What it costs to produce a barrel of oil
(CNN) Everyone in the energy industry is suffering as crude oil prices have slumped. But some oil producing countries are hurting more than others.
Ecstrat analyst on US shale oil production decline
“U.S. production is about to have a Wile E. Coyote moment where it literally falls off a cliff. One-hundred-and-twenty-thousand barrels, maybe even next month, will drop off…. The supply and demand mismatch will probably come in 2017.”
Emad Mostaque, analyst with London-based consultancy Ecstrat
Peak Oil Review – 23 Nov 2015
New York oil lost 35 cents last week closing at $40.39 a barrel after having dipped just before settlement to $38.99, the lowest price since August. In London Brent closed up 1.1 percent for the week at $44.66. Prices were weaker in the US as nationwide crude stocks climbed by 252,000 barrels, but stocks at Cushing, Ok storage depot rose by 1.8 million barrels. The US rig count was down by ten last week, after a two-rig increase the week before. Russia and the Saudis continue to pump at or near maximum capacity. Most brokers are expecting that Iran will be back into the markets in the first quarter of 2016 at about 500,000 b/d day to start.
Why “supply and demand” doesn’t work for oil
(OurFiniteWorld.com) The traditional understanding of supply and demand works in some limited cases–will a manufacturer make red dresses or blue dresses? The manufacturer’s choice doesn’t make much difference to the economic system as a whole, except perhaps in the amount of red and blue dye sold, so it is easy to accommodate.
Global Demand Growth for Oil May Fall by a Third in 2016
(Wall Street Journal) After hitting a five-year high in 2015, the global growth in demand for oil is expected to fall by about a third next year, adding further strain to an already oversupplied crude market.
Operating in a World of $50 Oil
(RigZone.com) While hopes for a reversal in oil prices may have faded just after mid-August when U.S. crude oil futures slipped to a six-and-a half year low, the battered petroleum industry continues to plod along in its search for ways to steer through these difficult times.
OPEC vs. the U.S. Oil Boom
(Bloomberg) After a year suffering the economic consequences of the oil price slump, OPEC is finally on the cusp of choking off growth in U.S. crude output.
How Exporting U.S. Liquefied Natural Gas Will Transform the Politics of Global Energy
(Wall Street Journal) The U.S. energy trade has been in the news often recently, with questions such as whether industry will be allowed to send oil overseas or import it via a certain pipeline from Canada. Seemingly forgotten is the historic milestone that will occur early next year when a tanker for the first time ever sets sail from the U.S. lower 48 to deliver liquefied natural gas (LNG) to the global market.
Bloomberg columnist on shale oil and prices
“The message from oil services firms is that shale drillers will not simply be able to turn the tap back on again once prices rise. Halliburton said on its earnings call last month that pressure pumping equipment currently sitting idle was being cannibalized for parts while the stuff still being used was being worked to its limits. And the falling backlog of uncompleted wells will also begin to make an impact.”
Liam Denning, Bloomberg View columnist
Peak Oil Review – 16 Nov 2015
Crude oil prices fell by 8 percent in New York and London last week, closing at $40.74 and $43.61 respectively. Continued growth in global crude stocks and uncertain economic outlooks for China and the US are still seen as the cause of the price slump. Short covering by speculators who believed we had already reached the bottom of the slump and a strong US dollar contributed to the decline. On Friday the IEA reported that at the end of September global crude stocks were at a new high of at least 3 billion barrels and growing. The Agency is not able to track stocks in smaller countries so actual storage is somewhat higher.
IEA expects world oil demand growth to slow in 2016
(Oil & Gas Journal) World oil demand growth is forecast to ease closer to a long-term trend of 1.2 million b/d in 2016 as supportive factors that have recently fueled consumption—such as post-recessionary bounces in some countries and sharply falling crude oil prices—are expected to fade, noted the International Energy Agency in its monthly Oil Market Report for November.
An Oil-Soaked Globe as Production Keeps Climbing and Demand Falls
(NY Times) Houston— Such is the state of the oil industry these days that there is sometimes nowhere to put the oil. Off the coast of Texas, a line of roughly 40 tankers has formed, waiting to unload their crude or, in some cases, for a willing buyer to come along. Similar scenes are playing out off the coasts of Singapore and China and in the Persian Gulf.
It’s Too Early to Assume Peak Oil Demand. Here’s Why
(The Fuse) “I believe we may not see $100 (oil) ever again,” said Vitol’s Ian Taylor last week in London. His rationale for making such a prediction is the belief that global oil demand will peak in the medium term.
Oil Tankers Are Filling Up As Global Storage Space Runs Low
(oilprice.com) The rebound in oil prices is still not here, and new data suggests that it will take some more time before the markets start to balance out.
Global supplies are still too large to justify a significant rally in oil prices. The latest indicator that the glut of oil has yet to ease comes from the FT, which concludes that there is 100 million barrels of oil sitting in oil tankers. Oil has piled up in tankers that are floating at sea, as onshore storage space begins to dwindle.
U.S. shale oil basins to decline
(UPI) Federal review expects most of the lucrative shale basins in the United States are expected to post declines in crude oil production. File photo by Gary C. Caskey/UPI WASHINGTON, Nov. 10 (UPI) — Only the Permian shale basin in the southern United States is expected to record a year-on-year increase in oil production, federal data show.
IEA Sees No Oil Price Rebound For Years
(OilPrice.com) Oil prices are likely to stay below $80 per barrel for another five years, according to a closely watched energy report.
China, Mideast Gas Use to Overtake Europe by 2035, IEA Says
(Bloomberg) China and the Middle East, spurred by lower prices and ample supply, will drive global natural gas demand growth in the next 25 years as consumption in Europe fails to recover to peak levels seen in 2010, according to the International Energy Agency.
Saudi Arabia will not stop pumping to boost oil prices
(CNBC) Saudi Arabia is determined to stick to its policy of pumping enough oil to protect its global market share, despite the financial pain inflicted on the kingdom’s economy.
Officials have told the Financial Times that the world’s largest exporter will produce enough oil to meet customer demand, indicating that the kingdom is in no mood to change tack ahead of the December 4 meeting in Vienna of the producers’ cartel OPEC.
Gulf oil ministers rebuff IMF fears over finances
(CNBC) Oil ministers in Saudi Arabia and the United Arab Emirates (UAE) on Monday rebuffed concerns from the International Monetary Fund that the global slump in oil prices will have a “deteriorating” effect on Middle East countries’ current account balances.
Why the oil sands no longer make economic sense
(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.
Text of Speech by Saudi Arabia’s vice oil minister at Asian energy conference
(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.
UVA Professor on Exxon Mobil and Climate
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
Peak Oil Review – 9 Nov 2015
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.
Oil Supply Picture Has Changed Since Keystone Was Proposed
(NY Times) When the Obama administration began considering the Keystone XL pipeline seven years ago, oil production in the United States was falling and most analysts thought it would never recover. At the same time, Mexican oil production was also in decline, meaning that domestic refineries would soon need another source of crude.
Will Obama’s ‘No’ on Keystone Curtail Canada’s Oil Boom?
(National Geographic) President Barack Obama’s rejection of a controversial U.S.-Canadian oil pipeline signals U.S. leadership on climate change, but it’s not expected to stop the growth in Canada’s oil production —at least not anytime soon.