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Loonie Seen Reaching 69 U.S. Cents on Oil

(Corrects currency forecasts in headline and the first two paragraphs.) (Bloomberg) — The Canadian dollar will sink as low as 69 U.S. cents with little to drive the economy after oil’s collapse, according to Macquarie Group Ltd, joining a growing list of forecasters lowering their projections. Macquarie forecast Monday the currency would reach a bottom near 69 U.S. cents. Royal Bank of Canada and Credit Suisse Group AG last week lowered their forecasts to 75 cents. HSBC Holdings Plc is calling for a 74 cent Canadian dollar. Morgan Stanley sees the loonie dropping to 71 U.S. cents by next year. “There’s going to need to be even more Canadian dollar weakness than people expect because of the significant loss of competitiveness,” Evan Brown, an analyst with Morgan Stanley, said by phone from New York. With consumer debt loads at a record high, manufacturing hobbled by the surge in the […]

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Fed Says Some Banks Tightened Oil-Industry Loans as Crude Fell

(Bloomberg) — The Federal Reserve said some banks tightened standards or terms to energy-industry borrowers in the fourth quarter, after the price of oil plunged. U.S. banks “reported little change in their standards” for commercial and industrial loans overall, the Fed said today in its Senior Loan Officer Opinion Survey, conducted Dec. 30 to Jan. 13 with 73 domestic banks and 23 U.S. branches of foreign banks. “Banks which reported having tightened either their standards or terms on C&I loans predominantly pointed to industry-specific problems as the main reason for having tightened their lending policies to non-financial businesses,” the Fed said. “Some survey respondents specifically noted their concerns about the oil and gas sector resulting from the sharp decline in the price of oil as a reason that they had tightened their lending policies.” West Texas Intermediate crude futures for March delivery declined below $45 a barrel last week […]

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U.S. Factories Brace for Oil Shock as Growth Cools: Economy

A factory worker assembles transmission components for Chrysler Group LLC vehicles in Tipton, Indiana. (Bloomberg) — America’s factories are bracing for trouble and hoping it doesn’t last. The Institute for Supply Management’s manufacturing index declined to a one-year low of 53.5 from December’s 55.1, according to data from the Tempe, Arizona-based group Monday. Readings greater than 50 signal growth. Another report showed consumer spending fell in December after surging over the previous two months. While gauges of orders, exports and production cooled last month, the comments from respondents were more positive, with the makers of food, autos and computers saying sales remained strong so far in 2015. That signals the 50 percent drop in oil prices in the second half of last year has created winners and losers — energy consumers versus producers — and is making manufacturers hesitate as they await the shakeout. “With the deep downdraft in […]

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Exxon’s Profit Drops 21% as Production Declines

Refining and marketing earnings fell by 54% to $497 million. ENLARGE Illustration: Getty Images Exxon Mobil Corp. ’s quarterly cash flow fell to its lowest level since 2009, as the plunge in oil prices led the company to pile on debt and spend less money buying back its shares. The largest U.S. energy company reported a $6.57 billion profit for the last three months of 2014, a 21% decrease from a year earlier, on revenue of $87.28 billion. Earnings per share of $1.56 beat analysts’ expectations. The company’s stock was up less than 1%, to about $88, in midday trading. Exxon pumped slightly less than four million barrels a day of oil and gas in 2014, the least since 2009 and the third consecutive year output has declined. The company said it met its production goal and completed projects from Russia to Canada that will add up to 250,000 […]

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Imperial Oil Profit Falls 36%

Imperial Oil Ltd. , the Canadian subsidiary of Exxon Mobil Corp. , posted a 36% decline in fourth-quarter earnings on Monday, hurt by lower oil prices and volumes. Imperial Oil said the continued slump in oil prices reduced earnings by about 100 million Canadian dollars ($78.7 million), while lower volumes shaved about C$50 million from profits. The Calgary, Alberta-based integrated energy company said its quarterly profit fell to C$671 million, or 79 Canadian cents a share, from C$1.06 billion, or C$1.24 a year earlier. Earnings came in ahead of the 72 Canadian cents a share analysts polled by Thomson Reuters were expecting. Revenue of C$8.03 billion was down from C$8.36 billion a year earlier. Lower commodity prices also took a bite out of parent Exxon’s earnings. It reported a 21% drop in fourth-quarter earnings earlier Monday and unveiled plans to slash its share buyback program. Imperial Oil said production […]

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Energy-Pinching Americans Pose Threat to Power Grid

ENLARGE Even in parts of the country where the population has been growing, electricity sales have been anemic. Retail sales to homes and businesses still are less than they were in 2007, before the recession. Photo: Bloomberg News The long-term future of the nation’s electric grid is under threat from an unlikely source—energy-conserving Americans. That is the fear of some utility experts who say that as Americans use less power, electric companies won’t have the revenue needed to maintain sprawling networks of high-voltage lines and generating plants. And if the companies raise rates too high to make up for declining sales volumes, customers will embrace even more energy-saving gizmos and solar panels, pushing down demand for grid power. The Edison Electric Institute, the trade group for investor-owned utilities, has warned that they could face a “death spiral.” “Utilities seem to have concrete shoes on,” says Elisabeth Graffy, co-director of […]

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After Record Decline, Drop In Fuel Prices May Be Running Out of Gas

Getty Images That decline in fuel prices that’s given millions of consumers across America reason to cheer? It looks like it’s running out of gas. The average per-gallon pump price for gasoline in the U.S. on Monday rose for the seventh straight day to $2.06, according to AAA . That follows 123 straight days of declines, a record, according to the motor club. Retail gasoline prices hit a nearly six-year low of $2.03 on Jan. 26. Seasonal trends in gasoline production and demand are a big factor behind the stabilization in prices. Refineries tend to scale back operations to make repairs in the first and second quarters, which curbs supplies. And consumption typically rises in the second quarter as the weather improves and people start driving more. It’s likely that gasoline prices have bottomed out for now, some experts say. To be sure, prices remain well below year-ago levels. “It […]

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Obama Budget Would Pour Funds Into Climate, Renewable Energy

ENLARGE President Obama’s budget released Monday includes a new $4 billion fund to help states comply with draft Environmental Protection Agency regulations cutting carbon emissions from U.S. power plants. Photo: Luke Sharrett/Bloomberg News WASHINGTON—President Barack Obama ’s fiscal 2016 budget plan would pour billions of dollars into climate-change and renewable-energy technologies, and repeal nearly $50 billion in tax breaks from the oil, natural-gas and coal industries. The budget proposal, released Monday, underscores an intensifying push by Mr. Obama on his climate agenda, which he hopes to cement as a presidential legacy in his final two years in office. While many of Mr. Obama’s energy and environmental plans have been included in prior year proposals, the 2016 proposal includes a new $4 billion fund, dubbed the Clean Power State Initiative Fund, to help states comply with draft Environmental Protection Agency regulations cutting carbon emissions from U.S. power plants. The fund, […]

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Cash-Starved Oil Producers Trade Treasured Pipelines for Money

(Bloomberg) — Oil and natural gas producers confronting a cash drain are auctioning off the family silver: pipelines and processing plants. Bakken shale billionaire Harold Hamm and Canadian gas giant Encana Corp. are among the latest to peddle some of their most valuable assets and steadiest earners. They don’t have much choice — as the oil price collapse deflates the value of drilling operations, pipes and plants are about the only things attracting big payments for producers vying to stay afloat. The deals for quick cash are another facet of the energy industry meltdown leading to more than $40 billion in spending cuts and thousands of job losses. The capital infusion comes with a trade-off because producers pay more to process and transport fuel over the lines and in the facilities they used to own. “At some point they all get desperate enough,” said Michael Formuziewich, a fund manager […]

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Three More Energy Companies in Texas Warn of Layoffs

Hundreds more oil-industry workers in Texas—including 330 in the oil and gas division of General Electric Co. —are about to lose their jobs as U.S. crude prices languish below $50 a barrel. In recent letters sent to the Texas Workforce Commission, GE Oil & Gas and two other energy companies warned state regulators of plans to cut 720 employees around the state. GE said it would cut about 45% of staff at its Buck Creek oil field equipment manufacturing plant in Lufkin, Texas, about 120 miles northeast of Houston. The layoffs are scheduled to begin in late March and are part of a restructuring drive to reduce costs, the company said. This “is a decision we don’t take lightly but one we must undertake for the long-term health of the business,” the company said. Analysts at Moody’s Investors Service said oil and gas has been an engine of growth […]

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Lower Oil Prices Strike at Heart of Canada’s Oil Sands Production

OTTAWA — For as long as 400-ton dump trucks have been rumbling around the open pit mines of Canada ’s oil sands , crews from Kal Tire have been on hand to replace and repair their $70,000, 13-foot diameter tires. But the relationship, going back over a decade, didn’t spare the company when oil prices began plummeting. Dan Allan, the senior vice president of Kal’s mining tire unit, said that customers immediately began looking for price concessions. Others asked Kal to withdraw personnel from some sites or swiftly canceled plans to add more maintenance crews. “We’re sort of caught at the sharp end of the spear,” said Mr. Allan, who is now looking to relocate some employees. “It’s really difficult.” Canada’s oil sands — and the 167 billion barrels of reserves — prompted an unprecedented expansion over the last decade. But the roughly $155 billion spending spree left the […]

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BP to cut exploration spend, postpone upstream, cancel downstream projects

London (Platts)–3Feb2015/245 am EST/745 GMT BP is to slash its capital expenditure in 2015 by at least 17% due to the lower price of crude oil, with exploration spending to be cut, projects in the upstream postponed and certain downstream projects canceled altogether, the company said Tuesday, February 3. CEO Bob Dudley in a fourth quarter results statement said that the focus was now on "resetting" BP. "We have now entered a new and challenging phase of low oil prices through the near and medium term," Dudley said. "Our focus must now be on resetting BP: managing and rebalancing our capital program and cost base for the new reality of lower prices," he said. BP said it was now taking action to respond to the likelihood of oil prices remaining low into the medium term and rebalance its sources and use of cash accordingly. Article continues below… Oilgram News […]

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Rosneft changes accounts policy to deal with oil and rouble blows

Rosneft , the Russian state-owned energy company, has sought to mitigate the heavy blows of falling crude oil prices and the volatile rouble by changing its accounting systems to record foreign currency fluctuations when they materialise, rather than every quarter. The company has yet to announce its fourth-quarter results but the move, which was backdated to October 1 2014, has benefited BP , which owns 19.75 per cent of the Russian company. Analysts were expecting BP to suffer losses of hundreds of millions of dollars in earnings and dividends but on Tuesday it reported a $470m fourth-quarter profit from its stake in Rosneft. Rosneft said the change was approved by the board’s audit committee “with the involvement of the independent auditor Ernst & Young”, but it is not clear if EY actually approved it. The “increased foreign exchange volatility of the Russian rouble . . . can distort the effect of the actual […]

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Russia Details Plans to Bolster Its Economy, but Experts Scoff

MOSCOW — With oil prices down more than 50 percent in the past year, the ruble having lost more than half its value, a recession looming and the country already dipping into its rainy-day funds, the Russian economy is in a race against time. But one would be hard pressed to grasp the depth of the troubles from the Kremlin’s prescriptions. Anton Siluanov, the finance minister, laid out the government’s long-promised “anti-crisis” package in a live broadcast on state television last week, a laundry list of half-measures and a vague promise of a 10 percent budget cut that economists almost unanimously dismissed as inadequate. “That plan is nonsense,” the Russian oligarch Aleksandr Y. Lebedev said in an interview, describing it as throwing away money to rescue some of Russia ’s worst companies. “Lots of words and little specific.” President Vladimir V. Putin weighed in briefly, repeating that along with […]

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Peak Affordable Oil

It is quite obvious that high oil prices in the last 3-4 years Fig 1: WTI spot prices to 23/1/2015 http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=rwtc&f=w have reduced demand for oil, as shown in this IEA graph for OECD countries: Fig 2: Oil demand in OECD countries Oct 2011 – Sep 2014 https://www.iea.org/oilmarketreport/omrpublic/charts/ So which oil is affordable? Let’s use a graph of the Monetary Policy Report (January 2015) of the Bank of Canada (which would be favourable to Canadian tar sands) Fig 3: Oil production by area and full-cycle costs The Bank of Canada report reads: “Based on recent estimates of production costs, roughly one-third of current production could be uneconomical if prices stay around US$60, notably high-cost production in the United States, Canada, Brazil and Mexico (Chart 4). More than two-thirds of the expected increase in the world oil supply would similarly be uneconomical. A decline in private and public investment in […]

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Why the Crash in Oil Prices Should Bury “Peak Oil” Once and for All

The Problem Isn’t That We Have Too Little Oil. We Have Too Much and are Cooking the Planet With It. In 1977 Isaac Asimov wrote of “The Nightmare Life Without Fuel.” Writing in the wake of the first Middle East oil shock, Asimov imagined cars and air conditioning as distant memories, cities mined for valuable minerals and hardware, and the last barrels of oil hoarded for agricultural and military purposes. A future of scarcity seemed in the cards after the 1979 revolution in Iran disrupted global supplies, reviving gas lines and rationing in the United States, and sending oil prices to a stratospheric $117 a barrel in today’s dollars. The U.S. economy plunged into recession for the second time in a decade. Inflation, food prices and unemployment all shot up. Energy-importing Third World nations were devastated as expensive crude depleted their treasuries even as the U.S. Federal Reserve jacked […]

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Forget peak oil; we’ve reached peak everything

Forget peak oil; we’ve reached peak everything thumbnail Peak oil is so last year. Now we can worry about peak everything: peak food, peak soil, peak fertilizer, even peak bees. Let’s start small. We depend on bees to pollinate plants that account for about one-third of the world’s food supply, but since 2006 bee colonies in the United States have been dying off at an unprecedented rate. More recently the same “colony collapse disorder” has appeared in China, Egypt, and Japan. Many suspect that the main cause is a widely used type of pesticides called neonicotinoids, but the evidence is not yet conclusive. The fact remains that one-third of the American bee population has disappeared in the past decade. If the losses spread and deepen, we may face serious food shortages. Then there’s peak fertilizer, or more precisely peak phosphate rock. Phosphorus is a critical ingredient of fertilizer, and […]

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World’s renewable resources reach limit

World’s renewable resources reach limit thumbnail Renewable resources representing 45 per cent of global calorie intake have reached peak production levels Peak oil has become a familiar term over the past decade, but the world will soon have to get used to peak rice, peak wheat and peak maize, according to new research from the Helmholtz Centre for Environmental Research . ‘Peak oil seemed believable because oil is a limited resource, but surprisingly our methodology in this study could not prove it,’ says Ralf Seppelt, a landscape ecologist working on the project. Money and innovation from the oil industry has seen peak oil recede as a risk, according to the research. The Helmholtz study found that while peak oil is not a cause for concern, renewable resources have reached the limit for annual growth. Among the 20 renewables studied, 18 – including meat production and the global fish catch […]

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How Much Will Low Oil Prices Stimulate Demand?

Since weak oil demand growth is a major ingredient in the current oil price crash, higher demand stimulated by low prices could be a moderating factor. While US demand has risen since prices fell, there are several reasons why the global response may be slower to appear and less dramatic. One of the main factors that will determine the depth and duration of the current slump in oil prices is the extent and timing of a resulting rebound in demand. It is likely to occur first in countries like the US, where fuel taxes are low and consumers see the results of lower oil prices at the gas pump relatively quickly–a $1.65 per gallon drop already, since June. However, other factors besides taxes could impede faster demand growth elsewhere. From 2007 to 2009 the combination of high oil prices and a weak economy reduced US petroleum demand by almost […]

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Oil Futures Fall In European Trade

LONDON–Oil started the week in the red as strikes at U.S. refineries and sluggish manufacturing data from China fueled fears of a demand slowdown. On the New York Mercantile Exchange, light, sweet crude futures for March delivery traded down 2.3% at $47.11 a barrel. Brent crude for March delivery fell 2.1% to $51.89 a barrel on London’s ICE Futures exchange. Workers represented by the United Steelworkers union at U.S. refineries that produce nearly 10% of the nation’s gasoline, diesel and other fuels went on strike Sunday after contract negotiations broke down over salaries and safety concerns. The union said the strike affects 3,800 workers. Oil refiners like Royal Dutch Shell PLC., Tesoro Corp. , Marathon Petroleum Corp. and LyondellBasell Industries said they would keep plants operating under contingency plans. The news fueled concerns that any reduction in refining capacity could cut consumption and allow supplies to build even more […]

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Oil prices fall on weak Chinese data, U.S. refinery strikes

LONDON (Reuters) – Crude oil prices fell on Monday after U.S. unions called a refinery strike and activity in China’s factory sector shrank for the second month in a row, quashing Friday’s bullish mood. At 0938 GMT (4.38 a.m. ET) Brent crude oil futures were down $1.05 at $51.94 a barrel while U.S. crude futures were down $1.13 at $47.11 a barrel. The move down followed a rally on Friday fueled by month-end short covering and a record weekly drop in the number of U.S. oil rigs employed, according to Baker Hughes. The count is now down 24 percent from its October peak. Both contracts rose by about 8 percent and Brent closed at $52.99 a barrel on Friday. But on Sunday workers at nine U.S. refineries and chemical plants went on strike in a bid to pressure oil companies to agree to a new national contract. "So far […]

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Commodities crash: Bad news for the world economy, but is anyone listening?

Depression: Unemployed;destitute man leaning against vacant store:photo by Dorothea Lange http://commons.wikimedia.org/wiki/File:Depression,_Unemployed,destitute_man_leaning_against_vacant_store-photo_by_Dorothea_Lange_-_NARA_-_195825.tif Reading the general run of financial headlines might lead one to believe that price declines in those commodities which are highly sensitive to economic conditions such as  iron ore ,  copper ,  oil ,  natural gas ,  coal , and  lumber  are good on their face. Obviously, the declines aren’t good for those who  sell  these commodities. But, those of us who  buy  these commodities in the form of cars, houses, utility bills and other products and services ought to be helping the world economy as we buy more stuff with the freed up income. As true as that may be, these commodity price declines also signal something else: exceptional weakness in the world economy. It is no secret that economic growth in Europe has been stalled for some time and is now receding. The European Union’s confrontation […]

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Islamic State Affiliate Takes Root Amid Libya’s Chaos

ENLARGE A Libyan worker cleans in front of the Corinthia Hotel last week, a day after it was targeted. Photo: European Pressphoto Agency Islamic State’s affiliate in Libya has capitalized on the battlefield failures and disillusionment among better-established, more moderate Islamist groups in the country, following the same formula that brought the radical movement success in Syria and Iraq, Western counterterrorism officials said. A group calling itself Islamic State’s Tripoli Province claimed responsibility for an attack on Tuesday on a hotel that killed nine people, including an American. It was the first time the group came to prominence in Libya, raising concerns that the reach of the extremists is spreading beyond Syria and Iraq. But the attacks also underlined the threat Islamic State poses to more entrenched Islamist groups such as Libya Dawn, a more moderate Islamist militia that is ideologically close to Egypt’s Muslim Brotherhood and now fights […]

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U.S. Treasury’s Sanctions Czar Says Iran, Russia, Islamic State Weakened

ENLARGE Under Secretary for Terrorism and Financial Intelligence David Cohen photographed in his office at the Treasury Department on Jan. 29 in Washington, D.C. Photo: Madeline Marshall/The Wall Street Journal WASHINGTON—Iran’s economy is now fundamentally incapable of recovery without a nuclear accommodation with the West, increasing Washington’s leverage in final negotiations with Tehran, said the Treasury Department’s outgoing sanctions czar David Cohen . “They’re stuck. They can’t fix this economy unless they get sanctions relief,” Mr. Cohen said in an interview with The Wall Street Journal about sanctions policy around the world. “I think they are coming to the negotiations with their backs to the wall.” Mr. Cohen is leaving his post to assume the No. 2 spot at the Central Intelligence Agency, where he’ll continue to spearhead U.S. efforts to contain Iran, Russia, North Korea and other American adversaries. Mr. Cohen has been a central player at Treasury […]

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Kirkuk: A new Isis attack is the latest challenge for the long-troubled oil-rich city in Iraq

Iraqi onlookers stand next to a burnt car following a motorcycle bombing attack which killed at least eight people on September 19, 2014 in the northern city of Kirkuk.(Getty) For Kirkuk, its oil-rich surroundings have been more a curse than a blessing. The northern Iraqi city struck black gold in 1927, while still under the control of the British Empire, and became the country’s oil production powerhouse in the north. At its peak, its oil fields were pumping out 3.2 billion barrels per day, but this has since fallen sharply amid war and mismanagement by the former Iraqi dictator Saddam Hussein, who seized control in 1968. Kirkuk is in what is now Kurdistan, a semi-autonomous region of Iraq, and was for years a multi-ethnic city. Many Kurds, who make up the bulk of the 850,000 population, had arrived in Kirkuk in search of work in the city’s oil industry. […]

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Morgan Stanley Sees China Peak Steel Now as Goldman Differs

(Bloomberg) — Peak steel arrives in China this year, according to Morgan Stanley, which forecast that production and consumption of the alloy will decline after 2015 as the second-largest economy matures. Steel output in the world’s top producer will peak at 806 million metric tons this year, drop to 801 million tons in 2016 and decline further to 795 million tons in 2017, the bank said in a commodities report on Monday. The comments reiterated remarks made by the bank’s analysts in a Dec. 16 note. China expanded at the weakest pace last year since 1990 amid a property market slowdown, as policy makers sought to shift the economy more toward consumption. The slowdown in the country that accounts for about half of global steel production contributed to a collapse in iron ore prices, which sank 47 percent in 2014. The drop was also spurred by a supply surge […]

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North Sea Oil Turns Buyer’s Market as Apache, BG Group Want Out

(Bloomberg) — Want to buy an oil well in U.K.’s North Sea? There are plenty available as some of the industry’s largest names try to sell aging, costly wells that have become even less profitable with the plunge in crude prices. BG Group Plc, Apache Corp. and Marathon Oil Corp. are among companies that have explored a sale of their North Sea assets, according to people familiar with the processes. In all, assets worth as much as 20 billion pounds ($30 billion) are currently for sale in the North Sea, said Dave Blackwood, senior adviser to investment bank Evercore Partners Inc. Drillers have struggled in recent years to extract oil from the North Sea’s depleting fields, leading to reduced output and costs that jumped 26 percent last year. Oil has slumped about 36 percent since the Organization of Petroleum Exporting Countries’ Nov. 27 accord to maintain production at 30 […]

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Oil Workers in U.S. on First Large-Scale Strike Since 1980

(Bloomberg) — The United Steelworkers union, which represents employees at more than 200 U.S. oil refineries, terminals, pipelines and chemical plants, began a strike at nine sites on Sunday, the biggest walkout called since 1980. The USW started the work stoppage after failing to reach agreement on a labor contract that expired Sunday, saying in a statement that it “had no choice.” The union rejected five contract offers made by Royal Dutch Shell Plc on behalf of oil companies including Exxon Mobil Corp. and Chevron Corp. since negotiations began on Jan. 21. The steelworkers’ union hasn’t called a strike nationally since 1980, when a stoppage lasted three months. A full walkout of USW workers would threaten to disrupt as much as 64 percent of U.S. fuel production. Shell and union representatives began negotiations amid the biggest collapse in U.S. oil prices since 2008. “The problem is that oil companies […]

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Oil Companies Draw on Creative Financing to Stay Afloat After Prices Tumble

(Bloomberg) — North America’s small and mid-sized energy companies are searching for creative ways to stay afloat as investors smell blood in the water from the almost 60 percent fall in the price of oil since June. Oil and natural gas companies are straining for solutions before cuts in credit lines and increases in lending rates hit home in April, when banks re-price the collateral used to secure revolving credit lines. Some are turning to more creative forms of financing as familiar sources of money dry up. That financing is coming from hedge funds, private equity shops and mega-wealthy investors like billionaire Carl Icahn who have the cash to weather a prolonged downturn and are on the hunt for deals among the wounded, bankers and analysts say. Oil operators, meanwhile, are laying off staff, freezing salaries and deferring investments to conserve cash. “Companies have lived in a state of […]

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Refineries Stay Open Amid Walkout

USW workers walk a picket line outside a Shell refinery in Texas. ENLARGE Photo: Reuters United Steelworkers at refineries that produce nearly 10% of the nation’s gasoline, diesel and other fuels went on strike Sunday, after contract negotiations broke down over salaries and safety concerns, union officials and companies said. The USW told members at nine refineries and chemical plants from Texas to California to walk out after their shifts were over and not to return until a new three-year collective bargaining agreement was reached. The strike affects 3,800 workers, the union said. The job action was the most widespread of its kind in 35 years. In 1980, a nationwide strike of refinery workers lasted three months, but most fuel generators were able to keep running using nonunion labor. This time around, companies said they, too, would keep plants operating under contingency plans. Royal Dutch Shell PLC., the oil […]

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North Dakota: Crude Production is Being Focused in Four Core Counties

The crude oil price drop has yet to chase all producers out of North Dakota, and it likely won’t – as long as prices remain at or above a critical threshold, according to recently released analysis by the North Dakota Department of Mineral Resources House Appropriations Committee . In doing their analysis, the department looked at several areas affected by wilting crude oil values, including well permits, rig counts, production projections and even breakeven pricing. What the department concluded is that new drilling would not cease until prices fell to $30/barrel or less, far lower than prices in the mid- to upper $40s a barrel seen in recent days. The drop in prices has slowed production in the state dramatically, however, and drillers that have remained are focusing on “the most bang for the buck,” Alison Ritter, spokesperson for the House Appropriations Committee, told Rigzone. “They are focusing their […]

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U.K. Manufacturing Strengthens as Oil-Price Drop Cuts Costs

(Bloomberg) — U.K. manufacturing growth accelerated in January as factories saw a pickup in domestic orders and the biggest decline in raw-material costs in almost six years. Markit Economics said its Purchasing Managers’ Index rose to 53 from a revised 52.7 in December. Measures above 50 indicate expansion. A gauge of input prices plunged to the lowest since May 2009. The report suggests the stimulus from cheaper commodity costs is feeding through to businesses. The oil-price drop is also easing price pressures across the economy, and Bank of England Governor Mark Carney said the inflation rate could fall below zero in the coming months. “The domestic market remains the main growth driver, as the U.K. economic recovery provides a steady stream of new business,” said Rob Dobson, an economist at Markit in London. “Waning inflationary pressures will provide the Bank of England with leeway to push back the first […]

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Greek Factories Slump as Crisis Risks Undermining ECB Action

(Bloomberg) — Greek manufacturing shrank at the fastest pace since 2013 as uncertainty about the country’s political future mounted, threatening to undermine efforts by the European Central Bank to stimulate the euro-area economy. A Purchasing Managers’ Index for Greece slipped to a 15-month low of 48.3. The measure has been below 50, the mark that separates expansion from contraction, since September. A final reading for the 19-nation currency bloc stood at 51 in January, London-based Markit Economics said on Monday. That’s up from 50.6 in December and in line with a Jan. 23 estimate. Subdued growth and a slide in prices aggravated by a slump in the cost of oil prompted the ECB to announce a 1.1 trillion euro ($1.2 trillion) quantitative-easing program on Jan. 22. Business confidence improved last month in anticipation of the move. Three days after the QE announcement, Greek voters elected Alexis Tsipras as new […]

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Russian Oil Output Near Record as Prices Fail to Slow Momentum

(Bloomberg) — Russian oil production remained near the post-Soviet record reached last month, as the collapse of crude prices since June has so far failed to visibly disrupt growth, and exports jumped. The country’s output dropped less than 0.1 percent from December to 10.657 million barrels a day, according to preliminary data e-mailed today from the Energy Ministry’s CDU-TEK group. Oil prices have fallen to the lowest since 2009 amid surging U.S. output and a November decision by OPEC to abandon its role as the global swing producer. Russia, which depends on the oil and natural gas industry for half of its budget, is on the brink of a recession, pressured by crude’s bear market and U.S. and European Union sanctions. Crude output will probably remain on par with 2014, although the current low prices present a risk, Energy Ministry Alexander Novak said last month, citing producers’ plans. Selling […]

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Death Toll Mounts as Ukraine Cease-Fire Talks Break Down

ENLARGE A man examines the wreckage of his car in the suburbs of Donetsk, Ukraine, on Sunday after it was destroyed by shelling the day before. Photo: Agence France-Presse/Getty Images ARTEMIVSK, Ukraine—Cease-fire talks broke down between Ukraine’s government and Russian-backed rebels while Kiev reported 28 soldiers killed over the weekend in some of the deadliest fighting since a tentative peace deal was signed in September. Artillery duels around a government-held railway hub of Debaltseve in eastern Ukraine squelched hopes to stem a return to full-scale fighting. Both sides accused the other of shelling civilian areas Sunday. Ukraine’s military says it expects a surge in fighting in the coming days, after Russia sent a convoy of what it said was humanitarian aid into the country over the weekend. Kiev has accused the Kremlin of using the aid convoys to funnel munitions to the rebels and says there is usually an […]

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U.S. Considers Supplying Arms to Ukraine Forces, Officials Say

WASHINGTON — With Russian-backed separatists pressing their attacks in Ukraine , NATO ’s military commander, Gen. Philip M. Breedlove, now supports providing defensive weapons and equipment to Kiev’s beleaguered forces, and an array of administration and military officials appear to be edging toward that position, American officials said Sunday. President Obama has made no decisions on providing such lethal assistance. But after a series of striking reversals that Ukraine’s forces have suffered in recent weeks, the Obama administration is taking a fresh look at the question of military aid. Secretary of State John Kerry , who plans to visit Kiev on Thursday, is open to new discussions about providing lethal assistance, as is Gen. Martin E. Dempsey , the chairman of the Joint Chiefs of Staff, officials said. Defense Secretary Chuck Hagel, who is leaving his post soon, backs sending defensive weapons to the Ukrainian forces. In recent months, […]

Posted On : Published By : Tom Whipple
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Ukraine rebel leader Zakharchenko ‘to raise 100,000 men’

Rebels have been gaining ground in the past few days Pro-Russian separatist leader Alexander Zakharchenko has announced plans to recruit 100,000 men, as fighting with Ukrainian forces intensifies. The separatists are trying to capture the key town of Debaltseve, while central areas of rebel-held Donetsk have been hit by artillery fire. Dozens of civilians were killed on both sides of the front line at the weekend. "Mobilisation will start in 11 days’ time," Mr Zakharchenko told Donetsk news agency. Hundreds of civilians have been moved out of Debaltseve amid reports that the separatists have reached the outskirts of the town. Attempts to negotiate a ceasefire failed on Saturday in the Belarusian capital Minsk when rebel representatives did not turn up.

Posted On : Published By : Tom Whipple
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Population: Four Out of Five Scientists Agree

A new poll of American scientists suggests that a large majority of them (82 percent) regard population growth as a major challenge, almost as many as those who believe that climate change is mostly due to human activity (87 percent). The poll, which was conducted by the Pew Research Center, indicates that a clear majority of the American public (59 percent) are concerned that there won’t be enough food and resources to accommodate a growing world population, but the level of concern in the scientific community, as with climate change, is noticeably higher. On one level, the poll results are not surprising. For decades now leading scientists have been warning that humanity is overusing planetary resources and inflicting dangerous harm on the environment. Earlier this month 18 scientists authored a paper in the journal Science warning that humanity is encroaching on nine “planetary boundaries,” and that we have already […]

Posted On : Published By : Tom Whipple
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Why we are at Peak Oil Right Now

In this life nothing is certain. Therefore I am not declaring, absolutely, that we are at peak oil, only that it is a near certainty. But I am putting my reputation on the line in making the claim that the period, September 2014 through August 2015 will be the year of Peak Oil. Below are my reasons for making this claim. First of all, Peak Oil is not a theory. The claim that Peak Oil is a theory is more than a little absurd. Fossil hydrocarbons were created from buried alga millions of years ago and they are finite in quantity. And as long as we keep extracting them in the millions of barrels per day, it is only common sense that one day we will reach a point where their extraction starts to decline. In fact most countries where oil is extracted are already in decline. So obviously […]

Posted On : Published By : ASPO-USA