Building a world of
resilient communities.

MAIN LIST

 

Peak oil notes - January 30

Oil prices have remained flat this week with New York trading around $97 and London around $107 per barrel. The stocks report showed the largest weekly supply gain, 6.4 million barrels since early October. An increase in imports of 500,000 b/d over the previous week accounted for a goodly share of the increase. Domestic production in the lower 48 showed no increase last week. The cold weather engulfing much of the US led to an unexpectedly large drop in distillate stocks of 4.6 million barrels with propane stocks falling by 3.6 million barrels; in addition natural gas prices hit a four-year  high of $5.72 per million. The implied demand for distillates last week hit 4.5 million b/d, the highest for this time of year since 2007.
 
Gasoline consumption jumped 6.5 percent last week to 8.6 million b/d; however, the question remains as to how much is being exported as opposed to being consumed domestically.
 
Despite the jump in the demand for heating oil, which hit a recent high above $4.18 a gallon on Wednesday, New York prices fell slightly on Wednesday after the Federal Reserve announced that it would continue to cut back on bond purchases. For the last five years, these purchases have been widely perceived as supporting oil prices.
 
The Wall Street Journal published a lengthy story on Wednesday bemoaning the woes of the major oil companies whose capital expenditures continue to set new highs without much in return. Despite Chevron, Exxon, and Shell having jointly spent over half a trillion dollars in the last five years, their production of oil and gas is down. Each is expected to report a drop in profits from 2012 to 2013 despite generally higher oil prices. Together, the three will probably earn $70 billion in 2013, down from $100 billion in 2012
 
Exploration and production costs are soaring. The giant Caspian Sea project is now up to $40 billion with little to show vs. original estimates of $10 billion. Shell just announced it was reducing its stake in its Brazilian holdings. Exxon says its capital expenditures hit $41 billion last year, up 51 percent from $27 billion in 2009.
 
Despite the troubles, the major oil companies remain optimistic that the heavy expenditures will soon be earning their keep. Nowhere is there any mention of the idea that one day the cost of producing oil may outrun what people can afford to pay for oil products. It might even lead to peak oil.
 
Not much news in the Middle East so far. Bombings of government installations in Egypt are picking up. The Army’s Chief of Staff has just been promoted to Field Marshal, which will give him a more impressive title when he runs for President.
 
Baghdad is bombing and shelling Fallujah in preparation for an attack on the city. The Iraqi government has decided to share more oil revenue with the provinces after local leaders threatened to stop producing oil in their districts.
 
Syria is refusing to let humanitarian aid into areas it has surrounded, choosing to let people starve in its cities rather than give in to foreign pressure. The US has resumed non-lethal aid to the rebels. Al Qaeda in Syria says it now has control of nearly all the oil and gas production. The Assad government is becoming highly dependent on Moscow and Tehran for financial support.

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.


Why Peak Oil Refuses to Die

Peak oil and climate change are two sides of the same coin. The coin itself …

Peak Oil Review - Sept 1

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

A Big Summer Story You Missed: Soaring Oil Debt

Last July the government agency, which has collected mundane statistics on …

Global Biofuels Status Update

Today I want to take a deep look at the global biofuels picture, drawing …

Peak oil notes - August 28

A mid-week update. Oil prices have been quiet this week trading around the …

Update on US natural gas, coal, nuclear, renewables

On August 6, I wrote a post called Making Sense of the US Oil Story, in …

The Peak Oil Crisis: When?

 The key question is just how many more months or years will production …