America's Oil Boom Is Shocking Global Energy Markets

An oil drilling rig and housing for workers is seen outside Williston, North Dakota, October 19, 2012. Thousands of people have flooded into North Dakota to work in state's oil drilling boom. (REUTERS)

US Shale Oil Supply Shock Shifts Global Power Balance -- BBC

A steeper-than-expected rise in US shale oil reserves is about to change the global balance of power between new and existing producers, a report says.

Over the next five years, the US will account for a third of new oil supplies, according to the International Energy Agency (IEA).

The US will change from the world's leading importer of oil to a net exporter.

Demand for oil from Middle-East oil producers is set to slow as a result.

"North America has set off a supply shock that is sending ripples throughout the world," said IEA executive director Maria van der Hoeven.

Read more ....

More News On America's Energy Boom Shocking Global Energy Markets

Oil Shockwaves From U.S. Shale Boom Seen by IEA Ousting OPEC -- Bloomberg Businessweek
U.S. oil boom causing energy upheaval -- CNN
Report: U.S. oil surge transforming markets, undercutting OPEC -- Washington Times
North America Is Setting Off An Oil Supply Shock That Is Rippling Through The World -- Joe Weisenthal, Business Insider
U.S. oil boom leaves OPEC sidelined from demand growth -- Reuters
IEA Sees Crude Trade Declining as North America Cuts Imports -- Bloomberg Businessweek
Oil slides below $95 a barrel as IEA sees surging US crude output coupled with slowing demand -- Washington Post/AP
U.S. to Surpass Russia as Largest Non-OPEC Oil Producer -- FOX News
Oil crisis for OPEC? -- Euronews

WNU Editor: The IEA report is here.

It's Been A Good Year For OPEC

OPEC Cartel To Reap Record $1 Trillion -- CNN/Financial Times

(Financial Times) -- The Opec oil cartel, led by Saudi Arabia, will pocket a record of more than US$1tn in net oil revenues in 2012 as the annual average price for Brent, the benchmark, heads to an all-time high in spite of weak economic growth.

The windfall will provide fresh capital to some of the world's largest sovereign wealth funds. United Arab Emirates, Saudi Arabia and Kuwait, the most influential members of the cartel, are home to three of the world's 10 largest SWFs by assets under management, according to estimates by the SWF Institute.

With one trading day left before the year-end, Brent oil prices are on the point of seeing an average for the year of about $111.5 a barrel, higher than the previous all-time high set in 2011 of $110.9.

The benchmark closed at or above $100 every trading day in 2012, bar 24 in June and early July.

Read more ....

Update: OPEC will earn a record $1.05 trillion in 2012 in oil revenues -- L.A. Times

My Comment: A good year .... yes. But the days of OPEC dictating price may be coming to an end because of this.

How OPEC's $1 Trillion In Cash Is Buying The Peace

OPEC’s $1 Trillion Cash Quiets Poor On Longest Ever $100 Oil -- Bloomberg Businessweek

Saudi Arabia will spend $43 billion on its poorer citizens and religious institutions. Kuwaitis are getting free food for a year. Civil servants in Algeria received a 34 percent pay rise. Desert cities in the United Arab Emirates may soon enjoy uninterrupted electricity.

Organization of Petroleum Exporting Countries members are poised to earn an unprecedented $1 trillion this year, according to the U.S. Energy Department, as the group’s benchmark oil measure exceeded $100 a barrel for the longest period ever. They are promising to plow record amounts into public and social programs after pro-democracy movements overthrew rulers in Tunisia, Egypt and Libya and spread to Yemen and Syria.

Read more ....

More News On OPEC's Spending Priorities

OPEC members investing in citizens as oil prices climb -- Financial Post
Sovereign wealth: Spending stays close to home -- Financial Times
IMF: Gulf states face fiscal costs -- Financial Times
To Stave Off Arab Spring Revolts, Saudi Arabia and Fellow Gulf Countries Spend $150 Billion -- Knowledge@Wharton Today

My Comment: All OPEC members have seen what has happened in Tunisia, Egypt, Syria, Yemen, Bahrain, Jordan, Morocco, etc... and do not want to be next. But this is only a stop-gap measure, and the question has to then be asked .... what happens if the money runs out?

Iran Revolutionary Guards' Commander Positioned To Become Opec's Next President

Iran Revolutionary Guards' Commander Set To Become President Of Opec -- The Guardian

Rostam Ghasemi, who is blacklisted by western powers, could have major role in determining global oil price

A senior commander of Iran's revolutionary guards, who is subject to comprehensive international sanctions, has been nominated as the country's oil minister, a position that currently includes the presidency of Opec.

Mahmoud Ahmadinejad, the Iranian president, sent a list of four ministers, including Rostam Ghasemi, commander of the revolutionary guards' Khatam al-Anbia military and industrial base, to the parliament for approval, the semi-official Fars news agency reported.

Read more ....

My Comment: We have two choices, renounce oil and be prepared for a post-industrial society (hi-tech green jobs are not going to happen), or deal with Opec and thugs like Rostam Ghasemi. Both options are distasteful.

The Best Year For OPEC Revenues

Opec To Haul In $1 Trillion As Oil Prices Increase Risk Of Double-Dip Recession -- The Telegraph

The cartel of oil-producing countries will have $1 trillion (£600bn) in revenues for the first time this year, benefiting from high prices that may cause a "double-dip recession".

Forecasts from the US government show that the Organisation of Petroleum Exporting Countries (Opec), whose key members include Saudi Arabia and Iran, will collect a third more in revenues because prices have averaged $111 per barrel this year.

But Fatih Birol, chief economist of the International Energy Agency, said that the current price of $120 per barrel could be the catalyst for a global economic crisis on the scale of the one experienced in 2008.

Read more ....

My Comment: Arab spring coupled with revolution in the Arab world. Iraq unstable. Iran unstable. Nigeria unstable. Venezuela unstable. With all of this turmoil and instability .... the money continues to roll in. It appears that in order for OPEC to continue to be successful .... instability and unrest is the way to go.

OPEC Is In Disarray Resulting In Oil Supply Concerns

'One Of The Worst Meetings We've Ever Had': Oil Prices Surge After Opec Fails To Raise Output At Tempestuous Session -- The Daily Mail

Tensions among members in the Organisation of the Petroleum Exporting Countries meant production levels remain unchanged - leading to a surge in oil prices.

The Opec nations will maintain present output with the option of meeting again within the next three months to agree to produce more barrels.

Secretary General Abdullah Al-Badri said: 'We are unable to reach consensus to... raise our production.'

Read more ....

More News On OPEC

Brent at 5-week high on supply fears after OPEC -- Reuters
Oil prices surge as cartel fails to agree on boost in output -- Belfast Telegrah
Oil production and consumption: Running dry -- The Economist
Opec Likely to Regroup When the Price of Oil Falls -- Wall Street Journal
Russia is the big winner from the Opec debacle -- David Prosser, The Independent
Foreign Policy: OPEC Who? -- Steve LeVine, NPR
Who is afraid of commodity cartels? -- Financial Times editorial

A Good Year For OPEC

OPEC Set For $1,000bn In Export Revenues -- Financial Times

Opec, the oil producers’ cartel, will reap $1,000bn in export revenues this year for the first time if crude prices remain above $100 a barrel, according to the International Energy Agency.

The cartel has been one of the main beneficiaries of high oil prices, which have soared in recent weeks amid the civil uprisings in the Middle East and north Africa.

Brent crude was trading at $115 a barrel on Tuesday.

Read more ....

My Comment: One of my past professions (and background) is being an analyst for oil production/consumption/prices. I always said then .... and I have been saying the same thing in this blog for the past few years .... there is an incredible amount of oil out there .... the problem has never been getting it .... the problem has always been government interfering in the industry and on how it operates.

After what happened last year with the BP oil blowout in the Gulf of Mexico, and how the White House approached this environmental disaster by forcing BP to cough out $20 billion .... I am not surprised to read stories like this one .... and all the speeches in the world are not going to change that. Mind you we are not the only ones who have a government that stumbles on how energy should be delivered .... the British are in a class of their own.

OPEC Sees 'Devastating Contraction' In Oil Demand

From AFP:

OPEC again revised down its estimate for world crude demand on Wednesday, saying a "devasting contraction" in consumption would keep prices under pressure in the months ahead.

"In the coming months, the market is expected to remain under pressure from uncertainties in the economic outlook, demand deterioration and the substantial overhang in supply," the Organization of Petroleum Exporting Countries wrote in its latest monthly report.

Read more ....

My Comment: This is going to make a number of countries and their leaders very nervous. i.e. Russia, Iran, Venezuela .... you get the picture.