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Oil Prices – What Does “Lower For Longer” Actually Mean?

The latest catch phrase to enter the lexicon of the oilpatch is “lower for longer.” One assumes it simply means oil prices are down and will stay that way for a long time. The difference between a catch phrase and an essay is the detail for purposes of definition. “Lower” must be oil prices below what they used be, although in fact they are not lower than they have ever been. “Longer” refers to an extended period of time, clearly undefined. “Longer” after the oil price collapse of 1985 was over 15 years. Oil is often treated as something a bit more special than a typical commodity because it is so essential to modern life. But let’s take a simple definition for “commodity”, such as, “any useful or valuable thing…something that is bought and sold”, and when the price of this thing falls to the point that it is […]

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EIA expects slump in upstream investments

Federal energy brief says to investments in oil and gas exploration and production to stay lower as crude oil prices remain depressed. Photo by Calin Tatu/Shutterstock WASHINGTON, Sept. 24 (UPI) — Investment in the exploration and production side of the oil and gas sector could flirt with historic lows if oil prices remain depressed, a U.S. brief said. "Low oil prices, if sustained, could mark the beginning of a long-term drop in upstream oil and natural gas investment," a brief from the federal Energy Information Administration said. West Texas Intermediate, the U.S. benchmark for crude oil prices, at around $44 per barrel are roughly 50 percent lower than this date in 2014. EIA explains investments in upstream activity, the exploration and production side of the industry, is "highly sensitive" to fluctuations in crude oil prices. Most companies focused heavily on exploration and production have cut spending and staff in […]

Posted On : Published By : Tom Whipple
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Sustained low oil prices could reduce exploration and production investment

graph of investment and oil prices, as explained in the article text Source: U.S. Bureau of Economic Analysis, U.S. Energy Information Administration Note: 2015 data are the average of the first two quarters. Low oil prices, if sustained, could mark the beginning of a long-term drop in upstream oil and natural gas investment. Oil prices reflect supply and demand balances, with increasing prices often suggesting a need for greater supply. Greater supply, in turn, typically requires increased investment in exploration and production (E&P) activities. Lower prices reduce investment activity. Overlaying annual averages of the domestic first purchase price (adjusted for inflation) on oil and natural gas investment reveals that upstream investment is highly sensitive to changes in oil prices. Given the fall in oil prices that began in mid-2014 and the relationship between oil prices and upstream investment, it is possible that investment levels over the next several years […]

Posted On : Published By : Tom Whipple
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World Shale Resource Assessments

This series of reports provides an initial assessment of world shale oil and shale gas resources. The first edition was released in 2011 and updates are released on an on-going basis. Four countries were added in 2014: Chad, Kazakhstan, Oman and the United Arab Emirates (UAE) and are available as supplemental chapters to the 2013 report Technically Recoverable Shale Oil and Shale Gas Resources . The most current version of each country chapter is linked in the table of countries below. Archived editions are provided in links in the sidebar column to the right. Countries assessed by date Unproved technically recoverable Region Country wet shale gas (trillion cubic feet) tight oil (billion barrels) Date updated North America Canada 572.9 8.8 4/14/15 Mexico 545.2 13.1 5/17/13 U.S. 1 622.5 78.2 4/14/15 Australia Australia 2 429.3 15.6 5/17/13 South America Argentina 801.5 27.0 5/17/13 Bolivia 36.4 0.6 5/17/13 Brazil 244.9 5.3 […]

Posted On : Published By : Tom Whipple
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Court blocks KRG’s oil route to U.S. as Israel exports grow

Oil tanks at Turkey’s Mediterranean port of Ceyhan, which is run by state-owned Petroleum Pipeline Corporation (BOTAS), where oil exports from the Iraqi central government and, separately, from the KRG, are sent. (UMIT BEKTAS/Reuters) A U.S. appellate court has effectively ended the Kurdistan Regional Government’s (KRG) efforts to bring its independent oil exports out of the shadows and into the mainstream marketplace by selling crude in the United States. With its path to the U.S. market blocked – and amidst enduring legal threats from Baghdad – the KRG’s growing exports remain reliant on arrangements with oil trading firms designed to disguise the identity of end-buyers and the financial terms of sale. Much of Kurdist… 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
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Saudis Seek to Fend Off U.N. Inquiry on Yemen

GENEVA — As Saudi Arabia and its Arab allies pressed their military offensive against Houthi rebels in Yemen , Saudi diplomats were waging their own battle to fend off calls in the United Nations Human Rights Council for an international inquiry into abuses by all parties to the Yemeni conflict. Those calls came in a council resolution submitted Thursday by the Netherlands , with support from a group of mainly Western countries, that requests the United Nations high commissioner for human rights send a mission to Yemen. The Dutch resolution draws on deepening international alarm over the civilian toll inflicted by both sides in the conflict and the effect of a blockade imposed by the Saudi-led coalition that has delayed delivery of humanitarian aid, including medicine and the fuel needed to keep the dwindling number of hospitals operating. At least 1,527 civilians were killed and an additional 3,548 injured […]

Posted On : Published By : Tom Whipple
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China to Announce Cap-and-Trade Program to Limit Emissions

Photo Presidents Obama and Xi Jinping of China left the White House on Thursday for dinner across the street at the Blair House. Credit Doug Mills/The New York Times WASHINGTON — President Xi Jinping of China will make a landmark commitment on Friday to start a national program in 2017 that will limit and put a price on greenhouse gas emissions, Obama administration officials said Thursday. The move to create a so-called cap-and-trade system would be a substantial step by the world’s largest polluter to reduce emissions from major industries, including steel, cement, paper and electric power. The announcement, to come during a White House summit meeting with President Obama , is part of an ambitious effort by China and the United States to use their leverage internationally to tackle climate change and to pressure other nations to do the same. Joining forces on the issue even as they […]

Posted On : Published By : Tom Whipple
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OPEC is winning battle to stimulate gasoline demand: Kemp

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is pictured at its headquarters in Vienna, Austria, August 21, 2015. OPEC’s bid to curb production of high-cost oil is taking time to produce results but the organization is already making good progress on its other objective of stimulating fuel demand. In the first half of the year, gasoline deliveries into U.S. local markets jumped by 4.3 percent compared with the same period in 2014, according to the U.S. Energy Information Administration. The United States is the world’s largest gasoline consumer and its gasoline demand accounts for 10 percent of all crude and condensates produced worldwide. In the first six months of 2015, U.S. gasoline consumption rose at the fastest rate since 1985 – another occasion on which the real price of oil halved over 12 months and stimulated demand ( link.reuters.com/xux65w ). U.S. gasoline sales have fallen […]

Posted On : Published By : Tom Whipple
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Iran Sees Oil Exports Starting to Rise as Early as Late November

GENEVA—Iran expects to be able to increase its oil exports by 500,000 barrels a day by late November or early December with sales to Asia, a top Iranian oil official said Thursday, even before most western sanctions would lift. By mid-2016, Iran expects that its exports will exceed today’s by 1 million barrels a day under that scenario, said Ali Kardor, the chief of investment for the National Iranian Oil Company. “We are ready,” Mr. Kardor said, speaking on the sidelines of a conference here in Geneva promoting business ties between Europe and Iran. The timeline laid out by Mr. Kardor is faster than many analysts and market participants believe Iran is capable of achieving. Iran has been the target of crippling sanctions from much of the western world since 2012 over the Persian Gulf country’s attempts to create a nuclear program. Persian Gulf members of the Organization of […]

Posted On : Published By : Tom Whipple
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Iranian oil conference postponed

Investment conference aimed at highlighting post-sanctions opportunities in Iran’s oil sector postponed without explanation File photo by Maryam Rahmanian/UPI TEHRAN, Sept. 24 (UPI) — A London conference aimed at detailing new investment opportunities in the Iranian oil sector has been postponed, the group organizing the event said. "The Iran oil and gas post-sanction summit has been postponed until Feb. 22-24, 2016," the event organizers said in a statement. Event organizer CWC Group said in response to email questions the event was postponed following recommendations from the National Iranian Oil Co. The Iranian oil minister had said new contracts for potential players would be formally outlined during an investment conference scheduled originally for December. Under the new terms, the NIOC would set up joint ventures with foreign companies, which would be paid with a share of the output. Iranian Oil Minister Bijan Zangeneh said "all international" energy companies can present […]

Posted On : Published By : Tom Whipple