Challenges facing Africa — and some of its oil producing countries — in 2015

Plummeting oil prices coupled with a significant increase in terrorism, and regime instability pose a direct threat to several sub-Saharan African countries the next year.

2015 will ask searching questions for Nigeria’s political climate as the country heads into a crucial election in February. Campaigning comes against a backdrop of sliding crude prices which have crushed an economy which relies on oil for 70% of its income. Opposition in the north to president Goodluck Jonathan’s re-election has deepened because of a deadly insurgency by Boko Haram Islamists in the region.

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At the Wellhead: A model oil contract in India might not be too popular

India is setting up a new model for outside investment in its oil and gas sector. But as Mriganka Jaipuriyar notes in this week’s Oilgram News column, At the Wellhead, it isn’t getting rave reviews just yet.

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Vitol’s CEO sees up-and-down oil prices, but it isn’t an opportunity

The kind of crazy up-and-down movements of the oil markets in recent weeks and months is not a ripe opportunity for a major trading company like Vitol. In fact, its CEO and chairman Ian Taylor says that whipsaw activity is a nightmare for his company.

“A market that is up $3 in the morning, down at lunchtime and then back up again at the close is almost impossible to hedge,” Taylor said in a one-on-one interview this week as part of the Platts Global Energy Forum. “I don’t think the trading companies do particularly well in that environment.” (Full disclosure: I conducted the interview with Taylor at the forum’s luncheon.)

And contrary to some beliefs, a relatively calm market that goes on many months — like the first part of 2014 — isn’t quite as bad as it might seem. “You’re making an assumption that traders speculate,” Taylor said when asked whether the first relatively non-volatile part of the year was a difficult time for a trading company. “Hardly any trading companies in existence today speculate. Shell, BP, Vitol…we don’t do flat price trading. A predictable long-term trend is much easier to handle.”

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It’s now Ant and Grasshopper days in the oil industry

During most times, the oil industry may operate in a dog-eat-dog world.  Now it’s also in an ant-and-grasshopper world.

You know the story of those two insects — they’re paired together in Aesop’s Fable of the same name.

The ant toils hard to save and scrimp for a rainy day, while the grasshopper flits around, enjoying the moment with no thought for tomorrow. Then winter comes and the ant has stores of food to last him for months; the grasshopper dies.

It’s hard to think, especially given the lavish times of several months back when Niagaras of oil revenues were pouring into corporate coffers, that any operator would ever be out shivering in the cold, harsh winter of sub-$60/barrel oil prices, but that reality is now here. And those who prepared for it in better times, are holding their heads up.

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Bearish IEA market report tops off bad week for oil exporters

If you’re an oil exporter, the December 12th report on the state of the oil market from the International Energy Agency will have topped off yet another week of very bad news.

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Has US oil production peaked? An EIA report argues both sides

Want to dazzle party guests this holiday season with a data-backed argument that the US oil boom may have peaked? Well, the US Energy Information Administration has a report you should probably read.

Want to shut up that obnoxious blowhard who keeps using EIA data to support his argument that the glory days of US oil may have gone by? Want some government data of your own to defend your claim that we have yet to see the peak of US oil production?

I have good news: You can use the same report.

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EIA analysis: Record US crude oil runs lead to bearish product stock builds

Soaring crude oil inputs at US refineries helped to push combined US gasoline and distillate stocks 13.78 million barrels higher the week ended December 5, US Energy Information Administration (EIA) oil data showed Wednesday. Despite the higher demand from refiners, the buildup in US product stocks weighed on the oil complex. Read the full Platts analysis of the EIA data here.

The Oil Big Five: Looking into the short future of 2014

The end of December is just around the corner, and it’s typical at this time of year for publications to take a grand look backward to sum up the year. What kind of proclamations can we make about the global oil industry in 2014? What sort of lessons are there to be learned, and how will we look back on 2014 years from now?

As tempting as it may be to take that look in the rearview mirror, today we’re going to look ahead with our December version of The Oil Big Five. By now you know the drill: We ask our Platts editors and analysts in offices around the globe what they think are the biggest issues or topics in the oil world for the upcoming month, and then we ask you for your thoughts. Are we right, are we wrong, and what do you want to see covered? Leave us your comments here or with #oilbig5 on Twitter.

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Guest post: in the oil market, you can’t have it both ways

The media is replete with stories of low oil prices killing the shale revolution.  This is not going to happen, and here’s why: the world remains dependent on US shale oil production growth.

We at Princeton Energy estimate that oil demand should grow at around 1.6 million b/d  per year at $80/b, on a Brent basis, with that demand improvement becoming evident from the second half of 2015.

Now, where would supply growth come from to meet that demand?

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OPEC oil production: still swinging on Libya

It’s likely that the monthly oil output numbers for OPEC are going to be highly subject to fluctuations in what a very unstable Libya does. That was no different in November, as you can read in our monthly output analysis here. 

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