Investment Continues to Fall
Although not yet widely appreciated, a key underpinning for economic recovery will be the size and effectiveness of investment in oil production projects. Without substantial investment, world oil production is certain to continue falling of its own accord after the current round of OPEC and other production cuts. Reports of delayed or cancelled projects continue to come in. During the past week
More
OPEC Secrecy
Such is the secrecy surrounding oil production and exports that OPEC, as an organization, cannot rely on its own members’ energy ministries to provide accurate information on the amount of oil being exported. In countries such as Nigeria, beset by insurgency and massive oil theft, and Venezuela, where the government maintains that production is nearly 1 million b/d greater than reality, export
Oil Prices
With OPEC sending mixed signals about the possibility of a production cut at the meeting in Cairo on Saturday, oil prices gyrated between $50 and $55 a barrel last week. Pessimism stemming from a drumbeat of bad economic news alternated with occasional bursts of optimism that one of the many new bailout plans by governments around the world or perhaps an OPEC production cut would do some good. The
Detroit Rescue Plan
General Motor’s board is currently reviewing the rescue plan that will be released on Tuesday and will be considered by Congress next week. GM said on November 7th that it may not have sufficient cash to operate after December. A 10-12 page summary of the plan will be released to the public and a more detailed 80 page version will be sent to Congress. The plan is rumored to entail closing factories,
China and Growth
Unlike most of the world’s economies, China is widely believed to need a minimum of 7 percent annual growth to maintain social stability. New jobs are required for the millions of young workers graduating from school each year and the millions more that continue to migrate from rural areas into the industrialized urban economy. As a major consumer of world energy supplies, the state of China’s
Investment
As US motorists rejoice that the price of gasoline is now approaching an all-time, inflation-adjusted low, many thoughtful observers are bemoaning the effects on future oil production as project after project is delayed or cancelled due to low oil prices and a lack of liquidity. It is starting to dawn on many that, should oil prices and demand remain low for an extended period, new investment in
Briefs - December 1, 2008
Amid the year’s ups and downs, 2008 will mark a record for global oil demand, at 87 million barrels a day. While U.S. oil demand is off 5.5% in the past year to its lowest level since 2002, China’s is up 6.5%. (11/28, #9) In July, the IEA estimated that the total number of motor vehicles could increase to as many as 1.2 billion by 2013, from the current 800 million. (11/27, #21) In
Quote of the Week
“OPEC might say that they will cut 1 million barrels but in reality the market knows maybe they’ll cut 500,000 to 600,000 barrels. And that’s simply not enough to exorcise the surplus out of the market.” – Stephen Schork, president Schork Group Inc. (Villanova, PA)
BP Fights Self in Phone Booth, Loses Match
British Petroleum ranks as one of the lead members of the peak oil denial club. ASPO’s Colin Campbell and Kjell Aleklett both took BP to task for recent comments slamming the peak oil perspective, even denying its validity. (More on the latter point in a moment.) But it wasn’t always this way. Just over a decade ago, and as recently as 2001, one could fairly say that-based
