October 2010 Archives

OPEC's crude production quotas are largely notional, with actual production running close to 2 million b/d higher than the 24.845 million b/d target 11 of the group's members agreed to nearly two years ago.

But quotas are also political, which may go some way towards explaining why Nigeria is resurrecting its push for a higher output allocation.

The recession may be officially dead and many banks' balance sheets seem solvent, but a stingy borrowing climate persists after the 2007-2009 meltdown. The notion of tightwad financiers is less the oxymoron that it once was, pre-2007, and beefed up due diligence is in vogue.

So runs a common thread among attendees and speakers at this week's Oil Council's Americas Assembly in New York.

Maybe it says something when talk of unconventional gas being a game changer starts to seem like old hat. So many facets of the US shale gas revolution -- the shift in LNG shipments to European markets, the contribution to a gas glut in key consumer markets -- now get taken for granted.

So what's new? To start with, there's what might be termed informed speculation concerning Europe's unconventional gas potential. There are some very large figures out there, including a serious suggestion that the underlying resource potential could yield as much as 200 billion cubic metres a year (Bcm/y) by 2030 -- or more than Russia's entire exports to both EU and non-EU Europe.

Northwest European refining margins were bolstered last week, as French refinery strikes lifted refined product prices while depressing spot crude prices, Platts data showed. And one industry analyst has argued that the price reaction to the strikes shows Europe is replacing the US as the oil price leader.

The Amsterdam-Rotterdam-Antwerp Brent cracking margin averaged $5.09/b the week ending October 22, up from $4.72/b the prior week and $2.77/b the week ending October 1. Platts refining margins reflect the difference between spot crude prices and the corresponding netbacks, which are based on Turner Mason & Company yield formulas.

The French refining strike shows no signs of letting up, even though the controversial pension reform which has sparked the unrest is moving closer to becoming law.

While gasoline retail associations and some refiners are showing caution when considering whether to sell the new government approved 15% ethanol-blended gasoline, or E15, it appears that National Association for Stock Car Auto Racing, or NASCAR, has a different idea.

There is widespread agreement that confusion hampered the response effort in the early days and weeks after the April 20 blowout of BP's Macondo well. There was confusion over whether there was an oil spill at all and then just how large; confusion over how quickly the gushing well would be capped; and confusion over just who was in charge, BP or the government.

The scale and scope of the confusion is well documented by a report produced by the staff of the National Oil Spill Commission, appointed by President Obama to investigate the Deepwater Horizon tragedy and recommend ways to avoid a repeat. The document, entitled "Decision Making Within the Unified Command," details some of the problems encountered by government responders in the early days and suggests ways to clarify roles in the future.

CNOOC is back tapping the US for the country's energy needs after a five-year hiatus, and again the latest deal has generated a lot of heated discussions in the US.

In its latest reading of the oil market tea leaves, the IEA said October 13 it saw clear signs of improving oil demand, but that it did not think market fundamentals would support a rise in oil prices to $100/b by next year.

Chicken Little took a walk in the woods when an acorn fell from a tree and hit the top of her little head. "My, oh, my," she said. "The sky is falling."

For industry and business groups in Washington and thousands of lobbyists the sky is always falling.  The real threat isn't Foxey Loxey but government regulations that industry and business groups consider threatening their interests.

Seen as the fringe and "out there" wing of the energy world, the Association for the Study of Peak Oil & Gas-USA shows signs of finding its inner nerd as its sets its sights on making a bigger policy footprint.

This year the group held its sixth annual conference within spittin' distance of the Capitol in Washington, DC. Recent past conferences have been in California, Colorado and  Texas.

The Oil Council is spreading its wings into the Americas, and it announced itself in a breakfast meeting with reporters the morning of October 5 that covered a lot of ground.

The group, which was described by its CEO Ross Campbell as a "community-based network of high-ranking oil and gas executives," is holding the Energy Capital Assembly in New York later this month. In preparation for that meeting, it brought together several executives involved in putting together capital for the oil and gas business.