Monthly Archives: February 2011

Hitting the wires at pixel time — an astonishing promise:

RIYADH, Feb 24 (Reuters) – Saudi Arabia is willing and able to supply high quality, light oil to replace any lost Libyan crude, senior Saudi sources said on Thursday.

“Saudi is willing and capable of supplying oil of the same quality, either Arab extra light or through blending,” one source said…

Some West African crude, such as Angolan crude can also be redirected to Europe, the sources said, while Saudi Arabia could temporarily send extra oil to Asia to compensate.

FT Energy Source

- Saudi’s $36bn to beat unrest – FT

- Libya shutdowns send oil soaring – FT

- Opec’s soothing words fail to calm – The Times (£)

- Nomura warns oil could hit $220 a barrel – The Telegraph

- Why disruption to Libyan oil has led to a price spike – NY Times

- Exxon, Shell ‘hacked via Chinese servers’ – Bloomberg

- Hunt for top-grade crude sources begins – FT

- North Sea ‘has more oil than was thought’ – The Times (£)

- How big is the 2011 oil price shock? – Gavyn Davies, FT

- Rio extends bid deadline for Riversdale – Argus

- Centrica reports higher profits and sales – Reuters

- Centrica signs £2bn gas deal with Qatar – FT

- RWE sees significant pressure on earnings until 2013 – WSJ (£)

- Origin posts loss and flags equity raising – WSJ (£)

- EU outlines ETS security measures – Argus

- Australia to tax carbon from July 2012 – Bloomberg

- Australia electricity prices jump on carbon scheme – Reuters

- Target ‘black carbon’ to tackle climate change, says UN – The Guardian

- Solar energy faces tests on greenness – NY Times

- Google Ventures invests in power-saving technology – Reuters

At least half of Libya’s oil production has been shut down in the wake of the violence wracking the country, industry executives estimate.

The continuing disruption in the country, the world’s 12th largest exporter of crude, drove oil prices to a fresh 2½-year peak on Wednesday. Brent oil futures jumped 3.7 per cent to hit $110 a barrel for the first time since before the collapse of Lehman Brothers. The benchmark has risen 7.7 per cent since Monday.

Apart from the prospect of $220 a barrel…

Much discussion on Wednesday of whether Opec could pump more oil from the Arabian peninsula to make up for Libya going offline — so we thought these pointers from Barclays Capital’s Amrita Sen might help:

Kiran Stacey

As the big guns of the oil industry gather in London this week for International Petroleum week, talk has been largely of two things: the effect of Middle East unrest on the oil price and how to improve its reputation, especially after Macondo.

I have just sat through a session entitled: “Restoring the industry’s licence to operate in the face of increasing public and political scrutiny”.

In it, Andrew Griffin, CEO of a PR company called Regester Larkin, explained how the Macondo spill showed that the oil industry needed to do more to explain its importance to the public. This, he said, would help protect companies’ reputations in the case of an accident or other negative event.

Kiran Stacey

As the oil price continues to surge, hitting $109 a barrel, the oil price movement for 2011 has begun to look very much like that in 2008, when the price ended up hitting $145, and became a contributing factor to the slump.

But Leo Drollas, chief economist at the Centre for Global Energy Studies, thinks it won’t, even though there are many similarities with the situation in 2008, including high oil demand.

FT Energy Source

- Libyan chaos threatens to spark oil crisis – FT

- Oil hits $109 a barrel on fears of more unrest – The Times (£)

- Opec ready to raise oil output – FT

- IEA may tap oil stockpiles – WSJ (£)

- Libya’s impact on oil – FT

- All eyes on Bahrain as Gulf tremors frighten oil markets – The Telegraph

- Prepare now for a Saudi oil price shock – Michael Levi, FT

- Mideast unrest shows need for alternative fuels: Navy secretary – Reuters

- Goldman sees WTI-Brent spread narrowing to $7 – Bloomberg

- BP to sell ageing North Sea assets – FT

- BP’s Eastern march of uncertainty – WSJ (£)

- BP rejig could embrace a demerger – FT Lombard

- Rosneft chief takes aim at TNK-BP action – The Times (£)

- Drax raises biomass project hopes – FT

- BHP looks to diversify commodities exposure – FT

- Icahn, Seneca, to reboot Dynegy – WSJ (£)

- Holly agrees to merger with Frontier – FT

- Billionaire Slim enters Colombian oil market – Bloomberg

- Profits rise at Hargreaves services – FT

- A stopgap for climate change – NY Times Green blog

Kiran Stacey

It is a very dangerous game to try and predict what will happen next in the Middle East and North Africa at the moment, so I report this with all the usual caveats. But John Roberts, an energy security specialist at Platts, has been watching the region for a long time, and he thinks that the possible removal of Muammar Gaddafi blows apart a lot of long-held assumptions about the region.

The key assumption as far as Libya was concerned was that with high oil revenues and a small population, Gaddafi was safe. If trouble started, he could always bribe people into remaining quiet – as he appears to have done recently, reportedly increasing wages and loans on offer to Libyans.

Breaking at pixel time — Reuters quoting an Italian government source that ‘informal’ Opec talks have begun on raising output if Libyan supply collapses (only for the Saudi oil minister to deny that Opec will consider extraordinary talks.)

Which is precisely what the supply has been doing (the country’s gas exports aren’t looking too hot either). Italy has every incentive to do something about it of course, given its ample Libyan exposure in both resources.

Kiran Stacey

Colonel Gaddafi’s rather strange television appearance last night failed to quell the Libyan insurrection, and this morning has seen a mounting number of oil companies depart the country and the oil price continue to surge.

The news for Opec in the short term is bad, with Libya currently accounting for 1.6m barrels a day of oil production. In the long term, it could be even worse, however, especially if trouble spreads to Kuwait, with 2.3m b/d, Iran, with 3.7m, or even the big one – Saudi Arabia, with 8.3m.

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