ExxonMobil forecasts in the 2016 edition of its annual Outlook for Energy that by 2040 energy efficiency gains and increased use of renewable energy sources and lower carbon fuels, such as natural gas, will help reduce by half the carbon intensity of the global economy.

Worldwide offshore oil rig utilization has fallen to 57% from 74.2% a year ago and 78.5% in 2014.

A year-and-a-half on from the start of the worst crude oil price crash in a generation, the largest North American and European energy companies have delayed projects and made such deep budget cuts that they will soon struggle to replace the crude oil they pump out of the ground with new reserves. In some cases, it is now cheaper for energy companies to buy one another rather than drill for crude. As a result,  more mergers and acquisitions are expected this year.

Investment in Canada’s oil and gas industry is forecast to fall 13%t this year, making for a total decline of 48% less than during 2014. That is a steeper decline than investment in oil and gas production worldwide, which is expected to drop by 40 % over this same period according to analyst Wood Mackenzie. Some Canadian oil sands companies are losing money on every barrel they sell, and are looking at ways to cut production.

In the US the Texas oil and gas sector is in decline. Last week, the state-wide rig count fell below 300 for the first time in more than 15 years. Continued deterioration of market conditions likely signals additional industry downsizing and more job losses in the coming months.

The world’s largest oil companies are asking oil tanker operators to slow down delivery of crude amid an ever-expanding supply glut on land. Tankers hauling 2 million-barrel cargoes are delivering them at speeds of about 13 knots, compared with a maximum of 15. The slower speeds might result in a voyage that would normally take 40 days instead lasting 48.

CNPC, China’s largest energy company, said that in collaboration with Chevron it has started commercial natural gas production from a field located in the Sichuan basin in southwest China. The Chuandongbei project has a production capacity of 345 million cubic feet per day. China’s demand for natural gas is expected to increase from 6% of total energy consumption to more than 10% by the end of this decade.

Egypt will get about $20 billion in petroleum products from Saudi Arabia over five years marking the desert kingdom’s latest display of support for its struggling North African ally. The agreement grants Egypt easy payment terms.

Financial markets expect Venezuela to default on its debt in the very near future. The country is basically bankrupt which is surprising for a country that has among the largest crude oil reserves in the world.

Japan’s crude oil imports last year fell to their lowest level since 1988 as demand weakened 2.3% from 2014 driven by a declining population and more efficient automobiles.


with h/t Tom Whipple

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