Helping America Navigate a New Energy Reality

Archive for December, 2015

Billions of Barrels of Oil Vanish in a Puff of Accounting Smoke

By on 11 Dec 2015 in news, notable posts with 0 Comments
Billions of Barrels of Oil Vanish in a Puff of Accounting Smoke

(Bloomberg) In an instant, Chesapeake Energy Corp. will erase the equivalent of 1.1 billion barrels of oil from its books.

Across the American shale patch, companies are being forced to square their reported oil reserves with hard economic reality. After lobbying for rules that let them claim their vast underground potential at the start of the boom, they must now acknowledge what their investors already know: many prospective wells would lose money with oil hovering below $40 a barrel.

Continue Reading »

U.S. Lowers 2016 Crude Output Forecast as Drillers Idle Rigs

By on 10 Dec 2015 in news, notable posts with 0 Comments
U.S. Lowers 2016 Crude Output Forecast as Drillers Idle Rigs

(Bloomberg) The Energy Information Administration cut its U.S. crude production outlook for next year as declining prices are prompting shale drillers to put rigs aside. Cheaper gasoline is expected to stoke demand for the motor fuel.

Continue Reading »

McKinsey Says Saudi Arabia Can’t Wait for World to Get Better

By on 10 Dec 2015 in news, notable posts with 0 Comments

(Bloomberg) Saudi Arabia can’t afford to wait for oil prices to recover and needs to accelerate economic measures to avoid rising unemployment, deficits and debt, McKinsey & Co. Inc. said in a report released Thursday.

Continue Reading »

What Went Wrong in Oil-Price Forecasts?

By on 10 Dec 2015 in analysis, notable posts with 0 Comments
What Went Wrong in Oil-Price Forecasts?

(Wall Street Journal) This was supposed to be the year oil prices turned around.

Ten banks surveyed by The Wall Street Journal in March predicted that U.S. crude would average $50 a barrel or better in the fourth quarter. December 2015 futures contracts were selling for $63.82 a year ago.

Continue Reading »

Oil Producing Countries Pummeled by $40 Crude

By on 10 Dec 2015 in news, notable posts with 0 Comments
Oil Producing Countries Pummeled by $40 Crude

(Wall Street Journal) The fall of crude prices to six-year lows in recent weeks has pummeled oil-producing countries from Venezuela to Iraq, threatening their ability to keep pumping petroleum and forcing governments to take painful measures to shore up national budgets.

Continue Reading »

Oil Spending Seen Down $70 Billion Next Year, Rystad Says

By on 9 Dec 2015 in news, notable posts with 0 Comments
Oil Spending Seen Down $70 Billion Next Year, Rystad Says

(Bloomberg) Reduced spending by oil explorers will lead to a global shortage of crude within the next few years, according to industry consultant Rystad Energy.

While the world’s exploration and production companies need to replace 34 billion barrels of oil every year to meet consumption needs, the companies made investment decisions that will result in only about 8 billion barrels in 2015, Rystad said in a report released Wednesday.

Continue Reading »

Oil prices may go even lower in 2016: IEA’s Birol

By on 9 Dec 2015 in news, notable posts with 0 Comments
Oil prices may go even lower in 2016: IEA’s Birol

(CNBC) Oil prices pared some of their losses on Wednesday after falling to near seven-year lows earlier in the week, but those hoping for a rebound next year may be disappointed.

Fatih Birol, the executive director of the International Energy Agency (IEA), told CNBC that crude prices could continue to fall in 2016, presenting a challenge to governments that are trying to encourage the use of relatively expensive sustainable energy.

Continue Reading »

The real danger of the oil collapse

By on 8 Dec 2015 in analysis, notable posts with 0 Comments
The real danger of the oil collapse

(CNBC) The collapse of the housing bubble sent the world spiraling into recession. The collapse of the energy and commodity bubble threatens to be just as damaging. That few are willing to even use the term “bubble” with regard to the boom and bust in the price of oil, copper, iron ore, and other materials tells how early we still are in the painful unwind phase.

Continue Reading »

EIA Says Shale Continues to Decline

By on 8 Dec 2015 in analysis, notable posts with 0 Comments
EIA Says Shale Continues to Decline

(Peak Oil Barrel) The EIA’s Drilling Productivity Report has US shale oil on a steep decline. The below shale oil production charts are the EIA’s estimate of what shale production will look like through January 2016. Keep in mind this is the EIA’s estimate and not hard production numbers.

Continue Reading »

Oil glut to persist as global demand growth slows: IEA

By on 7 Dec 2015 in news, notable posts with 0 Comments
Oil glut to persist as global demand growth slows: IEA

(Reuters) A global oil supply glut will persist through 2016 as demand growth slows from a five-year high and key OPEC members maintain near-record output, the International Energy Agency said, even as low prices curb supply outside the producer group.

Continue Reading »

Oil Prices: What’s Behind the Drop? Simple Economics

By on 7 Dec 2015 in analysis, notable posts with 0 Comments
Oil Prices: What’s Behind the Drop? Simple Economics

(NY Times) The oil industry, with its history of booms and busts, is in its deepest downturn since the 1990s, if not earlier.

Earnings are down for companies that have made record profits in recent years, leading them to decommission nearly two-thirds of their rigs and sharply cut investments in exploration and production. More than 200,000 oil workers have lost their jobs, and manufacturing of drilling and production equipment has fallen sharply.

Continue Reading »

Oil Extends Decline Below $40 as OPEC Abandons Production Target

By on 7 Dec 2015 in news, notable posts with 0 Comments

(Bloomberg) Oil extended losses below $40 a barrel amid speculation a record global glut will be prolonged as OPEC abandoned its long-time strategy of limiting production to control prices.

Continue Reading »

Texas state representative’s reflection on the state of Texas oil & gas’s industry

By on 7 Dec 2015 in quotes with 0 Comments

“It’s very clear that the production of oil and gas has carried [Texas] through this boomlet. Once the golden goose leaves, there’s nothing left but them regular gooses.”

Texas state Representative Garnet Coleman

Continue Reading »

Peak Oil Review – 7 Dec 2015

By on 7 Dec 2015 in Peak Oil Review with 1 Comment

The long-awaited OPEC decision came on Friday. With the Saudis and their close allies adamant that they would not cut production unless Russia and Iran and other OPEC members agreed to cut too, the meeting had no where to go but to continue existing policies. Indonesia was readmitted into the cartel and the output ceiling was adjusted to 31.5 million b/d reflecting the realities of the addition of Indonesia and of actual current production. While the cartel will reconsider the issue in June, the final decision led to considerable pessimism among traders. Global over-production is now running some 1.8 million to 2 million b/d and there is a good possibility that Iran will add at least another 500,000 b/d to the glut in the first six months of 2016. OPEC is hoping that stronger demand for oil will erase at least some of the over-production next year, but many see overproduction continuing into 2017.

Continue Reading »

As Oil Keeps Falling, Nobody Is Blinking

By on 6 Dec 2015 in news, notable posts with 0 Comments
As Oil Keeps Falling, Nobody Is Blinking

(Wall Street Journal) The standoff between major global energy producers that has created an oil glut is set to continue next year in full force, as much because of the U.S. as of OPEC.

Continue Reading »

OPEC Won’t Cut Production to Stop Oil’s Slump

By on 4 Dec 2015 in news, notable posts with 0 Comments
OPEC Won’t Cut Production to Stop Oil’s Slump

(Bloomberg) OPEC signaled no respite from the global oil glut that has driven prices to a six-year low.

Continue Reading »

Oil prices and budgets:The OPEC countries most at risk

By on 4 Dec 2015 in analysis, notable posts with 0 Comments
Oil prices and budgets:The OPEC countries most at risk

(CNBC) Plunging oil prices have left many crude-exporting countries with budgets that simply won’t balance.

For many of the biggest producers — places like Saudi Arabia, Venezuela and Algeria — oil accounts for the majority of the country’s exports and gross domestic product. Collapsing prices have meant dramatic declines in government revenue at a time when many political leaders are working to maintain social stability through liberal spending.

Continue Reading »

Energy companies choose storing oil over selling it cheap

By on 4 Dec 2015 in news, notable posts with 0 Comments
Energy companies choose storing oil over selling it cheap

(CNBC) Just a few miles from Houston’s Astrodome, a cluster of subterranean salt caverns will soon be able to store enough oil to fill the famed stadium.

By the end of 2016, phase I of Fairway Energy Partners’ Pierce Junction crude oil storage facility will come online, touting three caverns capable of socking away a combined 10 million barrels of black gold.

Continue Reading »

OPEC keeps oil production at current high level

By on 4 Dec 2015 in news, notable posts with 0 Comments
OPEC keeps oil production at current high level

(CBS) VIENNA – OPEC nations decided Friday to keep producing oil at their current high levels, effectively acknowledging their inability to push up crude prices.

Continue Reading »

Top