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Low oil prices threaten EU border economies

Economists at the International Monetary Fund find low oil prices threatening economies just outside the eurozone. (UPI/Shutterstock/canadastock) WASHINGTON, Feb. 3 (UPI) — The fall in oil prices may help short-term, but deflationary pressures are expected to spill out of the borders of countries in the eurozone, the IMF said. Beginning in March, the European Central Bank said it would purchase bonds valued at more than $65 billion per month through September 2016 as part of a so-called quantitative easing program meant to stimulate the struggling European economy. Eurostat, the statistics office for the European Union, reported inflation for January was at minus 0.6 percent, a further contraction from the minus 0.2 percent reported in December. Deflation is driven in large part by the slump in oil prices, off about half of their June value. A blog by economists at the International Monetary Fund found low oil prices will boost […]

Posted On : Published By : Tom Whipple
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BP works on strategic reset

BP Chief Executive Bob Dudley says company looking to hit the reset button in low oil price era. File photo by Roger L. Wollenberg/UPI LONDON, Feb. 3 (UPI) — British energy company BP is entering a reset phase focused on streamlined spending in the low oil price climate, Chief Executive Bob Dudley said Tuesday. "Our focus must now be on resetting BP: managing and rebalancing our capital program and cost base for the new reality of lower prices while always maintaining safe, reliable and efficient operations," Dudley said in a statement announcing fourth quarter results. The oil major reported a replacement cost loss during the fourth quarter of $968 million, compared with a profit of $1.5 billion during the same period last year. Replacement cost is similar to net income reported by the British company’s U.S. counterparts. BP began streamlining operations late last year. The company last year said […]

Posted On : Published By : Tom Whipple
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United Kingdom: Falklands Drilling Program Confirmed

Falkland Oil and Gas Ltd. has mobilized a rig from West Africa to the Falkland Islands for the 2015 drilling program, Merco Press reported Feb. 3, citing company CEO Tim Bushell. The drilling will begin March and will be operated by Premier Oil and Noble Energy. Significant oil and natural gas reserves have been discovered near the Falklands , aggravating disputes over its ownership.  

Posted On : Published By : Tom Whipple
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Here’s One Theory for Why Oil Is Going Nuts

Brent oil surged to $58 a barrel on Tuesday. It is now 24 percent higher than it was just a few weeks ago, meeting the technical definition of a bull market. (Some perspective: Prices are still down 50 percent since June.)  One possible reason for the recent surge: an industry in despair. U.S. drillers idled 94 rigs  last week, the most in data going back to 1987, according to Baker Hughes. In the past eight weeks, 352 rigs were idled. BP on Tuesday said it will reduce spending to $20 billion this year, compared with previous guidance of as much as $26 billion. The cuts bring renewed focus to rig counts and raise questions about how low prices can go and still sustain the U.S. oil boom.  U.S. Rigs Fall to a Three-Year Low Source: Bloomberg The history of oil prices follows a golden rule: What goes down must come up. Goldman Sachs in December […]

Posted On : Published By : Tom Whipple
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Peak oil, peak food, peak everything

It all started with peak oil, the point when the maximum rate of extraction is reached, after which production begins to decline By Gwynne Dyer PEAK OIL is so last year. Now we can worry about peak everything: peak food, peak soil, peak fertiliser, 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 […]

Posted On : Published By : ASPO-USA
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OPEC leader: Oil could shoot back to $200

Right now the oil market is totally focused on finding a bottom for oil prices. However, according to OPEC’s Secretary-General Abdulla al-Badri we’ve already hit bottom. Not only that, but he sees a real possibility that oil prices could explode higher to upwards of $200 per barrel in the future. He’s far from the only one that sees a return of triple-digit oil prices . Finding a bottom: According to recent comments by the Secretary-General when he was in London, the oil market doesn’t need to look for oil prices to bottom as the market has already bottomed. Instead, he offered quite bullish comments by saying, “Now the prices are around $45-$55 , and I think maybe they [have] reached the bottom and we [will] see some rebound very soon.” Normally that type of remark would be just another layer of noise, but this is coming from OPEC’s Secretary-General […]

Posted On : Published By : Tom Whipple
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The Entire Oil Collapse Is All About Crushing Russian Control Over Syria

While the markets are still debating whether the price of oil is more impacted by the excess pumping of crude here, or the lack of demand there, or if it is all just a mechanical squeeze by momentum-chasing HFT algos who also know to buy in the milliseconds before 2:30pm, we bring readers’ attention back to what several months ago was debunked as a deep conspiracy theory. Back then we wrote about a certain visit by John Kerry to Saudi Arabia, on September 11 of all days, to negotiate a secret deal with the now late King Abdullah so as to get a “green light” in order “to launch its airstrikes against ISIS, or rather, parts of Iraq and Syria. And, not surprising, it is once again Assad whose fate was the bargaining chip to get the Saudis on the US’ side, because in order to launch the incursion […]

Posted On : Published By : Tom Whipple
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Oil Prices Continue Their Rally

A flame shoots out of a chimney at a petroindustrial factory in Kawasaki, Japan. ENLARGE Photo: Reuters LONDON—Oil prices continued their rally on Tuesday as investors continued to bet that a sharp decline in U.S. drilling activity will balance the oversupplied global market even as analysts cautioned that the rebound may not prove sustainable. Front-month Brent crude, the global oil benchmark, rose 2.3% flirting with $56 a barrel on London’s ICE futures exchange. On the New York Mercantile Exchange, light, sweet crude futures for delivery in March recently traded at $50.65 a barrel, up more than 2% from Monday’s settlement. Both the global oil benchmarks have gained more than 11% over the last three sessions after data last week showed the number of oil-drilling rigs in the U.S. fell to their lowest in three years. Gareth Lewis-Davies, analyst at BNP Paribas , said that investors are encouraged by the […]

Posted On : Published By : Tom Whipple
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Natural Gas Hits Four-Session Losing Streak on Tame Weather Forecasts

Natural-gas prices closed at fresh two-year lows Monday as tame weather forecasts keep traders believing that supply is strong enough to overwhelm demand for the heating fuel. The front-month March contract settled down 1.1 cents, or 0.4%, at $2.68 a million British thermal units on the New York Mercantile Exchange. Gas is on a four-session losing streak, its longest in two months, and at its lowest settlement since Aug. 29, 2012. Weather updates from the weekend are showing limited cold for the next two weeks. Below-normal temperatures are limited to the Northeast while far above-normal temperatures are covering the entire western half of the country, spreading as far east as St. Louis. Without any sign of an extreme Arctic cold front coming for most of February, there is little hope for gas bulls, analysts said. Half of all U.S. homes use natural gas for heat, and that usually drives […]

Posted On : Published By : Tom Whipple
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How Floating Armories Help Guard Cargo Ships From Pirates on High Seas

The MNG Resolution, a floating arsenal in the Gulf of Oman, shuttles guards and weapons for private maritime security companies that protect ships in one of the most dangerous shipping routes in the world. Photo: Niki Blasina/The Wall Street Journal ON THE GULF OF OMAN—Before dawn one morning in November, four men on the deck of the MNG Resolution lifted cases of guns and body armor out of shipping containers and heaved them into a waiting speedboat. The team zipped across the water to a tanker, where the crew pulled aside razor wire and hoisted the weapons aboard. The four men clambered up a rope ladder, and the speedboat raced back. The 141-foot Resolution, built 30 years ago to service offshore oil platforms, has a new job: She is a floating armory and bunkhouse for contract security forces. At least a half dozen such boats ply the Gulf of […]

Posted On : Published By : Tom Whipple