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from Breakingviews:

Oil’s new age of plenty challenges old assumptions

By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The energy business may enter a tumultuous period in 2014, even if sanctions on Iranian oil exports remain in place. The combination of increased shale drilling, cheaper solar power and higher investments in energy efficiency has the potential to create a glut of oil from countries outside the OPEC producers’ cartel at current prices. A sharp drop in the oil price is possible, and more volatility in oil prices, energy investments and geopolitics is almost inevitable.

Spreading the shale revolution

Prolific American shale drilling is already changing the global petroleum map. The International Energy Agency (IEA), a rich-country oil club, expects the United States to overtake Saudi Arabia as the world’s biggest crude producer by 2015. By 2035, the world’s biggest economy may be self-sufficient in petroleum. The gains for the country are substantial, as domestic production with a cost of $40 to $80 a barrel replaces imports at something like the global Brent benchmark of $112 a barrel.

Analysts have consistently underestimated shale’s U.S. potential and they’re probably still underestimating the size of the global revolution. For example, the IEA’s latest long-term forecast estimates that production from shale and other “light tight oil” will hit only about 6 million barrels per day by 2030. That is about 6 percent of global supplies, but the combined production from would-be shale powers Russia, China and Argentina would only be about a fifth of that of the United States.

from Breakingviews:

Khodorkovsky pardon comes too late to matter

By PierreBriançon
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Vladimir Putin is putting out potential fires before the Olympic flame reaches Sochi. If the Russian president is true to his word, Mikhail Khodorkovsky, the former oil oligarch, will not serve the last eight months of his 10 years in prison. The new leniency is part of a Kremlin public relations offensive before the winter games. It cannot be taken as the sign of an upcoming liberalisation of Russia’s politics or economy.

from Breakingviews:

McClendon IPO plan is echo of bad old Chesapeake

By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Aubrey McClendon’s new public offering plan is an echo of the bad old Chesapeake Energy. He lost his job as chief executive of the energy firm over excessive spending and conflicts of interest. A new $2 billion venture would allow him to cherry-pick assets ahead of his investors and reward him generously. Despite McClendon’s knack for buying oil and gas properties, investor skepticism is in order.

from Breakingviews:

Blackstone’s $6 bln oil deal signals another peak

By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

A $6 billion oil deal signals yet another Blackstone apex. The sale of private equity-backed GeoSouthern Energy to Devon Energy comes at a toppy price by one important measure. Blackstone also has an uncanny knack for timing. The glut of undeveloped land owned by oil companies suggests finding buyers will get tougher.

from Counterparties:

Awash in fuel

Welcome to the Counterparties email. The sign-up page is here, it’s just a matter of checking a box if you’re already registered on the Reuters website. Send suggestions, story tips and complaints to Counterparties.Reuters@gmail.com.

The average price of a gallon of gas in the US this week is $3.19, and it’s been been falling since Labor Day, when it hit $3.60. The falling price caused one research firm to up its third-quarter GDP forecast by 0.3 percentage points to 2.7%.

from Breakingviews:

Review: Frackers needed long view to make history

By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The revolution in U.S. energy came from an unlikely source, as Gregory Zuckerman recounts in “The Frackers: the Outrageous Inside Story of the New Billionaire Wildcatters.” Tiny drillers like George Mitchell and Harold Hamm persisted with shale while deep-pocketed giants such as Chevron gave up. It was a triumph of leadership over short-term shareholder value.

from Breakingviews:

Suntech casts shadow over China capital raisings

By John Foley 

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Suntech has gone from solar panel maker to financial black hole. The stricken company is fighting with creditors who want to see it liquidated after it defaulted on interest payments in March. Proposals to sell assets and take Chinese government cash seem unlikely to help investors avoid huge losses. For investors it’s a lesson in what happens when things really go wrong with Chinese companies.

from Global Investing:

Value or growth? The dichotomy of emerging market shares

Investors in emerging markets are facing a tough choice. Should one buy cheap shares in the hope that poor corporate governance and profitability will improve some day? Or is it better to close one's eyes and buy into expensively valued companies that sell mobile telephones, holidays and handbags -- all the things high-spending emerging market consumers hanker after?

At the moment, investors are plumping for the latter, growth-at-any price investment strategy. Result: a lopsided emerging equity index in which consumer discretionary shares are up more than 5 percent this year, energy shares have lost 7 percent while MSCI's benchmark emerging equity index is down 3 percent.

from Data Dive:

The problem with moving away from coal power

On Tuesday, the US government announced it would stop investing coal power plants around the world in an effort to combat climate change. Here are the details from Reuters:

The U.S. Treasury said it would only support funding for coal plants in the world's poorest countries if they have no other efficient or economical alternative for their energy needs.

from Breakingviews:

UK’s nuclear rebirth comes at a fair price

By Pierre Briançon

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

David Cameron really is rolling out the red carpet for French investors - and no matter that they are state-backed. The first power plant of the UK’s nuclear reset will be built in the county of Somerset by a consortium led by EDF, the French government-controlled utility. UK taxpayers will guarantee the price paid for energy it produces from 2023. And EDF says it will meet its target of a 10 percent return on investment, in spite of making concessions during negotiations. The investor consortium - which includes two Chinese nuclear power groups, CGN and CNNC - will take on any extra cost and fund the plant’s decommissioning programme. This deal strikes the right balance, assuming energy markets do not suffer major turmoil.

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