Showing posts from 2024

Iran's reluctance to escalate the Middle Eastern crisis and falling commodity prices

Estimated Commodity Prices - Google  With the war in the Middle East at a critical juncture, especially when it comes to the potential casualties of the beleaguered Palestinians near the Rafah crossing, bordering Egypt, Iran's desire to get involved in the conflict, if it had any before -  apart from the Western estimates -  appears to be on the wane. Although the shipping route in the Red Sea is still vulnerable to the intermittent attacks by the Houthis from Yemen, the crisis appears to be manageable, as far as imminent dangers to the selected ships are concerned.  One of the obvious casualties in the  Red Sea saga, apart from the shipping companies - and consumers worldwide, of course -  has been Egypt: President Sisi of Egypt admitted today that his country lost between 40-50% of the revenue earned from the ships through the Suez Canal; many ships avoid the narrow waterway - and the Red Sea - not to risk the attacks by the Houthis; as the traffic plummeted so did the revenue fo

A Tale of Two Commodities: price of LNG falls and oil slightly up!

Prices of LNG and Oil on16 Feb 2024  As the feared 'R' word started doing rounds yesterday with Britain falling into recession, the energy markets have gone into shock-absorbing mode for obvious reasons; it goes without saying that the low manufacturing activity that inevitably stems from shrinking economic growth means less consumption in the main commodities such as oil and gas. Even before the official announcement by the British authorities about the country being in recession, the price of LNG, liquified natural gas, has been falling during the last two weeks. The United Kingdom was officially declared being in recession in line with the text book definition of the latter: there were two successive negative growths in the GDP during the third and fourth quarters in 2023 respectively.  Image Credit: Office for National Statistics - United Kingdom As of 14:00 GMT, the price of LNG was at $1.61, whereas the same was $2.35, a year ago. The price of oil, however, has slightly g

The Shale Boom in the US

US Shale Boom The US shale boom has regained its lost momentum in the immediate aftermath of Covid-10 pandemic.  According to the latest data, both Exxon Mobil and Chevron have reported strong financial results that has directly stemmed from the increased production; the production activities have increased in the Permian Basin in Texas, US.    The shale oil industry was dealt a massive blow in 2020, when the oil price - and the demand - crashed in the wake of once-in-a-century pandemic. The  industry had been facing with its own challenges even before the pandemic broke out,  due to higher production costs relative to those of the conventional oil producers.  They were compelled to compensate for the high production costs by increasing the price of shale oil; the OPEC+, meanwhile, made the very survival of the sector even harder by artificially deflating the oil prices by increasing the production. During the booming years,  meanwhile,  the industry accumulated significant debt in

An imminent attack by the US on those who killed its troops - and associates

  B-52 Bomber The US seems to have clearly decided to retaliate over the drone attack on its base in Jordan on Sunday that resulted in the death of three servicemen and injuries to many more.  President Biden, in response to the questioning of the journalists on Tuesday, clearly indicated that he had already made up his mind as to what to do, without giving away anything for obvious reasons. The absence of hubris and of course, the deafening silence on the part of the Americans is a classic case of ' the calm before the storm '; in the aftermath of the attack, President Biden said he would respond in a  ' time and manner of our choosing ', leaving it widely open to interpretation.  The developments in terms of the arrival of a fleet of the dreaded B-52 bombers, which are potentially armed with nuclear weapons and conventional bombs, in the Middle East, along with the other state-of-the-art aircrafts and those with refueling facilities clearly indicate,  it is not just a

Oil price rises as the events in the Middle East take a turn for the worse!

Kamikaze drone attack on the US troops The conflict in the Middle East shows no sign of abating at present. The drone attack on an American military base on the Jordanian-Syrian border, by an Iran-funded Shia group from Iraq, is going to make things turn ugly in the next few days as the CENTCOM - United States Central Command - announced three American servicemen died and scores were injured on Saturday. The Kamikaze drone, most probably produced in Iran, was a lucky hit. In Iraq they were brought down by the US Patriot missile system, when the US bases were under constant attack. The US, in retaliation, targeted the masterminds in Iraq and assassinated with the Predator drones in the past few months. US Predator drone: Image Credit - Wikimedia Commons The targeted killing of Shia militants on the Iraqi soil has already left the Iraqi government in a precarious position; it demanded that the US troops leave the country much sooner than they mutually agreed upon in principle years ago. 

Oil prices to remain static in 2024 - and beyond : EIA

  Oil and gas prices - January, 2024 As the energy markets attempt to limping back to normal after a long period of holidays, the prices of commodity did not show any sign of revival. On the contrary, the prices of WTI, Brent and LNG, liquified natural gas, recorded losses by 3.4%, 2.99% and 0.075% respectively in the first week of the New Year. Despite the plummeting temperatures in Europe and America, the price of natural gas did not spike as anticipated during this week either.  As the Europeans took timely precautions against harsh winter months, the fear of gas shortages has just disappeared into the thin air. Germany, for instance, managed to fill its reserves to an unprecedented 91%, according to media reports.  Analysts believe that the downward pressure on the commodities come in the form of weakening global demand, increased US crude stocks, warmer-than-expected winter during the last three months in 2023 and of course, the tightening sanctions against Russian oil and gas by

China's Manufacturing PMI down again in December: a weakened pulse reflecting decline in global energy demands!

  Contraction in China's Manufacturing  The latest data released by China's National Bureau of Statistics clearly shows that the the activities of the global manufacturing powers house, China, was down again in December, 2023. In fact, it has lost 0.4% points, from 49.4% in November to 49% in December. The significant index has been on a downward trend since September. The Manufacturing PMI of China is a barometer that represents China's manufacturing activity in a given month: the authorities survey the manufacturing managers in the vast country to gauge the activities at first hand; its threshold is 50% that indicates no changes; if it is above 50%, as happened in September, it is an expansion of the activity; on the other hand, any number below 50% is a contraction.  China's Manufacturing PMI for December With the latest data, China admitted explicitly that its manufacturing activity has contracted in the past four months. The admission has already cast a long shadow

Happy New Year to the resilient and innovative oil and gas community!

  Oil and gas industry - Happy New Year As the clock struck at midnight and we ushered in the fresh slate of 2024, it's a proud moment to raise a glass - or a hard hat, if safety's your calling! - to the remarkable community that keeps the world's engines humming: the oil and gas industry. Our warmest greetings go to the geologists, the drillers, the engineers, the pipeline tenders, the traders and even dowsers - who have helped in locating the oil and gas reserves, while being at the receiving end of ridicule for alleged practice of pseudoscience - who combine their tenacity, expertise, and unwavering dedication that bring warmth to homes, fuel transportation, and power countless industries under the Sun. The stakeholders defy the volatile markets, shifting landscapes, and evolving demands while adapting and innovating to ensure the energy flow neither falters nor evolves into a frightening uncertainty in the offing. The decade has been a whirlwind: geopolitical sto

Latest Energy News from EIA