Production and Prices
Oil prices had a good week, closing out above $53 barrel despite much bad economic news. After concern about the possible consequences of the swine flu on Monday and Tuesday, prices moved up on reports of increased consumer confidence and investor hopes that the recession may be bottoming out. Fundamentals supporting oil prices remain weak. Around the world crude stockpiles continue to build both in
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Iraq
The security situation in Iraq appears to be deteriorating at a time when Baghdad is making a major effort to attract foreign investment and increase its oil production. Last week the government sent revised contracts to potential bidders on six oil and two gas fields it seeks to develop. The new contracts ask for large payments up front as soon as the contracts are signed in an effort to offset the
Detroit
It will be some time before we can sort out the impact of last week’s developments in the US automobile industry. April sales figures continued sinking with sales dropping back to an annualized rate of 9.3 million, down from 14.5 million in April 2008. The week’s major development came when some of the hedge funds holding Chrysler’s secured debt refused to take a write-down and the
Quote of the Week
Offshore oil: “The pace of growth will slow and then become flat for the next few years. There were not a whole lot of large commercial discoveries in the last couple of years.” – Michael Rodgers, a partner at PFC Energy,
From Shortage to Glut, and Boom to Bust
In recent decades, technological advances have unlocked huge reserves of unconventional natural gas. Directional drilling and advanced seismic have been important, but many of the most critical advances have occurred in the realm of completion technologies, including hydraulic fracturing. Fracing was used half a century ago, but recent improvements have been stunning, unlocking new tight gas in Colorado
Briefs May 4, 2009
World oil demand is forecast to fall this year by much more than previously expected, as growth stalls in China and India and fuel consumption declines in the developed world. The latest Reuters poll of 11 analysts, banks and industry groups shows oil consumption is expected to decline by an average of 1.56 million b/d in 2009 to 84.10 million b/d. (4/30, #3) Natural gas production by Gazprom fell
