For months, pundits have focused on rising production, mostly from US shales, sluggish demand, primarily from European stagnation and disappointing Chinese activity, aided by conspiratorial Saudi/OPEC intentions. And there is no doubt that some of this is true…last year, today, and probably over the near term. The underlying oil (physical) picture stands, roughly, at 91 …
Still Trial and Error! Unconventional resource leaders believe that traditional petroleum geophysics, developed over 150 years, needs a makeover to most effectively exploit shale/tight reservoirs. The behavior of hydrocarbons in extremely low porosity rock may require an understanding of hydrocarbon, water, and rock surface behavior at a near atomic level – much like the difference …
Light at the End of a L-O-O-N-G Tunnel??? Cold weather aside, the multi-year outlook for US natural gas supply looks fairly glutted, leading to a “BTU Bargain” as far as the eye can see. Even off the bottom, the 2015-2020 futures trade, between $4-4.50 per million BTUs – about a quarter of energy parity with …
Investors and operators are flocking to the region in search of cheap feedstock for refining, chemicals, and energy intensive industrial opportunities. While it is difficult to imagine shortages and delays in such an infrastructure-rich region (Keystone XL excepted!), front end projects are already falling victim to sticker shock (permitting another matter!). It’s been 25 …
New Solutions for US Stranded Gas? There is increasing entrepreneurial effort to monetize stranded/low value gas in North America’s oil/liquids-based basins, as well as highly mature gas wells. A range of startups, including ‘micro-refineries,’ mini-LNG, low cost micro-turbines, and lower cost compression (with higher liquids capability) are all aiming at the same opportunity. A major …
Oil Markets and Geopolitics – “It’s Complicated” During late 2011, analysts (and experts!) were cutting their oil price and demand forecasts. Less than 60 days into the new year, they’re only partly right (or already partly wrong). Demand is, arguably, even more concerning than expected, with Spain/Portugal consumption lower by high single digits, and US …
Mid Term Elections Rarely are US political events very important within the Energy Geopolitik, but this week’s mid-term elections have clear implications for several energy matters. With the Republican takeover of the US House of Representatives, several evolving trends are under attack 1) National ‘frac-regulation’ is probably dead. Unless groundwater or other damage …
While the US struggles to pass an “Act,” the Free Market moves ahead With all the talk about shovel ready/other job creating infrastructure investment, the noise around the proposed Natural Gas Act continues at a high pitch. Infighting among/between energy producers and consumers threatens any “act”-ion at all. Opponents include Koch Industries (refiner), the …
Transportation – Inter-Concept Competition Coming? US gasoline prices have retreated from early May highs (see above), but are likely to move with underlying crude as the next spike unfolds. Meanwhile, auto, truck, and engine manufacturers rush to develop battery and natural gas-based transport options, as the US oil/gas ratio continues well over 20x (versus historical …
Capital Spending is Back! More Domestic Winners from the US Shale Gas Boom – “Downstream” Capital Spending is Back Low natural gas liquids prices, due in part to the shale boom, have turned North America into one of the lowest cost suppliers of chemicals, worldwide. Robust earnings results from Dow, Lyondell Basell, and …