The big question for investors: who is next? BP?
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Al-Hayat has one of the most experienced and well-connected Opec correspondents of all the news outlets that follow the cartel closely. And the paper has good access to Saudi officials. However, even Al-Hayat is not immune to Opec’s ‘sudden’ changes of plan, so reader beware:
Everyone and their dog has been warning that declining investment in oil infrastructure now, as low oil prices remove incentives for big spending, could store up problem in the future. By the time demand picks up, the industry may have reduced its investment in production such that we’ll see a supply crunch where prices rise sharply.
This risk has been written by everyone from analysts and policy wonks to USA Today. It’s a function of the oil industry: huge amounts of capital are spent developing new oil sources, and they do not go online quickly. So while the big international oil companies such as Exxon and BP are holding their investment levels reasonably steady this year, the outlook is less certain for 2010. Read more
More good news from Tullow Oil, one of the great success stories of the independent oil sector this decade. It has had yet more good exploration results from its offshore fields in Ghana and, more importantly, has sealed the deal for its $2bn refinancing.
UPDATE: Tullow shares are up 9.3 per cent at 803p in afternoon trading in London. Read more
Harry Reid, the Democratic senator and majority leader, has introduced legislation for a grid that is both smart and taps into renewable energy (as we have noted before, the two objectives are not the same).
“Simply put, the bill makes it easier to deliver clean energy from the often-rural areas where it is harnessed to major population centers throughout the country,” says a statement on Senator Reid’s website.
But will legislation alone be enough? Read more
(Updated) The days preceding an Opec meeting are usually tense ones for oil market participants, and oil prices have been edging higher in recent days as this Sunday’s meeting nears and further cuts are anticipated.
After Opec’s cuts of 2m barrels per day in September and a further 2.2m in December; and signs that these cuts are actually taking effect (another tanker tracker last week added to the evidence), the WSJ argues that Opec may decide it has no need for further deep cuts. Read more