(Globe and Mail) Lost in the political fallout from President Barack Obama’s decision to once and for all reject Keystone XL is the fact that there is no longer an economic context for the pipeline. For that matter, the same can be said for any of the other proposed pipelines that would service the planned massive expansion of production from Alberta’s oil sands.
(Reuters) Following is the full text of a speech by Prince Abdulaziz bin Salman Al Saud, Saudi Arabia’s vice minister of Petroleum and Mineral Resources at an Asian ministerial energy roundtable in the Qatari capital Doha.
Exxon Mobil and climate change spin: “This could open up years of litigation and settlements in the same way that tobacco litigation did, also spearheaded by attorneys general. In some ways, the theory is similar — that the public was misled about something dangerous to health. Whether the same smoking guns will emerge, we don’t know yet.”
Brandon L. Garrett, professor at the University of Virginia School of Law
After a bounce last Tuesday, oil prices continued to fall closing on Friday at $44.29 in New York and $47.42 in London, down 4.9 percent and 4.3 percent for the week respectively. While oversupply and weak demand remains the basis for the price decline, the jump in US employment with the prospects of higher interest rates and a stronger dollar helped with the decline on Friday. The Wall Street Journal’s Dollar index was recently at its highest level in 13 years against the euro, yen and other currencies.
(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.
(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.
(Barrons) A Lombard Street economist writes that a decline below this level is more likely than a sustained rally.
(Inside Higher Ed) The impending collapse of civilization should, as Samuel Johnson said about being hanged in a fortnight, wonderfully concentrate the mind. For most of the interview subjects whose responses Matthew Schneider-Mayerson analyzes in a recent book, that collapse is inevitable, if not already underway.
(ArtBerman.com) Only 1% of the Bakken Play area is commercial at current oil prices. 4% of horizontal wells drilled since 2000 meet the EUR (estimated ultimate recovery) threshold needed to break even at current oil prices, drilling and completion, and operating costs.
The leading producing companies evaluated in this study are losing $11 to $38 on each barrel of oil that they produce, the very definition of waste.
(bakkenshale.com) More energy companies are exiting the Bakken Shale Play as they struggle to adapt to the prolonged low oil prices.
(FORBES) As an investor in start-up companies, I am always working to test my assumptions and update my understanding of where the energy sector is now, and the direction it is moving in towards the future. Some key questions for this dynamic year: Is the current oil crisis the marking of a step change towards a cleaner energy industry or merely history repeating itself? While today’s oil price at $45-50 per barrel is probably too low to be considered the new normal, what should we expect moving forward?
(Bloomberg) Goldman Sachs Group Inc. went short oil and gas companies last quarter, bringing its total exposure to the industry below $12 billion for the first time since it started breaking out that risk to investors at the end of last year.
(Reuters) PBF Energy Inc, one of the largest independent oil refiners in the United States, spent heavily in recent years to build the rail terminals at its Delaware City complex that it needed to take delivery of large loads of crude coming from North Dakota’s Bakken oil fields.
But now it is considering eliminating those deliveries altogether, and replacing them with foreign crude imports, according to two sources familiar with the situation. It has even closed its small Oklahoma City office that was only opened in 2013 and had served as a hub for the company’s trading in North Dakota’s oil, the sources said.
(Platts) Platts Energy Economist Managing Editor Ross McCracken takes a look at OPEC’s spare crude production capacity. Much has been made recently of the US’ new spare capacity, but OPEC’s role has also shifted, as he explains.
OPEC’s spare production capacity is estimated by the US Energy Information Administration at 1.54 million b/d, a mere 180,000 b/d above the level reached in 2008 when oil prices hit their record high. But don’t panic! Oil inventories are at very high levels. The International Energy Agency puts global oil stocks at 147 million barrels, which it notes could notionally deliver 1.6 million b/d for just over 90 days in the event of a major supply disruption.
“”The industry is under so much pressure that you need to have a clear plan. You need to balance capital expenditure against production. Our capex in 2015 will be around 30 percent lower than in 2014.”
BG Group CEO Helge Lund [Q: how will that impact production in 3-5 years?]
It was a volatile week with oil prices falling on Monday and Tuesday, surging 6 percent on Wednesday and then stabilizing on Thursday and Friday. When it was over, prices were up for the week about 4.5 percent to $46.59 in New York and 3.3 percent to $49.56 in London. Crude prices have been more volatile this year than anytime since the 2008 crisis. Some of the large percentage moves we are seeing, however, are due to the relatively low prices as compared to recent years. The move on Thursday was generally assessed as being caused by computer trading signals coupled with a slightly bullish weekly stocks report. The report showed decreases in oil product stocks and crude in storage at Cushing, Okla. while overall US crude inventories continued to climb. On Friday another drop in the US oil-rig count was reported which led to a small price jump at the end of the day.