Total’s UK workers vote to end strike (Reuters)
Oil prices little changed by larger than expected inventory rise (Bloomberg)
Petroplus may sell Teesside refinery after poor results (Bloomberg)
Petrobras sells $1.5bn worth of 10-year bonds (Bloomberg)
Tankers concerned at new EPA vessel permits (Platts)
Democrats target Bush administration’s energy ‘midnight regulations’ (Platts)
GDF Suez and Iberdrola team up on bid for UK reactor land (Platts)
India to offer 100 oil exploration blocks (Platts)
Goldman Sachs latest energy note adds to the already substantial pile of evidence that industrial energy demand is continuing to plummet. From Chinese diesel demand to Italian car registrations, the figures are unremittingly bleak.
They note that Opec compliance is 61%, compared to 40% the previous month. But that’s not enough:
In particular, we maintain that an additional 1.1 million b/d of production needs to be removed from the market from anuary’s levels to curb the current market surplus and prevent a continued stock build in the next 2 months. We expect that a further 500 kb/d production cut will likely come from OPEC producers, bringing their compliance rate to 75%, but 600 kb/d will likely have to come from non-OPEC producers (see Exhibit 11). As a consequence, we continue to expect that prices will have to remain under pressure in the near term to force marginal non-OPEC producers to cut supply and help rebalance the market. However, should OPEC implement an additional 1.1 million b/d cut, and/or weather related demand strength become more dominant, the need for non-OPEC production cuts and related downward price pressure would diminish.
How does Opec know how closely its members are complying with production quotas? They use spies, of course – companies known as ‘tanker trackers’.
The most reliable data, used even by Opec countries themselves, come not from the cartel member’s energy ministries, but from so-called secondary sources – a network of spies watching, binoculars in hand, the movement of tankers in and out of the world’s biggest export terminals.
There are three main tanker trackers are Petro-Logistics, Oil Movements and Lloyd’s Intelligence Marine Unit.
Conrad Geber, head of Petro-Logistics… relies on multiple sources – from “spies” at oil ports to “friendly” officials at oil companies leaking data. But even so, he concedes the information is never 100 per cent accurate.
“There are black holes such as Nigeria and Venezuela where all you can come by is a reasonable estimate,” he says.
The confusion and distrust about production is so deep that Opec members regularly request data about fellow members’ production from the International Energy Agency. This is ironic because the IEA, created after the 1970s oil shocks as the western countries’ oil watchdog, is basically to Opec what Nato was to the Warsaw Pact.
‘The golden age for refiners is over’ (The Barrel/Platts)
Stern: We need a $2,000bn ‘green stimulus’ (FT) – but climate change represents a great business and investment opportunity (The Times)
Trade wars: Will climate change measures lead to a protectionist tit-for-tat? (WSJ)
BP blamed as carbon credit prices plunge (Guardian)
Additionality: the naughty teenagers and carparks analogy (EU Energy Blog)
Make your own wireless home energy monitor, and hook it up to Twitter
Repsol says plans €1.5bn in cost-savings (Reuters)
British Energy to return reactors to service (Reuters)
Rio Tinto in asset sale talks with Chinalco
Survey sparks EU probe into power market
Carbon price fall bad for green investment
Tide on the rise for wave generation
Editorial: By leaving markets, food importers make things worse
US – half of US refining capacity could be affected by a strike as contract ends this weekend
UK – workers at all three of the country’s refineries walk off job over Total’s use of an Italian contractor; no sign of disruption to supplies
Nigeria - strike threatened by Feb 11 over use of a foreign firm for oil monitoring (though we’re not quite sure yet from which country Cobalt International Services hails)
Earlier this week Platt’s blog The Barrel said Nigerian grades had strengthened against Brent since Jan 5, and traders were citing Opec cuts.
Meanwhile 12 of the 32 traders and analysts surveyed by Bloomberg this week said futures prices would rise through February 6. This is the slimmest of positive sentiment, however - the remainder of participants were equally split between further falls and remaining neutral.
Australia’s Origin Q2 output rises, sales slip (Reuters)
China energy firms aim to boost northwest output (Reuters)
EDF wins French approval to develop nuclear reactor (Bloomberg)
$515bn needed to boost clean energy (WEF Report)
In the FT and FT.com this morning:
- Investor fury over Xstrata cash call
- Rio Tinto to sell assets to Vale for $1.6bn
- Shell’s fourth-quarter profits tumble
- Centrica looks to US in quest for further acquisitions
- Europe could spark off US energy deals
- Eaga increases interim dividend