Jan Lars Mueller – Executive Director
Thomas Whipple – Editor, Peak Oil Review and Peak Oil News
“With oil down again [the day they hit $38], $20 per barrel predictions will be amplified. Remember the oil business doesn’t work at these prices.” Analysts at Tudor Pickering Holt & Co. ... Read More
“As part of our long-term plan to build a more resilient economy, create jobs and deliver secure energy supplies, we continue to back our onshore oil and gas industry and the safe development of shale gas in the U.K.” British Energy Minister Nick Bourne ... Read More
“Oil prices have so many moving parts that it’s exquisitely challenging to predict.” Jan Stuart, Credit Suisse Group AG global energy economist [Commenting on his February forecast that oil would average around $67/barrel at year-end 2015.] ... Read More
"Frack now and pay later." Business is so tough for oilfield giants Schlumberger and Halliburton that they have come up with a new sales pitch for crude producers halting work in the worst downturn in years. It amounts to this: "frack now and pay later." The moves by the world's No. 1 and No. 2 oil services companies show how they are scrambling to book sales of new technologies to customers short of cash after a 60 percent slide in crude to $45 a barrel. In some cases, they are willing to take on the role of traditional lenders, like banks, which have grown reluctant to lend since the price drop that began last summer, or act like producers by taking what are essentially stakes in wells. Terry Wade and Anna Driver, Reuters ... Read More
"A steady supply of gas from Iran would not be a silver bullet for Pakistan's energy crisis. Woeful energy sector governance is perhaps an even more debilitating factor than supply, with risks including rampant theft, poor maintenance, and transmission and distribution losses of around 20 percent." Oliver Coleman, deputy head of Asia programs at analytical firm Verisk Maplecroft [Note: Pakistan is the world’s sixth most populous nation with roughly 190 million inhabitants] ... Read More
"Corruption in Nigeria has virtually developed into a culture where honest people are abused. The amount of money [involved] is mind-boggling but we have started getting documents where some of the senior people in government and former ministers have as much as five accounts and were moving about one million barrels per day on their own. We have started getting those documents." Nigeria’s President Buhari ... Read More
“For a brief, brave moment this year there was a sense the worst was over for the oil sector. This week, that feeling evaporated.” Gregory Meyer, The Financial Times, July 17, 2015 ... Read More
“The Economist has examined the books of the 62 largest listed exploration and production firms in America whose collective output is mainly from shale. The results suggest many first are more vulnerable than the bullish noises from their bosses suggest. There are three sets of concerns: the juicing-up of the results announced for the first quarter of 2015; high leverage; and the industry’s returns on capital.” The Economist, July 4th issue ... Read More
“The initial [round of layoffs] was an absolute bloodbath to get rid of all the people who were not core, but if things don’t improve, they’re going to have to start cutting again. If the price of oil – or when the price of oil comes back—the question is whether we are going to have sufficient folks out there to meet the increased demand [for well completion services].” Bob Gray, a partner in the transactions practice at Mayer Brown LP ... Read More
"I am now more convinced than ever that 2015 will see the peak in world crude oil production. I have very closely studied the charts of every producing nation and my prognosis is based on that study. I see many nations in steep decline and most every other nation peaking now, or in the last couple of years, or very near their peak today. These include the world’s three largest producers, Russia, Saudi Arabia and the USA.”
--Ron Patterson, peakoilbarrel.com ... Read More
In reviewing BP’s latest Statistic Review of World Energy, the big story for world oil last year was obvious: the USA’s third straight record-breaking increase in average annual production. Just over 75% of the net increase in world oil production during 2014 came from the USA; add in Canada and 90% of the total increase came from North America. Throw in Brazil’s first significant increase in three years and you have all the world’s net gain in world oil production accounted for by three non-OPEC players. Production from all other producers combined was flat. So the question for 2015 is straightforward: will we see a repeat of those gains…and the flat-liners?
By Art Berman. Reprinted from ArtBerman.com World oil demand increased by 1.1 million barrels per day in February. This is a potentially important data point that suggests a crude oil price recovery sooner than later. It is also important because it further supports the view that a production surplus and not weak demand is the main cause for the […]
By Robert L. Hirsch. The recent world oil supply/price decline situation looks very much like what happened in 1985-86, when the Saudis dramatically increased oil production, causing world oil prices to crater. That Saudi action was the result of their having acted as swing producer in OPEC, which under those circumstances caused a progressive loss […]
A National Energy Program – A White Paper on Achieving Energy Independence and National Transformation. By Lawrence Klaus. Revised and Updated, January 2015. In a recent post, we marked the 40th anniversary of the 1973 Oil Embargo–an event that has had profound economic and geopolitical aftershocks for the United States. The embargo itself lasted […]
It was one of the wildest weeks for the oil markets in recent years. On Monday, another plunge in the Chinese stock markets sent New York oil futures below $38 a barrel and London down to $43, a six and one half year low. The markets bounced around on Tuesday and Wednesday and then surged upwards for two days on the news that the US’s GDP was doing better than previously thought and that the Chinese situation was stabilizing. By Friday afternoon New York futures were up 12 percent for the week, the largest one-week gain since February 2009, closing at $45.22 a barrel. London’s Brent gained 10 percent during the week, closing at $50.05.
The great oil price slide of 2014-15 is taking on epic proportions. US futures traded for a while below $40 a barrel on Friday while Brent closed out at $45.46. Last week the financial press struggled to find an historical comparison to what is taking place in the oil markets. Some papers finally settled on the price crash of 1986 which sent oil prices down to $10 a barrel and led to the demise of the Soviet Union as the most apt. The now familiar forces of too much oil in inventories with nobody moving to cut production; China’s exports, manufacturing, yuan, and stock markets continuing to drop with still more problems in sight; and the prospect for increased Iranian exports after the nuclear agreement is ratified; all contributed to the falling prices. Many sense a decisive shift in the oil markets overall appraisal of the situation with those expecting a price rebound at any minute throwing in the towel and acknowledging that those not expecting a substantial price increase until late 2016 or even 2017 are probably right.
Oil prices have now had a 7th consecutive weekly loss with New York futures closing Friday at $42.50 and London at $49.19. Last week Beijing’s devaluation of the yuan joined the 2 million b/d oil glut and an unplanned outage at a major US refinery to send oil prices lower. Traders now are talking about prices falling into the $30s. The week’s new data included: US crude stocks falling a bit, but not as much as expected; new forecasts from the IEA and EIA which predict that the glut will continue and US production will fall until late in 2016 at which time production and oil prices will rise; the monthly report from North Dakota saying that shale oil production continued to rise in June and that its well-head prices are now down to $28 a barrel; and that the US rig count was up slightly the week before last.
Oil prices continue to fall with New York futures closing Friday at $43.87 and London at $48.61, both down 7 percent for the week. There was the now usual mid-week bounce as traders anticipated that US crude inventories would decline. This time they did fall for the third straight week, but record refining simply turned the crude into inventories of oil products leaving the total stockpiles of commercial crude oil and products largely unchanged at the time of year when it usually drops due to heavier summer demand.