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News

Oil! Massive shale discovery in Texas

By on 8 Sep 2016 in news, notable posts with 0 Comments
Oil! Massive shale discovery in Texas

(CNN) Apache ( APA ) revealed the huge find this week after more than two years of stealthily buying up land, extensive geological research and rigorous testing.

The Houston company estimates the discovery, dubbed “Alpine High,” could be worth at least $8 billion.

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OPEC Monthly Oil Market Report August 2016

By on 22 Aug 2016 in news, notable posts with 0 Comments
OPEC Monthly Oil Market Report August 2016

(peakoilbarrel.com) When oil fell below $30 a barrel earlier this year, banks turned away from lending to energy companies. The price of crude has bounced back more than 80% from its February low, but banks are still wary.

Big banks cut loans to the energy sector by about 3% in the second quarter over all and some individual lenders pulled back much more, according to an analysis of July and August securities filings by Barclays analysts.

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Oil prices slip as short-covering rally fizzles

By on 8 Aug 2016 in news, notable posts with 0 Comments
Oil prices slip as short-covering rally fizzles

(Reuters) A worker walks at Nahr Bin Umar oil field, north of Basra, Iraq December 21, 2015. Oil prices dipped on Friday, ending a two-day rally, as a glut of crude and refined products weighed on markets and investors eyed a possible stutter in China’s imports.

U.S. West Texas Intermediate (WTI) crude futures CLc1 fetched $41.74 per barrel at 0930 GMT (0530 ET), down 19 cents from their last close, after trading as low as $41.44 earlier in the day. They were on track roughly to break even on the week.

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Analysis

Oil glut seen extending into 2017 on weaker demand

By on 13 Sep 2016 in analysis, notable posts with 0 Comments
Oil glut seen extending into 2017 on weaker demand

(Toronto Star) The much-anticipated rebalancing of oil markets appears to be a bit further away after the International Energy Agency revised its forecast, trimming its expectations for the growth in oil demand and citing near-record production by OPEC’s Middle East exporters.

The IEA said Tuesday that global oil demand is rising at a slower pace than expected, lowering its forecast by 100,000 barrels a day to an increase of 1.3 million barrels a day in 2016 and 1.2 million barrels a day in 2017.

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Are Shale-Oil Companies Starting to Weather the Crude Slide?

By on 5 Aug 2016 in analysis, notable posts with 0 Comments
Are Shale-Oil Companies Starting to Weather the Crude Slide?

(Wall Street Journal) A truck used to carry sand for fracking is washed in a truck stop on February 4, 2015 in Odessa, Texas. … Debt from U.S. shale companies has held its ground even as oil prices have beat a fast retreat, a sign the firms may have adapted to an era of cheaper crude and could remain key suppliers to the market.

A build-up in stockpiles of oil has renewed downward pressure on prices: U.S. crude is now at roughly $42 the barrel, 14% below where it was at the beginning of June, when it appeared to be rallying.

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The One Chart That Shows Why Oil Prices Have To Keep Rising

By on 28 Jun 2016 in analysis, notable posts with 0 Comments
The One Chart That Shows Why Oil Prices Have To Keep Rising

(oilprice.com) There has been a lot of pessimism among oil investors in recent months, and indeed the bear market over the last couple of years in black gold has destroyed many nest eggs. With that said, oil investors who have run for the hills could find themselves regretting that decision in the months and years to come.

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Viewpoints

What Hubbert Got Really Wrong About Oil

By on 8 Sep 2016 in notable posts, viewpoints with 0 Comments
What Hubbert Got Really Wrong About Oil

(Forbes) If you happen to be someone who is interested in the topic of “peak oil”, you know the name M. King Hubbert.

The history of the scientific study of peak oil dates to the 1950s, when Hubbert, a Shell geophysicist, reported on studies he had undertaken regarding the production rates of oil and gas fields.

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Is the Oil Industry Dying?

By on 10 Aug 2016 in notable posts, viewpoints with 1 Comment
Is the Oil Industry Dying?

(psmag.com) Talking about “peak oil” can feel very last decade. In fact, the question is still current. Petroleum markets are so glutted and prices are so low that most industry commenters think any worry about future oil supplies is pointless. The glut and price dip, however, are hardly indications of a healthy industry; instead, they are symptoms of an increasing inability to match production cost, supply, and demand in a way that’s profitable for producers but affordable for society. Is this what peak oil looks like?

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The Death of OPEC

By on 26 Jul 2016 in notable posts, viewpoints with 0 Comments
The Death of OPEC

(Project Syndicate) The Organization of the Petroleum Exporting Countries is dead. Saudi Arabia killed it. Now, OPEC is just a toothless zombie, attracting attention, but without having any impact on the living.

Few have noticed OPEC’s demise for a simple reason: it never really had the impact that it was widely perceived to have. It was never actually a cartel, possessing monopolistic market power. Anyone who thought otherwise was mistakenly attributing to it Saudi Arabia’s market power.

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Other Recent Posts

Peak Oil Review – 11 Dec 2017

By on 11 Dec 2017 in Peak Oil Review with 0 Comments
Peak Oil Review – 11 Dec 2017

In the wake of the OPEC decision to extend the production freeze, the oil markets were relatively quiet last week. Prices fell early in the week after the EIA reported a 6.78-million-barrel increase in the US gasoline inventory, but climbed later in the week on reports of near-record Chinese oil imports for November of more than 9 million b/d and concerns about the embassy-in-Jerusalem situation. At week’s end US crude settled at $57.36 and London nearly $6 higher at $63.40. For the immediate future, there are concerns about the US oil rig count which continues to climb slowly. The EIA reported last week that US production expanded to 9.71 million b/d, the highest since EIA began compiling weekly data in 1983. There are, of course, concerns that the EIA’s weekly production estimates are inflated and will be revised when better information becomes available. Other factors moving the markets last week were a good US jobs report, signs of modest growth in the EU economy, and the threat of a strike in Nigeria.

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MIT report on EIA’s assumptions and models regarding US oil production as reported by Bloomberg

By on 4 Dec 2017 in quotes with 0 Comments

“The EIA’s [assumes] that better technology has been behind nearly all the recent output gains, and will continue to boost production for the foreseeable future. That’s not quite right. Instead, the MIT research suggests increases have been largely due to something more mundane: low energy prices, which led drillers to focus on sweet spots where oil and gas are easiest to extract. ‘The EIA is assuming that productivity of individual wells will continue to rise as a result of improvements in technology,’ said Justin B. Montgomery, a researcher at the Massachusetts Institute of Technology and one of the study’s authors. ‘This compounds year after year, like interest, so the further out in the future the wells are drilled, the more that they are being overestimated.’ The problem with the EIA’s numbers, the researchers say, is that they give drillers too much credit for coming up with ways to improve fracking.”

From a Bloomberg News story (12/2)

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Peak Oil Review – 4 Dec 2017

By on 4 Dec 2017 in Peak Oil Review with 0 Comments
Peak Oil Review – 4 Dec 2017

The long-discussed decision by OPEC and its collaborators on whether to extend their production freeze to the end of 2018 came last week and to nobody’s surprise was unanimous. After three months of hype, hints, rumors, and speculation, and a nearly $10 a barrel increase in oil prices, the matter is settled for another year. When the oil markets concluded there would be no immediate sell-off in reaction to the three-month price increases, oil futures started rising again. On Friday afternoon, increasing political turmoil surrounding the Trump administration and its relations with Russia roiled the market leaving New York futures at $58.35 and London at $64.10.

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A communique from 15,000 scientists from 184 countries assessing the world’s latest responses to various environmental threats

By on 20 Nov 2017 in quotes with 0 Comments

“Humanity has failed to make sufficient progress in generally solving foreseen environmental challenges, and alarmingly, most of them are getting far worse. Soon it will be too late to shift course away from our failing trajectory.”

A communique from 15,000 scientists from 184 countries assessing the world’s latest responses to various environmental threats (11/14)

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Peak Oil Review – 20 Nov 2017

By on 20 Nov 2017 in Peak Oil Review with 0 Comments

Oil prices fell for most of last week, but then rebounded to close at $56.55 in NY ($62.73 in London) on Friday. This was only a dollar or so a barrel below the recent high set the week before last. As usual, there were numerous factors impacting oil prices. OPEC reported a small drop in October production due to lower output from Iraq, Nigeria, and Iran. OPEC also said it expects global demand for oil to grow by 1.5 million b/d this year and again in 2018. The IEA is not so sure that demand will be so strong, noting that crude prices have risen by roughly 20 percent since early September and now the “market balance in 2018 does not look as tight as some would like and there is not, in fact, a ‘new normal’.”

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The Future of Self driving Vehicles

By on 13 Nov 2017 in quotes with 1 Comment

“There isn’t a viable alternative to fossil fuels on the horizon. We’re not buying into the long-term demand destruction for oil.”

 Alasdair McKinnon, portfolio manager at Scottish Investment Trust

“Vehicles of the future will no longer be driven by humans because in 15 to 20 years — at the latest — human-driven vehicles will be legislated off the highways. The tipping point will come when 20 to 30 percent of vehicles are fully autonomous. Countries will look at the accident statistics and figure out that human drivers are causing 99.9 percent of the accidents.”

Bob Lutz, former executive with major auto company

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Peak Oil Review – 13 Nov 2017

By on 13 Nov 2017 in Peak Oil Review with 0 Comments
Peak Oil Review – 13 Nov 2017

Oil prices leveled off last week with New York futures closing at $56.74, up more than $20 a barrel since June.  Brent closed about $7 higher at $63.52. As has become normal these days, multiple factors impacted the oil prices last week pulling the markets in both directions. While the arrest of over 200 important princes, ministers and industrial leaders in Saudi Arabia on charges of corruption early in the week roiled the markets for a few days, by the end of the week the markets were largely ignoring what could morph into a major Middle East crisis or even hostilities.

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Portfolio Manager for Century Management on the Future of US Shale Oil

By on 6 Nov 2017 in quotes with 0 Comments

“There’s a complacency that shale is going to continue to produce at the kind of volumes that we had in the past…If the world keeps believing we’ve got surplus oil as far as the eye can see—which I don’t believe—then the reality is going to smack everybody in the face. And it will be hard to catch up.”

Jim Brilliant, portfolio manager for Century Management

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Peak Oil Review – 6 Nov 2017

By on 6 Nov 2017 in Peak Oil Review with 0 Comments
Peak Oil Review – 6 Nov 2017

The price surge, which began in mid-September, continued last week with NY futures closing Friday at $55.64 and London at $62.07. The $6.50 spread is leading to ever higher US exports which are now above 2 million b/d. Crude prices are at their highest level in over two years. Behind the price surge has been the steady stream of hints from the Saudis and the Russians that they are ready to back an extension of the production freeze through 2018 at the November 30th meeting. Some are asking whether the major oil exporters will be willing to continue a production freeze if prices move much higher. There now is a solid perception among traders that the global crude stocks are declining and that demand is rising. This in addition to the OPEC hype is contributing to the price surge.

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Batteries & Offshore Oil Drilling in Gulf of Mexico

By on 30 Oct 2017 in quotes with 0 Comments

“There’s going to be a lot of excitement around batteries in the next five years. And I would say that the country will get blanketed with [battery] projects.”

Spencer Hanes, Duke Energy business development managing director

“In today’s low-price energy environment, providing the offshore industry access to the maximum amount of opportunities possible is part of our strategy to spur local and regional economic dynamism and job creation and a pillar of President Trump’s plan to make the United States energy dominant.”

Ryan Zinke, US Secretary of the Interior, after announcing a record 77 million acres for lease in the Gulf of Mexico

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