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The World`s biggest oil producer

The United States has surpassed Saudi Arabia as the world`s biggest oil producer in 2014. The oil shale revolution has started to change the economy as the U.S produced 90% of the energy it consumed last year.

India has recorded the highest growth in energy consumption among major economies.

BP said the U.S shale revolution helped it overtake Saudi Arabia as the world`s biggest oil producer and surpass Russia as the world`s largest producer of oil and gas.

 

crude-oil

 

On the other hand, Chinese growth in consumption slowed to its lowest level since 1998 as the economy rebalance away from energy intensive sectors, though China remained the world`s largest growth market for energy.
The United States produced 15,9 percent more oil in 2014 at 11,6 million barrels of oil per day to topple Saudi Arabia`s 11,5 million bpd production, according to BP Plc`s Statistical Review of World Energy released today.
Russia was placed third with 10,8 million bpd oil production.
The United States surpassed Russia as the world`s largest producer of oil and gas, and they produced 1,250,4 million tons of oil and oil equivalent natural gas last year. This compared with Russia`s 1,062 million tons of oil equivalent. According to BP, world primary energy consumption slowed markedly, with growth of just 0,9 percent last year, a lower rate than at any time since the late 1990`s.
BP Group Chief Executive Bob Dudley said: “The eerie calm that had characterised energy markets in the few years prior to 2014 came to an abrupt end last year. However, we should not be surprised or alarmed.”
“These events may well come to be viewed as symptomatic of a broader shifting of the tectonic plates that make up the energy landscape, with significant developments in both the supply of energy and its demand. Our task as an industry is to meet today’s challenges while continuing to invest to meet tomorrow`s demand, safely and sustainably,» he added.

 

It seems like Saudi Arabia has a new strategy. They are pumping more oil despite weak oil prices, and their acute pressure to cut production is off. The heavyweight of OPEC is less concerned about the price of crude oil, and more concerned about delivering fuel to its growing economy.

Kuwait and the United Arab Emirates are also drilling at record rates, while Iraq is shrugging off widespread civil conflict to increase production. Even Iran is preparing plans to develop more oil fields. The surging output has taken much of the mystery out of what the delegates of the 12 OPEC countries will do when they assemble in Vienna this week to set production levels for the next six months.

The oil prices is stable at around $60 a barrel, and OPEC has already pushed the cartel`s output 3 percent above the current target, and production appears to be heading even higher. Saudi Arabia was the primary force that made OPEC the swing producer in global markets, for decades.

«Is Saudi Arabia still willing to play the swing producer and juggle the whole domestic economy, refineries, power plants, desalination, petrochemicals, just to meet the expectations of either OPEC or no-OPEC producers? The answer is no, obviously not,» said Sadad Ibrahim al-Husseini, a former executive vice president for Saudi Aramco, the state oil company.

After Saudi Arabia`s production peaked in 1980, it cut supplies later in the decade and again in the 90`s to top up prices. The Saudis followed the same playbook when oil prices briefly sank during the 2008 global financial crisis and the economy slump the next year.
When political turmoil rocked Libya, another producer, during the Arab Spring, Saudi Arabia increased production to keep markets and its own revenue stable.

Energy consumption in Saudi Arabi is growing and its growing at an average of 6 percent over the last decade, while any shift to nuclear power or renewable sources like solar has been slow.

«No cut is coming,» said Rene G. Ortiz of Ecuador, a former secretary-general of OPEC. «Each and every country, and particularly the Saudis and the other monarchies of the gulf, will protect their market share and increase their market share as much as possible,» he said.

Chesapeake Energy Corp and Exxon Mobil Corp are both shale drillers. They both spent about $120 billion last year in the U.S, and the surge in output and a slowdown in the demand have pushed crude oil prices down.
The number of rigs drilling in shale fields are down by half from an October peak, BP Chief Executive Officer Bob Dudley said.

«The shale revolution hasn`t run out of steam in the U.S,» Dudley said.

 

 


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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication. UA-63539824-1.

 

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What is the most dangerous war?

The new film San Andreas cracked well over $60M mark internationally this weekend to help boost its worldwide come to $118,5M, just in front of its China bow tomorrow. This is business for Warner Bros./Village Roadshow.

The film which stars Dwayne «The Rock» Johnson, knocked last week`s top film Tomorrowland, which debuted with $40,7M. Earthquake disaster movie San Andreas has topped the US box office over the weekend, allaying fears that audiences in quake-prone regions would avoid seeing it.

It is registered a little earthquake in Northern California about three hours ago, but it was just a little one (2,4). The biggest today is seen in North of Svalbard (5,1). A magnitude -7,8 earthquake struck off the southern coast of Japan on Saturday, shaking buildings in Tokyo and interrupting subway service, but causing no major damage or injuries.

If you haven`t seen the film yet, take a look at the official trailer below.

 

 

What`s worse than the nature being angry like an earthquake or a volcano? What about an asteroid? We are in big trouble if one of these giant rocks ends up on a collision course with Earth. What about a war? A World War III? Made by human beings.

We can solve a problem by diplomatic solution, but we can`t deal with an asteroid. We can`t deal with a volcano. Neither an earthquake.

We can stop a World War III, but not a big rock from space.

Former NSA intelligence analyst John Schindler said last week that a senior NATO official told him that the world would «probably be at war» sometime this summer. He is not alone to say so. The investor legend George Soros warned that we «are on the threshold of a Third World War.»

John Schindler`s tweet was retweeted more than 1,000 times, but no one in the media covered it. Soros said in remarks at a Bretton Woods conference at the World Bank that a trigger for a global military conflict can start as China`s economy slows down.

«If there is a military conflict between China and an alley of the U.S, like Japan, it is not an exaggeration to say we could be on the threshold of a Third World War. It could spread to the Middle East, then Europe and Africa.»

Soros called on the U.S to make a «major concession» and allow China`s currency to join the International Monetary Fund`s basket of currencies. Yuan will then be a rival to the dollar as a global reserve currency.

If so, China would have to make similar major concessions to reform its economy, such as accepting the rule of law, and an agreement along these lines will be difficult to achieve, but the alternative is a brutal war, Soros said.

«Without it, there is a real danger that China will align itself with Russia politically and military, and then the threat of third world war becomes real, so it is worth trying.»

This comes in a time when Europe engages in some of its biggest ever war games near Russia. If the War starts, it will be multi faceted and poses risks to markets. Modern warfare would involve many facets including cyber warfare and currency war.

Around a million asteroids are located between Mars and Jupiter in the «asteroid belt.» The craters on the Moon were formed by asteroids and some think it was an asteroid that wiped out the dinosaurs. The human beings survived. What can wipe out the humans on this planet?

«If we`re lucky it won`t be nuclear,» Schindler said in his tweet last week.

 


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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication. UA-63539824-1.

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AIIB will provide financial and ideological competition to the Washington institutions

The world is changing, and so is it in the banking industry. The Obama administration are concerned about the new superpower in the banking sector. It`s called AIIB, and the Obama administration has tried to stop other contries from investing in the new bank.

The reason why they have tried to stop AIIB, is because they are afraid that AIIB would undermine the power of the U.S dominated World Bank and the International Monetary Fund (IMF) in the emerging markets. So, what is AIIB, and should you be worried?

AIIB stand for The Asian infrastructure Investment Bank. It is an international financial institution proposed by the government of China. The purpose of the multilateral development bank is to provide finance to infrastructure projects in the Asia region.

 

AIIBMap.svg

(Picture: Prospective Founding Members (PFMs) of AIIB (2015-04-15 UTC+8 12:00:00)

  Blue dark: PFM which signed the memorandum to build AIIB
  Blue light: Approved as PFM of AIIB
  Green dark: Applying to become an ordinary member of AIIB
  Yellow: Application under consideration
  Red dark: No commitment to participate or rejected
  Grey: Uncommitted

 

The Bank`s foundation is built on the lessons of experience of existing MDB`s and the private sector. It`s modus operandi will be lean, clean and green; lean, with a small efficient management team and highly skilled staff.

Clean; an ethical organisation with zero tolerance for corruption; and green; an institution built on respect for the environment. The AIIB will put in place strong policies on governance, accountability, financial, procurement and environmental and social frameworks.

The AIIB, a modern knowledge-based institution, will focus on the development of infrastructure and other productive sectors in Asia, including energy and power, transportation and telecommunications, rural infrastructure and agriculture development, water supply and sanitation, environmental protection, urban development and logistics, etc. The operational strategy and priority areas of engagement may be revised or further refined by its governing boards in the future as circumstances may warrant.

AII B is regarded by some as a rival for the IMF, the World Bank and the Asian Development Bank (ADB), which are regarded as dominated by developed countries like the United States. The United Nations has addressed the launch of AIIB as «scaling up financing for sustainable development» for the concern of Global Economic Governance.

The United States officials have expressed concerns about whether the AIIB would have high standards of governance, and whether it would have environmental and social safeguards. The United States is reported to have used diplomatic pressure to try and prevent key allies, such as Australia, from joining the bank, and expressed disappointment when others, such as Britain joined.

As of April 15, 2015, almost all Asian countries and most major countries outside Asia had joined the AIIB, except the US, Japan (which dominated the ADB) and Canada. North Korea`s and Taiwan`s applications for Prospective Founding Member (PFM) were rejected.

The bank was launched at a ceremony in Beijing in October 2014. The Articles of Agreement (AOA) would be finalized and open for signature by PFM`s from June 2015. The AOA is expected to enter into force and AIIB to be fully established by the end of 2015. As of April 15, 2015 there are 57 PFM`s.

The World Bank and IMF which is dominated by Washington-based bureaucrats have had an ideological monopoly in the lending market since 1945. It all started in 1944, with the Bretton Woods Agreement.

Bretton Woods set up the World Bank and IMF duo, and provided subsidized competition to the merchant banks. This resulted in a situation were the merchant banks was driven out of the development lending business.

Lending to developing countries was carried out by the private sector before the World War II, notably by the London merchant banks. All this resulted in an attractive diversity of development banking approaches.

The problem for the recipients was that the people often got bad advice because there was only one source of long-term development capital. In the last decade, the landscape has been dotted with renewable energy projects.

Infrastructure is popular among development bankers, but it is very expensive. Huge amounts of money have been wasted over the past 70 years in attempting to develop poor countries on the basis of non-market fashionable theories from the rich West.

Africa became much poorer rather than richer from 1960 to 2000. The rest of the world became much richer, and IMF and World Bank cannot be blamed for that. The money funneled through them was both wasted and left recipient countries with often unbearable burdens of foreign debt.

The bombs the West have dropped in many Asian countries didn`t help either, and many of those countries will participate in the new bank AIIB. Some of them is Laos, Cambodia and Vietnam to name a few. Poor countries need money. Not bombs.

AIIB will provide financial and ideological competition to the Washington institutions.

This new model with Asian countries having a choice of funding sources (without Washington) will be beneficial, and the decisions will probably be free of the current Western «political correctness» doctrines.

It will be expensive and the new project will probably face huge losses to the institution concerned, but with India and Britain among its shareholders the new project will surely be one of its most benign manifestations. The multilateral development bank approach to developing poor countries has been proved over 70 years without any big success. Will AIIB change that?

It`s better with money and growth than bombs. The world can`t be held together by bombs and alliances.

 


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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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When will China be the world`s largest economy?

The U.S is still the largest economy in the world, followed by China. But China is growing much faster than the U.S, and China`s GDP will grow twice as much as its size today and much faster than the U.S.

China will close its gap with the U.S by 2030.

Largest economies in 2030

Not only the U.S will be far less dominant, but some of the largest European economies will also lose to several emerging markets that will skyrocket into the new economic order. This is what we will see in the next fifteen year, according to the U.S Department of Agriculture.

As you can see from the chart above, the gray bar represents the $16,8 trillion gross domestic product projected for 2015. The green bar show you how much bigger the economy is expected to be the next fifteen years.

China and India will grow fast. India is raked eights this year but India will climb past Brazil, France, Germany, Japan and the U.K. according to IMF (International Monetary Fund), India will have the largest workforce in the world within the next fifteen years.

Take a look at Japan.

Despite their QE programs in Japan, they will not grow much the next fifteen years, and that will push the country down on this ranking list made by USDA which is only estimates. It`s interesting to see because Japan was so big until the bubble burst in the early 1990`s.

So, Japan will not be the growth story the next decade, but where is the growth in addition to China and India? Africa is looking great, and Uganda are among the best. They will climb 18 spots and will be ranked at 91.

The fastest growing countries in the world right now is China, followed by Philippines, Kenya and India. Emerging markets in Asia and Africa will be at the top of global growth projections over the next two years.

The world is expected to grow 3,2 percent in 2015 and 3,7 percent in 2016. The Euro zone is expected to expand just 1,1 percent, as ECB`s President Mario Draghi deals with a fragile Greece and embarks on a bond-purchase program to stimulate the Euro-zone`s growth.

China, India, Philippines, Indonesia and Kenya will grow more than 5 percent this year and make up about 16 percent of the global GDP together. Africa`s largest economy, Nigeria, is projected to expand 4,9 percent this year, and Kenya about 6 percent despite their high unemployment rate. China will slow to 7 percent this year, but they are still the fastest growing G-20 nation.

Asia and Africa will dominate the global growth in 2015.

U.S growth this year is expecting to be about 3 percent even as the dollar soars to its highest level in more than a decade.

 


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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Black Gold is up on Iraqi war

Brent traded at its highest level since September as militants in Iraq seized more territory and President Barrack Obama warned that the crises may spill over into other countries. Fighters from the Islamic State in Iraq and the Levant took control of Iraq`s border crossing with Jordan and Syria.

Black gold

Iraq pumped 3,3 million barrels a day last month. Saudi Arabia is the largest producer in the 12-member Organization of Petroleum Exporting Countries. U.S Secretary of State John Kerry arrived in Baghdad to try to get political leaders to set aside sectarian divisions and confront the growing threat.

John Kerry will spend the day meeting with Prime Minister Nouri al-Maliki, as well as ministers and party leaders. But why do the U.S and John Kerry spend so much time and money on this case? Kerry said at a press conference that they want a government in Baghdad «that is prepared to represent all of the people of Iraq, that is prepared to be inclusive and share power».

The U.S didn`t invade Iraq to stop and evil tyrant and spread democracy. There were no weapons of mass destructions, and all of the terrorists that had been in Afghanistan fled to Pakistan. Not Iraq. The U.S went to Iraq for oil.

Back then, the U.S oil production was falling, but now it is rising. From 1970 to 2008, oil production fell from 9,6 million barrels per day to just 5 million barrels per day. Michael Simmons cast doubt on the actual size of Saudi Arabia`s reserves in his book from 2005, so it was not only the U.S either. M. King Hubbard`s «Peak oil» theory and breakneck emerging market growth, explain even more what happened in Iraq.

Vice President Dick Cheney had previously been the CEO of Halliburton, and made about $40 billion from the Iraq war. All this makes it hard to belive that the U.S was not in Iraq for the oil. But, did the U.S get all the oil? Nope.

Iraq is the second largest producer in OPEC and the country`s oil production hit 3,25 million barrels per day last year. A level not seen since before 1990, but the U.S oil imports from Iraq are actually down.

The U.S imported 725,000 barrels per day from Iraq in 1999, but now it is only 340,000 barrels a day. So, if Iraq is producing more oil than it has in decades, where is all the oil going? The oil is going to China.

China`s crude imports from Iraq increased by 31% year-over-year to about 600,000 barrels per day in the first four months of 2014, and that`s twice as much as the U.S import from Iraq. Up from almost nothing a decade ago.

Iraq`s oil production is expected to reach 8 million barrels by 2035, and that`s not all: they forecast that 80% of Iraqi production would go to China. Some investors say that Baghdad to Beijing is the new Silk Road of the global oil trade.

China National Petroleum Corp (CNPC) has invested $4 billion in the Iraqi oil industry. They produced 299 million barrels from the country last year. Almost one-third of its overseas output. PetroChina and Sinopec have invested billions of dollars in Iraq as well, acquiring stakes in some of the country`s largest oil fields. So, why do the U.S and John Kerry spend so much time and money to try to stabilize Iraq?
The U.S came uninvited and the American people don`t want to be there, nor do the Iraqi people want the American people to be there. The U.S has sacrificed much so far; 4,500 dead American soldiers and about 120,000 dead Iraqi civilians. About $800 billion in upfront costs, with additional $1 trillion in military pensions, disability payments and debt service. Is it worth it?

Saddam could have stopped the mess in Iraq, but he is dead. The U.S killed him. Now, the Sunnis, the Shiite, and the Kurds can do it all alone. There is nothing America can do to bring two warring Islamic factions together or redeem its credibility. If someone should spend time and money on this mess, it should be China.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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