WIA: The Resurrection of Peak Oil

1) The Resurrection of Peak Oil It has been a long wait for “peak oilers,” whose passionate belief is that the world will run out of oil in coming years, sending prices through the roof. This splinter religion came into being in 1956 when M. King Hubbert produced some simple supply/demand charts showing that US reserves of Texas tea would dry up by 1965-70, forcing a heavy reliance on imports with which we have become all too familiar

Can Saudi Arabia boost oil output in times of tight supply?

With recent unrest sweeping the Middle East and Northern Africa, oil supply concerns are a big factor pushing prices higher, and one possible solution to capping prices has been raised that Saudi Arabia, OPEC’s leading oil exporter should lift oil output quotas to balance any shortfall in oil supply. But is this a real possibility, or just small talk?

Brent oil trading over $117, oil supply now a real concern

Brent oil futures open today’s trading session firm over $117 a barrel as traders and investors resume buying into crude, which is driving oil prices higher, but the real concern is oil supply, as Libya oil production goes offline and unrest in the Middle East is set to escalate this week. Latest Brent Oil Price In London, Brent crude oil futures for April 2011 delivery was trading at $117.38 a barrel, 07.40 GMT this morning on the ICE Futures Exchange.

OPEC star Saudi Arabia looks to raise oil export capacity

Last weekend OPEC’s star crude oil exporter Saudi Arabia called apon top oilfield service firms to help the country quickly boost its oil rig count by 30 percent to help give Saudi Arabia additional capacity to export oil as the world faces tighter supplies. Saudi Arabian state run oil giant Aramco met with leading oil service companies and announced plans to quickly expand its oil rig count to ensure it has extra production capacity, and in turn, exports. “The rig count leap is likely imminent, and expected to accelerate in the second half of 2011 and into 2012.

WTI oil trading firm over $104 amid higher US inventories

WTI oil futures open today’s trading session firm over $104 a barrel as the latest EIA data showed that US crude oil inventories rose higher than many analysts had forecast, while the US President called for more oil production at home. Latest WTI Oil Price US Light crude oil futures for May 2011 delivery was trading at $104.68 a barrel, 05.55 GMT this morning in electronic trading on the NYMEX.

Oil settles lower on weak economic data

Oil fell again Tuesday after disappointing reports on factory production and new home construction raised more concerns about the economic recovery and future demand. The dollar fell against other currencies as well, which helped crude regain some losses.
Benchmark crude for June delivery lost 47 cents to settle at $96.91 per barrel on the New York Mercantile Exchange. It dropped as low as $95.02 at one point in the session.
The price of oil has fallen over 14 percent from a high of $113.52 on May 2.
The Federal Reserve said factory production fell 0.4 percent in April, the first decline in 10 months. A key reason was a drop in auto manufacturing after the Japan earthquake and tsunami led to a parts shortage. Industrial production has risen nearly 11.5 percent since hitting a recession-low in June 2009 but is still below its pre-recession peak in September 2007.
“If your industrial production is down, it means you’re not creating as much. It means the overall economic situation isn’t that good, meaning that demand for goods probably isn’t going to be as strong, including crude oil,” Telvent DTN analyst Darin Newsom said. “It’s just another bearish economic indicator that we aren’t fully on the road to recovery yet.”
Meanwhile the Commerce Department reported that new home construction fell 10.6 percent last month from March. Much of the decline occurred because apartment and condominium construction plummeted. The seasonally adjusted rate fell to 523,000 homes per year, which is less than half the 1.2 million homes per year that economists consider a sign of a healthy market.
The dollar initially got a boost from Europe’s debt woes, particularly worries that more will have to be done to rescue the Greek economy. Since commodities like oil are priced in dollars, a weaker dollar makes them more of a bargain for buyers who use foreign currencies, so the price falls. Oil got back some of its losses as the dollar weakened later in the day.
Lower oil prices are leading to lower prices at the gas pump. The national average for regular gasoline was $3.944 a gallon on Tuesday. That’s about 4 cents less than on Friday but still 11.7 cents more than a month ago, according to AAA, Wright Express and the Oil Price Information Service.
Cameron Hanover analyst Peter Beutel expects pump prices to decline 60 cents a gallon by Memorial Day. He said that would be the equivalent of putting $80 billion to $85 billion back into the pockets of consumers on an annualized basis.
Drivers across the country have been buying less gas because of high pump prices. The latest weekly survey of retail gas sales from MasterCard SpendingPulse shows demand down for the eighth straight week. Analysts expect the Energy Department on Wednesday to report that the nation’s gasoline supplies grew last week, because Americans are using less and refineries are starting to produce more.
Natural gas on Tuesday fell 3 percent, down 13.3 cents to settle at $4.246 per 1,000 cubic feet. Lower factory production means less natural gas is used to generate power.
In other Nymex trading in June contracts, heating oil fell 2.93 cents to settle at $2.8451 per gallon and gasoline futures lost 1.18 cents to settle at $2.9193 a gallon.

Brent oil price nears $116, traders eye Libyan conflict

Brent oil futures open the week’s trading session near $116 a barrel and oil prices are set to remain bullish as traders and investors eye up the Libyan conflict as international coalition forces conducting air strikes over the country. Latest Brent Oil Price In London, Brent crude oil futures for May 2011 delivery was trading at $115.64 a barrel, 06.00 GMT this morning on the ICE Futures Exchange. Oil Prices to Remain Elevated “Oil prices are likely to remain elevated while the situation in the Middle East and North Africa remains volatile.