Daily Commentary From OilSlick.com


Growth Continues, Production Does Not
The International Energy Agency (IEA) recently released their Oil Market Report (OMR). In it they warned the debt crisis in Europe slowed demand in October but fundamentals began improving in November Continue reading
Seven Billion
Somewhere in the world on Monday the seven billionth person will be born. It took 150 years to grow from one billion people in 1850 to six billion in 1999. It only took 12 years to go from six to seven billion. Continue reading
ASPO Declares War on DOE
ASPO took the fight to the Dept of Energy on Wednesday by holding a news conference on the steps of the DOE. ASPO is attempting to call attention to the blatantly false and misleading projections of the EIA for future oil production. Continue reading
Merger Monday, Anadarko Surrenders
Multiple deals in the energy sector were announced before the open on Monday and that was instrumental in keeping the majority of energy stocks from losing too much ground on a very bad day in the markets. Continue reading
Peak Oil and Weak Global GDP
If the world is headed into a period of weak global growth as a result of Europe's credit crisis how will that impact the arrival of Peak Oil? Continue reading
That Time of the Month Again
Once a month energy investors are subjected to irrationality, irritability, mood swings and bipolar behavior. Continue reading
OPEC Talking About Meeting
You knew it had to happen. When the price for the basket of OPEC crude dipped below $100 last week the OPEC hardliners immediately started talking about holding a meeting to discuss cutting production. Continue reading
Trouble Brewing In Libya
The civil war is not even over and Gaddafi has not yet been found but a new civil conflict is bubbling up between the various tribes and ideological interests. Gaddafi kept the tribes isolated and encouraged hostilities as a way to prevent a unified uprising to throw him out of power. Continue reading
A Billion A Day
Exxon Mobil spends a billion dollars a day. That number is astounding but given the scope of their business it should come as no surprise. Continue reading
Why Do Oil Prices Really Fall?
I continue to get emails asking why oil prices are down. First, they are normally down in Sept/Oct as the demand cycles and products change. However, there are other reasons with a lot more impact. Continue reading
Market Drop Not Sector Drop
The energy sector plunged again on Monday but it was falling in conjunction with the entire market. The declines we are seeing in energy are completely market related and caused by the uncertainty in Europe. Continue reading
$4 Billion and Still No Drilling
Shell has spent about $4 billion for the rights to drill in waters off the coast of Alaska and they are still a long way from putting a drill bit in the water. Continue reading
Shell, Hess, Petrobras Agree On Oil Shortage
Peak oil may be an often overlooked topic in the U.S. press but the heads of several of the world's major oil companies agree there will be oil shortages soon. Continue reading
The Great Debate
Since the beginning of recorded history there have been debates over countless topics that have lasted for decades before one position was proven to be true. Other debates continue to last and it could be centuries before we know the winner. Coke or Pepsi, Christianity or Judaism, Evolution or Creationism? Today's debate will be settled much sooner and with lasting consequences. Continue reading
IEA Cuts Demand Forecast
The IEA followed the trend set by OPEC when the IEA released its Oil Market Report for last month. The IEA cut demand growth estimates but they still predict growth Continue reading
OPEC Cuts Again
OPEC lowered its demand estimates for the rest of 2011 and 2012 because of the growing problem of austerity induced weakness in Europe. Continue reading
UK Production Falls to 30 Year Low
UK Oil production fell below one million barrels per day for only the second time in the last 30 years. The British sector of the North Sea pumped only 984,000 bpd of oil in June. Continue reading
Tony The Tiger Roars Again
There is the expression about the cat with nine lives and then there is the adage about he who laughs last always laughs best. Welcome to the world of Tony Hayward, the former embattled CEO of BP. He of public relations gaffes and verbal faux pas, cast aside in the aftermath of the worst oil spill in U.S. history. Continue reading
One Million New Jobs
The American Petroleum Institute (API) released a report by Wood Mackenzie projecting the benefits from opening up the U.S. energy industry to further exploration and less regulation. The findings were dramatic. Continue reading
Good News, Bad News From Recent Spill Study
Even if you are addicted to following the oil industry and I admit I am afflicted with such a condition, there is a reasonable chance that you have not heard of the Woods Hole Oceanographic Institution (WHOI). Established in 1930 and based in Massachusetts, WHOI is a private, independent organization dedicated to marine research, engineering and higher education. Those are the organization's words, not my own. Continue reading
Iran Can Make Six Bombs
For years we have been hearing that Iran was well on their way towards a nuclear future but the IAEA always said they were years away from having the capability. Unfortunately that has changed. Continue reading
The Other Side Of Exxon's Russian Coin
By now, those that follow the oil industry and the relevant stocks in this sector know that Exxon Mobil is teaming up with OAO Rosneft, Russia's largest oil company, on a $3.2 billion Arctic exploration partnership that could prove to be very lucrative for both companies. Boiling things down to the nitty gritty, Exxon gets access to one of the world's last great untapped oil resources. The areas of the Kara Sea that Exxon and Rosneft will explore could hold up to 36 billion recoverable barrels of oil. Continue reading
Peak Oil Is Unavoidable
That was the decision reached by the German Bundeswehr (Federal Defence Force) Transformation Centre in a study released to the public last November. Unfortunately it was in German. The document was translated into English and released last week and is getting plenty of press. Continue reading
To Russia With Love For Exxon
In a final stinging blow to rival BP, Exxon Mobil, the largest U.S. oil company, is teaming up with Russian counterpart OAO Rosneft to explore the oil rich Kara Sea in the frigid Russian Arctic region. Shares of Dow component Exxon traded fractionally lower today, but it is still reasonable to say this is very good news for Exxon. All one needs to do is remember how desperate BP was to see its partnership with Rosneft take flight. Continue reading
End of Alaskan Oil?
If new drilling in Alaska is not approved soon the Alaska pipeline will have to shutdown and the remaining oil in the National Petroleum Reserve will be lost. Continue reading
Confusion Reigns in Libya
Conflicting stories about restarting production, honoring existing contracts and the amount of damage done to the oil facilities suggests there are too many chiefs and not enough indians. Continue reading
Go-Go Days For Oil Services Group?
Last Thursday, I opined about National Oilwell Varco (NOV) and the $1.5 billion in Brazilian contracts the world's largest provider of oilfield equipment had just inked, arguing that this was indeed good news for U.S. trade and the jobs situation here. I will not repeat the entire column and if you need a quick refresher it can be viewed (HERE). Continue reading
Another Light Crude Outage
Just as Libya jumps to the front of the headlines on the potential for restarting production in the months ahead another country takes center stage again with a light crude outage. Brent prices continue to hold at $110 due to tight supplies. Continue reading
Regime Change No Guarantee Of Increased Output
In the here and now, that headline obviously applies to Libya, but it also serves as an important reminder that some OPEC members have become acquainted with political upheaval and regime change over the years and that does not always equal increased oil production. Put another way, there have been plenty of regime changes in Africa and the Middle East over the years, with most not being conducive to Western interests, and here we are living in a world of a peak oil. Continue reading
Not Over Till Its Over
Despite the fanfare and celebration in Tripoli the battle is not over. Even if Gadhafi is captured the fighting could continue for days or weeks. Yogi Berra once said, "It's not over till it's over" and that is definitely true in Libya Continue reading
The Beginning of the End?
Rebel forces could be days away from overthrowing Omar Gadhafi with forces capturing additional parts of the capital city of Tripoli as each hour passes. The closer they get the more aggressively they are fighting as they sense victory in their grasp. Continue reading
U.S. Wins With NOV's Brazil Deal
The world is full of conspiracy theories. Some blow off these sometimes whacky pearls while others revel in them. Marry the world of finance and politics and conspiracy theorists can be kept occupied for months on end, if not longer. For those that want to take things a step further regarding financial conspiracy theories, the oil business has a few. I am not saying the theories themselves are valid, but some are entertaining. Continue reading
Exxon and Statoil Sue Government
With one billion barrels of oil up for grabs the oil giant and their partner have taken exception to a new rule change by the BOEMRE. Continue reading
BP Picks Up Supporters
With the end of the second quarter about 50 days behind us, one of investors' favorite pastimes has been renewed and that is scouring the headlines for news of what stocks legendary investors and big-time hedge fund managers were loading up on in the quarter. That information comes courtesy of the SEC's 13F filing, which money managers are required to file if they manage more than $100 million in client capital. Continue reading
Rigs Still Leaving the Gulf
Noble announced last week another deepwater rig was leaving the Gulf of Mexico for work elsewhere. The Noble Paul Romano had been idle since June 2010 and it now going to work for $325,000 per day for Gujarat State Petroleum in Egypt. Continue reading
Oil Production Declining
Deutsche Bank recently compiled production numbers from many of the recent earnings reports and the results are startling even for those of us that already believe we are reaching a point where demand will exceed supply. Continue reading
Next Up On Africa's Oil Parade...Kenya?
Oil production may shrinking around the world, but give the continent of Africa credit for trying to do something about that situation. Already home to OPEC members Nigeria, Angola and Libya, the continent's top three producers, other African nations are looking to make their presence felt in the petroleum industry as well. Continue reading
Mixed Messages From Oil Reports
The various energy agencies all released versions of their monthly oil reports suggesting oil demand "growth" could slow in the coming months. That always confuses people when the headlines proclaim "EIA lowers estimates of oil demand." People don't always understand they are cutting GROWTH estimates not actual demand levels. Continue reading
Heavy Weighs The Crown For Exxon
One of the more interesting headlines that might get lost in the shuffle of what turned out to be a glorious Tuesday for beleaguered investors concerned the battle for market cap supremacy between Dow component Exxon Mobil, the largest U.S. oil company, and Nasdaq darling Apple. With a sharp bounce of almost 6% on better twice the average daily volume, Apple was a standout today. Continue reading
Do Fundamentals Matter?
The equity market is imploding with the S&P-500 declining -235 points or -17% since the high on July 21st. This is the worst start for August on record and it appears the damage may not be over. There are multiple reasons for the market drop and none of them are related to fundamentals of individual stocks. Continue reading
OPEC Concerned Over Fall in Oil Prices
Iran's representative to the OPEC and president of the cartel for 2011, Mohammad Ali Khatibi, said any further declines in oil prices would require an "extraordinary meeting" of OPEC ministers to discuss quota reductions. That did not take long! Continue reading
Thursday's Silver Lining From The Oil Patch
Today was one of those days where there is simply no sugar-coating things in the financial markets. If it could have gone wrong, it probably did as the Dow Jones Industrial Average careened to its worst-one day loss since 2008. Oil was no peach either. NYMEX-traded crude for September delivery plunged $5.30, or 5.8%, to $86.63, good for the lowest closing price since Feb. 18. All of 2011's gains in oil futures have now vanished. Continue reading
Need A Tanker?
In case you have not noticed the world's tanker market is experiencing the biggest glut of tankers in the last 29 years. The fleet will increase by 7.5% this year but the demand for seaborne crude is only rising +2.8%. Continue reading
Hostile Or Not, Peabody Has Aussie Drama
Forgive me for ascribing the word ''drama'' to the energy sector in a way that only someone far younger than I would do, but the energy patch can be quite dramatic. Whether its a major takeover, fatal accidents and spills or some stuff straight out of Hollywood at the hands of militant rebels, the energy sector does not lack for compelling headlines or drama. Continue reading
Debt Deal Done
Crude oil prices rallied Sunday night on hopes the U.S. debt debacle was finally history but worries over a final vote in the House of Representatives and some really crummy economic numbers slammed the futures back to $94 and a low for the month. Continue reading
Iraq Not Moving Into 21st Century
You may have seen the headlines last week. The U.S. said Iraq is actually more dangerous today than it was a year ago. Increased rocket attacks on the Green Zone, an increase in IEDs and an increase in the number of suicide bombers. The increased violence does not bode well for quadrupling their oil production by 2020. Continue reading
South America's ''Other'' Oil Player
It is easy for any country beyond Venezuela and Brazil to get lost in the South American oil shuffle. Venezuela not only has the perceived advantage of being an OPEC member, it is also the continent's largest oil producer and fall of Hugo Chavez's anti-U.S. rhetoric, the U.S. is still a reliable buyer of Venezuelan crude. Continue reading
Debt Ceiling = Oil Ceiling?
The oil market is used to dealing with things like wars, uprisings, strikes, sabotage, hurricanes and embargos but a debt ceiling is a new challenge. Why does a debt ceiling matter? Continue reading
Peak Coal, Too?
Last week, Jim offered up a great commentary on some goings on in the coal sector, which in case you missed it, can be found (HERE). Today, I want to build on the coal theme by addressing an issue that some may not even realize exists: Peak coal. Obviously, the word ''peak'' as it relates to commodities is most often applied to oil. Continue reading
Debt Worries Pressure Crude
The lack of an agreement in Washington on the U.S. debt limit and another downgrade of Greece was more than the equity markets could bear on Monday. Just when Greece was supposed to be moving out of the headlines Moody's downgraded Greek debt three more notches to "Ca" from the already junk status of "Caa1." If U.S. lawmakers don't end the current political theater in Washington we may be on the road to junk status as well. Continue reading
European Rescue Restores Hope
The large-scale rescue plan for the Eurozone appears to have eased the global market tensions and fears over a drop in oil demand from economies spiraling down the drain. Greece was the immediate focus but the plan would also help with future problems with Italy, Ireland, Portugal and Spain. Continue reading
Sun Suddenly Shining For BP?
The analogies and metaphors that can be applied with regards to BP using what appears to be an interpretation of a sun as its logo are plentiful, but the bottom line is this: Sixteen months removed from the largest oil spill in U.S. history, an event that there is no getting around that BP will share ample blame in, things are looking up for Europe's second-largest oil company. Continue reading
Failure at the IEA
On June 23rd, the International Energy Agency (IEA) and the US government announced the intention to tap strategic petroleum reserves (SPRs) of the US and other countries, with an eye to reducing oil prices. Were they right or wrong in their actions? Continue reading
Did Conoco Start A Trend?
One of the biggest headlines over the past week in the oil patch was the announcement by ConocoPhillips, the third-largest U.S. oil company, that it will split its marketing and refining business off into a separate publicly traded entity next year. The announcement came on the heels of much smaller Marathon Oil doing the same thing recently and as Bloomberg News reports, the move by Marathon has been an ''unqualified success'' as Marathon shares had jumped more than 25% heading into this week since it first made its spin-off announcement. Continue reading
Coal Getting Some Respect
The coal sector found some love today after several brokers upgraded coal stocks and a Walter Energy shareholder expressed interest in selling the company. Suddenly the grimy energy stepchild is being let back into the room. Continue reading
Petrobras Struggling Despite 50 Billion Barrels
You would think an oil company with dozens of new discoveries of as much as 60 billion barrels would be swimming in money. For a normal company going to the capital markets would be easy with that kind of fortune ahead. Continue reading
More Hurdles From BOEMRE?
Prior to the Gulf of Mexico oil spill last year, casual observers of the oil industry probably were not familiar with the Interior Department's Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE). To many, it was just another one of those alphabet-soup agencies in our nation's capitol. Continue reading
Oil Demand Highest Ever
OPEC lowered their estimates for demand growth for 2011 and 2012 but they still pointed out that demand would be at record levels later this quarter. Too bad we can't get some record production to go along with that demand. Continue reading
Offshore Rare Earths: Fuggedaboutit
With all the controversy surrounding offshore oil drilling, especially after the Gulf of Mexico oil drill last year, one might think navigating the high seas in search of highly sought after commodities is an endeavor best left to the world's oil giants. It probably is, but that did not stop the a team of Japanese scientists from cheering the discovery of bountiful rare earths supplies in the Pacific Ocean right after the Fourth of July. Continue reading
Excess Saudi Crude Not Selling
When Libyan crude production was halted Saudi Arabia it would produce any grade in any quantity to keep the oil market supplied. When OPEC failed to expand quotas in June Saudi and friends said they would immediately increase production by 1.5 mbpd. Neither promise has come to pass. Continue reading
Black and White
When a highly respected investment bank with a large research department and strong futures trading division tell us something will happen we normally accept it as a high probability event. That is of course unless we don't want to acknowledge the fact so our worldview remains calm. Continue reading
South Sudan: A New Oil Player?
Unless one is an avid watcher of the BBC or CNN, a frequent listener of NPR or regularly reads the Christian Science Monitor, there is a fair chance one does not know much about the goings on in the African nation of Sudan. As is the case with much of Africa, Sudan is a country that is home to rampant civil strife and political instability. And like many other African nations, Sudan is also home to abundant natural resources, in this case, oil. Continue reading
Iran Giving Away Oil
Iran is in a bind. The nuclear sanctions against Iran prevent it from receiving payments for things like oil sales. After several aborted attempts to structure payment arrangements using multiple banks in different countries they are finally at a dead end. Continue reading
Chevron Faced With Another Absurd Lawsuit
One has to imagine that these are busy times inside the legal department at Chevron. Lawyers at big oil companies are rarely lacking for work on a day-to-day basis, but at the moment, the second-largest U.S. oil company is dealing with a judgment of over $18 billion levied against the company by an Ecuadorean court, a case that I noted last month is not short on melodrama or annoyances for Chevron. For my full outlook on the Ecuadorean case, it is available (HERE). Continue reading
Israel Oil Bonanza?
The London based World Energy Council says Israel's Shfela Basin holds 250 billion barrels of recoverable shale oil, possibly making the country the "world's newest energy giant." Unfortunately there is a catch. Continue reading
Unintended Consequences?
By no means is it Seward's Folly, but Royal Dutch Shell sure does have its own little headache brewing in Alaska. While Alaska is still one of the top oil-producing states in the U.S., production at Prudhoe Bay has been in decline for years now. In fact, Reuters reported on Wednesday that the Trans Alaska Pipeline may only have another decade of service left if Alaska's oil output continues to decline at current rates. Continue reading
Who Knew What and When
An interesting revelation appeared in the news today that changes how I view the announcement of the IEA/USA strategic reserves announcement. I had previously criticized the current administration for the reasoning and timing of the announcement. It turns out there was an even bigger reason for criticism. Continue reading
Missing The Boat On Nat Gas
Anyone that reads the New York Times knows the paper has really been beating the drum against natural gas and fracking, the controversial procedure energy producers use to extract natural gas and oil from shale rock formations. The paper has written numerous pieces on the subject over the past year, few of them favorable, but most of them have at least been worth the read if for no reason than to get a sense for some of the hurdles this country faces in terms of increasing domestic energy production. Continue reading
OPEC Complaining About IEA Release
At an annual meeting with the EU on Monday OPEC's president complained the IEA's release of oil from the strategic reserves of 28 countries was "meddling" and contrary to the "free market" principles of the IEA countries. Continue reading
IEA's Big Mistake
On Thursday the IEA, manager of oil supplies and statistics for 28 nations, announced they were releasing 60 million barrels of crude oil from strategic reserves. The USA would provide 30 million of those barrels. This could go down in history as a turning point in IEA history. Continue reading
A Dubious Strategy By Transocean
Wednesday will not go down as a day of great news flow for Transocean, the owner of the Deepwater Horizon rig. Not only was the sort-of-Swiss company slapped with a $1.8 billion tax evasion law suit in Norway, Transocean was grandstanding and pointing the finger at BP, the Deepwater Horizon's operator, for the Gulf oil spill. Continue reading
Goldman Predicts Choppy Prices
The 800 pound gorilla in commodities forecasting predicted much higher prices 2-3 weeks ago with Brent going to $130 by Q3. Events over the last two weeks has caused them to temper that bullishness and call for "choppy" prices in the near term. Continue reading
Dueling Views On Oil Speculators
The mere mention of the word speculators, particularly of the oil variety, has a tendency to conjure up plenty of unsavory images. While oil prices have been declining recently, they are still uncomfortably high, at least for the businesses that depend on oil to grease their wheels of commerce and for consumers and the ''working family,'' just to throw in some political jargon. Continue reading
Strategic Petroleum Reserve
Back before the OPEC meeting the Obama administration held talks with Saudi Arabia on swapping oil in the SPR for new oil Saudi would produce. This revelation shocked many traders and suggests the administration is unaware of the reasons behind the SPR. Continue reading
Record Oil Supplies?
The American Petroleum Institute (API) said last week that U.S. oil supplies rose to the highest levels in 31 years for the month of May. In the EIA report for May 27th crude oil in inventory rose to 373.8 million barrels and a level not seen since mid 2009. Before 2009 you have to go back to 1990 for a higher inventory number. Continue reading
Wildest Oil-Related Headlines Of The Week
The week is not even over, but as is often par for the course, the oil world can be counted on to generate so compelling headlines. I have taken the liberty of compiling a few of my favorites that I have seen this week. Continue reading
Top Ten Producers Equal 61%
Many people view the world's oil production as though oil was equivalent to trees. Every country has some but the number varies by the size and geography of the country. Unfortunately that is not correct. We are highly dependent on a very few countries. The resources are definitely not distributed evenly. Continue reading
Paper Trail Shows Big Oil Had Dangerous Qaddafi Ties
From the perspective of price, Libya's political mess is still front and center for oil industry observers because, at this point, it seems all but certain that Libya's production for 2011 is a lost cause. The political element of what is going in Libya has sort of been shuffled to the back burner, unless you are a big fan of global geo-politics. Continue reading
Tale of Two Contracts
The U.S. light sweet crude contract (WTI) dropped to nearly $96 and more than a $3 loss intraday but rebounded slightly to close down only -$2.34. The Brent contract, which expires on Wednesday also dropped sharply but quickly rebounded to close positive once again at $118.84. This pushed the spread between the two contracts to a record $22. Why? Continue reading
Population Driven Demand
China reported last week that export growth slowed while imports accelerated. One of those accelerating imports was crude oil. The U.S. may be facing slower demand growth but demand from Asian nations is accelerating rapidly. Continue reading
Top Seven Tidbits From The BP Statistical Review
I will be the first one to confess to being, shall we say, a bit harsh on BP (BP) over the past year or so, but I will give the British oil giant this much credit: The company's annual Statistical Review of World Energy always makes for interesting reading. Assuming you do not want to peruse the entire document, I have taken the liberty of compiling a list of seven highlights from the 2011 version, which was released yesterday. Continue reading
OPEC Politics Prevents Consensus
Political infighting between the twelve OPEC countries kept delegates from reaching a consensus and raising production quotas as many had expected. Any quota raise would have been only symbolic in nature and have no direct impact on production but the lack of a hike is telling the world OPEC either can't or won't make any effort to reduce prices. Continue reading
BP Takes To Social Media To Refurbish Brand
Social media is all the rage these days. Regardless of your age, you have at least heard of Facebook and Twitter and since you are reading something about the financial markets, I imagine you are no stranger to all the fervor regarding the IPOs from those companies, Groupon and some others. Continue reading
Crude Declines on OPEC Comments
Comments suggesting more OPEC production ahead plus a stronger dollar helped to push crude prices back under $100. Also helping pressure prices was the restart of the Keystone pipeline. Continue reading
OPEC and Economics
The price of oil remain stuck in a narrow range centered around $100 for WTI and $115 for Brent despite several weeks of bad economic news that depressed the equity markets. Concern over this week's OPEC meeting also provided uncertainty about direction. Continue reading
Chevron's Ecuador Soap Opera Drags On
If you have not been keeping up with Chevron and the contentious lawsuit brought against the second-largest U.S. oil company by a group of Ecuadorean plaintiffs, I strongly encourage you to do so. Not only does this imbroglio make for entertaining reading, it is a stark reminder of the perils faced by Western oil majors when they do business in less-than-hospitable international locations. There is probably also room for lawyer joke or two, but I will leave that to the professional comedians. Continue reading
Demand Fears Crush Crude
Crude oil prices declined by $3 on Wednesday as new economic reports created new fears about falling demand. Does demand really rise and fall so quickly or is this simply a renewed bout of volatility fueled by sagging economics? Continue reading
Dollar Drops, Crude Rises
The dollar continued its five-day decline from the highs set on May 23rd and closed at a three week low on Tuesday. The falling dollar helped to push oil prices higher despite signs of slower growth from China and Australia and mass confusion over the European debt crisis. Continue reading
Airlines Struggling To Pay Fuel Bills
To fly you from New York to Los Angeles and back today it costs the airlines $330 per person in fuel. That is a 48% increase over May of 2010 and the single biggest expense for the airlines. Continue reading
Chevron Shareholders Meeting = Good Theater
While no U.S. company can lay claim to putting on an annual shareholders meeting that is anywhere near as popular and widely anticipated as Berkshire Hathaway's, big oil's yearly shareholder conclaves are usually good for some interesting drama and Chevron's get-together on Wednesday did not disappoint. Folks came from all over the globe to protest Chevron's alleged misdeeds. Continue reading
Can U.S. Consumers Afford Oil?
As demand rises around the world so will the price of crude oil and refined products. However, the USA, even though it is called the richest nation on earth may not be able to afford the higher priced crude. Continue reading
Crazy Coal Conspiracy Theories
For those of us that love a good conspiracy theory, the financial markets offer no shortage of such fare. Think back to the financial crisis when rumors swirled that Bear Stearns and Lehman Brothers were forced out of the business by rampant short-selling on the part of their rivals, who allegedly were also spreading spurious rumors about those banks. Or we could jump back to the days leading up to September 11, 2001 and find some interesting options trades in various airline stocks. Continue reading
Dollars and Demand
It was another rocky day for crude on Monday after several news items suggesting demand was slowing and the plunging euro pushed the dollar to a two month high. Rest assured any decline in oil prices is temporary and represents a buying opportunity for energy stocks. Continue reading
OPEC Faced With A Challenge
As the June 8th OPEC production meeting draws near the oil ministers from OPEC countries have got to be scratching their heads trying to come up with a new and novel way to say the same thing only spin it differently. The "market is well supplied" sound bite is growing old. Continue reading
Learning Lessons In Unlikely Places
There is an interesting item posted in the news section of OilSlick (posted on Wednesday) regarding plans by Chevron, the second-largest U.S. oil company, to expand its shale gas footprint in Poland. The full story, which is brief, can be found (HERE). Obviously, stories of Western oil giants looking to new and unusual places to boost reserves and profits are not new. Write enough of them as I have and after a while, it feels like all that changes is the company and the country. Continue reading
Skipping the Trip
With gasoline prices very close to $4 per gallon the low priced retailers are struggling as the number of customer visits decline. Wal-Mart reported same store sales declined by -1.1% last month as store traffic slowed significantly. Continue reading
BP's Arctic Dreams Hit By An Iceberg
While not officially dead, BP's oft-criticized $16 billion share exchange with Russia's OAO Rosneft is now on life support, but at this point, someone close to BP CEO Bob Dudley might want to tell him to sign a ''do not resuscitate'' order because this effort by BP to get its hands on more Russian oil has really been bungled from the get go. Continue reading
WTI Sinking Ahead of Expiration
Brent crude futures for June expired at the close today and there was very little movement in the price because there are no delivery problems associated with the Brent contract. Brent closed at $112.73 with a loss of -$1.10. Continue reading
Oil Market Structurally Bullish
Goldman's Jeffrey Currie, head of commodity research said, "Long term and medium term we are still structurally bullish." Currie is only one of several high profile analysts who have reiterated their bullish views on the energy sector in the last couple weeks. Continue reading
Swing And A Miss On Oil Taxes
There was another one of those infamous dog and pony shows on Capitol Hill today and this time it was oil industry executives getting their feet held to the fire. The issue of the day is legislation that could be considered by the Senate as early as next week that singles out five oil giants, Exxon Mobil (XOM), Chevron, ConocoPhillips (COP), Royal Dutch Shell and BP, for tax credits they've been receiving from Uncle Sam on their payments to foreign governments. Continue reading
China, Flooding and the CME
Crude prices are starting to make a habit of monster intraday moves thanks to the CME and their attempts to decrease volatility. Add in the rising inflation in China and the threat of flooding for 900,000 bpd of refinery capacity in Louisiana and those big moves just keep coming. Continue reading
Margin Hikes' Interesting Track Record
Keeping with the theme of margin increases, oil is getting its turn in the spotlight. Crude is by no means a ''new'' victim to the margin raising shenanigans of the CME Group, but the new margin increases on oil futures that went into effect at the close of trading today were the first on oil since March. Traders now have to deal with a margin requirement of $6,250, up from $5,000 for existing futures position on West Texas Intermediate and $8,438 up from $6,750 on new futures positions. Continue reading
CME Slaps Investors Again
The Chicago Mercantile Exchange (CME) is on a mission. They single handedly cost investors tens of billions of dollars last week by raising margins on silver futures five times in a two-week period. Prices plunged -27%. The CME is now taking aim at oil traders. Continue reading
Beware of Aftershocks
After the commodity flash crash last week the rumors are rampant that several macrofunds, commodity funds and even some hedge funds are in trouble. Maybe trouble is the wrong word but several are rumored to have lost between 5% and 20% for the week. Given their normal excessive leverage there could be some that lost more than that. Continue reading
The OPEC Quota Tease
Only a day after I wrote about OPEC laughing at the please from the IEA and others to produce more oil a strange thing happened. OPEC suddenly mentioned raising their quotas at the June meeting. Did OPEC undergo a heart transplant or are they crafty like a fox? Continue reading
Barking At the Moon
The International Energy Agency is doing the equivalent of barking at the moon with their latest plea to OPEC nations to increase production. It has no impact on OPEC other than giving them a reason to laugh. Asking them to spend money to produce more oil so they can sell it cheaper is a lost cause. Continue reading
The Slippery Slope Of Taxing Big Oil
Another earnings season is drawing to a close and to put things in the most basic of terms, big oil made big profits in the first quarter. If you want go over the numbers again, all of the major oil earnings reports can be found in the news section of OilSlick (HERE), but I will briefly mention the highlights. Continue reading
Mexico Oil Importer By 2020
In 2004 Mexico's oil production peaked at 3.9 million barrels per day. Since 2005 that output has been falling and is now down -25% to 2.98 mbpd in 2010. Since Mexico is one of our biggest sources for oil the possibility they will switch from exporter to importer is a chilling thought. Continue reading
Osama bin Laden Killed In Pakistan
President Obama announced on Sunday night that Osama bin Laden was killed in a Special Forces assault on a mansion in Abbotabad, 62 miles from Islamabad Pakistan and 125 miles from the Afghanistan border. Equity futures spiked more than ten points and crude oil prices collapsed. Continue reading
Your Government Dollars In Action
The U.S. Energy Information Agency (EIA) updated their energy outlook this week and it makes for some interesting reading. I am always shocked by the conclusions they reach and how often they are wrong. Somehow they never seem to get the message. Continue reading
Open the SPR, Are You Kidding?
Steven Kopits wrote an excellent article this week on why the Strategic Petroleum Reserve (SPR) should be opened to reduce gasoline prices in the USA. I disagree with the concept but he makes some excellent points. Continue reading
Energy ETFs Share An Old Dilemma With Stocks
Exchange traded funds (ETFs) while still fairly new on the financial scene have developed an interesting quagmire that traders and investors have seen for years: Too many products, too little time, at least as far as the media and the analyst communities are concerned. This is a situation that has been repeated over and over again in myriad sectors for decades. Continue reading
Population Explosion
Timothy Siegel revealed some interesting facts last week that tie in perfectly with the worldview I have been writing about for years. There is a population explosion in progress but this one is not people although in the end it is the growing human population that really counts. Continue reading
Silver Soars, Dollar Plunges
Amid this economic firestorm the IEA warns that the era of cheap energy is over. The dollar sank to a new 16-month low against the Euro last week and that prompted price spikes in every commodity from silver to oil. Continue reading
A Year Later And Fireworks Still Flying
It has been a year since the initial explosion, fire and sinking of the Horizon drilling rig in the Gulf of Mexico but there are still quite a few fires remaining to be put out. Those fires are not on the rig. There is nothing but ocean over the well. No markers are left and no ships are anchored there but the billions spent to close that hole and clean up the resulting mess are still in dispute. Continue reading
Irani's Compensation Continues To Mystify
The oil industry is littered with controversial executives, some of which arrive at that point by their own doing while others get there simply because they help run a big oil company and picking on big oil is sport for some folks. When it comes to compensation though, one oil executive takes the cake, that being Occidental Petroluem's soon-to-be former CEO Ray Irani who earned a tidy $76.1 million in 2010, more than double his 2009 pay. Continue reading
Stormy Weather For Crude Prices
Conditions are worsening for crude demand and for crude prices as news from around the world suggested there was trouble ahead. The news of the Saudi production cut of 800,000 barrels and claims by the IEA that current prices could push the world back into recession caused prices to fall sharply. Continue reading
Further Confirmation Oil Is Plentiful?
Be careful when you read the headlines because there is normally a hidden meaning. Headlines from OPEC countries are guaranteed to be hiding the real truth and trying to foster their agenda to keep oil prices moving higher while putting the blame for these prices on someone else. Continue reading
Fifty New Production Platforms and 40 Rigs in Gulf
Unfortunately those rigs and platforms will not be in U.S. waters. Mexico's Petroleos Mexicanos or PEMEX is Latin America's largest oil producer. They have some very big plans to increase production and those plans don't involve waiting 6-9 months for the BOEMRE to approve a permit. Continue reading
Demand Destruction In Progress
The knowledge consumers around the globe are cutting back on fuel consumption because of high prices should not be a surprise to anyone. OPEC, the IEA and EIA have all narrowed their demand estimates and Saudi Arabia actually cut production because of lack of demand. Continue reading
Oh No, It's Back
If ever there was a corporate rumor that could be compared to the cat with nine lives, my nomination would be BP takeover speculation. Obviously, this rumor flew around quite a bit in the weeks and months following the tragedy in the Gulf of Mexico last April, with analysts and plenty of credible media outlets opining on the odds of Europe's second-largest oil company being taken over. Continue reading
Chevron, Maersk, Transocean, BOEMRE
It was a heavy news day for the energy sector with Chevron giving the first major guidance presentation for the quarter and crude prices dropping -$4. Continue reading
Signs of Saudi Production Struggle
Analysts are constantly looking for minute details in announcements from Saudi Arabia that could be construed as a symptom of a bigger problem. Saudi's formal policy is always "we will produce any quantity needed to fill demand." Informally there are cracks forming in those statements. Continue reading
Saudi Found No Takers for Super Light Blend
IEA Deputy Head, Richard Jones, said there appears to be no supply gap from Libya and the market is well supplied. So well supplied that Saudi Arabia's new super light blend of crude oil has not found a home. Continue reading
Offshore Drilling Due for Recovery
It may take a long time before the demand for rigs catches up to the number of available rigs but at least the trend is in the right direction. However, new rigs planned or under construction continue to grow faster than executed leases. Continue reading
Transocean PR Department Needs Some Help
There is a valuable lesson that most of us learn early in life and that is, in many circumstances, it is not what one says, but how it is said. Important advice to remember for interpersonal correspondence to be sure, but it is a pearl of wisdom that can be applied to the business world. Unfortunately, some folks at Transocean did not get the memo. Continue reading
Nigeria, the Next Powder Keg?
Nigeria postponed parliamentary elections hours after they were scheduled to begin due to widespread organizational problems. The parliamentary elections were the first of three elections this month. Nigeria has seen a long history of flawed and violent elections. Continue reading
Trading One Problem For Another
President Obama has given three speeches in the last week on energy and reducing our importation of foreign oil. He favors electric cars, hybrids, ethanol, biofuels, wind and solar. His Energy Secretary Steven Chu has advocated more than once that fuel prices should be raised to the same levels as Europe ($6-$8) to encourage conservation. Obama also mentioned that in his campaign. Are you ready to go electric? Continue reading
OPEC Revenues At $1 Trillion in 2011
If crude prices remain over $100 for the majority of the year the OPEC exporting countries could reap over $1 trillion in revenue. This would be more than the $990 billion received in 2008. Unfortunately that revenue wealth is coming at a high price. Continue reading
Something Stinks In Saudi Arabia
We found out from Halliburton this week that Saudi Arabia was upping its rig count significantly in preparation for adding additional excess capacity. While that sounds good as a bullet point the actual details could give us an insight into the real story. Continue reading
U.S. Energy Policy Continues To Baffle
For those that have ever been confounded, perplexed, vexed or some derivative of the word ''confused'' regarding the U.S. government's oil policies, prepare to have those feelings revved up a bit. The source of what could very well be the next U.S. misstep with regards provides the opportunity for some alliteration: Baffling, befuddling...Brazil. Continue reading
No Need For Peak Oil In Near Future
Despite everything you have read about the expected arrival of peak oil in the next 2-3 years there is no need for it to occur. We have plenty of oil on the planet to increase production for decades to come but that possibility is handicapped by politics, terror, wars, mismanagement, lack of technology, bad government and just plain stupidity. Continue reading
$120 Oil Is Reasonable, Second Look
I wrote last week about the OPEC oil minister saying $120 is a reasonable price for oil. In hindsight I may have been looking at the comment entirely backwards. Maybe this is not greed but simply a defense mechanism. Continue reading
How Did Qaddafi Become So Rich?
A classified State Department cable said in 2009, "Libya is a kleptocracy in which the regime - either the al- Qaddafi family itself or its close political allies - has a direct stake in anything worth buying, selling or owning." Continue reading
$150 Oil, $5 Gasoline This Summer?
That is what some analysts are now predicting. They are blaming the loss of oil production from Libya and the potential explosion of tensions in Yemen and the rest of the Middle East. More than 27% of the world's oil comes from the MENA nations. Continue reading
Random Musings From The Energy Sector
Just a few interesting headlines that have caught my attention in the energy sector over the past couple of days. Continue reading
Car Sales in India Surge By 23% in February
China is no the only country posting record surges in auto sales. Sales of autos in India jumped +22.6% to 189,008 vehicles in February. Motorcycle sales rose +21% to 776,051 units and sales of commercial vehicles grew by over 10%. Welcome to the 21st century. Continue reading
Libya Attack Sends Oil Prices Higher
The long awaited no-fly operation is in effect over Libya and crude prices have taken off again on the news. Add in the violence in Yemen, Bahrain and other countries and we should have price support for several weeks ahead. Continue reading
Gaddafi's Days Are Numbered
Unfortunately that could be a big number. The UN Security Council approved a resolution by a vote of 10-0 with five countries abstaining to use "all necessary measures" to protect civilians in Libya. Continue reading
Get Ready for Oil to Rise Again
It is only a matter of time and conditions are building that could push oil prices higher again once the nuclear headlines disappear from view. Analysts are united in expecting a strong rise in demand in Japan in the weeks and months ahead. Unfortunately the problems in the Middle East have not gone away. Continue reading
Uranium Sector's Bludgeoning Sounds Familiar
Good grief, these are not good days to be investing in the uranium sector. This is a sector littered with small-cap stocks, so its somewhat speculative to begin with, and rather than run down the carnage seen on a stock-by-stock basis, it is easier to paint the picture with the Global X Uranium ETF (URA). URA is less than six months old, but has probably become a household name recently, shedding more than 25% in the past week on the back of Japan's grim prognosis for nuclear power. Continue reading
OPEC Expects Decline In Global Oil Supplies
That is a headline you don't hear everyday. It is not often, actually almost never that you hear a prediction from OPEC about declines in anything. Did a sudden attack of conscience afflict OPEC ministers? Continue reading
The World Waits for Japan Damage Reports
With a quarter of its refining capacity offline, meltdowns in two reactors and ten more offline there is a very uneasy quiet on Sunday evening. The scenes of tsunami damage are horrific with entire communities completely washed away. Debris is stacked up to 30 feet high in places where the floodwaters were halted. Continue reading
No Shortage In the Market According to OPEC
After two days of conversations among OPEC leaders the production question was answered on Wednesday. 'There is no shortage in the market" and OPEC is not going to increase production. Continue reading
Get Comfortable, It Is Going To Be A Long Ride
The escalation of the Libyan conflict and attacks on oil facilities suggests this is not going to be settled soon. People in the region are now claiming they expect this revolutionary process to spread to the entire Middle East. Continue reading
Time For Molycorp To Shine?
With Molycorp, the largest U.S.-based rare earths miner, due to report earnings Wednesday after the close, I figured it might be a good time to take another look at the company. For those interested, I wrote on Molycorp two months, which can be found (HERE). Continue reading
Current Oil Price Justification
We have heard every conceivable reason for high oil prices as a result of Libya and the unrest in other Arab countries. Officials are talking about no-fly zones, donating weapons to Libyans and releasing oil from the strategic petroleum reserve. Will any of this help? Continue reading
$70 Billion Gasoline Tax
Gasoline prices have risen +70 cents per gallon since October when prices were $2.80 on average in the USA. For every penny increase in gasoline prices the U.S. consumer spends an extra $1 billion per year for fuel. That 70-cent rise in prices is the equivalent of an undeclared $70 billion tax on consumers that comes directly out of their available cash. Continue reading
Surplus Oil In Floating Storage Disappears
Crude prices fell slightly intraday on Thursday but the rebound was pretty quick. News of a Libyan peace plan submitted by Venezuela and being considered by the Arab League prompted the drop but realization that neither Qaddafi or the opposition forces would never agree to it produced the rebound. Continue reading
Are We Headed for Another 2008 Crisis?
With Brent crude nearing $120 and a price the majority of analysts did not expect until 2012 are we headed for another oil crisis like we saw in 2008? Continue reading
For Whom The Bell Tolls: Saudi Arabia
Another day in the Wild West that is the Middle East has oil hovering at 29-month highs, U.S. military personnel on standby regarding Libya and assorted other alarming fare that led to a mighty tumble for U.S. stocks. Libya is the problem of the moment, but if Tuesday is any indication, it might not be a stretch to say the market is starting to ''price in'' the effects of protests and/or disrupted oil supply from Saudi Arabia, the world's largest oil exporter. Continue reading
New Permits Or A Political Ploy?
Noble Energy won the first deepwater drilling permit to be issued since the Horizon exploded back on April 20th. Is this the end of the unofficial moratorium or just a way for the Interior Dept to avoid growing criticism for not allowing new drilling? Continue reading
Racing Toward "Peak Sweet"™
In the wake of Libya's production halt Saudi Arabia promised to provide any Quantity and Quality of oil refiners need to compensate for the shortfall. Unfortunately Saudi does not have any light, sweet crude. Angola and Nigeria, countries that also produce light crude, immediately announced they had none to spare. Plenty of oil available but none of it is sweet. Continue reading
Quality Or Quantity?
Saudi Arabia's oil minister tried to assure the world today that Saudi stand ready to replace any lost output from Libya in any "quality and quantity" desired. Those are big words for a country without the actual capability to back it up. Continue reading
Can Saudi Arabia Buy Love for $35 Billion?
Saudi King Abdullah returned to Saudi Arabia this week after being away for three months for medical treatment. He immediately announced a package of concessions worth $35 billion in an attempt to prevent Saudi Arabia from falling into the same crisis as Libya. Can you buy love for $35 billion? Continue reading
The Saudi Conundrum
I was searching for a sexier title for this week's commentary, something along the lines of the ''Italian Job'' or the ''French Connection,'' but conundrum, quagmire, problem, etc. all work with regards to Saudi Arabia and the escalating tensions in the Middle East. With all this calamity in the Middle East, I have come up with a comparison to the fallout faced by Wall Street banks during the financial crisis. One regime falls and everyone wants to know who is next. Continue reading
Export Land Model Revisited
Jeffrey Brown, originator of the Export Land Model wrote another article this week with Egypt as the focus and proving the ELM is alive and well and predicting trouble ahead. Continue reading
Oil Spill Commission Final Report
The Presidential Oil Spill Commission just released their final report and the companies involved in the spill got a look at how the liability trial will probably end. The commission assigned responsibility for each of the nine decisions that led to the disaster. Continue reading
Marine Well Containment System Ready for Duty
The joint venture formed by the four biggest U.S. oil companies after the Horizon disaster announced on Thursday the blowout containment system was ready for business. The lack of a system has been the "official" reason the administration has not issued any deepwater drilling permits. Continue reading
New Peak Oil Theory Explained
Some analysts believe Peak Oil will be delayed until 2020 or longer but don't start rejoicing today. The reasons for the delay could be worse than Peak Oil itself. Continue reading
Life On The ''B'' List
When celebrities and the business world cross paths, the results can be interesting to put it mildly. For every story of a celebrity's success in business, be it investing, real estate development, whatever, there is another about epic failure. For every Roger Staubach, the former Dallas Cowboys quarterback that made hundreds of millions in commercial real estate, there is a bankrupt athlete or movie star somewhere. Continue reading
Enquiring Minds Want To Know
Apparently I touched some nerves in the weekend commentary over the impact of peak oil on the life of a U.S. consumer. I received several emails containing a tad bit of hostility over my predictions. This is good. If I forced you to think out of your comfort zone you now have a better chance of surviving. Continue reading
The Boy Scout Motto Is "Be Prepared"
How do we prepare for peak oil? How do we prevent the storm headed our way from destroying our way of life and that of our children? There are some concrete steps we can take to be ready. Continue reading
The Reality of Peak Oil In 2012
What will it really be like when the peak oil age finally arrives a couple years from now? It won't be the Mad Max doomsday scenario but it is going to be really painful for those not prepared for it. Continue reading
Saudi Arabia Oil Production Has Peaked
It was all over the news yesterday that WikiLeaks had published a batch of diplomatic cables exposing the Saudi Arabia misrepresentations about oil reserves. Most people in the Peak Oil community already knew of these claims but now we have backup from government documents. Continue reading
BP's Tryst With Mubarak
Oh boy, BP's public relations mishaps just keep on piling up. For investors and traders that actively follow the second-largest European oil company along with keeping abreast of current events, you might have had a hunch that this Egypt mess was not going to blow over without touching BP in someway. Continue reading
What Will Really Happen in 2012?
Contrary to the those who suggest the Mayan calendar predicts the end of the world or to those expecting the asteroid Toutatis to strike earth on December 12th 2012 I believe we will still be alive and kicking in 2013. However, we may be doing a lot less driving. Continue reading
Rescuing WTI From Oblivion
U.S. crude producers have taken it upon themselves to find a way around the sharply discounted WTI prices by finding alternate ways to sell their crude. Continue reading
WTI No Longer Relevant For Crude Pricing?
The broad disparity between the price of WTI Light Crude and Brent Crude has produced some serious questions about the relevance of WTI as the global benchmark for crude. Continue reading
Egypt May Be More Than Short Term Problem
Brent crude rallied to close at $102.34 on Wednesday as the demonstrations in Egypt turned violent and worries increased about the future of the conflict. Egypt may not be a major oil producer but it is the gatekeeper for global trade by virtue of its control of the Suez Canal. Continue reading
BP, Rosneft Face ANWR-Esque Issues
For those that are champions of oil drilling in exotic, frozen locations, or better yet, someone that is hoping to land a job on such a project, you probably will not be rushing off to your local zoo anytime soon to checkout the polar bears. Polar bears, a regal, yet endangered species, sure have a way of becoming an issue for oil companies looking to tap into resources in the Arctic Circle. Continue reading
Lies We Tell Ourselves, By Sharon Astyk
Sharon wrote another really good article today about the rulers we support and the lies we tell ourselves in order to justify that support. Continue reading
The Oil Economy Runs Only When Countries Are Stable
Crude oil prices have rallied from $85 to more than $90 in the last two days as violence in Egypt caused concerns about a contagion to other Middle East countries like Yemen and Saudi Arabia. Continue reading
IEA Versus Saudi Arabia, Round Two
The International Energy Agency too aim at Saudi Arabia and OPEC again this week with a claim the cartel was already pumping more oil than they claimed. OPEC's Secretary General again blasted the IEA claiming inconsistency. Continue reading
China's Petroleum Demand Rising Dramatically
In the last 20 years China's oil demand has risen nearly 400% and the rate of increase accelerates every year. At the current rate China will consume more oil than the USA by 2020. Continue reading
Spill Fund: Something To Behold, Criticize
It was said that everything King Midas touched turned to gold. In the past year, it can be said that everything touched by BP in the Gulf of Mexico after April 20, 2010 turned to, well let's just say something far less appealing than gold. Continue reading
EIA Fails To Warn On Oil Shortfall
The U.S. Energy Information Administration (EIA) is funded by taxpayers to monitor energy usage and warn about energy issues. Somebody needs to wake up the EIA. Continue reading
Oil Moves Over $100 Around the World
U.S. West Texas Intermediate crude or WTI may have taken a tumble last week to $88 but other grades of crude around the world are moving in the opposite direction. Prices for WTI are being impacted by several factors that are not present in Europe, Asia and Africa. Continue reading
Can You Smell the Burning Rubber?
China's economy is overheating despite a series of hikes in the reserve rates. The country will eventually have to slam on the brakes and slow the economy dramatically before they crash into the reality barrier. Continue reading
IEA Takes Aim At OPEC
In the IEA's monthly oil market report the IEA called on OPEC to raise production levels or be responsible for another recession. OPEC fired back claiming the IEA numbers were wrong. Continue reading
Markey Conjurs Up Cold War Fears
BP's recently announced $16 billion share swap with OAO Rosneft, the Russian state-run oil giant, has delivered all the controversy market observers have become accustomed to with BP in the past year. Good grief, one would think that since BP's reputation in the U.S., one of, if not the company's most important market, is still in dire need of repair smarter things could have been done than getting cozy with a Russian firm. Continue reading
Iran Calls For $100 Oil, Total CEO Warns of Risk
Iran has never a country where its leaders were allergic to the TV cameras and reporter microphones. They are out winning friends again this weekend with their views on oil prices. Iran's oil minister is the acting president of OPEC for 2011. The position rotates among OPEC countries and this is the first time in 36 years that Iran holds the leadership position. Massoud Mirkazemi joined Libya and Venezuela in talking up crude prices this weekend. Continue reading
$4 Gasoline In September According to EIA
The U.S. Energy Administration (EIA) issued its Short Term Energy Outlook for January (STEO) claiming demand would rise and inventories would fall with gasoline prices over $4 possible this year. Continue reading
Australia Considering Building An Ark
Queensland Australia has been washed off the map in many places with water levels so high only a random hill is visible. The floods have produced a vast inland sea. Unfortunately many of Australia's coal mines are under that sea. Continue reading
Rare Return On Rare Earths Investment
I am going to take a little break today from my normal commentary on the oil industry to take a look at the scorching-hot rare earths sector. As has been mentioned dozens of times over the past couple of months as rare earths stocks have been ushered to the forefront of the investment lexicon as the new high-growth opportunities in the materials sector, that rare earths are not that rare at all. Continue reading
Can the Bakken Production Rate Double?
Recent advances in drilling technology have cut the drilling time in half in the Bakken and drilling activity is exploding. Continue reading
High Prices and Winter Destroying Demand
U.S. gasoline demand at the pump fell -13% to the lowest level since Hurricane Katrina for the last week in December according to the MasterCard Spending Pulse report. Continue reading
Declines Everywhere But In the News
Crude oil production seems to be declining aggressively around the world but the press is not reporting it. This is due to the efforts of the IEA and EIA to disguise the numbers in order to fill their political mandate. Continue reading
The Final Answer But Not the End of the Story
The presidential Oil Spill Commission released its final report on the Horizon disaster. It found that BP, Transocean and Halliburton all made bad decisions that led to the disaster. Continue reading
Shell's Interesting Approach To BP
Continue reading
Drillers Going Back to Work
In a sudden burst of unexpected sanity the Obama administration announced on Monday that 13 companies could resume deepwater drilling in the Gulf of Mexico. Continue reading
The End of the Oil Age 2011 and Beyond: A Reality Check
Deutsche Bank is now convinced OPEC will run out of spare capacity in 2012 as increasing demand exceeds existing global production. The result is not pretty. Continue reading
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