LONDON, Aug 1 (Reuters) – The precise cause of widespread
power failures that cut electricity supply on Tuesday to states
where half of India’s 1.2 billion people live will take many
months to establish, and may never be known for certain.
So any analysis at present must be speculative.
The most likely explanation is a small localised problem
that rippled across the network as grid managers lost control of
power flows and automatic relays shut down transmission lines
and power plants to prevent further damage to equipment.
LONDON, July 30 (Reuters) – The United States can extract
billions of barrels of otherwise unrecoverable oil by injecting
carbon dioxide (CO2) underground and also needs to bury CO2,
produced by its reliance on coal for power and industry, to
fight climate change.
Until now, the CO2 used for recovering oil has been
specially extracted from underground but the government is
working to use the lure of oil extraction to encourage the
capture and storage of carbon produced from power stations.
LONDON (Reuters) – News that Britain’s economy contracted 0.7 percent in the second quarter, as bad weather and the impact of extra public holidays compounded the drag from the government’s austerity programme and the euro zone debt crisis, has underscored the abysmal performance of the United Kingdom and most other G7 economies since 2007.
Many explanations have been offered. But the core of the problem is straightforward. Businesses and households have refused to invest in long-lived and illiquid assets in the face of extreme uncertainty about the outlook, preferring to accumulate short-term, liquid but low-yielding and unproductive assets such as cash and high-rated government bonds.
LONDON, July 24 (Reuters) – UK government revenues from oil
and gas production will almost halve over the next four years,
as falling output as well as investment in new fields and the
cost of decommissioning old ones cut into tax receipts.
Shrinking revenues highlight the rapid depletion of North
Sea oil fields, but also the growing costs of plugging and
abandoning old wells that are no longer productive as the
province becomes more mature.
LONDON, July 23 (Reuters) – Nearly five years after it began
investing in commodities, the biggest public pension fund in the
United States has yet to make any money in the asset class –
highlighting the difficulty even the largest and most
sophisticated institutions encounter in wringing returns from
investments in agriculture, metals and energy derivatives.
The California Public Employees’ Retirement System (CalPERS)
had assets valued at $236 billion at the end of March 2012,
including $3.6 billion linked to commodity prices, according to
the latest quarterly performance report presented to CalPERS
investment committee in May.
LONDON (Reuters) – Britain’s Financial Services Authority (FSA), still reeling from its failure to prevent manipulation of Libor and other failures of supervision in the run up to the financial crisis, should heed calls to open an investigation into the oil market to ensure it remains free from distortion.
Several prominent analysts and news organizations have drawn parallels between Libor and the potential for manipulation of oil prices.
LONDON (Reuters) – Far too many analysts and commentators are still linking rising Brent futures prices to geopolitical tensions in the Middle East and macroeconomic factors, rather than looking for a more localized cause in the North Sea.
It is always tempting to seize on a single piece of hard evidence to make a larger point, especially when that data confirms an already-held belief (something which behavioral economists call “confirmation bias”). But in this case it could not be more wrong.
LONDON, July 2 (Reuters)- Commissioner Scott O’Malia has
emerged as the most consistent and formidable opponent of
Chairman Gary Gensler’s rule-writing efforts at the U.S.
Commodity Futures Trading Commission (CFTC).
On everything from position limits to the legal definition
of swap dealers and rules for derivatives clearing
organisations, O’Malia has issued a string of long and carefully
reasoned dissents from regulations proposed by CFTC staff and
endorsed by a majority of the other commissioners.
LONDON, July 10 (Reuters) – Buying ultra-low yielding
long-dated government bonds that guarantee losses in the event
of even moderate inflation or interest rate rises any time
before maturity, or leaving cash on deposit at negative real
interest rates, as many households and companies across the
advanced industrial economies have done in the last three years,
is fundamentally irrational behaviour.
The current extreme preference for safe assets and liquid
assets, is no more rational than buying technology stocks at the
height of the internet boom in the 1990s, writing negative
amortisation mortgages for subprime households in the mid-2000s,
or buying oil futures at $140 per barrel in 2008.
LONDON, July 5 (Reuters) – Pressure to respond to falling
oil and gas prices by cutting operating costs, coupled with the
need to reduce the social and environmental footprint on host
communities, will force fracking firms to employ a more targeted
approach to drilling wells and hydraulic fracturing in future.
More than a million fracturing operations have been
conducted in the United States since 1947, according to the U.S.
National Petroleum Council, yet in many ways the technology is