This week on FT Energy Source:
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By Izabella Kaminska
Remember the days when hurricanes and geo-political events made oil fly?
Well, according to Olivier Jakob at Petromatrix, those days — for the time being at least — should be forgotten. The correlations between the Dow, the dollar and oil are now so well set, traders simply can’t afford to ignore them. Read more
So, carbon capture and storage (or carbon capture and sequestration, if you prefer) costs a lot. That is the finding of the phenomenally well-funded Global CCS Institute, launched by the Australian government earlier this year.
The report states that CCS is unlikely to be cost-effective, at market carbon rates, before 2030 – 2040.
Matching the market price of carbon, under whatever cap-and-trade schemes are in operation, is the crucial threshold for CSS. When CCS plants first begin truly operating at scale – which won’t be until well into next decade – the cost of capturing a tonne of CO2 will likely be much, much higher than simply buying emissions allowances on the market.
It’s hardly news that CCS is likely to be very expensive. Read more
Oil prices dipped on Friday while base metals were mixed as commodity markets paused following a strong rally in the previous session prompted by news that the US economy had escaped recession in the third quarter.
After rising by more than $2 on Thursday, Nymex December West Texas Intermediate retreated 43 cents to $79.44 a barrel, while ICE December Brent lost 52 cents at $77.52 a barrel.
Crude oil’s extremely high correlation with movements in the US dollar and stock market is continuing to trouble analysts who argue that oil market trading is not currently based on supply and demand fundamentals.
Or, blame policy.
The US and China might be making nice this week, with several trade disputes being resolved at a meeting in Hangzhou – which included a promise by China to drop the ‘local content’ requirement on wind farm tenders. Meanwhile a big wind project in Texas announced yesterday will use turbines supplied by a Chinese company, A-Power Energy.
But if US wind turbine manufacturers want another foreign renewables contingent to worry about, there’s always the Europeans. A study by non-profit group the Investigative Reporting Workshop found that 84 per cent of the $1.05bn handed out by the US government since September 1 has gone to foreign companies – mostly European. Read more
Oil prices managed a partial recovery on Thursday after falling more than $2 a barrel in the previous session, while base metals were firmer as commodity markets steadied ahead of data expected to show that the US economy escaped recession in the third quarter.
The consensus forecast was for US gross domestic product to have expanded at an annualised rate of 3.2 per cent in the third quarter following an 0.7 per cent contraction in the previous three months.
Nymex December West Texas Intermediate rose 44 cents at $77.90 a barrel, while ICE December Brent added 44 cents at $76.30 a barrel.