The International Monetary Fund reports that Middle Eastern crude oil exporters are on track to receive about $500 billion less for their oil this year as compared to 2014.

Iran’s crude oil production in April is estimated to have increased by 300,000 barrels per day to 3.5 million. The Iranian production increase surprised oil analysts who were predicting that it would take many months to get back to the country’s pre-nuclear sanctions levels.

By every measure, Venezuela is a country on the verge of collapse. Some see the South American nation degenerating into a Somalia-like situation with armed gangs running various parts of the country and trying to make deals to export its crude oil. The workweek is down to two days a week for many if not most workers. Inflation is at 700%. Imports soon will be down by 60%.  Foreign companies are not being paid and are pulling out.  The government no longer reveals information about the impact of drought on the Guri dam which now is providing almost 70% or more of the country’s electricity.  Nationwide blackouts of at least 4 and probably more hours a day are in place. Medicines and other vital supplies are no longer available. Should the dam have to close in the next few weeks to avoid damage to its turbines, it is difficult to see how much longer the country can keep exporting oil. Oil services companies, Schlumberger and Halliburton, are cutting back their activity in Venezuela due to lack of payments for their services.  This alone will likely cut into the country’s crude oil exports.

International oil companies continue to report a drastic decrease in their profits and revenues due to the slump in world crude oil prices. This week Norway’s state-owned Stat Oil, Italy’s ENI, Mexico’s Petroleos Mexicanos, Exxon-Mobil, Chevron, and British Petroleum revealed major losses. The companies are responding by cutting costs and shelving crude oil investment plans for the next few years. Chevron announced it is cutting its workforce by 12%.

Oil rigs in the US are now down 80% from their peak in 2014.

Over the past 6 months, almost 120,000 of US oil and gas employees (22% of the total) were laid off.

According to US ratings agency Standard & Poor, more than half of the corporate defaults in that country this year are by oil and natural gas and coal companies.

African countries Uganda and Tanzania are expected to meet this week to finalize plans for the development of a proposed 1,400 kilometer crude oil export pipeline that will run from Uganda to the Indian Ocean port of Tanga in Tanzania. The target date for completion of the pipeline is likely to be 2020.

A new study published by the Massachusetts Institute of Technology says renewable energy sources will be unable to compete with conventional energy in the US for at least a decade without government support or high taxes on fossil fuels. The authors also conclude renewable energy may always need government assistance to stay in business. While renewable energy has made promising cost efficiency gains in the past few years, the trend of cheaper renewables has been outpaced by even cheaper fossil fuels led by shale oil and gas. Conventional energy is expected to be less expensive than renewable energy for the next 10 years.  Developing enough wind and solar power to substantially impact or displace fossil fuels could cost $16.5 trillion by 2030. (“Will We Ever Stop Using Fossil Fuels?” Journal of Economic Perspectives 30, no. 1 February, 2016)

The American Wind Energy Association said it expects wind’s contribution to America’s electricity supply to double over the next five years.

The Australian Capital Territory (ACT) where the country’s capital, Canberra, is located has set a goal of getting its electricity from 100% renewable sources (solar and wind) by 2020. The move, however, comes at a cost. Residents will see a $300-per-year increase on their electricity bill — or an extra $5.50 per week.



with h/t Tom Whipple

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