It has been a turbulent year for oil. Prices were strong in summer 2014, before plummeting in the second half of that year. After a modest stabilisation in early 2015, they dropped even further and are now more than two thirds lower than in summer 2014 – as the graph below shows. It’s bad news for oil producers but is forcing some, at least, to reform their economies as a result.
After failing to come to agreement with Apple to enable mobile phone payments, six of Australia’s biggest financial institutions this week signed on with Android Pay. The service will go live in Australia in the first half of 2016.
Both Android Pay and its competitor Apple Pay allow consumers to pay for purchases using a card-linked mobile phone by tapping their phone in the same way you would tap your card at the point of sale. The services also work with smart watch devices, and in the case of Apple Pay, by holding the fingerprint on the phone.
Every year around the world, hundreds of millions of children wait anxiously for Santa Claus to arrive and bring presents and good cheer. But what if Santa never came? What if this year the reindeer all fall ill, perhaps due to Crazy Reindeer disease (the analog to Mad Cow) and Santa is forced to cancel Christmas? The result would be devastating.
Business is business, so why not buy oil from ISIS. The Russians claim the Turks are doing it, and in all likelihood, even Assad is buying it. No one can fight a war without oil, according to Robert Bensh, partner and managing director of Pelicourt LLC oil and gas company. However, while the politically unhinged are coming out the woodwork, the more important aspects of this story remain elusive to the public.
With OPEC breaking down and any kind of coordination among its members on price cuts looking increasingly unlikely, it now appears that oil prices could remain below $50 a barrel for a year or more. As producers confront this unpleasant reality, some will finally start to significantly curtail or even shut down operations. That is going to severely hurt an all but invisible group; strippers in the United States.
Whatever the outcome of the climate talks in Paris, one thing is certain: climate change will result in assets becoming “stranded”. In addition, despite the claims of various naysayers, investors should be prepared.
Many observers conclude OPEC is dead. Oh, there have been claims of its demise before, but after the oil cartel failed to provide a quota (output goal) in last week’s statement, the claim has new life.
As the recent summit of the Organization of the Petroleum Exporting Countries (OPEC) suggests, they will not lower the oil production ceiling, despite great overcapacity. What we are witnessing is not just a cyclical shift, but a new secular tend that heralds the demise of the petrodollar era in the Middle East.
Meltdown of oil prices
The effects of the rapid growth of the world’s second largest economy are visible everywhere. China’s pollution is raising environmental and health concerns, and steeply rising oil imports raise questions around energy security. Chinese leaders are deeply aware of the challenges and they have placed ecological goals at the same level of priority as economic, political, cultural and social policies.
The Turkmenistan–Afghanistan–Pakistan–India (TAPI) gas pipeline project was first conceived in October 1997 by Central Asia Gas Pipeline Limited (CentGas). Almost 18 years later, the pipeline—often dubbed as the “on/off pipeline,” the “pipeline dream,” and the “peace pipeline”—although still on the drawing board is inching closer to reality.
