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Predictions for the change in oil price through to 2017
After a dismal start to the year, oil prices staged a partial recovery, with dated Brent Blend, the global benchmark, rising by almost 70% from a 13-year low of US$26/barrel in January to US$44/b on May 10th. The rally was driven in part by stronger economic data from China and robust gasoline demand in the US: Economist Intelligence Unit . On the supply side successive supply disruptions (in Nigeria, Iraq, Kuwait, Libya and Canada) have also provided support, as has falling US output. The broad recovery in wider financial markets, coupled with a modest weakening of the US dollar, has also boosted sentiment towards oil. In April oil futures prices also pointed towards a nearing rebalancing of the oil market, as the contango (a situation where the oil price for future delivery is higher than the spot price) narrowed across all maturities. Although recent price developments have tilted risks […]
EIA’s Annual Energy Outlook and the Seneca Cliff
The scenario above shows an Oil Shock Model with a URR of 3600 Gb and EIA data from 1970 to 2015 and the Annual Energy Outlook (AEO) 2016 early release reference projection from 2016 to 2040. The oil shock model was originally developed by Webhubbletelescope and presented at his blog Mobjectivist and in a free book The Oil Conundrum . The World extraction rate from producing reserves must rise to 15% in 2040 to accomplish this for this “high” URR scenario. This high scenario is 100 Gb lower than my earlier high scenario because I reduced my estimate of extra heavy oil URR (API gravity<10) to 500 Gb. The annual decline rate rises to 5% from 2043 to 2047 creating a “Seneca cliff”, the decline rate is reduced to 2% by 2060. The scenario presented above uses BP’s Energy Outlook 2035 , published in Feb 2016. This outlook does […]
Saudi Arabia’s economy is slowing
IMF finds the Saudi economy is slowing under pressure from lower crude oil prices, though reforms are pushing momentum more or less in the right direction. Photo by Fedor Selivanov/Shutterstock WASHINGTON, May 19 (UPI) — The economy of Saudi Arabia is expected to slow down noticeably as a result of lower oil prices, though the fiscal policies are adapting, the IMF said Thursday. Moody’s Investors Service this week lowered the credit rating for Saudi Arabia by one notch from Aa3 to A1. While strong when compared with other sovereigns, Moody’s said the Saudi economy would not be spared from the pressure of lower crude oil prices. A survey from the International Monetary Fund said the decline in crude oil prices, off roughly 20 percent from this time last year, could translate to a 1.2 percent increase in real gross domestic product for Saudi Arabia this year. That’s compared with […]
Crude tanker storage fleet off Singapore points to stubborn oil glut
Prices for oil futures have jumped by almost a quarter since April, lifted by severe supply disruptions caused by triggers such as Canadian wildfires, acts of sabotage in Nigeria, and civil war in Libya. Yet flying into Singapore, the oil trading hub for the world’s biggest consumer region, Asia, reveals another picture: that a global glut that pulled down prices by over 70 percent between 2014 and early 2016 is nowhere near over, and that financial traders betting on higher crude oil futures may be in for a surprise from the physical market. “I’ve been coming to Singapore once a year for the last 15 years, and flying in I have never seen the waters so full of idle tankers,” said a senior European oil trader a day after arriving in the city-state. […]
Solar power getting cheaper in the United States
The cost of installing solar energy in the United States is down more than 50 percent since the start of a federal support program, the Energy Department said. The federal government is supporting solar development through its SunShot initiative, which aims to make the renewable technology competitive. The program aims to move solar power capacity from less than 1 percent of the national electricity supply to 14 percent by 2020. In a progress review , the Energy Department said it was about 70 percent on its way to reaching its goals. Solar power accounts for about 1 percent of the total electricity consumed in the United States, but represented 30 percent of the new power […]
Fifteen to 20 nuclear units in US ‘at risk’ of shutdown:
Some 15 to 20 nuclear power units in the US are “at risk” of being shut over the next five to 10 years due to economic challenges such as low power prices, competition from natural gas-fired generation and subsidized renewables, a nuclear industry official said Thursday. Marvin Fertel, president and CEO of the Nuclear Energy Institute, did not name any of the reactors considered to be most at risk in his remarks at a US Department of Energy summit on the future of nuclear power. He did say that small, single-unit nuclear power plants are the most economically challenged. Two such plants, Dominion’s Kewaunee in Wisconsin and Entergy’s Vermont Yankee, have closed for economic reasons since 2013. Entergy’s FitzPatrick in New York and Pilgrim in Massachusetts are scheduled to be shut in 2017 and 2019, respectively, due to such factors, the company has said. The Omaha Public Power District […]
