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Allen's blog

Does GM Bankruptcy Mark Peak US Oil Demand?

Yesterday, as expected, General Motors entered a structured bankruptcy designed to create a smaller, more profitable car manufacturer.  The bankruptcy was orchestrated by the Obama administration's auto panel and was designed to "save" as many auto worker jobs as possible.  We are now witnessing the rapid restructuring of the American automobile industry in a world of reduced new auto sales.  The challenges for auto sales are both government regulations and credit availability - both of which remain is a state of chaos. =>Continue Reading

Mixed Global Economic Data Supporting Crude Oil Prices

An recent economic blog posted several charts showing both positive and negative economic and sentiment survey data showing how optimism about the economic recovery is gaining ground.  Taken in its entirety, the data shows that the global economic downdraft is easing and certain generally leading indicators show signs of a possible recovery beginning.  The challenge is understanding exactly how sure the leading edge data may be in forecasting an ending to the recession.  Wall Street started talking last week about the possibility that the official end to the recession would b

Energy Stocks Waiting On Economic Developments

Tomorrow morning we will get the first preliminary estimate for U.S.

Media Doesn't Know Natural Gas From Gasoline

CNBC had an interview the morning with John Hofmeister, the former head of Shell's U.S. operations and now heading up Citizens For Affordable Energy.  The story on CNBC's web site that accompanied the video clip of the interview totally mixed up the impact of the falling drilling rig count in the U.S. with gasoline pump prices.  =>Continue Reading

Rig Count Up; End of the Decline?

Wow! The Baker Hughes U.S. drilling rig count released last Friday showed an increase in active rigs.  While active rigs increased by only four (one on land and three offshore in the Gulf of Mexico) the important thing is this was the first neutral to positive change in the rig count trend since last fall.  In fact, it has been 20 straight weeks of falling rigs until last week's rise.  Does the increase signal a reversal in trend? =>Continue Reading

Oil Prices Soar on Economic News and G20 Meeting

As we write this blog, WTI prices are up over 7% this morning with crude oil trading slightly under $52 a barrel.  Yesterday, oil prices were in the $47-$48 range as the value of the US dollar was rising and the weekly inventory numbers were sour.  =>Continue Reading

U.S. Energy Demand Contraction Documented

Yesterday, the U.S. Energy Information Agency released its March 2009 Energy Monthly Report showing that total energy consumption fell 2% in 2008 while total energy production rose by 3.3%.  These trends help explain the sharp fall in hydrocarbon fuel prices during the second half of last year.  In the month of January, total energy consumption increased 2% from the same month in the prior year, but by December it was down 3%.  =>Continue Reading

Energy and Environment Changes Are Coming - Prepare for Heat

Sunday's New York Times carried several columns discussing the impending need for dramatic action on carbon emissions before the damage from global warming overwhelms the world.  One column was by Thomas Friedman arguing that if one follows climate science you see that some of the world's best (I'm not sure who determines that status) scientists they are warning that climate change is happening faster and will bring bigger changes quicker thn we anticipated just a few years ago.  Could the fact that there is a meeting of climate change scientists and government policy makers in th

Future Oil Supply At Risk - Price Spike Risk Increased

A new study is scheduled to be released today by Cambridge Energy Research Associates (CERA) detailing why they believe the fall in oil prices will mean less future oil supply.  The outcome is a greater risk of an oil price spike sometime within the next five years.  Of course, the key to the timing of a crude oil price spike will be the pace of demand for oil, which is currently suffering through its second consecutive year of falling global oil consumption. =>Continue Reading

Oil Service Landscape Changing

The landscape for the oil service industry is shifting.  The changes are reflected in this week's industry M&A activity and revelations about company strategies - both producers and service companies.  The Suncor/Petro-Canada $18 billion merger received the lion's share of investor focus with the logical follow-on question being whether this would be the start of an industry consolidation phase as we experienced in the late 1980s and 1990s.   =>Continue Reading

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