Energy Archives - Page 2 of 16

Saudi Arabia Plays a Balancing Act

It’s possible that OPEC is crying wolf with hints of an output freeze next month in Algiers; but it’s also possible that they are ramping up production to take the sting out of a freeze. This is a delicate balancing act that the Saudis need to play very carefully.

The official chatter is that the OPEC meeting in Algeria from September 26 to 28 could conclude with an agreement to freeze production by the member nations, with even Russia joining forces in a freeze that may prevent further oil price erosion.

Stacking the Deck before the Next OPEC Meeting

Saudi Arabia suggests it may be increasing its August crude output to a new all-time high as it could give it more leverage to influence the September informal talks on a possible production freeze, Reuters reported on Wednesday, citing industry sources.

Vietnam’s Ambitious Clean and Green Goals

In recent decades, Vietnam’s demand for energy has increased along with its rapid economic development. This surge in demand could provide the impetus to develop Vietnam’s emerging renewable energy industry.

Are Conditions Setting the Stage for Higher Natural Gas Prices?

The U.S. electric power sector burned through a record amount of natural gas in recent weeks, a sign of the shifting power generation mix and also a signal that natural gas supplies could get tighter than many analysts had previously expected.

A New OPEC Meeting May Give Oil New Life

This Great Graphic from Bloomberg shows the September light sweet crude oil futures contract since peaking in early June near $52.75. It reached a low last week of about $39.20.

The turn last week came on news that although oil inventories rose gasoline inventories fell dramatically. The recovery seemed to have stalled at the end of last week near $42.40 but it was given a new lease on life by reports of an OPEC meeting next week. OPEC President Al-Sada (Qatar) seemed to try to make the most of the informal meeting.

Conditions now Could Set Up Higher Oil Prices Later

Another oil price downturn threatens to deepen the plunging levels of investment in upstream oil and gas production, which could create a more acute price spike in the years ahead.

Oil and gas companies have gutted their capex budgets, necessary moves as drillers went deep into the red following the crash in oil prices. However, the sharp cutback in investment means that huge volumes of oil that would have otherwise come online in five or ten years now will remain on the sidelines.

September Oil is Losing a Technical Battle

Today’s 2.5% fall in the September light sweet crude oil futures contract extends the decline that began on June 9. It is the third consecutive loss and the fifth loss in the past six sessions. There are two important points to make that this Great Graphic from Bloomberg helps illustrates.

Lithium’s Run is Likely not Over

So far, lithium has been the hottest metal of 2016, beating out gold, with exponential demand expected over the coming years. Although the price trajectory of the metal has been subdued in recent months, the fundamentals behind the long-term trajectory suggest strong potential for long-term growth.

Price doubling from 2014/2015 was first seen in China and is now being felt worldwide, with lithium hydroxide prices from $16-20 and carbonate prices from $12-14 thousand USD per ton.

Automotive Thrust

(Re) Calling All Oil Workers

The rig count has rebounded from the lows seen in late May; a small indication that oil companies in the U.S. could begin drilling anew. Shale drilling is a short-cycle prospect, requiring only a few weeks to drill and bring a well online. Because of this, the collective U.S. shale industry has been likened to the new “swing producer”: low oil prices force quick cutbacks but higher prices trigger new supplies. In essence, shale could balance the market in the way OPEC used to.

More Rigs could be the Oil Rally’s Greatest Foe

In an industry where anything could happen, surprises—often unwelcomed—are hard to come by. Oil is exactly such an industry at the moment. No one is sure where oil is heading, near-term forecasts range from $20 to $80 per barrel by the end of the year, and there are just too many wild cards on the scene.