Some energy analysts are predicting that the US will soon run out of crude oil storage capacity in the next few months for all the current production and this will drive prices down to $10 or $20 a barrel.

US crude oil storage the week before last grew by another 7.7 million barrels to 4.25 million, the highest in at least 80 years. The Cushing, Oklahoma storage site is now above 46 million barrels. The Energy Information Administration says Cushing has a capacity of 70 million barrels; however only about 56 million is available for storage.

Saudi Arabia’s refusal late last year to reduce oil production helped trigger the oil price crash that has hurt oil-producing countries around the world and private energy companies alike. Now even the Middle East kingdom’s own oil company is feeling the pain. As a result, state-owned Saudi Aramco is looking for ways to cut costs everywhere, from trying to negotiate better deals with contractors on oil-well services to negotiating discounts on its telephone and electric power bills.

Crude oil production from Saudi Arabia is rising and demand has pushed it up to about 10 million barrels per day, according to energy consultancy PIRA. Saudi production averaged about 9.7 million b/d in the last half of last year.

Canada said it would create a compensation fund to cover the potential costs of crude oil-train derailments and finance the fund with a new tax on crude oil shippers. The planned fund was one of several new measures Canada unveiled to bolster the safety of a rail system carrying growing volumes of crude oil.

In its annual energy review, energy giant BP forecasts rapid growth of so-called “tight” oil supplies, or shale oil, particularly in the US, until the end of this decade.

Chevron Corp. plans to quit searching Romania’s shale fields  for oil and gas this year after abandoning Polish and Ukrainian shale prospects in 2014.

Russia’s  Gazprom Neft said it made its first ever winter shipment of oil from a field located above the Arctic Circle. The company said 117,280 barrels of crude oil was shipped on a tanker to European consumers from the Yamal Peninsula under the escort of an icebreaking ship.

Ukraine announced plans to spend $1 billion to build up a strategic natural gas reserve in order to reduce its reliance on fuel imports from Russia. Gas imported from Russia accounted for 58% of Ukraine’s total consumption in 2013.

The Canadian government announced tax breaks for developers of liquefied natural gas (LNG) export projects in an effort to kick-start investment amid a low energy-price environment. LNG developers would be eligible to write off industrial equipment and real estate at a faster pace up until 2025.

In the UK, the world’s largest offshore wind project has been approved off the coast of Yorkshire. The Dogger Bank Creyke Beck project is expected to be one of the UK’s biggest electric power stations, second only to the Drax coal-fired plant in North Yorkshire and capable of supplying about 2.5% of the country’s electricity. The development comprises 400-wind turbines and can power 2 million homes.

 

 

with h/t Tom Whipple

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