Coal consumption in China fell by 2.9% in 2014 to 3.9 billion metric tons. This was the first decline in coal consumption in that country in the past 14 years. The move came as crude oil and natural gas replace coal in a slowing economy.
The issue of US crude oil storage capacity is receiving a lot of attention as that country runs out of storage capacity. Some energy analysts say that the US is already at 80% of capacity and much of the remainder is scattered at remote locations that are not well suited to temporary storage. The cost of storage aboard seagoing oil tankers is rising rapidly as global supply is thought to be running at some 1.5 million b/d and much of it has already been stored in tankers.
Iraq overtook Angola and Russia to become China’s second-largest oil supplier in January as imports from the Middle Eastern country rose to 803,000 barrels a day.
The International Monetary Fund commented on the desperate state of crude oil supplier Venezuela: “The fiscal position of Venezuela will suffer the most from the decline in world crude oil prices, as its public sector derives a large share of its fiscal revenues from oil exports. In addition, the domestic price of gasoline is expected to remain close to zero, which virtually eliminates any potential revenues from domestic sales.” . Deutsche Bank AG and Jefferies LLC believe Venezuela will run out of money to pay its debt later this year.
Nigeria’s government revenue fell 15% in January as falling crude oil prices eroded the income of Africa’s biggest oil producer. The volume of crude oil exports declined 33% in November and December. Nigeria relies on oil exports for more than 90% of foreign exchange income and 70% of government revenue.
Royal Dutch Shell said it was indefinitely postponing plans to develop a proposed 200,000 barrel per day oil sands surface mine in Western Canada, the company’s latest sign of retrenchment amid the drop in crude oil prices. This follows Shell’s decision last month to cut up to 10% of its 3,000 Canadian oil-sands-related jobs. Shell was the first major energy company to cut workers in Canada’s oil patch.
Exxon Mobil said exploration spending would decline about 11% this year to around $34 billion due to plunging world crude oil prices. Smaller oil and gas companies have been making cuts to capital expenditures that generally range from 20% to 50% in response to the oil price crash.
Oil production in the British North Sea declined by 1.1% in 2014 amid rising production costs, high taxes and low oil world prices, underscoring the need for more investment and exploration in that region.
Over the past 50 years the North Sea has supplied 42 billion barrels of crude oil.
Saudi Arabia wants to become the world’s second-largest exporter of refined oil products in 2017 as part of its goal to diversify its economy and increase its share of the global crude and petroleum products markets. The desert kingdom’s two new refineries will add 800,000 barrels per day in refining capacity this year. A planned 400,000 b/d oil refinery in Jazan will bring Saudi Arabia’s refining capacity to more than 3 million b/d.
The North African country of Morocco holds an estimated 20 trillion cubic feet of recoverable shale oil and natural gas reserves.
The governor of the US state of California wants to cut the state’s use of petroleum for transportation in half by 2030. The governor’s goals include cutting petroleum use in cars and trucks by 50%, doubling the efficiency of existing buildings, and increasing from one-third to 50% the electricity delivered from renewable sources.
with h/t Tom Whipple