Cheap Oil At An Energy Inflection Point

 
MISSION STATEMENT

As conversations of weather occurrences and suggested anomalies become more frequent and mainstream in the scientific community, as well as at the grass-roots-level, the need to embrace and index substantive information into an authoritative conduit to encourage more research and development~~~IS IMPERATIVE.

Pertinent themes as Global Warming, Climate Change, and Melting Ice Caps has stimulated discussions, seeded forums, and spawned additional research, all to foster consensus, and recommend courses-of-action. 

The intent of CLIMATE; THE CONVERSATION, is to be The Bulletin Board, The Platform, The Podium,  and The Credible Source & Bibliography for such astute, sincere, and scholarly considerations. 

Sincerely;

Administrators:

Andrew M. Marconi

Lou Marconi

 Despite the Middle East crisis and Russian tensions, world oil prices are plummeting. We’ll look at why and what it means for rising clean energy.

This Sept. 11, 2013 file photo shows oil pumps the desert oil fields of Sakhir, Bahrain. Dramatic changes in oil production around the globe, both higher and lower, are balancing each other out instead of wreaking havoc. (AP)

 

Oil prices worldwide are plummeting.  The US benchmark price down nearly 25 percent since June.  Went below $90 a barrel this month for the first time in a long time.  You’d think oil would be going the other way.  We’ve got crisis in the Middle East.  Crackling tensions with energy giant Russia.  But no.  It’s way down.  The “why” of that is fascinating.  So are the implications.  It’s rough on Russia, Iran, Iraq, Venezuela.  And, if it goes further, rough on American hydraulic-fracturing.  And on solar and wind power.  This hour On Point:  Oil’s price swoon, and what it means.

– Tom Ashbrook

Guests

Nicole Friedman, energy markets reporter for The Wall Street Journal. (@NicoleFriedman)
Michael Levi, senior fellow for energy and the environment and director of the Center for Geo-economic Studies at the Council on Foreign Relations. Author of “The Power Surge: Energy, Opportunity and the Battle for America’s Future.” Co-author of “By All Means Necessary” and “The Future of Arms Control.” (@levi_m)
Nathanael Greene, director of renewable energy policy and the energy and transportation program at the National Resources Defense Council. (@NRDCRenewables)

From Tom’s Reading List

The Wall Street Journal: Oil Prices Weaken Further on Storage Data — “The U.S. was a bright spot for demand this summer, because refineries ran at unusually high rates to profit from cost-advantaged domestic crude. However, refineries typically run at lower rates in September and October as refiners shut units to perform seasonal maintenance.”
Washington Post: Oil prices are falling — and that’s good for the U.S. and bad for Russia — “The drop in prices is providing a boost to the U.S. economy and U.S. consumers, but it could put a dent in revenues in countries such as Russia, Iran, and Iraq, where oil exports play an enormously important role in supporting economic growth and government finances. Europe, meanwhile, is only partially benefiting from the decline in prices because the euro has been weakening, making it relatively more expensive for Europeans to purchase oil, which is priced in dollars.”
Vox: Oil prices are plummeting. Here’s why that’s a big deal — “If oil prices keep falling, that could have plenty of far-reaching effects. OPEC is already fighting bitterly over how to respond. Russia, a major oil producer, could see its economy crippled if prices decline.Some shale oil producers in North Dakota and Texas may find it unprofitable to keep drilling. And lower gas prices could bolster the US economy (though it would also curtail the recent drive for energy-efficient vehicles).”

Oil Prices Decline as Supplies Build

Published: Oct 08, 2014

By Nicole Friedman

Oil prices slid Wednesday after weekly storage data showed that U.S. stockpiles grew more than expected last week, as imports rose and refineries processed less crude.

U.S. oil prices have now fallen 21% from a peak reached in September 2013, meeting the definition of a bear market. Brent, the global benchmark, has been in a bear market since Sept. 30.

Crude-oil stockpiles climbed by 5 million barrels to 361.65 million barrels in the week ended Oct. 3, according to the U.S. Energy Information Administration. Analysts surveyed by The Wall Street Journal had expected stocks to rise by 1.9 million barrels on the week. Imports rose by 428,000 barrels a day to 7.7 million barrels a day.

Global and U.S. oil prices have been sliding for months amid high global supplies and lackluster demand.

The U.S. was a bright spot for demand this summer, because refineries ran at unusually high rates to profit from relatively cheap domestic crude. However, refineries typically run at lower rates in September and October as refiners shut units to perform seasonal maintenance.

"The oil inventory raised concerns about weak demand," said Phil Flynn, analyst at the Price Futures Group in Chicago. "There's a sense that there's not a lot that anybody can do about it in the short term."

Light, sweet crude for November delivery slid $1.54, or 1.7%, to $87.31 a barrel on the New York Mercantile Exchange, the lowest level since April 17, 2013.

Brent settled down 73 cents, or 0.8%, at $91.38 a barrel on ICE Futures Europe, the lowest settlement price since June 28, 2012.

Brent prices are down 21% from their mid-June high.

The sustained drop in oil prices has sparked concern among market participants that U.S. shale-oil drillers could pull back on new investment if prices fall too low. However, Fitch Ratings said Wednesday that shale-oil producers won't respond until Brent prices fell below $80 a barrel.

"We think we're in a sweet spot for supply at the moment," said Alex Griffiths, managing director at Fitch, in an interview. "We think that $80 is where you start seeing some deceleration of drilling new shale wells."

The Organization of the Petroleum Exporting Countries said Wednesday that the average price of its members' crude stood at $89.37 a barrel, compared with $90.40 the previous day. The OPEC basket hasn't fallen below $90 a barrel since June 2012.

Gasoline stockpiles rose by 1.2 million barrels to 209.7 million barrels. Analysts had predicted stockpiles would decline by 900,000 barrels.

November reformulated gasoline blendstock, or RBOB, slumped 4.99 cents, or 2.1%, to $2.3184 a gallon, the lowest price since Dec. 17, 2010.

Distillate stocks, which include heating oil and diesel fuel, rose by 439,000 barrels to 126.1 million barrels. Analysts had expected a 1.2 million-barrel weekly decrease.

November diesel slipped 3.14 cents, or 1.2%, to $2.5759 a gallon, the lowest price since June 2012.

Refining capacity utilization fell less than expected, to 89.3%. Analysts had expected the operating rate to fall by 0.7 percentage point in the week.

Write to Nicole Friedman at nicole.friedman@wsj.com 

Being at the TIPPING-POINT that these actions are having,  it becomes necessary to access their impacts and once having recognized the negative affects on the environment, the land that we are farming, our commercial and industrial endeavors, the atmosphere that we are breathing, it is critical to recognize that WE MUST REVERSE THESE TRENDS. Then, given the time and place to implement actions and practices to have a cause-and-effect impact in a positive way, we should encourage and influence implementation, and at least retard further deterioration of our environment and our climate.  On a larger scale, reversing the trends of deterioration should always be----the ultimate objective.  

Its impact on the economy, pollution, and the focus on Climate; The Conversation---makes this worthy of continued enthusiasm and consideration

Lou Marconi (SuiteLou0819)