Crude oil prices spike. Copper tanks. Cotton and coffee can’t make up their minds. The price graphs you see look more and more like they’re tracking major seismic activity or a sprinter’s heart rate, not the markets. If you’re a buyer of these or other commodities, you’re no stranger to the volatile nature of commodity markets over the past decade. The real headache for manufacturing organizations isn’t high or low prices — it’s that prices jump from high to low unpredictably, and often for no apparent…

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As last year’s Arab spring has slowly roiled eastwards from Tunisia to the eastern Mediterranean, the two most concerned governments are the U.S. and Israel, that are watching their carefully constructed defense alignments  crumble to the populist forces unleashed. After decades of repression, the Arab “street” is finding its democratic voice, which is rejecting the cozy decades-long security and energy arrangements carefully stitched together by Washington to ensure Israeli security. In the “brave new world”…

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Figure 1 shows the huge increase in world energy consumption that has taken place in roughly the last 200 years. This rise in energy consumption is primarily from increased fossil fuel use. Figure 1. World Energy Consumption by Source, Based on Vaclav Smil estimates from Energy Transitions: History, Requirements and Prospects together with BP Statistical Data for 1965 and subsequent With energy consumption rising as rapidly as shown in Figure 1, it is hard to see what is happening when viewed at the level of the individual. To get a different view,…

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It is clear that many people have a very simplistic — but wrong — view of the energy markets. This extends to politicians who believe they can usher in a return to $2 gasoline, as well as those who underestimate the difficulty of replacing oil with renewable energy. For the average person, gasoline prices go up because oil companies are pulling strings, meeting in secret to set prices, or withholding product from the market. To top it off, we are sending them our tax dollars as subsidies while they are wallowing in cash! That’s…

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In the titanic struggle for world supremacy fought between the U.S. and USSR between 1945 and 1991, all eyes were focused on their attempts to bring Third world nations to their side, and the subsequent U.S.-Russian Federation continues to dominate headlines today. Now, that battle for influence continues to dominate the media, but has shifted to Western attempts to inveigle former Soviet republics to decouple from Moscow’s influence and move towards Western values and economic integration, most notably in the Baltic and Central Asian states.…

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An FT article last week lauded the intent of General Electric and Chesapeake Energy to form an alliance to promote the use of natural gas as a fuel for cars and trucks. The intent is to develop gas re-fuelling infrastructure with a target to add 250 compressing and recharging units principally at gasoline filling stations. Currently there are about 1,000 natural gas fillings stations in the US, according to an article in the South Bend Tribune; but only half of those are available to the public, with the rest operated by local governments or private…

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The spill-over of the political revolutions from the neighbouring countries to Libya and the resulting civil war have highlighted the threat caused by production downtimes in politically unstable countries. Although with an oil production of about 1.65mn barrels/day (2010; some 1.5mn barrels/day of those were exported) the country accounts for only 2% of global production, the price of Brent increased by about 25% between February and April last year. The influence of downtimes on the oil price does not only depend on the quantity of the production…

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This week marks the one-year anniversary since the 9-magnitude earthquake and subsequent tsunami rocked Japan. It was the strongest earthquake ever to hit the country, leaving an estimated 15,000 people dead. It caused roughly $34 billion worth of damage. Within hours of the afternoon quake, Tokyo Electric Power Co. reported a loss of power at the Fukushima Daiichi nuclear power plant and later a meltdown. One year later, the international community is debating the safety of nuclear power. Though the Fukushima disaster was on par with the Chernobyl…

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Chevron is facing some very tough times in South America and this year could be telling for the success of their continued business in the continent. The latest disaster occurred in November last year when they were responsible for a spill of more than 2,400 barrels of crude off the coast of Brazil. Although the spill was less than 0.1 percent the size of the BP deep water horizon spill in the Gulf of Mexico in 2010, Chevron is being sued more than $11 billion by its Brazilian prosecutors. It also faces an extra $121 million in fines and has had…

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The Austrian School provides a new angle on the development of the oil price. We already discussed the oil price development from the perspective of the Austrian School of Economics in our Oil Reports 2010 and 2011. The recent economic events have caused a renewed interest in the ideas of the Austrian School. The purpose of our Oil Report is to provide the reader with a better basis for decision-making on the back of the facts and analyses presented in this write-up. Focus on price and market If we had the chance to meet Ludwig von Mises in a Vienna…

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