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U.S. shale oil firms feel credit squeeze as banks grow cautious
Nearly two years into an epic oil rout, U.S. shale drillers that have upended global energy markets are finally feeling a credit squeeze as banks make their biggest cuts yet to their loans. Every six months, oil and gas producers and their banks negotiate how much credit they should be given based on the value of their reserves in the ground. In previous reviews, banks were willing to offer borrowers some leeway, encouraged by producers’ hedges against falling prices and their ability to keep cutting costs in step with crude’s slide that began in mid-2014. This time, with many companies’ hedges largely gone and crude prices used in the reviews as much as 20 percent lower than six months earlier, banks are getting tough. Just a few weeks into […]Cheap Gasoline Creates Illusion of Abundance for American Motorists and Policymakers
The U.S. saw average retail gasoline prices drop below $2 per gallon in early January, the lowest prices observed since 2009 during the depths of the global financial crisis. Cheap gas is fueling a driving boom in the United States, with consumption well above the five-year average for this time of year. It is still early, but the U.S. is on course to set a new record in gasoline consumption in 2016, breaking the previous high set in 2007. The EIA releases weekly estimates on gasoline consumption, which are less precise than the retrospective monthly surveys, but assuming the latest data is accurate, the U.S. is currently consuming gasoline at a rate typically seen at peak driving season in the summer months. As a result, the upcoming summer could be a blockbuster for American gasoline demand. Fuel efficiency gains secured? In 2009, U.S. President Barack Obama issued new standards […]U.S. oil job cuts reach about 118,000
The U.S. oil industry handed out 23,200 pink slips in the first three months of the year as companies began cutting their once-flush spending budgets deeper than in the ferocious mid-1980s oil bust. The latest round of layoffs, including recent cuts by Chevron Corp., BP and Anadarko Petroleum Corp., has brought oil-and-gas job cuts across the nation to nearly 118,000 since the beginning of 2015. That’s more than one in every five workers the industry had when crude prices began to tumble, the Federal Reserve Bank of Dallas said Friday. “You won’t see job cuts bottom out until the middle of the year, if then,” said John Graves, a Houston oil consultant who has tracked the industry’s layoffs. The dramatic and ongoing exit of more than a fifth of the industry’s workforce comes as drillers sideline three-quarters of the drilling rigs they used to power the nation’s biggest oil […]
Russia’s Most Important Bank Needs a Bailout
When the Russian government needed to build up infrastructure in the southern city of Sochi ahead of the 2014 Winter Olympic Games, it turned to Russia’s most important lender: Vnesheconombank, the country’s state-owned development bank. Russian President Vladimir Putin said private investors would be responsible for most of the Olympic costs, which ballooned to an estimated $50 billion. But VEB ended up picking up much of the tab, eventually holding the equivalent of at least $2.9 billion in overdue loans. Now, the bill is coming due. VEB for years kept its books in balance by borrowing heavily from foreign lenders. But after being slapped with sanctions by Europe and the U.S. following Russia’s annexation of Crimea in 2014, the bank faces the task of paying off about $20 billion in foreign-currency debt, about $3 […]
Ford tests Fusion Hybrid autonomous research vehicles driving in complete darkness
As part of its LiDAR sensor development, Ford has tested Fusion Hybrid autonomous research vehicles in complete darkness without headlights on desert roads, demonstrating the capability to perform beyond the limits of human drivers. Driving in pitch black at Ford Arizona Proving Ground marks the next step on the company’s efforts to delivering fully autonomous vehicles. The development shows that even without cameras, which rely on light, Ford’s LiDAR (units from Velodyne), working with the car’s virtual driver software, is robust enough to steer flawlessly around winding roads. While it’s ideal to have all three modes of sensors—radar, cameras and LiDAR—the latter can function independently on roads without stoplights. National Highway Traffic Safety Administration data has found the passenger vehicle occupant fatality rate during dark hours to be about three times higher than the daytime rate. Thanks to LiDAR, the test cars aren’t reliant on the sun shining, nor […]
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