(Forbes) Congress ended the U.S. crude oil export ban last week. There is apparently no longer a strategic reason to conserve oil because shale production has made American great again. At least, that’s narrative that reality-averse politicians and their bases prefer.
(Business Insider) A year ago, Saudi Oil Minister Ali Naimi made it plain that he didn’t care what happened to Russia if oil-producing countries failed to cooperate with Saudi-dominated OPEC on keeping prices high by restricting production.
(Seeking Alpha) I follow the JODI World Oil Database primarily because it is now four months ahead of the EIA international database. I make some adjustments however. I use the OPEC MOMR “secondary sources” for all OPEC data, where JODI also uses the MOMR but uses their “direct communication” data instead.
(Forbes) I have seen the handwriting on the wall for the coal industry for more than a decade. Not only is coal the most carbon-intensive of the fossil fuels, it is also the fuel that has the greatest number of potential replacements. Renewables may ultimately scale to displace a substantial fraction of our coal consumption, but it’s natural gas and nuclear power that spell the beginning of coal’s demise.
(Washington Post) There is no reprieve, of late, for the oil market. And U.S. consumers have been reaping the benefits.
(OurFiniteWorld.com) This past week, I gave a presentation to a group interested in a particular type of renewable energy–solar energy that is deployed in space, so it would provide electricity 24 hours per day. Their question was: how low does the production cost of electricity really need to be?
(Motley Fool) The U.S. Energy Information Administration routinely puts out a Short-Term Energy Outlook, and one component of that outlook is an oil price forecast. Last year at about this time, its STEO forecast that crude would average around $77.75 per barrel in 2015.
(Fortune) The oil industry is going through its third crash in prices since the formation of the OPEC cartel. Many are wondering when the market will recover and what oil prices will be when it finally does.
(CNBC) Energy stocks have been summarily punished over the past year and a half. And it hasn’t been a minor selloff. Now that the Federal Reserve has begun the tightening process, it will likely further cloud the outlook for the sector.
(CNN) Oil plummeted below $30 a barrel on Tuesday for the first time since December 2003. The latest wave of selling leaves crude oil down 19% this year alone. It represents an incredible 72% plunge from crude oil’s June 2014 peak of almost $108.
“The fundamental situation for oil markets is much worse than previously thought,” Barclays commodities analysts wrote in a client note.
(The Economist) For decades, the word “market” has been a misnomer for global trade in oil. Not only has the business been manipulated by an international cartel, OPEC, with varying degrees of success. Since 1975 America has also distorted it by banning the export of almost all crude oil.
(The Globe and Mail) The U.S. Congress voted on Friday to repeal the 40-year-old ban on exporting U.S. crude oil in an energy policy shift sought by Republicans as part of a bipartisan deal that also provided unprecedented tax incentives for wind and solar power.
(Wall Street Journal) For struggling U.S. oil producers, Congress’ plan to lift the ban on most crude-oil exports is too little, too late.
(FuelFix.com) Houston — Since Congress and the President agreed last week to lift the ban on oil exports the government’s energy forecasting arm decided on Monday to highlight a recent analysis it did on the topic.
Q: “Can you imagine selling shares in Saudi Aramco?
A: “This is something that is being reviewed, and we believe a decision will be made over the next few months. Personally, I’m enthusiastic about this step. I believe it is in the interest of the Saudi market, and it is in the interest of Aramco, and it is for the interest of more transparency, and to counter corruption, if any, that may be circling around Aramco.”
Interview with Saudi Arabia’s deputy crown prince Muhammad bin Salman in The Economist
Oil prices plunged again last week from a high above $38 a barrel on Monday to a new low of $32.10, touched by NY futures on Thursday. For the week New York futures were down $3.88 or 10.5 percent to close at $33.16. London’s Brent was down 10 percent for the week closing at $33.55, the lowest closing since June of 2004. The usual factors of too much oil and too little demand as the US and Chinese economies continue to weaken were behind the move. A number of the factors that usually move oil markets are beginning to change. For example, another large drop of 20 units in the US rig count failed to drive the market higher for more than a few minutes as traders have come to recognize that changes in the rig count do not translate into short-term supply changes. Likewise the increase in enmity between Iran and the Saudis is having very little impact on prices as the markets believe the harsh rhetoric is unlikely to lead to hostilities – at least in the short term. Even a US jobs report which showed the creation of 292,000 new jobs, 39 percent more than expected, did little to move prices higher. Usually traders see more people working as a sign that there will soon be more demand for gasoline, but not this time. Fundamentals are ruling the markets.
(Bloomberg) Venezuela’s new economy minister , who has argued that inflation doesn’t exist “in real life,” said policies to be announced on Jan. 12 would seek to avoid sacrifices by ordinary people as the price the South American country receives for oil exports plunges to a 12-year low.
(artberman.com) Daniel Yergin and other experts say that U.S. tight oil is the swing oil producer of the world.
They are wrong. It is preposterous to say that the world’s largest oil importer is also its swing producer.
There are two types of oil producers in the world: those who have the will and the means to affect market prices, and those who react to them. In other words, the swing producer and everyone else.
“By our calculations it will require additional debt formation of $39 trillion over the next decade to keep petroleum production operating. Where that funding will originate from, when it is very unlikely to ever be repaid, will be of tantamount importance. It will take very strong-willed societies to make such sacrifices. If those sacrifices are not made, the integrated global production system will have disappeared by 2026. 2016 will be witness to the beginning of this event with dramatically increasing closures and bankruptcies throughout the world’s petroleum industry.”
The Hill’s Group — “an association of consulting petroleum engineers and professional project managers”
There were no surprises during the last week of trading for 2015. Prices moved sideways, with an occasional flurry of short-covering briefly offsetting the steady downwards trend of the markets. At the close Thursday, New York futures were at $37.04 a barrel, down 30 percent for the year, and London was at $37.28 down 35 percent during 2015. On Thursday, the EIA released US crude production data for the first nine months of 2015 showing production falling from a 44-year peak of 9.7 million b/d in April to 9.3 million in October. This drop in production was less than many had anticipated given the severe cutbacks that have taken place in drilling rigs and capital expenditures.
(MSN/Reuters) Brent crude oil prices hit their lowest in more than 11 years on Monday, while U.S. crude flirted with seven-year lows on more signs that swelling global supply looked set to outpace tepid demand again next year.
Global oil production is running close to record highs and, with more barrels poised to enter the market from nations such as Iran and Libya, the price of crude is set for its largest monthly percentage decline in seven years.
Brent’s premium over U.S. crude narrowed further as the market braced for the end of a 40-year ban on U.S. crude exports. President Obama signed a law on Friday that will end the ban.
“Around $200 billion of investments in energy have been canceled this year, with energy companies planning to cut another 3 to 8 percent from their investments next year. This is the first time since the mid-1980s that the oil and gas industry will have cut investment in two consecutive years.”
Prince Abdulaziz bin Salman al Saud, Saudi Arabia’s vice minister of petroleum and mineral resources
Despite oil’s fundamentals pointing to lower prices, the oil markets rebounded in thin trading last week. New York futures which were trading below $36 on Tuesday closed Thursday at $38.10, nearly a 9 percent jump. In a similar fashion Brent, which on Monday touched its lowest point since 2004, climbed to close out the week at $37.89. We now have US oil selling above Brent, which makes it rather hard to sell on the international markets unless a refiner is looking for very light oil and is willing to pay a premium.
(NY Times) ANCHORAGE — Oil money no longer pays the bills here. The governor, facing a profound fiscal crisis, has proposed the imposition of a personal income tax for the first time in 35 years. State lawmakers, who recently moved into a palatial new office building here, where they work when not toiling in the far-off Capitol in Juneau, are now seeking less costly digs.
(Peak Oil Barrel) Guest post by Verwimp Bruno.
Peak Oil is the moment in time when, on a global scale, the maximum rate of oil production is reached. The moment after which oil production, by nature, must decline forever. Since Earth is a closed system, next to this production (supply) event, there must be an equal demand event: Peak Oil Consumption.
