Strong demand for oil is driving prices steadily higher. And if you think it’s bad here in the U.S., imagine living in Europe.
Brent crude (which is the European crude oil benchmark) is trading for more than $80 per barrel. That’s about $8.00 per barrel higher than the price for oil here in the U.S.
The growing global economy is creating plenty of demand for oil. And of course, when demand is high, prices naturally rise. Continue reading
What Russian and China basically did was create new rating agencies to give each other legitimacy. Here we now have the end result. As the U.S. suicidally declines, look for these to gain traction.
MOSCOW, February 2 (Sputnik) — Gazprom’s AAA investment rating with Chinese rating agency Dagong will help reduce the costs of obtaining Chinese loans, which in turn will help to ensure the completion of the energy companies’ projects with China, BCS financial analyst Kirill Tachennikov told Sputnik on Monday. Continue reading
Strong headwinds from weak investment, substantial debt burdens and high unemployment are preventing a pickup in global economic growth despite a strengthening U.S. recovery and tumbling oil prices, International Monetary Fund Managing Director Christine Lagarde said.
A healthier U.S. and cheaper energy “won’t suffice to actually accelerate the growth or the potential for growth in the rest of the world,” the head of the emergency lender to nations said in a speech Thursday at the Council on Foreign Relations in Washington.
“If the global economy is weak, on its knees, it’s not going to help,” said Ms. Lagarde in remarks previewing the IMF’s latest forecasts for the global economy due out on Monday. Continue reading
Are much lower oil prices good news for the U.S. economy? Only if you like collapsing capital expenditures, rising unemployment and a potential financial implosion on Wall Street. Yes, lower gasoline prices are good news for the middle class. I certainly would rather pay two dollars for a gallon of gas than four dollars. But in order to have money to fill up your vehicle you have got to have an income first. And since the last recession, the energy sector has been the number one creator of good jobs in the U.S. economy by far. Barack Obama loves to stand up and take credit for the fact that the employment picture in this country has been improving slightly, but without the energy industry boom, unemployment would be through the roof. And now that the “energy boom” is rapidly becoming an “energy bust”, what will happen to the struggling U.S. economy as we head into 2015?
At the start of this article I mentioned that much lower oil prices would result in “collapsing capital expenditures”. Continue reading
China is gaining an edge in energy deals with Russia as Moscow faces sanctions pressure from the conflict in Ukraine.
The latest energy accords announced in Beijing on the sidelines of the Asia Pacific Economic Cooperation (APEC) summit suggest that China is increasing its access to Russian resources while resisting demands for more favorable financial terms.
At a signing ceremony on November 9, Presidents Xi Jinping and Vladimir Putin sealed a memorandum of understanding for a second Siberian gas pipeline on a western route that Russia has promoted unsuccessfully for years.
The preliminary commitment to the project known as the Altai pipeline, named for a remote Russian border region, follows an agreement in May on an eastern Siberian gas line to supply China’s coastal cities and industrial northeast. Continue reading
Domestic prices in Europe will go up by at least 50 percent, if it cuts supplies from Russia, according to Russia’s Energy Minister Alexandre Novak.
“Moving away from pipeline transportation of natural gas, construction of terminals and deliveries of liquefied natural gas will lead to an increase in gas prices in Europe from the current $380 per 1,000 cubic metres to at least $550,” Novak said in an interview to the Russia 24 TV Channel.
“And the question arises: are the economies of European countries ready to supply and consume gas at such a price?” the Minister asked. Continue reading
Panic is in the air as gasoline prices move above $4.00 per gallon. Politicians and pundits are rounding up the usual suspects, looking for someone or something to blame for this latest outrage to middle class family budgets. In a rare display of bipartisanship, President Obama and Speaker of the House John Boehner are both wringing their hands over the prospect of seeing their newly extended Social Security tax cut gobbled up by rising gasoline costs.
Unfortunately, the talking heads that are trying to explain the reasons for high oil prices are missing one tiny detail. Oil prices aren’t high right now. In fact, they are unusually low. Gasoline prices would have to rise by another $0.65 to $0.75 per gallon from where they are now just to be “normal”. And, because gasoline prices are low right now, it is very likely that they are going to go up more—perhaps a lot more.
What the politicians, analysts, and pundits are missing is that prices are ratios. Gasoline prices reflect crude oil prices, so let’s use West Texas Intermediate (WTI) crude oil to illustrate this crucial point.
Full article: Gasoline Prices Are Not Rising, the Dollar Is Falling (Forbes)
Global Geopolitics 