The U.S. Has Too Much Oil And Nowhere To Put It

oil 2As oil prices have crashed, from more than $100 a barrel last summer to below $50 now, big trading companies are storing their crude in hopes of selling it for higher prices down the road. With U.S. production continuing to expand, that’s led to the fastest increase in U.S. oil inventories on record. For most of this year, the U.S. has added almost 1 million barrels a day to its stash of crude supplies. As of March 11, nationwide stocks were at 449 million barrels, by far the most ever. Oil investors appear to be coming around to the notion that a lack of storage capacity could lead to another price crash. –Matthew Philips, Bloomberg, 12 March 2015

A recent rebound in oil prices is built on flimsy foundations, the International Energy Agency warned Friday, with another sharp fall possible and few signs that cheap fuel was giving growth a real boost. —AFP, 13 March 2015

Japan is continuing to re-embrace coal to make up for its lack of nuclear energy, with plans for another power station released Thursday bringing the number of new coal-fired plants announced this year to seven. Before the nuclear accident in March 2011, the environment ministry had essentially blocked the building of new coal-power stations through tighter environmental assessments as Japan sought to meet ambitious greenhouse-gas reduction goals that have since been scrapped. –Mari Iwata, The Wall Street Journal, 12 March 2015

Headaches surrounding the permitting process mean Cuadrilla has not fracked a well since 2011. It is not just uncertainty over policy that is casting a shadow over UK shale – explorers must also contend with the grim reality of the European gas market. Demand across the continent has fallen to levels not seen since the 1990s, sending prices in February – traditionally the coldest month of the year – to record lows. Therefore, even if companies succeed in getting gas out of the ground in significant quantities, will anyone be prepared to pay the price needed to make the process commercial? —Interfax Natural Gas Daily, 13 March 2015

Global emissions of climate-warming carbon dioxide did not rise last year for the first time in 40 years without the presence of an economic crisis. “This is a real surprise. We have never seen this before,” said IEA chief economist, Fatih Birol, named recently as the agency’s next executive director. –Pilita Clark, Financial Times, 13 March 2015

Many investors are attracted to “green” investments by the promise of good returns allied with care for the environment. But there are growing fears that some are being sucked into unsuitable schemes. –Kate Palmer, The Daily Telegraph, 12 March 2015

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