Four long-time oil market traders allege in a lawsuit that the prices for buying and selling crude oil are fixed — and that they can prove it. They say some of the world’s biggest oil companies including BP, Statoil, and Royal Dutch Shell conspired with Morgan Stanley and energy traders including Vitol Group to manipulate the spot prices of Brent North Sea crude oil for more than a decade. This benchmark is used to price more than half the world’s crude oil and helps determine where costs are headed for petroleum products like diesel, gasoline and heating oil.  These allegations follow at least six other US lawsuits alleging price-fixing in the Brent market.

Coal, natural gas, and crude oil accounted for 87% of global primary energy consumption in 2012. Natural gas increased its share of energy consumption from 23.8% to 23.9% during 2012, coal rose from 29.7% to 29.9% and oil fell from 33.4% to 33.1%.. The International Energy Agency predicts that coal will replace crude oil as the dominant primary energy source on the planet by 2017.

The US will surpass Saudi Arabia and Russia to become the world’s top crude oil producer by 2016 the International Energy Agency reported yesterday. However, by 2020, the oilfields of Texas and North Dakota will be past their prime and the Middle East will once regain its dominance – especially as a supplier to Asia.

In just the last eight years, US crude oil imports have dropped from 60% to 35% and US oil production has reached the highest level in 20 years.

The US exported a record 3.2 million barrels a day of gasoline, diesel, and other refined products in September. That number is 65% more than the US was exporting in 2010, before the shale oil revolution took off. Three years ago, the U.S. was a net importer of gasoline and other refined petroleum products. Today, it is a net exporter.

Canada’s oil sands could account for 16% of all new crude oil production in the world by 2030.

Canada’s National Energy Board announced the unconventional resources in the Montney Formation in the western provinces of Alberta and British Columbia holds 449 trillion cubic feet of marketable natural gas and 1.1 billion barrels of marketable crude oil.

Ernst and Young’s annual global crude oil and gas reserves study, released last week, predicts high exploration and development costs (up 20% in 2012 alone, 48% between 2008-2012) will lead to sluggish production growth (oil up 2%, gas up 3%). This could signal that the incredible advances made in drilling productivity recently are reaching its limits, especially in the US.

Asian economies are expected to account for a significant portion of the global demand for crude oil, OPEC wrote in its 283-page World Oil Outlook last week. Oil demand from India is expected to more than double from its 2012 level to 9.3 million barrels per day by 2035. Chinese oil demand should increase 80 percent from 2012 levels to 17.5 million barrels per day in 2035.

Russian crude oil output, the largest in the world, reached 10.6 million b/d in October, setting the record for the post-Soviet period.

Russia expects crude oil prices to remain flat in real terms (adjusted for inflation) through to 2030, taking a more bullish view than many independent energy forecasters who are predicting lower oil prices as a result of large new discoveries of oil and natural gas. Russia’s forecast sees crude rising to $160-$170 per barrel by 2030, and cited “worsening production conditions and increased demand from developing countries”.

A Nigerian group estimates Nigeria lost $10.9 billion in crude oil revenue due to theft and sabotage from 2009 to 2011.

Russia’s Gazprom’s said last week that Ukraine owes more than $880 million in unsettled debt from its August natural gas bills. In 2009 Russia cut off supply to the Ukraine, and ultimately affecting European gas supplies, because of Ukraine’s failure to pay its bills. Records show that Ukrainian energy company Naftogaz stopped purchasing natural gas from Gazprom last week. Ukraine says a $10 billion shale natural gas deal signed last week with the US energy company Chevron would make the country energy independent by 2020.

The number of US homes using heating oil declined from a peak of 17.2 million in 1973 to 8.1 million in 2011, a 53% decrease, according to the Energy Information Administration. An average home with oil heat will spend $2,046 this winter, compared with $679 for homes using natural gas.

Water shortages are threatening energy output and increasing costs in some of the world’s most prolific sectors including shale gas in the US, crude oil in the Middle East, and coal in China, and the situation is set to worsen, Wood Mackenzie said last week. The energy sector is already the world’s largest consumer of water for industrial purposes, using over 15% of global supply.

A federal judge in Brazil has suspended construction on the 11 gigawatt Belo Monte hydro-power dam in the heart of the Amazon rain forest on grounds that environmental commitments have not been met. When completed, the dam would be the world’s third largest hydro-power behind China’s Three Gorges dam and the Itaipu, which straddles the border of Brazil and Paraguay.

Two-thirds of town and city councils in England are dimming their street lights or switching them off to avoid rising electricity costs. A survey of local authorities suggested that 750,000 lights in 81 council areas have either been turned off or set to a lower brightness during the night or early morning.

 

 

with h/t Tom Whipple

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