saudi Arabia’s Half-Off Sale on Crude Oil. Global Demand Strong Despite Weakness in OECD. Supply Issues Remain in the Hands of Saudi Aramco. Why would anyone sell seven widgets for $50 a widget (total revenue: $350) when they could sell six of the widgets for $100 per widget (total revenue: $600) and just keep the seventh widget in a garage to sell later? No rational person would do this, unless there were other considerations at work. Yet this is precisely the current situation with Saudi oil exports. Few people doubt that Saudi Arabia could have held oil prices in the $100 per barrel range by cutting exports to six million barrels per day (bpd) as it did previously on several occasions over the past three years. Instead, Saudi oil exports have remained in the seven million bpd range. This together with weak demand in Europe and Japan (two of […]

Posted On : Published By : ASPO-USA
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Gunmen kill 3 Sunni clerics in Iraqi city of Basra

BAGHDAD (AP) — Gunmen killed three Sunni clerics near the mostly Shiite city of Basra in southern Iraq, a government spokesman said Friday, an apparent sectarian attack that drew immediate calls for calm. Interior Ministry spokesman Saad Maan told The Associated Press that the assailants ambushed a car Thursday night carrying the clerics in the mostly Sunni district of Bab al-Zubeir near Basra, shooting dead the three and seriously wounding two other clerics traveling with them. The ministry, he said, was investigating the killings. He gave no other details. There was no claim of responsibility for the ambush and no reports of retaliatory attacks by Sunnis. Iraq’s sectarian violence peaked in 2006-07, when thousands of Shiites and Sunnis perished in attacks. The violence later eased but has partially resumed after Sunni militants of the Islamic State group swept across much of northern and western Iraq last year. Shiites make […]

Posted On : Published By : Tom Whipple
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Iran says Saudi Arabia should move to curb oil price fall

DUBAI (Reuters) – Falling world oil prices will hurt countries across the Middle East unless Saudi Arabia, the world’s biggest crude exporter, takes action to reverse the slump, Iran’s deputy foreign minister told Reuters. Hossein Amir Abdollahian described Saudi Arabia’s inaction in the face of a six-month slide in oil prices as a strategic mistake and said he still hoped the kingdom, Tehran’s main rival in the Gulf, would respond. Oil prices closed on Wednesday at a 5-1/2 year low, registering their second-biggest ever annual decline after OPEC oil exporters, led by Saudi Arabia, chose to maintain oil output despite a global glut and calls from some of the cartel’s members – including Iran and Venezuela – to cut production. "There are several reasons for the drop of the price of oil but Saudi Arabia can take a step to have a productive role in this situation," Abdollahian said. […]

Posted On : Published By : Tom Whipple
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Falling Oil Price Poses Tough Challenge for West African Rulers

ENLARGE Cameroon’s President Paul Biya and his wife, Chantal Biya, arrive for a White House dinner in August. Reuters Some of Africa’s most entrenched leaders are facing an unprecedented challenge from an unexpected foe: falling oil prices. Rulers of a cluster of nations along Africa’s oil-rich Atlantic coast have long used crude revenue to consolidate their power, reward political allies and subsidize basic goods and services. As oil prices decline, that formula for maintaining power looks increasingly inadequate for rulers such as Angola’s José Eduardo dos Santos. “If the drop in prices continues, he will be in free fall,” said Ricardo Soares de Oliveira, a political scientist at the University of Oxford. For more than 30 years in office, Mr. dos Santos has relied on the proceeds from oil sales. If that revenue continues to shrink, “the very assumption that this regime is able to weather all sorts of […]

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Three Gorges breaks world record for hydropower generation

YICHANG, Jan. 1 (Xinhua) — China’s Three Gorges Power Plant generated 98.8 billion kilowatt-hours (kwh) of electricity in 2014, beating the world record for hydropower generation set by Brazil’s Itaipu hydroelectric plant, according to the China Three Gorges Corporation on Thursday. Though with a much smaller installed capacity, Brazil’s Itaipu hydroelectric plant has long been the champion of world hydropower generation. It generated 98.6 billion kwh of electricity in 2013. The China Three Gorges Corporation said 98.8 billion kwh is the equivalent of saving 49 million tonnes of coal consumption and preventing the emissions of carbon dioxide by 100 million tonnes. The Three Gorges Power Plant, the world’s largest hydropower station, has an installed capacity of 22.5 million kw. The Itaipu hydroelectric plant has an installed capacity of 14 million kw.

Posted On : Published By : Tom Whipple
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Trucks Triumph in 2014 as Cheap Fuel Frees U.S. Consumers

Fresh from a fifth year of growth in the U.S., carmakers are rolling into the new year with yet another sign of good fortune: Cheap fuel is gassing up truck sales. Consumers bought more pickups, minivans and sport utility vehicles than cars in every month of 2014. That’s something Detroit ’s carmakers and their rivals haven’t enjoyed since 2004 when a barrel of oil sold for less than $40. And the industry’s bonanza in the world’s most valuable market should continue. Hot-selling pickups like the Ram 1500 and luxury SUVs such as the Cadillac Escalade command higher prices and fatter profits than most passenger cars. Available credit, cheap gas, and good lease deals have given consumers the confidence to buy more of both. All automakers are projected to report on Monday that sales rose in December. Last month’s annualized sales pace, adjusted for seasonal trends, may have been 16.9 […]

Posted On : Published By : Tom Whipple