Starting with the good news first: it seems there is an expectation amongst a greater group of oil-executives that the price of oil will go down substantially later this year. (see article in ‘Features’). A good 55% even believes that the price will go below $ 100 per barrel, which by then could be an almost 50 % reduction. What can we say, other than that we hope the wisdom and foresight of these executives will be accurate, and that we will be given a pause in the relentless driving up of the prices?

The bad news comes from the article "Perhaps 60 % of today’s oil price is pure speculation" (also ‘Features) that describes how the speculation works and how it has become possible that so much money can be used to speculate on the oil-price (and other commodities) without any oversight or control even being possible. The article describes also how the infrastructure for this has been and is being created, which does not bode well for the future prices, as there seems to be no limit to the insatiability of ‘the market’ and those facilitating it.

The good news in this is, that it is now said long enough and ever more clearly by OPEC-dignitaries and other high-level executives, that there is enough oil in the market and there is therefore no reason for such high prices, other than speculation, in which some start to make the link with the dollar going down and oil-prices going up. Hopefully one day in the future the market will return to its fundamentals, and then we may see lower prices. Unless of course another major crisis is taking place…

The ugly was in two articles, of which one from a seemingly innocent angle. In the article ‘Winds of change blow in Tanzania’ (Company News Africa) we learn about the 2 MW windmills that will be placed in a valley in central Tanzania. It tells about the people living there and staring at pictures of the windmills, all impressed, and saying that soon the people will find out as they will live next to them. It apparently just happens that a few huts were under the ‘footprint’ of the wind-park, and these people will soon find out how it is to live in the midst of gigantic windmills.

My thought was immediately: is this the modern day-version, the ‘renewable-energy-version’ of Nigeria? There, for 50 years, some white people came, dug some holes, laid pipes, put up flares and since then the people living there have not had a dark night without ‘jet-like’ noise again. Is the modern version that gigantic windmills are being set up where-ever there is wind, whether there happen to live some people or not? And will it take 50 years before people will start to protest? Time will tell.

Another little ‘ugly’ was in a news-item of a small US oil company that has signed an E&P-contract in Nicaragua for a block 100 km offshore (see Company News Latin America). It noted that the company would pay 15 % royalties on oil drilled and 30 % of net profits earned in the country. If we consider that the production will be 100 km offshore, it bodes the question how much Nicaragua will effectively get from the resources that are pumped out from her soil.

Next to these highlighted issues, there is another 400+ other articles in this Update, of which we hope you enjoy some, for your interest and education.

Rest me to say that I will be around at the World Petroleum Congress in Madrid (June 29 – July 3) and if you wish to meet, you are most welcome to send a e-mail.

After my speech in Athens I had the honour to be invited as guest-speaker at the banquet of the World Renewable Energy Congress, taking place in Glasgow (July 19 – 25). If you are around and want to meet: send an e-mail.

Other responses are also always welcome at Alexander@gas-oil-power.com

Take care,

Alexander

Alexander's Gas & Oil Connections at www.gasandoil.com