(Energy Matters) Every year I have a bet with a good friend on where the Brent oil price will be in December the following year. Last year I estimated $56.50, my friend $99, so this year I am a clear winner, even though I’m out by about 49%. Brent is trading at $38 as I write. I can extract little satisfaction from this since I got “close” for the wrong reasons.
(Aleklett’s Energy Mix) This year’s big news regarding the reporting of oil reserves in World Energy Outlook 2015 is that this annual report now discusses “resources that are technically possible to produce” and what proportion of these are proven reserves. When I was working on Chapter 17, The Peak of the Oil Age for my new book a few weeks ago I discussed the difference between technically producible resources and reserves.
(OilPrice.com) The EIA recently published a global oil consumption data sheet that provided a clear picture of where the global oil economy is currently heading. The data revealed that although there had been a substantial oil consumption increase in the Middle East (led by Saudi Arabia), Asia (Led by China) and Oceania, the rest of the world which included Russia , other FSU countries, the U.S., Japan and Europe experienced a consistent decline in their oil consumption rates over the last decade.
(Nikkei) Oil prices remain stuck at low levels, unaffected by the waves of risk washing over the world amid mounting geopolitical tension. What is driving that trend, and how long will it last? The Nikkei Asian Review put these and other questions to Daniel Yergin, vice chairman of research company IHS and a world-renowned expert on oil prices.
(CNBC) Unless the Fed shocks investors with a hawkish tone, oil conceivably could be a bigger factor for credit markets this week than the Fed’s first hike in nine years.
“Credit rating agency Fitch says defaults for oil and gas companies are already at the highest since 1999. Since the start of the third quarter, at least 12 oil and gas companies have defaulted on their debt. The ‘zombies’ bet that by shifting into survival mode they can hang on until oil prices recover, but the outlook is grim.”
Anna Driver and Tracy Rucinski, Reuters, “Zombies Appear in U.S. Oil Fields”
Oil prices tumbled for six straight sessions following the OPEC decision to maintain production levels the week before last. At the close Friday prices were down 11 percent for the week with New York futures closing at $35.62 a barrel and London at $37.93. This is the lowest close for oil futures since the 2008-2009 recession. Adjusting for inflation, oil prices this low were last seen in 2002.
(AP) — Getting paid has always been hard for government contractors in Mexico, but seldom has the problem been so bad, as low oil prices are battering government finances.
(OilPrice.com) The dramatic drop in oil prices has created what are called “zombie” companies , oil companies which can still afford to pay interest on huge debts, but little else. If oil prices stay low, the problem is likely to spread and become an economic zombie apocalypse for much of the industry and the communities and countries that depend on it.
(CNBC) History is repeating itself on Nymex, and although $10 oil looks a long shot, technical analysis indicates that prices have further to fall.
