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China factories scrabble for growth in May, export demand shrinks

BEIJING Growth in China’s giant factory sector edged up to a six-month high in May but export demand shrank again, prompting companies to shed jobs and keeping alive worries about a protracted economic slowdown, a government survey showed on Monday. In a sign that China’s worst downturn in at least six years is hurting its services companies, too, a similar survey showed growth in that sector slipped to a low not seen in more than five years. Services have been one of the lone bright spots in the Chinese economy in the last year. The muted reports reinforced the view that authorities would have to roll out more stimulus in coming months, despite having cut interest rates three times in six months. "China’s economy still faces strong headwinds," economists at ANZ Bank said in a note to clients. "If capital outflow continues at the pace of the first quarter, […]

Posted On : Published By : Tom Whipple
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Easy Access to Money Keeps U.S. Oil Pumping

Wall Street’s generous supply of funds to U.S. oil drillers helped create the American energy boom. Now that same access to easy money is keeping them going, despite oil prices that are languishing around $60 a barrel. The flow of money into oil has allowed U.S. companies to avoid liquidity problems and kept American crude production from falling sharply. Even though more than half of the rigs that were drilling new wells in September have been banished to storage yards, in mid-May nearly 9.6 million barrels of oil a day were pumped across the country, the highest level since 1970, according to the most recent federal data. Helped by a ready supply of money, the flow of oil from the U.S. could keep crude prices low for the remainder of 2015 and beyond. It wasn’t supposed to happen this way. As crude prices began to plunge last year, many […]

Posted On : Published By : Tom Whipple
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New low rig count in North Dakota

The number of rigs actively exploring for or producing oil and natural gas in North Dakota hits new low at 80, state data show. Photo by David Gaylor/Shutterstock BISMARCK, N.D., June 1 (UPI) — The number of rigs actively exploring for or producing oil and gas in North Dakota hit a new low Monday at 80, state data show. The number of rigs in service in North Dakota, a state at the heart of the shale oil and gas boom, was down 62 percent from 2012 levels and 57 percent lower than this date in 2014. State data show oil production in March, the last full month for which data are available, was 1.19 million barrels per day, a 1 percent increase from the previous month, but 2.6 percent below the all-time high reached in December 2014. The state’s oil and gas division reported the number of wells in […]

Posted On : Published By : Tom Whipple
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Oklahoma next to ban drilling bans

Oklahoma Gov. Mary Fallin signs state measure that’s meant to avoid "patchwork" of local legislation on oil and gas drilling. File Photo by UPI/J.P. Wilson OKLAHOMA CITY, June 1 (UPI) — Oklahoma’s governor said a "patchwork" approach to oil and gas regulation wasn’t in the state’s interest, reaffirming a state entity as the sole overseer. Gov. Mary Fallin signed a bill establishing the state’s Corporation Commission as the sole regulator of the oil and gas industry in the state. "The bill aims to preserve a unified regulatory framework for the industry and prevent a confusing patchwork of inconsistent municipal regulations across the state," her office said in a statement. "A patchwork of regulations that vary across the state would be inconsistent with the goal of reasonable, easily understood regulations and could damage the state’s economy and environment." Fallin’s signature follows last month’s signing by Texas Gov. Greg Abbott of […]

Posted On : Published By : Tom Whipple
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Western Canadian Wildfires Shut in Oil Sands Production

CALGARY—Wildfires that have crimped Alberta’s oil sands production for more than a week continue to burn, officials said Monday, dealing another blow to producers already spooked by low crude prices and expected royalty increases. Some 1,400 firefighters in northern Alberta—including hundreds from neighboring provinces—have been working to douse or corral dozens of wildfires which have raged for several days, spread by strong winds and dry underbrush in the boreal forests that dominate the landscape. Of 35 blazes currently being fought, five have yet to be contained, including the largest which has engulfed nearly 80,000 acres in the province’s northeast, said Richard Horne, a spokesman for the Alberta Agriculture and Forestry Ministry. “Our crews are still working around the clock to get the fire under control and build a perimeter,” Mr. Horne said, adding that light rain and milder winds over the weekend helped firefighters extend a fire proof zone […]

Posted On : Published By : Tom Whipple
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Natural Gas is Killing Coal

There’s no denying that natural gas is revolutionizing our energy economy, but few believed it could deal such a swift death blow to coal, the commodity that brought us into the Industrial Revolution and has been our backbone ever since. But the signs are irrefutable. Here’s what you need to know. A historic battle Coal and natural gas have been going at it for a while. Traditionally, these were actually complementary energy sources. As a cheaper fuel that was more difficult to manage, coal-fired generation plants were the “slow burners” that kept our energy capacity steady throughout the day. Relatively expensive and more malleable natural gas-fired power plants served as the “pinch hitters” that powered up during peak hours when we needed that extra bit of juice. Today, things look a bit different. Natural gas and coal are no longer complements: natural gas has become a substitute for coal. […]

Posted On : Published By : Tom Whipple
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Paris Geothermal Boom Brings Deep Drilling to Crowded Suburbs

Work on the floor of the drilling rig at the geothermal energy extraction site in Paris. Photographer: Kosuke Okahara/Bloomberg Squashed between a highway overpass and a towering suburban shopping center east of Paris, a drilling rig is completing the second of two geothermal wells aimed at capturing the earth’s natural heat for homes and offices. The project is one of five around the French capital being built by Engie, the new name for GDF Suez SA, accelerating a geothermal boom in the region. Greater Paris already boasted the world’s largest concentration of deep geothermal wells linked to heating networks, even before these latest additions. An energy law making its way through the French parliament that seeks to spur rewewable energy could lead to more. “This is the most active period for geothermal in two decades,” Damien Terouanne, head of Engie’s Cofely Reseaux unit that specializes in heating and cooling […]

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Six European energy companies make low-carbon plea

Six of the biggest European energy companies issue plea for a mechanism that will help advance low-carbon goals. File Photo by Stephen Shaver/UPI LONDON, June 1 (UPI) — Six of the largest European oil and gas companies issued a global appeal Monday for a mechanism to limit global warming and curb emissions. The heads of BG Group, BP, Eni, Royal Dutch Shell, Statoil and Total called on governments and the United Nations to introduce a carbon pricing scheme . "We now need governments around the world to provide us with this framework, and we believe our presence at the table will be helpful in designing an approach that will be both practical and deliverable," they said in a joint statement. Their appeal comes as world leaders are working toward finding climate solutions at a December conference in Paris. Last week in Mexico, the International Energy Agency said policy uncertainty […]

Posted On : Published By : Tom Whipple
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Sluggish factory growth in Europe and Asia puts central bank stimulus in spotlight

LONDON/SYDNEY Manufacturing activity showed scant sign of picking up across Europe and Asia in May as demand stayed stubbornly weak, highlighting the need for central banks to continue supporting growth. The gloomy business surveys come a little less than three months after the European Central Bank embarked on a 1 trillion-euro stimulus program and will likely fuel expectations its counterpart in Beijing will have to roll out more aggressive policy measures. Euro zone factory growth was weaker than previously thought last month while Chinese factory activity barely accelerated and South Korean exports sank. "Across the euro zone as a whole it is plodding along. We can probably do with a little bit more strength out of Germany and France," said Peter Dixon at Commerzbank. "We are going to have to live with rather slower growth in China. We have seen some modest monetary easing and I expect that will […]

Posted On : Published By : Tom Whipple