Have oil markets had enough of low prices?

EIS fig_es-6 oil production six cases

SOURCE: US EIA There is an interesting convergence in views by the global agencies that track oil supply and demand suggesting that US oil production is finally trending down in two of the biggest onshore tight oil plays at Bakken and Eagle Ford while global oil demand seems to be creeping up. The question is will this leveling off of US oil production growth be enough to bring world oil prices to more sustainable higher levels? US EIA started it in its Annual Energy Outlook forecasting …Continue Reading »

Are we seeing our Energy Future Today in New England?

EIA New England losses generation and neeeds more gas

SOURCE: US EIAMy first energy CEO job was serving as General Manager of a troubled wholesale electric joint action agency in New England. The Massachusetts Municipal Wholesale Electric Company (MMWEC) served the power supply requirements for 28 municipal utilities across New England. It was troubled because its traditional source of power generation fuel had been oil and coal. But oil’s reliability and costs were badly hurt by the Arab oil embargo and the spiking of oil prices. Many New England …Continue Reading »

Why Keystone XL Matters!


In his State of the Union speech President Barack Obama effectively tried to take credit for rising U.S. oil and gas production and lower gasoline prices as if to refute the polls that report that the country seems to have the opposite view---the country is not moving in the right direction. Never mind that his Administration has thrown up one roadblock or regulation after another to the use of fossil fuels. “At this moment—with a growing economy, shrinking deficits, bustling industry and …Continue Reading »

Where will Falling Crude Oil Prices Settle?

WTI and Brent Oil Prices

SOURCE:  US EIA That is the question everyone in the oil and gas industry is asking themselves. After reaching monthly peaks of $112 per barrel (bbl) and $105/bbl in June 2014, crude oil benchmarks Brent and West Texas Intermediate (WTI) fell to $62/bbl and $59/bbl in December 2014. Today, January 9, 2015 Brent crude is priced at $49/bbl and WTI at $47/bbl. There are two common reactions to this fall in oil prices. “OMG---Yes!” is the consumer reaction every time they fill up the gas …Continue Reading »

Four Stages of Oil Market Volatility

Oil Price Volatility

Crude oil prices continue their downward movement with the question most asked---when will this end? The answer of course is that commodity prices especially fuels are notoriously volatile. The official OPEC market report for December with data through the end of November described it with precise technical language saying market conditions reflect “reflect bearish global crude oil market fundamentals as abundant supply remains significantly higher than demand.” The answer is that prices will …Continue Reading »

Temperatures are not Rising over Climate Change except at the IPCC Conference in Paris


SOURCE: http://www.bbc.com/news/science-environment-28870988 Prepare yourself for wailing and gnashing of teeth as the UN International Panel on Climate Change advocates meet in Paris. The Telegraph newspaper article in the UK summed up the Panel’s view: “The world is on course to experience “severe and pervasive” negative impacts from climate change unless it takes rapid action to slash its greenhouse gas emissions, a major UN report is expected to warn on Sunday. Flooding, dangerous …Continue Reading »

Lessons from the Gas Pump about Oil Price Volatility

WTI Brent Crude price decline EIA

As I filled the gas tank in my wife’s car this weekend I chuckled about the great low price I was paying for the experience. It made me feel so good I went inside the Chevron service station and bought a lottery ticket and a few scratchers for good measure. This was my lucky day. Later, I asked my wife if she won anything on her scratchers---“Yes! She cheered $10 and a free ticket. Now where are you taking me for dinner.” What does this have to do with oil price volatility? Actually, I bet …Continue Reading »

Big Sale on Oil! Limited Time Only!

WTI Brent Crude price decline EIA

SOURCE: US EIA, Bloomberg, CME Group That’s the real headline from the geopolitical reaction to falling oil prices. In the past falling world oil prices have provoked a meeting of the OPEC oil ministers who would agree to and announce a cartel cut in production targets to bring down supply levels to match demand. Then the ministers would fly home on their private jets and cheat hoping some other OPEC member would take the production cut medicine so they would not get sick. Too often that …Continue Reading »

The Global Energy Game Changer @ Work

USEnergy Boom Infographic McClatchy

The Global Energy Game Changer @ Work The US oil and gas business is booming because of the shale revolution at work, but in many parts of the industry there are growing pains.  The super majors face rising costs for finding and developing new reserves.  The midstream players face infrastructure bottlenecks.  Refineries face a glut of light crude or condensate that does not fit the refining process demand for heavy crude and thus must be pre-processed out.  Even the shale pioneers who struck …Continue Reading »

Shale Gas Supply Growth Shakes Up Everything

EIA World Shale Resources

SOURCE:  US EIA Data and Reuters graphic The shale revolution is a full reversal of energy fortunes in the United States.  It might have similar potential in other parts of the world if as projected global LNG prices decline over the decade ahead and indexing gas prices to oil erodes from competitive pressures on existing oil-indexed LNG suppliers. Large volumes of global gas supplies are expected come to market at prices below oil price parity (assuming oil prices at or above $90/bbl). …Continue Reading »