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Can The Oil Industry Really Handle This Much Debt?
Can The Oil Industry Really Handle This Much Debt? As the crude industry has been wrestling with low oil prices that declined by over 50 percent since its highest close at $107 a barrel in 2014, many exploration and production companies worldwide and in the U.S., in particular, have faced large shortfalls in revenue and […]
Macroeconomic Instability For Emerging Markets Thanks To Commodity Bust
Macroeconomic Instability For Emerging Markets Thanks To Commodity Bust The bust in commodity prices is sending ripples through the world of emerging markets. Countries depending on resource extraction and exports of commodities have run into a brick wall this year the prices collapsed for all sorts of materials – oil, gas, coal, gold, copper, and […]
Oil and the Global Economy
Oil and the Global Economy How important is oil to the future of the global economy? The remarkable economic expansion of in the United States and other industrial nations over the past century or more has been fueled by a steadily growing supply of low-cost energy—mostly from fossil fuels—oil in particular which accounts for more global energy […]
Another petro-state throws in the towel – the last nail in the petrodollar coffin
Another petro-state throws in the towel – the last nail in the petrodollar coffin Source: Norwegian Ministry of Finance, Bawerk.net According to the proposed budget submitted by the current ‘blue-blue’ government the Norwegian deficit will reach another record high in 2016. Mainland taxes are expected to bring in 1,008 billion NOKs, while expenditures are estimated […]
How Big an Oil Glut is There Really?
How Big an Oil Glut is There Really? Revisiting Crude Oil Beginning in late August we have frequently discussed the possibility that a significant low in crude oil prices could be imminent in spite of the “obvious” lousy fundamentals. As blind luck would have it, the first of these articles (entitled “Is Crude Oil Close to a Low?”) was […]
With a Collapse in Commodity Prices, What Happens Next?
With a Collapse in Commodity Prices, What Happens Next? This has to be a scary time for virtually all commodities investors, whether one is talking about investing in commodities directly or in commodities companies. From oil to aluminum, nearly all commodities are not just trading near multi-year lows, but multi-decade lows. Bloomberg recently noted that commodities are […]
Newfoundland’s oil ripple effect: As prices fall, commuting workers stay home
Newfoundland’s oil ripple effect: As prices fall, commuting workers stay home The big paycheques from Alberta are drying up, and with them the economic good times It was a tell-tale sign when East Coast Catering of St. John’s laid off 44 workers in September. The company supplies meals and housekeeping services to Newfoundland’s offshore oil rigs, two […]
Too Many Wildcards For Oil Markets To Settle Yet
Too Many Wildcards For Oil Markets To Settle Yet Could the price of oil be a value such that the current quantity produced exceeds the current quantity consumed? The answer is yes, and indeed that has been the case for much of the past year. Suppose, for illustration, that even at a price of $40, […]
US shale oil too expensive, peaks 1H 2015
US shale oil too expensive, peaks 1H 2015 According to EIA data, monthly US crude oil production peaked in April 2015 at 9.6 mb/d. Fig 1: US crude oil production to June 2015 http://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbblpd_m.htm The above graph shows that US crude production increased by around 4 mb/d between mid 2011 and mid 2015, mostly from […]
Low Oil Prices – Why Worry?
Low Oil Prices – Why Worry? Most people believe that low oil prices are good for the United States, since the discretionary income of consumers will rise. There is the added benefit that Peak Oil must be far off in the distance, since “Peak Oilers” talked about high oil prices. Thus, low oil prices are viewed […]
Will declines in U.S. and Canadian oil production lead to a global decline?
Will declines in U.S. and Canadian oil production lead to a global decline? At the beginning of this year I noted that all of the growth in world oil production* since 2005 has come from two countries: the United States and Canada. And, I suggested that since the growth in production in those two countries came […]
Oil Majors Sacrifice Production To Protect Dividends
Oil Majors Sacrifice Production To Protect Dividends The French oil company Total released a downward revision to its production forecast, lowering its target from 2.8 million barrels per day (mb/d) in 2017, to 2.6 mb/d, a sign that low oil prices continue to cut into long-term oil production for even the largest companies. Total’s CEO said part […]
Is cheaper driving here to stay?
Is cheaper driving here to stay? Gasoline may stay cheap until we burn through the current market glut in perhaps a year. We are now seeing declining growth and a deflationary economic contraction globally. In fact, the current $40-plus a barrel oil price is by itself good proof of that. The global collapse in the […]
Peak Oil Has More To Do With Oil Prices Than You May Think
Peak Oil Has More To Do With Oil Prices Than You May Think The Origins of Peak Oil Awareness The scientific study of peak oil began in the 1950′s, when Shell geophysicist M. King Hubbert reported on the evolution of production rates in oil and gas fields. In a 1956 paper Hubbert suggested that oil […]
When good loans go bad among junior energy companies
When good loans go bad among junior energy companies The energy sector is facing a season of pain as its loans are renegotiated. This is shaping up to be a deeply unpleasant autumn for junior energy companies and the banks that lent them hundreds of millions of dollars. “Everyone got hall passes until the fall, but the principal […]
