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Crude-Oil Price Collapse Takes Toll on Williston

Oil-pump jacks in Williston, N.D., last November. ENLARGE Photo: Associated Press WILLISTON, N.D.—As the epicenter of the North American oil boom, this town was a magnet for blue-collar job seekers. But the collapse in crude prices means truck-choked Williston is no longer the land of opportunity it was less than a year ago. “I tried to get in on the oil rigs, but by the time I got here they were laying off,” says Jimmy Sidwell, who arrived in Williston from Atlanta in January. He had figured the oil fields were one of the few remaining places where he could earn a good salary without having a college degree. Instead, Mr. Sidwell has been digging ditches and sleeping in motels, hoping that something better will open up. “It’s like everyone is here looking for the pot of gold,” he says. In 2008, energy companies figured out how to combine […]

Posted On : Published By : Tom Whipple
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IS HUMANKIND ALREADY WITNESSING THE SLOW ARRIVAL OF “PEAK OIL”?

March 11, 2015 (NATIONAL) — If you’ve never heard of the concept of "peak oil" don’t feel left out. The news media rarely mentions it even though it may be one of the most significant events in the history of humans on earth. Because if peak oil hits in our lifetime, things could get dicey for every human being on the planet sometime this century. LIfe as we know it in a modern world could change forever. Peak oil is a predicted future event made famous by Marion Hubbert (October 5, 1903 – October 11, 1989) who was a a geoscientist working at the Shell research lab in Houston, Texas. He made important contributions to geology and petroleum geology, including what is called the Hubbert curve and Hubbert peak theory, a basic component of peak oil. Peak oil refers to the point in time when the maximum rate of […]

Posted On : Published By : ASPO-USA
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IMF: Energy reforms key to Ukraine’s success

With bailout in hand, the International Monetary Fund nonetheless says Ukrainian economic woes stem from "deep-rooted" issues. UPI/Ivan Vakolenko Energy sector reforms and the addressing of "deep-rooted" structural issues in Ukraine will return the country’s economy to growth, the IMF said. The International Monetary Fund announced it approved the immediate disbursement of about $5 billion to Ukraine, with a little more than half of that allocated to budget support for the former Soviet republic. The Ukrainian administration that took over in the wake of political upheaval in late 2013 said the economy was left in shambles by former President Viktor Yanukovych . More than a year later, the IMF said real gross domestic product is expected to contract by 5.5 percent. Gripped by conflict and interference by its former Soviet patrons, the IMF nonetheless said some of the onus lies with Kiev . "Addressing deep-rooted structural problems is critical […]

Posted On : Published By : Tom Whipple
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The Real Story Behind The Oil Price Collapse

Many reasons have been provided for the dramatic plunge in the price of oil to about $60 per barrel (nearly half of what it was a year ago): slowing demand due to global economic stagnation; overproduction at shale fields in the United States; the decision of the Saudis and other Middle Eastern OPEC producers to maintain output at current levels (presumably to punish higher-cost producers in the U.S. and elsewhere); and the increased value of the dollar relative to other currencies. There is, however, one reason that’s not being discussed, and yet it could be the most important of all: the complete collapse of Big Oil’s production-maximizing business model. Until last fall, when the price decline gathered momentum, the oil giants were operating at full throttle, pumping out more petroleum every day.  They did so, of course, in part to profit from the high prices.  For most of the […]

Posted On : Published By : Tom Whipple
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Oil Choppy, High U.S. Supplies Weighs on WTI Prices

By Eric Yep Crude-oil futures were choppy in Asian trade Thursday as markets weighed South Korea’s surprise interest-rate cut and pressure from rising U.S. oil supply levels. On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $48.33 a barrel at 0556 GMT, up $0.16 in the Globex electronic session. April Brent crude on London’s ICE Futures exchange rose $0.56 to $58.10 a barrel. Oil prices had diverged in the previous trading session, with Brent posting gains on the back of a technical correction and ahead of the expiry of the April contract, according to Citi Futures. Market sentiment also received a boost after the Bank of Korea’s surprise rate cut early Thursday, in line with other central banks that have taken similar measures to boost growth. U.S. crude-oil inventories rose by 4.5 million barrels to 448.9 million barrels in the week ended […]

Posted On : Published By : Tom Whipple
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Oil market shrugs off worries about crude stocks: Kemp

LONDON (Reuters) – Oil watchers have spent much of the last two months speculating about whether overproduction and the rapid accumulation of crude oil inventories in the United States would cause storage space to run out and trigger another fall in spot prices. Commercial crude stocks held at refineries, tank farms and in pipelines across the United States have surged by more than 63 million barrels, an average of more than 6 million barrels per week, this year and are at their highest since the 1930s, according to the U.S. Energy Information Administration (EIA). The volume of crude in storage last week was almost 80 million barrels higher than the corresponding week in 2014, and 106 million barrels above the 10-year average. ( link.reuters.com/qym34w ) Storage facilities in the U.S. Midwest were 69 percent full, while those on the Gulf Coast were 56 percent full, the EIA reported on […]

Posted On : Published By : Tom Whipple
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Natural-Gas Prices Rising on Winter’s ‘Last Gasp’ — Update

By Timothy Puko Natural-gas prices made their biggest gains Wednesday in more than two weeks as weather forecasts show a cooler start to spring. Natural gas for April delivery settled up 9.2 cents, or 3.4%, at $2.824 a million British thermal units on the New York Mercantile Exchange. It is the largest percentage gain since Feb. 20, and two winning sessions have now nearly cancelled out massive losses from Monday. Short sellers–investors who bet prices would fall–likely bought back in to close out those trades, an analyst and trader said. Colder-than-normal weather now forecast for the last week of March and into April could be limiting a further collapse in prices, said Gene McGillian, an analyst at Tradition Energy. "We have maybe one last gasp of winter," he said. Traders may also think that heavy withdrawals from stockpiles could buoy the market, Mr. McGillian added. Cold weather has been […]

Posted On : Published By : Tom Whipple
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Exclusive: Iraq builds up arrears to majors as oil price drops – sources

LONDON (Reuters) – Iraq is building up debts to the oil companies developing its giant fields, industry sources said, a further sign of how the oil-price drop is putting a squeeze on revenues in OPEC’s second-largest producer. Western oil companies including Royal Dutch Shell, BP and Exxon Mobil are working at Iraq’s southern oilfields under service contracts, which are currently based on a fixed dollar fee for additional volumes produced. As a result of the halving of oil prices to around $56 a barrel from $115 in June, the amount of crude needed to pay the companies has roughly doubled – reducing revenue to a government fighting an Islamic State insurgency. "The Iraqis have a problem. The number of barrels they have to give to the companies as service fees has risen two-fold because the oil price has fallen two-fold. So Iraq simply has less barrels for themselves," said […]

Posted On : Published By : Tom Whipple
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Low Oil Prices Are Hurting Iraq’s War Against ISIS

The budgetary blow from falling oil prices is being acutely felt in crude revenues-dependent Iraq, which is undermining the government’s efforts to pay for a war against Islamic State extremists. Senior writer for global energy issues Bill Spindle joined  the Moneybeat show to discuss his page one story and explain how this funding shortfall means that Iraq’s government is increasingly having to rely on Iran-backed militias in the fight against the extremists. “The problem is that these militias are really very sectarian, they are entirely made up of Shiites, but when they move into areas like they are doing now…those are all Sunni-dominated areas. And as they move into them you get all sorts of tensions that result from all of this and it’s all just being exacerbated by the lack of money now.”

Posted On : Published By : Tom Whipple
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Palestinian side cancels Israeli gas deal

Palestinian power company cancels contract with counterparts controlling Israeli natural gas reserves. (UPI/Shutterstock/James Jones Jr.) Operators at the Leviathan natural gas field off the Israeli coast said Wednesday a Palestinian group canceled a $1.2 billion purchase contract. Delek Group, which alongside Noble Energy holds an 85 percent stake in the Leviathan project, said it received a "conditioned cancellation notice of the natural gas supply agreement from the Leviathan project to Palestine Power Generation Co." Leviathan is one of the largest regional gas fields, with an estimated 18 trillion cubic feet of reserves. Development was curtailed in late 2014 when the Israel Antitrust Authority said Delek Group and its partners at Noble Energy held a monopoly over all of the gas reservoirs off the nation’s coast. Both companies also control the nearby Tamar, estimated to hold as much as 10 trillion cubic feet of natural gas. Delek in a statement […]

Posted On : Published By : Tom Whipple