Production and Prices
The oil markets continue to move with the equity markets. When there is bad economic news, oil and stocks go down. When there is even a flicker of good news, both go up. Last week oil climbed above $53 a barrel, fell to $47 on general pessimism about the global economy, and then rebounded to close Thursday evening at $52.24. News relating to the supply and demand for oil seems to have minimal impact
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IEA’s Forecast for 2009
Following the lead of the IMF, which recently forecast a significant drop in global economic activity this year, the International Energy Agency reduced its forecast for world oil demand by 1 million b/d. Global demand for 2009 is now forecast to be 83.4 million b/d, 2.4 million b/d below 2008. The IEA says that OPEC production fell by 235,000 b/d in March, but is still about 720,000 b/d above the
Investment during the recession
Investment in oil and gas production continues to slip everywhere, unless ExxonMobil or China is involved. The CEO of ConocoPhillips discussed nearly $2 billion in investment cuts that his company plans to make. Drilling in the US slipped further, with Baker-Hughes reporting that the US rig count was down by another 38 to 1,005 last week, down just over 50% from mid-September. Low natural gas prices
Quote of the Week
“The evidence to me is persuasive that, had there been no oil shock, we would have described the US economy in fourth-quarter 2007 to third-quarter 2008 as growing slowly, but not in a recession.” – James Hamilton, professor of economics, UC San Diego
Briefs week of April 13, 2009
Russia and Iraq have agreed to work on restoring oil contracts that they signed before the U.S.-led invasion of Iraq in 2003. Previously, Baghdad had renegotiated and signed another Saddam-era deal, with the Chinese National Petroleum Company. (4/11, #4) Alaska’s North Slope oil output is expected to drop 5 percent in the coming fiscal year as its oilfields age, and average prices of its
Interview with Matt Simmons, Part 2
ASPO-USA’s Steve Andrews recently hooked up with Matthew R. Simmons, chairman of Simmons & Company, Int’l, for a lengthy interview. In Part 2, Matt challenges current conventional wisdom about the degree of on-going demand destruction and other issues. Question: What are the big differences between the demand drops post-1978 and today? Simmons: They’re as comparable as
