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BP fights to blow away gas market rigging case

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Posted On : Published By : Tom Whipple
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Russia Says Ukraine Preparing New Offensive Against Separatists

MOSCOW — Russia’s foreign minister Sergei Lavrov said on Monday he suspected Ukraine was preparing a new offensive against pro-Moscow separatists in east Ukraine following an upsurge in fighting. Clashes near the port city of Mariupol and the rebel-held town of Gorlivka have put further strain on a fragile ceasefire between Ukrainian government forces and the separatists. "We are worried by the developments in recent days which strongly recall preparation for more military actions," Lavrov told a news conference, accusing Kiev of breaking the terms of a ceasefire. "It was like that in August last year when Ukrainian soldiers received the order to attack. … It was like that in January of this year. One shouldn’t be experimenting and trying one’s luck, one should simply fulfill what was agreed in Minsk." Both sides have withdrawn artillery guns, tanks and other heavy weapons under the terms of the Minsk peace […]

Posted On : Published By : Tom Whipple
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What is the price of oil telling us?

Market fundamentalists tell us that prices convey information. Yet, while our barbers and hairdressers might be able to give us an extended account of why their prices have changed in the last few years, commodities such as oil– which reached a six-year low last week –stand mute. To fill that silence, many people are only too eager to speak for oil. And, they have been speaking volumes. So much information in that one price! First, as prices fell last year when OPEC refused to cut its oil production in the face of slowing world demand, the industry kept saying that it could continue to produce from American tight oil fields at around $80 a barrel and be profitable . Then, as prices fell further, the industry and its consultants assured everyone that while growth in tight oil production would slow, it would still be profitable for the vast majority […]

Posted On : Published By : Tom Whipple
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Population and climate instability will lead to severe food shortages by 2050

The food industry has become much more efficient in the last few decades as a result of globalization, but also a lot more vulnerable to shocks. Climate change will lead not only to increased temperatures, but the extreme weather it causes in North, South America and Asia are likely to also lead to global food shortages. Severe production shocks, with the food shortages, price spikes and market volatility that come with are likely to become three times as usual than today, according to a joint report by a US-British task force. These are likely to occur every 30 years by 2040. The Task force on Extreme Weather and Global Food System Resilience estimated that due to a rise in the world population from 7.3 billion to 9 billion in 2050, food production will need to increase by more than 60 percent and climate-linked market disruptions could lead to civil […]

Posted On : Published By : Tom Whipple
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Approaching A Global Deflationary Crisis?

Anyone with any sense for global economic trends ought to be worried. The signs are everywhere of a serious deflationary crisis. It is obvious that Chinese growth is falling. The prices for energy and the raw materials that feed the growth economy keep falling. The demand for Chinese exports is down too. Stock Markets in Asia are falling, despite attempts to prop them up. Countries are being tempted to export their problems abroad – for example by competitive devaluation. In Europe its obvious that a “solution” is being cobbled together for the Euro and Greek crisis even though no one at all believes that it will work. At the same time the policy response of “quantitative easing” which has kept interest rates down very low has reached the end of the road. With interest rates at or near to zero the scope for addressing the crisis through monetary policy […]

Posted On : Published By : Tom Whipple
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Why an Oil Glut May Lead to a New World of Energy

The plunge of global oil prices began in June 2014, when benchmark Brent crude was selling at $114 per barrel. It hit bottom at $46 this January, a near-collapse widely viewed as a major but temporary calamity for the energy industry. Such low prices were expected to force many high-cost operators, especially American shale oil producers, out of the market, while stoking fresh demand and so pushing those numbers back up again. When Brent rose to $66 per barrel this May, many oil industry executives breathed a sigh of relief. The worst was over. The price had “reached a bottom” and it “doesn’t look like it is going back,” a senior Saudi official observed at the time. Skip ahead three months and that springtime of optimism has evaporated. Major producers continue to pump out record levels of crude and world demand remains essentially flat. The result: a global oil […]

Posted On : Published By : Tom Whipple
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Oil Prices Slide to 6½-Year Low

LONDON—U. S. oil prices slid to a more-than six-year low Friday on escalating concerns about the mismatch between global supply and demand. Oil futures on the New York Mercantile Exchange hit a low of $41.35 a barrel, a level seen last on March 4, 2009, when the U.S. economy was still mired in a deep recession. Oil was recently trading at $41.88 a barrel, down 0.7% from Thursday’s settlement. Brent crude, the global price benchmark, fell 0.6% to $49.32 a barrel on London’s ICE Futures exchange. Investors are worried about China’s oil demand following its surprise currency devaluation earlier this week. A weaker yuan makes imports of dollar-priced commodities, such as crude, more expensive. Fears about demand in the world’s second biggest oil consumer are compounded by strong supply from the U.S. and the Organization of the Petroleum Exporting Countries, a 12-nation oil cartel. Market participants are awaiting the […]

Posted On : Published By : Tom Whipple
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Optimistic Oil Experts Still See Rally as Crude Hits New Lows

(Bloomberg) — Oil analysts are, if nothing else, optimists. So much so that no one seemed to see the 60 percent slide in oil prices coming when the commodity was trading at almost $108 a barrel on June 20, 2014. At the time, analysts as a group predicted oil would average about $100 a barrel this quarter and the most pessimistic called for $84, instead of the low $40s it’s languishing at. Analysts are still mostly sunny, looking for a 60 percent rally by late next year. Even the worst month for oil since 2008 has brought out just a few frowns, as Societe Generale SA and Canadian Imperial Bank of Commerce cut their estimates in the past week by more than $10 a barrel. The prognosticator looking smart? Goldman Sachs, which in May said the rally would fizzle. “Oil prices have so many moving parts that it’s exquisitely […]

Posted On : Published By : Tom Whipple
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Tomgram: Michael Klare, Big Oil in Retreat

On July 14, 2011, at TomDispatch , Bill McKibben wrote that he and a few other “veteran environmentalists” had issued a call for activists to descend on the White House and “risk arrest to demand something simple and concrete from President Obama: that he refuse to grant a license for Keystone XL, a new pipeline from Alberta to the Gulf of Mexico that would vastly increase the flow of tar sands oil through the U.S., ensuring that the exploitation of Alberta’s tar sands will only increase.” It must have seemed like a long shot at the time, but McKibben urged the prospective demonstrators on, pointing out that “Alberta’s tar sands are the continent’s biggest carbon bomb,” especially “dirty” to produce and burn in terms of the release of carbon dioxide and so the heating of the planet. Just over four years later, the president, whose administration recently green-lighted Shell […]

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Iran is hiding more oil at sea than we realized

Western companies eye Iran’s business potential One of the biggest mysteries in the oil market surrounds just how much oil Iran is hoarding at sea. That’s a key question because Iran’s nuclear deal with the West could lift crippling sanctions, and pave the way for tons of Iranian oil to hit the market . A surge in Iranian exports would only deepen the oil supply glut that has sent prices to fresh six-year lows this week to below $43. Iran claims it’s not stockpiling oil in tankers in the Persian Gulf, but no one believes it. Up until recently, energy experts thought Iran’s vessels held 30 million to 40 million barrels of oil. But maritime surveillance firm Windward has harnessed sophisticated technology to determine Iran is actually hoarding 50 million barrels of oil. That’s up nearly 150% from April 2014 when Windward started tracking this closely-watched metric. Based in […]

Posted On : Published By : Tom Whipple