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Nigeria Without Oil is Now a Reality

opinion "Unsold Nigeria crude grows as buyer interest falls". PUNCH, Thursday, April 9, 2015, p 41. The story by Femi Asu, went on to state that "Weak buying from Asia and other regular buyers of Nigerian crude oil has left a large overhang of March, April and May cargoes, it was learnt". For those who might not fully understand the implications of that report, it is necessary to spell them out. The first casualty, and it has been in that position since last year, is the 2015 budget which is now nothing more than an academic exercise. With crude oil prices hovering between US$45 and US$60 per barrel, the budget which out-going Finance Minister first based on $78 per barrel crude oil price, had by February been dropped in the dust bin. Now, with volume supplied imperiled by weak demand from our traditional customers, it is obvious that the […]

Posted On : Published By : Tom Whipple
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China’s President Heads to Pakistan With Billions in Infrastructure Aid

Photo President Xi Jinping of China will sign accords for projects worth $46 billion during a visit to Islamabad on Monday. Credit Anjum Naveed/Associated Press BEIJING — China ’s president, Xi Jinping , travels to Pakistan on Monday laden with tens of billions of dollars in infrastructure and energy assistance on a scale the United States has never offered in the past decade of a close relationship, a gesture likely to confirm the decline of American influence in that nation. Mr. Xi, making his first overseas trip this year, and the first by a Chinese leader to Pakistan in nine years, will arrive fortified from the robust reception to the new China-led Asian Infrastructure Investment Bank , and is looking to show that China can make a difference in a friendly, neighboring country troubled by terrorism. Pakistani officials say that Mr. Xi will be signing accords for $46 billion […]

Posted On : Published By : Tom Whipple
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China cuts bank reserves again to fight slowdown

BEIJING (Reuters) – China’s central bank on Sunday cut the amount of cash that banks must hold as reserves, the second industry-wide cut in two months, adding more liquidity to the world’s second-biggest economy to help spur bank lending and combat slowing growth. The People’s Bank of China (PBOC) lowered the reserve requirement ratio for all banks by 100 basis points to 18.5 percent. The reduction is effective from April 20, the central bank said in a statement on its website www.pbc.gov.cn. The latest cut in the reserve requirement shows how the central bank is stepping up efforts to ward off a sharp slowdown in the economy. Weighed down by a property downturn, factory overcapacity and local debt, growth is expected to slow to a quarter-century low of around 7 percent this year from 7.4 percent in 2014, even with expected additional stimulus measures. The PBOC last cut the […]

Posted On : Published By : Tom Whipple
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Slight Production Declines Hide Bigger Oil Storage Issues

Storage Builds Everyone this week focused on the slight production declines that this was a sign to go long oil, but what seemed to go under the radar was another build in both Cushing and the Gulf Coast storage hubs . Cushing added another 1.3 million barrels to weekly storage and stands at 61.5 million barrels. The Gulf Coast added another 600 thousand barrels to storage and stands at 237 million barrels. By comparison Cushing had 26.8 million barrels in storage this time last year, and the Gulf Coast had 207.2 million barrels in storage a year ago. Refinery Utilization Rate 92% This is with refineries operating at 92.3 percent of capacity which is robust and near the top end of this metric. We also have about 17.6 million more barrels of Gasoline in storage versus this time last year, and 17 million more barrels of Distillate stocks in […]

Posted On : Published By : Tom Whipple
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Texas RRC February Production

The Texas Railroad Commission has released its  incomplete production data for February.  The RRC also estimates final production but that data has not been posted yet. All Texas RRC data is through February . The EIA data is through January. Texas C+C It looks like, after the final Texas data comes in, that February crude oil will be above January production but still below December production. It is my best guess that Texas production will be down about 80,000 barrels per day in January and up about 50,000 bpd in February or about 30,000 bpd below December production. Texas Crude Only I always post the last six months data just so we can get some idea of the general trend. You can see the general trend is up until January when it took a huge hit and only partially recovered in February. Texas Condensate Texas condensate likely peaked back […]

Posted On : Published By : Tom Whipple
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Systematic review of EV battery pack costs suggests economies of scale may push cost toward US$200/kWh without further cell chemistry improvements

Industry-wide cost estimates for battery packs for electric vehicles have declined by approximately 14% annually between 2007 and 2014, from above US$1,000 per kWh to around US$410/kWh, according to a systematic review of more than 80 different estimates by a team from the Stockholm Environment Institute. Further, they reported in their paper published in Nature Climate Change , the cost of battery packs used by market-leading BEV manufacturers are even lower at US$300/kWh, and has declined by 8% annually. The results further suggest that it is possible that economies of scale will continue to push cost towards US$200/kWh in the near future even without further cell chemistry improvements. Their study, said Björn Nykvist and Måns Nilsson, has significant implications for the assumptions used when modeling future energy and transport systems and permits an optimistic outlook for BEVs contributing to low-carbon transport. Cost of Li-ion battery packs in BEVs. Results […]

Posted On : Published By : Tom Whipple
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Brent crude oil prices fall as OPEC production soars

SINGAPORE (Reuters) – Brent crude oil prices fell on Friday, ending a run of rallies earlier in the week, after OPEC said that its output surged in March, adding to a global glut. The Organization of the Petroleum Exporting Countries (OPEC) said that its March production jumped 810,000 barrels per day (bpd) to 30.79 million bpd, which is equivalent to a third of global supply. "It seems Saudi Arabia has not had enough of low oil prices," Singapore-based Phillip Futures said. Front-month Brent crude futures LCOc1 were down 37 cents at $63.61 a barrel at 2.59 a.m. EDT, recovering from a fall of more than $1 in earlier trading. U.S. crude CLc1 was down 43 cents at $56.28 a barrel. Reuters technical analyst Wang Tao said that Brent could fall further to slightly above $61.20 a barrel before finding market support. Dipping output from the United States and other […]

Posted On : Published By : Tom Whipple
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Oil Fades on Lack of ‘Belief’

ENLARGE A worker walks up the stairs on the side of an oil tank at the Total refinery in Grandpuits, near Paris. Several analysts are warning a recent winning streak is vulnerable to a pullback, while many traders are still banking on other factors keeping prices close to recent multiweek highs. Photo: Reuters Oil prices faded, undoing a small rally Friday as traders showed skepticism that a surge of U.S. production is leveling off. Several banks and analysts are warning that oil’s steady gains this month came from a false premise of sputtering production. U.S. producers aren’t shutting down rigs as quickly as they once were and several countries around the world are trying to put more of their crude onto the market. “There’s not necessarily a lot of belief in the front of the market,” said Ric Navy, senior vice president for energy futures at brokerage R.J. O’Brien […]

Posted On : Published By : Tom Whipple
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Oil Firms, Nations Agree to End Gas Flaring

ENLARGE A gas flare burns beyond petroleum cracking towers at the Lukoil-Nizhegorodnefteorgsintez oil refinery in Nizhny Novgorod, Russia, in December. Photo: Bloomberg NEWS WASHINGTON—Twenty-five major oil companies, oil-producing nations and development institutions agreed Friday to end the practice of routine flaring of natural gas by 2030 at thousands of oil production sites around the world. Royal Dutch Shell , Statoil , Kuwait Oil Co., Russia, Norway and the Asian Development Bank are among those making the commitment, which was announced by the World Bank and United Nations at an event in Washington Friday. No U.S.-based companies have signed onto the initiative. Many producers regularly burn off natural gas as carbon dioxide into the atmosphere when producing oil for a variety of reasons, including lack of infrastructure to move the gas and low economic incentive to use the gas. Andrei Lushin, World Bank Group Executive Director for Russia, said in […]

Posted On : Published By : Tom Whipple
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OPEC should consider return to oil quotas: delegate

LONDON (Reuters) – OPEC should consider re-introducing individual output quotas, shuffled quietly to one side in 2008, to prevent oversupply hitting prices should Iran increase its oil exports following a deal over its nuclear work, an OPEC delegate said. A proposal to reintroduce quotas would spark a fierce debate in the Organization of the Petroleum Exporting Countries as national prestige and market share are at stake. After refusing to cut output last year, OPEC is pumping much more than its overall output target of 30 million barrels per day (bpd) because of record Saudi Arabian output, higher Iraqi exports and a partial return of Libyan crude. "Iraq is increasing each month and if that is so and if Iran is back, then either the price has to go down or there has to be some sort of arrangements," said a senior OPEC delegate from a non-Gulf OPEC member who […]

Posted On : Published By : Tom Whipple