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California’s continued drought, reduced snowpack mean lower hydropower output

Source: U.S. Department of Agriculture Drought Monitor ; National Drought Mitigation Center Earlier this month, California Governor Jerry Brown enacted mandatory water restrictions for the first time in the state’s history. While the executive order doesn’t directly address hydropower generation and instead focuses on water use in cities and towns, the drought that began in 2011 has had a noticeable effect on hydropower . Furthermore, reduced levels of snowpack likely mean that hydropower output will be low throughout the summer. California’s drought caused a state of emergency to be declared in January 2014. Since then, the drought has worsened, and, as of March 31, 2015 , 41% of the state is now classified as experiencing exceptional drought, the most intense drought category. The drought has limited the state’s ability to generate electricity from its hydropower plants. For instance, the California Department of Water Resources reports that 2013-14 precipitation in […]

Posted On : Published By : Tom Whipple
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Oil price holds key to success of Shell takeover

Pump jacks and wells in an oil field Sometimes one number is all that matters. In the case of the proposed takeover of BG Group by Royal Dutch Shell , that number is the oil price. In short, the success or failure of the blockbuster energy deal hinges on Shell’s long-term oil price assumptions for the transaction involving a range of $70 to $110 per barrel for Brent crude, according to some of Europe’s biggest investors. “The real issue is whether you believe the oil price will rise to $90 a barrel or not, which is in the middle of Shell’s range. If it rises to $90, then this deal becomes financially brilliant,” says Matthew Beesley, head of global equities at Henderson Global Investors, which holds shares in Shell and BG. “If the oil price rises to $70 dollars, then the deal is financially tolerable, but if it does […]

Posted On : Published By : Tom Whipple
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Tiny UK explorer makes big claim of oilfields near Gatwick

Gatwick has promised to ‘bear all the main risks’ of an expansion programme A tiny UK oil explorer has claimed there could be up to 100bn barrels of oil beneath the home counties of southeast England, after drilling at a well near Gatwick airport. Shares in UK Oil & Gas Investments (UKOG), an Aim-traded oil exploration company, leapt 220 per cent on Thursday after it said that the Weald Basin held 158m barrels of oil per square mile, far outreaching previous government-funded estimates. UKOG claimed to have discovered a “world-class potential resource” in a 650ft section some 3,000 to 5,000ft below the ground after drilling into the Weald Basin at Horse Hill in Surrey. However, industry analysts were sceptical about the company’s claims and how much oil could be economically recovered from the area. David Lenigas , chairman of UKOG, extrapolated that the whole basin could contain “multiple billion […]

Posted On : Published By : Tom Whipple
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California Fines PG&E $1.6 Billion for Deadly Gas Explosion

ENLARGE In this Sept. 9, 2010 photo, a massive fire following a pipeline explosion roars through a mostly residential neighborhood in San Bruno, Calif. Photo: Associated Press California’s pipeline-safety regulator slapped PG&E Corp. with fines totaling $1.6 billion for the deadly natural gas explosion that rocked San Bruno, Calif., in 2010. The blast, which killed eight people and destroyed a neighborhood in the suburb of San Francisco, was caused by an aging, poorly maintained pipeline with faulty welding work that dated back to the 1950s. Members of the state’s Public Utilities Commission voted unanimously Thursday to levy penalties totaling $1.6 billion for alleged violations, the largest-ever fine for a California utility. The fine, coupled with pipeline-safety repairs that the commission has ordered PG&E to make using shareholder funds, totals $2.2 billion. PG&E stock was trading about 2% lower at $52.45 a share at midafternoon Thursday. PG&E shareholders—not customers—will pay […]

Posted On : Published By : Tom Whipple
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Oil wells in England’s green and pleasant land

LONDON (Reuters) – There could be up to 100 billion barrels of oil onshore beneath southern England, the chief executive of a small exploration firm told the BBC in an interview on Thursday. To which the correct response is "yes, but". Based on an analysis of samples from a single well drilled near London’s Gatwick airport, UK Oil and Gas Investments estimates there could be 158 million barrels per square mile in the local area. Horse Hill, where the well was drilled, is part of the Weald Basin, which stretches across large parts of the counties of Dorset, Hampshire, West and East Sussex, and Surrey, as well as parts of neighboring Wiltshire and Kent. Scaled up across the whole of the basin, there could be 50-100 billion barrels of oil, though only 3-15 percent might be technically recoverable, the firm admitted ("Oil discovery near Gatwick airport significant" April 9). […]

Posted On : Published By : Tom Whipple
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Oil Prices Regain Some Ground

Dow Jones Newswires By Georgi Kantchev LONDON–Oil prices rebounded on Thursday after tumbling more than 6% in the previous session, underscoring the volatility of the market as investors weigh signs of improving demand against a continuing global oversupply of crude. Brent crude, the global price benchmark, rose 2% to $56.68 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May were up 1.9% at $51.38 a barrel. U.S. oil stockpiles rose more than expected last week and hit a fresh 80-year record, the U.S. Energy Information Administration said on Wednesday. Oil production also increased over the week. "U.S. stocks of crude oil are now 20% above last year’s high and show no signs of peaking," said Thomas Pugh, an oil analyst at Capital Economics. Some analysts, however, say that the inventory increases are set to slow on the […]

Posted On : Published By : Tom Whipple
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Oil edges back from 6 percent fall, but outlook weak

SINGAPORE (Reuters) – Oil prices rose more than a percent on Thursday, clawing back part of the 6 percent slump in the previous session that was triggered by a shock jump in U.S. crude inventories and record Saudi output, although analysts said sentiment remained bearish. A 10.95 million-barrel surge in U.S. crude stockpiles to 482.4 million last week, the biggest gain in 14 years, and Saudi oil production of 10.3 million barrels a day in March had battered crude futures on Wednesday. "Total U.S. crude stocks continued to fly far above 5-year highs, setting new records every week," Societe Generale analysts said in a note. Cushing, the delivery point for West Texas Intermediate contracts, is now filled to 85 percent of its total working capacity of 70.1 million barrels, the bank said. Brent crude LCOc1 was up 73 cents at $56.28 a barrel by 2.48 a.m. EDT, while U.S. […]

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Oil slides on ballooning US stockpiles

A flame from an oil installion in the desert near the oil-rich area of Khouris Oil prices slid on Wednesday after data showed US crude stockpiles ballooned last week and Saudi Arabia announced production reached a record high in March. The US benchmark Nymex May West Texas Intermediate dropped $2.97 a barrel to $51.01 in late afternoon trading, while the international marker ICE May Brent fell $2.55 a barrel to $56.53 a barrel. US crude stocks recorded their biggest gain in 14 years surging by 10.9m barrels, according to the US Energy Information Administration. Analysts’ surveyed by Reuters had expected an increase of 3.4m barrels. Behind the increase was a rise in imports of 869,000 barrels a day. Gasoline stocks recorded an unexpected pick-up of 817,000, even as analysts forecast a drop of 1m barrels. Crude stocks at the important Cushing, Oklahoma delivery hub, where WTI is priced, rose […]

Posted On : Published By : Tom Whipple
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Oil falls on U.S. stock build, record Saudi output

LONDON (Reuters) – Oil prices fell towards $58 a barrel on Wednesday as industry data showed a larger-than-expected weekly increase in U.S. stockpiles and as Saudi Arabia reported record output in March. The decline in prices followed a rally on Tuesday, when U.S. crude approached 2015 highs following strong jobs data and government forecasts for lower U.S. crude production growth and higher global demand for oil. "We’re going to need to see a very big uptick in demand to offset that supply," Ben Le Brun, analyst at OptionsXpress in Sydney, said. "There is a glut of supply in oil at the moment." Brent May crude LCOc1 was down $1.03 at $58.07 a barrel by 0816 GMT and U.S. May crude CLc1 dropped $1.33 to $52.65 a barrel. Both benchmarks posted strong gains in the past two sessions but are still down about 50 percent since June last year, when […]

Posted On : Published By : Tom Whipple
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Natural Gas Slipping on Spring Weather

Dow Jones Newswires By Timothy Puko Natural gas slipped back Wednesday as traders resume their focus on an oversupplied market heading into a season that is usually unkind to gas. Natural gas for May settled down 6.1 cents, or 2.3%, at $2.619 a million British thermal units on the New York Mercantile Exchange. It has lost ground in 10 of the past 14 sessions and is just 1.6% above its lowest point since June 2012. Spring weather often causes a fall in gas prices, which are highly connected to winter weather. Half of all U.S. homes use natural gas for heat, making demand, and often prices, highest when temperatures are lowest. Couple that with near-record production this year, and prices are on a slow decline. Recent U.S. production is up about 6 billion cubic feet from a year ago, and Canadian production is up another 0.5 bcf, according to […]

Posted On : Published By : Tom Whipple