ResiliencePublished on Resilience (http://www.resilience.org)
Peak oil notes - March 27Published by ASPO-USA on 2014-03-27
Original article: http://aspousa.org/ by Tom Whipple
New York oil futures climbed back to a close Wednesday just above $100 a barrel this week while London oil has held around $107. There was an unexpectedly large jump of 6.6 million barrels in US crude inventories last week. The transfer of large amounts of crude from Cushing, Okla. to storage facilities along the Gulf Coast is continuing. Crude stockpiles along the Gulf Coast are now above 200 million barrels which is the highest since the EIA began tracking inventories there some 25 years ago.
Domestic gasoline stocks fell by an unexpected 5.1 million barrels last week as US gasoline consumption grew to over 9 million b/d for the first time this year. Some of this increase in “demand” is likely being exported as Libyan crude exports, once above a million b/d and which go largely to European refineries have nearly disappeared. An oil spill closed the Houston ship channel for the better part of four days this week, delaying the import of crude and the export of oil products.
US natural gas prices jumped on Tuesday as frigid weather settled in once again over the northeastern US bringing unseasonable snows from Washington to Maine. Analysts are expecting natural gas stockpiles to fall by 54 billion cubic feet in the report that will be released Thursday morning. This week usually marks the last week in which natural gas inventories fall before rebuilding begins. Working inventories will likely bottom out below 900 million cubic feet before the rebuilding begins.
The Russian-Ukrainian crisis continues to bubble along with threats of sanctions being exchanged, yet without any major impact on oil and gas flows. A drive to punish Russia by increasing US exports of oil and natural gas is growing in the US Congress without much thought of just where the exportable oil and gas will be coming from and the effect on domestic prices. Rumors persist that Russia, which is already shipping some 12 percent of its exports to China, is looking to increase its markets in Asia in retaliation for whatever Western sanctions are imposed.
The Europeans, however, are clearly worried about where the Ukrainian crisis is going. There are already reports that natural gas exports from Russia are beginning to slip. Moreover the economic sanctions already imposed or under consideration by both sides could have a considerable impact in Russia and in the rest of Europe.
Elsewhere in the world, Libyan crude production has sunk 150,000 b/d, after protestors halted production in a western oil field run by ENI; Venezuela is seeking to confront its economic problems by opening a new currency market; a major oil service firm is pulling out of Venezuela as they are not being paid; and new economic reports out of China show the country’s manufacturing is continuing to slip.
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