Clipmarks | JICWyllie's 'i-peak oil' clips

Oil falls futher ahead of inventories data

Wed, 30 Jul 2008 18:53:49 GMT

clipped by: JICWyllie

Oil prices continued their three-week slide on Wednesday as traders waited for weekly US oil stocks data, released later in the session, to give the market firmer direction.

Analysts expect US crude stocks to fall this week, while they predict gasoline and distillate inventories to rise. Any numbers sharply below or above the consensus forecasts could prompt a sharp move in energy prices.

Oil prices have fallen more than 17 per cent since their peak above $147 a barrel on July 11. Fears that global demand is slowing have dominated since then, though analysts were divided on where oil prices would go from here.

Tags: energy, oil, i-prices, i-decrease, i-reported

The Law of Diminishing Returns

Thu, 17 Jul 2008 12:14:11 GMT

clipped by: JICWyllie

Clip Source: www.theoildrum.com

Economists seem to have trouble understanding geological and technical limits to oil production, but they should understand the law of diminishing returns (Wikipedia):

Until the mid 1980s, discovery of new oil fields exceeded our consumption rate, so there was little need to increase recovery from existing fields. As the discovery rate declined, companies had greater motivation to extract more from their existing fields. While at first they found easy gains, in the last decade especially the amount of effort required has climbed and yet the returns are falling: is it any surprise that oil industry inflation is rampant?

Discovery of new fields has tapered off to low levels and the easy pickings for increased recovery have already been had. Unconventional oil sources will yield similarly small returns for extraordinary amounts of effort. The numbers simply do not stack up for oil production continuing to expand for another decade against the decline in large mature conventional oil

Tags: energy, oil, i-peak oil, i-extraction

Ailing sentiment hits dollar and global stocks

Tue, 15 Jul 2008 13:19:44 GMT

clipped by: JICWyllie

Clip Source: www.ft.com

Global equities fell sharply and the dollar sank on Tuesday after US government plans to rescue ailing mortgage groups Freddie Mac and Fannie Mae left investors unconvinced.

The dollar declined to a new record low against the euro boosted oil prices close to recent highs, while hopes of finding havens lifted gold to a four-month peak, and bond yields fell as investors piled into the safety of government paper.

”The impact of Sunday’s announcement by the Federal Reserve regarding its mortgage bail out plan for Fannie Mae & Freddie Mac remains somewhat derided in the market,” said James Hughes at CMC Markets. ”It has apparently done little more than underline the perilous state of the US economy.”

Asian equity markets were battered as banking stocks tumbled across the region. India’s Sensex fell more than 4 per cent as ICICI Bank slid 8.5 per cent. Hong Kong’s Hang Seng index lost 3.8 per cent, with ICBC and China Construction Bank both down more than 4 per cent.

Tags: economy, financial markets, i-losses, i-increase, i-accelleration

Status and Curiosity - On the Origins of Oil Addiction

Tue, 08 Jul 2008 15:08:12 GMT

clipped by: JICWyllie

Clip Source: www.theoildrum.com

Over the 16 year study, all age groups tested did acquire some/many of the things they originally desired. But in each case, their desires increased more than their acquisitions. This phenomenon is termed the "Hedonic Treadmill".

Modern brain research indicates that we get a higher buzz by pursuing the type of 'status' symbols (in this study, cars) that society attaches value to. In my opinion, this behavior is at the heart of the Peak Oil problem, and gives me less confidence that we are just going to 'tighten our belts' when the energy situation gets a little tougher and more expensive.

If the rush is tied to something that society rewards we call it ambition, if its attached to something a little scary, then we label the individual a ‘risktaker’ and if its tied to something illegal – then they are an ‘addict’ or substance abuser.

The rich wanted 'more' because they were habituated to getting more - it's how they kept score.

few will believe until events force them too.

Tags: energy, oil, i-addiction, i-demand, i-risks

Fuel tax reduction: choosing the maximum pain route

Wed, 28 May 2008 16:04:14 GMT

clipped by: JICWyllie

Clip Source: www.theoildrum.com

The European Union should consider capping sales taxes on fuel products if oil prices rise further, French President Nicolas Sarkozy said on Tuesday, seeking to allay consumer fears about spiralling costs.

Ah, lower taxes on oil are sure going to help solve that "growing demand, stagnant supply" situation, right?

I must admit that I am even more amazed at our politicians now that they are making the right descriptions of the energy market (saying, quite correctly, that oil is no longer cheap nor plentiful) - their lack of action when that diagnosis was absent was at least consistent, if irresponsible. Now, the contradictions are just stunning.

Given that voters seem to only care about how much their next gas tank will cost, and can't or won't grasp the consequences of short term fixes, it may be rational for politicians to pander to such denial.

One way or another, it's not going to last. But we're choosing the maximum pain route.

Tags: energy, oil, i-policy, i-risks, i-peak oil, i-denial

Oil Reserves: Where Ghawar goes, the rest of OPEC follows

Tue, 27 May 2008 15:48:08 GMT

clipped by: JICWyllie

Clip Source: www.netvibes.com

Claimed OPEC reserves are overstated by approximately 340 Gb. They are, with a high degree of certainty, rather much closer to 570 billion barrels than the 904 claimed. Combining this with the Oil and Gas Journal's non-OPEC conventional oil reserves estimate of 280 Gb⁹, yields a global reserves base of 846 billion barrels, well short of the 1140 level assumed.

The implications of this circa 340 billion barrel reserves shortfall for global forecasts of petroleum supply cannot be overstated. With cumulative consumption at 1180 Gb¹⁰ and reserves of less than 850 Gb, we have consumed well over half our conventional oil reserves base.

With those kinds of numbers, peak oil cannot be far away, and exploration and 'reserves growth' will not be enough to get us out of the woods.

Tags: energy, oil, i-reserves, i-depletion

After 'peak oil', world now faces 'peak water'

Tue, 27 May 2008 15:32:21 GMT

clipped by: JICWyllie

Clip Source: www.euractiv.com

The challenge posed by current high oil prices is nothing compared to what lies ahead amid dwindling supply and growing demand for a far more basic commodity - water, warns a Massachusetts Institute of Technology (MIT) professor.

Slaughter argues that as awareness of the vulnerability of water systems increases together with concerns over climate change, "public utilities are discussing how to restructure water rates to better reflect true costs without causing public harm". Meanwhile, the price of water is increasing.

The solution to the looming water crisis could, according to her, be provided by innovative companies who seize water as "the next opportunity for smart innovation". She cited a particular ultraviolet treatment technology already being used to deliver clean drinking water to various communities.

As for the EU, water crept up the bloc's political agenda last summer following the serious drought that swept across Europe.

Tags: environment, fresh water, i-supply, i-decrease, i-forecast

Is the world about to be running on empty?

Fri, 23 May 2008 21:55:57 GMT

clipped by: JICWyllie

Clip Source: www.independent.co.uk

In France, fishermen are blockading oil refineries. In Britain, lorry drivers are planning a day of action. In the US, the car maker Ford is to cut production of gas-guzzling sports utility vehicles and airlines are jacking up ticket prices. Global concerns about fuel prices are reaching fever pitch and the world's leading energy monitor has issued a disturbing downward revision of the oil industry's ability to keep pace with soaring demand.

As evidence emerges of dwindling oil reserves, the price of crude hits $135 a barrel

Tags: energy, oil, i-peak oil, i-reported

Running on empty? Fears over oil supply move into the mainstream

Wed, 21 May 2008 14:03:22 GMT

clipped by: JICWyllie
clipper's remarks: This is the Financial Times!

Clip Source: www.ft.com

But with the oil price at a record $126 a barrel, more than 1,000 per cent higher than a decade ago, fears of the end of the hydrocarbon age have seeped into the mainstream

So are the peak oilists right? A series of recent events certainly appears to lend credence to those who argue that the world’s ageing oilfields are being sucked dry amid China’s and India’s determination to lift themselves out of poverty and the west’s reluctance to give up the luxuries of modern oil-dependent life.

The fact that Russia’s oil production declined almost half a percentage point in April, the first drop in a decade, was shocking enough news from the world’s second biggest oil producer, whose output was growing at a rate of 12 per cent just five years ago.

Just days later Saudi Arabia, the world’s biggest oil producer and by far the largest exporter, confirmed it had put on hold plans to increase the kingdom’s production capacity.

Tags: energy, oil, i-peak oil, i-supply, i-risks, i-increase

Shortage fears push oil futures near $140

Wed, 21 May 2008 13:53:54 GMT

clipped by: JICWyllie

Clip Source: www.ft.com

Fears of a shortage within five years propelled long-term oil futures prices to almost $140 a barrel, further stoking inflationary pressures in the global economy.

The spot price of Nymex West Texas Intermediate hit a record $130.30 a barrel on Wednesday. On Tuesday investors had rushed to buy oil futures contracts as far forward as December 2016, pushing their prices as high as $139.50 a barrel, up more than $9.50 on the day.

EDITOR’S CHOICE

Lex: Cost inflation in E&P - May-21

Video: Carola Hoyos on US oil dependency - May-21

The Short View: Commodity speculation - May-20

In depth: Oil - Apr-29

Editorial comment: The $130 oil conundrum - May-20

Analysis: Running on empty? - May-19

Veteran traders said they had never seen such a jump and said investors were increasingly betting that oil production would soon peak because of geopolitical and geological constraints.

“Peak oil views – regardless of whether right or wrong – are seeping into the market and supporting high prices.”

Tags: energy, oil, i-peak oil, i-prices, i-increase, i-record

Oil price surges as Bush visits Saudi

Fri, 16 May 2008 18:06:26 GMT

clipped by: JICWyllie

Clip Source: www.ft.com

Crude oil prices on Friday hit a fresh record high of almost $128 a barrel boosted by a bullish forecast from Goldman Sachs and as US President George W. Bush asked Saudi Arabia, the world’s largest oil producer, for help to lower skyrocketing energy prices.

The surge in prices came after Goldman Sachs forecasted West Texas Intermediate crude to average $141 a barrel in the second half of 2008, up from a previous projection of $107 a barrel, it said in a report. Goldman also forecasts prices will rise further next year to average $148.

Nymex June West Texas Intermediate jumped to an intraday record of $127.82 a barrel. It later traded $3.46 higher to $127.58 a barrel. ICE June Brent surged to an intraday high of $125.85 a barrel.

Tags: energy, oil, i-peak oil, i-supply, i-risks

The End of OPEC

Sun, 11 May 2008 19:00:41 GMT

clipped by: JICWyllie
clipper's remarks: Original thinking.

Clip Source: seekingalpha.com

In a Peak Oil world, OPEC, by definition, will not be able to contain the rise in the price of oil; they simply will not have the reserves to do so. Since we are either at or very near Peak Oil, OPEC is now or soon will be quite powerless.

Why will OPEC end? Well, clearly once they are known to have no power they will have no reason to exist.

they are increasingly being blamed for the rise in oil prices that is starting to become a serious problem for the global economy

They no longer benefit economically from OPEC because it is not OPEC that is keeping their oil price high. No economic benefit AND becoming the object of global blame? It is not in their self-interest. I predict that OPEC will soon disband. I define “soon” as within the next three years.

Tags: energym oil, i-peak oil, i-prices, i-policy, i-failure, i-forecast

The peak oil crisis: the half-life for air travel

Fri, 02 May 2008 16:40:22 GMT

clipped by: JICWyllie

Clip Source: www.energybulletin.net

In 2000, the airlines fuel bill was $14 billion. It is now pushing $60 billion and climbing. Southwest, the most profitable carrier, recently announced that this year’s fuel bill will be $500 million more than last year and equal to 2007 profits. During the first quarter of 2008 American airlines lost $328 million; Delta lost $274 million; United lost $537 million; Continental $80 million; Northwest $191 million; and US Airways $236 million. Only Southwest Airlines, which did a better job of hedging its fuel than the others, made a profit.

It is clear we are going to see major changes in air travel shortly.

After the summer flying season ends next September, many airlines are planning to retire 5-10 percent of their least efficient aircraft, thereby reducing their flight schedules by a similar amount.

Knowledgeable observers are expressing doubts these moves will be enough.

There is still a remarkable amount of denial in the airline business.

Tags: energy, oil, i-demand, i-decrease, i-forecast

The Politics of Food is Politics

Sat, 26 Apr 2008 10:52:27 GMT

clipped by: JICWyllie
clipper's remarks: Worth reading the whole article.

Clip Source: www.counterpunch.org

we are seeing the outlines of "an historic opportunity to change the terms of theory and practice for a politics of resistance." In a real sense, however, we are suggesting a return to a perennial politics of resistance: the defense of "peasant" (smallholder, local) agriculture against imperial profit-takers.

material "contractions" in the economy have transformed the "reserve army of labor" into "surplus people"... a darwinian nightmare leaving us nearly 7 billion souls at extreme risk.

F. H. King's Farmers of Forty Centuries documents practices which permitted Asian peasant farmers to plant and harvest on the same land for 4 millennia without exhausting the soil; North American topsoil 21 inches deep or more prior to European colonization is now down to 6 inches or less in many areas after only 200 years.

So one pound of worms can sustain 12 square surface-feet of garden throughout the year for the highest levels of productivity.

Tags: politics, food, i-peak oil, economy, i-capitalism, i-crisis, i-starvation, i-resistance, i-gardening

The First Oil Shortages

Thu, 17 Apr 2008 10:41:56 GMT

clipped by: JICWyllie

Clip Source: www.thetrumpet.com

Russia is the world’s second-largest oil exporter. But something ominous is occurring in the land of the bear. Russia’s oil production has fallen for three months in a row, and Russia is now pumping less than it was last year.

If its production is stalling, this could be the beginning of a way-of-life changer for America.

if there is a supply crunch on the horizon, America is in serious trouble. According to some estimates, 85 percent of global oil supplies are found in countries not especially friendly to the United States.

54 of the top 65 oil-producing countries have declining production rates. Make that 55 counting Russia.

Tags: energy, oil, i-peak oil, i-supply, i-decline