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Oil Demand Set for 2-Year Drop on Recession, IEA Says
Grant Smith, Bloomberg
Oil demand will fall for a second year, the first back-to-back contractions since 1983, as a deepening recession erodes consumer spending, the International Energy Agency said.
The adviser to 28 nations cut its global 2009 forecast by 1 million barrels a day on expectations the economic outlook will deteriorate. The IEA estimates consumption will shrink 0.6 percent to 85.3 million barrels a day. Forecasters including OPEC, JPMorgan Chase & Co. and Deutsche Bank AG have already said demand will fall this year.
“It’s a major shift,” said Gareth Lewis-Davies, an analyst at Dresdner Kleinwort Group Ltd. in London who worked at the IEA. “The weakness in oil demand is significant. This year there will be a lot of attention on their forecasts and they don’t want to be accused of being behind the curve.”
(16 January 2009)
Rigzone: Why We’ll See $200 Oil Soon
David Kent (President of Rigzone), Rigzone
Will oil prices drop to $20, or will they catapult to $200? In the short-term, it is anyone’s guess. In the long-term, the answer is simple — if we use a little history and a bit of common sense. Growing up in an oil family and working within the industry for the past decade, I have experienced some interesting times. The oil and gas industry is notorious for its cyclical nature and dramatic ups and downs.
And no matter how many times you go through these cycles, it seems “When it is up, we don’t see how it can ever go down; and when it is down, we don’t see how it can ever go up,” as a good friend recently summed it up. With that said, I do not believe low commodity prices and rig counts will be here for long. Simply put, our industry rises and falls with the price of oil and gas, and two simple truths will provide upward pressure on prices for decades to come. Those truths: 1.) supply is finite, and 2.) the world population continues to grow at a tremendous rate.
If you look at U.S. oil production over the last 30 years, you can clearly see there is a limit to production. Even with the recent years’ high commodity prices, the U.S. was only able to produce a limited amount of oil and gas relative to prior years’ production levels. The U.S. is not unique in that regard. Production will inevitably decline for every country.
(15 January 2009)
Chávez Lets West Make Oil Bids as Prices Plunge
Simon Romero, New York Times
President Hugo Chávez, buffeted by falling oil prices that threaten to damage his efforts to establish a Socialist-inspired state, is quietly courting Western oil companies once again.
Until recently, Mr. Chávez had pushed foreign oil companies here into a corner by nationalizing their oil fields, raiding their offices with tax authorities and imposing a series of royalties increases.
But faced with the plunge in prices and a decline in domestic production, senior officials have begun soliciting bids from some of the largest Western oil companies in recent weeks — including Chevron, Royal Dutch/Shell and Total of France — promising them access to some of the world’s largest petroleum reserves, according to energy executives and industry consultants here.
Their willingness to even consider investing in Venezuela reflects the scarcity of projects open to foreign companies in other top oil nations, particularly in the Middle East.
(14 January 2009)
The Ten Most Coal-Reliant Countries
Robert Bryce, Energy Tribune
… A bit of data crunching from the latest BP Statistical Review of World Energy yields a list of the most coal-reliant countries. And that list provides some hints as to why achieving a global carbon emissions reduction plan will be so difficult.
It’s not much of a surprise that South Africa is so coal-reliant. South African giant Sasol produces much of the country’s motor fuel from coal. And China’s heavy reliance on coal is well known. What is somewhat surprising is that of the ten most coal-reliant countries, four are members of the OECD: Australia, Czech Republic, Poland, and Turkey. And of those four, the ones that are most important to Europe and the US are Poland and the Czech Republic.
[From the charts:
the top coal users:
China, US, India, Japan, South Africa
the 10 countries which rely most on coal:
China, India, South Africa, Poland, Australia, Taiwan, Turkey, Kazakhstan, Czech Republic Bulgaria.]
(15 January 2009)
