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Federal Reserve Chair Janet Yellen said Friday that an interest rate hike would be appropriate in the coming months if the economy keeps improving. While economic growth was relatively weak at the end of last year and beginning of this year, it appears to be picking up now based on recent data, Yellen said during a discussion at Harvard University. She said she expects the Fed to “gradually and cautiously increase” its key interest rate “and probably in the coming months, such a move would be appropriate.” …

The Wall Street Journal recently printed an excerpt from "The Next Oil Crisis Looms Large – and Perhaps Close," printed in the Aug. 28, 1998 issue of Science magazine. According to a study from the International Energy Agency of the Organization for Economic Cooperation and Development, "sometime between 2010 and 2020 the gush of oil from wells around the world will peak at 80 million barrels per day, then begin a steady, inevitable decline." Well, not quite. According to the U.S. Energy Information Administration, in 1998, when the article was written, global oil production was 75.7 million bbl/day. In 2014...

Oil companies have scrapped $380 billion in new projects since the oil-market downturn began a year and a half ago, Wood Mackenzie said Thursday. The energy research firm's dollar-figure estimate has nearly doubled since its first report on the matter last July, as oil prices crashed from around $60 a barrel in the summer to about $30 a barrel this week. About $170 billion of the scrubbed projects had been scheduled to come into production from 2016 to 2020. That means 2.9 million barrels a day that the industry had planned to bring up won't hit the market until after...

U.S. oil prices dropped below $32 a barrel Monday for the first time since 2003 on a stronger dollar and continued concerns about Chinese demand. Prices slumped to 12-year lows this month as the global glut of crude that has weighed on oil prices for more than a year continues to persist.

If you read Stephen Moore's column, he noted how the consensus over oil is wrong. We're not running out of oil. In fact, many have been saying we're going to run out since the 1930s: These stupid predictions of the end of oil have been going on for most of the last century. Just over 100 years ago, the U.S. Bureau of Mines estimated total future production at 6 billion barrels, yet we've produced more than 20times that amount. In 1939 the Department of the Interior predicted U.S. oil supplies would last 13 years. I could go on. […] The...

Irving-based Magnum Hunter Resources Corp., an oil and gas explorer once heady with spending amid the U.S. shale boom, filed for bankruptcy as its heavy debt load was exacerbated by the glut in cheap energy. The company said Tuesday that it has the support of a majority of its lenders for a turnaround plan. Holders of 75 percent of the company's debt have agreed to support the restructuring, which calls for a $200 million loan to keep Magnum Hunter operating in bankruptcy, according to a statement. The loan will convert to equity in a new, reorganized company in a process...

... It's fueling financial turmoil on Wall Street with Standard & Poor's Ratings Service recently warning that a stunning 50% of energy junk bonds are "distressed," meaning they are at risk of default. Overall, about $180 billion of debt is distressed. It's the highest level since the end of the Great Recession and much of it is in energy companies. ... Not a repeat of 2008...

The recent OPEC meeting provides an opportunity to understand the mysteries of the global oil market. As expected, OPEC decided not to cut its oil production. Barring unanticipated developments, prices will drop, says oil analyst Larry Goldstein. Potential oil supply, including drawdowns from bloated inventories, exceeds demand. Goldstein rightly cautions, however, that no one knows where prices will settle. Oil’s dramatic price changes seem baffling. In mid-2014, crude prices averaged around $100 a barrel; now, they’re gyrating between $50 and $60. Over the same period, U.S. gasoline prices have dipped from more than $3.50 a gallon to around $2.50. With...

Elon Musk our billionaire, whose Stimulus funded Tesla Motors, Solarandra City and (only option to Russia, NASA is out) Space X has received $4.9 billion in FedSlush. Is Elon Musk a billionaire welfare queen of Federal grants, discounted loans, tax breaks, government RICO & Carbon credits? Tesla is set to receive an incentive worth $1.3 billion from the state of Nevada. Anyone who buys a Tesla gets a $7,500 federal income tax credit, Californians receive an additional rebate of $2,500 from the state. In all, Tesla Motors Inc. has received close to $2.391 billion in form of government subsidies. SolarCity,...

Storage withdrawals and falling rig count have been the main sources of hope that U.S. tight oil production will fall and that oil prices will rebound. That hope is fading as it is now clear that recent withdrawals from U.S. crude oil storage are because of price, not falling supply, and that the drop in rig count has stalled. Figure 1 below shows the relationship between U.S. crude oil storage inventory and WTI price. The thinking around recent withdrawals from storage is that this reflects depleting supply. The data, however, reflects that traders were storing crude oil during the price...

...Output will average 9.37 million barrels per day (bpd) in April and the same in May before falling to 9.33 million bpd in June and 9.04 million bpd by September, the EIA predicted in the April edition of its Short-Term Energy Outlook (STEO).... Production is forecast not to exceed this month's level for another 18 months. The EIA has cut its forecast for the end of 2016 by 230,000 bpd compared with three months ago... It is unlikely a halving of the rig count can be completely offset by greater target selectivity and other efficiency improvements such as employing only...

It may be difficult to look beyond the current pricing environment for oil, but the depletion of low-cost reserves and the increasing inability to find major new discoveries ensures a future of expensive oil. While analyzing the short-term trajectory of oil prices is certainly important, it obscures the fact that over the long-term, oil exploration companies may struggle to bring new sources of supply online. Ed Crooks over at the FT persuasively summarizes the predicament. Crooks says that 2014 is shaping up to be the worst year in the last six decades in terms of new oil discoveries (based on...

Republican victories in the US midterm elections in early November and the Saudi Arabia-imposed decision by Opec on Nov. 27 to maintain production at 30 million barrels of oil a day may seem too disconnected and tangential to merit deep consideration of any linkage. But the two political events actually illustrate the slowly diverging paths between the US and Saudi Arabia that could become too entrenched to redirect, and may ultimately destroy or at least permanently alter one of the most important remaining strategic constants in the world since 1945 — America's security guarantee of Saudi Arabia and its energy...

In a chilling 2010 column, Paul Krugman declared: “peak oil has arrived.” So it’s really not surprising that the national average for a gallon of gas has fallen to $2.77 this week – in 10 states it was under $2.60 – and analysts predict we’re going to dip below the two-dollar mark soon. U.S. oil is down to $75 a barrel, a drop of more than $30 from the 52-week high. Meanwhile, the Institute for Energy Research estimates that we have enough natural gas in the U.S. to meet electricity needs for around 575 years at current fuel demand and...

Petroleum engineers are among the best paid professionals in the United States. Only chief executives and some specialist doctors earned more last year, according to federal government pay data. Petroleum engineers were paid an average of $132,000 a year, with the top 10 percent on more than $187,000, according to the Bureau of Labor Statistics (BLS). These figures include everyone from the newest graduates to the most experienced engineers with decades of experience, and are based on median earnings in May 2013. Petroleum engineers earned almost four times as much as the average employee across the economy, who was on...

The remnants of the peak oil community cling avidly to the belief that oil production has already peaked and that high prices prove this. “Look at the data” seems to have become a catechism amongst them, and it can be hard to dissuade them otherwise, especially by considering more than one variable as explaining oil supply and price. Most anyone can understand that high oil prices are no more an indicator of resource scarcity than the occasional spike in coffee, pork or orange juice prices. Things happen that can cause prices to rise for a period before supply and demand...

Despite increased spending, oil majors are seeing flat or declining production as they struggle to replace reserves, according to a recent analyst report. Exxon Mobil Corp., Chevron Corp., Royalty Dutch Shell plc and BP plc recorded declines in their 2013 production. ExxonMobil reported an average production of 4,175 million barrels of oil equivalent per day (MMboepd), down 1.5 percent from 2012, and Chevron saw its production decline by .5 percent from 2012 to 2013 to 2,597 MMboepd. Shell’s average 3,199 MMboepd of production for 2013 was down 1.9 percent from 2012 levels, while BP saw its production volumes fall to...

On July 3, the administrators of The Oil Drum, a blog/discussion forum site dedicated to and frequented by those who advocate for “Peak Oil” theory, announced the site would close at the end of July, marking an end to an eight-year existence. During that period of time, “Peak Oil” theory has basically gone the way of the California Condor, from widespread existence and acceptance in the oil and gas environment to near extinction as its environment has dramatically shifted thanks to the discovery of and ability to access massive oil shale reservoirs not just in the United States, but all...

Guys...remember the Peak Oil debates? They seem to have, well, peaked. Check out all the money Russian oil giant Rosneft is throwing around at global oil supplies these days.

It was with some dismay that I read this morning of the impending end of The Oil Drum, perhaps the leading “peak oil” blog … … due to scarcity of new content caused by a dwindling number of contributors. Despite our best efforts to fill this gap we have not been able to significantly improve the flow of high quality articles. Because of this and the high expense of running the site, the board has unanimously decided that the best course of action is to convert the site to a static archive of previously published material as of 31st July...