Robert Rapier on the End of OPEC and Rise of Electric Vehicles

In a recent interview with Financial Sense’s Jim Puplava, energy expert Robert Rapier explained why he thinks OPEC (the Organization of Petroleum Exporting Countries) is headed for trouble and what the increased popularity of electric vehicles will do to oil markets. It’s only a matter of time before the markets are hit by the wave of newer cleaner energy. Rapier walked us through what this could look like for OPEC and how other countries and companies are tackling the issue. Continue reading

U.S. Shale Production Growing At An Unprecedented Pace

 

The oil markets have long expected that U.S. shale production would rebound once oil prices started to rise. But the comeback of shale could be much faster and stronger than many once anticipated.

There are a few reasons for this. First, the industry is leaner than it once was, with some of the least efficient companies forced out of the market and the consolidated sector is now moving quickly with oil prices stabilized in the $50s per barrel range. Second, oil drillers have a lot more experience in shale than they did years ago. Improved drilling techniques, which include longer laterals, more wells per wellpad and stronger fracking processes are yielding more oil per rig and per well. Third, instead of drilling everywhere, companies are focusing on the best spots this time around. Finally, it isn’t just the small companies drilling in U.S. shale – the oil majors are increasingly getting into the shale game. Continue reading

Saudis’ war on the oil markets targets U.S. frackers, Iran, Venezuela

Saudi Arabia is going all out in its war on U.S. shale oil and to preempt the return of Iran’s oil production after sanctions are lifted.

Even as the price of crude sunk below $40 per barrel, the Saudis and OPEC decided on Dec. 4 to increase production by 31.5 million barrels per day.

Analysts say the Saudis may be willing to let the price of crude slide near the $20 per barrel mark in order to drown out competition from United States shale producers. Continue reading

OPEC Is Winning The Price War Says IEA

Oil markets may not balance until late 2016, but supply is finally contracting in a big way.

Early last week the EIA confirmed that U.S. oil production was down sharply since peaking in April at 9.6 million barrels per day (mb/d). The agency estimates that U.S. output fell by 140,000 barrels per day in August, a steeper decline than in previous months. In its latest weekly estimate (which is less accurate than monthly retrospective estimates), U.S. oil production is now down to just 9.1 mb/d. Continue reading

How Much Longer Can OPEC Hold Out?

OPEC has been the most talked about international organization among investors, analysts and international political lobbies in the last few months.

When OPEC speaks, the world listens in rapt attention as it accounts for nearly 40 % of the world’s total crude output. With its headquarters in Vienna, Austria, one of the mandates of 12- member OPEC is to “ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry.” (Source: opec.org).

However, OPEC has been in the line of fire from the western world in light of its stance of not reducing the production levels of its member nations (excluding Iran). Most view this as a strategy to squeeze the American shale production and other non OPEC nations. Continue reading

Energy as a Weapon

BERLIN/WASHINGTON (Own report) – The German Chancellor is suggesting that the EU should take a “new look at its energy policy” as a whole. As Angela Merkel confirmed last week, several EU countries are at least partially “very highly dependent” on “the supply of raw materials from Russia.” Spurred on by the Ukrainian crisis, Berlin and Brussels could, however, in the long run, seek to liberate themselves. Merkel made her remarks following talks with Canada’s Prime Minister, who is considering the diversification of his country’s energy exports and does not exclude exporting natural gas to Europe. This, along with gas, which is extracted in the USA by the controversial “fracking” technique and should be exportable soon, could shake Russia’s strong position on the European gas market. Massive price cuts could result, forcing Moscow to drastically cut its budget, according to US experts. Whether Putin could politically survive such measures is unknown. In Berlin the debate continues over the new perspective of transatlantic energy. Representatives from US-oriented sectors are in favor and those from energy companies doing business with Russia and from the SPD, are opposed. Continue reading