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Germany’s green goals have profound consequences for Eon and RWE

Thousands of ordinary Germans are using renewables, which entitle them to an above-market rate for power they put into the grid Johannes Teyssen, Eon chief, hopes Eon’s successor company will be able to compete more effectively in new energy technology The solar panels Konrad Kuisle installed on the roof of his barn and milking shed have been a steady source of income for the Bavarian dairy farmer. “I installed the panels because, on the one side, I support renewable energy. But I also get something out of it,” says Mr Kuisle, who calculates the power he feeds into Germany’s electricity grid generates up to 15 per cent of his annual turnover. Mr Kuisle is just one of thousands of ordinary Germans who have scrambled to invest in renewable power as Germany pursues one of the most radical sets of energy policies in the world — which are having enormous […]

Posted On : Published By : Tom Whipple
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The Problem of Debt as We Reach Oil Limits

(This is Part 3 of my series – A New Theory of Energy and the Economy. These are links to Part 1 and Part 2 .) Many readers have asked me to explain debt. They also wonder, “ Why can’t we just cancel debt and start over? ” if we are reaching oil limits, and these limits threaten to destabilize the system. To answer these questions, I need to talk about the subject of promises in general, not just what we would call debt. In some sense, debt and other promises are what hold together our networked economy. Debt and other promises allow division of labor, because each person can “pay” the others in the group for their labor with a promise of some sort, rather than with an immediate payment in goods. The existence of debt allows us to have many convenient forms of payment, such as dollar […]

Posted On : Published By : Tom Whipple
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Oil Fluctuates Before U.S. Inventory Data

Crude-oil futures swung between gains and losses in Asian trade Wednesday as investors remain uncertain about oil supply levels and scrutinize data for cues. On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at $50.31 a barrel in recent trade, up $0.29 in the Globex electronic session. Brent crude for March delivery on London’s ICE Futures exchange fell $0.14 to $56.29 a barrel. Oil prices are under pressure due an increasing glut in global oil supply, helped by the U.S. shale revolution and steady oil production from the Middle East. A series of spending cuts by major oil companies and a drop in the number of drilling rigs deployed in the U.S. had raised hopes that supplies would be curbed, resulting in a price rally of around 20% in recent weeks. However, there is little evidence to suggest that actual oil production levels […]

Posted On : Published By : Tom Whipple
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Brent holds above $56 after U.S. crude stocks rise less than expected

BEIJING (Reuters) – Brent crude held steady above $56 a barrel on Wednesday, and U.S. crude rose briefly more than $1, after a smaller-than-expected rise in U.S. crude stocks was viewed by some as a sign that a supply glut was starting to abate. The gains in futures, however, were capped by a warning from the International Energy Agency (IEA) that ample global production would still swell world inventories before investment cuts begin to significantly dent output. "The supply growth in 2015 is likely to continue unabated, albeit at a somewhat lower rate," Fereidun Fesharaki at Facts Global Energy said in a note on Wednesday. "This all means a weak market in 2015 and even lower oil prices. Demand rebound will not save the oil market," he said. Brent March crude futures had ticked up 28 cents to $56.71 by 0557 GMT, after losing $1.91 during the previous session […]

Posted On : Published By : Tom Whipple
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Oil falls sharply as IEA expects inventories to rise

NEW YORK (Reuters) – Crude oil prices fell for the first time in four sessions on Tuesday after the International Energy Agency (IEA) warned that ample supplies will raise global inventories before investment cuts begin to significantly dent production. Oil stockpiles in member countries of the Paris-based Organization for Economic Cooperation and Development (OECD) may approach a record 2.83 billion barrels by mid-2015, said the IEA, advisor on energy policy to a group of Western nations. U.S. March crude futures CLc1 fell $2.84, or 5.37 percent, to settle at $50.02 a barrel, after dropping to $49.86. Brent March crude LCOc1 fell $1.91, or 3.3 percent, to settle at $56.43 a barrel, having fallen as low as $56.11. "It’s the battle of the oil outlooks playing out here," said John Kilduff, partner at New York energy hedge fund Again Capital LLC. "The IEA report is a good reminder that there’s […]

Posted On : Published By : Tom Whipple
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Natural Gas Rises on Cold Spell, Rising Demand

(Updates to add price table at bottom) By Timothy Puko Natural gas closed with its first back-to-back gains in nearly a month, as an arctic chill settling over the eastern half of the U.S. raised heating-demand expectations through next week. The front-month March contract settled up 8 cents, or 3.1%, at $2.677 a million British thermal units on the New York Mercantile Exchange. Prices are up 3.8% from the 2 1/2-year low settlement from Friday during the first back-to-back gains since Jan. 13 and 14. High temperatures are unlikely to rise above 30 degrees Fahrenheit–and in some places not even into the teens–across the Northeast, Ohio Valley and Great Lakes regions, according to Weather Services International in Andover, Mass. These temperatures will be as much as 25 degrees below normal and will be part of a series of arctic fronts that sends cold air across the East for a […]

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Oil on Wild Ride; How Will It End?

NEW YORK (AP) — The price of oil is on a wild ride, and there is little agreement on where it’s headed. After falling nearly 60 percent from a peak last June, the price of oil bounced back more than 20 percent as January turned to February. Then, on Tuesday, it sunk 5 percent, closing just above $50. Oil has fallen or risen by 3 percent or more on 14 of 27 trading days so far this year. By comparison, the stock market hasn’t had a move that big in more than three years. Predicting prices is especially tricky now because the oil market has never quite looked like this. Oil price collapses of the past were triggered either by plummeting demand or an increase in supplies. This latest one had both. Production in the U.S. and elsewhere has been rising, while slower economic growth in China and weak […]

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Kurdistan budget payment imminent

Iraqi Oil Minister Adil Abdulmahdi (left), KRG Prime Minister Nechirvan Barzani (center), and KRG Deputy Prime Minister Qubad Talabani (right), in Erbil on Nov. 13, reach a deal on restarting revenue sharing payments and exports. (Source: Kurdistan Regional Government) The Kurdistan Regional Government (KRG) is set to receive a budget payment from Baghdad as soon as Iraq’s federal budget law officially takes force, despite continued uncertainty about Kurdistan’s contributions to federal oil exports.“A budget payment will be made very soon to the KRG of their share, according to the agreement that was reached, as soon as the law is made official,” said Hoshyar Zebari, Iraq’s Minister of Finance.The final step in passing the 2015 budget into l…

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OPEC down, but not out, IEA says

IEA Executive Director Maria van der Hoeven sees OPEC influence enduring, but waning in the era of U.S. shale. Photo by Anatoli Zhdanov/UPI PARIS, Feb. 10 (UPI) — OPEC’s market influence is expected to grow, but the 12-member group might not return to its pre-recession glory, the International Energy Agency said Tuesday. The Organization of Petroleum Exporting Countries said in its February market report demand for its crude oil should increase as low oil prices put downward pressure on production in U.S. shale basins. OPEC in late November opted to keep production levels static to protect a market share influenced by rising U.S. oil production. The 12-member group still holds considerable influence over the global market, but IEA Executive Director Maria van der Hoeven said its status is waning . "OPEC’s share of global production will indeed grow," she said in a statement. "But it will not revisit the […]

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Petrobras Said to Hit Drilling Snag at Biggest Brazil Find

(Bloomberg) — Petroleo Brasileiro SA halted drilling at its largest oil discovery in deep waters, two people with knowledge of the matter said, underscoring the technical challenges facing the company’s new management team. An unplanned procedure to retrieve equipment stopped work for more than a week at a well in Libra, the people said, asking not to be named because it hasn’t been made public. Rio de Janeiro-based Petrobras didn’t immediately respond to a request for comment on the incident and if it had been resolved. Commercial production is expected to start in 2020. While Petrobras expanded output to a record in December at the so-called pre-salt region that holds Brazil’s largest deposits, it has also run into drilling disruptions in the past. In 2010, it abandoned the first well it started at Libra, citing mechanical issues. In 2011, it briefly halted production at the Sapinhoa field in the […]

Posted On : Published By : Tom Whipple