Economist Liam Halligan says crude oil has gone into “bull market” territory!

Received from Douglas (Mick) Field
28 Aug 2016 at 1:00 p.m.

Message: Good summary here on the oil situation. Especially clear opening comment on the dependency on fossil fuels in the foreseeable future. But full article (warning: pay wall) also good on the situation re the economic battle for supply.

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[sputniknews.com]

### telegraph.co.uk 27 Aug 2016 • 2:19PM
Why I’m sticking with my forecast of oil rising to $60 a barrel
By Liam Halligan
In the absence of a major financial meltdown, oil will end 2016 north of $60 a barrel,” this column stated at the turn of the year. It was a forecasting flourish possibly fuelled by one Christmas brandy too many. With just four months of 2016 to go, though, I’m sticking to my Yuletide view.
Attempting to predict the oil price is crazy. Yet no decent economist can afford not to. The world economy still revolves around oil –used in everything from transport and electricity generation to the production of plastics, synthetics and so much else. And for all the breathless talk about renewables, and the grim inevitability of growing nuclear dependence, we remain addicted to oil.
As recently as 2005, world crude consumption was just 84.7 million barrels a day. That’s since gone up to 95.1 million daily, a 12pc increase in just 10 years. And that rise came during a decade when global GDP growth was rather sluggish. Had the world economy not endured the 2008 financial crisis, and subsequent stop-start recovery, oil consumption would have grown even more. But still, for all the expansion of wind and solar, and endless hype about a “post-petroleum world”, oil consumption continues to rise relentlessly and that won’t change any time soon.
The oil price has surged this month, up from around $41 a barrel in early August to almost $52 last week, before falling back slightly. This 20pc-plus increase puts crude technically into “bull market” territory. This is striking, not least because from mid-June to the end of July, oil was in “a bear market”, having dropped over 20pc. Despite this summer volatility, though, the direction of travel is clear. Oil has been climbing steadily, if not always in a straight line, from its February low of $28 a barrel. This August rise in oil prices stems from market fundamentals on the one hand, and geopolitical speculation on the other.

Earlier this month, the highly respected International Energy Agency (IEA) published a report suggesting global crude supply will fall short of demand during the third quarter by nearly a million barrels a day. This projected deficit comes despite the fact that the Opec exporters’ cartel continues to pump like billy-o. Having traditionally restricted supply to keep prices high, Opec has over the last two years been doing the reverse, of course – flooding global markets with oil, lowering prices to squeeze high-cost US shale producers out of existence. Amidst record production by Saudi Arabia, Kuwait and UAE, total Opec output hit an eight-year high in July, up no less than 840,000 barrels a day on the same month in 2015. This Opec supply surge was more than offset, though, by the dramatic ongoing slump in output from producers outside Opec. Declines in the US, China, Canada and Mexico combined to push non-Opec production down by more than 1.1 million barrels a day compared to July 2015. […] If there is a deal in Algiers, and it binds with Opec holding together, and the Russians staying on board then my end-of year oil prediction, in the absence of a Lehman-style global meltdown, will almost certainly come true. Such geopolitical stargazing has helped push up oil prices this month. During the first week of August, short crude oil positions on the NYMEX, one of the world’s leading commodity exchanges, were at a 10-year high. A large number of traders, in other words, thought oil was set to fall back towards $30. That view has now been thoroughly trounced, with the resulting “short squeeze” helping to drive this latest 20pc oil price rise. Aside from speculation and diplomatic wrangling, though, there’s growing evidence of an emerging supply-demand deficit. Buried in the IEA’’s latest report is the significant observation that it expects a further 900,000-barrel reduction in non-Opec output by the end of this year. This Saudi-driven price war has seen global investment in oil exploration and field development cut by $300bn, some 41pc, since 2014. The “active rig count”–, the number of wells being pumped worldwide, is down 37pc. Before these trends are slowed, let alone reversed, oil will need to spend at least six months, and probably a year, firmly above $60 a barrel, if investors are to be convinced profits can be made, so persuading them to put serious money back into future crude production. Unless global markets crash, I say that year of $60-plus oil will be 2017.

Full article at http://www.telegraph.co.uk/business/2016/08/27/why-im-sticking-with-my-forecast-of-oil-rising-to-60-a-barrel/

● Liam Halligan (@LiamHalligan) – Economist/Writer/Broadcaster, Telegraph Columnist, BNE Editor-at-Large, Proud member of http://www.thehooligans.co.uk Locations: London, Saffron Walden, Moscow.

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Posted by Elizabeth Kerr

Pollution in Chinese cities

City pollution [ddmcdn.com]

### stuff.co.nz Last updated 12:20, March 7 2015
Film highlighting pollution woes vanishes from China’s Internet
By Dian Zhang
A 104-minute film lecture that outlines the serious pollution in China has been removed from the nation’s internet, after receiving millions of views and raising hopes that the country’s leadership might tackle China’s widespread smog problem. The film – by Chai Jing, one of the best-known journalists in China and a well-known former state television reporter – was released right before China’s two most important political events, the National People’s Congress and the Chinese People’s Political Consultative Conference. Before the movie was censored, a story from Xinhua News Agency, China’s official press agency, praising the film was deleted online the same night the article was posted, offering a hint of the government’s real attitude.

Released last Saturday, Under the Dome had received 42.9 million views on Youku, a video-sharing website like YouTube, by 5 pm Thursday (local time). It prompted 530,460 posts on Weibo.

In the film, Chai gives a speech and shows data and interviews with government officials and environmental experts from China and abroad. The film shows striking images of the extent of air pollution in a number of Chinese cities, as well as rivers fouled by chemicals and littered with flotsam and dead fish. Chai also travelled to Los Angeles and London to gauge their experiences dealing with smog.
Read more

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█ Chai Jing’s documentary is well worth watching. Preamble via CNN.

CNN Published on Mar 3, 2015
China smog documentary goes viral
Director of China Environment Forum Jennifer Turner discusses a new documentary titled “Under the Dome” that discusses pollution in China.

Linghein Ho Published on Mar 1, 2015
Chai Jing’s review: Under the Dome – Investigating China’s Smog 柴静雾霾调查：穹顶之下 (full translation)
ENGLISH SUBTITLES ARE FULLY TRANSLATED
For more information: http://www.linghein.me/tr_u/
English Subtitles: FULLY UPDATED | Japanese Subtitles: update to 09:25 | French Subtitles: update to 31:06
Former celebrity TV anchor Chai Jing quit her job after her baby daughter was born with a lung tumor, and after a year of rigorous investigation, launched this 1 hour 40 minute documentary about China’s smog: what is smog? Where does it come from? What do we do from here? It is very powerful in many ways. English subtitles are now completely finished, and other languages are being added.
Music: “Brotherhood” by John Dreamer (Google Play • iTunes)

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[click to enlarge]
3 photo comparatives (*gif) taken by NASA’s Aqua satellite via gizmodo.com

Related Post and Comments:
23.3.13 Chongqing, Southwest China

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Posted by Elizabeth Kerr

Whaleoil: Rodney Hide on Dunedin’s Luddite Council

Ever since Helen Clark allowed councils general competence we have seen debt burgeon and empire building of armies of council staff increase. It is time to rein in the excesses. The reforms have largely failed. I’m not even sure we need local councils in any case….except to just provide essential services. –Cameron Slater

### whaleoil.co.nz May 24, 2014 at 5:00pm
Rodney Hide on Dunedin’s Luddite Council
By Cameron Slater
Rodney Hide excoriates the Dunedin City Council for their embracing of a buggy culture. [NBR paysite]

“I was taken aback by Dunedin City Council committing to invest ethically. I would have thought it was already beyond reproach. But it turns out it’s not about the council not taking back-handers and the like but rather what it can and can’t invest in. Henceforth, it won’t invest in porn, munitions, tobacco or gambling. Seriously? Was investing in porn ever in prospect? I once took a paper to the cabinet to circumscribe council activity. I wanted to limit them to core services. To buttress my argument, I had examples of the nutty investments that councils had entangled ratepayers in. I remember dairy farms, property development, Lotto shops and cinemas. My concern wasn’t ethical investing but rather local government’s proper role. I wanted councils to stick to basics. I didn’t succeed but would have had a chance with the Dunedin example: a council having to make a rule to stop itself investing in pornographic movies.”
Read more

█ It matters enormously that city leaders are declaring fossil fuel extraction unethical. –Rodney Hide

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Posted by Elizabeth Kerr

DCC: Eco-worriers’ grab on council seats, too previous [disaster averted]

NEW INFORMATION: “The continuing furore caused by The Mail on Sunday’s revelations – which will now be amplified by the return of the Arctic ice sheet – has forced the UN’s climate change body to hold a crisis meeting.”

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The Daily Mail (UK) floats this headline:
And now it’s global COOLING! Record return of Arctic ice cap as it grows by 60% in a year

PUBLISHED: 23:37 GMT, 7 September 2013 | UPDATED: 12:01 GMT, 8 September 2013

Along with a story by David Rose, he writes:

● Almost a million more square miles of ocean covered with ice than in 2012
● BBC reported in 2007 global warming would leave Arctic ice-free in summer by 2013
● Publication of UN climate change report suggesting global warming caused by humans pushed back to later this month

A chilly Arctic summer has left nearly a million more square miles of ocean covered with ice than at the same time last year – an increase of 60 per cent. The rebound from 2012’s record low comes six years after the BBC reported that global warming would leave the Arctic ice-free in summer by 2013. Instead, days before the annual autumn re-freeze is due to begin, an unbroken ice sheet more than half the size of Europe already stretches from the Canadian islands to Russia’s northern shores.

Arctic ice cap by NASA satellite 2012-13 (via dailymail.co.uk)
[click to enlarge]

The Northwest Passage from the Atlantic to the Pacific has remained blocked by pack-ice all year. More than 20 yachts that had planned to sail it have been left ice-bound and a cruise ship attempting the route was forced to turn back.
Some eminent scientists now believe the world is heading for a period of cooling that will not end until the middle of this century – a process that would expose computer forecasts of imminent catastrophic warming as dangerously misleading.
The disclosure comes 11 months after The Mail on Sunday triggered intense political and scientific debate by revealing that global warming has ‘paused’ since the beginning of 1997 – an event that the computer models used by climate experts failed to predict.
In March, this newspaper further revealed that temperatures are about to drop below the level that the models forecast with ‘90 per cent certainty’.
The pause – which has now been accepted as real by every major climate research centre – is important, because the models’ predictions of ever-increasing global temperatures have made many of the world’s economies divert billions of pounds into ‘green’ measures to counter climate change.
Those predictions now appear gravely flawed.
Read more

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Posted by Elizabeth Kerr