January 2012 Archives

(John Roberts was a guest lecturer on energy security at the NATO Partnership for Peace Symposium at Oberammergau earlier this month.)

When NATO looks at Iran it would seem reasonable to expect that it was looking at how the western world's warships are cramming into the Strait of Hormuz amidst charge and counter-charge that the strait faces the prospect of an Iranian blockade.

But when NATO invites its partners in the region -- countries such as Saudi Arabia, the UAE, Iraq, Jordan and Egypt are all members of NATO's Partnership for Peace program -- for an informal symposium on issues of mutual interest, it's not just energy security that's up for discussion, but cyber security, water and the problems posed by declining military budgets.

In his much-hyped State of the Union address this past week, President Barack Obama gave a rhetorical bearhug to US energy development, even stealing a line from Republicans and pronouncing the need for an "all-out, all-of-the-above strategy" on increasing energy production.

Platts Senior managing editor Shailaja Nair of our Singapore office, sat down with CNBC to talk about the effect of geopolitical events on oil and gas going forward. You can see the interview here.

It's the Lunar New Year in China, which marks the start of the zodiac Year of the Dragon. And 2012 will be another year that the world will again focus on China and actions to be taken by world's second largest oil consumer.

So given the importance of the number eight in Chinese culture, here are eight areas of focus for China's energy demand for 2012.

On January 19, the NYMEX crude-to-gas futures contract ratio hit an all-time, 22-year high of 43-to-1, tightening to 36-to-1 January 25.

Here's the question: Who cares anymore?

The National Petrochemical & Refiners Association officially changed its name today, to American Fuel & Petrochemical Manufacturers. In its presentation to a group of the Washington energy community, and the press, the "manufacturing" aspect of this was uppermost.

That makes a great deal of sense. With so much national policy aimed at boosting the manufacturing sector, why not look to be part of it? Especially when your product, as has been widely reported, was the largest export for the US, by dollar value, in 2011.

The numbers are in, and the rate of Chinese oil demand growth slowed considerably in 2011, falling to almost zero growth by the end of the year.

Platts' monthly survey of Chinese oil demand for December also gave us the opportunity to add up the figures for the entire year. While the country continues to set demand records virtually every month, by December that rate of growth compared to the prior year had slid to less than 1 percent.

You can read all about the numbers here.

For the first time in a decade or so, Europe can -- theoretically at least -- look forward to a relatively uninterrupted period of low-cost wholesale gas supplies. It should not be like this. Given the depressed markets, overseas sellers would be more naturally inclined to postpone their marketing plans or to cancel them outright.

With more production and transport capacity coming on stream and Europe's economies in deep recession, oversupply appears to be the way the market is heading.

Canada's official exit from the Kyoto treaty -- an act undertaken by one of the pact's biggest public supporters -- could be seen as a significant win for the oil sands industry. But that sector is facing a host of other issues, including rising costs. Platts correspondent Gary Park, in this week's Oilgram News column "Petrodollars," reviews the landscape.

The brief protest at a Washington, DC, energy conferen­ce served as an unintentional but appropriate metaphor last week for Dave McCurdy, president and CEO of the American Gas Association.

Another week has gone by with relatively little movement in the headline price of oil, but don't let that fool you into thinking the market is calm. It just doesn't know whether to focus on the never-ending gloomy economic news from Europe or take its cue from the increasing fundamental tightness in the market and the risk of supply interruptions arising from the increasingly heated standoff between Iran and major Western powers.

When US refiners release fourth quarter earnings in a couple weeks it's going to be ugly. That point was driven home today when Hovensa, the joint Hess-PDVSA refinery in St. Croix, said it was joining a list of other East Coast refineries in shutting its doors.

For the refinery business as a whole, a string of losses are expected as big discounts for WTI-priced crudes were erased during an already weak period.

In discussing the inclusion of airlines in the EU Emissions Trading System, which started January 1, here are a few numbers to consider:

Platts' managing editor for European oil markets Simon Thorne was on Africa Business News earlier today, talking about the ramifications of strikes and shutdowns in Nigeria. The stoppages followed the country's decision to end subsidies that helped keep down the price of gasoline. You can view the interview here.

More than just a playground for winter-weary northerners, The Bahamas serves as a key distribution center for the world's oil.

It's home to Buckeye's Borco and Statoil's South Riding Point terminals that, with a combined 29 million barrels of storage -- and growing -- makes the island nation the region's largest transshipment poin of other countries' oil.

Not all that long ago, it seemed that every jump in US crude oil stocks, or overall petroleum stocks, was centered on the NYMEX delivery hub of Cushing, Oklahoma. That isn't the case anymore, as evidenced in this week's Energy Information Administration inventory report. You can read Platts' analysis of it here.

After a more than three-week delay, US Commodity Futures Trading Commission member Scott O'Malia on Wednesday got the present that has been at the top of his Christmas wish list for months.

But, like the kid who asked for a brand new ipod, but instead found an off brand, bargain bin mp3 player under the Christmas tree, O'Malia seemed a little disappointed that he didn't get exactly what he wanted.

In case anyone hadn't noticed, January 10 is the 111st anniversary not only of the Texas "awl bidness" (that's Texan for oil business, to all you non-Lone Stars) but also of Big Oil.

On that day in 1901, the Lucas well at Spindletop, a salt dome oil field sited south of what is now the city of Beaumont, Texas came in and was soon producing more than 100,000 b/d of oil.

Republican presidential candidates are trying to outdo each other to show how pro-drilling they would be if they occupied the White House. But as Platts' Gary Gentile explains in this week's Regulation & the Environment column in Platts Oilgram News, the president's power is not all that it's cracked up to be.

The long-standing belief that energy demand in the US could do nothing but rise inexorably continues to fade in the rear view mirror. It's been replaced by week after week, month after month of various reports showing a decline in consumption. This week's EIA weekly statistical report showed another drop in demand, and a concurrent big rise in inventories. You can read Platts' analysis of this week's report at http://platts.com/PressReleases/2012/010512c.

The Barrel was preparing to pull together a blog entry based on recent Platts' reporting regarding the impact that California's Low Carbon Fuel Standard might have on the state's crude oil market and production. Then a federal court intervened.