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Energy / Oil Prices

  • Who Benefits Most From Cheap Oil?

    We are living in a world obsessed with oil and its price movements. Some time back, when all the trade pundits were predicting a stable 100$ benchmark, the prices fell… and how! The current fall in the oil price has been particularly harsh and excruciating for some of the prominent players such as Russia and Venezuela. To add fuel to the fire, on March 16, 2015, the oil price plummeted to a 6-year low level of 42.98 dollar per barrel. With the possible addition of Iranian oil to the global oil supply, the refusal of OPEC to cut down its…

  • Oil Markets Blow Yemen Crisis Out Of Proportion

    Saudi Arabia launched airstrikes in Yemen, causing oil prices to jump on fears over Middle East instability. The markets clearly reacted with concern over the rising violence in the Arabian Peninsula, which pits Saudi Arabia against Iran in a proxy war. Saudi Arabia is targeting Shia rebels seeking to topple the Saudi-backed Yemeni government. Reuters reports that Saudi bombs targeted an airport and airbase held by the Houthis, which seized Yemen’s capital of Sanaa last September. “We will do whatever it takes in order to protect the legitimate government of Yemen from falling,” Adel al-Jubeir, the Saudi ambassador to the…

  • Forget Rig Counts And OPEC, Media Bias Is Driving Oil Down

    We are in an age of propaganda where most people argue viewpoints not based on facts but on selective perception basis. They cherry pick what supports their argument then ignore the rest to make their case. Facts are no longer weighed objectively and in some cases ignored altogether. This has been going on for years as the “talking heads” come on TV and talk about various things and positions they own attempting to sway others to buy or sell based on a TV appearance. Well what has occurred the last 6 months when the steep decline in oil occurred went…

  • Energy In Nigeria: Ghosts Of The Past, Present And Future

    If electricity and the management of power sector reforms are key to Nigeria’s economic future, crude oil/gas – and the mismanagement thereof – is at the heart of its current mess. And the decline in oil prices since 2014 constrains Nigeria’s abilities to maneuver at a time when it needs maximum flexibility. Whoever wins the next election, will have to face the ghosts of Nigeria’s energy past, to set the country towards a brighter future. Add to this a volatile security situation, and the next President will face a challenging time. What happens in Nigeria will reverberate across West Africa.…

  • T. Boone Pickens Points The Finger At U.S Shale

    So what do you do when you believe devoutly in hydraulic fracking but also understand that too much fracking is responsible for an oil glut that’s hammering the price of oil like a pile-driver? If you’re legendary Texas oil billionaire T. Boone Pickens, you call for a time out. But you don’t cloak that call trying to make excuses for the controversial oil-extraction process, which injects water and chemicals into underground rock to free fossil fuels trapped within. You simply stick to the financial facts of the case. That’s why Pickens was speaking so positively about fracking on March 23…

  • Low Oil Prices Stimulate Chinese Growth, Prevent Global Recession

    Two of the factors in the oil price crash are well constrained: 1) oversupply of expensive light tight oil (LTO) in North America and 2) the decision of OPEC to not cut production. The third possible factor of weak global demand is not so easy to constrain but the current oil price crash bears many of the same hallmarks as the 2008 finance crash. This has led to speculation that weak global demand, stemming from masked economic woes, may also be playing a key role. Below is a collection of 10 charts collected from various internet sources that tell a…

  • Norway Investing Oil Wealth In Foreign Real Estate

    Norway is stuck between a rock and a hard place. Last week, the Norges Bank defied market expectations by leaving rates unchanged citing an overheating housing market. Here’s the statement: "The key policy rate was reduced in December to counter the risk of a pronounced downturn in the Norwegian economy on account of lower oil prices. So far, the effects on the real economy have been relatively small, and house prices are still rising at a fast pace. The key policy rate has therefore been left unchanged", says Governor Øystein Olsen. ...and a bit more from the bank… Banks have…

  • Three Triggers That Will Send Oil Crashing Again

    Oil prices bounced back on March 24 on a sliding U.S. Dollar, but the pain may not be over yet. Oil storage capacity continues to deplete. Storage levels at Cushing, Oklahoma, home to the crucial WTI benchmark, are at record levels. As of March 13, Cushing oil inventories hit 54.4 million barrels, the highest ever, according to the Energy Information Administration. That means that Cushing’s storage is now 77 percent full, up from just 27 percent in October 2014. The glut of oil has led to a flood of crude being diverted into storage tanks. As storage nears capacity, it…

  • Low Prices Help Arctic Avoid A ‘Gold Rush’ Scenario

    The plunging price of oil over the past nine months has forced many if not most energy companies to cut back drastically on spending, especially on projects in Arctic waters, where exploration and drilling are more difficult and expensive. But the Norwegian government says such delays could pay off in the long run. The list of companies paring back their plans is long, and exploration in the Arctic Ocean north of Western Europe will decline by half in 2015. One company is Lundin Petroleum of Sweden, which cites the plunge in oil prices for its plans to drill no more…

  • Oil Price Speed Limit Presaging An Age Of Austerity?

    It is a staple of oil industry apologists to say that the recent swift decline in the price of oil is indicative of long-term abundance. This kind of logic is leading American car buyers to turn once again to less fuel efficient automobiles--trading efficiency for size essentially--as short-term developments are extrapolated far into the future. The success of such argumentation depends on a disability in the audience reading it. The audience must have amnesia about the dramatic developments in the oil markets in the last 15 years which saw prices reach all-times highs in 2008 and then after recovering from…