Peak oil review – Mar 30

1. Production and Prices

2. Natural Gas Prices Continue to Fall

3. The Next Oil Price Spike

4. Briefs
1. Production and Prices

Oil prices started the week at $52 a barrel, climbed to a recent high of nearly $55 on better economic news, and then fell to close back at $52 as the equity markets softened and natural gas prices dropped dramatically on Friday. The weekly stocks report showed an unexpectedly large 3.3 million barrel increase in crude stocks. The report also had total US oil consumption increasing by 2.2 percent to 19.2 million b/d and gasoline increasing by 1.6 percent to 9.1 million b/d. Some analysts are now saying that a new floor of $50 a barrel for oil prices has been established. […]

2. Natural Gas Prices Continue to Fall

Natural gas prices fell by more than 16 percent last week, settling on Friday at $3.63 per 1000 cubic feet, the lowest close since September 2002. As the US economy contracts, the demand for natural gas has been dropping. Nearly 60 percent of US natural gas consumption is for industrial purposes or the generation of electricity. The EIA estimates that US industrial use of natural gas will be down by 5 percent this year and demand for electricity is at its lowest level since April 2006. US stores of natural gas rose by 3 billion cubic feet the week before last and now total 1.65 trillion, 20 percent above the five year average. […]

3. The Next Oil Price Spike

There is widespread agreement that a combination of falling investment in oil production and the ongoing OPEC production cut will eventually cause another damaging spike in oil prices. Last week Matthew Simmons told Reuters that