Archives: Our View

ExxonMobil's Fantasy Forecast of Global Energy Demand

ExxonMobil's new projection of long-term energy demand is not realistic. Click here to read more.

Jeff Currie Leaves Goldman -- The End of Commodity Futures as an Asset Class

The crusade to keep commodities as an asset class ended on August 7, 2023. Click here to read more.

Crude Oil Prices: Going Nowhere

Reporters and consultants who follow oil seem certain that the Saudi and Russian production cuts will push prices higher. Twenty-five years of market history and data contradict their view. Click here for more.

Oil Producers Are Pushing on a String

Oil exporters were pushing on a string when they announced production cuts to raise prices. The July 3 news that Saudi Arabia will continue its cuts into August and that Russia will reduce exports is meaningless because global oil demand is declining more rapidly than production. Click here to read more.

Investor Demands and the Hess Capitulation

Oil industry investors want companies to return all cash to them in dividends or stock buybacks. Click here to read more.

A Conspiracy of Fools

Chaos may await oil markets in coming months when the conspiracy of fools in Saudi Arabia realizes its actions have reduced the country’s income from oil.

To read more, click here.

OPEC+'s Don Quixotes

Oil ministers seem fixated on speculation in oil. Like Cervantes’ Don Quixote, they continue to tilt against financial markets every time prices fall, blaming speculators for the decline. Read more here.

BP: The "Enron" Multinational Oil Company

BP is following the same asset-light strategy as Enron did in 2000 and 2001. This tactic will likely fail. Read more here.

$40 per Barrel Crude?

Could crude oil prices fall to $40 in 2023? The skeptic's answer would be "no, that's impossible!" Continued Russian "dumping" of low-priced crude oil and diesel fuel, high interest rates, and crude oil and petroleum product inventory liquidations might make this happen, however. Click here to read more.

What Was That All About?

OPEC+ and Prince Abdulaziz failed in their bid to control the market and raise prices because the oil ministers incorrectly diagnosed the market situation. Read more here.

A Perfect Squeeze -- The Option Driven Crude Price Rise

The Saudi oil minister and his fellow travelers timed their April 2 production cut announcement perfectly. The OPEC+ announcement, in other words, was exquisitely timed to affect those who write calls on futures. The consequence was a perfect squeeze. Read more here.

US on Track for 50% EV Sales by 2033

US electric vehicle (EV) sales now account for 7% of all auto sales. EV sales data since 2013 closely track the trend of cellphone adoption. If this continues, EV sales shold reach 50% by 2033. Read more here.

OPEC+'s Stupid Mistake

Joe Biden picked OPEC+'s pocket for a cool $100 billion.

Energy reporters seem to think the Saudis have been brilliant in managing the oil market. They are wrong. Read more here.

Repeating History: California's Coming Gasoline Catastrophe

California has limited the gasoline margins in-state refiners can earn for producing gasoline. The legislators believe retail prices will be lower because the refiners cannot collect “excess profits.” They are wrong. Read more here.

Financial Contagion in a Restructured Oil Market

There was a time when banks were irrelevant to oil markets but that economic world vanished more than 40 years ago. To their detriment, oil ministers and US oil company executives seem ignorant of the change. Read more.

Energy's Eleanor Rigby Moment

FT's energy reporters suggest that oil and gas are no longer "getting beat up as climate villains." A neutral observer might have a different opinion. Read more here.

Oil Economic Terrorists Have Been Neutralized

It is now clear, based on developments since 1973 and especially since 2010, that society can accelerate its move away from fossil fuels without suffering recession or depression. Click here for more.

Prepare for the Great Inventory Liquidation

International Energy Week (formerly International Petroleum Week) will take place this week in London. Missing from all the talks and presentations will be any discussion of the coming crude oil stock liquidation. Click here for more.

Are Happy Days Here Again? -- Not Quite

The IEA and EIA see substantial rises in oil demand in 2023 based on their expectations of an increase in Chinese consumption and an easing of interest rates. These expectations are incorrect. Click here for more.

BP: Energy's Bad Predictor

British Petroleum’s actions over the last thirty years have made it one of the world’s best inverse indicators. Indeed, for us, BP stands for “Bad Predictor.” Read more here.

The Year of the Refiner

The optimization models used by refiners have cut US WTI producers' earnings by $30 per barrel. Read more here.

Crude Oil Price Suppression

Refiners are suppressing global crude oil prices to boost margins. Their actions have cost oil producers around $20 per barrel. For more, click here.

Increased EV Use Cuts CA Gasoline Consumption by 175 mbd

While the miles driven in California increased 10% in the first ten months of 2022, gasoline sales decreased 1%. For more, click here.

Refiner Output Discipline

US oil producers have been practicing "capital discipline," that is, to keep enjoying high oil prices they have curtailed investment in drilling. Now, US refiners are practicing "output discipline" by limiting production and cutting crude purchases. Soon the world's oil producers will be singing, with apologies to the musical Oliver, "who will buy my crude oil?" Read more here.

Credit-Constrained Oil Markets

Tightening credit and high interest rates force oil firms to cut inventories. In 2023, aggressive central bank actions will compel the worldwide oil industry to reduce stocks by more than 1 billion barrels. New lending regulations that constrict funding to refiners and marketers will cap oil prices.

Canada Fouls Kansas with Oil

The Canadian pipelines always spill oil here, never in Canada. TC Energy’s Keystone pipeline just recorded the largest on-land spill of the decade in Kansas, according to Bloomberg. I am proud that ten years ago I helped in the battle that killed the Keystone XL Pipeline. It is time for Canadian pipelines to foul Canada, not us. Canadian pipelines cannot be trusted.

Oil's Weakest Link

Undercapitalized oil marketers and distributors cannot afford to hold inventories. The resulting high prices may speed the energy transition. Read more here.

Consuming Nations Control Crude Oil Prices

UAE's oil minister said today (Oct 31) "that if consumers require its help, the alliance of top producers was ‘only a phone call away.'" Consuming-nation leaders have responded, "No thanks. We can balance markets ourselves." Their strategic stock releases have reduced oil prices by around $28/bbl (28%) since April 1.

The Oil Capacity Shibboleth

The Saudi oil minister suggests his country is doing the world a favor by keeping surplus capacity in reserve. He is wrong. Click here to read more.

The Biden Put

With his recent SPR announcement, President Biden has done more for US oil producers than any president since Richard Nixon. Click here to read more.

Economists as Fools

A group of economists has written Treasury Secretary Janet Yellen in support of the Biden administration's proposal to cap prices for Russian oil. The letter signatories are economic "fools."

Click here to read more.

OPEC+ Decision Will Hasten Oil's Demise

The decision by Opec+ to cut production may seal the fate of fossil fuels by accelerating efforts by the nations that control the world’s financial resources to move away from them. Click here to read more.

OPEC+ to Lose US Antitrust Exemption

For 50 years, the US State Department and nine administrations have stopped Congress from subjecting oil-exporting countries to US antitrust judication. That situation changed today with OPEC’s decision to cut production by 2 million barrels per day. Look for quick bipartisan action to abolish this exemption.

OPEC+ Announces the End of Oil

NY Times' Tom Friedman said it best: "There is only one cardinal sin in the energy business: Never, ever, ever make yourself an unreliable supplier. No one will ever trust you again." OPEC is about to put oil out of business. Click here to read more.

Reuters' John Kemp's Stupidity

Columnist John Kemp has stupidly asserted that a recession is necessary to rebalance the oil market. Markets can be rebalanced by higher prices or lower economic activity. A recession is coming, though, caused in part by the economic energy crisis created by skyrocketing natural gas prices. Click here to read more on the energy economic crisis.

The Markets' Disobedience

Oil markets continue to confound projections and the wishes of oil ministers. Apparently, they know something that escapes forecasters and producing-nation officials. Click here to read more.

Europe’s Energy Crisis May Collapse Commodity Financing

Efforts to suppress European electricity and natural gas prices could cause key commodity banks to fail, just as US goverment actions to stop silver speculation once led to a severe contraction in commodity financing. Oil trading could be particularly affected. Click here to read more.

US Must Build Strategic Diesel Stocks

The federal government has just threatened to take unspecified steps against the US oil industry unless companies divert gasoline and diesel production to inventories in the Northeast rather than exporting the products. This threat is unnecessary. Click here to read more.

The Great SPR Income Transfer

US President Joe Biden’s Mar. 31 Strategic Petroleum Reserve (SPR) release, which was followed by other International Energy Agency (IEA) members, has effected a transfer of almost $30 per barrel from oil producers since it was announced. Click here to read more.

Prepare for a Winter from Hell

At some point in the future, historians will describe December 2022 to April 2023 as “the winter from hell,” for Europe particularly, but also spreading around the world. Click here to read more.

The IEA's Trillion Dollar Theft from Oil Producers

The March 31 strategic stock release has transferred $1 trillion (at annual rates) from oil producers to refiners. Saudi Arabia lost $100 billion and Pioneer Natural Resources $1.18 billion. Consumers received no benefit. Click here to read more.

Declaring an Emergency to Slow Global Warming

Brute force is sometimes the only option when tailored and well-planned measures cannot be implemented. Click here to read more.

The G7 Price Ceiling on Russian Oil: "Make More Marcs"

Marc Rich famously became rich gaming the holes in US oil price controls. The proposed ceiling price on Russian oil will make many new trading firms very rich but do nothing to limit Russian oil income. Click here to read more.

This Time Must Be Different

The reaction to the 2022 energy crisis must be fundamentally different from past energy crises. Click here to read more.

Striking Diesel/Jet Fuel Shortages Are Coming

The world economy is in trouble. Environmental regulations will create a 2022/2023 period of growth repression. Click here to read more.

Brent Is Worth $161/bbl; Diesel Shortages to Blame; Recession to Follow

The current constraint on diesel supply is pulling the world economy into recession. Click here to read more.

Windfall Taxes - Down the Rabbit Hole

Boris Johnson’s government has finally caved to calls for a windfall profit tax on energy company profits. Click here to read more.

The US Should Stop Subsidizing Foreign Gasoline and Diesel Consumers

Elliminating the subsidy could save US consumers as much as $0.40/gallon on gasoline and diesel. Click here to read more.

A Serious Recession Is Coming

Bloomberg's Javier Blas believes the oil industry has little to fear from the coming recession. He is wrong. Read more here.

NOPEC and Bloomberg's Useless Idiot

Bloomberg's Javier Blas has written the most irrelevant book on commodity markets published in years. Read more here.

Economic IQ of US DOE Is Zero

The stupid people at the US Department of Energy simply do not understand markets. Read more here.

Independent Oil Producers Should Be Sued

US shale oil producers are on track to lose $42 billion dollars from hedging. Read more here.

Crude Oil Hoarding Premium Gone, Distillate Still Tight

The 2022 crude oil market disruption may have ended. Read more here.

Ukraine Invasion Oil Price Impact

Oil prices increased 22% in the month after Russia invaded Ukraine. Click the link here to view the Ukraine price impact vs. that of other disruptions.

A Distillate Constraint Confronts the Global Economy

World environmental regulators have banned sulfur in distillate fuel oil. The production of this crucial fuel is limited in large part to the sulfur in crude oils. Hence, diesel, jet, and marine fuel prices will likely stay very high, which may contribute to the world slumping into a recession. Read more here.

The SPR Success Story

From the financial stability viewpoint, not its impact on gasoline and diesel prices, the SPR release must be rated a great success. Read more here.

Hoarding Explains High Gasoline Prices

The hoarding “premium” for gasoline and heating oil is now nearly 40 cents per gallon. Hoarding is a common behavior when supplies of commodities become uncertain. Read more here.

AI Drives Crude Prices

Computers at the financial institutions are programmed to buy crude futures when prices rise and sell when prices fall. They helped take Brent to nearly $140 per barrel and could take it below $80. Read more here.

A Brilliant Sanctions Policy

Everyone believes Russian oil and gas exports should be sanctioned. They are wrong. Read more here.

Wood Mackenzie's Macroeconomic Nonsense

Reports such as Wood Mackenzie’s “No Pain, No Gain” are not helpful. Indeed, they only will slow and perhaps stop progress toward net-zero emissions. Read more here.

Accelerating Net-Zero Goals

In 2022, economic policymakers in Europe see high energy prices not as a threat to economic growth, but rather as an opportunity to move more quickly to their goal of ending all fossil fuel use. Read more here.

Are Oil Futures Dying?

Several forces are pushing oil futures toward what could be a terminal crisis, Dr. Verleger explains in his Energy Intelligence op-ed. Read more here.

Biden's "Pop Gun" Will Not Impact Oil Prices

The White House's just-announced SPR release of 50 million barrels will have no significant effect on crude prices. Read more here.

Market Intervention Works with Bold Action

Research on central bank interventions shows that bold action in foreign exchange markets succeeds four out of five times. A bold, 300 million barrel release of oil stocks would work as well. Read more here.

A US SPR Release and Oil Market Intervention Would Work Wonders for the US Economy

Several good, well-known reporters write that an SPR release would have little effect on the oil market. They are wrong--dead wrong. Read more here.

China's Need for Light Sweet Crude: Repeating the 1972 "Great Grain Robbery"?

In 1972, the US arranged for Russia to buy a large amount of grain. Food prices surged when the news became public. Today, China may be committing the "Great Oil Robbery." See Notes at the Margin.

Reuters' Utter Economic BS

Reuters has published an item titled “Why today’s economy can handle oil at $100 a barrel or higher.” [see]. It is utter BS. Read more here.

This Time Is Different

Past energy crises have been driven by rising oil prices. The current one is propelled by high oil, natural gas, and coal prices that could lead to a recession or worse. Read more here.

The Worst Energy Crisis in Half a Century

The current energy crisis is on track to be among the worst in fifty years. Read more here.

Europe's Energy Crisis Can Speed Transition

Western Europe is experiencing a serious energy crisis. Governments should embrace the higher prices to accelerate the transition to a low-carbon or no carbon world, while increasing payments to consumers to offset the impact of higher prices. Read more here.

Blame China for Crude Price Decline

China's releases from strategic oil reserves and product stocks, along with its ordering banks to stop selling petroleum-linked products and unwind existing positions, has brought global crude prices down sharply and suggests that China may be usurping OPEC+ as the prime market stabilizer.

Ignoring Past Energy Policy Disasters May Doom Climate Battle

August 15, 2021, marked fifty years since the start of US energy policy disasters. The political lackeys who oversaw oil prices and allocations in the seventies inflicted enormous damage on the oil industry. The mistakes they made must not be repeated as the world attempts to slow climate change.

Automakers Circumvented US Fuel Economy Standards

The SUV’s emergence and greater use of pickup trucks for everyday transportation explain this development. Essentially, vehicle manufacturers used the truck loophole to avoid the fuel economy standards, and politicians turned a blind eye to this tactic. Read more here.

The Tin Lesson for Oil

The 1985 collapse of the International Tin Agreement and tin prices offers a cautionary lesson to OPEC+. Read Dr. Verleger's EIG World Energy Opinion on this topic here.

OPEC, Carbon Fees, and Benign Neglect

Oil-exporting countries have implemented their “carbon tax” by shutting in substantial production. Prices would likely be around $50 per barrel, not $70, if most of these countries were producing at capacity. The $20 difference caused by the cuts roughly equals a $50/ton carbon tax. Read more here.

JIT Oil Investing Risks Shortages But...

In an EIG World Energy Opinion, Dr. Verleger asserts that appropriate economic policies can soften the impacts of oil market disruptions in a "no new investment" world. Read more here.

Negative Interest Rates Have Destroyed the "Oil Weapon"

Larry Summers and the research team of Atif Mian, Ludwig Straub, and Amir Sufi have pointed consuming countries toward a tool they can employ today to erase past anxiety over the economic impact of higher oil prices. Read more here.

RVO Ruining US Refiner Margins

US refiners are not enjoying lucrative margins today due to their renewable volume obligation and the higher cost of refining summer gasoline. Read more here.

Achieving a 50% Reduction in US Emissions

President Biden has petroleum in his crosshairs. He has the tools he needs to reduce emissions, and oil consumption, without congressional action. Read more here.

Is Pioneer Natural Resources the Newest OPEC Member?

Today OPEC has become OPEC&C: the Organization of Petroleum Exporting Countries and Company. The nations remain the same. However, the organization seems to have been joined by at least one US company: Pioneer Natural Resources. Read more here.

Murban Rebuttal: Silo Effect

The oil industry suffers because most of its thought leaders and those in managerial positions live in narrow intellectual silos, refusing to read or learn about activities unrelated to oil or hydrocarbons. This "silo effect" is causing massive damage to the industry, especially recently, as investors come to recognize the industry’s isolation. Read more here.

Murban: Ideal Global Benchmark

The new ICE Futures Abu Dhabi contract will probably become the world marker, making global oil markets more competitive and reducing large producers' market power. Ultimately, oil may become "just another commodity" like cotton or wheat. Read more here.

The End of Oil

The fossil fuel industry may have less than two decades left. Oil reserves not developed and in production by perhaps as soon as 2023 may be permanently stranded. Read more of Dr. Verleger's "World Energy Opinion" piece here.

Too Big to Succeed (World Energy Opinion)

The multinational oil company experiment, begun with high hopes in 1998, has failed. By one measure, the eight "supermajors" created through mergers now need to write off almost $1 trillion in assets--half their net worth. (See Dr. Verleger's EIG World Energy Opinion piece.)

Oil's New Investment Paradigm (December 21, 2020)

The oil industry of the 20th century was built on investing in anticipated future demand growth. That investment paradigm no longer works due to the myriad uncertainties facing the industry, and it is being replaced by a new approach that will have profound impacts on oil and energy. Read more here.

Fracking Makes a Comeback

Fracking, like the proverbial cat, seems to have nine lives. It will come back strongly in 2021 if prices remain at current levels. Falling costs will drive the resurgence. Read more of Dr. Verleger's World Energy Opinion piece on this topic here.

ANWR Is Safe

The Arctic National Wildlife Refuge once offered the oil industry a perfect exploration prospect. Today, though, the standard model no longer applies as the Trump administration makes a last-minute effort to sell oil leases there. Any oil in ANWR today will likely still be there in 100 or even 1,000 years. Read more here.

Events, Not Plans, Set Energy Policy

Few of the predictions being made post-election regarding the consequences of the Joe Biden presidency will prove correct. Read why here.

What Was Equinor Thinking?

The Norwegian state-owned oil company Equinor lost $20.4 billion on its investments in oil and gas exploration in the United States. What was it thinking? Read more here.

The End of the Oil Era

Dr. Verleger writes that "Daniel Yergin has bookended the zenith and coming nadir of the oil era with his just-published The New Map." Read more here.

US Energy Dominance Denied

America's pursuit of energy domination has faltered. Along the way, however, it has destroyed the oil industry. Read how in Dr. Verleger's essay in The International Economy

Energy Transition Off Oil Will Come Faster than Many Think

Author Daniel Yergin and others think the energy transition away from fossil fuels will take decades. Dr. Verleger thinks otherwise. Read more here.

What's Behind the Great Gasoil Glut?

A record surplus of diesel and gasoil has accumulated over the last six months as the Covid-19 crisis slowed travel and business activity. The excess has led to price inversions and collapsed refining margins. Read more here.

There's Reason to be a Climate Optimist

Much of the world will likely achieve net-zero emissions by 2040 or earlier, well before the 2050 deadliines set by many. Read more here.

IEA/EIA Supply/Demand Projections Contain Misleading Error


IEA/EIA projections show a third-quarter market imbalance, with global demand exceeding supply by almost 4 million barrels/day. Prices would be rising rapidly if this imbalance were real. It is not. Read more here.

A Timely, Reliable Source of US Crude Oil Production Data

The biggest problem oil industry forecasters and planners face in carrying out their duties is a shortage of timely and reliable data on US crude oil output. The EIA provides monthly estimates only after a two-month delay. Now this data hole can be filled using a new forensic accounting approach. Read more here.

Fixing the EIA's Gross Errors

EIA’s weekly estimates of US crude production in May were off by 10 percent when averaged for the month. The estimates published by PKVerleger LLC were off by 0.4 percent. EIA needs to amend its procedures instead of misleading the world.  Read more here.

The Volcker Approach to Oil Markets

Saudi Arabia seems to understand how to apply the practices of a central bank to oil markets. Its goal is a stable oil price that assures the kingdom a stable market for the future. The outcome for other producers, including the Opec+ members, is not its concern. Read more here.

Petroleum Consumption Prospects Uncertain

The Covid-19 crisis has altered the direction of the global economy in a thousand ways. The economic impacts are difficult to delineate, even today. The prospects for future energy and petroleum consumption are even more uncertain. Read more here.

Pundits Prattle -- Computers Buy or Sell

Oil prices are being driven by computer. Artificial intelligence dominates. The widely quoted commentators may prattle all they want. However, it is the computers programed to protect the writers of puts to frackers that drive oil price movements. Read more here

OPEC Must "Defang" USO Market Influence

The SEC has just authorized the United States Oil Fund to sell one billion additional shares. The increase directly threatens OPEC members as it would encourage US independents to hedge and produce more oil. OPEC can stave off this threat by changing how it markets its oil. Read more here.

Can OPEC+ Function as a Central Bank for Oil?

OPEC+ wants to raise cash crude prices while depressing forward prices. For the organization to succeed in this, its members much change the way they market some of their oil. Read more here.

Can Crude Price Gains Hold?

Brent crude prices have increased by 259% since their April 21 lows. In his latest Energy Intel "World Energy Opinion," Dr. Verleger states that crude prices can probably continue around current levels. To find out why, read more here.

US Crude Production Is Falling Fast

PKVerleger LLC estimates show that US crude oil output has fallen 3 million barrels per day since the price war began. For more, see Dr. Verleger's World Energy Opinion piece.

Possible Decline in US Crude Output

US oil production may have decreased to less than nine million barrels per day by the end of April. See Notes at the Margin.

Beyond Greed Redux

The market manipulation allowed by the CME led to negative crude prices on April 20. US energy dominance will be denied as a consequence. Read more here.

Negative Prices: Never Again

At one point on April 20, the WTI front-month crude price fell to -$37 per barrel. Such market failures, if they repeat, threaten the global energy industry's financial foundation. Read more here.

Middle East Producers Seek to Destroy US Frackers by Filling US Tanks with Their Crude

Middle East producers want to fill US tanks with their oil, forcing US producers to shut down, They are also hoarding tankers to prevent US exports. The game is almost over. For more, see this Notes at the Margin and/or this Bloomberg article.

An Oil Market in Crisis


The oil market is out of balance because planes are not flying and consumers are not driving, which could lead to a unmanageable surplus of jet fuel and gasoline. The solution is to boost output of crude grades with high gasoil yields and shut in shale oil and other light, sweet crudes. Read more here.

Russia Declares Economic War on the US


The IEA's director has warned that Russia's actions could have "grave consequences" such as forcing prices down and US oil producers to close. Hello, Fatih. You have just identified President Putin's goal. Read more here.

Evidence for Hard Coronavirus Hit on Oil


"The coronavirus poses a very serious threat to global oil demand, but just how serious is difficult to quantify." Read Dr. Verleger's World Energy Opinion article here.

OPEC Needs to Fast Forward

Attempts to sustain higher oil prices in the future are less and less likely to succeed, absent dramatic changes in Opec and Opec-plus strategy to counter these financialized oil market practices. Read more here.

Multinational Oil Companies Cannot and Will Not Become Large Players in the Renewable Sector


Read more in Dr. Verleger's Energy Intel World Energy Opinion piece here.

Did China Sucker Trump, Navarro, and Lighthizer?


The USMAC trade agreement references "market prices" but says nothing about price manipulation. China is now manipulating energy prices. Will US producers lose? For on this, read Dr. Verleger's "China: The New Price Stabilizer."

Will OPEC Sign Its Death Warrant?


If the OPEC+ members cut production to sustain prices at current levels or raise them, they could be signing their death warrants. Read more here.

Time to Rethink Energy Security


Consuming countries have traditionally borne the burden of assuring oil supply security. With an abundance of oil available, that burden has now shifted to OPEC. Read more here.

Who's the Most Reliable Supplier? (October 29, 2019)


Find out why Dr. Verleger believes this to be true by reading his latest Energy Intel World Energy Opinion.

Saudis: Oil's New Central Bankers


The government of Saudi Arabia has stepped in where IEA officials never have, despite their ostensible role in protecting consumers, and adopted the crisis-management procedure central bankers follow in times of monetary stress. Read more about this action here.

Time's Up for ANWR

Rights to explore the Arctic National Wildlife Refuge (ANWR) will shortly be offered for lease by the US Interior Department. Five years ago, oil company interest would have been great. Today, however, the financially constrained industry will likely take a pass. Find out why here.

Vanishing Oil and FANG Day


FANG Day, the day on which the market capitalization of one tech major will exceed the combined value of the seven largest oil companies, will probably occur this month. Read more here.

Aramco Threat to Private Oil Firms

The Aramco IPO could slow or reverse even oil production increases from the US and other non-Opec countries, leaving Aramco with a bigger market share and, potentially, a higher equity value. Read more here.

Seeking Profits from Opportunities Created by Regulatory Changes

Refiners and shipowners are rent seeking on the back of the IMO 2020 marine fuel sulfur rule. Read more here.

IMO 2020: The First Rat Abandons Ship


Indonesian authorities have recognized that the IMO got it wrong when it predicted no price impact from its new fuel regulation. Consequently, they will ignore the rule for domestic ship movements between the country’s 18,000 islands. Read more here.

Chinese Threat to Oil Prices


China is pushing unneeded oil products into broader Asian markets, driving down first product and then crude oil prices, with products clearly the driving force. Read more here.

Crude as a Casualty of the Trade War

While no one noticed, China increased its oil inventories 120% as the rest of the world ran down inventories. China may now use these stocks to suppress global oil prices. For more, click here.

RFS Program Saves Consumers $0.22/gal on Gasoline


A new study by Dr. Verleger has found that consumers save 22 cents on every gallon of gas thanks to the Renewable Fuel Standard. View/download the study here.

Ending Exemptions on Iran Sanctions Could Raise Crude Prices 70%


The announcement from Washington that exemptions from the sanctions on Iran will not be renewed could trigger an increase in the precautionary demand for inventories across the globe. Read more here.

Trump Estimate of IMO 2020 Impact Different from EIA's


The Trump administration has two assessments of the impact of the IMO 2020 marine fuel sulfur regulation to consider. Read more here.

Trump Will Block or Limit US Petroleum Exports to Restrain Gasoline and Diesel Price Increases

Given the upcoming presidential election in 2020, Donald Trump could decide to block US product exports to keep gasoline and diesel price increases from alienating his voter base. Read more here.

CERA Flunks Economics

Every year, Cambridge Energy Research Associates (CERA) publishes "Special Advertising Features" in The Wall Street Journal. The first for 2019 appeared Tuesday, March 12. Sadly, the authors flunked their economics test. Read more here.

Introducing the Trump Call


Market commentators once described the Greenspan Put. Today, we have the "Trump Call." Read more here.

OPEC Putting Lipstick on a Pig?

The Wall Street Journal headline reads "OPEC Weighs a First-Ever Influence Campaign in the U.S.” OPEC officials want to convince the U.S. that they have helped stabilize oil prices. This claim is wrong. Read more here.

US Energy Independence Day

In his December 6 Wall Street Journal article, reporter Bradley Olson declared "US Becomes Net Exporter of Oil, Fuels for First Time in Decades." We saw this coming in 2012 in this paper published by The International Economy. Olson acknowledged our "get" in this tweet.

Current Oil Industry Expenditures on E&P Adequate

In its 2018 World Energy Outlook, the IEA asserts that "approvals of conventional oil projects need to double from their current low levels" to meet projected increases in global demand. We disagree. Current expenditure levels are adequate. Investors should demand continued capital discipline. See the summary of our study here.

$200 Crude and the Economic Crisis of 2020

Click the link above to open "Our View."

Posted: July 10, 2018

$200 Crude Oil?


The global economy is at risk for $200 per barrel crude oil if the International Maritime Organization follows through with its 2020 regulations. Click the link above for more information.

PES Bankruptcy Not Caused by RFS Program


In this letter to Senator Checuk Grassley, Dr. Verleger argues that the PES assertion that its financial troubles came from the Renewable Fuel Standard program requirements is incorrect. Read the letter here.

Time for Low-Cost Middle Eastern Producers to Abandon OPEC?

To read more, click the title link above or here.

The Border Adjustment Tax: A Fee on Imported Oil in Drag

To read more on this, click the title link above or here.

Border Adjustment Import Taxation


PKVerleger LLC and The Brattle Group have released a white paper on the potential impact of a border adjustment import tax on crude oil and petroleum product markets. To view or download the white paper, please click here. For a short mathematical explanation of how a border adjustment tax would work, click here.

The Looming Financial Collapse of Big Energy


"Developments in the world oil industry have taken on all the characteristics of a Shakespearean tragedy." To read or download Dr. Verleger's article in the Fall 2016 issue of The International Economy, click here.

Border Adjustment Import Taxation


PKVerleger LLC and The Brattle Group have released a white paper on the potential impact of a border adjustment import tax on crude oil and petroleum product markets.


To view or download the white paper, please click here.

Idiotic Statement of the Day


"OPEC members will say, 'if you (raise output), we are going to ramp up production and push oil back down to $35' ... I hope shale in America will be responsible and realize what's happened and allow the higher oil price to be sustained." Ivan Glasenberg, CEO of Glencore, as quoted by Reuters.


Read our response here.


Oil and the Global Economy

The Group of Thirty today released the paper, Oil and the Global Economy. In it, Dr. Verleger argues that the major oil firms are economically ossified and discusses three forces he believes "threaten to permanently transform the oil industry." (Read the G30 press release here.)

PKVerleger LLC Gasoline Use Estimates Vindicated

The EIA just revised its estimate of US 2016 gasoline consumption growth compared to 2015, reducing its previous estimate of four percent to two percent. Read more here.

A CA Gasoline Futures Market?

Consumers in parts of the United States benefit from lower gasoline prices thanks to mature energy futures markets. Consumers elsewhere in the country, particularly California, do not. The cost to Californians could total $2 to $3 billion in 2016 as residents there pay between $0.15 and $0.20 more per gallon than they might if the state had a futures market. Read more here.

US Gasoline Use Update

The EIA estimates a 6.2 percent increase in gasoline disappearance from the level recorded the same week in August in 2015. Adjusted for the likely underreporting of exports, use increased last week from 2015 by 4.7 percent. Year to date, the EIA shows an increase in gasoline disappearance over 2015 of 3.4 percent. Adjusted for the likely underreporting of exports, this increase is 0.9 percent.

Candles for Caracas


US Gasoline Disappearance: As of July 8, US year-to-date gasoline use is up just 1.1% in 2016 from 2015, not 3.6% as published by the EIA. See details on our "adjusted" gasoline use here.


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BPT Collapse






VenWatch™: Click here for current comments and/or news on Venezuela.

Has the IEA’s Executive Director Become the Clown Prince of Oil?

Fatih Birol: "I trust Saudi Arabia will act responsibly in line with its reputation." Read more here.


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Consumers Refuse to Be Fooled


Americans no longer rush out and buy when gasoline prices drop. Read more here.


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The IEA's Preposterous Economic Thinking


The IEA's recently released World Energy Outlook 2015 is devoid of economics. Read more here.


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Strategic Sense


Why the US should sell every barrel in the SPR. Read more here.


VenWatch™: Click here for current comments and/or news on Venezuela.

Energy: A Gathering Storm?


On Wednesday, October 21, 2015, Dr. Verleger will deliver the keynote address at the 2016 OPIS National Supply Summit. To request a copy of his paper, "Energy: A Gathering Storm?,' please click here.


VenWatch™Click here for current comments and/or news on Venezuela.

Oil Markets Enter the Adelman Era


Read more here.

Energy: A Gathering Storm II -- The global crude oil E&P investment gap is growing. Read more here.

The California Exception -- Retail gasoline prices in California surged past $5 per gallon at some locations recently. The price jumps have brought out the kooks. Read more here.

QE and Oil Prices -- Most oil market observers believe the 2014-2015 crude oil price collapse began on November 27, 2014, when Saudi Arabian officials announced they would not cut production. As Dr. Verleger explains in his paper, this is a convenient but incorrect explanation. Read more here.

WE WERE RIGHT! -- Keystone XL will be the "tar sands road to China." Read more here.

The Rise of Petro-Exuberance -- Former Federal Reserve chairman Alan Greenspan coined the phrase "irrational exuberance" in 1996. He worried that dot-com assets were overvalued. Four years later, the bubble burst, confirming his concerns. Presently we are observing the last gasps of irrational exuberance in petroleum. Call it "petro-exuberance." Read more here.

Who Put the BS in BIS? -- Despite what the Bank for International Setttlements asserts in a recent press release for a forthcoming study, commodity markets have not caused the crude price increase. Read more here.

The 2014-2015 Oil Price Decline: Deja Vu Redux -- The 1985-1986 crude oil price decrease was almost identical to the current price slide. Read more here.

The Rise of the ManufRacturers -- Quite simply, the path for global oil and gas prices going forward is down. Read more here.

TRADERS: DO NOT RELAX! -- Read more about why you should not here.

OIL PRICE WAR 3.0 -- Very few people have participated in all three crude oil price wars. Far fewer actually predicted all three. Phil Verleger was one. Read his "Oil Price War 3.0" here. (Notes at the Margin is sent to PKVerleger LLC clients. For more information on the services of PKVerleger LLC, click here.)

Poor Canada -- Canada’s national anthem begins “Oh Canada, Our Home and Native Land.” Soon these words may change to “Poor Canada, Our Home and Native Land.” Read more here.


(To view previous Our View postings, click here.)

European Refiners Face Extinction -- A recent Financial Times article by Ed Crooks suggests European refiners are being harmed because US refiners are benefiting from low-cost crude. He is wrong. European refiners, like the dinosaurs, face extinction because they failed to adapt. Read Dr. Verleger’s comment on the Crooks article here.


(To view previous Our View postings, click here.)

Chuck the Models -- American entrepreneurs are on a roll. America's future could not be brighter. Read more here.

Hit Putin Where It Hurts -- Selling oil from the US Strategic Petroleum Reserve could cut world oil prices by $10 to $12 per barrel. Although that amounts to only about a ten-percent reduction, it would cut Russian export income by around $40 billion, about ten percent of the country's 2012 fuel export income according to the WTO. This action could exacerbate the ruble's decline as well. Read more here.

Renewable Fuel Standard Kept Gasoline Prices Down -- Consumers paid $3.25 to 3.30 per gallon for gasoline over the holidays. In contrast, they paid $4.11 in June 2008 when oil prices peaked. But for government action taken in 2007, vehicle owners could easily have paid $4.25 or even $5 per gallon for gasoline this Christmas. To be blunt, we got lucky. For once, the U.S. government did something right. Read more here.

Futures Markets Have Cut Crude Oil Prices $30 per Barrel -- US consumers paid at least $1 per gallon less for gasoline in 2013 than they would have in the absence of futures markets. Former CFTC chairman Gary Gensler did his best to deny them this benefit. Read more here.

Will This Be the American Decade or the American Half-Century? -- Some thought this would be China's century. They were wrong. Circumstances have made it the North American century. Read more here.

Renewable Fuels Legislation Cuts Crude Prices -- Crude oil prices today are between $15 and $40 per barrel lower than they would be had Congress not passed the Energy Independence and Security Act of 2007. Read more here.

The International Energy Agency Continues Its Program of Economic Destruction -- By intentionally sterilizing more and more of the world’s oil supplies, the IEA is driving crude oil prices higher as stocks accumulate and wreaking havoc on economies across the globe. Read more here.

Ethanol Cuts Crude Price $10 to $30 per Barrel  -- The US renewable fuels program provides a benefit that has gone unnoticed, one that can be measured in the lower price of crude oil on world markets. Read more here.

Canadian Crude Exports to Asia: We Saw It Coming Two Years Ago -- On August 22, 2013, The Wall Street Journal published an article headlined "Canada Looks to Sell Its Oil Beyond the US," most likely to Asia. We correctly predicted an action like this in the February 2011 Petroleum Economics Monthly. Download or open the February 2011 report here.

It's Not the Hedge Funds and Money Managers; It's the Hedgers -- Press attention generally focuses on the position of hot money in oil futures, not the activity of those who use the markets. In the case of Brent futures, though, they make a mistake. Those who fail to understand do so at their peril. To view or download the PDF of this paper, please click here.

The Blend Bump Once Again -- In this paper presented to the CFTC, we show that the market clearing price of RINs is about $1. To view or download the PDF of this paper, please click here.

The US Will Become the World’s Oil Supplier of Last Resort -- The May 2013 Petroleum Economics Monthly discusses the implications of the change in the economic geography of global oil markets. One conclusion is the US can become the petroleum lender of last resort or the “Federal Reserve of Oil.” Read more here.

Gasoline Consumption: The Horrible Story -- US Bureau of Economic Analysis data released on April 29, 2013, show that current dollar US consumer spending on gasoline decreased 5.6 percent in March 2013 from March 2012. In real terms, that is a three percent decline from last year. The trend looks to continue down. Read more here.

The Price of RINs: How High! How Stupid! -- Click here for excerpts from the March 18, 2013 issue of Notes at the Margin, which has been quoted widely. We explain that there is no RIN problem, just obstruction by refiners.

The End of the Oil Crisis -- By 2023, the US economic difficulties that began with the first oil crisis fifty years ago will likely be solved. Click here to view or download the paper.

Economic Consequences of Falling Off the Fiscal Cliff if Oil Prices Decline -- An oil price decrease resulting from the US falling off the fiscal cliff could ease the economic impact. Read more here.

Market Impact of Hurricane Sandy -- The economic impact associated with Hurricanes Katrina and Rita, as large as it was, will likely pale in comparison to the coming one from Hurricane Sandy. Read more here.

Major SPR Oil Sales Likely Over New Few Years -- The United States could add 300 million barrels to the world oil market in 2013 and 2014 as it disposes of oil no longer required to be held in the Strategic Petroleum Reserve. Sales could contribute $30 billion to budget reductions. Canada may be the big loser. Read more here.

The BP Royalty Trust: Warning of Impending Price Declines? Find out here.

Regulating Oil Prices to Infinity. Comments on the CFTC's proposed regulation of price reporting agencies. Learn more.

The Amazing Tale of US Energy Independence. In the Spring 2012 issue of The International Economy, Dr. Verleger writes, "In a little more than a decade, the United States will find itself as an energy exporter and this amazing outcome will have happened by accident. The United States will then have low-cost energy supplies for decades." Learn more.

Decline in US Gasoline Consumption Accelerates -- The February 2012 Bureau of Economic Analysis data on consumer spending indicated that the decline in US gasoline use is quickening. Real purchases fell six percent from year-earlier levels. Learn more.

Strengthening Sanctions on Iran with Strategic Reserves -- The United States today holds almost 300 million barrels of excess oil in its Strategic Petroleum Reserve. In his paper on this issue, Dr. Verleger suggests these surplus barrels should be sold to supplement efforts to reduce Iran’s crude export sales. This will help tighten sanctions on Iran and ease concerns of countries that must replace their Iranian crude imports. Learn more.

The Keystone Pipeline Will Not Increase US Energy Security: The proposed Keystone XL pipeline expansion, which would move oil from the Canadian tar sands to the US Gulf, has been defended on the basis of energy security. Proponents assert the increased oil supply from Canada will displace less secure imports from other foreign sources. This claim is incorrect. The Keystone project will likely decrease US energy security. Learn more.

Before 2021, US drivers will pay $10 per gallon for gasoline or $0.50 per gallon for E85 (an 85:15 ethanol/gasoline blend). Before 2021, diesel prices in Europe will hit €2.50 per liter if the euro/dollar exchange rate and taxes stay steady. Before the decade closes, US consumers will also pay less than $2 per gallon for gasoline as their European counterparts pay under €1 per liter, assuming no tax or exchange rate changes. Learn more.