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Tag Archives: oil price
This week’s lead story features Germany’ faltering Energiewende. We continue with OPEC, Iran, Venezuela, more US oil & gas jobs, Rex Tillerson on Paris and subsidies, Norway to increase oil production, Bradwell approval process begins, clean coal in the US, wind in Austria, hydrogen in Australia, nuclear waste in Spain, Fluor’s small nuclear reactor, EC approves Areva restructuring, UAE to go big on renewables, clean energy funding decreases in 2016, Chernobyl goes solar, solar-powered trains in UK, Swansea Bay tidal recommended for go-ahead, National Grid escapes a breakup and what happens when you crash an F-4 Phantom jet into a reinforced concrete wall. Continue reading
Global total liquids production hit yet another record high of 98.24 Mbpd in November led by OPEC and Russia! Libya’s drive to restore production is a significant factor with production up 280,000 bpd from recent lows. The US oil rig count has risen for 32 consecutive weeks and US oil production has stopped falling. Production from the North Sea and Asia are in decline as the past low price and drive to restore profitability works through the system. Continue reading
The signatories to the the Paris Climate Agreement, who include just about every country in the world, agree that the world must cut its fossil fuel emissions drastically if global climate catastrophe is to be avoided. Yet according to Exxon’s just-released Energy Outlook (the IEA and EIA outlooks are similar) the world will be burning more fossil fuels in 2040 than it is now. Does this mean that the world is doomed? Or is somebody missing something?
We continue with stories on the fallout from OPEC’s production cut, followed by nuclear in the US, France, Sweden and China, coal in China and Australia, renewables in China, Europe, and Germany, recent events in UK, roads that recharge EVs in Israel, 2016 ties 1998 for the warmest year on record in the lower troposphere and India solves the carbon capture and storage problem.
Every year around this time I make an oil price “forecast” for fun and have a bet with a friend. A year ago my BAU scenario for Brent was $37 for December 2016. The current front month is $55.80. My friend wagered on $64 leaving $50.50 as the break-even point. It is time to concede defeat and examine why I did so badly?
To cut to the quick, my wag for December 2017 is $60 but we may see $80 some time during the year. Light tight oil (LTO) production has disturbed the historic price-supply dynamic adding uncertainty to predictions. Continue reading
This week it’s back to OPEC, which recently agreed to cut its output by 1.2 million bpd in an attempt to increase oil prices supplemented by an additional 0.5 million bpd from Russia + other non-OPEC producers. What does this portend for the oil market? Industry opinion is unanimous. No one knows: Continue reading
In October, global total liquids production hit a new record high of 97.84 Mbpd led by OPEC and Russia! This was caused largely by the scramble to boost production ahead of production cuts with a datum on October 2016. The US rig count continues to rise and US production has stopped falling. The rest of the oil production world outside of OPEC, N America and Russia continues to suffer under the weight of low oil price. Continue reading
There are two major stories this week. First, the agreement within OPEC to cut production in concert with some non-OPEC countries, notably Russia sent the oil price soaring, but it has so far failed to break resistance at $54. Second, 50% of the 2 GW England-France inter-connector was severed by a dragged anchor during storm Angus. Continue reading
The post-November 2015 production decline was accentuated by the Fort McMurray wild fire in Canada in May 2016. But overprinting all this is Iran coming back to full production with a YOY rise of 760,000 bpd combined with large rises in Saudi and Russian production.
The oil price is pressing on its $51 / bbl resistance. With OPEC spare capacity approaching lows and global production fast approaching balance, we can look forward to a rally in the oil price towards $65 / bbl (perhaps higher) some time in 2017. Continue reading
Asking what it costs to produce a barrel of oil is rather like asking how long is a piece of string? The answer can be anything you want between $1 and $500. But of course the cost of producing oil in an ideal world should be well below the price of oil, leaving room for taxes and profits. The global oil market sets the price and producers need to adjust and adapt their strategies to maintain costs below prevailing prices from time to time. That is the theory at least. Continue reading
Global total liquids bounced by +600,000 bpd in June as Canada partially recovered from the Fort McMurray wild fire and Saudi Arabia flexed its muscles raising production by 200,000 bpd compared with May.
Not surprisingly the oil price has wilted to the vicinity of $43 / bbl. But Bull and Bear forces are beginning to equilibrate. Continue reading
The big news in May’s production figures is Canada down 620,000 bpd in the wake of the Fort McMurray wild fire, Nigeria down 250,000 bpd in the wake of civil unrest on the Niger Delta and Libya down 80,000 bpd as that country disintegrates in the wake of western intervention in its civil war.
Global total liquids production was down 760,000 bpd in May and while the oil price was perky, getting above $50 in early June, it has not really responded to any of those events. Continue reading
Most regions experienced production losses in March with the exceptions of Iran (+80,000 bpd) and Europe (+90,000 bpd compared with a year ago). Total liquids were down -260,000 bpd for a loss of -990,000 bpd since the peak last July. The oil price rally has continued with WTI on $44 as I write. While many signs point to the worst of the rout being over it remains premature to declare that it is over.
Drilling continues to decline across the board with US oil+gas rigs = 420, this is the lowest level of US drilling for over 20 years. Two strongly opposing forces control the near and medium term destiny of the oil market. The collapse in drilling must surely lead to an acceleration of production decline near term. Offset by the ever present risk of shale drillers returning to action on the back of a continued price rally. Continue reading
Since the possible double bottom at $26 formed on February 11th the oil price has staged a rally to $40 (WTI). Traders lucky enough to buy at $26 and sell at $40 have pocketed a tidy 54% profit. Very few will have been this lucky. The trade was stimulated by news that Saudi Arabia and Russia had agreed to not increase production this year which is hollow news since neither country could significantly increase production no matter how hard they tried. Profit taking has now driven WTI back towards $37 as of 1 April. Continue reading
OPEC is known to have suffered economic damage as a result of low oil prices, but exactly how much?
GDP, 11 OPEC countries combined: Down from $3,392 billion in 2014 to $2,849 billion in 2015, a decrease of $543 billion.
Budget deficit, 11 OPEC countries combined: Up from $17 billion (0.5% of GDP) in 2014 to $278 billion (9.8% of GDP) in 2015, an increase of $261 billion.
This week’s lead story speculates that climate change killed off all the aliens. It is an award-winner even by climate change standards, but I’m not sure what the award should be. Suggestions are solicited. Below the fold more on OPEC and the Middle East, oil industry job losses, Obama concerned about methane emissions, wind overwhelms Merkel, Hinkley doubts and the Greens want to shut down the North Sea. Continue reading
I have been following the oil price crash since it began in late 2014, providing annual forecast scenarios and monthly vital statistics updates. There has recently been an acceleration in activity and news, and as the oil price has continued its fall to below $30, investors and speculators wrestle with the main question: “how low will the oil price go?” Continue reading
This week’s Blowout features the plight of two of Europe’s major electric power suppliers – RWE and EON – who because of market pricing mechanisms that favor renewable energy over fossil fuel generation are rapidly losing value. What happens if they are driven out of business? Plus Saudi Arabia budgeting for $29 oil in 2016…… Continue reading
The oil just keeps on gushing. All of the main producing regions posted gains in November. As expected, the oil price tested lows on the right shoulder of the head and shoulders pattern and carried on down this month heading for lows last seen in December 2008. Continue reading
In a departure from the normal format I’m kicking off today with a few stories from Germany. Else where there is news of renewables subsidies being cut everywhere, nuclear power expansion everywhere bar Europe, oil price woes, concentrating solar power in Chile, the marijuana harvest straining the US grid and France opts for cheese power over nuclear power. Continue reading