Category:

Oil and the Global Economy

How important is oil to the future of the global economy? The remarkable economic expansion of in the United States and other industrial nations over the past century or more has been fueled by a steadily growing supply of low-cost energy—mostly from fossil fuels—oil in particular which accounts for more global energy consumption than any other source. But there is growing uncertainty whether this trend will continue as it has in the past. How will shifting trends regarding the cost, demand, and supply for oil affect the global economy and the outlook for investment and economic growth? Guests: Stephen P.A. Brown – professor of economics and director, Center for Business and Economic Research , Lee Business School, University of Nevada, Las Vegas; visiting fellow, Resources for the Future ; associate editor, Energy Policy Mark Lewis – senior analyst for energy, climate, and sustainability research, Kepler Cheuvreux ; former head […]

Posted On : Published By : Tom Whipple
Category:

Why Are The IMF, The UN, The BIS And Citibank All Warning That An Economic Crisis Could Be Imminent?

The warnings are getting louder. Is anybody listening? For months, I have been documenting on my website how the global financial system is absolutely primed for a crisis, and now some of the most important financial institutions in the entire world are warning about the exact same thing. For example, this week I was stunned to see that the Telegraph had published an article with the following ominous headline: “ $3 trillion corporate credit crunch looms as debtors face day of reckoning, says IMF “. And actually what we are heading for would more accurately be described as a “credit freeze” or a “credit panic”, but a “credit crunch” will definitely work for now. The IMF is warning that the “dangerous over-leveraging” that we have been witnessing “threatens to unleash a wave of defaults” all across the globe… Governments and central banks risk tipping the world into a fresh […]

Posted On : Published By : Tom Whipple
Category:

Forget Peak Oil – It’s All About Peak Population Growth

Summary Global annual population growth peaked in 1988 and is decelerating. Global annual population growth is estimated to be back to 1950 levels by 2050 but the bulk of "growth" will be among 65+ year olds living longer…not greater births. Substituting lower interest rates and encouraging more debt for declining population growth (consumption) was and is a tragic error by our central bankers. The idea that global population growth will perpetually drive increasing demand for food, natural resources, real estate, consumer goods, and global trade is a common theme. This idea of ever greater demand drives most investors thinking and actions. The premise the world currently operates under is that demand (consumption) will grow driven by population increases coupled with wage increases and be magnified by access to credit. The resultant growth will allow rapidly growing debt to be serviced / paid by even more rapidly growing global trade. […]

Posted On : Published By : ASPO-USA
Category:

EIA Short Term Energy Outlook

The EIA is out with the latest Short Term Energy Outlook . All charts below are in million barrels per day. The one table is in thousand barrels per day. The projected data is through December 2016. STEO Non-OPEC Liquids The EIA has Non-OPEC total liquids dropping 620,000 bpd in September, up 280,000 bpd in November but bottoming out in January, February and March, then climbing until October of 2016. STEO Non-OPEC Change The EIA expects Non-OPEC average total liquids to increase by 140,000 bpd in 2016. The chart above shows the change they expect each country to make. Canada, by far, has the largest increase in production, up by 340,000 barrels per day. Without Canada’s input the EIA says, Non-OPEC total liquids production would be down by 200,000 bpd. STEO Numbers Here are the changes in Non-OPEC production the EIA expects each country to make 2015 to 2016 […]

Posted On : Published By : Tom Whipple
Category:

U.S. oil production to decline

Low crude oil prices crimping expected production from U.S. shale basins, federal market report finds. File photo by Lilac Mountain/Shutterstock WASHINGTON, Oct. 7 (UPI) — Weak economics in the energy sector may lead to a general decline in total U.S. crude oil production, a short-term federal market report finds. The U.S. Energy Information Administration said in its short-term market report total U.S. crude oil production declined by 120,000 barrels per day from August to September. By next year, EIA expects crude oil production to fall from the expected 2015 average of 9.2 million bpd to 8.9 million bpd next year. "Expected crude oil production declines from May 2015 through mid-2016 are largely attributable to unattractive economic returns in some areas of both emerging and mature onshore oil production regions," EIA said in its latest report. Crude oil prices are down about half from this time last year. West Texas […]

Posted On : Published By : Tom Whipple
Category:

Canadian Oil Sands Adopts Poison Pill in Wake of Hostile Suncor Bid

Calgary, Alberta-based Canadian Oil Sands said the shareholder rights plan is meant to give its shareholders and board adequate time to evaluate Suncor’s 4.3 billion Canadian dollar ($3.3 billion) all-stock offer and any other unsolicited bid or strategic options. The company reiterated that shareholders take no action on the Suncor bid until the offer has been fully reviewed by its board. “The board will consider Suncor’s unsolicited offer in both the current context and in light of the strong long-term potential of Canadian Oil Sands,” Canadian Oil Sands Chairman Donald Lowry said in a statement. Shareholder rights plans, or poison pills, are designed to dilute the value of a stock by flooding the market with additional shares, which makes it expensive for an investor to acquire a controlling stake. The rights plan, which is in addition to one already in place, would be triggered upon the purchase of 20% […]

Posted On : Published By : Tom Whipple
Category:

Oil Depletion Likely Without Technology

Without the latest technologies to increase production, there is a good chance that Iranian oilfields will be exhausted in the near future, says the deputy for technology and international affairs at the Research Institute of Petroleum Industry. “Even if the country focuses all its energy on completing the value chain in oil and gas industries, without new drilling techniques to exploit our reserve of nearly 650 billion barrels of crude oil, we will still fail to harvest the maximum capacity of oilfields,” Amir Abbas Hosseini told ILNA. The official had previously announced that the institute is seeking a strategic mechanism to raise oil extraction rate by nearly 11% and that the current extraction rate is a long way from the target rate of 35%, because extraction procedures are lacking know-how. “Failing to do so would lead to a production decline through the second half of the operational oilfields’ lifecycle […]

Posted On : Published By : Tom Whipple
Category:

U.S. oil production on brink, say oil executives

A pump jack operates at a well site leased by Devon Energy Production Company near Guthrie, Oklahoma September 15, 2015. U.S. oil production will start to decline soon unless oil prices rise substantially, oil executives said on Tuesday, saying lower production could pave the way for a spike in the market in future if fuel demand increased. Delegates at the Oil and Money conference in London, an annual gathering of senior industry officials, said world oil prices were now too low to support U.S. shale oil output, the biggest addition to world production over the last decade. "We are about to see a pretty dramatic decline in U.S. production growth," the former head of oil firm EOG Resources ( EOG.L ) Mark Papa, told the conference. Papa, now a partner at U.S. energy investment firm Riverstone Holdings LLC, said U.S. oil production would stall this month and begin to […]

Posted On : Published By : Tom Whipple
Category:

Rating for Chesapeake Energy lowered

Weak cash flow and low oil prices leads to rating downgrade for Chesapeake Energy. Photo by Steve Oehlenschlager/Shutterstock NEW YORK, Oct. 6 (UPI) — The credit rating for U.S. shale player Chesapeake Energy was downgraded because of cash flow problems in the weak market, Moody’s said. Moody’s Investors Service downgraded the corporate rating for Chesapeake Energy Corp. by one notch to Ba2. Moody’s Senior Vice President Pete Speer said the downgrade came as a result of weak cash flow and the toll taken by lower natural gas and crude oil prices. "Chesapeake will have to execute on assets sales and other transactions to meaningfully reduce its debt levels to better align its capital structure with the current commodity price environment," he said in a statement. Energy consultant group IHS warned the depressed crude oil market could limit the borrowing options for North American exploration and production companies like Chesapeake. […]

Posted On : Published By : Tom Whipple
Category:

Short-Term Energy and Winter Fuels Outlook

Highlights EIA projects average U.S. household expenditures for natural gas, heating oil, and propane during the upcoming winter heating season (October 1 through March 31) will be 10%, 25%, and 18% lower, respectively, than last winter, because of lower fuel prices and lower heating demand. Forecast lower heating demand and relatively unchanged prices contribute to electricity expenditures that are 3% lower than last winter ( Winter Fuels Outlook slideshow ). North Sea Brent crude oil prices averaged $48/barrel (b) in September, a $1/b increase from August. However, volatility remained high during September. EIA forecasts that Brent crude oil prices will average $54/b in 2015 and $59/b in 2016, unchanged from last month’s STEO. Forecast West Texas Intermediate (WTI) crude oil prices average $4/b lower than the Brent price in 2015 and $5/b lower in 2016. The current values of futures and options contracts for January 2016 delivery ( Market […]

Posted On : Published By : Tom Whipple