Devaluation is now the preferred tool to reinvigorate slowing economy. On a traded-weighted basis, the US dollar is at its highest level in over a decade. Resource-based countries have seen their currencies tumble by as much as 25% and manufacturing-based economies as much as 20% in the last 12 months. The Japanese yen, the Russian ruble, the Brazilian real, the Chinese yuan and other Asian emerging economies have all adopted a policy of allowing their currency to float downwards, principally to stimulate exports. There is a race to the bottom as nations no longer can rely on monetary policy to…
Canada's Supreme Court ruled on Friday that a group of Ecuadorian villagers can proceed with their US$9.5 billion pollution lawsuit against Chevron Corp. (NYSE:CVX) in the Canadian province of Ontario. The court found simple reasons to let the suit be pursued in Canada, noting that the original lawsuit, a claim for environmental damages in the Amazon jungle, was properly brought in Ecuador. However, it also found the Ecuadoran plaintiffs had every right to bring the claim against Chevron, since it was able to serve notice of the enforcement claim at the company’s office in Ontario. The main issue the court…
EIA begins monthly survey-based reporting of U.S. crude oil production With the release of today’s Petroleum Supply Monthly, EIA is incorporating the first survey-based reporting of monthly U.S. crude oil production statistics. Today’s Petroleum Supply Monthly includes estimates for June 2015 crude oil production using new survey data for 13 states and the federal Gulf of Mexico, and revises figures previously reported for January through May 2015. From the EIA’s Monthly Crude Oil and Natural Gas Production webpage. Beginning with the June 2015 data, EIA is providing estimates for crude oil production (including lease condensate) based on data from the…
Remember when the oil crash was supposed to be "unequivocally good" for the global economy and the US consumer, only for this to be disproven as the biggest macroeconomic lie since "QE is good for the people"? We do - quite vividly - which is why in December of last year we presented "150 Billion Reasons Why Low Oil Prices Are Not Good For The Global Economy" and countless other articles subsequently explaining why the great oil collapse of 2014 (and 2015) is actually "unambiguously bad." It took the so-called experts the usual 6-8 months to catch up, and admit…
The characteristic feeling of the post-2008 world has been one of anxiety. Occasionally, that anxiety breaks out into fear as it did in the last two weeks when stock markets around the world swooned and middle class and wealthy investors had a sudden visitation from Pan, the god from whose name we get the word "panic." Pan's appearance is yet another reminder that the relative stability of the globe from the end of World War II right up until 2008 is over. We are in uncharted waters. Here is the crux of the matter as expressed in a piece which…
The main action this month has been on the oil price that continued to slide. Both WTI and Brent set new post-crisis lows but saw sharp reversals on 27th and 28th August last week. This is a story still unfolding that is discussed in greater detail in the caption to Figure 1 (below). Global oil production data remains in its up trend although there are signs from the regions that this may be slowing and reversing. Monthly data revisions continue to obscure the real picture. 1. World total liquids production down 580,000 bpd to 96.57 Mbpd.2. OPEC production down 20,000…
Russian President Vladimir Putin with his Chinese counterpart, Xi Jinping China will host a huge military parade in Beijing on September 3, and President Vladimir Putin will be in attendance—returning President Xi Jinping’s earlier gesture of Sino-Russian partnership, which the Chinese head of state expressed as the top guest of honor at the parade in Moscow on May 9. Yet, this past year’s pompous Red Square celebrations of the Soviet victory in World War II only illuminated Russia’s sad international isolation today. And the carefully planned ceremony in Beijing comes as China experiences its own unexpected and potentially severe turmoil.…
The EIA’s Monthly Energy Review came out a couple of days ago. The data is in thousand barrels per day and the last data point is July 2015. US consumption of total liquids, or as the EIA calls it, petroleum products supplied, reached 20,000,000 barrels per day for the first time since February of 2008. Related: OPEC Divorce And Self-Destruction Thanks To Saudi Oil Strategy? Something I never noticed before, consumption started to drop in January 2008, seven months before the price, along with world production, started to drop in August 2008. This had to be a price driven decline. Could…
The semi-autonomous Kurdistan Regional Government (KRG) says that increased oil sales will allow it to begin making regular monthly payments to the oil companies that export crude from the region in northern Iraq. The KRG’s Ministry of Natural Resources in Erbil said in a statement on Aug. 27 that between $75 million and $100 million of the revenue from its direct crude oil sales would be set aside for payments to international oil companies, which are referred to as IOCs. They include Oslo-based DNO and Genel Energy, with headquarters in London. “Regular payments will allow the exporting companies to cover…
When the price of a commodity falls, there are two ways for companies to react: Either cut costs and even sell assets to improve cash flow, or to invest – if you can afford to.The past week saw examples of both approaches. On Aug. 26, Schlumberger Ltd., the world’s largest oilfield services company, said it will spend about $12 billion to buy Cameron International Corp., a leader in making oilfield equipment. The deal is intended to streamline Schlumberger’s operations and attract customers by bundling service and equipment fees at lower prices.The next day, Total, France’s oil and gas giant, took…
