IEA

Wednesday, 08/03/2022

It’s one thing if you’re 25 or 30 years old and your 401(k) is just getting started — you’ve got time to build it up, so don’t sweat it — but it’s quite another if you’re 60 or 65 and you’ve still got to sock away a lot of money before calling it quits. It could be argued that the environmental community is facing a quandary very similar to that of an aging boomer short on retirement savings. The fact is that the International Energy Agency’s (IEA’s) target of achieving net-zero man-made carbon emissions globally by 2050 in order to blunt the human impact on climate change will require massive new investment and a complete and well-coordinated transformation of the world’s energy complex. In the near-term, progress along that path must include an extraordinarily rapid ramp-up in the use of carbon capture and sequestration (CCS). And like an aging worker whose late discipline may be thwarted by an unforeseen health challenge, as we’ve seen with the recent energy crisis, there’s a lot that could derail progress toward those goals. Is the IEA's goal achievable? Maybe. But, as we discuss in today’s RBN blog, it won’t be easy.

Tuesday, 11/16/2021

The November 4 decision by the Organization of the Petroleum Exporting Countries and its collaborators — collectively known as OPEC+ –– to stay the course on crude oil production surprised few and disappointed many. Officials from leading oil-consuming nations, including the U.S., Japan and India, want the group to relax its production restraint by more than the scheduled 400 Mb/d in December. They see extra crude supply as an antidote for high prices that have been hampering recovery from the global economic slump caused by the COVID-19 pandemic. But OPEC+ leaders made clear that they’re in no mood to accelerate their phase-out of production cuts. They know the market pressures now elevating crude prices won’t last forever and can change unexpectedly. They also face internal strains that might weaken the quota discipline that has kept the group’s supply management intact, despite the occasional upset, for nearly five years. One of those strains is the number of OPEC+ participants already producing as much crude as they can while falling short of existing ceilings — a number that grows as the ceilings rise. Today’s RBN blog looks at oil-market expectations underlying OPEC+ members’ cautious approach and at the growing divide among those unable to keep up with output targets and the relatively few but volumetrically overpowering counterparts with capacity to spare.

Tuesday, 08/24/2021

This summer’s resurgence of the COVID-19 pandemic in many parts of the world will wreck forecasts of demand for petroleum products and, therefore, for crude oil. Most oil-market forecasts published in the first half of 2021 didn’t anticipate the 75% jump in new weekly coronavirus cases that has occurred since mid-June, or new possibilities for travel limits and other restrictions of the type that clobbered economies — and oil demand — around the globe in 2020. Obviously, swerves away from expectations for oil consumption scramble the supply-demand balances widely used in oil-market analysis. But they do happen. In fact, deviation between forecast and actual demand is the rule, not the exception. It’s just not always as extreme as the balance adjustments likely to be needed after the latest COVID surprise. Even when there’s no deadly pandemic to worry about, demand can be tricky to define, difficult to measure, and frustrating to predict. In today’s blog, we discuss the intricacies of oil-demand assessment and explain why balance calculations, based on forecasts destined to be wrong, remain meaningful to analysts mindful of their limitations.

Sunday, 07/25/2021

As the outlook for crude oil in 2022 came into three-dimensional view this month, the market’s steadying mechanism managed to right itself again after another wobble. The Organization of the Petroleum Exporting Countries (OPEC) took its first formal look at next year in its July Monthly Oil Market Report (OMR), becoming the third of three widely watched prognosticators to do so. Among the other two, the International Energy Agency (IEA) began projecting 2022 oil-market data in its June Oil Market Report, and the intrepid U.S. Energy Information Administration (EIA) took its first analytical shot at next year way back in January in its Short Term Energy Outlook. The important third dimension that OPEC gave to the 2022 oil-market picture arrived on July 15 after two weeks of worry about whether production restraint by most of the group’s members and cooperating countries would survive. On July 18, though, the internal squabble driving that concern ended in a compromise that will result in production quota increases for several OPEC+ members. The 2022 projections by OPEC, IEA, and EIA, not to mention worry-driven elevation of crude oil prices prior to the compromise, make clear that the market needs OPEC+ to continue the orderly unwinding of its production cuts. In today’s blog, we compare the three forecasts and look at how the latest adjustment to OPEC+ supply management will affect the market.

Thursday, 04/01/2021

When it comes to energy markets analysis, there’s nothing quite like spending the better part of an afternoon piecing together a long chain of unit conversions only to find the next day you’ve misplaced the sticky notes on which you wrote them. We’ve all been there, though for most of us it’s become commonplace to memorize the few hydrocarbon conversions needed to get through a lunch or happy hour. Unfortunately, the same cannot be said when it comes to hydrogen, which brings its own set of unique units of measure, many of them not usually bantered around your typical business development discussion. Crunching through them is tough, in our experience, and we find ourselves writing them down over and over again. Which gave us an idea: why not write a blog on the topic? Fortunately, we are in that business, and today we continue our series on hydrogen with a look a green hydrogen production projects and the math needed to make sense of them.

Wednesday, 03/24/2021

When it comes to energy markets analysis, there’s nothing quite like spending the better part of an afternoon piecing together a long chain of unit conversions only to find the next day you’ve misplaced the sticky notes on which you wrote them. We’ve all been there, though for most of us it’s become commonplace to memorize the few hydrocarbon conversions needed to get through a lunch or happy hour. Unfortunately, the same cannot be said when it comes to hydrogen, which brings its own set of unique units of measure, many of them not usually bantered around your typical business development discussion. Crunching through them is tough, in our experience, and we find ourselves writing them down over and over again. Which gave us an idea: why not write a blog on the topic? Fortunately, we are in that business, and today we continue our series on hydrogen with a look a green hydrogen production projects and the math needed to make sense of them.

Sunday, 03/01/2015

Alan Greenspan coined the phrase "irrational exuberance" during his tenure as Federal Reserve chairman. He used it in a 1996 speech in reference to the excessively high prices of "dot-com" companies. He worried that assets were overvalued. Four years later, the dot-com bubble burst, confirming his concerns. Presently we are observing the last gasps of irrational exuberance in petroleum. Call it "petro-exuberance." This malady became apparent during a session on oil market issues at the World Economic Forum in Davos, Switzerland. Some panelists clearly had a case of irrational exuberance, an overenthusiasm no different from what we saw at the end of the dot-com and the housing crises.

Tuesday, 02/10/2015

It seems logical to maintain stockpiles of critically important commodities like crude oil, heating oil and gasoline. After all, supply can be cut off suddenly by acts of God or man, causing price spikes, cold houses and empty gas tanks. Worries about supply interruption led to the creation of a federal Strategic Petroleum Reserve (SPR) and Northeast Home Heating Oil Reserve (NEHHOR) and, more recently, both federal and state reserves for motor fuels, again in the Northeast. But does the SPR as currently configured still make sense, given how much has changed in crude production and flows? Should we set up heating oil or motor fuel reserves in regions beyond the Northeast? And what about a strategic reserve for propane—an important fuel for millions of American homes and businesses? Today, we continue our look at the challenges of stockpiling hydrocarbons in a changing, unpredictable energy world.