Daily Archives: January 10, 2011

Kiran Stacey

Analysts are currently rushing out their forecasts for 2011, and one thing that almost everyone seems agreed on is this: oil prices will remain high.

Last week, Barclays predicted that oil would hit $100/barrel at points during the next year. Today, Moody’s has made a slightly lower prediction, saying that it expected prices to average around $80/barrel over the year. (It is worth pointing out that these two are not mutually exclusive).

As ever, the driving factor is Chiinese demand:

Oil finally moved sharply higher late in the year, thanks to continued strength in Asia (particularly China), a weaker US dollar and an improving outlook for western economies…

We expect these fundamental and technical dynamics to continue in 2011, keeping oil prices strong.

For many investors, oil and natural gas are the only energy commodities.

But thermal coal, used to fire power stations, is also important even if it is often overlooked.

Don’t get me wrong, oil is still the most important source of energy, but rather than concentrating only on whether its price its $100 a barrel, investors should also pay attention to whether thermal coal prices continue their climb up towards records.

Kiran Stacey

Many thanks for all your questions for Jack Gerard, the head of the API. His answers will appear on this site on Friday, January 14th.

Next week, the person in the hotseat will be Magued Eldaief, the managing director of GE’s energy business in the UK.

This is your chance to ask him about anything: from whether Western wind turbine makers can keep up with their Chinese rivals; to the future of smart grids; to whether CCS is a viable commercial enterprise.

Email all your questions to energysource@ft.com by the end of Sunday, January 16th.

BP just can’t keep out of the news these days.

After hitting the Gulf coast with its Macondo well oil spill last year, the oil major as of Saturday was seemingly involved in another major oil-infrastructure fail — the shutdown of its Trans-Alaska pipeline system due to a leak.

While the environmental implications aren’t likely to be as severe, the impact on US crude prices could be well felt if the shutdown remains prolonged.

FT Energy Source

- Small leak shuts down BP pipeline – NY Times

- Market on alert over BP leak – FT

- BP likely to face criminal charges – FT

- Scale and pace of Gulf clean up criticised – NY Times

- China’s crude imports surge in 2010 – Argus

- Shale drillers hit high costs in flight from gas – Bloomberg

- Brazil to approve four new nuclear plants – WSJ (£)

- Duke Energy in advanced talks with Progress – FT

- Gas supplies at five-year low for early January – The Observer

- Centrica to recruit 2,600 UK staff – WSJ (£)

- Investors may walk after Spain’s solar cut – FT

- First Utility ‘failing to protect vulnerable’ – The Telegraph

- Perenco looks to Nigeria for next phase – FT

- The futility of fighting price shocks – Roger Bootle, The Telegraph

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