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Oil Trades Near Six-Year Low With U.S. Supply Highest Since 1982

(Bloomberg) — Oil traded near the lowest price in almost six years in New York after U.S. crude stockpiles climbed to the highest level since at least 1982. West Texas Intermediate futures were little changed following Wednesday’s 3.9 percent drop. Crude inventories in the U.S., the world’s biggest oil consumer, expanded by 8.87 million barrels to 406.7 million last week, the Energy Information Administration reported. Royal Dutch Shell Plc said it will cut $15 billion of spending over the next three years. “The huge build in U.S. crude-oil stocks reported by the EIA yesterday brought stockpiles to an all-time high and weighed on prices,” Michael Poulsen, an analyst at Global Risk Management Ltd. in Middelfart, Denmark, said by e-mail. West Texas Intermediate for March delivery was at $44.53 a barrel in electronic trading on the New York Mercantile Exchange, up 8 cents, at 11:02 a.m. London time. The contract […]

Posted On : Published By : Tom Whipple
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Natural Gas Prices Decline on Growing Supply

By Timothy Puko Natural gas prices are falling back as production appears to be edging higher. Natural gas for February delivery is down 11.4 cents, or 3.8%, at $2.867 a million British thermal units on the New York Mercantile Exchange. The front-month contract hasn’t had back-to-back sessions of gains or losses in more than a week. The more actively traded March contract is down 10.4 cents, or 3.5%, at $2.831/mmBtu. Options expired at Tuesday’s close and the February contract expires Wednesday at close. "There is ample … gas in inventory to meet the demand of the remaining winter season even it is colder than normal," Dominick Chirichella, analyst at the Energy Management Institute, said in a note to clients. Half of U.S. homes use natural gas for heat, making winter cold typically the biggest driver for demand. But prices have plummeted 36% since November because record production has been […]

Posted On : Published By : Tom Whipple
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U.S.: Iran’s oil production capacity curbed

Sen, Bob Menendez, D-N.J., and fellow Democrats say they’ll hold off on Iranian sanctions as U.S. Treasury Department officials weigh the damage to Tehran’s oil sector. UPI/Molly Riley Iran under the terms of a November 2013 agreement is allowed some oil exports in exchange for commitments to curb some of its nuclear research activity. In mid-January, Mohsen Rezaei , secretary of the influential Expediency Council, said exports have since dropped by 1.5 million barrels per day and inflicted more than $100 billion in revenue losses. U.S. Treasury Undersecretary for Terrorism and Financial Intelligence David Cohen testified before members of the Senate Banking Committee on the effectiveness of existing sanctions, saying Iran is exporting less than half of the oil it was in 2012 and only to six countries. "Because Iran cannot access Western technology and services, and because it has been forced to sharply cut its oil exports, we […]

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Officials confirm Baghdad airplane shooting

An Iraqi Airways plane lands at Baghdad International Airport Jan.27, 2015. Airlines from at least three countries suspended flights to Baghdad on Tuesday after bullets hit an airplane operated by Fly Dubai as it was landing on Jan. 26. Company officials said Iraqi Airways and Iran’s Caspian Airlines were operating flights to Baghdad on a normal schedule. (THAIER AL-SUDANI/Reuters) One child was injured in a surface-to-air machine gun shooting of a Fly Dubai flight as it descended toward Baghdad International Airport (BIAP) late Jan. 26, the Transportation Ministry said on Tuesday. The acting head of the Iraqi Civil Aviation Authority (ICAA) denied the incident altogether both Monday and Tuesday, despite the confirmation by the Transportation Ministry, to which ICAA belongs, and BIAP officials and workers. "Yesterday evening, an aircraft of Fly Dubai was hit while …

Posted On : Published By : Tom Whipple
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Total Wins Stake in Abu Dhabi’s Top Onshore Oil Fields

(Bloomberg) — Total SA won bidding to develop the biggest onshore oil deposits in the United Arab Emirates, making the French energy company the first to be chosen by Abu Dhabi to pump more crude amid a global supply glut. Abu Dhabi National Oil Co. awarded Total 10 percent of the main land-based concession in the U.A.E.’s largest sheikhdom, for 40 years starting Jan. 1, 2015, the Paris-based company said in an e-mailed statement on Thursday. Adnoc, as the government-owned producer is known, confirmed the award and said it will name other partners “soon.” Total’s stake would account for oil output generating $2.83 billion a year based on yesterday’s closing Brent price of $48.47 a barrel. Middle Eastern energy suppliers including the U.A.E. are expanding their capacity to produce crude for export as well as to boost output of natural gas, which they burn as fuel in local power […]

Posted On : Published By : Tom Whipple
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China to Keep 200 Million-Barrel Crude Hoard Even If Oil Rallies

(Bloomberg) — China is poised to maintain its commercial hoard of more than 200 million barrels of crude within three years even if oil rallies toward $130 a barrel. Refiners have been asked to hold inventories equal to at least 15 days of the volumes they can process, according to the National Development and Reform Commission. Stockpiles shouldn’t fall below 10 days’ equivalent even if international crude prices rise above $130 a barrel, it said in a document published on its website on Jan. 28. Brent futures, a global benchmark grade, last traded at that price in July 2008. China, the world’s second-largest oil consumer, has benefited from crude’s slide to below $50 a barrel, the weakest in almost six years. It already has 33.37 million metric tons of commercial crude stockpiles at the end of last year, or about 244.6 million barrels, according to Bloomberg calculations using data […]

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China’s Coal Consumption Fell in 2014

For the first time this century China’s coal consumption has fallen, according to preliminary data from both the Chinese Coal Industry Association and the National Energy Administration. The amount by which coal use declined last year remains an open question, with the Coal Industry Association reporting a reduction of around 3.5% but NEA data showing a fall of only 0.4%. Applying the two growth rates to corresponding official statistics for 2013 yields very similar numbers for absolute coal consumption in 2014, however, which may suggest that the NEA’s small reduction is likely due to under-reporting of consumption in previous years. China’s implied coal demand Climate impact News of the coal fall represents a major step-change on two fronts: China’s war on air pollution, and global efforts to peak CO2 emissions. China burns half of world’s coal and has been responsible for well over half of total CO2 growth globally for […]

Posted On : Published By : Tom Whipple
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Planning for peak oil and Detroit’s future

According to Time Magazine, in an interview with Thomas Hoenig, president of the Federal Reserve Bank of Kansas, “Global Food prices have risen 25% this last year and many nations are starting to hoard commodities” (corn, wheat, rice etc.). Whatever the reasons for this, and I don’t understand many of them, this trend is not going to get better. One of these reason alone will sky rocket food prices in the next 10-20 years and that is described in “ Peak Oil” graphs. In very over-simplified terms, “peak Oil” means that world-wide we have reached our highest production level of oil and that from here on the availability of oil will decrease rapidly and consequently the price of oil will increase sharply. By 2030 we will have as much oil available as we had in 1970 with double the demand. Increased oil prices have already caused us to look […]

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Early signs of the Bakken oil slow-down

Overview The state of North Dakota—home of the Bakken shale oil boom—reported recently that oil production there had held steady, despite that the number of new producing wells had dropped drastically. But as I found from digging into the data, the drop-off in well completions was not nearly as steep as North Dakota had said—and that the apparent “silver lining” in the data is not there. It’s free to read because it was shared by the author. Back Mason Inman, and your funding directly supports his future work — You can impact the stories that get told. In mid-January, when the North Dakota Department of Mineral Resources released its latest update on the Bakken oil boom—the “Director’s Cut,” a summary compiled by the Department’s Director, petroleum engineer Lynn Helms—I was surprised by the data. But I wasn’t the only one surprised. In presenting the latest data, through November 2014, […]

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Shale oil production will level off and we will have a peak in the oil production in 2015

(Photo: Oil pump east Eagle Frod, K Aleklett) Lower 48 production The US Energy Information Administration, EIA, has now made a first forecast of the production of oil from the lower 48 states, the states with fracking. As the decline for individuate wells are very steep the rig count will be a very important factor for the future and the number of new wells each rig will drill per quarter. In the figure you can see that the number of rigs will drop down to 1300 and not came back to the level it had in the 4th quarter of 2014. We have seen peak rig count for shale oil in the US. EIA indicate a peak production in 2015 but hope the production will come back. This is just guesses and the price of oil will determine this. The decline in the existing wells might be so large […]

Posted On : Published By : Tom Whipple