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Archive for August, 2017

Drilling off the Atlantic Coast

By on 28 Aug 2017 in quotes with 0 Comments

“It will likely be years before the oil and gas industry can start drilling off the Atlantic coast, even in the best-case scenario. But even then, it is unclear if there will be any interest. The Atlantic has not been explored very much, and as a result, the exact nature of the oil and gas reserves in place is unknown. That likely means that development costs will be high. If oil prices fail to rise much from current levels, it is not at all clear that the Atlantic will be very competitive.”

Nick Cunningham, Oilprice.com

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Peak Oil Review – 28 Aug 2017

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Peak Oil Review – 28 Aug 2017

It likely will take several weeks to assess the impact that Hurricane Harvey will have on the US oil industry.  As of Monday morning, the storm is still dumping large amounts of rain on Houston and its refineries. Weather forecasts are predicting that the storm will continue to cause heavy flooding along the Gulf Coast and will move further east, possibly closing or damaging additional oil production facilities in Louisiana.

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The Correlation between Interest Rates and Oil Prices

By on 21 Aug 2017 in quotes with 0 Comments

“When interest rates fall, this tends to allow oil prices to rise, and thus allows increased production. This postpones the Peak Oil crisis, but makes the ultimate crisis worse…Falling interest rates between 1981 and 2014 are one of the things that allowed Peak Oil to be postponed for many years…. Peak Economy is likely not very far away. We do not need to encourage it, by raising interest rates and selling securities held by the Federal Reserve. We badly need more people to understand the connection between interest rates and oil prices, and how important it is that interest rates not rise.”

Gail Tverberg, actuary and commentator (8/16)

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Peak Oil Review – 21 Aug 2017

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Peak Oil Review – 21 Aug 2017

Oil continues to trade in one of the narrowest ranges seen in the last decade as the efficacy of the OPEC production cap weighs against increasing US and other production increases and slowing Chinese demand.  Last week saw oil prices falling for three days and then rebounding sharply on Friday to close at $48.50 in New York as a combination of a large drop in US crude stocks, a weaker US dollar, and a falling rig count supported prices.

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The State of Nuclear Power Plants

By on 14 Aug 2017 in quotes with 1 Comment

[After two nuclear plants in South Carolina were cancelled:] “We continue to believe that the problem with new nuclear (small modular units excepted) power plants is not that they generate electricity with nuclear fission. The difficulty is economic. The nuclear units are expensive, base load generating units in a world where production of electricity is becoming less expensive and increasingly decentralized. Base load power plants (and especially nuclear ones) are, in general, must-run, inflexible price takers. Going forward there will be less need for those facilities regardless of how they are fueled. Furthermore, the builder of a nuclear plant must bet an enormous sum on the need for electricity a decade hence, when the plant is completed. Given the uncertainty in power demand and prices, that is a gamble uncompensated in the regulatory process.

By Leonard Hyman and William Tilles for Oilprice.com

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Peak Oil Review – 14 Aug 2017

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Peak Oil Review – 14 Aug 2017

It has been two weeks of mixed signals as to the course of oil prices. Last week prices fell around 1.5 percent, closing at $48.82 in New York on concerns that the OPEC/NOPEC collation was not following through on its pledge to cap production. Even though US stocks continue to fall, much of this is due to increasing exports of light oils and finished oil products and not to increased domestic demand. On Friday, the IEA said that although the oil markets were slowly balancing, it is not going quickly. OPEC and other friends of higher oil prices continue to release optimistic reports, but the consensus seems to be that oil prices will stay around their current levels for the rest of the year unless there is a major geopolitical upheaval.

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