Jan Lars Mueller – Executive Director
Thomas Whipple – Editor, Peak Oil Review and Peak Oil News
“If we stay at this [sub-$50 oil] price longer, then a third to a quarter of the [US] industry will go bankrupt. More activity could drive production, but that takes money and the US industry doesn’t have it anymore. We don’t believe that US production can grow at $50, $60, or even $70. It will likely take $80 per barrel cash flows to return the US from decline to growth.” Walker Moody, Managing Director of Energy Investment firm Tudor, Pickering, Holt & Co. ... Read More
““I believe that arctic oil is not for today, and not for tomorrow — maybe for the day after tomorrow,” Fatih Birol, incoming Director of the IEA ... Read More
“On the face of it, the Saudi-led OPEC strategy to defend market share regardless of price appears to be having the intended effect of driving out costly, ‘inefficient' production.” International Energy Agency, September Oil Monthly Report ... Read More
The U.S. Geological Survey estimates the Chukchi and Beaufort seas hold 26 billion barrels of recoverable oil. “It’s probably fair to say, this [Shell’s drilling effort in the Chukchi sea] is the most scrutinized, analyzed project — oil and gas project — probably anywhere in the world. I’m actually sure of that. We can’t afford to have a problem here.” Marvin Odum, CEO Shell Oil Co. ... Read More
“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
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 […]
Oil prices closed out the week about in the middle of the range where they have traded for the past month — $45.70 in New York and $48.60 in London. During September, prices bounced a dollar or two on news suggesting that demand for oil could increase or production might decline. Conversely, news suggesting that demand might sink or production might increase sent prices back down about the same amount. It appears we could be stuck in this trading range until there are better indications that the oil glut is shrinking; or more definitive news about the course of the global economy – particularly China’s; or there is some major geopolitical upheaval.
After some intra-week volatility, New York oil prices were unchanged for the week closing at $44.68. Brent, however, suffered a 3.2 percent weekly loss closing at $47.47. Much of the week’s oil-price action came on Friday after the US Federal Reserve announced on Thursday it was postponing any increase in interest rates. While such an announcement would normally support oil prices by lowering the value of the dollar, the oil markets jumped to the conclusion that the US economy must be in worse condition than is apparent and fell 5 percent in sympathy with the equity markets. A third weekly drop in the rig count did little to stem the tide as traders are getting use to the idea that small changes in the oil-rig count no longer have much impact on production.
Oil traded in a narrow range last week between $44 and $46 per barrel in New York and $48 to $50 a barrel in London. Increases mostly came from news suggesting that better economic times might be ahead in some part of the world, while declines came when concerns about high inventory numbers, oversupply, and the outlook for China took precedence. US natural gas futures have cycled steadily between $2.73 per million BTUs and $2.64 for over a month now with little news to drive prices out of their trading range.
The three day, nearly 30 percent, price surge which began the week before last continued through last Monday, then slowed as the week progressed with New York crude closing Friday up 1.8 percent and Brent down by 0.9 percent. New York futures settled on Friday at $46.05 and London at $49.61.