OPEC next gathers December 4 in Vienna, just over a year since Saudi Oil Minister Ali Al-Naimi announced at the previous OPEC winter meeting the Saudi decision to let the oil market determine oil prices rather than to continue Saudi Arabia’s role of guarantor of $100+/bbl oil.
The World Bank seeks to use its economic power to affect changes that can improve the environment. One recent push has involved setting a global standard regarding the practice of “flaring,” or burning off unwanted gas from oil wells.
By doing so, the World Bank hopes to end both a needless waste of resources and reduce the creation of greenhouse gasses. According to a report by the Associated Press, the World Bank’s executives hope to use their clout to influence the world’s largest oil-producing countries and companies to agree to the new policy.
By the time the yuan had weakened almost 2%, the slide in commodity prices was cited as evidence of the market’s concern that China was going to export deflation. This weighed on the dollar-bloc currencies, and the currencies of other commodity producers. Now the yuan has fallen further; oil prices are higher as are the dollar-bloc currencies and the main commodity producers in the emerging market space.
In the last quarter of 2014, in the face of possible oversupply, Saudi Arabia abandoned its traditional role as the global oil market’s swing producer and therefore it role as unofficial guarantor of existing ($100+ per barrel) prices.
Many oil companies had trimmed their budgets heading into 2015 to deal with lower oil prices. However, the rebound in April and May to $60 per barrel from the mid-$40s suggested that the severe drop was merely temporary.
But the collapse of prices in July – owing to the Iran nuclear deal, an ongoing production surplus, and economic and financial concerns in Greece and China – have darkened the mood. Now a prevailing sense that oil prices may stay lower for longer has hit the markets.
A flood of bearish news has pushed down oil prices to their lowest levels in months, with WTI nearing $45 per barrel and Brent flirting with sub-$50 territory.
With a bear market back, there is pessimism throughout the oil markets. Goldman Sachs is even predicting oil stays at $50 through 2020, a profoundly grim view of the state of oil supplies.
On the other hand, the contraction in U.S. shale is underway, so it is just a matter of time before the mismatch between supply and demand balances out.
Canada has given oil sands a dirty reputation, but a breakthrough, commercially viable technology has caught the eye of a former Exxon Mobil president who is putting it to use to clean up Utah’s billions of barrels of oil sands.
Imagine extracting high-quality oil out of the estimated 32 billion barrels buried in Utah’s oil sands, without creating the toxic wastelands that have resulted from oil sands projects in Western Canada. In addition, imagine doing it at a cost that can still turn a profit in today’s oil price slump.
With continued indications of a global slowdown in economic activity, oil has entered a bear market as oversupplies hurt prices for the second time in a year.
Oil futures has fallen 20% from its peak in 2015 as Brent futures fell over 1% during Tuesday morning trading. WTI futures continued their slide in the U.S., nearing $47 per barrel as losses extended for the second day in a row.
With the recently concluded nuclear deal between Iran and the P5+1 countries, oil prices have already started heading downward on sentiments that Iran’s crude oil supply would further contribute to the already rising global supply glut. The economic crisis in Greece, OPEC’s high production levels and China’s market turmoil have created more pressure on oil prices, making a price rebound look highly unlikely in the near future.
Since the 1970s, nuclear power has provided cheap, stable and clean electricity that has fuelled South Korea’s rapid economic growth. Currently, 23 nuclear power plants with a total capacity of 21 gigawatts of electric energy are generating 27 percent of South Korea’s total electricity needs. The wholesale price of nuclear power, US$52 per megawatt hour (MWh) in 2014, is still cheaper than coal (US$61/MWh) without any form of carbon pricing.
