Daily Archives: May 3, 2010

Kate Mackenzie

Last year Banc of America-Merrill Lynch’s head of global commodities research Francisco Blanch published several interesting notes considering the level at which crude oil prices could threaten world economic recovery. Blanch’s threshold estimates — $80 for the developed world, and $90 for emerging markets — has already, in part, been exceeded.

We have seen some other analysts and economists pointing out that gasoline consumption in the US is nearing a critically high proportion of consumption spending. The IEA, meanwhile, also began to express concern about prices in April.

Blanch’s figures published in 2009 were partly based on information from colleagues who are economic analysts covering different countries around the world. While Blanch cautions he has not yet revisited this analysis, he believes that the world can probably tolerate higher crude prices than his last estimate. However he warns there are still risks, particularly for western economies, which are much less well-equipped now to deal with another steep price rise than they were in 2007 – 2008.

Kate Mackenzie

The Gulf of Mexico oil disaster has drawn a great deal of attention to the often-overlooked subject of where our energy comes from, and how difficult it is to obtain.

The long-term fallout from the incident could be significant for the rest of the US offshore drilling industry. And from Sarah Palin to The New York Times to peak oil bloggers, the point has been made that the US shouldn’t rush to cut back its drilling in the Gulf, because of its importance as a growing source of US oil production. But the fact that oil is heavily traded makes its provenance less important than is often assumed.

Kate Mackenzie

- Oily cormorants are hardly black swans

- Lessons from the Exxon-Valdez spill

- Massive disaster feared if spill enters Gulf Stream

- Where would we be without offshore oil?

- Would a drain America first policy really lower gas prices?

Kate Mackenzie

- Obama pledges to spare no effort in oil clean-up - FT

- White House defends oil spill response - FT

- Critics hit at oil industry lobbying efforts - FT

- US oil spill stresses local labour market - FT

- BP’s worsening spill crisis undermines CEO’s reforms - WSJ

- Salazar warns of impact of pulling back on GoM production – The Hill

- BP oil spill threatening GoM crude oil, natural gas operations - Bloomberg

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