Reports indicate active drilling rigs in the US are shutting down rapidly and that shale oil production was likely to drop later this year which could boost the world price of crude oil. Meanwhile several major and numerous smaller oil companies in that country reported lower earnings or announced major cutbacks in capital expenditures during the coming year.

Iraq wants to increase its crude oil production to 7 million barrels per day in the next few years and ultimately overtake Saudi Arabia’s 10 million b/d. Whether this happens will depend on rebuilding the aging infrastructure in southern Iraq. New pipelines, export facilities, and a new water-flooding system are needed before a major increase in production can be achieved.

The world is beginning to focus on what will happen to China’s demand for imported crude oil, which has been an important factor for global demand and high oil prices in recent years. If Chinese demand continues to weaken in 2015 if would seem to be difficult to get the world price of crude oil back above $100 a barrel.

US crude oil exports rose 126,000 barrels per day to a record 502,000 b/d in November reported the country’s Energy Information Administration.

South African energy company Sasol announced it is cancelling an $11 billion project on the US Gulf Coast, imperiling one of the largest foreign investments on US soil because of the plunge in global crude oil prices. The plant was to convert natural gas into diesel fuel.

Chevron announced it is abandoning its efforts to find and produce natural gas from shale rock in Poland in perhaps the biggest setback yet to efforts to start a European shale oil and gas industry.

China’s coal consumption has fallen for the first time this century, according to both the Chinese Coal Industry Association and the National Energy Administration.

 

with h/t Tom Whipple

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