Energy / Crude Oil

• How Reliable is the IEA’s Oil Market Forecast?

  The famous Danish physicist Niels Bohr once humorously observed, "Predictions are very difficult, especially about the future." And so, as the world considers yet another rosy oil supply forecast, this time from the Paris-based International Energy Agency (IEA), it is worth reviewing the agency's record.Back in the year 2000, the IEA divined that by 2010, liquid fuel production worldwide would reach 95.8 million barrels per day (mbpd). The actual 2010 number was 87.1 mbpd. The agency further forecast an average daily oil price of $28.25 per barrel (adjusted for inflation). The actual average daily price of oil traded on the…

• “Hard sell?” Canada Doubles PR Budget to Promote Tar Sands in U.S.

  Canada is, according to the U.S. Energy Administration, the leading source of United States crude oil imports, which average 9.033 million barrels per day (mbpd), with Canada sending 2.666 mbpd southwards to the U.S. Mexico is second with 1.319 mbpd and Saudi Arabia third with 1.107 mbpd.The EIA notes, “Canada is one of the world's five largest energy producers and is the principal source of U.S. energy imports. … Just as the United States depends on Canada for much of its energy needs, so is Canada profoundly dependent on the United States as an export market.”The EIA continues, “Canada is…

• US: Mexico-TAP and the Dodd Frank Act

  Bottom Line: US Congress is reviewing House and Senate legislation that could see US companies working under the Mexico-TAP exempted from Dodd-Frank Section 1504 SEC disclosures about payments to foreign governments. Analysis: The Dodd Frank Act Section 1504 requires US companies to disclose payments to foreign governments, subnational governments and the federal government. Opponents of the act, which is pretty much everyone making money on government contracts, say it harms the competitiveness of US companies in the face of foreign companies who are not made to stand up to the same scrutiny. Right now, Congress is reviewing legislation concerning the…

• Displacing Oil Costs Less than Oil

  “Innovation is the ability to see change as an opportunity — not a threat.” — Steve JobsAre we running out of oil? Are fuel alternatives overrated? Can fossil fuels become irrelevant? The recent surge in so-called “energy” discussions is astounding. From top news outlets like National Geographic’s “Great Energy Challenge” and The New York Times’ “Wheels” to niche sites like The Energy Collective and Oil Price, proponents have consciously delegated a space to discuss solutions to some of the most important transportation, electricity generation and environmental issues of our time.An article by a contributing editor to The Atlantic, Charles C.…

• Libya Wants to Sell Oil. Is Anyone Listening?

  Libyan Oil Minister Abdel Bari Ali al-Arousi said his country was ready to recover from civil war and take its rightful place as the powerhouse of North African energy producers. In its monthly report for May, OPEC said that Libya's economic recovery, despite lingering violence, was "exceptionally strong" with an 80 percent increase in gross domestic product year-on-year.  Arousi told delegates at last week's offshore energy conference in Houston that his government was looking to bring investors back to a country that boasts more than 40 million barrels of oil reserves. Amid accusations that gunmen are now influencing decisions in…

• North Dakota Oil Boom Set to Continue for Some Time

  Last week the U.S. Geological Survey (USGS) provided an update of oil and gas resources in the Bakken region. This was their first update since a 2008 report that estimated mean undiscovered volumes of 3.65 billion barrels of oil and 1.85 trillion cubic feet of natural gas in the region. The new estimate includes the Three Forks formation which largely lies underneath the Bakken in the Williston Basin that sprawls across North Dakota, South Dakota, Montana, and southern Saskatchewan.The new USGS assessment stated that the Three Forks formation had not been previously assessed, but that an assessment was warranted based…

• A Company that Stands to do Well from the Collapsing WTI-Brent Spread

  Another week away from my usual trading desk in New York does lead to a different and useful perspective on energy events without concentrating on the minute movements on my screens, specifically concerning Hess (HES) and PBF Energy (PBF) – both of which I’ve been thinking about.Here at this small conference on the West coast where I’ve had a chance to talk to a few different voices in the middle of the energy space, there are a few brewing stories that I’ve gotten some interesting and intelligent views – and might even lead to an investment idea.First is an update…

• Oil Market Forecast & Review 10th May 2013

  Late breaking news on Thursday may have signaled the top in July crude oil as traders reacted with aggressive selling pressure. The move was triggered by comments from Fed Bank of Philadelphia President Charles Prosser. Speaking in New York on May 9, Process said he wants the central bank to start reducing the rate at which it buys bonds as soon as the next Federal Open Market Committee meeting in June. He also added that the central bank would be “limited” in capability for more stimulus and the unwinding of the current measures would be harder than expected. This comment…

• Middle East Oil Markets Contracting

  The Iraqi and Libyan governments said they would help Egypt cope with its economic crisis by offering up crude oil exports. The Egyptian government of President Mohamed Morsi is trying to right the economic ship more than two years after the country's revolution. Conflict in Libya and Iraq, meanwhile, has raised questions about their ability to make post-war oil gains. With OPEC members forced to make adjustments to U.S. oil production gains, it may be that retraction isn't just an economic issue anymore.The Egyptian government is trying to secure a $4.8 billion loan from the International Monetary Fund.  The country's…

• Don’t Count your Chickens or your Oil Wells Before they Hatch

  If one is to believe the hype and the optimism going around Lebanon these days, one would think that every Lebanese citizen, or at least those residing in Lebanon, is going to strike the jackpot and join the ranks of the Gulf Arab millionaires once drilling in the newly discovered offshore oil and natural gas fields begins. Among the anecdotes making the rounds of Lebanese coffee houses is one that all Lebanese living abroad will now return to the old country. That would be nice but it would create a terrible shock to the real estate market, already over-priced as it…