Archive for the ‘oil’ Category

The continuing demise of US fuel oil consumption

When commentators talk about the US cutting its oil consumption, they often cite the reductions in usage that were spurred by the first oil shock in 1973-1974. “See,” they say. “We did it back then, and we can do it again!”

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What they often fail to note is that one of the ways in which the US did dial back on its oil consumption is by drastically changing over its use of fuel oil for electricity generation to lots of other things: coal, natural gas, nuclear, alternatives. In 40 years, there have been plenty of things.

But the fact is if you’ve all but zeroed out your consumption of fuel oil, you can only do that once. That’s why the whole “we can do it again!” comes up short.

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Shell Chemical woos the neighbors of its still-undecided Pa. ethane cracker

Shell’s $4 billion proposal to build a petrochemical complex on the site of the former Horsehead Corp. zinc smelter in Monaca, Pennsylvania, was on display Wednesday at two events at a banquet facility overlooking a golf course near the community, which lies about 30 miles northwest of Pittsburgh.

If constructed, Shell’s ethane cracker would feed production of 1.5 million mt/year of ethylene, 500,000 mt/year of gas-phased high density polyethylene, 500,000 mt/year of slurry HDPE, and 500,000 mt/year of linear low density polyethylene. Shell and Horsehead have extended Shell’s option to buy the Horsehead site along the Ohio River three times, most recently in December.

But the details of the proposal were not the main focus of Wednesday’s event. There was no PowerPoint presentation. No Q&A session. No leaflets. And significantly, still no indication that the project had been clearly decided as a “go.”

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EIA analysis: a big jump in crude oil stocks

Crude oil stocks in the US had been declining for several weeks, but they’re turned around significantly. This week’s Energy Information Administration report showed a significant build. You can read our analysis here.

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Regulation & Environment: Crude-by-barge not as controversial as its rail counterpart

Almost anything that moves has been pressed into serving the transportation needs of the expanding US production profile. That includes barges. In this week’s Oilgram News column, Regulation & Environment, Herman Wang reviews the safety considerations that the crude-by-barge industry faces.

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IEA points to supply risks outside OPEC

A real prospect that export flows out of Libya can start to ramp up in the coming weeks after the resolution of a nine-month-long standoff with rebels couldn’t come at a better time for OPEC it seems.

According to the International Energy Agency’s latest monthly report, OPEC’s 12 members will need to pump an average of 350,000 b/d more during the second half of 2014 to meet global oil demand after their output slumped to a five-month low in March.

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OPEC oil output in March: A reversal of recent trends

OPEC output took a significant decline in March, according to the latest Platts survey. It also marked a reversal of recent trends, wherein Saudi Arabia would normally make up for shortfalls out of other OPEC countries. But this time, Iraq output fell, as did that of Libya, but Saudi output declined as well. You can read Platts’ analysis here.

EIA analysis: big draw in gasoline inventories

A draw in gasoline stocks far beyond what had been predicted by analysts was one of the most notable numbers in this week’s Energy Information Administration’s weekly statistical report. You can see our analysis here.

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Citi vs. Chevron: two opposing views of the oil price future

In another of our occasional guest blog entries, Steven Kopits of Princeton Energy Advisors considers the clashing views of Citi Commodities Research and Chevron regarding the likely path of oil prices. Steve can be reached at steven.kopits@prienga.com.

The direction of oil prices is once again a hot topic. In a recent Barron’s article, Ed Morse, Citigroup’s head of global commodity research, forecasts a collapse in global oil prices to $75 /b over the next three to five years. By contrast, Chevron has announced that it is budgeting with $110/b oil for 2017, with the company’s CEO John Watson stating, “There is a new reality in our business… $100/bbl is becoming the new $20/bbl in our business… costs have caught up to revenues for many classes of projects.” And for good measure, he adds, “If $100 is the new $20, consumers will pay more for oil.”

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At the Wellhead: Unconventional drilling comes to Australia’s Cooper Basin

Christine Forster writes from Australia that 2014 is going to be a key year in the quest to develop unconventional oil and gas resources in that country’s Cooper Basin. Her discussion of it is the focus of this week’s Oilgram News column, At the Wellhead.

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Jordan follows rocky road to oil shale development

After many years of incubation, Jordan’s dream of producing oil from its large near-surface shale deposits is showing signs of transforming from desert mirage into hydrocarbon oasis, set to yield the Hashemite kingdom’s first domestically produced crude within five years.

That is because a Saudi enterprise appears to have advanced an eight-year-old preliminary agreement to develop a commercial project using Russian technology. Appearances, however, can sometimes be deceiving. Read the rest of this entry »