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Posted
Sep 05 2008, 12:30 PM
by
Andrew Horowitz
Rating:
 Earlier this year, the parabolic rise of oil had once again shown just how penguin-like analysts can be. The news was filled with "pundits" predicting prices to go to $150, $175 and even $200 by the end of the summer. All were based on the theory that China and other emerging markets were outstripping supply and the unrelenting demand will last indefinitely.
The idea that speculation was driving prices was buried under the loud roar of obfuscating supply/demand conversations that were taking place in print, radio, TV and podcasts. Worse still, the mention of manipulation of the oil markets was set aside as crazy talk by lunatics (like me - See June 27 update) who were grasping at an idea that had little evidence and was even less popular. Why? Because that would have killed their golden goose!
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Posted
Sep 02 2008, 04:19 PM
by
Jon Markman
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The number of practical new plans to dump crude oil from the modern transportation system is advancing at breathtaking speed. Last week, I wrote about the new Fisker Karma electric car, and now I’ve been reading about a new electric-car system lifting off drawing boards to completely replace gasoline-powered cars in Israel and Denmark.
According to the cover story of the the latest Wired, a former SAP software exec named Shai Agassi has developed an end-to-end system, called Better Place, aimed at helping smaller countries eliminate their dependence on imported crude oil. Israel was a natural first choice for the idea, since it has no oil of its own and all purchases fund its Arab enemies. Denmark has a glut of wind energy, and wants to use it to power cars.
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Posted
Jul 31 2008, 05:01 AM
by
Douglas McIntyre
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Through much of the spring and early summer, Wall Street experts and oil analysts said gasoline could break above the $5-a-gallon barrier as oil moved close to $150 a barrel and vacation travel increased. This has broken the back of the car industry and crippled airlines as well.
In some regions of the country premium gas prices did top $5, but now, for the first time in a long time, the move in prices is downward. Data from the AAA show the national price for a gallon of gas falling to $3.96 this week, down from $4.05 a week ago.
With crude still dropping, how far can gas fall and can it make it back to $3 this year? Because of changes in consumption patterns, gas prices could fall sharply and fast.
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Posted
Jun 27 2008, 01:49 AM
by
Andrew Horowitz
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After the close of the markets Thursday, as the fear of a continued parabolic rise in the price of oil was still fresh on the minds of investors, the U.S. House of Representatives approved a bill that that could help to reverse the direction of oil prices.
The bill would provide for the Commodity Futures Trading Commission (CTFC) to enact emergency measures to “maintain or restore orderly trading.” Concurrent to the bill’s approval, the CTFC released a notice that spells out the broad powers granted by Congress that have been used when the commodity markets have been manipulated in the past. Yes, manipulation.
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Posted
May 06 2008, 06:14 PM
by
Charley Blaine
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I'm really not here to scare you, but, get ready, I AM going to scare you.
The news got lots of attention: Goldman Sachs analyst Arjun Murti predicted Tuesday that the price of crude oil could hit $150 to $200 a barrel in six to 24 months. (Here's one discussion of the report. Another is here.)
Crude oil in New York promptly jumped to as high as $122.73 a barrel in New York before closing at $121.84. And, as I write this, crude was trading slightly lower in electronic trading. But it also had the perverse effect of pushing the stock market higher. Indeed, the biggest winners in Tuesday's stock market were oil and gas production companies, natural gas companies. (But not refiners; crude oil is rising faster than refiners can push their prices up.)
So, if crude jumps to $150 or $200, how does that translate into prices at the gas pump. Here's the scary part.
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Posted
May 06 2008, 12:05 AM
by
Jon Markman
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If soaring gasoline prices are blowing a hole in your commuting budget, perhaps you ought to consider going to work for an oil company. That seems to be the employment road to riches these days, as the industry reportedly faces the loss of half of its aging work force over the next decade.
According to a report by Cambridge Energy Research Associates, the energy industry will lose as many as 15% of its engineers in just two years to retirement, and has therefore launched an all-out assault on finding, training and retaining new young staffers. It sounds like the boom in demand for software developers in Silicon Valley in the '90s. Bonuses and perks are escalating as companies vie for talent. Report author Pritesh Patel said new workers will stream into the industry from around the world, but there will still be a “knowledge gap” that will hamper efforts to find and exploit new oil and gas reserves.
It sounds like this is a better direction for college graduates to head than the traditional havens of medicine and law. The Society of Petroleum Engineers has published a survey that shows the average base salary for petroleum engineers was $122,458 in 2007, up 5% from 2006. Bonuses, housing allowances, retirement plan contributions and the like reportedly push the average compensation to $167,712. All this at a time when doctors and IT pros are facing cutbacks.
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Posted
Apr 10 2008, 03:53 PM
by
Jon Markman
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Watch out, Texas! Get back California, Louisiana and Alaska! North Dakota and Montana are on track to knock all of you off your high horses as the oil capital of the United States.
According to a government report published today that has stunned the energy biz, a thin layer of rock known as the Bakken Shale, located a couple of miles under the Badlands, holds up 4.3 billion barrels of recoverable oil, making it the single largest oil reservoir that federal scientists have ever assessed.
At today’s price of $110 per barrel, that puts the value at $475 billion, give or take a few bill, or more than enough to make people think ND stands for North Dallas. Or maybe that’s New Dhabi.
The U.S. Geological Survey only assessed the Bakken Shale in U.S. boundaries, so the full extent of the find, which stretches north into the Canadian provinces of Saskatchewan and Manitoba, will ultimately be larger. Already the estimate for “technically recoverable” oil – or that which is exploitable using current technology -- is 25 times higher than the last time the USGS surveyed the area, in 1995.
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