Daily Archives: October 31, 2013

It seems bizarre to say that a company which will generate cash this year of between $40bn and $45bn has a fundamental structural problem. But the latest results from Royal Dutch Shell show just how weak the correlation between size and performance has proved to be. Capital expenditure is so high that even cash at that level may be insufficient to cover spending and dividends. The company looks lost – a lumbering dinosaur in a world where the prizes go to the quick and nimble. Read more

It is impossible to understand the outlook for energy prices – internationally or at the domestic level – without looking carefully at what is happening in the gas market. The simplistic assumption is that because demand is rising, prices must also increase inexorably. This assumption underpins a lot of official forecasts and the business plans of some optimistic producers. The reality is much more complicated. The emergence of a spot market suggests that there is a strong chance of prices falling over the next decade. Read more