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Each week, PennEnergy delivers a unique perspective on the global energy scene. Compiled by award-winning veteran energy journalist Bob Williams, PennEnergy Perspectives offers a weekly overview of the key energy market trends, top industry operations news, and personnel moves, along with provocative, insightful commentary with an edge. For a look at more energy news and PennEnergy’s complete portfolio of energy intelligence and information offerings, please visit our website.
Market Recap
Key question of the day: Will OPEC defend $100/bbl?
Remember the good old days? When the oil market’s biggest concern was: How high will oil prices go? Never underestimate the volatility of the oil market. Now the question on everyone’s mind is: How low will oil prices go? Will OPEC defend $100/bbl? And will that in turn aggravate the downward economic spiral that a dysfunctional Congress seems intent on perpetuating?
Economic uncertainty stemming from the Wall Street meltdown has put energy commodities on a rollercoaster ride. Just as some analysts were predicting crude oil is bottoming around $100/bbl, the NYMEX front-month futures contract pierced that psychologically important floor, dropping $10 on the day Monday. A bearish near-term sentiment has taken hold as concern grows over whether contagion from the broader economic flu will spread to commodities.
Also see these other recent oil and gas market-related stories:
MARKET WATCH: Energy prices fluctuate in uncertain markets—September 29, 2008. Energy prices continued to waffle, declining Sept. 26 amid uncertainties about the international economy, the value of the US dollar, and global energy demand through 2009. MARKET WATCH: Unstable economy raises energy prices—September 26, 2008. Energy prices rebounded Sept. 25 among investors' fears that the $700 billion economic rescue plan being hammered out in Washington could weaken the US dollar, the currency in which oil is traded internationally. MARKET WATCH: Economic worries pull down energy prices—September 25, 2008. The front-month crude contract approached $110/bbl during intraday trading Sept. 24 in the New York futures market but finished down for the day due to economic uncertainties and concerns about decreased demand.
Top Stories
Not just the oil and gas industry, but the entire world is waiting on tenterhooks to see if the US Congress can get over its politicized internecine squabbling to pass a bailout plan. Then again, there is still much to keep squabbling about as long as energy remains a hot topic in an election year. After failing previous back-door efforts to sneak a ban on federal oil shale leasing, US Senate Majority Leader Harry M. Reid (D-Nev.) inserted a moratorium on federal oil shale leasing into a continuing resolution to keep the federal government operating through Mar. 6, 2009. The CR was subsequently defeated in the Senate.
Is Russia taking a more active role in oil markets—to the point where the Kremlin is using energy as a tool of foreign policy? US Energy Sec. Samuel Bodman seems to think so, and he plans to take up the issue meeting with OPEC officials next week in Vienna. Russian officials recently have made vocal overtures toward greater coordination (read: influence) regarding oil prices and markets.
Also see these other top oil and gas stories:
Japanese firms boost Vietnamese oil industry—September 29, 2008. Japanese firms are stepping up their involvement in Vietnam's oil industry, entering both upstream exploration and production and downstream refining and marketing.
Statoil teams with universities in heavy oil research—September 28. StatoilHydro has partnered with universities in Canada and Norway to examine ways to improve recovery of heavy oil and oil sands in an environmentally friendly way.
Mexican production continues downward spiral—September 26, 2008. Mexico's state-owned Petroleos Mexicanos said that during January-August 2008 its production of crude oil fell to 2.83 million b/d or 9.7% while exports dropped 16% compared with the same period in 2007.
Brazil sees $25 billion investment in ethanol—September 29, 2008. Brazil's state-owned Empresa de Pesquisa Energetica, a division of the energy and mines ministry, said the country will invest some $25 billion for the construction of new ethanol plants to meet domestic demand growth projected at 150% over the next decade.
France to increase gas transportation tariffs—September 29, 2008. France's CRE reported that it will enable increases in usage tariffs on France's gas transport network in order to provide "better visibility" to market players.
Chevron plans Wheatstone LNG hub on Pilbara coast—September 24, 2008. Chevron Australia has applied to the federal government for environmental approval to build an LNG hub on Western Australia's Pilbara coast for its proposed Wheatstone project.
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