Wednesday, Continued -- September 17, 2014; Blackouts And Brownouts; Saudi Cuts Production, Will Have To Cut More

Last night my wife and I were watching the 17th or 18th episode of "House of Cards," the episode in which there is a power outage during a night game when the protagonist, Kevin Spacey (as vice president) is to throw out the opening ball at a professional baseball game. So when Don sent me this link, it seemed more than coincidental. PJMedia is reporting:

The US energy industry has been warning for years that the Obama EPA’s caps on carbon emissions will lead to several bad outcomes for Americans, including skyrocketing energy prices and even brownouts and blackouts.

The EPA’s Janet McCabe was testifying in the House today on the agency’s plan to cap carbon emissions. And then the power went out.

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Two stories affecting the price of oil today:

Bloomberg is reporting that at least one oil field in Libya was shut down due to ... gunfire.

And Saudi is in trouble. Bloomberg is also reporting:

Saudi Arabia will need to keep cutting oil output to sustain prices above $100 a barrel, even after the kingdom’s largest reduction in two years.

The world’s biggest crude exporter told OPEC last week it pumped 408,000 barrels a day less last month, about as much as Australia produces. Output rose in Iran, Iraq and Nigeria, adding to supply that drove benchmark Brent crude futures below $100 this month for the first time since June 2013. Saudi Arabia probably will have to cut a similar amount again to stabilize prices, the banks said.

Global oil demand growth this year will be the weakest since 2011, just as the U.S. shale boom means oil production from countries outside OPEC rises by the most since the 1980s. The glut is prompting most of OPEC’s Middle Eastern members, including Saudi Arabia, to cut prices to customers.

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Federal Reserve vows to hold rates "low" for a "considerable time." The market is up about 40 50 80 points. [On my bike ride at dawn this morning, I said to myself: "if the Fed were to actually admit they planned to hold interest rates very low until at least 2016, that would be worth at least 200 points on the Dow."] [Later: the market finished up only 25 points but that was more than enough for the Dow to set another all-time record. Intra-day high of 17,221 also set all time record.]

Halliburton and Schlumberger are distancing themselves from Russian oil and gas companies. Earnings could suffer.

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Remember that announcement by MDU that earnings will suffer because of difficulties in the Paradox? Don wrote me; from MDU's analysts' day:

SALT problems in Paradox. $12-14 million well cost in Powder River Basin ( down from $ 20 MM ) a yr ago. 

Watching/waiting for transcript.

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This link sent to me some time ago; getting caught up with e-mail. Bloomberg is reporting Germany's economy is hurting due to sanctions:

MWL is one of many businesses in Germany’s Mittelstand, the thousands of small- and medium-sized companies that form the backbone of Europe’s largest economy, that are already getting pinched as Russian customers put off purchases. With the crisis now intensifying through deeper European Union and U.S. sanctions and retaliatory measures from Russia banning EU and U.S. food imports, they’re preparing for an even bigger hit. 

It will be interesting to see which tail is wagging which dog on this Ukrainian issue. Who blinks first?