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The Mysterious Case of Big Oil’s Disappearing Barrels

By on 30 Sep 2016 in analysis, notable posts with 0 Comments
The Mysterious Case of Big Oil’s Disappearing Barrels

(Bloomberg) If you ever find yourself at a cocktail party with a bunch of oil executives, one phrase is a guaranteed mood-killer: “reserve replacement.”Not merely awkward to say, it is the industry’s bogeyman. Because in a business chiefly concerned with getting stuff out of the ground, you need to replace that stuff pretty consistently unless you want to, well, eventually run out of stuff.Last year, the stuff-gathering did not go so well.

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OPEC Just Triggered The Biggest Crude Oil Short Squeeze In History

By on 22 Aug 2016 in news, notable posts with 0 Comments
OPEC Just Triggered The Biggest Crude Oil Short Squeeze In History

(oilprice.com) Ever since the February crash, when oil tumbled to 13 years lows, and when OPEC started releasing tactical headlines at key inflection points about an imminent oil production freeze (which not only never arrived but has since seen Saudi Arabia’s output grow to record levels) which we first suggested were meant to trigger a short squeeze among headline scanning HFT algos, our suggestion was – as is often the case – dismissed as yet another conspiracy theory.

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EIA: U.S. shale oil production to fall sharply through 2017

By on 22 Aug 2016 in news, notable posts with 0 Comments
EIA: U.S. shale oil production to fall sharply through 2017

(fuelfix.com) The flow of oil from U.S. shale fields is projected by government analysts to fall 14 percent by 2017, as the reverberations of the recent crash in crude prices are felt.

Production from those shale fields had increased exponentially over the past decade as hydraulic fracturing and horizontal drilling techniques were improved. Shale oil now accounts for more than half of the nation’s crude output.

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« Oil Prices Lower Forever? Hard Times In A Failing Global Economy

By on 15 Jul 2016 in notable posts, viewpoints with 0 Comments

(artberman.com) Two years into the global oil-price collapse, it seems unlikely that prices will return to sustained levels above $70 per barrel any time soon or perhaps, ever. That is because the global economy is exhausted.

The current oil-price rally is over as I predicted several months ago and prices are heading toward $40 per barrel.

Oil has been re-valued to affordable levels based on the real value of money. The market now accepts the erroneous producer claims of profitability below the cost of production and has adjusted expectations accordingly. Be careful of what you ask for.

Meanwhile, a global uprising is unfolding.

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Former OPEC insider tells how global oil pricing got flipped on its head

By on 3 Apr 2016 in analysis, notable posts with 1 Comment
Former OPEC insider tells how global oil pricing got flipped on its head

(The National) From 2004 to 2008 and 2010 to 2014, oil production and prices both rose. The price increases were completely divorced from the market principle of a supply-demand balance. In the middle of 2014, the price momentum ran out of steam and prices began sinking in a bog of unconsumed, overproduced, expensive new oil.

That market disorder should have been a reason for concern. Unfortunately, greed suppressed the voices that raised the alarm and warned of the long-term dangers of short-term gains.

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IEA: oil prices have bottomed out, but growth will not be sharp

By on 1 Mar 2016 in news, notable posts with 0 Comments
IEA: oil prices have bottomed out, but growth will not be sharp

(Reuters) Global oil prices appear to have bottomed out and are expected to rise through this year as investment cuts help to reduce a supply glut, a senior analyst at the International Energy Agency said on Tuesday.

Benchmark Brent crude futures LCOc1 were up 44 cents at $37.01 a barrel at 1304 GMT (06:04 EST), the highest in eight weeks. They hit a more than 12-year low of $27.10 on Jan. 20.

“Oil prices appear to have bottomed out,” Neil Atkinson, the new head of IEA’s oil industry and market division, told a seminar in Oslo.

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IEA sees global oil glut worsening, OPEC deal unlikely

By on 9 Feb 2016 in news, notable posts with 0 Comments
IEA sees global oil glut worsening, OPEC deal unlikely

(Reuters) The world will store unwanted oil for most of 2016 as declines in U.S. output take time and OPEC is unlikely to cut a deal with other producers to reduce ballooning output, the International Energy Agency said.

The agency, which coordinates energy policies of industrialised countries, said that while it did not believe oil prices could follow some of the most extreme forecasts and fall to as low as $10 per barrel, it was equally hard to see how they could rise significantly from current levels.

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Who’s Afraid of Cheap Oil?

By on 28 Jan 2016 in analysis, notable posts with 0 Comments
Who’s Afraid of Cheap Oil?

(The Economist) Along with bank runs and market crashes, oil shocks have rare power to set monsters loose. Starting with the Arab oil embargo of 1973, people have learnt that sudden surges in the price of oil cause economic havoc. Conversely, when the price slumps because of a glut, as in 1986, it has done the world a power of good. The rule of thumb is that a 10% fall in oil prices boosts growth by 0.1-0.5 percentage points.

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This Time, Cheaper Oil Does Little for the U.S. Economy

By on 21 Jan 2016 in analysis, notable posts with 0 Comments
This Time, Cheaper Oil Does Little for the U.S. Economy

(NY Times) WASHINGTON — It has been a truism of the American economy for decades: When oil prices rise, the economy suffers; when they fall, growth improves.

But the decline of oil prices over the last two years has failed to deliver the usual economic benefits.

As oil prices have fallen to levels not seen since 2003 — sagging below $27 a barrel on Wednesday before rebounding to about $30 on Thursday — many experts now say they do not expect lower prices to bolster the domestic economy significantly in 2016.

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Oil crashes to $30 a barrel

By on 12 Jan 2016 in news, notable posts with 0 Comments
Oil crashes to $30 a barrel

(CNN) Oil plummeted below $30 a barrel on Tuesday for the first time since December 2003. The latest wave of selling leaves crude oil down 19% this year alone. It represents an incredible 72% plunge from crude oil’s June 2014 peak of almost $108.

“The fundamental situation for oil markets is much worse than previously thought,” Barclays commodities analysts wrote in a client note.

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As Oil Money Melts, Alaska Mulls First Income Tax in 35 Years

By on 26 Dec 2015 in news, notable posts with 0 Comments
As Oil Money Melts, Alaska Mulls First Income Tax in 35 Years

(NY Times) ANCHORAGE — Oil money no longer pays the bills here. The governor, facing a profound fiscal crisis, has proposed the imposition of a personal income tax for the first time in 35 years. State lawmakers, who recently moved into a palatial new office building here, where they work when not toiling in the far-off Capitol in Juneau, are now seeking less costly digs.

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Looking Back 10 Years After Peak Oil

By on 23 Dec 2015 in analysis, notable posts with 0 Comments
Looking Back 10 Years After Peak Oil

(Peak Oil Barrel) Guest post by Verwimp Bruno.

Peak Oil is the moment in time when, on a global scale, the maximum rate of oil production is reached. The moment after which oil production, by nature, must decline forever. Since Earth is a closed system, next to this production (supply) event, there must be an equal demand event: Peak Oil Consumption.

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Oil Giants Pledge Even Deeper Spending Cuts Amid Prolonged Slump

By on 11 Dec 2015 in news, notable posts with 0 Comments
Oil Giants Pledge Even Deeper Spending Cuts Amid Prolonged Slump

(Bloomberg) Some of the biggest oil explorers in the Western Hemisphere are cutting budgets yet again to conserve cash as a plunge in energy markets shows no signs of abating.

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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.

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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.

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An Oil-Soaked Globe as Production Keeps Climbing and Demand Falls

By on 13 Nov 2015 in analysis, notable posts with 0 Comments
An Oil-Soaked Globe as Production Keeps Climbing and Demand Falls

(NY Times) Houston— Such is the state of the oil industry these days that there is sometimes nowhere to put the oil. Off the coast of Texas, a line of roughly 40 tankers has formed, waiting to unload their crude or, in some cases, for a willing buyer to come along. Similar scenes are playing out off the coasts of Singapore and China and in the Persian Gulf.

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Oil Supply Picture Has Changed Since Keystone Was Proposed

By on 6 Nov 2015 in analysis, notable posts with 0 Comments
Oil Supply Picture Has Changed Since Keystone Was Proposed

(NY Times) When the Obama administration began considering the Keystone XL pipeline seven years ago, oil production in the United States was falling and most analysts thought it would never recover. At the same time, Mexican oil production was also in decline, meaning that domestic refineries would soon need another source of crude.

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Will Obama’s ‘No’ on Keystone Curtail Canada’s Oil Boom?

By on 6 Nov 2015 in news, notable posts with 0 Comments
Will Obama’s ‘No’ on Keystone Curtail Canada’s Oil Boom?

(National Geographic) President Barack Obama’s rejection of a controversial U.S.-Canadian oil pipeline signals U.S. leadership on climate change, but it’s not expected to stop the growth in Canada’s oil production —at least not anytime soon.

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The Oil Production Story: Pre- and Post-Peak Nations 2015

By on 15 Jun 2015 in commentary

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?

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An Apollo Program for Energy

By on 29 Jan 2015 in commentary

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 […]

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Happy 40th Anniversary, America

By on 18 Oct 2013 in commentary with 2 Comments

On October 19, 1973, the Organization of Arab Oil Exporting Countries (OAPEC) proclaimed an embargo of oil exports to the United States, in response to U.S. support for Israel in the 1973 Arab-Israeli War.  The embargo, which was accompanied by cuts in overall production by OAPEC countries, lasted until March 1974. Oil prices shot up […]

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Shell’s Oil Shale Shutdown: 1-800-Dry-Hole

By on 11 Oct 2013 in commentary

By Steve Andrews. Early last week, Shell Oil announced it was shutting down its oil shale research project in western Colorado. Combine their departure with Chevron’s exit back in February 2012 and you can count another nail in oil shale’s coffin. Yet since this unconventional resource ranks among the largest in the world, estimated by […]

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Albert A. Bartlett: Ode to a Gentle Giant

By on 10 Sep 2013 in commentary with 2 Comments
Albert A. Bartlett: Ode to a Gentle Giant

By Jan Lars Mueller. I learned last night that Al Bartlett–professor emeritus of physics at the University of Colorado, and a long-time friend, advisor, and guiding light for ASPO-USA–had died over the weekend. The news did not come suddenly, Al had shared that a previous illness had reasserted itself and that he and his family […]

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Arithmetic, Population, & Energy

By on 10 Sep 2013 in video with 3 Comments

A lecture by Dr. Albert A. Bartlett – Professor of Physics, University of Colorado (In eight parts, approximately nine minutes each.  Full lecture below)   Part 1 Part 2 Part 3 Part 4 Part 5 Part 6 Part 7 Part 8 Full Lecture

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Whither Shale Oil? – An Interview with David Hughes

By on 12 Aug 2013 in commentary with 0 Comments

ASPO-USA Co-founder Steve Andrews recently talked with Canadian geoscientist David Hughes on the outlook for shale oil.  Q: Andrews–Production from shale oil plays has been impressive and has taken the national energy dialogue by storm.  When did you sense that the shale oil plays had the kind of muscle they are currently showing? A: Hughes—The […]

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