The price of Brent crude oil fell $35/barrel between April and June. But increases this summer have taken about $25 of that back.
Author Archives: James_Hamilton
How long can Japanese bond prices defy gravity?
That’s the question posed in an interesting new paper by UCSD Professor Takeo Hoshi and University of Tokyo Professor Takatoshi Ito.
The Federal Reserve’s Maturity Extension Program and Treasury debt management
The Fed giveth and the Treasury taketh away.
Is this as good as it gets?
Several other new indicators confirm the message from the Q2 GDP report: the U.S. economy continues to grow, but at a discouragingly slow rate.
The Fed stands pat, at least for now
Today’s statement from the FOMC, the decision-making body for the Federal Reserve, basically said that, yes, the economy has worsened since the FOMC’s previous meeting, but no, they’re not going to do anything about it. At least, not right now.
Yet another discouraging GDP release
The Bureau of Economic Analysis reported Friday that U.S. real GDP grew at an anemic 1.5% annual rate during the second quarter. When the same bad thing keeps happening to you again and again, “disappointed” no longer seems the appropriate word to use.
The fiscal cliff and rationality
What should happen, what could happen, and what will happen?
Maugeri on peak oil
Carpe Diem, Reuters, FTalphaville, and WhaleOil are among those calling attention to a new paper by Leonardo Maugeri, senior manager for the Italian oil company Eni, and Senior Fellow at Harvard University, which concluded:
Contrary to what most people believe, oil supply capacity is growing worldwide at such an unprecedented level that it might outpace consumption. This could lead to a glut of overproduction and a steep dip in oil prices.
Based on original, bottom-up, field-by-field analysis of most oil exploration and development projects in the world, this paper suggests that an unrestricted, additional production (the level of production targeted by each single project, according to its schedule, unadjusted for risk) of more than 49 million barrels per day of oil (crude oil and natural gas liquids, or NGLs) is targeted for 2020, the equivalent of more than half the current world production capacity of 93 mbd. [After factoring in risk factors and depletion rates of currently producing oilfields], the net additional production capacity by 2020 could be 17.6 mbd, yielding a world oil production capacity of 110.6 mbd by that date.
Here I take a look at some of the details of Maugeri’s analysis.
Is QE3 coming?
Conditions have changed since January, and we might expect some additional stimulus from the Fed at the next FOMC meeting.
Shale oil and tight oil
Since 2005, the “total oil supply” for the United States as reported by the Energy Information Administration increased by 2.2 million barrels per day. Of this, 1.3 mb/d, or 60%, has come from natural gas liquids and biofuels, which really shouldn’t be added to conventional crude production for purposes of calculating the available supply. Of the 800,000 b/d increase in actual field production of crude oil, almost all of the gain has come from shale and other tight formations that horizontal fracturing methods have only recently opened up. Here I offer some thoughts on how these new production methods change the overall outlook for U.S. oil production.