The Great Debate UK
from The Great Debate:
-- John Kemp is a Reuters columnist. The views expressed are his own --
U.S. refiners have emerged as the biggest losers from the previous surge in oil and push for cleaner energy. The industry's brief golden age has swiftly given way to a prolonged dark period of adjustment and decline.
What went wrong? Like other sectors, refiners have been hit by the cyclical downturn, which has cut trade volumes and the related demand for transport fuels such as aviation fuel and marine diesel especially hard.
But cyclical factors are compounding a structural decline in consumption that began around 2007 and has continued through the recession, as high prices and legislative responses force greater conservation and a shift towards biofuels.
Even as the economy recovers, U.S. consumption of petroleum-derived gasoline and distillate fuels is unlikely to exceed the record set in 2007. The resulting "demand peak" has left up to 10 percent of total U.S. refining capacity (around 1.8 million barrels per day) surplus to requirements.
Oil price bulls and bears have both had their triumphs in recent history. The price of crude rose to $147 a barrel in July of 2008 only to plummet to $33 a barrel a few months later. It swung past $82 a barrel this week because of a cold snap, and is up 18 percent since mid-December. But barring heightened tension in the Middle East, oil looks likely to slide in the short term.
Demand remains relatively subdued, in spite of the massive stimulus applied to the global economy. This is especially true in OECD countries and the United States, the largest consumer of energy. American crude oil inventories actually rose by 1.3 million barrels last week when temperatures plummeted, according to the latest figures by the Department of Energy. Elsewhere in the OECD, oil inventories have fallen, but only slightly, according to the International Energy Agency. They are still high, at nearly 60 days of demand.
Ryanair's warning that things are going to get worse in Europe's economies has understandably got investors in airline shares flustered. The airline's own shares fell by more than 8 percent.
The low-cost airline's finance director Howard Miller couldn't have been more stark in his comments: "There are no signs of recovery in any country across Europe. We think things are getting worse. There are no signs of green shoots so a tough winter for everyone".
-Arvind Ganesan is the Director of the Business and Human Rights Program at Human Rights Watch. The opinions expressed are his own.-
Equatorial Guinea is a tiny country of about half a million people on the west coast of Africa, but is the fourth-largest oil producer in sub-Saharan Africa.
-Ben Amunwa is a campaigner with oil industry watchdog Platform, where he runs Remember Saro-Wiwa, a project that uses art and activism to raise awareness about the impact of the oil in the Niger Delta. The opinions expressed are his own.-
When the news broke of a settlement in the Wiwa v Shell case, a cacophony of responses soon flooded my inbox. Hailed as a victory for human rights by some, others felt disappointed that Shell could throw money in the face of justice. In such a high profile and emotive legal battle, holding oil giant Shell responsible for human rights abuses in Nigeria, including the execution of charismatic activist Ken Saro-Wiwa, hopes were inevitably high.
– Neil Collins is a Reuters columnist. The opinions expressed are his own –
LONDON, April 8 (Reuters) – BP has undergone a critical period of self-assessment over the last four years. The chairman, no less, says so in the oil company’s annual report.
from The Great Debate:
The record differential between the front-month and more liquid second-month contracts at expiry last week once again raised pointed questions about whether the NYMEX light sweet contract is serving as a good benchmark for the global oil market, or sending misleading signals about the state of supply and demand.
The expiring January 2009 contract ended down $2.35 on Friday at $33.87, while the more liquid February contract actually rose 69 cents to settle at $42.36 - an unprecedented contango from one month to the next of $8.49.
The Organisation of the Petroleum Exporting Countries agreed on Wednesday to make its deepest output cut ever to counter slumping demand and falling oil prices. The output cut has been received with cautious optimism by analysts.
Some say that the price of oil will fall further, while others say $40 a barrel was the lowest it will go. "If you look at the market, prices are going up immediately," said Frank Schallenberger, head of commodity research at Landesbank. "I really think this is the end of a bear market. $40 was the bottom."
Andrew Simms is policy director and head of the climate change programme at the London-based New Economics Foundation. The opinions expressed are his own.
Nothing reveals the thin veneer of civilisation like a threat to its fuel or food supply, or the cracks in society like a major climate-related disaster. But that, increasingly, is what we face: the global peak and decline of oil production; and a global food chain in crisis due to multiple stresses including imminent, potentially irreversible global warming.
from The Great Debate:
LONDON, Dec 8 (Reuters) - China's decision on Friday to link domestic fuel prices to the international price of crude oil, but increase consumption taxes on gasoline and diesel sharply to spur more efficient use of energy in the medium term, raises the question whether the incoming Obama administration might be tempted to do the same.
China is taking advantage of a cyclical pull back in energy to push through a permanent structural increase in taxes and prices. The aim is to combine a short-term boost to the economy with longer-term and more consistent incentives for improving energy efficiency.