Category: Energy

Low Oil Prices Spillover Effect Hits Energy Sector Debt and Equity Hard

Oil companies continue to get burned by low oil prices, but the pain is bleeding over into the financial industry. Major banks are suffering huge losses from both directly backing some struggling oil companies, but also from buying high-yield debt that is now going sour.

The Wall Street Journal reported that tens of millions of dollars have gone up in smoke on loans made to the energy industry by Citigroup, Goldman Sachs, and UBS. Loans issued to oil and gas companies have looked increasingly unappetizing, making it difficult for the banks to sell them on the market.

Oil Storage is Getting Creative and, in Some Cases, Expensive

Oil prices fell from the middle of last year through mid- to late-January.  They have been broadly sideways since.  The April light sweet futures contract has been in a $48-$55 range.  The April Brent contract traded in a $55-$60 range in the first half of February and moved into a slightly higher range $58-$63. 

Japan’s Abe Commits to Changing His Party’s Relationship with Deeply Unpopular Power Utilities

Japanese politics was dominated by energy in the wake of the disaster of 11 March, 2011. The decision to shut-down all the remaining 48 nuclear units introduced real concerns of brownouts, previously unthinkable in Japan’s gold-plated power system. The parliament commissioned the first independent inquiry in Japan’s postwar history, and gave it the task of finding out what happened, and how a similar event can be avoided.

Good News/Bad News from a Recession-Backed Energy Consumption Reduction

Readers of the Financial Times would have recently encountered a story that encompasses the paper’s version of bad/good news when it comes to the oil business. According to the author Daniel Yergin, the bad news is that several major oil exporters are suffering from insurrection and civil war, which threatens global supplies. But, there is also good news:

The sum of these risks is trumped by the old-fashioned forces of supply and demand. While there may be a surplus of geopolitical risk in the world, there is an even greater surplus of oil.

Is Russia Building The Next Floating Chernobyl?

Two years after the Fukushima Daiichi nuclear disaster, Russia is planning the construction of a new line of floating nuclear power plants that could power remote and arid areas of the country, but could also have dire consequences for the maritime environment should any mishaps occur.

So much for the lessons of Fukushima. Never mind oil spills, the Russian Federation is preparing an energy initiative that, if it has problems, will inject nuclear material into the maritime environment.

Rising Powers, Shrinking Planet: What’s Next in the Energy Debate?

Most, if not all, wars have been trade wars connected with some sort of material interest. As geopolitical risks multiply and conventional energy reserves decline, could the accelerated development of renewable energy prove to be the only way to avoid an inevitable spiral of war and disaster? 

Why Peak Oil Pundits Got It Wrong

Many investors believe that global oil production would start to decline from 2014-15, a prediction based on the so-called peak oil theory that the world demand for oil would soon outstrip supply and send oil prices through the roof. For several years in the middle of the last decade, as oil prices climbed past $100 a barrel and analysts were betting it would cross $200, peak oil pundits were sure they had it right.

Junior Oil Companies: Making It Big In Canada? – Aroway Energy Interview

Junior oil companies may not have the reach, nor the resources, of major oil firms, yet some still manage to turn up massive profits – thanks to the economic principle that the management of small oil & gas properties are run more efficiently and profitably by small companies. In Canada, the junior oil & gas sector is thriving, particularly as more companies turn away from risky overseas venture and plant their feet firmly in homeland soil.