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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

Petrol prices expected to fall after Saudis open the oil taps

Posted on 14 August 2014 by VRS  |  Email |Print

Petrol prices are poised to fall further after the cost of a barrel of crude oil reached its lowest level this year. The fall followed the publication of an influential report that showed a glut of crude from Saudi Arabia flowing on to the market and rising stockpiles.
The Paris-based International Energy Agency, the leading oil think tank, said yesterday that the world will consume less crude than experts had thought this year. Saudi Arabia’s supplies are running at the highest level since last September and crude from Libya is back on the market………………………………………..Full Article: Source

Oil Price is in ‘Sweet Spot’

Posted on 14 August 2014 by VRS  |  Email |Print

Oil prices have remained stable despite political unrest in the Middle East, and fund manager Nordea predicts this high-price, low-volatility environment to continue.
Despite many important macroeconomic and geopolitical events, the past two years have seen oil prices remarkably stable at a fairly high level. With respect to Brent crude, now considered the industry’s global benchmark, prices have held between $100 and $115 per barrel over the past 24 months. Today’s price of $103 is not too far away from the price two years ago………………………………………..Full Article: Source

U.S. Cuts 2014 Oil Price Forecast as Production Surges

Posted on 13 August 2014 by VRS  |  Email |Print

The Energy Information Administration decreased its 2014 price forecast for West Texas Intermediate crudes after the U.S. reached its highest monthly production in 27 years.
WTI will average $100.45 a barrel this year versus the July projection of $100.98, the EIA, the Energy Department’s statistical unit, said today in its monthly Short-Term Energy Outlook. Brent will average $108.11, down from $109.55. Oil output was 8.5 million barrels a day in July, the most since April 1987, the EIA said………………………………..Full Article: Source

IEA raises call on OPEC crude oil for rest of 2014, 2015

Posted on 13 August 2014 by VRS  |  Email |Print

The International Energy Agency said Tuesday it sees a need for more OPEC crude on the global market for the remainder of 2014 and in 2015 than it previously forecast despite global demand growth being curtailed.
In its latest monthly oil report, the IEA raised the “call” on OPEC by a combined 400,000 b/d for the third and fourth quarters to 30.8 million b/d. This compares to previous forecasts of 30.7 and 30.5 million b/d, respectively. For 2015, the call has been raised by 100,000 b/d to 29.9 million b/d………………………………..Full Article: Source

IEA says sanctions have low impact on Russian oil

Posted on 13 August 2014 by VRS  |  Email |Print

US and EU sanctions on Russia’s oil sector are unlikely to have a major effect on production, the International Energy Agency said on Tuesday, chiming with comments from some market watchers that the restrictions are toothless.
“Neither set of sanctions will have any tangible near term impact on supplies. Even for the medium term, their impact appears questionable,” the energy watchdog for wealthy nations said in its widely-followed monthly oil market report………………………………..Full Article: Source

Here’s Why Geopolitical Chaos Hasn’t Caused Oil Prices To Spike

Posted on 13 August 2014 by VRS  |  Email |Print

Oil markets have been startingly calm in recent months despite unrest in some of the world’s largest oil producing regions. The price of London-traded Brent crude oil is actually down $5 since mid-May.
The reason is that the world doesn’t need as much of the stuff right now - and global production continues to ramp up. Tuesday, the International Energy Agency announced global oil demand growth in Q2 had fallen to 0.7 million barrels a day, the slowest place since Q1 2012………………………………..Full Article: Source

PwC: 2Q oil and gas M&A activity strongest in 5 years

Posted on 12 August 2014 by VRS  |  Email |Print

The US oil and gas industry experienced a substantial rise in mergers and acquisitions during the second quarter, according to a quarterly report by PwC US Energy Practice. During the 3-month period ending June 30, 54 oil and gas deals took place with values greater than $50 million, accounting for $42.2 billion, compared with 47 deals worth $30.3 billion during last year’s second quarter.
The upward movement is largely attributed to an increase in megadeals, with 12 occurring worth a combined $30.8 billion—73% of total deal value—due to larger oil and gas companies divesting more valuable assets. There were just five megadeals during the first quarter……………………………………Full Article: Source

2015 Carries Risks for Oil Prices

Posted on 12 August 2014 by VRS  |  Email |Print

Expansions by U.S. refiners might not come soon enough to keep crude prices afloat in 2015, as the companies rush to add capacity to process more shale oil, Credit Suisse says. This year, the market has managed to stave off threats of an oversupply by processing more oil and importing less. As crude production keeps rising, the challenge will be to keep prices from tanking next year.
“2015 looks a slightly more risky year for U.S. crude prices versus Brent than 2014,” Credit Suisse says. Brent is the global oil benchmark……………………………………Full Article: Source

MidEast Watch:Saudi Bank Raises ‘14 Oil Price,Output Forecasts

Posted on 12 August 2014 by VRS  |  Email |Print

A Saudi investment bank has increased its forecasts for both oil prices and the amount of oil Saudi Arabia pumps out in 2014, citing events around the world that are keeping prices high, supply disruptions to other key producers, and a faster than expected rebound in the U.S. economy.
The report by Jadwa Investment does caution that higher crude production by the oil market heavyweight will erode the amount of spare production capacity available to counter new threats to global oil supply. The bank said its expects the Gulf kingdom to use part of its windfall from higher oil prices to add to its foreign asset holdings by more than $45 billion over the whole of 2014……………………………………Full Article: Source

Opec trims 2014 oil demand growth forecast

Posted on 12 August 2014 by VRS  |  Email |Print

The Opec oil cartel trimmed its 2014 forecast for global oil demand growth on Friday after weaker-than-expected economic growth in rich countries in the second quarter and a “fragile” worldwide recovery.
The Organisation for Petroleum Exporting Countries said it now expects demand to grow by 1.10 million barrels per day (mbd) to 91.11 mbd, down from a previous projection of 91.13 mbd. In its new monthly report Oped, which pumps a third of the world’s crude, stuck however to its forecast that demand would grow by 1.12 mbd in 2015 to 92.32 mbd……………………………………Full Article: Source

OPEC Sees Lower 2014 Oil Demand Growth, Pumps More

Posted on 11 August 2014 by VRS  |  Email |Print

OPEC trimmed its 2014 global oil demand growth forecast for a second consecutive month and said the group managed to increase output in July despite violence in Iraq and Libya, pointing to more comfortable global supplies. In a monthly report on Friday, the Organization of the Petroleum Exporting Countries trimmed its projection for growth in global demand this year to 1.10 million barrels per day (bpd), down 30,000 bpd, citing weaker-than-expected U.S. demand.
“The slow and uneven global recovery continues,” OPEC said in the report. In 2014, “U.S. oil demand remains strongly dependent on the development of the U.S. economy, however the risk is skewed to the downside compared to the previous month.”…………………………………….Full Article: Source

Oil and gas company debt soars

Posted on 11 August 2014 by VRS  |  Email |Print

Energy businesses are selling assets and took on $106bn in net debt in the year to March. The world’s leading oil and gas companies are taking on debt and selling assets on an unprecedented scale to cover a shortfall in cash, calling into question the long-term viability of large parts of the industry.
The US Energy Information Administration (EIA) said a review of 127 companies across the globe found that they had increased net debt by $106bn in the year to March, in order to cover the surging costs of machinery and exploration, while still paying generous dividends at the same time. They also sold off a net $73bn of assets……………………………………..Full Article: Source

Is This Trend a Killer for Oil and Gas?

Posted on 11 August 2014 by VRS  |  Email |Print

Very interesting research released last week by the U.S. Energy Information Administration shows that the domestic E&P sector may be headed for some difficult times.
The Administration calculated the spending habits of oil and gas firms operating within the U.S., tallying both incoming operational cash flow and outgoing capital expenditures for these companies. The results are surprising, revealing that today’s oil and gas sector is spending well beyond its means……………………………………..Full Article: Source

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

Posted on 11 August 2014 by VRS  |  Email |Print

The average price of a gallon of gasoline in the United States fell by six cents in the past two weeks as crude prices have continued a broad decline, according to the Lundberg survey released on Sunday. Prices fell to an average of $3.52 per gallon for regular grade gasoline, according to the survey conducted Aug. 8. That extends a decline in prices to seven weeks, survey publisher Trilby Lundberg said.
“It is lower crude oil prices that bring this lower pump price,” Lundberg said. “Crude oil is the overwhelmingly most important factor both in the price of gasoline and in directional price move.”…………………………………….Full Article: Source

OPEC: Iran’s monthly crude oil output declines by 10 kbpd

Posted on 11 August 2014 by VRS  |  Email |Print

Iran’s crude oil production (excluding gas condensates and natural gas liquids) declined by 9, 800 barrels per day and stood at 2.762 million barrels per day in July, compared to June. Iran’s crude oil output increased by 86,000 bpd in 2Q14 compared to 4Q13, according to a monthly report based on secondary sources, released by OPEC Aug. 8.
Iran and the six world powers including the U.S., the U.K, France, Germany, Russia and China reached an interim nuclear deal Nov.23, 2013. The agreement entered into force Jan.20, 2014 and extended by Nov.23, 2014……………………………………..Full Article: Source

Global growth in use of gasoline outpaces diesel in 2014

Posted on 08 August 2014 by VRS  |  Email |Print

Unlike in recent years, growth in global gasoline consumption is outpacing diesel growth in 2014. At the same time, new refining capacity engineered to produce more distillate than gasoline is coming online in 2014. The narrowing spread for December 2014 futures contracts demonstrates how these two factors may be temporarily leading to a tighter global gasoline market than was expected at the beginning of the year.
On July 8, the futures price premium of New York Harbor ultra-low-sulfur diesel (heating oil) over reformulated blendstock for oxygenate blending (RBOB) for December 2014 delivery fell to 22 cents per gallon on the New York Mercantile Exchange (Nymex)………………………………………..Full Article: Source

2013 EIA Stats Show Oil Price Stability Based On News, Not Supply

Posted on 08 August 2014 by VRS  |  Email |Print

Let’s start this analysis with the 2013 figures for the United States (right). In general, the oil export/import status looks better for the US than it has in a long time. Although the US is a major oil producer, it has been an even heavier oil consumer, importing millions of barrels per day of oil from more than 40 countries.
Last year, the US imported 7.7 million bpd of crude oil, according to the Energy Information Administration. This represents an improvement, about 23% less than in 2008, reflecting the early direction of President Obama’s policies and the success of an increased focus on natural gas by oil and gas companies………………………………………..Full Article: Source

Drums of War Sound for OPEC

Posted on 07 August 2014 by VRS  |  Email |Print

Amid war and rumors of war, it seems odd that oil prices have dropped so far in August. That might be because another war could be brewing: within OPEC. Saudi Arabia on Wednesday released September official selling prices for its oil. It offered bigger discounts for Asian and U.S. buyers compared to August’s levels, while raising prices for Europe.
As energy economist Phil Verleger pointed out in a recent report, this could indicate a growing battle for market share. Rising U.S. shale oil output has caused American imports of oil from West Africa to plummet from an annualized average of two million barrels a day in late 2007 to about 300,000 barrels a day currently. That forces countries such as Nigeria to push their barrels towards other markets, such as Asia—putting them in direct competition with Saudi Arabia and other OPEC members in the Middle East………………………………………..Full Article: Source

Russia sanctions impact seen in long-term oil price

Posted on 07 August 2014 by VRS  |  Email |Print

Since sanctions were announced at the end of last month, those monitoring the oil industry have questioned whether the restrictions placed on Russia by the EU and the US are just a piece of “theatre” without any meaningful impact. And with good reason.
The restrictions apply to the “sale, supply, transfer or export [of certain technologies] in connection with a project pertaining to deep sea drilling, arctic exploration or shale oil”………………………………………..Full Article: Source

Renewed Violence In Iraq and Libya Could Send Oil Prices Up

Posted on 07 August 2014 by VRS  |  Email |Print

Violence has returned to key oil-producing countries Iraq and Libya after a brief period of calm. Shelling and firefights between militias over the control of a key airport in Tripoli have hurled Libya back into a state of emergency, punctuating several weeks of escalating violence in the troubled North African country.
In mid-July, the Libyan government appeared to gain more control over the country’s restive provinces when it secured a deal with rebels in the east, which led to the reopening of the major ports of Es Sider and Ras Lanuf. The accord led to a drop in oil prices as investors anticipated an immediate influx of several hundred thousand barrels of oil per day to global markets………………………………………..Full Article: Source

Middle East supply fears send oil prices higher

Posted on 06 August 2014 by VRS  |  Email |Print

Oil prices rose in Asia Tuesday on fresh fears of supply disruptions in the Middle East, analysts said. US benchmark West Texas Intermediate (WTI) for September delivery rose 10 cents to $98.39, while Brent crude for September gained 15 cents to $105.56 in afternoon trade.
“We haven’t seen signs so far that the ongoing conflicts in the Middle East could cause disruptions, but those concerns are still there at the back of investors’ minds,” Desmond Chua, market analyst at CMC Markets in Singapore, said. WTI on Monday snapped a five-day losing streak to gain 41 cents in New York trade following continued violence in crude producer Libya, where at least 22 more people died in Tripoli over the weekend………………………………………..Full Article: Source

Fracking won’t cause oil price slump: Lombard Odier

Posted on 06 August 2014 by VRS  |  Email |Print

The oil price is unlikely to fall despite the onset of fracking, and investors looking to capture the gains available in the oil and gas sector should focus on US-listed companies, according to Pascal Menges, manager of the Lombard Odier Global Energy fund.
Menges told What Investment that even with the twin threats of the global financial crisis and the advent of fracking technology, the oil price since 2008 has been ‘flat’, rather than falling, while between 2004 and 2008 it rose consistently………………………………………..Full Article: Source

ENBD Research: OPEC output update

Posted on 06 August 2014 by VRS  |  Email |Print

Average OPEC oil production dropped slightly in July to 30.2 million b/d, compared to 30.3 million b/d registered in June and 30.9 million in the same month last year. For the first seven months of 2014, total OPEC output has averaged 30.1 million b/d, down 2.2 per cent in year-on-year terms. The fall in aggregate production in July was due almost exclusively to lower output from Iran and Iraq, which saw drops of 140k b/d and 100,000 respectively.
In the case of Iraq, oil output has now slumped by 300,000 in the past two months to sit at 3.0 million b/d. Although there are ongoing concerns that the weakened security environment across the country could eventually undermine investment and hence production growth, the largest and most important oil fields do not yet appear to have been affected………………………………………..Full Article: Source

Regulation becoming more burdensome for oil, gas independents

Posted on 05 August 2014 by VRS  |  Email |Print

Regulations over the past 5 years have made operations more complex for independent oil and gas producers, according to a recent survey, Profile of Independent Producers 2012-13, released by the Independent Petroleum Association of America. A vast majority of respondents indicated that regulations have resulted in increased administrative costs, with 48% reporting slight increases and 43% reporting significant increases.
Air pollution standards represented the most pressing concern for independents, as 33% said it had the largest impact on operations while 35% said it had the second-largest impact on operations………………………………………..Full Article: Source

Oil rebounds as global tensions raise supply disruption fears

Posted on 05 August 2014 by VRS  |  Email |Print

Oil prices on both sides of the Atlantic climbed on Monday, as investors shifted their attention from worries about swelling supplies to concerns about ongoing violence in Libya and other global hotspots.
Oil prices fell sharply last week, with the front-month of Brent crude hitting its lowest level since April, and traded lower early on Monday before bouncing back into positive territory. Brent crude gained 57 cents to settle at $105.41 a barrel, off a session low of $104.52. U.S. crude gained 41 cents to settle at $98.29 a barrel, after touching a session low of $97.43………………………………………..Full Article: Source

America’s Oil Export Policy Is Stuck in the ’70s

Posted on 05 August 2014 by VRS  |  Email |Print

The unexpected increase in the production of shale oil, a light oil called condensate and natural gas in the U.S. has upended many assumptions about the U.S. energy market. As the oil and gas bonanza continues, the U.S. ban on crude-oil exports looks increasingly outdated, arbitrary and economically damaging.
With Europe poised to endanger its gas supply by imposing more sanctions on its major supplier Russia, the possibility of energy exports from America takes on an important security dimension too………………………………………..Full Article: Source

The Oil Market’s Next Crisis

Posted on 05 August 2014 by VRS  |  Email |Print

I’m glad I’m not in OPEC members’ sweaty Gucci loafers right now. Sure, it must be nice to be an oil gazillionaire. But consider the problems. Oil production from OPEC members is down all over the place. Libya still hasn’t recovered from its 2011 uprising. It’s exporting only a third of the 1.4 million barrels per day (bpd) of oil that it could produce at full capacity. A Sunni uprising in Iraq threatens that country’s oil production.
OPEC doesn’t expect production to recover anytime soon. It says non-OPEC producers would have to step up and meet increasing oil demand. Here’s the thing: OPEC has another cause for concern. One that wasn’t in its recent forecast………………………………………..Full Article: Source

Peak oil proponents still dancing around reality

Posted on 04 August 2014 by VRS  |  Email |Print

The debate over whether we are running out of oil sometimes resembles the medieval controversy over how many angels could dance on the head of a pin. By redefining the size of the pin and the agility of the angels, today’s “peak oil” proponents have managed to continue the argument.
The characters have changed though. Matthew Simmons, author of Twilight in the Desert, casting doubt on Saudi oil production, died in August 2010, and the Oil Drum website closed down last September. New disputants, including economist James Hamilton from the University of California, and Stephen Kopits, the managing director of the consultancy Douglas-Westwood, argue that oil production is limited by geology and is a severe drag on economic growth………………………………………..Full Article: Source

The 10 most oil-rich states

Posted on 04 August 2014 by VRS  |  Email |Print

The U.S. energy industry is booming. As new technologies make oil easier and more affordable to extract, the United States is poised to become the world’s leading oil producer as soon as 2015, according to a 2013 study by the International Energy Agency. At the same time, proven oil reserves — the estimated quantities of oil that can be extracted under existing conditions — have also risen. In 2012, the U.S. had more than 30.5 billion barrels of proven oil reserves, up 15% from the year before.
Ten states accounted for nearly 80% of the U.S. proven oil reserves as of the end of 2012. Texas was the state with the most proven reserves, totaling more than 9.6 billion barrels of oil, or close to a third of all U.S. reserves. Based on the U.S. Energy Information Agency (EIA) data on proved oil reserves, these are the most oil-rich states in the country………………………………………..Full Article: Source

Oil and gas mergers escalating among smaller firms

Posted on 04 August 2014 by VRS  |  Email |Print

Mergers and acquisitions (M&A) activity is escalating among junior oil and gas companies as they attempt to diversify exploration risk and secure cash flows, according to EY’s latest quarterly report on the sector.
Barry Fraser, executive director at the accountancy firm’s Aberdeen practice, said: “Deal making is back on the agenda, with funding for development opportunities at the heart of acquisition and farm-out activity.” One example, according to EY, is the proposed acquisition of Mediterranean Oil and Gas by fellow Aim-quoted company Rockhopper Exploration………………………………………..Full Article: Source

North American oil output versus OPEC

Posted on 01 August 2014 by VRS  |  Email |Print

GlobalData has said that global oil demand in 2014 is forecast to increase by approximately 1.2 million bpd compared to levels last year, while non-OPEC members’ production will grow by approximately 1.6 million bpd which will reduce the call for OPEC production. GlobalData’s research has also said that a significant increase in non-OPEC production is forecast to occur, particularly in North America, where crude oil and condensate production will increase by approximately 1.3 million bpd.
Carmine Rositano, Managing Analyst, Downstream Oil & Gas, GlobalData, said, ‘crude oil production increases are also expected in South America, the Former Soviet Union and from the greater use of biofuels. This will more than offset slightly lower production anticipated in the North Sea and Mexico………………………………………..Full Article: Source

Saudi Kingdom sees modest increase in oil supply

Posted on 01 August 2014 by VRS  |  Email |Print

OPEC’s oil production rose in July from June, a Reuters survey found, as a fragile recovery in Libyan supply outweighed fighting in Iraq and reduced output from Angola.Saudi Arabia raised supply modestly, in part because of a greater need for crude in domestic power plants, industry sources said. Some sources said exports had increased.
Despite the increase, unrest in Africa and the Middle East is still weighing on supply. That could hinder OPEC’s ability to boost output later in the year, when the International Energy Agency expects demand for OPEC crude to rise………………………………………..Full Article: Source

Russia needs high oil prices to survive

Posted on 01 August 2014 by VRS  |  Email |Print

For all the sanctions Western leaders can throw at Russia, the biggest threat to President Vladimir Putin’s ability to back separatists in east Ukraine is something beyond his or their control: the price of oil. With Russia’s $2 trillion economy heavily dependent on crude exports, oil prices are always closely monitored by the Kremlin, but the government is particularly wary now as tensions with the West mount and sanctions ratchet up.
Such conflicts often push up crude prices, but as long as oil, which accounts for 40 percent of state revenues, remains above the average $104 per barrel written into the 2014 budget, Moscow has little immediate need to worry………………………………………..Full Article: Source

Oil Majors Pivoting Away from Risky Countries

Posted on 01 August 2014 by VRS  |  Email |Print

The rising tide of political instability around the world is negatively affecting the some of the oil industry’s largest companies, and several are considering withdrawing their investments in risky areas. Violence, government turmoil, sabotage, and economic sanctions are presenting serious challenges to the oil majors, after years of expanding deeper and deeper into some of the least developed parts of the world.
The Wall Street Journal wrote on July 27 about several companies that are pivoting away from troubled regions, and moving towards industrialized countries — willing to assume the higher cost of operating in richer nations as the price for a more stable investment climate………………………………………..Full Article: Source

Higher oil prices lift Exxon’s profit as production sags

Posted on 01 August 2014 by VRS  |  Email |Print

Exxon Mobil Corp, the world’s largest publicly traded oil company, reported a stronger-than-expected quarterly profit on Thursday as higher prices for its crude and natural gas offset a 6 percent drop in production.
Exxon has struggled in recent quarters to replenish its reserves quickly, investing in massive new projects in Russia and Papua New Guinea that take years to develop. Meanwhile, many of its smaller, more-nimble peers have aggressively developed shale formations around North America, fueling massive production and exciting Wall Street………………………………………..Full Article: Source

World oil demand in 2015 forecast to grow 1.2 mb/d

Posted on 31 July 2014 by VRS  |  Email |Print

Despite some weakness in the first half of the year, the world economy continues to recover, OPEC Monthly Oil Market Report for July 2014 said. Global GDP growth in 2014 is now forecast at 3.1 percent, slightly higher than the estimated 2.9 percent for 2013. The US experienced a surprisingly large contraction in economic activity in the first quarter due to severe winter weather, leading to a downward revision in US GDP growth to 1.6 percent from 2.4 percent previously.
However, with the US economy expected to rebound and continued large monetary stimulus in the Euro-zone and Japan, the OECD is seen growing by 1.7 percent in 2014 and 2.0 percent in 2015………………………………………..Full Article: Source

Oil prices drive projected carbon dioxide enhanced oil recovery

Posted on 31 July 2014 by VRS  |  Email |Print

In its 2014 Annual Energy Outlook (AEO2014), the US Energy Information Administration (EIA) projects that the price of oil will largely determine whether to use carbon dioxide enhanced oil recovery (EOR) technologies to extract additional crude oil from existing producing fields. The OPEC oil output rises in July on fragile Libyan reboundinjection of CO2 gas into oil reservoirs at high pressure forces the CO2 to mix with oil. This reduced the oil’s viscosity and causes the oil to increase in volume.
The result is an increase in the total cumulative volume of oil produced and in the percentage of oil-in-place that is recovered. The decision by a producer whether or not to employ this technique depends on a number of factors, including the geophysical properties of the reservoir, the oil within that reservoir, the cost of applying CO2 EOR and the revenue received from the additional production………………………………………..Full Article: Source

OPEC oil output rises in July on fragile Libyan rebound

Posted on 31 July 2014 by VRS  |  Email |Print

OPEC’s oil production rose in July from June, a Reuters survey found on Wednesday, as a fragile recovery in Libyan supply outweighed fighting in Iraq and reduced output from Angola.
Despite the increase, unrest in Africa and the Middle East is still weighing on supply. That could hinder OPEC’s ability to boost output later in the year, when the International Energy Agency expects demand for OPEC crude to rise………………………………………..Full Article: Source

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