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News Oil

Oil Drops On Signs Of Slower Global Growth

October 4, 2012

Oil prices plunged Wednesday on more evidence of slower growth in Asia and concerns about Europe‘s ongoing financial crisis.

Benchmark oil fell $3.43 or 3.7 per cent to $88.46 per barrel in afternoon trading on the New York Mercantile Exchange. Brent crude, which is used to price international varieties of oil, fell $2.59, or 2.3 per cent, to $108.98 a barrel in London.

China‘s services sector slowed in September. Analysts say the index was 53.7 compared with 56.3 in August. It was released just days after a survey indicated that the country’s manufacturing continues to slow.

China is the world’s second largest economy and a huge importer of commodities like oil. Slower growth in that country could cut demand for oil.

And it’s not only China. After years of rapid growth, Asia’s developing economies now face much more modest prospects, the Asian Development Bank said Wednesday in a report that slashes growth forecasts for this year and next.

The ADB said growth in developing Asia, which includes giant emerging economies such as India, China and Indonesia, will slow to 6.1 per cent this year from 7.2 per cent last year and only partly rebound to 6.7 per cent in 2013. It had previously forecast growth of 6.9 per cent for 2012 and 7.3 per cent for 2013.

The disappointing reports were overshadowing signs of improvement in US service companies, which employ nearly 90 per cent of the work force. The Institute for Supply Management says its index rose in September at the fastest pace since March.

Meanwhile, the US government says crude inventories fell slightly last week but remain 8.4 per cent above year-ago levels. Gasoline supplies rose.

In other energy futures trading in New York, natural gas is down 16 cents, or 4.6 per cent, to $3.37 per 1,000 cubic feet, a day after hitting a high for the year.

Heating oil has fallen 5 cents to $3.07 per gallon, and wholesale gasoline has dropped 7 cents, or 2.5 per cent, to $2.80 per gallon.

– AP

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News Oil

Oil Prices Fall On Global Economic Concerns

June 12, 2012

Oil fell Monday on the realisation that a short-term fix in Spain won’t offer a long-term solution to Europe’s debt crisis.

A multibillion-dollar bailout loan for Spain’s banks generated initial enthusiasm in the global stock, bond and energy markets. But by the close in New York, the good feeling had given way to scepticism.

Benchmark oil fell $1.40 to $82.70 per barrel in New York. Brent crude, which is used to price international varieties of oil, dropped 81 cents to $98.66 per barrel in London. The broad S&P 500 stock index fell nearly one per cent.

Leaders of European countries agreed over the weekend to lend Spain up to $125 billion to help its troubled banking system. Spain is the fourth European country after Greece, Portugal and Ireland to request financial help since the debt crisis began.

Oil jumped above $86 per barrel in trading in Asia. But the relief was temporary, replaced by concern over Spain’s ability to repay the money. The potential for Greece to abandon the European currency still hangs over the market, as does a deepening recession in Italy. That turmoil, as well as slowing economic growth in China and the United States (US), is reducing demand for oil, gasolene and diesel fuel.

It’s not yet clear whether Europe’s ongoing efforts to put the financial crisis to rest will result in an economic turnaround. “It just doesn’t seem like that’s very close,” said Michael Lynch, president of Strategic Energy & Economic Research.

Meanwhile, oil supplies continue to build despite ongoing weak demand around the world.

US oil production topped six million barrels a day in the first quarter of 2012, which was a 14-year high, according to the Energy Information Administration. Most of the increase was the result of more production in North Dakota, Texas and the Gulf of Mexico.

Oil’s decline was tempered by data showing China imported nearly six million barrels of crude a day in May. That was about 10 per cent more than April and 18 per cent more than a year earlier. China is a huge importer of oil and other commodities.

Meanwhile, motorists are continuing to see a steady decline in pump prices. The national average for gasolene fell less than a penny overnight to $3.54 per gallon, according to AAA, Wright Express and the Oil Price Information Service. That’s 19 cents less than a year ago. Gas has dropped 50 cents per gallon in a little more than two months.

Natural gas dropped 8.1 cents to $2.218 per 1,000 cubic feet. The price has plunged about 50 cents in three weeks as supplies remain well above normal levels.

In other trading, heating oil fell 3.64 cents to $2.638 per gallon and gasolene dropped 2.86 cent to $2.657 per gallon.

– AP

http://jamaica-gleaner.com/gleaner/20120612/business/business2.html

News

‘Coal Is The Way To Go’

June 4, 2012

JAMAICA COULD have saved over a billion dollars last year if we had been using coal.

That’s according to studies presented by Lincoln Bailey, Jamaica-born co-owner of Mchenga Mine in Malawi, that country’s second largest coal mine. Bailey was guest speaker at the Kingston 360 Breakfast Talk Series, hosted by the Mona School of Business and the Spanish Court Hotel.

Using Jamaica Public Service 2011 statistics, Bailey said the company imported a little over seven million barrels of oil for power-generation at a cost of $876 million. The bauxite sector imported about nine and a half million barrels at a cost of $1.1 billion. Bailey calculated that 995,000 tonnes of coal (at $100 per tonne) would equal the power-generation amount of oil.

“So if you take that … it will only cost $99 million. So it represents a saving to the country of over $776 million.” Likewise for bauxite companies, to replace the nearly 10 million barrels would need 1.8 million tonnes of coal. Using the same 100 per tonne, that would be a cost of $185 million, a saving of $954 million.

“Jamaica would have saved $1.7 billion last year if we had used coal. Now that’s not small change. What I’m saying is that it’s really a no-brainer.”

Unhealthy dependence on oil

Bailey was incredulous that a country of Jamaica’s size was so dependent on oil, noting that our oil consumption fits the profile of an oil-producing country. He noted that 53 per cent of oil import goes to power generation for public use and about 30 per cent of that goes to bauxite and aluminium processing. He found it strange that coal was not being readily accepted even though coal has historically fuelled nations, including in Europe, North America and Asia.

He noted that coal was responsible for over 90 per cent of South Africa’s power generation, 79 per cent in China and 77 per cent in Japan. He noted that the reason for coal’s success was that it was cheap, abundant, and could be transported over long distances at low cost.

Bailey pointed out that coal discussions have taken place from the 80’s in Jamaica, but nothing was done. He opined that renewable energy like solar and wind had their place, but were more expensive than coal in terms of megawatt-per-hour cost. He also felt they could not be depended for base load power.

He dismissed the notion that coal was still ‘dirty fuel’, opining that clean coal technology has made strides in the last two decades.

http://jamaica-gleaner.com/gleaner/20120531/lead/lead9.html

News Oil

Oil Rises On Bullish US Manufacturing Data

April 3, 2012

Oil rose the most since late February after a report said that United States (US) factories have cranked into a higher gear.

Manufacturers are big users of diesel fuel, so increased factory activity usually means increased demand for diesel.

Benchmark US crude increased Monday by $2.21 to $105.23 per barrel in New York. It was the biggest gain since February 21. Brent crude rose by $2.55 cents to $125.43 per barrel in London.

Meanwhile,

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