People are increasingly appreciating the fact that food prices are linked to oil on the cost side.  As you know, a lot of oil and natural gas inputs are required to put food on the table.  Higher oil and gas prices are therefore pushing food prices higher. But another link is emerging - the role of China’s growth in creating demand.   China was formerly an oil exporting country but they became a major oil importing country.  That turnaround roughly corresponded with the recent period of steeply rising oil prices.  …

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Churchill’s assessment applies to the current oil situation: this is the beginning of the end of OPEC.  That much is obvious; the more interesting question is “why?”

OPEC was founded in 1960 to protect the interest of its members, major oil exporting nations.  That interest is to stabilize world oil prices at levels that balance their competing objectives to maximize both long term oil demand and the short term oil price.   The idea was to keep enough oil off the market during glut periods to elevate the price and insert enough …

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There is much information about megaprojects at Wikipedia including a summary of their own volunteers’ compilation of megaprojects by year out to 2015.  It is interesting that the peak of megaproject oil production is scheduled for 2008, a year they think will feature a long list of non-OPEC projects in a wide variety of countries.  Maybe many of these projects have encountered delays or perhaps they are scheduled for later in the year.  Whatever, there seems to be a disconnect between the vast amount of oil scheduled to come on stream this …

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There’s a new green box on the EIS home page that says, “Rx for U.S. Energy Policy.” It brings you to a summary of my policy prescription for dealing with the coming energy catastrophe.

Catastrophe?

Yes. Only a few months of $100+ oil is already starting to cause working class pain in the U.S. This pain in nothing compared with what will be felt during Crunch Time when oil and gas prices will reach extremely high level – perhaps five times what they are now. When? Perhaps as soon …

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With the Israel’s 60th birthday giving the little country a big stage for world attention Shimon Peres took the opportunity to showcase what he considers their secret weapon for fighting Arab terrorism: the electric car.  I previously noted this project, called “A Better Place” and have used it as a model of one part of my recommended energy policy.  Denmark became the second country, after Israel, to adopt this model as a national policy.  Now Peres says it is also part of Israel’s defense policy because it will …

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The game plan was that the Fed was done and the economy seemed suddenly not so weak so the dollar would continue to strengthen.  Plus the Saudi’s are bringing on their last big new fields this year and next.  Plus oil demand growth is slowing all over except among the oil exporting countries.  Plus oil tried to bust $120 for a while and failed after a long and strong rise.  So clearly the fundamentals and the technicals are aligned to say that oil is headed for a correction.  Right? 

And right …

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Chart   Number of Stocks: 47 long, 2 short Concentration: Top 5 holdings = 28.3% of total Percent Long: 69.24% Percent Futures: 17.06% Percent Short: 0.77% Top 5 …

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  Crunch Time     Time for Natural Gas         Current Oil Outlook             It IS the dollar! First the April numbers. The EIS portfolio was up 11% for the month, about the same amount as the oil and services indexes, a bit better than the S&P. Year to date being up 8% is good relative performance. About 3% of it was due to the options on futures strategy. I added an option on some late 2011 natural gas futures contracts. I also disposed of most …

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One beauty of British mystery writers like Conan Doyle and early Le Carre is their use of deductive reasoning to relate odd facts and explain reality.  Matt Simmons used the same powers to help us understand why major oil companies deny Peak Oil and why they finance groups like Cambridge Energy Research Associates that go around sowing doubt in the public’s mind about Peak Oil (although, as recently reported, their scheme has failed). 

The reason, as Matt told us in Twilight in the Desert, is that the production sharing agreements …

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A report in The Financial Times today casts doubt on the ability of Mexico to develop new oil supplies to offset the declining Cantarell field that is scheduled to result in substantially lower Mexican oil production starting in 2010.  The left wing opposition party brought Congress to a standstill by physically occupying the building and not allowing business to proceed while there was consideration of a modest proposal by the Calderon government to provide incentives for foreign companies to help find and develop Mexican oil.  “Denise Dresser, a political …

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My previous report relating to Nova Biosource Fuels, Inc (NBF) indicated doubts about 1.the renewal of the biodiesel tax credit and 2.management’s ability to bring the complex start up issues of their new plant to a successful conclusion.  Both matters have become more questionable since then. A report by AgWeb.com reads in part as follows: “Note: The farm bill will not include a one-year extension of the biodiesel tax incentive program, which is due to expire at the end of 2008. One …

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