OPEC expects global oil demand to reach 88.87 mbpd this year

Updated 11 April 2013
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OPEC expects global oil demand to reach 88.87 mbpd this year

VIENNA: OPEC kept its world oil demand forecasts for 2012 and 2013 virtually unchanged yesterday, with China expected to contribute the most to growth while industrialized countries appeared to be headed for a decline.
The Organisation of Petroleum Exporting Countries (OPEC) expects world demand to reach 88.87 million barrels per day (mbpd) this year, slightly higher than its previous forecast in March of 88.83 mbpd.
This would represent a hike of 770,000 bpd from the revised figure for 2011, the organization said in its latest monthly report.
For 2013, it forecast 89.66 mbpd, with slow growth at the beginning of the year picking up in the second half, OPEC said.
"The largest share of this growth is expected to come from China, with 0.4 mbpd," meaning that oil demand for that country alone would reach 10.1 mpbd this year.
"In contrast, OECD (industrialized countries) demand is expected to see a contraction of 0.3 mbpd," the report said.
With the Americas making up the most demand in terms of regions, OPEC warned about developments in the United States, with oil consumption "strongly dependent on the impact of the (planned) spending cuts and newly adopted budget ceilings in the near future" as well as growing interest in alternative fuel sources.
Meanwhile, global oil prices fell yesterday but trimmed earlier losses after signs of stronger-than-expected demand in top crude consumer the United States, analysts said.
Brent North Sea crude for delivery in May dipped 51 cents to $ 105.72 per barrel in late afternoon deals in London.
New York's main contract, West Texas Intermediate (WTI) light sweet crude for May shed 25 cents to $ 93.95.
The US government's Energy Information Administration (EIA) revealed yesterday that American crude reserves grew 250,000 barrels in the week ending April 5.
That was far less than market expectations for a large gain of 1.2 million barrels, according to analysts polled by Dow Jones Newswires, and indicated solid demand.
"WTI was in the spotlight today with the weekly government EIA report on petroleum stocks showing a lower-than-expected rise in crude stockpiles," said analyst Michael Hewson at CMC Markets.
The EIA meanwhile added that US gasoline or petrol stockpiles rose 1.7 million barrels last week. That confounded estimates for a drop of one million barrels.
Torbjorn Kjus, oil market analyst at Oslo-based DNB Bank, said that the overall impression from the inventory report was "bearish", meaning that it would likely weigh on prices.
He added that gasoline demand was "weak", as stockpiles were normally expected to drop at this time of year.
Crude futures also trimmed losses after Federal Reserve meeting minutes suggested the central bank would curtail stimulus measures only if the job market improves significantly.
Minutes from the Fed's March 19-20 meeting reaffirmed the central bank's commitment to its quantitative easing program until the job markets improves.
The minutes showed policymakers slightly more inclined to reel in QE bond purchases this year amid signs of recovery in the labour market.
Kjus also noted that traders were still digesting a "mixed bag" of data from China, which is the world's biggest energy consuming nation.
"Overnight we had some mixed-bag Chinese trade figures which showed exports growth slowed in March to 10 percent compared to a year ago, while imports growth surged to 14.1 percent.
"However, imports of oil by the world's second largest economy fell 2.1 percent. This only helped to exacerbate demand worries which have come to the forefront recently following the release of some disappointing global economic data."


Power-sucking Bitcoin ‘mines’ spark backlash

Updated 51 min 14 sec ago
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Power-sucking Bitcoin ‘mines’ spark backlash

  • Local US authorities pushing back against bitcoin miners as power prices rise
  • Firms insist they bring revenue, investment and talent to mining locations

NEW YORK: Bitcoin “miners” who use rows of computers whirring at the same time to produce virtual currencies began taking root along New York’s northern border a couple of years ago to tap into some of the nation’s cheapest hydroelectric power, offering an air of Silicon Valley sophistication to this often-snowy region.
But as the once-high-flying bitcoin market has waned, so too has the enthusiasm for bitcoin miners. Mining operations with stacks of servers suck up so much electricity that they are in some cases causing power rates to spike for ordinary customers. And some officials question whether it’s all worth it for the relatively few jobs created.
“We don’t want someone coming in, taking our resources, not creating the jobs they professed to create and then disappear,” said Tim Currier, mayor of Massena, a village just south of the Canadian border, where bitcoin operator Coinmint recently announced plans to use the old aluminum plant site for a mining operation that would require 400 megawatts — roughly enough to power 300,000 homes at once.
In Plattsburgh, where two cryptocurrency operations have been blamed for spiking electricity rates, the prospect of more cryptocurrency miners plugging in spooked officials enough in March to enact an 18-month moratorium on new operations. The small border village of Rouses Point also is holding off on approving new server farms and Lake Placid is considering a moratorium.
For local officials, the power struggle has been a crash course in the esoteric bitcoin mining business in which miners earn bitcoins by making complex calculations that verify transactions on the digital currency’s public ledger.
Since it often uses hundreds of computers that throw off tremendous heat and burn a lot of power, it has tended to gravitate toward cooler places with cheap electricity, such as geothermal-rich Iceland or along the Columbia River region of Washington state.
The stretch of New York near the Canadian border similarly fits the bill. Cheap hydropower from a dam spanning the St. Lawrence River is doled out by a state authority to local businesses that promise to create jobs. Additionally, some municipalities such as Massena and Plattsburgh receive cheap electricity from a separate hydropower project near Niagara Falls.

 

In Plattsburgh, electricity is so cheap most residents use it instead of oil or wood to heat their homes. The couple of commercial cryptocurrency mines here can get an industrial rate of about 3 cents per kilowatt hour — less than half the national average.
But Plattsburgh Mayor Colin Read said its largest operator, Coinmint, which has two plants employing 20 or fewer people, can consume about 10 percent of Plattsburgh’s 104 megawatt cheap electricity quota. When the city exceeded its allocation like it did this winter, customers ended up paying $10 to $30 more a month for the extra electricity. For a major employer like Mold-Rite Plastics plant, it cost them at least $15,000 in February.
State regulators have since given municipal utilities the ability to charge higher rates to cryptocurrency miners. At least one bitcoin miner in Plattsburgh says he’s working with the city on solutions to the power worries.
Ryan Brienza, founder and CEO of the hosting company Zafra, said those could include mining on behalf of the city for an hour a day or harnessing the heat from mining computers to warm up large spaces.
While the direct number of jobs associated with mines can be small, Brienza said they can bring revenue, investments and talent to the city while employing local contractors.
“It can start snowballing,” Brienza said.
Coinmint’s plans for a new plant in Massena, for example, come with a promise of 150 jobs. That’s welcome in an area that in the past decade has suffered though the loss of aluminum-making jobs and the closure of a General Motors powertrain plant.
“J-O-Bs. Yup. What we need up here,” said Steve O’Shaughnessy, Massena town supervisor.
Coinmint had asked for a cheap power allocation from the New York Power Authority for Massena for part of its energy needs, but that request was deferred.
The power authority has separately enacted its own moratorium on allocating hydropower to cryptocurrency operations — mirroring municipalities that have effectively pushed the “pause” button on a rush of miners coming in.
Coinmint representatives said this month they hope to begin the Massena operation in the second part of this year. The company stressed that mines can be a good fit for this job-hungry area.
“They’re also going to get substantially more efficient over time,” said Coinmint spokesman Kyle Carlton. “So to the extent that Plattsburgh or Massena or anybody else can get in on that and establish themselves on the ground floor, I think that’s going to help those cities to be successful.”

Decoder

Bitcoin mining is the process used to verify transactions and add them to the currency's public ledger (blockchain). It involves compiling pending transactions and turning them into a computationally difficult, mathematical puzzle. The first computer to solve the puzzle claims a transaction fee and a newly-released bitcoin.