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Why economists were totally wrong about cheap oil

If there was one thing most economists agreed on at the start of the year, it was this: Plunging oil prices would boost the U.S. economy. It hasn’t worked out that way. The economy is thought to have shrunk in the January-March quarter and may barely grow for the first half of 2015 — thanks in part to sharp cuts in energy drilling. And despite their savings at the gas pump, consumers have slowed rather than increased their spending. At $2.74 a gallon, the average price of gas nationwide is nearly $1 lower than it was a year ago. In January, the average briefly reached $2.03, the lowest in five years. Cheaper oil and gas had been expected to turbocharge spending and drive growth, more than making up for any economic damage caused by cutbacks in the U.S. oil patch. Consider what Federal Reserve Chair Janet Yellen said in […]

Posted On : Published By : Tom Whipple
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Oil Prices Lower as Dollar Strengthens

NEW YORK—Oil prices slid Friday as the dollar strengthened and the closely watched U.S. oil-rig data showed another slight decline . Light, sweet crude for July delivery recently fell $1.07, or 1.7%, to $59.65 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell $1.17, or 1.8%, to $65.37 a barrel on ICE Futures Europe. Moves in the oil price have closely tracked the dollar in recent weeks, with some analysts attributing nearly all of a recent rally in oil prices to a weakening in the dollar. The global crude market remains oversupplied, and some analysts warn that the rally was unsustainable and oil prices are likely to slump from current levels later this year. The dollar rose Friday after the Labor Department said that U.S. consumer prices rose for the third straight month in April. The WSJ Dollar Index, which tracks the greenback against other […]

Posted On : Published By : Tom Whipple
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Brent crude oil steadies near $66 before long weekend

LONDON Oil prices steadied on Friday as worries over the impact on crude supplies of war in the Middle East were balanced by reports of profit-taking ahead of a long weekend. Monday, May 25 is Memorial Day in the United States and a public holiday in much of Europe, closing many markets. "No one wants to hold open positions ahead of a long weekend so books are being squared, bringing some consolidation," said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt. July Brent crude LCOc1 was down 25 cents at $66.29 a barrel by 0800 GMT after closing up 2.3 percent on Thursday. U.S. crude futures are experiencing their longest winning streak since records began in 1983, helped by a drop in U.S. crude and product stockpiles last week, reflecting better demand in the world’s largest oil consumer. [EIA/S] U.S. crude for July CLc1 was down […]

Posted On : Published By : Tom Whipple
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Natural-Gas Prices Give Up Gains

By Nicole Friedman NEW YORK–Natural-gas prices snapped a three-week winning streak on continued concerns about ample supplies. Front-month futures for June delivery settled down 6.2 cents, or 2.1%, to $2.887 a million British thermal units on the New York Mercantile Exchange. Prices fell 4.3% on the week. Prices have rallied in recent weeks since hitting a nearly three-year low in April, as cheap prices and hotter temperatures spurred expectations of demand for gas-fueled power generation to run air-conditioning units. Natural-gas stockpiles grew less than expected last week, an indication of stronger consumption. But after prices rose Thursday on the inventory data, "traders were quick to take their money and run," said Aaron Calder, analyst at Gelber & Associates in Houston, in a note. Robust production continues to keep the market subdued. In addition, some power generators switch from natural gas to coal when gas prices near $3 a million […]

Posted On : Published By : Tom Whipple
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World Exports versus Consumption, The ELM

The EIA has updated their International Energy Statistics  with annual production numbers through 2014 and export data through 2012. Sometimes these stats can be confusing as they include several types of production and exports. But for production I use only “Crude plus Condensate” and for exports I used “Crude Oil Exports” which I assume includes condensate as well. Also the export data is not exact, just close, because some importers are also exporters. For instance in 2001 the US exported 59,000 barrels per day. In 2012 the US exported 629,000 barrels per day. The exporting of condensate is allowed in the US and since the Shale boom condensate exports have increased quite dramatically because Light Tight Oil is rather top heavy with condensate. To get exports versus consumption for exporting nations I simply subtracted their exports from their production. The difference was what they consumed. Similar data can be […]

Posted On : Published By : Tom Whipple
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Iraq exports hold close to record high in May

LONDON Iraq’s oil exports have held above 3 million barrels per day (bpd) so far in May, according to loading data and an industry source, keeping shipments from OPEC’s second-largest producer close to a record high. Another strong month from Iraq adds to signs of high output from major members of the Organization of the Petroleum Exporting Countries focused on keeping market share, weighing on global oil prices. "There is little doubt that record crude exports out of Iraq are adding further length to an already extremely well-supplied market, thereby adding downside pressure," said Eugene Lindell, oil analyst at JBC Energy in Vienna. Exports from Iraq’s southern terminals have averaged 2.55 million barrels per day (bpd) in the first 21 days of May, according to shipping data seen by Reuters and an industry source, down from 2.63 million bpd in April. But exports from Iraq’s north via Ceyhan in […]

Posted On : Published By : Tom Whipple
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Sunni Tribes in Iraq Divided Over Battle Against Islamic State

Islamic State claimed full control of the ancient Syrian city on Palmyra and a nearby military airport and prison. What is the strategic and cultural significance of this victory? WSJ’s Jason Bellini has #TheShortAnswer. BAGHDAD—While some of his Sunni kinsmen in Anbar province set about working with Shiite militias on a strategy to oust Islamic State, Emad al-Jumaili was making a very different kind of plan. The tribal elder was busy preparing to guard his home and family from those same militias. “I have always said I would much prefer to be killed by a Sunni terrorist organization than a Shiite terrorist organization,” said Mr. Jumaili. Islamic State now controls Palmyra, a Syrian city housing renowned archeological ruins. Amr Al Azm, Syrian antiquities expert at Shawnee State University, discusses what’s at risk. Photo: Getty That’s a big problem for the Shiite-dominated Iraqi government and its U.S. allies. They are […]

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Shi’ite militia deploy from base near Iraq’s Ramadi

BAGHDAD A convoy of Shi’ite militia fighters and Iraqi army forces set out from a base near the western provincial capital of Ramadi on Saturday, heading towards areas controlled by Islamic State militants, an eyewitness and a local official said. Anbar provincial council member Azzal Obaid said hundreds of fighters, who arrived at the Habbaniya air base last week after Ramadi was overrun by Islamic State, were in Khalidiya and were approaching Siddiqiya and Madiq, towns in contested areas near Ramadi. While pro-government forces are seeking to retake Ramadi, Islamic State insurgents have been pushing forward in the direction of Fallujah in a bid to take more territory in Anbar province that would bring them closer to the Iraqi capital Baghdad. (Reporting by Baghdad Bureau; Writing by Stephen Kalin; Editing by David Holmes )

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After seizing Ramadi, IS presses Anbar campaign

Iraqi security forces battle militants from the Islamic State (IS) group in Ramadi, in Anbar province, on May 14, 2015. (STRINGER/Reuters) Recommend 271 people recommend this. Sign Up to see what your friends recommend. The Islamic State (IS) group is battling swiftly toward a key Iraqi military base in Anbar – building on momentum from its recent takeover of Ramadi – in an apparent campaign to consolidate its control of the province.IS militants are pushing toward the al-Habbaniya air base, east of Ramadi, which is one of the Iraqi government’s few major staging areas in Anbar from which it can potentially launch counter-attacks.Iraqi Army forces began to retreat Thursday afternoon from the Juayb… This content is for registered users. Please login to continue. If you are not a registered user, you may purchase a subscription or sign up for a free trial .

Posted On : Published By : Tom Whipple