" />
Building a world of
resilient communities.

MAIN LIST

 

Peak oil notes - May 19

Developments this week
Oil prices fell on Monday and Tuesday as the euro remained weak, there was a spate of bad economic news about the US economy and the flooding threat to the refineries along the lower Mississippi receded. At one point on Tuesday NY crude traded close to $95 a barrel and London’s Brent was down to $108. In NY gasoline futures fell on Monday and Tuesday going below $2.84 a gallon on the good news about the flood situation. Just a week ago, gasoline was trading at nearly $3.40 a gallon, or more than 50 cents higher.

The situation reversed on Wednesday after the weekly stocks report showed that crude and gasoline inventories remained flat last week rather than increasing as oil analysts had expected. The report sent NY crude up $3 a barrel to a close of $100.10. Brent ended the session at $112.30.

Inventories of crude at the Cushing, Okla. delivery point fell by 1.6 million barrels last week after the 600,000 b/d pipeline that brings oil from Alberta to Cushing sprang a leak in North Dakota and had to be closed for repairs.

Although US retail gasoline prices have dropped 4 cents a gallon in the last week, they are still in the vicinity of $4 a gallon and are starting to cut into demand. The EIA reports that demand for oil products over the last 4 weeks is down by nearly 3 percent as compared to last year.

An increasing number of investment banks are beginning to forecast higher oil prices later this year as the Libyan and Yemeni situations drag on, OPEC apparently remains unwilling to increase production and electric power shortages spread across much of Asia. When export embargos from Russia and China are taken into account, the situation appears even more serious.

Forest fires erupted across Alberta this week threatening some of the nearly 2 million b/d of oil that the US imports from Canada. A major pipeline system has already been closed.

Tokyo has gotten around to admitting that the meltdown of the reactors at Fukushima is more serious than had been thought and that it will take a longer time to recover from the disaster. In the meantime, industrial production is suffering and the demand for imported energy is increasing.

The rhetoric surrounding China’s electric power shortage seems to grow stronger every day. A combination of drought and the inability to mine and ship enough coal to meet demands has led to power rationing across much of central China. Beijing has banned the export of diesel and if history is an example, we should be seeing increasing Chinese imports of coal, oil, diesel, and natural gas in coming months.

India too is suffering from coal shortages and is talking about having to import 112 million tons in the next 12 months to keep electricity production high enough to meet the needs of a growing economy.

The power situation in Pakistan gets worse every day as a combination of drought and the inability to pay for imported fuel is leading to an increasingly worse electric power situation.

What do you think? Leave a comment below.

Sign up for regular Resilience bulletins direct to your email.

Take action!  

Make connections via our GROUPS page.
Start your own projects. See our RESOURCES page.
Help build resilience. DONATE NOW.


Kashagan – Back to the drawing board?

The recent shutdown of Kashagan oil field in Kazakhstan represents one …

King Coal Is Dying a Slow Death in America

In cities choked by pollution and a world coming to grips with the realities …

Peak Oil Review - Apr 14

A weekly review including: Oil and the Global Economy, The Middle East & …

Did crude oil production actually peak in 2005?

Haven't we been hearing from the oil industry and from government and …

Talking Energy Reality

Read on to learn about Leslie Moyer’s work with artists and energy, …

Fracking politics - headlines

•Why US fracking companies are licking their lips over Ukraine …

Five pathways to post-capitalist 'renaissance' by a former oil man

In my first post on Leggett's new book, I focused on his analysis of our …