Oil falls below $70

U.S. crude oil prices deepened early losses to fall below $70 a barrel for the first time in two weeks after Iraqi television reported the death of al Qaeda's leader in Iraq, Abu Musab al-Zarqawi. U.S. crude traded down 85 cents to $69.97 a barrel by 0735 GMT, falling about 35 cents following Iraqi television and U.S. ABC News reports of Zarqawi's death, apparently in an air raid near Baghdad.

Oil exports from Iraq have failed to return to pre-war levels due to frequent sabotage attacks on the country's northern pipeline and deteriorating security that has prevented significant investment in aging southern oilfields.

(2006-06-08 16:35:10 SGT) [Energy] Permalink

ASPO newsletter #66 released

peakoil.com -> aspo-ireland.org (pdf), peakoil.ie :

Notable points :

710 - Venezuela has discovered that its Regular Oil production has peaked and that the Heavy Oil of which it has huge resources is slow, costly and difficult to produce. It has forced the country to buy oil from Russia to meet its short term commitments.

711 - Saudi Aramco admits that the natural decline of its old fields is now running at 8% a year. Infill drilling can of course help offset the decline but it is a losing battle. Overall it begins to sound as if Saudi Arabia has passed its Peak.

714 - Business Week of May 15th carries an interesting article explaining both that, although the major international companies are making record profits from high prices, their actual production is close to peak and their reserve replacement is slipping to negative.

(2006-06-08 13:07:10 SGT) [Energy] Permalink

Greenspan: Energy Costs May Stunt Economy

biz.yahoo.com :

Former Federal Reserve Chairman Alan Greenspan said that while the country has been able to absorb sharp increases in oil prices, high energy costs are beginning to stunt economic growth. "The United States, especially, has been able to absorb the huge implicit tax of rising oil prices so far," because the nation has become "far more flexible" over the past three decades because of globalization and less regulation, Greenspan told a Senate hearing. It was his first appearance before Congress since leaving the Federal Reserve in January. However, he added, "Recent data indicate we may finally be experiencing some impact."

Greenspan said high oil prices, exceeding $70 a barrel and pushing gasoline costs beyond $3 a gallon in many areas, are due to a sharp decline in spare global oil production capacity, refinery shortages and, to some extent, market speculation.

He said "current oil prices over time should lower to some extent our worrisome dependence on petroleum," with the development of alternative fuels and broader use of electric-hybrid cars. "We are gradually ... weaning ourselves off petroleum. It is slow and in many ways like watching grass grow," Greenspan said, adding that if the shift "happens smoothly, that is the best of all contingencies. ... But what happens if it doesn't go smoothly."

See also :

1. Greenspan on Peak Oil

(2006-06-08 08:54:16 SGT) [Energy] Permalink

7-Eleven to run 65 Shell petrol stations across Singapore

channelnewsasia.com :

7-Eleven will take over the running of all but three of Shell's 68 petrol stations across Singapore, starting with the first four in August. It will also inherit all 1,500 petrol station staff. 7-Eleven will operate the mini-marts as well as man the pumps. The move comes less than two months after Exxon Mobil announced a similar alliance with NTUC Fairprice. The big oil giants are roping in retail partners to make their petrol stations more profitable.

The partners aren't saying how much they're spending on the conversion, only that it will be less than Exxon and NTUC because they have less stations to convert. Their rivals are pumping in S$30 million to revamp and run 74 service stations.

When asked about further expansion plans, Shell says its priority right now is on converting its existing petrol marts into 7-Eleven stores. But at the same time, it is on the lookout for viable and attractive locations, especially in newer heartlands. Shell says it has been shutting down stations in the central areas - including one along Newton Road and another along the Stevens Road highway exit - because leases have come up or the urban planning for the area has changed.

(2006-06-08 00:27:58 SGT) [Biz] Permalink

Russia: 'Era of cheap fuel is over'

energybulletin.net -> telegraph.co.uk :

Viktor Khristenko, Russian's energy minister and guardian of 5% of the world's oil reserves, declared that motorists and business would have to learn to live with expensive fuel because "the era of cheap hydrocarbons is over". He also made it clear that any intervention by EU states if Russian firms sought to buy their European rivals would be regarded as unfriendly.

Russia with its huge oil and gas reserves has been one of the main beneficiaries of soaring oil price and shares the industry consensus that there is little prospect of relief. Mr Khristenko said: "Forecasting is a thankless task in hydrocarbons, but one can say with certainty that the era of cheap hydrocarbons is over."

(2006-06-08 00:21:21 SGT) [Energy] Permalink

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