As the chart to the left shows, in the period from 2002 until 2014 the U.S. moved from 3rd place to 1st place in world crude oil production. This is primarily due to the improvement in “fracking” technology which has led to the massive increase in the production of shale oil. This does not sit […]
Are Low Crude Oil Prices a “Boom Or A Curse” For The World Economy? Read More »
With OPEC breaking down and any kind of coordination among its members on price cuts looking increasingly unlikely, it now appears that oil prices could remain below $50 a barrel for a year or more. As producers confront this unpleasant reality, some will finally start to significantly curtail or even shut down operations. And that is going to severely hurt an all but invisible group; strippers in the United States.
Strippers Suffering From Low Oil Prices Read More »
As the terrorist attack in Paris sparks worldwide fear of similar reprisals and a bloody shootout and hostage situation in a five-star Mali hotel exacerbates those concerns, global energy security reels under the pressure of unfathomable geopolitics. In an exclusive interview with Oilprice.com, Robert Bensh—managing director and partner at Pelicourt, a Western-owned oil and gas company navigating tricky conflict zones—discusses:
• The terrorist threat to global energy security
• What ISIS is really after
• The bigger oil picture for ISIS
• Why Iraq can’t cope
• Why Iraqi Kurdistan has disappointed
• Why loose and shifting alliances spell geopolitical disaster
• Whether it’s all as doom-and-gloom as it seems…
ISIS, Turkey And Oil – The Bigger Picture: Interview With Pelicourt Read More »
Russia’s central bank recently warned about the growing financial risks to the Russian economy from Saudi Arabia encroaching upon its traditional export market for crude oil. Russia sends 70 percent of its oil to Europe, but Saudi Arabia has been making inroads in the European market amid the oil price downturn. The result is a
Saudi War Of Attrition With Russia’s Oil Industry Read More »
The U.S. Energy Information Administration ( EIA) reported a production decline in the Lower 48—essentially shale production—of 208,000 BOPD. That is a staggeringly enormous number, approximately 10 percent of the estimated global over-supply.
Bloodbath in the Oil Patch Read More »
This article shows that the Saudis cannot achieve, or even come close to, their estimated 2014 net export revenue if they prolong their current strategy. This doesn’t mean the Saudis won’t stay the course despite its peril to their own situation. To repeat the two modified Keynes quotes: This doesn’t mean the Saudis won’t stay the course despite its peril to their own situation. To repeat the two modified Keynes quotes at the beginning of this article: “A government can stay irrational longer than it can stay solvent.” “Even in the short term, you’re dead, if you commit suicide.”
“A government can stay irrational longer than it can stay solvent.”
“Even in the short term, you’re dead, if you commit suicide.”
OPEC Self-Destruction Thanks To Saudi Oil Strategy? Read More »
In the past, I documented the overstatements by both the IEA and EIA in 2014 & 2015 in terms of supply, inventory and understatements of demand. Others also noticed these distortions and, whether intentional or not, they exist and they are very large in dollar terms. These distortions, which are affecting price through media hype and/or direct/indirect price manipulation, are quite possibly the largest in financial history.
Putting numbers behind it, with worldwide production running some 95 million barrels per day, and assuming $55 per barrel for oil, the market for crude oil is about $5.2 billion per day. Each $10/Barrel change is worth nearly $1 billion/day or $365 Billion/year for the worldwide crude oil market. Add the worldwide equity market caps of oil and oil related equities and debt you have a scandal that is in the trillions; a number that cannot be ignored.
According to Cornerstone Analytics, who have documented the IEA systematically underestimating demand in 2012-2013 only to revise it higher quarters if not years later, the EIA has created the appearance of an imbalance of supply by some 500 million barrels or $2.5 trillion in the last 5 quarters alone. This has easily swung oil by at least $20/barrel if not more.
More “Funny” Data from the Government Read More »
Oil production in North Dakota has exploded over the last five years, from negligible levels before 2010 to well over a million barrels per day, making North Dakota the second largest oil producing state in the country. But the bust is leaving towns like Williston, North Dakota stretched extremely thin as it tries to deal with the aftermath.
The Dark Side Of The Shale Bust Read More »
To understand why financial warfare and the oil weapon is so common, you must understand how it came into existence and what it has achieved. The oil weapon first came into existence in 1965, when Egypt nationalized the Suez Canal. What resulted from this was a declaration of war by France, England, and Israel. As a way to counter this invasion, Saudi Arabia decided to ban exports to England and France. Although this embargo turned out to have minimal economic impact, it was a beginning.
The Evolution of Economic Warfare and the Oil Weapon Read More »
Tesla’s announcement last week about creating a new line of batteries for use by businesses, consumers, and the electrical grid at large is a game-changer for the industry. Currently, when individuals or companies need back-up power, they usually rely on generators. Effective battery storage for large amounts of energy would be a game changer in that it would enable a separation of generation and use of energy produced through clean fuels like solar and wind power.
Is Tesla Changing The Dynamics Of Global Energy? Read More »
