David Hargreaves on energy, week 16 2012

Oil. Is it a lull or has crude topped out? We have:

• Natural gas prices in full retreat as shale gas in the USA takes a grip.
• The threat of shale gas in relatively energy-starved regions eg South Africa, takes its toll.
• The USA and EU threatening to release emergency oil stocks to dampen prices.
• Iran braced for the oil embargo but the price not reacting upwards.
• A sort-of Syrian ceasefire.
• Nigeria’s terrorist problems not shaking the apple trees.
• Northern hemisphere summer approaching.

All-in-all, it looks more like concerted downward pressure. Pakistan is putting its faith in coal (its own production) to provide 10-12% of its needs in the energy-starved region in the next five years. Watch Oracle Coalfields.

South Africa is trying hard to alleviate its energy crisis but this collides with its industrial growth ambitions. So Anglo American might build a 450 Mw coal fired station of its own, targeted at its platinum mining activities.

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About David Hargreaves

David Hargreaves

David Hargreaves is a mining engineer with over forty years of senior experience in the industry. After qualifying in coal mining he worked in the iron ore mines of Quebec and Northwest Ontario before diversifying into other bulk minerals including bauxite. He was Head of Research for stockbrokers James Capel in London from 1974 to 1977 and voted Mining Analyst of the year on three successive occasions.

Since forming his own metals broking and research company in 1977, he has successfully promoted and been a director of several public companies. He currently writes “The Week in Mining”, an incisive review of world mining events, for stockbrokers WH Ireland. David’s research pays particular attention to steel via the iron ore and coal supply industries. He is a Chartered Mining Engineer, Fellow of the Geological Society and the Institute of Mining, Minerals and Materials, and a Member of the Royal Institution. His textbook, “The World Index of Resources and Population” accurately predicted the exponential rise in demand for steel industry products.