(After a brief hiatus, mostly tied to ‘Macondo-Fatigue,’ we’re back, with more observations on the broad energy scene. I thought I’d open with a review and update of the initial outlook from the first issue, in March. ) My view of oil supply fundamentals is largely unchanged from Issue 1 – a hole in the …
Oil Spill Continues to Dominate the Energy Scene – Commentary I commented in the last issue on some broader implications of the deadly TransOcean Horizon and Massey Mine explosions, including contrast with the first approved offshore wind farm. As a ‘confirming list’ of disturbing shortcuts, poor maintenance, fingerprinting, headlines the escalating environmental tragedy, the …
All Eyes on the Gulf of Mexico, but How about Beyond?? As failure to control the Macondo oil spill passes the six week and, possibly, half million barrel mark, frustration grows, similarly, on many fronts – with the apparent, negligence or very poor judgment which led to the explosion, with the failure of Modern Technology …
The not so slow motion demise of the Euro has major energy implications. Iran has, in the past, sold most of its crude in Euros (still trying to update the current exposure). Thus, not only have they lost 20% of the value of their crude from the mid $80 level, but another 20% …
Other Oil Macro Leading energy agencies and consultants have been raising their 2010-11 demand forecasts, now averaging about 1.6 million b/d growth, versus 1.4 mmb/d earlier this year. And for the first time in awhile, they have NOT been cutting their nonOPEC outlook. However, after a several year hold in new projects, the nonOPEC …
Russia Interesting that in a world of $80+ oil, Iran has added to its fleet of leased tankers, for storage of produced crude. This is consistent with the widening light heavy spreads (reflecting excess supply of lower grade product. There are anecdotes, from multiple sources, which point to buyer reluctance to purchase Iranian crude, along …
President Obama & Offshore Drilling – A “Nixon to China Moment?” Last week, President Obama announced, with some fanfare, a plan to open certain offshore regions (Continental Shelf from Virginia to Florida, a small area in the Eastern GOM, about 100 miles from Florida) to oil/gas exploration, while “ordering further study on others (primarily …
Markets The strength in crude oil, particularly during the first quarter, finally seems to have broken with the macro oil-(weighted basket) currency trade. Even before the Greek/PIGS debt crisis, the correlation was breaking down, possibly with increasing signs of global economic recovery. Perhaps this is in anticipation of the real currency winner against both USD …
Shale Gas – The Revolution is Underway! Lastly, natural gas continues to benefit from headline opportunity. This week’s Economist highlights the global potential for shale gas, which may be in greater abundance and at lower costs than conventional gas or crude oil. Coincidentally, a Barclay’s note predicts that the Marcellus Shale (Pennsylvania/West Virginia/New York) …
Chinese Win Iraqi Project A Chinese consortium had bid $21.40/barrel to rehabilitate and manage a small oilfield in Iraq, near the Iranian border. Due to location, the Iraqi government did not want a Western company to participate. When Iraq told the Chinese bidders that they would not pay more than $2.40/barrel, the consortium hit the …