Category:

OPEC vs. the Petrodollar

“Washington doesn’t like cartels like OPEC. But then how can you have one market [the oil trade] dominated by one currency – the dollar?”

Participant at an EU industrial working group convened to promote the euro and fight the monopoly of the US dollar in oil and commodities trading (2/14)

Posted On :
Category:

Peak Oil Review – 19 Feb 2019

Prices moved higher last week as the markets perceived that production problems in Venezuela and elsewhere might outweigh any decline in demand that could take place if global economic growth slows. London oil climbed by nearly $5 a barrel last week to close at $66.25. This is still about $20 a barrel lower than the recent peak set last October, but up about $16 a barrel from the early January low.

Posted On :
Category:

The future of the Green New Deal

“[W]ith President Trump’s poll numbers in negative territory, whichever candidate emerges from the Democratic primary will have a decent shot at winning the presidency. If that occurs, they will be on record having supported the Green New Deal and will most likely push for some version of it in 2021. That means that oil and gas companies, having enjoyed a deregulatory bonanza under Trump, could see rougher waters ahead. But with the climate debate getting momentum, that pressure is not going away, no matter what happens with the Green New Deal.”

Nick Cunningham, Oilprice.com

Posted On :
Category:

Peak Oil Review – 11 Feb 2019

Oil prices have moved very little in the past month closing on Friday at $52.72 in NY and $62.10 in London or about where they were in the first week of January. Several factors such as the recent price drop, the OPEC+ production cut, the US sanctions on Tehran and Caracas, and the outage of Libya’s largest field should be pushing prices higher. However, concerns about slowing global economic growth, the US/China trade dispute, and the possibility of turmoil resulting from the UK’s exit from the EU suggest that the demand for oil could drop significantly in the coming year.

Posted On :
Category:

Global Commission on the Geopolitics of Energy Transformation on the future prospect of renewable energy

“Because energy can be generated by technologies, using the sun and wind, rather than concentrated natural resources in the form of oil and gas, which is not ubiquitous in geographic terms, many countries will be able to reduce their vulnerabilities to price spikes and outright supply disruptions by pivoting to renewable energy. Moreover, the strategic importance of chokepoints – the Straits of Hormuz, or the Straits of Malacca for instance – will diminish as fossil fuels lose their grip.”

Global Commission on the Geopolitics of Energy Transformation

Posted On :
Category:

Peak Oil Review – 28 Jan 2019

Oil prices continue to hover in the low $50s in the US and low $60s in London – about where they have been since early January. The main issue affecting prices remains the efficacy of the OPEC+ production cut vs. US shale oil production and the slowing Chinese economy. Last week a political upheaval occurred in Venezuela, raising the possibility that Caracas would no longer be able to export 500,000 b/d to the US or that its production might fall below its current 1 million b/d level. So far, the Venezuelan turmoil has not moved oil prices, but with the world’s major powers lining up for or against the Maduro government, prices seem likely to be affected.

Posted On :
Category:

DeSmog Blog on the viability of the US shale oil industry

“The fracking industry has helped set new records for US oil production while continuing to lose huge amounts of money — and that was before the recent crash in oil prices. But plenty of people in the industry and media make it sound like a much different, and more profitable, story… The explanation is pretty simple: Shale companies are not counting many of their operating expenses in the “break-even” calculations. Convenient for them, but highly misleading about the economics of fracking because factoring in the costs of running one of these companies often leads those so-called profits from the black and into the red.”

Justin Mikulka, DeSmog Blog (1/19)

Posted On :
Category:

Peak Oil Review – 21 Jan 2019

Oil prices continue to climb steadily closing up about $3-4 a barrel by the end of last week. Behind the move are concerns that US shale oil production this year may not be as strong as forecast; lower OPEC production; and reports that the US and China are making progress towards ending their trade war. New York futures closed at $53.80 on Friday, while London closed at $62.70. This leaves London’s Brent about $12 a barrel higher than it was at the end of December, but $22 lower than it was in September. These prices should make the OPEC exporters happier but may not be high enough to keep shale oil production increasing as fast as predicted.

Posted On :
Category:

Reuters on the global automakers’ plans for the future of EVs

“Global automakers are planning an unprecedented level of spending to develop and procure batteries and electric vehicles over the next five to 10 years, with a significant portion of their budgets targeted at China… Automakers’ plans to spend at least $300 billion on EVs are driven largely by environmental concerns and government policy, and supported by rapid technological advances that have improved battery cost, range and charging time.”

Paul Lienert and Christine Chan, Reuters

Posted On :
Category:

Peak Oil Review – 14 Jan 2019

Oil prices continued to climb last week and are now some $10 a barrel higher than they were just before Christmas when recent lows were set. Prices now have retraced about 30 percent of the $35 a barrel drop that took place between late September and late December. Part of the recent price correction likely is due to technical factors such as closing out long positions in the futures markets. The news that the Saudis will cut even more production than specified in their recent pledge in hopes of raising world prices to $80 a barrel was an important part of last week’s price jump. Hopes that the US and China would settle their trade dispute during on-going talks was also an important factor in the recent price jump.

Posted On :
Category:

The Wall Street Journal on US shale industry’s financial woes

“Shale companies have attracted huge amounts of capital from Wall Street over the past decade. So far, investors have largely lost money. Since 2008, an index of US oil and gas companies has fallen 43%, while the S&P 500 index has more than doubled in that time, including dividends. The 29 companies in the Journal’s analysis have spent $112 billion more in cash than they generated from operations in the last 10 years, according to data from FactSet, a financial-information firm.”

Bradley Olson, Rebecca Elliott and Christopher M. Matthews, The Wall Street Journal (1/2/19)

Posted On :
Category:

Peak Oil Review – 7 Jan 2019

Since hitting a recent low on Dec 22nd, oil prices have climbed by $5-6 a barrel as the markets tried to sort out where supply and demand are going. With US oil prices still below $50 a barrel, it is hard to imagine that the optimistic forecasts for US shale oil production will be reached in 2019. There are continuing indications that China’s economy is headed for a dip, but there are reports that US/China trade negotiations are making progress. The US sanctions on Iran seem to be hurting Tehran’s exports, and the OPEC+ production cut is slow getting off the ground.

Posted On :
Category:

S&P Global Platts on the potential of ANWR’s prospective resources

“Some geologists harbor doubts about ANWR’s prospective resources. ‘I don’t see (in the refuge’s geology) what I hear in the political talk,’ about the refuge’s potential, said Richard Garrard, an Alaskan-based exploration geologist. said. Geologically, the region is an extension of the Brooks Range, which is to the south. ‘How many oil fields have been discovered in the Brooks Range? None.’”

From S&P Global Platts

Posted On :
Category:

Peak Oil Review – 31 Dec 2018

It was a volatile week for oil prices with WTI falling on Monday to nearly $42 a barrel and London falling to $51. Oil surged on Wednesday, after posting on Christmas day its strongest daily gain in more than two years from the steep losses on Monday that pushed crude benchmarks to lows not seen since 2017. Both US and Brent crude rose about 8 percent, their largest one-day increase since Nov. 30, 2016, when OPEC signed a landmark agreement to cut production. The week closed out with oil at $45.33 a barrel in New York and $53.21 in London.

Posted On :
Category:

Deputy director, State Energy and Environmental Impact Center, NYU School of Law on proposed seismic testing off the east US coast

[about proposed seismic testing off the east US coast] “Almost every single one of those states is pretty adamant about not wanting that activity off their shore. The administration is pushing through the industry agenda on expanded oil and gas leasing despite all evidence that other stakeholders have other viewpoints about the appropriateness and the scope of that activity.”

Elizabeth Klein, deputy director, State Energy and Environmental Impact Center, NYU School of Law

Posted On :
Category:

Peak Oil Review – 24 Dec 2018

Oil prices fell by more than 11 percent last week to their lowest since mid-2017 with London futures closing at $53.82 and New York at $45.59. There is much debate as to whether the rapid fall in prices is due to oversupply or fears of a global economic recession slowing the demand for oil. Forecasts of rapidly growing US shale oil production next year that could offset much of the OPEC+ production cut and growing political chaos in Washington, London, Paris, and other world capitals is adding to concerns about the future.

Posted On :
Category:

Peak Oil Review – 17 Dec 2018

Oil prices were volatile last week trading inside a narrow range of about $1.50 a barrel and climbing or falling in response to the news of the day. Reports of the OPEC production freeze, the Iran sanctions, or production slowdowns in Libya and Venezuela push prices up while news of economic problems and falling equity markets tend to push prices down. At week’s end, New York futures settled at $51.20, about where they have been since the $7 a barrel price in mid-November. London futures closed $9 higher at $60.28 which is about they have been since November 22nd.

Posted On :
Category:

White House economic advisor on the cancellation of subsidies for EVs

“As a matter of our policy, we want to end all of those subsidies [for electric vehicles]. And by the way, other subsidies that were imposed during the Obama administration, we are ending, whether it’s for renewables and so forth…It’s just all going to end in the near future. I don’t know whether it will end in 2020 or 2021.”

Larry Kudlow, White House economic advisor

Posted On :
Category:

Peak Oil Review – 10 Dec 2018

Oil prices surged briefly on Friday after the announcement of a 1.2 million b/d OPEC+ production cut; however, by the close NY futures were up only $1.61 to close at $52.61, and London was up about the same to close at $61.67. The bulk of the cut is to come from the Saudis and their Gulf Arab allies. Moscow is to cut production by 228,000 b/d but does not expect its cuts to start until spring, and the Iranians were exempted from the cut. Despite the announcement, oil prices were still down slightly for the week.

Posted On :
Category:

US EIA on US oil reserves

“Total US oil reserves in 2017 exceeded a … 47-year-old record, highlighting the importance of crude oil development in shales and low permeability plays, mainly in the Southwest.”

US EIA

Posted On :
Category:

Differential between Canada and the US oil prices

“In my 36 years in this [petroleum] business, I have never seen such a wide differential in sentiment between Canada and the US. I’ve never seen more frustration among our customers and our competitors and in our peer-group companies than right now.”

Kevin Neveu, chief executive officer of the oilfield-service company Precision Drilling Corp.

“The assumption that current and future climate conditions will resemble the recent past is no longer valid…With continued growth in [greenhouse gas] emissions at historic rates, annual losses in some economic sectors are projected to reach hundreds of billions of dollars by the end of the century – more than the current gross domestic product (GDP) of many US states,”

The Fourth National Climate Assessment Volume II, compiled through combined efforts of 13 US government agencies

Posted On :
Category:

Peak Oil Review – 26 Nov 2018

Oil prices slid more than 6 percent on Friday to the lowest levels in more than a year. New York futures closed at $50.42, down almost $26 a barrel since early October, and London closed at $58.80, down more than $27. The reasons for the plunge, which some observers are calling excessive, are well known. Inventories continue to build as US shale oil production increases; there are signs of a weaker global economy ahead; Washington has granted six-month waivers for Iranian oil importers; Moscow is not interested in cutting production; and there are doubts that the Saudis will make a significant cut in production while under pressure from President Trump to keep up production. Trump’s support for Crown Prince bin Salman in the wake of the killing of journalist Jamal Khashoggi is likely to complicate decision-making in Riyadh, to say the least.

Posted On :
Category:

Excerpt from “Thoughts on the Future of World Oil Production”

“It is likely that in the coming years world oil production will decline (at around 5 percent per year) and that LTO [light tight oil] will decline more sharply. This will come as a shock because it is contrary to the official forecasts, which see oil production rising up to 2040.”

Jean Laherrère, retired geologist-geophysicist involved in oil and gas exploration worldwide; from “Thoughts on the Future of World Oil Production,” 11/18

Posted On :