" />
Building a world of
resilient communities.



Peak oil notes - November 17

Developments this week
NY oil prices continued the climb – now over $25 a barrel -- that has been underway since early October. The move was helped on Wednesday by the announcement that Enbridge and TransCanada have purchased the 350,000 b/d Seaway pipeline that has been bringing crude from the Texas coast to the Cushing, Oklahoma oil delivery hub. Enbridge plans to reverse the pipeline so it will drain the glut of crude that has built up over the past year at the Cushing Terminal. The crude from Cushing can then be sold at higher prices to Gulf Coast refiners earning more money for Canadian crude producers while increasing feedstock costs for midcontinent refiners. Pending regulatory approval, the reversed pipeline could be sending as much as 150,000 b/d to the Houston area by the 2nd quarter of 2012 and as much as 400,000 b/d a year later after upgrades.

The pipeline news sent NY prices up $3.22 a barrel on Wednesday to close at $102.59. The NY price increase was not followed in London. It closed the NY-London spread, which was as high as $28 a barrel in October, to a close Wednesday at $8.81. Conoco had resisted reversing the Seaway pipeline because its midcontinent refiners were benefitting from the cheaper feedstock coming from Canada and the Bakken shale. In London, Brent crude which is burdened by spreading financial troubles in Europe fell by $0.36 Wednesday to close at $111.40.

The move in crude prices also was aided by the weekly US stocks report which showed US crude inventories falling by 1.1 million barrels last week and US commercial petroleum inventories falling by 8.7 million barrels.

The news from Europe has been bad all week with the stronger economies such as those of Austria, the Netherlands, Finland and France subjected to falling government bond prices. All this is seen as spreading contagion from the Italian and Greek crises that will lead to a continent-wide recession, if not worse, shortly. In this environment, the price of Brent crude has been volatile for several weeks in response to the ever shifting economic news.

The situation in Syria continues to deteriorate with army defectors mounting attacks on government forces and facilities. Economic and diplomatic pressures are increasing on the Assad government daily which is fast losing friends in the region. The Turks are now actively supporting the insurgents and even the Russians, who were probably the best friends the regime has, are talking with the opposition. The country appears to be sliding into civil war. Except for small amounts of Syrian oil, thus far there has been no disruption of Middle Eastern oil exports attributable to the uprising, but with Damascus close to the center of numerous Middle Eastern confrontations, this could change, especially if the troubles are prolonged.

Elsewhere in the region, Shell has approved a $17 billion deal to capture and sell the natural gas that is being flared from southern Iraqi oil fields. Over in Egypt, the government has declared force majeure after yet another attack in the Sinai on the gas pipeline to Israel and Jordan.

What do you think? Leave a comment below.

Sign up for regular Resilience bulletins direct to your email.

Take action!  

Find out more about Community Resilience. See our COMMUNITIES page
Start your own projects. See our RESOURCES page.
Help build resilience. DONATE NOW.


This is a community site and the discussion is moderated. The rules in brief: no personal abuse and no climate denial. Complete Guidelines.

Peak Oil Review - Dec 5 2016

A weekly roundup of peak oil news, including: -Quote of the Week -Graphic of …

Waiting for the Climacteric: or, the Return of the Greentard

...I want to broach some wider energy-related issues with the help of two …

The Curse of the Modern Office

The information society promises to dematerialise society and make it more …

Howling at the USGS’s Wolfcamp Announcement

The recent USGS announcement about the Wolfcamp play may inspire another …

Transition in Ireland  

Ireland is one of the most advanced countries in energy transition, getting …

Trudeau’s Six Unanswered Questions on Kinder Morgan Expansion

In early November, the Trudeau government tabled a ministerial panel report …

Tiffany's Fallacy: the Mineral Pie is Shrinking, and Most of What's Left is in the Sky

In the debates that deal with energy and fossil fuels, it is rather common …