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Oil and gas investment boom ‘fading fast’

Posted on 29 August 2014 by VRS  |  Email |Print

The boom in oil and gas investment that insulated Australia from the Global Financial Crisis is fading fast and there are few signs of new projects on the horizon, EnergyQuest says.
Dr Graeme Bethune - chief executive of the energy economics group – said the level of oil and gas investment is already well below the peak reached in the last quarter of 2013 and will keep falling as new LNG projects are completed………………………………………..Full Article: Source

A New American Oil Bonanza

Posted on 29 August 2014 by VRS  |  Email |Print

Whenever overseas turmoil has pushed energy prices higher in the past, John and Beth Hughes have curbed their driving by eating at home more and shopping locally. But the current crises in Ukraine and Iraq did not stop them from making the two-hour drive to San Antonio to visit the Alamo, have a chicken fried steak lunch, and buy fish for their tank before driving home to Corpus Christi.
“We were able to take a day-cation because of the lower gas prices,” said Ms. Hughes. The reason for the improved economics of road travel can be found 10,000 feet below the ground here, where the South Texas Eagle Ford shale is providing more than a million new barrels of oil supplies to the world market every day………………………………………..Full Article: Source

Falling Oil Prices Could Force Venezuela to Veer off the Chávez Formula

Posted on 29 August 2014 by VRS  |  Email |Print

Venezuela’s embattled Nicolás Maduro has spent most of his 19-month presidency fighting to avoid changing any of the economic policies he inherited from his predecessor, the late Hugo Chávez. Maduro has repeatedly told his countrymen that Chávez’s socialist blueprint is working in spite of mounting shortages, soaring inflation, and two maxi-devaluations in the past two years. Now falling oil prices may force his hand.
The price of Venezuela’s benchmark basket of crude and petroleum products fell on Aug. 22 to $90.89, a two-year low. Since the end of last month, the price has fallen 10 percent, tracking a surprising drop in international prices in spite of Mideast tensions………………………………………..Full Article: Source

OPEC oil output rises in August as Libyan recovery holds

Posted on 29 August 2014 by VRS  |  Email |Print

OPEC’s oil production has risen in August from July, a Reuters survey found on Thursday, as a recovery in Libyan supply held up and Angola and Iran boosted supplies, outweighing a further decline in Iraq.
The survey also found Saudi Arabia and other core Gulf OPEC producers kept output largely flat and have not cut back to prop up prices, which in August dipped to a 14-month low near $101 a barrel, or to make room for higher Libyan output………………………………………..Full Article: Source

Iraq and Libya spark oil production fears

Posted on 29 August 2014 by VRS  |  Email |Print

The world fears an oil crisis will occur if the security situation in oil-producing countries does not improve, especially in Iraq and Libya, two prominent producing countries. Everyone is concerned and is expecting the suspension of the Iraqi oil supply at any time now. If an Iraqi oil disaster occurs — especially if production allocated for export is halted — oil prices will easily hit an average of $130 per barrel and will only cease to fluctuate when Iraq regains calm and stability.
There is an urgent demand on Iraqi oil in both the short and long term. The suspension of production is equivalent to 1 million barrels per day (bpd) of Libyan oil supplies and nearly 3.3 million bpd of Iraqi supplies………………………………………..Full Article: Source

Dearth of oil finds threatens long-term supplies, price

Posted on 28 August 2014 by VRS  |  Email |Print

The rate of oil discoveries continues to disappoint after a record low last year and firms could even cut their exploration budgets to save on costs, a risk to long-term supplies and prices, industry executives said.
Explorers are finding so little oil, many are retreating from high-risk frontier areas to safer bets like North American shale, executives at a major Norway oil conference said. This will likely force them to buy expensive discoveries once investor sentiment shifts focus to reserves from cash flow………………………………………..Full Article: Source

Reasons behind oil price stability despite turmoil

Posted on 28 August 2014 by VRS  |  Email |Print

These are really changing times. It is no longer enough to have a coup a plane hijack or violence erupting in one oil producing country to have prices skyrocketing.
The hotspots are all over the map of the Middle East from key producers such as Iraq and Libya to marginal ones like Yemen and the two Sudans to ongoing tightened sanctions against Iran. Brent crude prices that briefly rose in midJune above 115 following the take-over of Iraq’s city of Mosul by IS radicals dropped to 14-month low a few days ago………………………………………..Full Article: Source

U.S. oil surge restrains prices despite heightened global turmoil

Posted on 28 August 2014 by VRS  |  Email |Print

The controversial practice of “fracking” helped keep North American fuel prices from soaring this summer even as supply disruptions in the Middle East and North Africa hit a 23-year high.
The surge in United States oil production – made possible through horizontal drilling and hydraulic fracturing – has more than offset unplanned supply outages in embattled Organization of the Petroleum Exporting Countries (OPEC) member nations, the U.S. Energy Information Administration (EIA) said Wednesday………………………………………..Full Article: Source

Reasons behind oil price stability despite turmoil

Posted on 27 August 2014 by VRS  |  Email |Print

These are really changing times. It is no longer enough to have a coup, a plane hijack or violence erupting in one oil producing country to have prices skyrocketing. The hotspots are all over the map of the Middle East from key producers such as Iraq and Libya to marginal ones like Yemen and the two Sudans to ongoing tightened sanctions against Iran. Brent crude prices that briefly rose in mid–June above $115 following the take-over of Iraq’s city of Mosul by IS radicals dropped to 14-month low a few days ago.
Moreover, and following the downing of the Malaysian Airliner in mid-July, prices rose some 2 percent or $1.99 a barrel in New York Mercantile Exchange, but only to reach $104 a barrel and briefly before retreating again………………………………………..Full Article: Source

Iran’s Oil Minister: Not Alarmed by Crude Price

Posted on 27 August 2014 by VRS  |  Email |Print

Iran’s oil minister said Tuesday he wasn’t alarmed by a recent drop in crude oil futures, reflecting a widely- held view among oil producers that prices are still at an acceptable level and their decline won’t last. The remarks suggest members of the Organization of the Petroleum Exporting Countries–of which Iran is one of the largest–won’t need to alter their production for the time being.
Iran’s oil minister Bijan Zanganeh was quoted by his ministry’s Shana website as saying “crude oil prices on global markets are at an appropriate level and seasonal fluctuations in crude oil prices will not continue.”……………………………………….Full Article: Source

All’s Fair In Love And War And Oil

Posted on 27 August 2014 by VRS  |  Email |Print

An Iraqi Kurdish crude oil tanker has been seen floating off the coast of Israel after offloading its cargo, ship tracking data has shown. If true, the transaction would be in open defiance of Baghdad, with whom Israel has no diplomatic or commercial relations. Furthermore, any commercial transaction between an Arab country and Israel violates the ruling of the Arab Boycott Bureau that bans all commercial exchanges with the Jewish state.
But it would not be the first time that Kurdish oil has found its way into the Israeli market. Iraqi Kurdistan, although autonomous, is still in principle supposed to conduct its oil transactions through Baghdad. Selling into the oil market directly and independently of Baghdad provides the Kurds in northern Iraq with much needed funds. It also helps the Kurds move away from Baghdad and toward independence, which it has made no secret of wanting………………………………………..Full Article: Source

IEA: U.S. LNG won’t matter much for Europe

Posted on 27 August 2014 by VRS  |  Email |Print

Liquefied natural gas sent from North America to European markets likely won’t make much of a regional difference, the director of the IEA said from Norway. International delegates are gathered for an annual energy conference in Stavenger, Norway. The theme for the ONS conference, organizers said, is change.
Maria van der Hoeven, executive director of the International Energy Agency, said the glut of natural gas from North American shale is changing the dynamics of a global energy sector where demand centers are pivoting toward Asian economies………………………………………..Full Article: Source

Saudi Aramco CEO says OPEC will take oil price “as it comes”

Posted on 26 August 2014 by VRS  |  Email |Print

The global oil price is market driven, fluctuating with supply and demand and the Organization of the Petroleum Exporting Countries or the International Energy Agency should not try to control it, the chief of Saudi Arabia’s state oil producer said.
“I share … the belief that this is a market driven business, it’s not OPEC, the IEA, and consumers that should be in the business of trying to control the market,” Khalid Al-Falih, the chief executive of Saudi Aramco, told a conference in Norway on Monday………………………………………..Full Article: Source

IEA Chief Says Europe Must Rely on Russian Gas

Posted on 26 August 2014 by VRS  |  Email |Print

Europe has limited options for finding natural-gas supplies from outside of Russia despite tensions over Ukraine, the International Energy Agency’s chief executive, Maria van der Hoeven, said on Monday. “In the short term, Europe has very, very little means to diversify its gas imports,” Ms. van der Hoeven said on the sidelines of the Offshore Northern Seas energy conference. “As far as we can see, Russian gas will be needed in Europe.”
About a third of Europe’s gas supply comes from Russia and a fifth is supplied by Norway, while other key sources include imported liquefied natural gas and producers like the Netherlands and the U.K., Ms. van der Hoeven said………………………………………..Full Article: Source

Low Oil Prices Could Crush Russian Economy

Posted on 26 August 2014 by VRS  |  Email |Print

Oil remained under pressure from plentiful supplies and October Brent crude eased 18 cents to $102.11 a barrel. WTI crude lost 18 cents to $93.47 a barrel. As tensions around the globe continue to escalate oil supplies remain higher than expected.
Federal Reserve Chair Janet Yellen on Friday nodded to the concerns of some Fed officials about the sustained level of monetary policy stimulus, even as she stressed the need to move cautiously on raising rates. In a stronger language than he has used in the past, ECB President Mario Draghi on Friday stressed the central bank is prepared to respond with all its “available” tools should inflation drop further………………………………………..Full Article: Source

Hedge Fund Crude Bets Tumble Amid Surging Global Supply

Posted on 25 August 2014 by VRS  |  Email |Print

Speculators are the least bullish on U.S. crude oil prices in 16 months as refinery maintenance weakens demand at a time when Libya and Iraq are swelling global supplies.
Futures dropped a fifth consecutive week after money managers reduced net-long positions in West Texas Intermediate, the U.S. benchmark grade, by 14 percent in the seven days ended Aug. 19, the Commodity Futures Trading Commission said………………………………………..Full Article: Source

The 3 Most Serious Threats Facing Big Oil Companies

Posted on 25 August 2014 by VRS  |  Email |Print

At first glance, the future may look pretty bright for the large Western integrated oil companies like ExxonMobil, BP, Royal Dutch Shell, and Chevron – collectively known as Big Oil. Oil prices have risen dramatically over the past decade and continue to hover just above $100 per barrel, while US natural gas prices have rebounded nicely since hitting a low of under $2 per Mcf in the spring of 2012.
But despite relatively high commodity prices, there are some very serious threats facing Big Oil companies – challenges that could meaningfully constrain their long-term earnings power, ability to grow their dividends, and share price performance. Let’s take a look at three of the biggest ones………………………………………..Full Article: Source

Crude oil anchored to $100

Posted on 25 August 2014 by VRS  |  Email |Print

In a little over two months, the price of crude oil (Brent) has slipped from $115 a barrel to near $100 a barrel, a 14-month low. This is thanks, in large part, to the perceived change in geopolitical conditions which had pushed up prices in the first place. In mid-June, the rapid advance of the Islamic State of Iraq and Syria (ISIS) had raised the spectre of supply shocks from Iraq, the second largest oil producer among the OPEC nations. This resulted in the price of Brent shooting up from $108 a barrel to $115 a barrel in quick time.
But then, with the realisation that the major oil producing fields and ports in the southern part of Iraq were not at imminent risk of being overrun by the ISIS, prices started moderating………………………………………..Full Article: Source

Brent Crude Oil hits 2014 lows, light quality swamps market

Posted on 25 August 2014 by VRS  |  Email |Print

Brent Crude oil reched 2014 lows last week as light quality crudes swamped the market, according to Barclays. In a weekly report, it said that rapid increase in Libyan production, amid weak demand, has thrown the market off balance. However, OPEC may readjust production prior to the November meeting.
In recent months, Libya’s rebound in production has surprised market participants, rising from 220 kb/d in May to over 550 kb/d in late August. With domestic demand at roughly 150 kb/d, around 400 kb/d is being marketed for export. The flood of Libyan barrels into the global market has pressured other light grades, including WAF and North Sea crudes………………………………………..Full Article: Source

U.S. gasoline prices continue to drop -Lundberg survey

Posted on 25 August 2014 by VRS  |  Email |Print

The average price of a gallon of gasoline in the United States fell by 4 cents in the past two weeks as crude oil prices continued a broad decline, according to the Lundberg survey released on Sunday. Prices fell to an average of $3.48 per gallon for regular grade gasoline, according to the survey conducted Aug. 22. That extends a decline in prices to nine weeks, survey publisher Trilby Lundberg said.
“This is really a reflection of the crude oil market, and crude oil is by far the biggest component in the retail price of gasoline and is the chief determinant as to directional movement in the retail price of gasoline,” said Lundberg………………………………………..Full Article: Source

EIA: Brent crude oil price stability continues

Posted on 22 August 2014 by VRS  |  Email |Print

Spot prices of Brent crude oil averaged $107/bbl in July, marking the 13th consecutive month in which the average price has ranged $107-112/bbl. Compared with the volatility seen as recently as 2 years ago when Brent spot prices ranged as high as $125/bbl in March 2012 to as low as $95/bbl in June 2012, this price stability has been remarkable, according to the US Energy information Administration.
Implied volatility—a measure of expected price variation—for the near-month Brent futures contract has averaged 18% over the past 12 months compared with 28% during the previous 24 months………………………………………..Full Article: Source

Oil investors bet on future supply risks

Posted on 22 August 2014 by VRS  |  Email |Print

Bloodshed in Iraq, sanctions on Russia, conflict in Palestine. If you had asked market participants at the start of the year what would happen to the oil price if such events coincided, few would have predicted it would stay near $100 a barrel.
But since rising to $115 a barrel in mid-June, amid initial fears that fighting with Islamist militants in Iraq would result in major stoppages, the front month price of Brent crude has since dropped to 14-month lows………………………………………..Full Article: Source

China’s Natural Gas Demand Set to Triple by 2040

Posted on 22 August 2014 by VRS  |  Email |Print

China’s demand for natural gas will more than triple over the next 35 years, according to a new report from the U.S. Energy Information Administration.
Natural gas demand in China is projected to hit 17.5 trillion cubic feet (tcf) in 2040, a greater than three-fold increase from the 5.2 tcf of demand in 2012. There is a big question mark over how the country will meet that need, but the EIA says the vast majority of it will come from two sources: domestic production and liquefied natural gas (LNG) imports………………………………………..Full Article: Source

Crude Oil Price Drop Takes Pressure Off the Fed

Posted on 21 August 2014 by VRS  |  Email |Print

Nymex crude oil futures have dropped 3% in two days to $94.48 per barrel and they’re down 10% from a year ago. The bad news in this drop is the implication of soft global demand when many economists were looking for a lift in worldwide economic growth. The good news is that markets have weathered months of grisly conflicts in the Middle East and Ukraine and the supply worries that come with the shooting.
If Iraqi and Kurdish forces continue to push back Islamic State forces which are deeply opposed to advanced economy values, or if Russian and Ukrainian adversaries cool off, market angst about Middle East and Russian energy supplies could further dissipate………………………………………..Full Article: Source

Here Comes Cheaper Oil: Why Prices Are Set to Fall

Posted on 21 August 2014 by VRS  |  Email |Print

I learned from Art Laffer that government is the 800lb gorilla in the economy and that investors can profit from changes in government policies. But a practitioner has to accept the framework – that government policies drive incentives as much or more than any other single driver. The charts that follow should prove that out.
They show how a proposed change to the RFS ethanol mandate drove corn prices down 30% almost instantaneously. Similarly, in 2008, oil prices plunged at the mere suggestion that a moratorium against drilling on the outer continental shelf (OCS) might end………………………………………..Full Article: Source

Oil and gas set to run out within 35 years, says energy expert

Posted on 21 August 2014 by VRS  |  Email |Print

A leading figure in Scotland’s energy industry has voiced concerns over the country’s oil and gas reserves. Wood Group founder Sir Ian Wood said he expects the effect of a decline in North Sea production to be felt as early as 2030.
Sir Ian told the Press and Journal’s Energy Voice that he has “no allegiance to any party or campaign” but said he believes First Minister Alex Salmond’s estimates of North Sea reserves are too high. Sir Ian said: “I believe the debate should not be about nationalism, but growth and economic success, and the quality of life for citizens and all that goes with that………………………………………..Full Article: Source

OPEC unruffled by oil price slide, sees market rebound: delegates

Posted on 20 August 2014 by VRS  |  Email |Print

OPEC is not worried about a slide in oil prices towards US$100 a barrel, delegates from the producer group said, with current levels seen as acceptable for producers while higher seasonal demand in the coming weeks was expected to support the market.
Brent crude fell to a 14-month low of US$101.11 a barrel on Monday as investor concerns over conflict in Ukraine and Iraq eased and Libyan output rose. The drop brought prices below the level some in OPEC need for their budget needs. But delegates from three members of the Organization of the Petroleum Exporting Countries told Reuters on Tuesday the decline in prices was not an immediate concern………………………………………..Full Article: Source

Price of oil plummets! Who wins, who loses, and how low can it go?

Posted on 20 August 2014 by VRS  |  Email |Print

The barrel price of West Texas Intermediate crude oil has been falling since late June, and the fall is accelerating. Monday’s closing price was $96.63; Tuesday’s opening price was $94.02. Back in early July, I argued that oil’s downward move was not over , but I confess, I’m surprised by the speed of the current drop.
Factor in seasonal considerations, and the drop appears even more extreme, as oil prices tend to be high in August and September. Does that mean that we should expect oil prices of $90, $85 or even lower in October and November, when prices typically fall? I believe it does, for two reasons………………………………………..Full Article: Source

European Gas Reverses Biggest Drop Since 2009 on Ukraine

Posted on 20 August 2014 by VRS  |  Email |Print

European natural gas prices are reversing their biggest slump in five years as concern mounts that tension between Russia and Ukraine will again disrupt flows to the region. Gas for next-month delivery in the U.K. rallied 21 percent over the past six weeks as Ukraine said it may ban OAO Gazprom, Europe’s biggest supplier, from shipping the fuel across its territory because of Russia’s support of separatists.
The Moscow-based company, which meets 15 percent of European gas demand through Soviet-era pipelines across Ukraine, halted supplies to its neighbor on June 16 in a debt and price dispute………………………………………..Full Article: Source

Lower oil price adds to economic pressure on Russia

Posted on 20 August 2014 by VRS  |  Email |Print

A fall in the price of Urals crude oil, the benchmark on which Russia bases its budget calculations, is adding to the government’s problems at a time when western sanctions are already hurting the economy. Urals, fell below $100 per barrel on Monday for the first time in 15 months and was trading just below $97 on Tuesday, extending a trend of falling oil prices that reflects abundant supply on global markets.
Russia relies on oil and gas for around two-thirds of exports and half of federal budget revenues. Over the course of a year, each $1 fall in the oil price wipes around $1.4 billion off federal tax revenues………………………………………..Full Article: Source

Five Regions Where Big Oil Is Foolishly Chasing Profits

Posted on 20 August 2014 by VRS  |  Email |Print

Big Oil has been very successful at developing sophisticated technology to access oil in some pretty remote areas. Consider the technological skill necessary to drill several miles below the seabed at staggering depths, or the processing equipment needed to transform viscous bitumen into usable fuel – these are impressive feats of engineering and science.
But after years of spending billions of dollars on these challenges, the world’s largest oil companies are running into a serious problem: Many of their projects are not profitable and won’t be anytime soon………………………………………..Full Article: Source

Global oil and gas transaction activity by sector

Posted on 20 August 2014 by VRS  |  Email |Print

In 2013, the total disclosed oil and gas transaction value was US$ 337 billion. This total was significantly lower (down 21%) than the record high of US$ 423 billion posted in 2012. EY notes that in 2013, there was a reduced willingness to commit to larger transactions. In 2012, 98 oil and gas transactions exceeded US$ 1 billion, compared with just 70 in 2013. In 2012, there were four ‘mega-deals’, with reported values over US$ 10 billion, but in 2013 there were only three.
Transaction activity in the oilfield services (OFC) sector declined in 2013, with 185 deals announced compared with 243 in 2012 and 201 in 2011. According to EY, the average disclosed deal value fell from US$ 244 million to US$ 179 million, marking a continuous decline from the 2011 peak of US$ 416 million………………………………………..Full Article: Source

IEA: Oil demand growth forecast lowered

Posted on 19 August 2014 by VRS  |  Email |Print

The global oil demand growth forecast for 2014 has been curtailed since last month’s report to a more modest 1 million b/d, according to the International Energy Agency’s most recent Oil Market Report.
The revision was primarily due to lower-than-expected second-quarter deliveries and downgraded macroeconomic outlook from the International Monetary Fund (IMF). Demand growth is forecast to accelerate in 2015 to 1.3 million b/d as the economy improves. Global oil supply in July averaged 93 million b/d, up 230,000 b/d from a month ago and 840,000 b/d from a year ago………………………………………..Full Article: Source

Russian oil prices fall below $100/barrel, straining budget

Posted on 19 August 2014 by VRS  |  Email |Print

Russian Urals crude weakened for an eight straight trading day on Monday due to weak European refining demand, falling well below $100 a barrel for the first time in a year in a move to increase the pain for Russian state finances amid Western sanctions.
Russia has balanced its budget at $114 a barrel this year as President Vladimir Putin is ramping up social military spending amid a conflict in Ukraine, which sent relations between Moscow and the West to their worst since the end of the Cold War………………………………………..Full Article: Source

Oil price tumbles as supply trumps political troubles

Posted on 19 August 2014 by VRS  |  Email |Print

The price of oil has fallen to its lowest in more than a year as a supply glut allows markets to shrug off concerns over the crisis in Ukraine and the impact of Islamist rebels in Iraq.
Brent crude fell in London by more than 2 per cent yesterday to $101.30, taking the price to its lowest level since June 2013, days after it had jumped amid fears of an escalation in the conflict between Ukraine and Russia………………………………………..Full Article: Source

New funding opportunities in the oil and gas sector

Posted on 19 August 2014 by VRS  |  Email |Print

Project finance has been less widely used in the oil and gas sector than in other sectors such as power and utilities. Future revenue streams are typically less stable in oil and gas. The logistics, infrastructure and social issues caused by the increased size of projects have made achieving time, cost and quality targets more challenging than ever.
According to EY, the industry’s relatively poor track record of completing projects on time and on budget will test banking sector appetite for lending to the oil and gas sector. Project financing has typically been more prevalent in the downstream sector than in the more capital intensive upstream sector. In 2013, the Sadara Chemical Company JV successfully completed the project financing for the Sadara chemical complex in Saudi Arabia………………………………………..Full Article: Source

OPEC output dropped, Nigeria’s output increased in July

Posted on 19 August 2014 by VRS  |  Email |Print

Crude oil production from the Organisation of Petroleum Exporting Countries (OPEC) dipped by 30,000 barrels per day (bpd) in June to 29.94 million bdp, according to the latest Platts survey of OPEC and oil industry officials and analysts.
Meanwhile, Nigeria’s oil production rose to 1.98 million barrels per day in July, the highest since March this year. The country’s production stood at 1.87mb/d in March. The survey showed Iraq’s output plunge of 160,000 b/d was largely offset by production increases from several other OPEC member countries………………………………………..Full Article: Source

Oil and Turmoil in the Middle East

Posted on 18 August 2014 by VRS  |  Email |Print

Whereas most primary commodities have dropped drastically in price, crude oil remains as much as $100 per barrel. It is in effect a result of manipulative actions and is unlikely to be sustained over the long term.
The Organization of Petroleum Exporting Countries (OPEC) has been driving the high oil prices through manipulative behaviors such as limiting oil production quotas. With the current pricing mechanism, oil is only partially affected by the relationship of supply and demand. Despite the regime change in Egypt and factional conflicts over Libyan oil fields, instability in the world’s most oil-rich region has little to do with today’s high energy prices………………………………………..Full Article: Source

An Impending Oil Shortage?

Posted on 18 August 2014 by VRS  |  Email |Print

An uncertain investment climate in oil-exporting Middle Eastern countries may lead to a two million bpd shortfall and a $15 jump in oil prices by 2025. Forget North America’s shale revolution, the world needs Middle East oil for long-term sustainability and to quench growing global demand for fossil fuels.
The International Energy Agency’s (IEA) latest report on global energy investments notes that while unconventional crude oil and natural gas reserves from North America have snared the majority of investments over the past decade, the Middle East will be crucial to meet the energy demand of a fast-growing world………………………………………..Full Article: Source

Oil prices below most OPEC producers’ budget needs

Posted on 18 August 2014 by VRS  |  Email |Print

Oil prices are now too low for most OPEC countries to cover their spending needs, a Reuters survey shows. Although the cost of getting oil out of the ground is low in most countries in the cartel, growing social spending and ambitious infrastructure plans mean many oil producers now earnless from their oil sales than they need to fund their budgets.
The weighted average of oil prices collected by members of the Organization of the Petroleum Exporting Countries was $106 a barrel last year - just enough to cover the average budget requirements of the group, according to figures compiled by one team of analysts, who declined to be identified. But oil prices are falling, and the OPEC crude oil basket price was just $100.88 a barrel on Wednesday, the OPEC Secretariat calculates………………………………………..Full Article: Source

Fracking – another commodity bubble of our times

Posted on 18 August 2014 by VRS  |  Email |Print

Here’s a Dutch phrase for you, Gouden Eeuw. No, nothing to do with the currently controversial topic of cheese, it rather means Golden Age. Nowadays, the Netherlands is best known for “whacky-baccy” and a liberal take on life – it is a significant trading economy but hardly a global leader. However, in the 17th century it was the USA of its day, the foremost economic and maritime power in the world in a time when size did not matter.
Holland did this by being the first European power to gain a foothold in Asia, including a monopoly on trade with Japan through the Dutch East India Company and dominating inter-European trade, fuelled by cheap energy from Windmills. Then everybody went nuts, completely insane actually or “krankzinnig” as they would say themselves………………………………………..Full Article: Source

Why Oil Prices That “Should” Be Going Higher Are Going Lower

Posted on 18 August 2014 by VRS  |  Email |Print

The world has changed. Even two years ago, with a war going on by proxy between Russia and Ukraine, we’d have seen a ten dollar rally in the price of crude, not prices below $97, like we’re seeing today. Add to that the Iraq crisis in the North, the continuing Syrian conflict, the destabilization in the oil producing countries of Libya and Egypt and you’d have been shocked - at least in 2011 - to see prices go decisively under $100 a barrel and act badly there. What’s going on here?
One long-term trend in the oil market and one very short-term trend have made the difference between a price that ’should’ be higher, but is in fact going lower. We need to really understand those changes to track where oil prices will go next and where those underlying oil stocks are headed………………………………………..Full Article: Source

Why King Coal is Bigger than Oil or Gas

Posted on 18 August 2014 by VRS  |  Email |Print

Lost in the debate about exporting U.S. oil and natural gas is any mention of America’s greatest energy export. Coal. And while legislators, corporations, environmentalists and others argue over pipelines, refineries, tariffs and trade agreements in the oil and natural gas industries, the U.S. sends tons of coal to eager customers all over the globe. Coal usage is at a 45-year peak, and Europe and Asia will take every ounce we can export…
Oil, natural gas, and renewable energy sources may be the ones in the spotlight, but King Coal is still king………………………………………..Full Article: Source

Oil Prices Keep Tumbling to Multi-Month Lows

Posted on 15 August 2014 by VRS  |  Email |Print

Oil prices skidded Thursday, hitting multi-month lows on a sluggish demand outlook. The European Union announced Thursday that euro-zone economic growth was flat in the second quarter. Demand for oil from European refineries has been weak this spring and summer, leaving some cargoes in the Atlantic searching for buyers last month.
Global supplies are ample, and investors are continuing to discount the possibility that violence in the Middle East and Eastern Europe could cause a supply interruption………………………………………..Full Article: Source

Oil Nationalism Seen Reversing by IEA Amid Shale Boom

Posted on 15 August 2014 by VRS  |  Email |Print

The wave of resource nationalism among oil-producing nations that helped propel prices to a record in 2008 is dissipating as competition from U.S. shale stirs governments to offer better terms, the IEA said.
Sliding crude prices in the face of supply threats in Iraq and Libya reflect that industry concerns of scarcity have been replaced with a perception of sufficiency, said Antoine Halff, head of the Paris-based International Energy Agency’s industry and markets division………………………………………..Full Article: Source

World Awash in Oil Shields Markets From 2008 Price Shock

Posted on 15 August 2014 by VRS  |  Email |Print

Fighting across Iraq, Libya, Ukraine and Gaza, and an accelerating economy, should mean higher oil prices. Yet crude is falling. Six years ago, oil soared to a record $147 a barrel as tension mounted over Iran’s nuclear program and the world economy had just seen the strongest period of sustained growth since the 1970s. Now, West Texas Intermediate, the U.S. benchmark price, has traded below $100 for 10 days and Brent, the European equivalent, tumbled to a 13-month low.
What’s changed is the shale fracking boom. The U.S. is pumping the most oil in 27 years, adding more than 3 million barrels of daily supply since 2008. The International Energy Agency said yesterday that a supply glut is shielding the market from disruptions. Bank of America Corp., Citigroup Inc. and BNP Paribas SA concur………………………………………..Full Article: Source

Oil and the prospect of a Chinese shale boom

Posted on 15 August 2014 by VRS  |  Email |Print

From the charts it increasingly looks like somebody somewhere is enforcing an unofficial trading band, capped on the top-end by SPR releases or Opec production hikes, and propped up on the bottom-end by monetary policy and strategic supply cuts.
But the weirdest thing of all is that the prospect of supply disruption isn’t doing much to prices at all. More than that, our old friend contango is threatening to make a significant come back in the Brent market………………………………………..Full Article: Source

Energy Journal: Libyan Supply Set to Increase Price Pressures

Posted on 15 August 2014 by VRS  |  Email |Print

More news likely to put downward pressure on oil prices overnight as it emerged that Libya’s largest oil-exporting port is to resume service shortly. As Summer Said and Benoit Faucon report, the Es Sider port will resume operations next week. The port is capable of loading around 340,000 barrels of oil per day and there are some big tankers anxiously waiting to start taking on the crude that’s been piling up in storage in Libya.
With another large Libyan port already having reopened this week, hopes will be rising of a return of significant amounts of Libyan oil to international markets………………………………………..Full Article: Source

Iran: $100 Desirable Price for Crude Oil

Posted on 14 August 2014 by VRS  |  Email |Print

Iranian Oil Minister Bijan Namdar Zanganeh expressed satisfaction with the current global price for crude oil. “I have never favored an oil price below $100 (for a barrel) and now we have the best price for crude oil and all sides are satisfied with that price,” Namdar Zanganeh told reporters on Tuesday.
In reply to a question about the future of crude oil market, the Iranian minister said no forecast is saying that the market will remain unchanged. Asked about oil giant Royal Dutch Shell’s debts to Iran, the Iranian oil minister said that the company has no problem to pay its debts, but the problem lies in transferring the money to Iran………………………………………..Full Article: Source

World Awash in Oil Shields Markets From 2008 Price Shock

Posted on 14 August 2014 by VRS  |  Email |Print

Fighting across Iraq, Libya, Ukraine and Gaza, and an accelerating economy, should mean higher oil prices. Yet crude is falling. Six years ago, oil soared to a record $147 a barrel as tension mounted over Iran’s nuclear program and the world economy had just seen the strongest period of sustained growth since the 1970s.
Now, West Texas Intermediate, the U.S. benchmark price, has traded below $100 for 10 days and Brent, the European equivalent, tumbled to a 13-month low………………………………………..Full Article: Source

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