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With 9.5 million barrels a day cut for U.S. G20 and OPEC+ negotiated by president Trump many Texas oil wells will be shut in. Even with these cuts price is sensitive after dropping to $22 by April 12, 2020. The cuts averted a complete collapse in oil prices when markets opened on April 13. By April 12 oil demand worldwide had fallen by 30 million barrels a day. That is how grave the situation was. By doing so the U.S. protected its oil industry. There was complete lack of leadership from Russia, Saudis, Mexico and other countries until president Trump intervened with strong action. Trump threatened tariffs on imported oil to protect the U.S. oil industry if other nations did not come to terms, including calls from U.S. senators telling prince Abdulaziz the Saudi oil minister the U.S. Saudi relationship could not be salvaged if the Saudis did not come to an agreement. Once again president Trump's tariff moves worked, this time to save the world oil industry and oil producing economies such as Russia from severe hardship. ...

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Barley points to the other factors surrounding the ECB decision for massive monetary easing on Jan. 22, 2015. THe ZEW and IFO business sentiment indicators show an upward trend, and the German economy is picking up momentum in 2015. The lower oil prices, and the decline in the euro boosting exports, are two other factors pointing to higher growth in 2015. Just as the U.S. QE program came at a time when economic conditions were improving, the same can be said for the Draghi ECB QE program in Europe, says Barley. Draghi appears to have sent a strong signal to financial markets, just as he accomplished in July 2012, when bond yields of Spain and Italy were over 7%.

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Canadian tar sands oil production from Alberta faces increasing competition from production by Bakken oil fields in N. Dakota. The increasing production from Bakken fields in the U.S. and the lack of pipeline space to bring oil from Alberta to the U.S. is putting the more costly projects on hold. The costlier projects have costs of about $100 a barrel with crude prices dropping below $90 in the U.S. Projects using steam to get bitumen to the surface are viable at $50 a barrel, other projects that require mining the bitumen to make synthetic crude have costs upwards of $100 a barrel. Costs are rising quickly with the cost of geoscientists going up 14.5% in 2012 and salaries over 200,000. Production workers make $35-$39 an hour and can make about $170,000 a year. The boom has pushed costs higher each year. Suncor Energy, the largst producer, is reviewing the viability of large planned multibillion upgrading and mining projects and cutting capital spending in 2012 by 11%. By 2020 oil sands output is forecast to double from the 2011 figure of 1.6 million barrels a day, according to the Canadian Association of Petroleum Producers. In 2012 about 50% of production is from the costlier mining operations....

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Energy Aspects, London based consultancy, estimates non-OPEC production declines of 700,000 barrels a day, up from previous forecasts of 200,000-300,000 barrels a day. Demand is expected to be higher than supply by June 2016, and drawing down inventory from that time. Agreement to freeze production is uncertain at a Doha meeting of OPEC countries, with Iran planning to increase production from 3.1 million barrels a day currently to 4 million barrels a day. Saudis increased production to 10 million barrels a day in 2015, and Iran is determined to increase its production to the higher level. The price of U.S. oil rebounded to $42.17 by April 2016.

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This WSJ report traces the development of rail, trucking, container shipping and forklift use in Germany, Russia and the US. The World Bank Logistics Index shows Germany ranking first, the US 14th, China 26th, Russia 75th out of 160 countries.  Russia's military relies on a supply system that uses crates instead of container shipping, not much use of forklifts, and relies on rail and conscript labor. During the invasion of Ukraine in April Russian supply lines that did not control rail failed to supply forces leading to slow progress. Because of dense rail lines in the eastern Donbas region Russian supply lines have worked to sustain advances. About 750 miles of rail lines have also been repaired by a special force set up for this purpose.  In a larger sense the problem of logistics and supplying front lines remains. This report shows the contrast between the development of Russian logistics and American logistics described by military experts in the US. The Russian system evolved in the early years of the 20th century based on conscript or free and abundant labor compared to the US where labor was scarce and costly. Automation progressed rapidly with American business taking up use of forklifts and containers during the 1940's extending to its use in the military. During the Vietnam war Cam Ranh Bay US bases were converted to modern container and forklift use. Russia continued through the sixties till today with a different and less automated system of logistics and movement of goods.    The use of modern logistics in Russia is limited to the amount of freight that gets moved in Colombia and much less than France says this report in WSJ. Much of the industrial base in Russia is built around oil and gas exports and manufacturing with movement of supply chain parts has never taken the importance that it has in Germany or the US. This limits the capacity of the Russian military outside the rail lines located towns and cities in Donbas where it has recently made gains. ...

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A locally produced ton of hot rolled coil steel in India, an industry benchmark, is up 42% in price to $675, since January 2008, when Tata unveiled the Nano. Raw materials account for a higher portion of the costs of making a car like the Nano, and account for 23% of the costs of making the Nano, according to consultants Global Insight. This means margins will be harder to preserve on the Nano. As Ratan Tata, Chairman of the Tata group of companies put it at a shareholder meeting July 24, "if we passed on all costs to the consumer, it will affect demand, and if we don't it will affect margins". Tata is accomodating suppliers like Rico Industries that make the engine blocks that use steel for increased costs of raw materials. Other costs also are going up. For new car loans the interest rates are between 14 and 16% and fuel prices are going up making the cost of operating the 50mpg Nano costlier for those riding motorcycles. Tata faces other higher costs, its managng director Ravi Kant says the project for the Nano plant in Singur is costing more. The $470 million invested so far is 18% more than it had projected in January and double the amount stated when the prject was started in 2006....

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Alternatives to the Keystone Pipeline if the Obama administration's objections to the pipeline are not overcome.

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The Deepwater Oil Spill Commission staff said BP management was responsible for "not putting policies and systems in place to ensure that decisions made to reduce costs and improve efficiency did not increase risks or diminish safety." The staff report says the mistakes and oversights that led to the blowout were a result of management failures by BP, Halliburton Co., and Transocean Ltd. The companies failed to share information with contractors or within their own teams, and contractors did not share information with the companies. This resulted in critical decisions being made without fully grasping their context or importance.

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Daniel Yergin cites an estimate by IHS Cambridge Energy Associates which shows oil from shale and dense rock, which was about 1 million barrels a day in 2011, could reach 3 million barrels a day 2020. North Dakota where much of the production is taking place is now fourth in oil production in the U.S. after Texas, Alaska, and California, and is likely to move up to second place. U.S. imports of oil come primarily from Canada 25%, Mexico 11%, Venezuela 9%, and the Persian Gulf 16%. Canadian oil sands development has increased production and the completion of the Keystone pipeline will increase the share of oil imports from Canada. This is shifting the dynamic of oil away from the Persian Gulf, with the volatile politics in the region, and more towards North America.

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Fitch raised its ratings on Ford debt to triple B minus from double B plus. GM and Ford ran up losses since 2005 faced with labor costs that were not competitive, high health care costs for retired employees, and underutlization of factory capacity as American buyers turned away. The result was that credit ratings agencies cut their debt to junk status in 2005. In 2006 Ford faced with a financial crisis took out loans of $23.5 billion, putting up all of its assets as collateral including its logo. Ford survived bankruptcy with these loans. By the end of 2011 Ford had $13.1 billion in debt, down from $33.6 billion in 2009. For Ford to have the collateral released credit ratings agencies must now move Ford to investment grade as the next step in this story of disaster and renewal over seven years of an American icon- of toil, sweat and tears back to a rebirth in the eyes of American buyers.

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Michael Barnier was the candidate for Les Republicains. Macron's Movement Renaissance party is closest in thinking to the Les Republicains, the party of De Gaulle. He was appointed prime minister of France by Macron. Barnier had proposed a strong policy of turning off non European immigration for 4 years, and not allowing relations of immigrants within the country to come in. This immigration policy is becoming accepted in Europe among the socialist parties. In Denmark socialist prime minister Mette Fredriksen was elected with policies for the working class and unions but opposed to migration on grounds that it hurts the working class. France, Germany are shifting in this direction after overburdening of social services, and crime by migrants. The US is also shifting in this direction for both Democrats and Republicans with Biden policy to close the Mexican border. This ends a period of relative tolerance which set back goals of workers and their families for a decade or longer as anti migrant parties used the protest vote to oppose worker rights and shifted the economy into the hands of pharma, oil and tech companies, billionaires in the US, UK and Europe at the expense of workers, middle class, and students.  ...

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TransCanada says it will reapply for the permit to build the Keystone pipeline from Alberta oil sands region to the Gulf Coast refineries.

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U.S. revised GDP figures from the Commerce Department show growth of 5.1% for the 3rd quarter 2014, up from 4.6% in the 2nd quarter of 2014. The 1st quarter's contraction, and slower growth of about 2-3% expected in the 4th quarter 2014 means the full 2014 GDP growth is expected to be about 2.5%, according to U.S. Fed officials. For 2015 oil capital expenditures will decline, and housing continues to struggle. Exports from the U.S. may slow with a stronger dollar and weakness in Europe and China, creating some of the same uncertainties faced in 2014.

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As its economy slows and facing high debt levels, China benefits by an estimated $18 billion a month from lower oil prices in 2015. The estimate is from Starfort Holdings, investment and private equity group. The estimates as China benefits from lower prices of all commodities, including oil, are of about $250 billion annually as China replenishes its stocks of commodities. With $12 million barrels imported daily China is a major emerging market beneficiary, along with India, of the drop in oil prices. Continuing pressure on prices from the expected resilience in shale oil production in the U.S. with learning and the development of new production methods means the benefits are likely to continue. China has also not renegotiated price points in deals made earlier at higher prices with China and Venezuela, as it pursues its foreign interests. Stockpiling of grains and edible oils are being increased by 33% in 2015 by $24.7 billion.