Farming equipment maker Deere expects South American farmers to buy 20% more tractors and harvesting combines after this year. Record harvests and increased profitability are giving South American farmers the confidence to buy. Meanwhile North American farmers aren't feeling the same, with expectations that they will purchase 5% less farm equipment this year. The slump in U.S. and Canadian sales is a bit of a backlash from recent success. Bob Tita writes in the WSJ: The slump, driven by years of strong harvests that have produced record global grain stockpiles, is pushing some U.S. farmers to … [Read more...]

As OPEC members dutifully hold back on oil production, American producers are stepping in to fill the gap in production left by the cartel. Oil boom-bust areas like Williston, North Dakota, which was hit hard by the drop in oil prices, are now booming once again. If America has become the new swing producer in oil markets, OPEC will have trouble getting a firm grip on oil prices ever again. NPR reports on the boom in oil country: There are more than twice as many U.S. rigs drilling for oil as a year ago, a turnaround that's felt keenly in places like the Bakken oil patch in North Dakota. … [Read more...]

According to the IEA, a host of new efficiency measures, the rise of electric vehicles, and increased usage of bioplastics could combine to cap world oil demand by 2020. All these things together, which is what the IEA says would be required to limit global warming to within 2 degrees Celsius, would mean oil demand peaking around 2020 and declining by about 20 million barrels a day by 2040. That’s 36 million barrels a day lower than the average oil company forecast for 2040—a gap larger than OPEC’s current production. Some oil companies have acknowledged the potential for demand to peak … [Read more...]

Scientists working in Rutland, Vermont have installed a massive lithium ion battery at the Green Mountain Power, Stafford Hills solar farm. The battery charges up during the day when the installation's 7,722 solar panels are producing power at full blast. The power can then be fed back into the grid when the sun has set. Grid battery storage is something like a "Holy Grail" for power companies. Electricity is mostly a "use-it or lose-it" commodity, and planning generation around fickle renewable power sources like solar and wind can make it hard on utilities to operate. The research … [Read more...]

You can see on my chart that, aside form a couple hiccups, consumption of oil has been rising without much difficulty since the early 1980s. The big declines in oil consumption you can see on the chart are all recession driven (the shaded areas represent periods of economic recession in the United States). But according to the Wall Street Journal's Lynn Cook and Elena Cherney, that may be about to change. While most big oil companies foresee a day when the world will need less crude, timing when that peak in oil demand will materialize is one of the hottest flashpoints for controversy … [Read more...]

Bobby Patel, a local small-business magnate is very optimistic about his home town in Texas. The town is home to ExxonMobil sites including a refinery and a polyethylene facility. Patel is so optimistic about the town's future, he is investing $2.5 million in his businesses there over the next five years. He's not the only one optimistic about Beaumont, Texas though. ExxonMobil is expanding its facilities there, spending hundreds of millions of dollars on upgrading its refinery to remove sulfur. In December ExxonMobil completed a project to increase the refinery's capacity and to give it … [Read more...]

In the relatively short span of about 180 years, the world has moved from using almost exclusively biomass (i.e. wood, whale blubber, dung and other plants) to produce energy, to a wide diversity in the energy mix. Take a look at the chart below to see the shift in the world's energy mix since 1850. ExxonMobil's Energy Factor explains that the shift is worth careful study. Aside from manual labor, through most of the 19th century (indeed, for all of human history up until that point), humankind primarily relied on biomass for its energy needs, largely for cooking and heating. That soon … [Read more...]

A market crash has a way of focusing the mind. The 2014-2015 crash in oil prices, for example, forced unconventional oil and gas producers (Frackers) to improve their water management programs. “The predominant overarching trend in the industry is still dominated by ways to reduce the total spend on water—whether through recycling or sourcing water for lower cost,” said Devesh Mittal, vice president and general manager of Aquatech’s Shale Gas Division. Jeff Gunderson writes at Industrial WaterWorld: According to Wastewater Treatment Technologies in Natural Gas Hydraulic Fracturing, a report … [Read more...]

Investing in commodities can be a profitable endeavor, but unlike the stock market where a passive investment in a broad-based index can yield average results, passive investment in a broad-based commodities index suffers from many problems. The Wall Street Journal highlights some of the challenges passive commodities investors face. If you are going to invest in commodities, stick with an active approach. Commodity indexes haven’t provided that same kind of “significant persistent level of return over time,” says Amanda Agati, an investment strategist at PNC Institutional Asset Management in … [Read more...]

After a big rally last year iron ore prices are rolling over. The FT reports that a glut of supply in China is weighing on prices. The sharp drop on Wednesday is the latest swing for a commodity that raced higher over the second half of last year to more than $90 a tonne. The benchmark 62 per cent ore for immediate delivery into China was trading at $67.9 a tonne, according to the Steel Index, a price reporting agency. Signs of faster economic growth in China helped the rally in the second half of last year, leading to a build-up of iron ore inventories at the country’s ports. With China … [Read more...]