Peak Oil – A Dramatic Turn of Events

In our May 20, 2015 article, we wrote that “Concerns and worry about Peak Oil are overstated and irrelevant.”  The article concluded, “With crude oil supplies increasing and the demand for crude oil slowing, and likely to continue to slow more, demand for crude oil will peak long before dwindling supplies of crude oil become…

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Are Crude Oil and Natural Gas Reconciling?

Crude oil prices have dropped 38% since June for two reasons.  Shale oil production in the US Bakken, Eagle Ford, and Permian basins has increased dramatically – by more than 4 million barrels per day since 2008.  At the same time, worldwide demand for crude oil has declined as a result of slowing economies in…

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Natural Gas Market Update

The above graph looks at natural gas prices going back to January 1997. Natural gas prices have retreated from the Polar Vortex bump and remain relatively low by historical standards. The prices plotted above are not adjusted for inflation.  If they were in 2014 dollars, the left side of the curve would be more elevated. …

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Keystone XL Pipeline – Where’s the Noise?

As the author notes below, on September 5, 2012, TransCanada (NYSE: TRP), the Canadian energy company hoping to build the controversial Keystone XL pipeline, submitted its final re-routing plan to the Nebraska Department of Environmental Quality (DEQ) and the U.S. State Department.  This submission represents the latest step in what has become a more than…

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Time To Draw Down The Strategic Petroleum Reserve?

What is the Strategic Petroleum Reserve? The Strategic Petroleum Reserve consists of a number of large underground caverns created in naturally occurring salt diapirs (domes) along the Gulf Coast of the United States.  The caverns were created by drilling wells into the salt domes, dissolving the salt with water, pumping the salt water solution to…

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Long Tailed Fish Swimming East

Markets adjust.  There are perhaps few better examples of that adage than the crude oil and natural gas markets.  One way of looking at how these two markets adjust is through the rotary rig count.  Baker Hughes keeps track of the number of active drilling rigs in the US (and also internationally). Since July 1987,…

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Crude Oil and Natural Gas Move to Different Hemispheres

On December 16, 2011, we looked at the relationship between natural gas and crude oil prices (see “Crude Oil and Natural Gas Get a Divorce” here).  We looked at how historically, on an energy equivalent basis ($/mmBtu), crude oil (West Texas Intermediate at Cushing, Oklahoma) traded at about a 50% premium to natural gas at…

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