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Showing posts from March 7, 2021

Reliance of Texans on natural gas for heating and electricity

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  In February 2021, an unusual weather event, an extreme winter weather front, brought the energy supply in the US state of Texas under tremendous strain as never before. Not only did it set off alarm bells across the energy sector, but also raised the concern about the logic of turning our back on fossil fuels entirely without a credible alternative at our disposal. According to the EIA, the US Energy Information Administration, in Texas, 61% of households use electricity as the main power source and 52% of electricity in the state is generated by gas-powered power plants; 31% of households use natural gas for heating purposes. On February 15, electricity generated by natural gas, wind and nuclear power went down substantially, causing a serious energy crisis. The fate of wind turbines attracted the global attention during the crisis, because what happened to the blades was not something anticipated in a severe winter storm; that means, there are still some unknowns when it co

The EIA forecasts a significant crude oil inventory draw in the coming weeks and hints shale oil revival

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  The EIA, the US Energy Information Administration, forecasts a significant crude oil inventory draw in the coming weeks in response to the strong demand of the commodity. According to its latest projections, the supply of crude oil will remain constrained in the short term due to the recent OPEC+ decision to stick to the existing production level and the voluntary addition production cut of 1 million bpd announced by Saudi Arabia for the months, starting from February to April. Despite recent steep rise in price, the EIA still maintain that the price will remain around $67 a barrel. It expects that the OPEC+ will increase the production of crude oil for May as the demand start growing due to heightened economic activities thanks to the relative success of the global vaccination programmes. In order to meet the rising demand, the EIA, expects that the US shale oil producers will be back in action in light of rising oil price; the scenario may have prompted the OPEC+ to increase

Government Taxes on Fuels: the figures that remain in the shadow of oil drums

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  The steep rise in oil price, relative to what it was around this time last year, has led to a brewing storm in the sphere of global politics with the OPEC+ at its centre. The governments in question – or politicians for that matter – are looking for a scapegoat and they appear to have got a herd of them in their hour of need – the OPEC+. With the price of crude oil at the current level, the oil producers just manage to balance their books, having suffered for years facing the plummeting oil price since 2014. There were thousands of job losses; research and exploration activities came to a screeching halt without a warning out of the blue; hundreds of major projects were put on hold; millions of workers from poorer countries of Asia and Africa were compelled to stare at the grim pit of uncertainty and countries they hail from lost a vital stream of revenues that was essential for survival. In short, the ‘collateral damage’ on the poorer countries in Asia and Africa was conveni

Plea for brining oil price down: India snubbed by Saudi Arabia

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Oil Price: Saudi Arabia increases crude oil price for the US and Asia - again

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  Having buoyed by the absence of an immediate threat from the US shale producers, Saudi Arabia shows no sign of slowing down its ambition to cash in on its position being the world’s top crude oil exporter. It raised the oil price for Asia and the US for the second time in a matter of few months; it still maintains the unilateral production cut of 1 million bpd, in addition to what was agreed upon at the recent OPEC+ meeting. The rise in oil price had already affected the Asian consumers when they are pursuing the economic recovery with renewed vigour. That’s why India, the world’s third biggest oil consumer, made its displeasure known about what it called, ‘artificial production cuts’ in order to boost the price. Judging by the rise in oil price in the wake of criticism, Saudi Arabia showed its consumers in Asia that business comes first over regional loyalties. Saudi decision to increase the price will certainly resonate with some members of the OPEC+ in the Middle East; bot

Sheikh Yamani and his Oil Prophesy: the end of Stone Age vs Oil Age

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  Sheikh Ahmed Zaki Yamani, the former Saudi oil minister who passed away on February 23 this year, has left an impressive legacy that no substitute can ever match in terms of vision, intellect, influence, power and the courage for calling a spade a spade when the need was in the air. Mr Yamani achieved all that without being born into Royalty in his native Saudi Arabia; he was a commoner with Bedouin roots and born in Mecca in 1930. He was educated in Egypt and then at Harvard before being attracted to the Saudi ruling circles, thanks to his skills in identifying the undercurrents in the realm of oil and turning them to the full benefit of the country he represented. The OPEC would not have been where it is now, without him. In Mr Yamani’s heyday, if the OPEC was the solar system, he was the central Sun that kept what belongs to the former in orbit; it’s no exaggeration that his mere presence in the OPEC meetings has, more often than not, made the collective outcomes foregone co

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