Why Crude Oil Will Present Investors with a Golden Opportunity in 2009
Back in 1988, for instance, Saudi Arabia raised its proven-reserve figure from 170 billion barrels to about 260 billion barrels. That figure has remained more or less constant since then, despite the fact that billions of barrels of oil have been pumped out of the ground.
“Saudi Arabia has announced for 20 years in a row that they have 260 billion barrels of oil in reserve,” Rogers told Money Morning during an exclusive interview in Singapore recently. “It’s astonishing. The figure never goes up and it never goes down. They have produced dozens of millions – billions – of dollars of oil in that period of time.
“Every oil country in the world has declining reserves except Saudi Arabia,” Rogers said. “And I know that every oil company has declining reserves. So unless somebody discovers a lot of oil very quickly in very accessible areas, the surprise is going to be how high the price stays, and how high it goes.”
Simmons thinks oil prices could hit $300 a barrel – and could possibly even surge as high as $500 a barrel – during the next several years.
Oil jumps above $40 on Gaza conflict
VIENNA, Austria – Tensions generated by a widening conflict between Israel and Palestinian militants sent crude prices up sharply to above $40 a barrel Monday, with gasoline and heating oil also making sizable gains.
Prices also were supported by indications that key OPEC members were acting on commitments to cut back production, in line with a decision earlier this month to take a daily 2.2 million barrels off the market.
Light, sweet crude for February delivery rose $2.56 to $40.27 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe.
Oil said to back near $100 by 2010-2015
ISTANBUL (Reuters) - Oil prices may rebound to around $100 per barrel between 2010 and 2015, International Energy Agency Chief Economist Fatih Birol predicted on Monday.
Birol told an energy conference that he saw downward pressure on oil prices in 2009 but said he expected prices to move up again in 2010 with a recovery in the world economy.
Oil is on track for a nearly 60 percent loss this year, the biggest annual fall since futures began trading 25 years ago.
China to Increase Oil, Gas Imports on Lower Prices
(Bloomberg) — China, the world’s second-biggest energy consumer, will take advantage of lower prices to boost imports of oil and natural gas as reserves are being built, the head of the National Energy Administration said.
Companies will be encouraged to utilize their spare oil- storage capacity while state and commercial reserves of other “strategic resources” will be set up, Zhang Guobao, also the vice chairman of the National Development and Reform Commission, wrote in an article in the official People’s Daily today.
Myanmar signs gas deal with SKorea, India, China: state media
YANGON (AFP) – Military-run Myanmar has signed a deal with South Korean and Indian companies to pipe natural gas from the energy-rich nation’s offshore fields to China, state media reported Monday.
The Myanmar Oil and Gas Enterprise inked the deal last Wednesday with South Korean companies Daewoo and Korea Gas Corporation and Indian energy firms ONGC Videsh and GAIL to supply gas to the China National United Oil Corporation.
Tumult in the life of a Calgary oil trader
CALGARY - There were days this year when Rob Gigiel felt as if he were watching a space shuttle blow up in slow motion. There were days this year when Mr. Gigiel felt as if he’d won the Stanley Cup.
But the day a barrel of oil hit US$100 - now that was a day to remember.
Russia continues gradual devaluations as econ slows
MOSCOW (Reuters) - Russia allowed the ninth mini-devaluation of the rouble this month on Monday, bringing the currency’s losses to more than 18 percent since August as the oil-funded economy faces growing risks of recession.
Russia’s central bank began a gradual depreciation of the rouble a month and a half ago due to downward pressure on the currency from slumping oil prices, a worsening economy and investors’ flight from emerging markets.
Kuwaiti Partner: Dow Deal Still in Effect
PHILADELPHIA (AP) - Rohm & Haas Co. said its proposed acquisition is still in effect even though the Kuwaiti government has canceled a $17.4 billion joint venture with U.S. petrochemical company Dow Chemical Co.
On Sunday the Kuwait government said the joint venture, known as K-Dow Petrochemicals, was “very risky” due to the global financial crisis and low oil prices. The move came just days before the joint venture’s Jan. 1, 2009 startup date.
Saudi Aramco, Total award first contract for Jubail
DUBAI (Reuters) - Saudi Aramco’s and French oil major Total awarded a construction contract for its $12 billion joint-venture refining and petrochemical facility in Saudi Arabia, the companies said on Monday.
The contract, which is required to support the construction phase of the complex at Jubail, is an indication of the companies commitment to push through the project.
No country can be expected to continue supplying gas to a customer which refuses to meet its bill.
Ukrainian speaker in favor of gas consortium with Russia
MOSCOW (RIA Novosti) - The speaker of Ukraine’s parliament said on Monday that he was in favor of reviving a proposal to establish a gas consortium between Russia and Ukraine.
“The idea has been discussed, all the basic documentation has been signed. We should examine this very seriously and gain a mutual advantage. The idea is good, and it needs to be brought back,” Volodymyr Lytvyn told Ekho Moskvy radio.
Gazprom sees record 10% reserves boost
The hydrocarbon reserves of Russia’s Gazprom rose by a record 10% this year after the government granted it 10 major gas deposits and its oil arm boosted oil reserves, according to reports.
Vedomosti business daily quoted two unnamed Gazprom officials as saying Gazprom and its subsidiaries increased reserves by 4.7 billion barrels (601 tonnes) of fuel equivalent in 2008.
Russia’s initial investment in Bolivian gas fields to hit $4 mln
MEXICO CITY (RIA Novosti) - Immediate investment by Russian companies in the exploration of new gas fields in Bolivia could reach $4 million, Mexican media reported, referring to Bolivian Energy Minister Saul Avalos.
According to Avalos, geological prospecting will begin as soon as January.
Lower gas prices helping Ohio police departments
WILLOUGHBY (AP) - Police chiefs said they’re relieved gas prices have fallen so much in recent months, especially after record high prices strained department budgets over the summer.
But with 2008 gas prices ranging from $4 a gallon to the current $1.60 a gallon, some northeast Ohio officials are wondering how much to set aside in 2009 to keep patrol cars on the road.
Green building stalls amid falling home prices
PHOENIX - Homebuilders slapped on solar panels and added other eco-friendly enhancements as energy prices soared earlier this year, hoping greener homes would lure reluctant buyers.
But since July, the cost of oil has plunged from $147 a barrel to about $36, while home prices continued to fall. Together, these headwinds have stalled low-energy housing developments around the country, including projects by Meritage Homes and Shea Homes.
Demand grows for U.S.-style suburbs overseas
A growing number of architects and urban planners are finding work overseas as the domestic real estate slump persists. An emerging affluent class abroad is drawn to suburbs with U.S. names that mimic the American ideal — down to the master bathroom and tree-lined sidewalk.
Brazil unveils plan to expand ethanol sales in Asian market
Brazil’s giant oil and gas corporation Petrobras has plans to open next year its first service stations in Japan to promote the distribution of ethanol, of which Brazil is the world’s second leading producer, according to a report from O Estado de Sao Paulo. Petrobras already operates an oil refinery in Japan.
Japan would be the first step in a long term plan to conquer the Asian ethanol market. Brazil currently exports 380 million litres of ethanol (made out of sugar cane), but the target is to reach 12 billion litres in a decade.
Biodegradable plastic made from plants, not oil, is emerging
Here is one word about an up-and-coming innovation in plastics: cornfields.
Bioplastics — most of which are now made from corn — are poised to grab a bigger share of the plastics market as concerns about the environment and U.S. dependence on foreign oil promote alternatives to products made from petrochemicals.
Canada’s vast oil cache hides dirty environmental secret
FT. MCMURRAY, Canada - From here in the far north of Canada through a web of transcontinental pipelines down to a network of refineries ringing the Chicago area, a new supply of precious oil has begun flowing into the gas tanks of more Americans, tapped from a source so vast it could one day furnish close to half of U.S. oil needs for 50 years or more.
This Canadian oil is stable and reliable. It promises to substantially reduce America’s future dependence on volatile Middle Eastern sources of oil. And much of it is profitable to produce even with oil prices hovering around $50 per barrel, which explains why some of the world’s largest oil conglomerates have invested tens of billions of dollars here despite wild short-term swings in international oil prices.
But what few American consumers know as they routinely fill up their tanks is that this new petroleum bonanza, drawn from dense, tarry deposits known as oil sands, ranks as what environmentalists call the dirtiest oil on the planet. Extracting it causes widespread ecological damage - and could accelerate global warming.
Million dollar question: how to get oil from shale
Opinions differ about what role oil will play in the energy future of the United States and what role oil shale should have. Should oil shale be developed and, if so, when and how? Many geologists, engineers, physicists, chemists and others have been studying oil shale and its potential for years and have established some basic facts.
Re-igniting the global warming debate: Here’s what will make headlines in 2009
3- Talk of peak oil goes mainstream.
Earlier this month Fatih Birol, chief economist of the International Energy Agency, told British journalist George Monbiot that conventional oil production will plateau – that is, peak – in 2020 and that it’s “not good news from a global oil-supply point of view.” It was an unprecedented statement coming from a conservative organization that has traditionally sugar coated the long-term oil outlook.
It seems odd, when you consider that members of the Organization for Petroleum Exporting Countries are making unprecedented curtailments of supply.
But that’s a reaction to a short-term fall in demand. More dangerous is that unconventional oil projects that represent future supply, such as those in the oil sands, have been put on hold because of tight credit markets and low oil prices. When demand picks back up, and it will happen fast, supply just won’t be able to keep up. Given this scenario, expect more talk of “peak oil” next year, and not just from fringe groups shouting from the sidelines.
Humans, Oceans Shaped North American Climate Over Past 50 Years, NOAA Report Says
While a general trend toward warmer ocean conditions is expected with increasing greenhouse gases, regional differences in sea surface temperature trends can be either natural or human-caused, according to Dole.
The assessment found that an increase in greenhouse gases is likely responsible for more than half of the average continental warming of 1.6° Fahrenheit observed during the past 50 years. Greenhouse gases, emitted by fossil fuel burning and natural sources, trap heat in Earth’s atmosphere and warm the surface.
Energy secretary Ed Milliband says 2009 is crunch year for climate change
Energy and climate change secretary Ed Miliband said 2008 was an historic year for confronting the twin challenges of developing a low-carbon economy and combating climate change, thanks to the agreement on European energy and emission targets, the passing of the world-first Climate Change Act, and strong growth in the UK renewable industry.
But he said 2009 will be crucial when it comes to meaningful action on climate change.
Natural Disasters Cause Higher Losses in 2008, Munich Re Says
(Bloomberg) — Losses from natural catastrophes rose to the third-highest level on record as climate change fueled cyclones and hurricanes and China was hit by the Sichuan earthquake, according to a report from Munich Re.
Worldwide insured losses related to natural catastrophes increased about 50 percent to an estimated $45 billion last year compared with 2007, the world’s biggest reinsurer said in an e- mailed statement today. Overall losses more than doubled to about $200 billion, the Munich-based company said.
