Category:

Dollar falls, Wall St up in volatile post-Fed trading

NEW YORK The U.S. dollar slid on Wednesday while Wall Street stocks rose in volatile afternoon trading after the Federal Reserve signalled it may wait until late this year to raise interest rates. The Fed has said it would first raise rates when it deems the economy strong enough to handle it, and on Wednesday said the economy was likely strong enough to support a rate hike by the end of the year. The U.S. central bank also lowered expectations for 2015 economic growth. Analysts are torn on whether the first rate hike in about 10 years will occur in September or December, but some took Yellen’s comments to imply it could be December. "It’s a very cozy statement, and so far as when we do this it’s going to be gentle, we might need to keep rates low for a long time. It’s reiterating everything Janet Yellen has […]

Posted On : Published By : Tom Whipple
Category:

U.S. House mulls arctic drilling

House committee hears testimony on the wisdom of exploiting the potential reserves held in the arctic waters off the coast of Alaska. Photo by ziggysofi/Shutterstock WASHINGTON, June 17 (UPI) — Drilling offshore, particularly in arctic regions offshore Alaska, won’t do much to wean the United States off foreign oil, a U.S. House committee heard. A House subcommittee on energy resources held an oversight hearing on reserves thought to be in arctic waters and how they could potentially impact U.S. leverage overseas. Sen. John Cornyn , R-Texas, said in early June that moving more domestic oil to the global market could "strengthen the strategic hand of the United States." Michael LeVine, a senior counsel on the Pacific region for advocacy group Oceana, told the House committee that arctic waters alone weren’t enough to protect the U.S. economy from overseas shocks. "Offshore drilling in the United States, particularly in the Arctic […]

Posted On : Published By : Tom Whipple
Category:

Small U.S. frackers face extinction amid drilling drought

WEATHERFORD, Texas Oil field work was coming in fast when GoFrac doubled its workforce and equipment fleet at the beginning of last year, just one of hundreds of small oil service companies thriving on the revival of U.S. drilling. Founded in November 2011 with a loan of around $35 million, the Fort Worth, Texas-based company was by 2014 making nearly that much in monthly revenues, providing the crews and machinery needed by companies including ExxonMobil ( XOM.N ) to frack oil and gas wells from North Dakota to Texas. Executives flew to meetings across the country in a Falcon 50 private jet, and entertained customers at their suite at the Texas Rangers baseball stadium in Arlington. The firm would soon move into a 22,000-square-foot office on the 12th floor of Burnett Plaza, one of Fort Worth’s most prestigious office buildings. Eighteen months on, however, without work and unable to […]

Posted On : Published By : Tom Whipple
Category:

U.S. crude oil stockpile falls, gasoline builds unexpectedly: EIA

NEW YORK U.S. crude stocks fell last week, while gasoline stocks and distillate inventories rose, data from the Energy Information Administration (EIA) showed on Wednesday. Crude inventories fell by 2.7 million barrels to 467.93 million last week, compared with analysts’ expectations for a decrease of 1.7 million barrels. But the drop recorded by the EIA was less than the 2.9 million-barrel slide reported on Tuesday by industry group American Petroleum Institute (API). Crude stocks at the Cushing, Oklahoma, delivery hub rose by 112,000 barrels, the first increase since mid-April, EIA said. U.S. crude futures erased gains and briefly turned lower after the EIA data. U.S. July crude was up 8 cents at $60.05 a barrel, having swung from $59.81 to $61.38. Brent August crude was up 40 cents at $64.10, well off its $65.47 intraday peak. "The drawdown in crude oil inventories was expected so its effect is muted, […]

Posted On : Published By : Tom Whipple
Category:

Tesla Partners With Battery Researcher to Lower Costs

Tesla Motors Inc. has locked a leading advanced battery researcher into an exclusive partnership designed to help the Palo Alto, Calif., electric-car maker sharply lower the cost of its batteries. Jeff Dahn, a professor at Dalhousie University in Nova Scotia known for his work innovating lithium-ion batteries like those Tesla uses to power its Model S sedan, will cooperate with Tesla researchers. Now working on a project with 3M Co. MMM 0.29 % , he will enter a research partnership with Tesla when his current work is completed. Financial terms weren’t available, but Tesla said it would sponsor Mr. Dahn’s research efforts roughly 6,400 kilometers from Northern California in return for his help solving Tesla’s cost problem. JB Straubel, Tesla’s chief technologist, said this week that lithium-ion battery costs need to come down significantly in coming years so the auto maker can offer lower-priced vehicles. Tesla is the largest […]

Posted On : Published By : Tom Whipple
Category:

E.U. Agrees to Extend Economic Sanctions Against Russia

BRUSSELS — The European Union is set to extend by six months economic sanctions against Russia , calming fears that Greece ’s acrimonious negotiations over its debt crisis might allow Russia to break the unity of the 28-nation bloc in its response to the conflict in Ukraine. A decision to prolong the sanctions, which expire at the end of July, was made by European ambassadors in Brussels on Wednesday and is expected to be ratified at a meeting of foreign ministers early next week in Luxembourg, diplomats in Brussels said. Moscow lobbied hard against a renewal of the sanctions, imposed last year in tandem with similar measures by the United States after Russia annexed Crimea in March and then provided support to separatist rebels in eastern Ukraine. Decisions on sanctions require unanimity, so Russia needed to win over only one European Union country to block an extension. But it […]

Posted On : Published By : Tom Whipple
Category:

Peak Oil? Yes, Absolutely – Peak Oil Demand

You should never bet against the capability of oil investors to turn the world completely upside down. A great example occurred on Wednesday of last week, as Arthur Berman argues in this excellent article. He points out that Brent crude surged from $62 a barrel to $65 a barrel on 10 June, despite the US Energy Information Administration announcing on that very same day that the global oil production surplus in May rose to almost 3 million barrels. ‘Not to worry, ‘demand growth is robust,’ the oil markets seemed to be saying. But if you look at the same EIA report, you will find that whilst worldwide oil production declined by 106,000 barrels per day, consumption fell more by 156,000 barrels per day. It is supposed the job of oil futures markets to anticipate the future – that’s why they are, of course, called futures markets. Perhaps, therefore, they […]

Posted On : Published By : Tom Whipple
Category:

60 Million People Fleeing Chaotic Lands, U.N. Says

Photo Syrian children crossing into Turkey this week. The U.N. says the war in Syria is the world’s biggest source of displacement. Credit Bulent Kilic/Agence France-Presse — Getty Images UNITED NATIONS — Nearly 60 million people have been driven from their homes by war and persecution, an unprecedented global exodus that has burdened fragile countries with waves of newcomers and littered deserts and seas with the bodies of those who died trying to reach safety. The new figures, released Thursday by the United Nations refugee agency, paint a staggering picture of a world where new conflicts are erupting and old ones are refusing to subside, driving up the total number of displaced people to a record 59.5 million by the end of 2014, the most recent year tallied. Half of the displaced are children. Nearly 14 million people were newly displaced in 2014, according to the annual report by […]

Posted On : Published By : Tom Whipple
Category:

Beyond the Perfect Drought: California’s Real Water Crisis

The record-breaking drought in California is not chiefly the result of low precipitation. Three factors – rising temperatures, groundwater depletion, and a shrinking Colorado River – mean the most populous U.S. state will face decades of water shortages and must adapt. The Lake Oroville reservoir in Northern California was at less than 25 percent capacity last month. Image via raybouk/flickr. Creative Commons 2.0. The current drought afflicting California is indeed historic, but not because of the low precipitation totals. In fact, in terms of overall precipitation and spring snowpack, the past three years are not record-breakers, according to weather data for the past century. Similarly, paleoclimate studies show that the current drought is not exceptional given the natural variations in precipitation of the past seven centuries. Nor can it be confidently said that the current drought bears the unequivocal imprint of climate change driven by increasing greenhouse gases, since […]

Posted On : Published By : Tom Whipple