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Page added on January 11, 2018

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Oil Reaches $70 a Barrel for First Time in Three Years

Oil topped $70 a barrel in London for the first time in three years as production cuts by OPEC and rising demand whittle away a global surplus.

Brent crude futures, used in the pricing of more than half the world’s oil, rose as much as 1.2 percent to the highest since Dec. 4, 2014. Prices rallied after the longest stretch of declines in U.S. inventories during winter in a decade.

Oil’s rally shows that the Organization of Petroleum Exporting Countries and its allies are succeeding in clearing the glut triggered by the growth of U.S. shale oil. Prices have also been supported by concerns that supply disruptions could stem from rising political tensions in OPEC members Iran and Venezuela.

“Pretty much all of the fundamental boxes are supportive of the current rally and a bit more,” said Paul Horsnell, head of commodities research at Standard Chartered Plc in London.

Brent for March settlement advanced to $69.90 a barrel on the London-based ICE Futures Europe exchange at 11:28 Eastern time.

With the climb in crude, there are growing signs that OPEC could be falling into a trap it had sought to avoid. Rising prices are putting U.S. production on track to rival both Saudi Arabia and Russia, with output likely to exceed 10 million barrels a day as soon as next month and top 11 million before the end of 2019, according to Energy Information Administration forecasts.

See video: OPEC’s Control of Oil Is Running on Fumes

“Seventy dollars is too much,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “It’s not completely unexpected, given the price momentum. But there will be a reaction in U.S. shale, and OPEC’s strategy will backfire massively.”

Iran has warned that the group risks overheating the market with oil at current levels. OPEC’s members aren’t keen on Brent prices above $60 a barrel because of the potential for more shale output, Iran’s Oil Minister Bijan Namdar Zanganeh said, according to the ministry’s news service Shana.

Oil-market news:

  • U.S. crude inventories fell by 4.95 million barrels last week, the eighth consecutive drop, EIA data show.
  • OPEC will stick with production cuts for the rest of the year as the group makes headway toward its goal of clearing an oversupply, U.A.E. Energy Minister Suhail Al Mazrouei said Thursday.

Bloomberg



26 Comments on "Oil Reaches $70 a Barrel for First Time in Three Years"

  1. Boat on Thu, 11th Jan 2018 6:35 pm 

    The cuts in oil production have driven up prices $20 PER BARREL. Where is the cry for the poor starving now. Oh yea, this is a pro Russian site. Thank you Canada for my last $2.14 PER gal fillup.

  2. Boat on Thu, 11th Jan 2018 6:45 pm 

    The US will be close to energy independence in 3 years. Perfect timing.

  3. MASTERMIND on Thu, 11th Jan 2018 6:47 pm 

    Boat

    The US Shale Business is “not profitable” and can’t fund itself whether oil is at 100 or 50 dollars a barrel
    https://imgur.com/a/t7ulB

    MIT Technology Review: Shale Oil Will Boost U.S. Production, But It Won’t Bring Energy Independence
    https://www.technologyreview.com/s/507446/shale-oil-will-boost-us-production-but-it-wont-bring-energy-independence/

    The world’s largest oil trader Vitol says US oil production will peak in 2018
    https://www.reuters.com/article/us-commodities-summit-vitol/u-s-oil-output-may-be-set-for-last-spike-in-2018-vitol-idUSKBN1CF1MZ?rpc=401&

    Chevron CEO warns US shale oil alone cannot meet the world’s growing demand for crude
    https://www.cnbc.com/2017/05/01/us-shale-cannot-meet-the-worlds-growing-oil-demand-chevron-ceo-warns.html

  4. Boat on Thu, 11th Jan 2018 6:56 pm 

    My information is much more relevant than the trash you regurgitate. I have reviewed your links and they have been found wanting. There are large chunks of US oil fields that make money at $40. We’re at $62 peckerhead.

  5. MASTERMIND on Thu, 11th Jan 2018 8:05 pm 

    Boat

    The US Shale Business is “not profitable” and can’t fund itself whether oil is at 100 or 50 dollars a barrel
    https://imgur.com/a/t7ulB

  6. MASTERMIND on Thu, 11th Jan 2018 8:07 pm 

    Boat

    Contrary to much rhetoric around it, shale is not a recent discovery. Shale has a significant history, and one that clearly demonstrate the material realities on which it rests. Indeed, encouraging shale production was one response to the oil price shocks of the 1970s. Wanting to reduce American dependence on foreign oil, the Carter administration initiated a programme to develop ‘synfuels’ that focused first and foremost on shale.

    This shale project attracted significant investment from oil companies, and production began in the late 1970s in the Green River Formation, which straddles Colorado, Wyoming and Utah and contains the largest shale oil deposits in the world. But when the price of oil crashed in 1982 at a time of relatively high interest rates these projects were rendered unviable. (Hirsch et al. 2005) (Yergin 2012)

    -Thompson, Helen. Oil and the Western Economic Crisis

  7. Cloggie on Fri, 12th Jan 2018 12:12 am 

    Good, the higher oil prices the better, b’cause…

    https://cleantechnica.com/2018/01/11/wind-solar-storage-prices-smash-records/

    Wind & Solar + Storage Prices Smash Records

    Let oil make itself impossible.

    Up, up, up!!!

  8. dave thompson on Fri, 12th Jan 2018 1:25 am 

    We will soon be back in a oil glut at these prices. Just ask planetgard.

  9. Green People's Media on Fri, 12th Jan 2018 1:26 am 

    It seems that “Boat” is operating off of a kind of religious-dogma kind of mindset with regard to the fossil-fuels markets.

    That’s OK, to be like that, I mean, we should have empathy, but it’s not actually grounded in reality, so all empathy aside, it seems the “Mastermind” person is on the correct track here.

    Have a nice weekind.

  10. Davy on Fri, 12th Jan 2018 5:19 am 

    “Wind & Solar + Storage Prices Smash Records”

    AAAh, where are the storage prices smashing records? In you fantasy future I am sure.

  11. MASTERMIND on Fri, 12th Jan 2018 5:25 am 

    Davy

    Clogg is so dumb he will believe anything some nerd website tells him. it wouldnt matter if solar and wind were free if they don’t produce any energy.

  12. twocats on Fri, 12th Jan 2018 7:05 am 

    I was interested in seeing where we stood with generation cost by source per kWh or MWh, especially with storage.

    And boy is that a freaking rats nest. The first ten links that come up in most google searches are all Koch brothers shit – Institute for Energy Research and so on. The EIA is fairly useless since they combine gas turbine, ICE and solar and wind?! why the hell would you do that? And then its a mix of obviously pro-renewable sites. To be honest I couldn’t find a source that didn’t seem overly biased.

    I think tracking this stuff is important, and I feel we have a bit of “moving goalposts” where for the longest time it was “wind and solar cost too much” and now that they don’t cost more than coal or oil it’s all about storage issues.

    Also, let’s not forget energy efficiency would probably be the cheapest source of energy.

  13. JuanP on Fri, 12th Jan 2018 7:27 am 

    Boat “Oh yea, this is a pro Russian site.”
    We baiscally live in a pro Russian world today. Only corrupted politicians paid off by the USA act against Russia, but they are only doing it for the money and out of fear. All the USA and its citizens have to do is look in the mirror if they are looking for someone to blame? Why would anyone side with the USA, the most violent, agressive, abusive, corrupt, wasteful, disrespectful, and selfish country on Earth? That would be like people from Norway migrating to the USA, ridiculous! The USA is a third world shithole! Most migrants regret coming to the USA and wish they could go to Europe or Australia. I talk to them every single day here in Miami Beach and most of them are incredibly disappointed with their experience migrating to the USA.

  14. Cloggie on Fri, 12th Jan 2018 11:20 am 

    I said: Good, the higher oil prices the better, b’cause…

    https://cleantechnica.com/2018/01/11/wind-solar-storage-prices-smash-records/

    Wind & Solar + Storage Prices Smash Records

    Davy responds: “Wind & Solar + Storage Prices Smash Records”

    AAAh, where are the storage prices smashing records? In you fantasy future I am sure.

    Eh no, actually they are in the link. That’s why I posted the link in the first place.

    Davy

    Clogg is so dumb he will believe anything some nerd website tells him. it wouldnt matter if solar and wind were free if they don’t produce any energy.

    It is the standard method millimind applies if he is confronted with data he doesn’t like: declaring the source as “not credible”.

    Davy, who loves to claim that “Europeans are lazy”, quite a statement considering trade balances, energy policies and Olympic medal tables, clearly needs some help here as moving the mouse to the link is apparently too much trouble:

    “Wind alone was bid at an astonishingly low median price of $18.10/MWh, smashing previous records.”

    (In Europe the bids are now ZERO)

    “The big surprise, however, was the very low bid for wind and solar plus storage. Wind and solar plus battery storage had seven bids for a total of 4,048 MWh at a median bid of $30.60. The energy storage projects ranged from 4 to 10 hours in duration.”

    “The previous record for renewable energy plus storage was $.045/kWh, with Tucson Electric Power.

    While few details of the projects are known, the bid is lower than any yet revealed. Prior to the Tucson Electric Power bid, two other bids were made public for Hawaii. A bid was set for $0.11/kWh from AES.”

    “Tesla set a PPA bid at $0.139/kWh in a 20 year contract for solar plus storage, a 13 MW, 52 MWh project completed in March 2017.”

    Davy hates these kinds of data, even if this good news comes from his own USofA, because they shatter his worldview he build his personal living arrangement around.

  15. davy on Fri, 12th Jan 2018 12:30 pm 

    “Eh no, actually they are in the link. That’s why I posted the link in the first place.”
    Neder, put down the example of your storage cost “smash records” if they are so great. Instead you puke huge amounts of slop and expect us to do the research. You are intellectual dubious and rely on snake oil salesmanship technics to sell your half-baked story.

    Davy, who loves to claim that “Europeans are lazy”
    What do you expect neder, you Europeans work less than most other countries in the world. That is hard to deny. No need to google this because this is well known.

    “The energy storage projects ranged from 4 to 10 hours in duration.”
    What kind of storage, how big, and what was the cost? Don’t mix in the wind or solar part. Get down to the real issue and that issue is that storage is very small today and the costs are still high.

    “Davy hates these kinds of data”
    Neder, I have more renewable power than you do. I want these projects to succeed but I get tired of lies and distortions that you live by. You are a FRAUD. Tell the facts and quit your story telling.

  16. davy on Fri, 12th Jan 2018 12:56 pm 

    “3 Million Barrels Per Day Could Go Offline In 2018”
    https://tinyurl.com/yahsgpdq

    “Worryingly for Venezuela, the monthly declines are accelerating. A year ago, monthly declines typically ran somewhere between 10,000 bpd and 30,000 bpd. By the third quarter, those monthly dips ballooned to around 40,000 bpd, month-on-month. But Between November and December, output fell by massive 100,000 bpd, according to S&P Global Platts. Argus Media says the losses are even larger than that, with production falling by 151,000 bpd in December to 1.686 mb/d.”

    “The move, ostensibly to root out corruption, will likely hollow out some of the technical talent that helps keep oil operations running, such as they are. Compounding that problem is labor unrest on the ground. S&P Global Platts says that protests and resignations of refinery personnel are mushrooming because the poor state of PDVSA’s assets are leading staff to worry about safety. “The Venezuelan economy could collapse at any moment,” said Torbjorn Kjus, oil market analyst with Norway’s DNB Bank, according to S&P Global Platts. “We could envisage scenarios spanning from outright civil war to a state coup, to a general strike or even just one more year of strangulating slow death for the economy. Neither of these outcomes bodes well for Venezuelan oil production.”

    “There are plenty of reasons why these more dire scenarios could play out. More credit defaults are likely. Venezuela is locked out of the bond markets, which means it will have trouble finding cash. PDVSA’s oil and refining assets are in a decrepit state and are only deteriorating. The quality of Venezuela’s oil exports are also worsening, and some refiners around the world are rejecting shipments. The lack of cash means that PDVSA will struggle to import the diluent needed to mix with its heavy oil. And rock bottom morale and increasing worker unrest could cripple operations. The losses from Venezuela, combined with potential outages in Iraq, Libya and Nigeria, could reach 3 mb/d in 2018, Citi said.”

  17. Boat on Fri, 12th Jan 2018 12:56 pm 

    MM,

    One of the reasons guys like you don’t last is your attention to detail. The oil post from MIT about shale oil is from 2012. The opinion of the poster is no longer relevant. The information used is long outdated.

  18. MASTERMIND on Fri, 12th Jan 2018 1:18 pm 

    Boat

    What about these ones from this year

    The US Shale Business is “not profitable” and can’t fund itself whether oil is at 100 or 50 dollars a barrel
    https://imgur.com/a/t7ulB

    The world’s largest oil trader Vitol says US oil production will peak in 2018
    https://www.reuters.com/article/us-commodities-summit-vitol/u-s-oil-output-may-be-set-for-last-spike-in-2018-vitol-idUSKBN1CF1MZ?rpc=401&

    Chevron CEO warns US shale oil alone cannot meet the world’s growing demand for crude
    https://www.cnbc.com/2017/05/01/us-shale-cannot-meet-the-worlds-growing-oil-demand-chevron-ceo-warns.html

    Lets not just cherry pick one article. You dumb buffoon! In Jebus name!

  19. Boat on Fri, 12th Jan 2018 4:04 pm 

    MM

    Let’s take on the Chevron link. A claim US production cannot meet world demand, Since world demand is 1.3 mbp and up……well no shyt. The US is projected to raise production close to 1 mbpd which is massive for any country. Your posts are nonsense.

  20. Boat on Fri, 12th Jan 2018 4:12 pm 

    A cut by Russia/OPEC of 1.8 mbpd does not equal a lack of reserves or oil which is what you claim. More nonsense. If they returned that oil to the market tomorrow the 5 year average storage drop would reverse and the glut deepen. Your posts show no understanding of reality.

  21. MASTERMIND on Fri, 12th Jan 2018 4:22 pm 

    Boat

    According to the HSBC oil study 2017. They concluded the world would need to discover and bring online 6 1/2 new Saudi Arabia’s worth of oil to make up for depleted conventional supplies and increased world demand.

    ://www.scribd.com/document/367688629/HSBC-Peak-Oil-Report-2017

    Shale can’t do that much buddy! And its never made any money! You better find a new horse to plug this one died at the gate!

  22. MASTERMIND on Fri, 12th Jan 2018 4:25 pm 

    Boat

    Existing oil reserves are scheduled to begin a catastrophic crash within 1 to 3 years. When it hits the economic and social damage will be catastrophic. The end of Western Civilization, from China to Europe, to the US, will not occur when oil runs out. The economic and social chaos will occur when supplies are merely reduced sufficiently….

    https://www.scientificamerican.com/article/has-peak-oil-already-happened/
    http://www.sciencedirect.com/science/article/pii/S030142151300342X
    http://www.sciencedirect.com/science/article/pii/S0016236114010254
    http://www.geo.cornell.edu/eas/energy/the_challenges/peak_oil.html
    http://www.scribd.com/document/367688629/HSBC-Peak-Oil-Report-2017
    https://imgur.com/a/6dEDt

  23. ____________________________________________ on Fri, 12th Jan 2018 7:08 pm 

    You are Juan syphilitic faggot. America is a shithole because of imported trisexual satanists like you.

  24. Pat on Fri, 12th Jan 2018 7:34 pm 

    the show just begun, the oil prices breach 70s and 2008 levels not far. world is seeing unprecedented demand for oil with falling oil supplies due geopolitical, depletion, natural and falling explorations. prepare……

  25. onlooker on Fri, 12th Jan 2018 8:24 pm 

    This oil price rise is sustainable to consumers around the world. So effective Demand, the oil price and Net Energy will continue to fall

  26. onlooker on Fri, 12th Jan 2018 8:26 pm 

    sorry NOT sustainable to consumers

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