Tuesday, April 11, 2006
Oil price fall predicted
Globe and Mail Update
Ben Dell, an energy analyst at Sanford C. Bernstein & Co., is a long-term oil bull but his short-term outlook is decidedly bearish, warning investors that the price of crude could fall significantly in the next year and a half.
In a report Tuesday, Mr. Dell said a big reason underpinning his outlook is an expected rush of new oil production from the United States, Britain and Canada, areas considered by global industry players to be mature regions with little to offer the market in terms of fresh output.
But while the United States and Britain have reported nothing but production declines in recent years, new projects such as BP PLC's Thunder Horse in the Gulf of Mexico and Calgary-based Nexen Inc.'s Buzzard in the North Sea means significant output is coming later year, Mr. Dell said.
That additional production could help ease the supply crunch of recent years, especially as production capacity increases from countries such as Saudi Arabia, Angola and Russia also emerge.
"It is often assumed supply from mature areas cannot grow," Mr. Dell said in the report but he noted that frenzied levels of drilling are producing results and high prices have encouraged companies to chase smaller projects that would have otherwise been left to sit.
"The cushion of spare capacity should grow meaningfully through 2006 and 2007," he said, "reducing the risks associated with supply disruption and placing further downward pressure on crude prices."
The benchmark price of oil on the New York Mercantile Exchange has been steady around the $60 (U.S.) a barrel level in recent weeks but Mr. Dell said the price could average $45 a barrel in 2007, a steep 25-per-cent decline.
He said analysts will start cutting their profit estimates for energy companies, which he said has historically led to poor performances on the stock market. He advised general caution but didn't provide specific recommendations.
However, in the longer term, he said lower prices next year will eventually mean higher prices, as marginal projects are cut back. He prices oil at about $60 a barrel in 2010.
Dave Ebner
Ben Dell, an energy analyst at Sanford C. Bernstein & Co., is a long-term oil bull but his short-term outlook is decidedly bearish, warning investors that the price of crude could fall significantly in the next year and a half.
In a report Tuesday, Mr. Dell said a big reason underpinning his outlook is an expected rush of new oil production from the United States, Britain and Canada, areas considered by global industry players to be mature regions with little to offer the market in terms of fresh output.
But while the United States and Britain have reported nothing but production declines in recent years, new projects such as BP PLC's Thunder Horse in the Gulf of Mexico and Calgary-based Nexen Inc.'s Buzzard in the North Sea means significant output is coming later year, Mr. Dell said.
That additional production could help ease the supply crunch of recent years, especially as production capacity increases from countries such as Saudi Arabia, Angola and Russia also emerge.
"It is often assumed supply from mature areas cannot grow," Mr. Dell said in the report but he noted that frenzied levels of drilling are producing results and high prices have encouraged companies to chase smaller projects that would have otherwise been left to sit.
"The cushion of spare capacity should grow meaningfully through 2006 and 2007," he said, "reducing the risks associated with supply disruption and placing further downward pressure on crude prices."
The benchmark price of oil on the New York Mercantile Exchange has been steady around the $60 (U.S.) a barrel level in recent weeks but Mr. Dell said the price could average $45 a barrel in 2007, a steep 25-per-cent decline.
He said analysts will start cutting their profit estimates for energy companies, which he said has historically led to poor performances on the stock market. He advised general caution but didn't provide specific recommendations.
However, in the longer term, he said lower prices next year will eventually mean higher prices, as marginal projects are cut back. He prices oil at about $60 a barrel in 2010.
Dave Ebner
Tuesday, April 04, 2006
Why Johnny can't be bothered
chicagotribune.com
By Thomas Geoghegan, a Chicago attorney and author, and James Warren, a Tribune deputy managing editor
April 4, 2006
In Chicago for their annual gathering, the nation's newspaper publishers should sit down with some politicians and school principals. All three parties are impacted by the real Culture War. Not the one between left and right over gays, guns and abortion, but the one between the "we" who still read a daily paper and those who don't.
"My wife and I read three papers a day," says a law professor friend. "But my daughter who's in graduate school, not a one. And my son, 19, doesn't read a paper at all either."
Yes, newspaper reading has dropped around the world. But that's a half-truth at best. The share of Germans over the age of 14 who scan a daily paper is nearly 80 percent. The French and Scandinavians, among others, read much more than we do too.
So don't be so quick to blame the Internet, TV news, iPods, IMing or even unrelenting attacks on the evil "mainstream media." It's too facile. Other countries have most of that, as well as Britney Spears, nincompoop shock jocks and pro wrestling. But newspaper reading in those countries hasn't collapsed as far as it has here.
The crisis in America, where ironically we have the world's highest rate of bachelor's degrees, is that if people don't read papers, they generally won't vote. The crisis of the press here is a crisis of democracy too. The single best indicator of whether someone votes is whether he reads a paper, according to political scientist Martin P. Wattenberg in his book, "Where Have All the Voters Gone?" But the converse is also true. Whether one votes is a much better indicator than a college degree as to whether one is reading a daily paper.
The reaction between these two trends, a decline in voting and the decline in the reading of dailies, is what scientists call autocatalytic. One drives the other in a downward spiral. The under-30 young read far less, and vote far less--and according to their teachers, have fewer opinions. Not reading, not having political sentiments, they aren't especially capable of voting intelligently anyway.
What can we do now?
Let's start with public education. In the Northwest Ordnance of 1787, Thomas Jefferson slipped in a famous mandate of public schools for basically one reason: to turn kids into citizens able to govern themselves. But we take democracy for granted. The founders could not. No one had ever attempted such a huge experiment: to test whether the common people could manage the public business.
Critical to public education was telling children not that they merely could but that they had to vote: It was a moral obligation. And to exercise that obligation, they had to be literate enough to read a paper. If they didn't read a paper, they couldn't follow a legal argument and sit on a jury. Unless they read a paper, they couldn't cast a vote; it would be too dangerous to the country. Jefferson opined, "If I had to choose between newspapers without government and government without newspapers, I'd choose the latter."
But teaching students to read a paper is virtually the last thing anyone in America expects from a school, especially in this test-driven era of No Child Left Behind. The purpose of education is now largely vocational or economic, preparing students for job and career, while filling a dizzying array of state and local mandates, including AIDS awareness, obesity prevention, anti-bullying and fire-safety programs. The civics element is gone. And the industry's traditional link to schools, its Newspaper in Education program, evolved into more of a gambit to boost circulation than a means of thoughtful civics instruction.
History, civics and other "political" subjects need to play a big role not just for the college-bound but also the armies who will at most have high school diplomas. A year ago the Chicago Tribune ran an estimate that only 47 percent of high school graduates from public schools in Chicago went on to any college work at all, and most of those soon dropped out. They depart having been cheated out of the civic skills they need to vote and take part in the great policy debates over allocation of the country's income (Social Security, welfare reform, Medicare, etc.).
There are many ways to recast public education to save the press and the democracy. One approach is four years of civics and four years of American history. "Four years of civics" might include one old-fashioned civics course, a current-events course, a course on problems of American democracy, and a final course that involves in-service learning and volunteer work.
Another approach would be for the state school system to publish a "student paper" that is given every day to students. The paper would consist of articles taken from newspapers around the state. The plan here is to turn the reading of the paper into a daily habit.
If publishers want to save themselves from long-term demise, they must consider reinvention of their papers' content and dramatic hikes in traditionally anemic marketing and promotion efforts. But they should also push for a new public education quite different from that envisioned by No Child Left Behind.
Worry a bit less about the Wall Street analysts and a bit more about the principals and the taxpayers on the local school boards. Sit down with them, but with a bit of care since school leaders rightfully feel put upon by too many mandates. And think about paying something for civics courses, which may turn out your future readers. It's the democratic thing to do--and maybe the industry's best hope to stay alive, even flourish.
Copyright © 2006, Chicago Tribune
By Thomas Geoghegan, a Chicago attorney and author, and James Warren, a Tribune deputy managing editor
April 4, 2006
In Chicago for their annual gathering, the nation's newspaper publishers should sit down with some politicians and school principals. All three parties are impacted by the real Culture War. Not the one between left and right over gays, guns and abortion, but the one between the "we" who still read a daily paper and those who don't.
"My wife and I read three papers a day," says a law professor friend. "But my daughter who's in graduate school, not a one. And my son, 19, doesn't read a paper at all either."
Yes, newspaper reading has dropped around the world. But that's a half-truth at best. The share of Germans over the age of 14 who scan a daily paper is nearly 80 percent. The French and Scandinavians, among others, read much more than we do too.
So don't be so quick to blame the Internet, TV news, iPods, IMing or even unrelenting attacks on the evil "mainstream media." It's too facile. Other countries have most of that, as well as Britney Spears, nincompoop shock jocks and pro wrestling. But newspaper reading in those countries hasn't collapsed as far as it has here.
The crisis in America, where ironically we have the world's highest rate of bachelor's degrees, is that if people don't read papers, they generally won't vote. The crisis of the press here is a crisis of democracy too. The single best indicator of whether someone votes is whether he reads a paper, according to political scientist Martin P. Wattenberg in his book, "Where Have All the Voters Gone?" But the converse is also true. Whether one votes is a much better indicator than a college degree as to whether one is reading a daily paper.
The reaction between these two trends, a decline in voting and the decline in the reading of dailies, is what scientists call autocatalytic. One drives the other in a downward spiral. The under-30 young read far less, and vote far less--and according to their teachers, have fewer opinions. Not reading, not having political sentiments, they aren't especially capable of voting intelligently anyway.
What can we do now?
Let's start with public education. In the Northwest Ordnance of 1787, Thomas Jefferson slipped in a famous mandate of public schools for basically one reason: to turn kids into citizens able to govern themselves. But we take democracy for granted. The founders could not. No one had ever attempted such a huge experiment: to test whether the common people could manage the public business.
Critical to public education was telling children not that they merely could but that they had to vote: It was a moral obligation. And to exercise that obligation, they had to be literate enough to read a paper. If they didn't read a paper, they couldn't follow a legal argument and sit on a jury. Unless they read a paper, they couldn't cast a vote; it would be too dangerous to the country. Jefferson opined, "If I had to choose between newspapers without government and government without newspapers, I'd choose the latter."
But teaching students to read a paper is virtually the last thing anyone in America expects from a school, especially in this test-driven era of No Child Left Behind. The purpose of education is now largely vocational or economic, preparing students for job and career, while filling a dizzying array of state and local mandates, including AIDS awareness, obesity prevention, anti-bullying and fire-safety programs. The civics element is gone. And the industry's traditional link to schools, its Newspaper in Education program, evolved into more of a gambit to boost circulation than a means of thoughtful civics instruction.
History, civics and other "political" subjects need to play a big role not just for the college-bound but also the armies who will at most have high school diplomas. A year ago the Chicago Tribune ran an estimate that only 47 percent of high school graduates from public schools in Chicago went on to any college work at all, and most of those soon dropped out. They depart having been cheated out of the civic skills they need to vote and take part in the great policy debates over allocation of the country's income (Social Security, welfare reform, Medicare, etc.).
There are many ways to recast public education to save the press and the democracy. One approach is four years of civics and four years of American history. "Four years of civics" might include one old-fashioned civics course, a current-events course, a course on problems of American democracy, and a final course that involves in-service learning and volunteer work.
Another approach would be for the state school system to publish a "student paper" that is given every day to students. The paper would consist of articles taken from newspapers around the state. The plan here is to turn the reading of the paper into a daily habit.
If publishers want to save themselves from long-term demise, they must consider reinvention of their papers' content and dramatic hikes in traditionally anemic marketing and promotion efforts. But they should also push for a new public education quite different from that envisioned by No Child Left Behind.
Worry a bit less about the Wall Street analysts and a bit more about the principals and the taxpayers on the local school boards. Sit down with them, but with a bit of care since school leaders rightfully feel put upon by too many mandates. And think about paying something for civics courses, which may turn out your future readers. It's the democratic thing to do--and maybe the industry's best hope to stay alive, even flourish.
Copyright © 2006, Chicago Tribune
