China has knocked the U.S. out of the top spot –a position it held for more than a century– as the world’s biggest energy consumer, according to new data from the International Energy Agency.

China consumed 2,252 million tons of ‘oil equivalent’ last year, which is about 4 percent more than the 2,170 million tons the U.S. consumed. Oil equivalent is the term used by the IEA to bring all forms of energy into a comparable form, including crude oil, coal, natural gas, nuclear, hydropower, wind and solar power.

Projections were for China not to overtake the U.S. for another 5 years, but the takeover occured faster than expected with the effects of the global recesssion causing the U.S. economy to decline at a time that the Chinese economy was continuing to expand at a double-digit pace. Energy consumption in the U.S. flatlined while China continued to consume more.

Energy consumption in the U.S. was double that of China’s just a decade ago.

The U.S. still remains the world’s largest energy consumer per capita, with the average American using 5 times more energy than the average Chinese citizen.

“The fact that China overtook the U.S. as the world’s largest energy consumer symbolizes the start of a new age in the history of energy,” IEA chief economist Fatih Birol was quoted as saying by the Wall Street Journal.

China relies on coal for much of its electricity generation, which accounts for why China already passed the U.S. as the world’s largest polluter several years ago.

The U.S. still remains comfortably in the lead in terms of crude oil consumption, with a consumption rate of 19 million barrels of oil per day. China currently consumes only nine million barrels of oil per day, although their consumption rate continues to climb.

Over the next 15 years, China’s electricity demand is expected to increase by 1,000 GW – equivalent to the total U.S. electricity output today.

Wind turbines may spin on American soil but many of them carry the "Made in China" label.

Washington D.C. – The war between members of the U.S. Senate and wind energy investors rages on as lawmakers try to suspend government appropriations earmarked for privately operated wind-energy projects. The complaint, raised by the Committee for Energy and Natural Resources, is that investors are funneling an overwhelming percentage of government funding toward Asian manufacturers, rather than using American companies.

With nearly $2 billion already spent on wind farm projects, several senators are leading the charge against stimulus funds that are suspected of being used for manufacturing wind mills in China that will eventually be used in the U.S. The purpose of the wind stimulus project, proposed by the Obama administration in early 2009, was to help expand the United States goal of producing wind generated energy, as well as create jobs across the country. Now, committee members are investigating the exact nature of the spending so far.

According to a report conducted by Investigative Reporting Workshop, 73 percent of the $1.9 billion in stimulus money that has distributed since Sept. 1, 2009 has been invested in foreign companies.

One particular project, a wind farm in west Texas slated to receive $450 million in government funds, has become the focal point of the debate. Sen. Charles Schumer (D-NY), has been outspoken in his skepticism of the project since its inception last year. Schumer claims that US Renewable Energy Group (US-REG), Texas-based Cielo Wind Power and Chinese Shenyang Power Group, all responsible for financing the venture, so far have not relied on U.S. manufacturing. Instead Schumer claims the investment will provide 3,000 jobs for Shenyang and 330 for Americans -300 of those U.S. jobs being temporary.

Senator Charles Schumer (D-NY) has hostile words for American companies using government grants to manufacture products abroad.

“It is a no-brainer that stimulus funds should only go to projects that create jobs in the United States rather than overseas,” Schumer’s office said in a statement. “These wind projects have a lot of merit, but the manufacturing should be happening here, not in China.”

In a statement released by US-REG, managing partner Cappy McGarr countered the charges by stating that his company intends to manufacture a minimum of 70 percent of the wind turbines for the $1.5 billion project domestically.  McGarr said that it is incorrect to assume that hundreds of additional jobs created aside from the direct construction and operation of the Texas plant would be outside the U.S.

The U.S. Energy Department released a statement saying that they do not support blocking stimulus payments and if projects that use foreign-manufactured turbines are cut off, even temporarily, the result could be immediate layoffs for American workers.

The current American Recovery and Reinvestment Act requires government run and financed stimulus projects to rely on American manufactured goods. Where the bill lacks coverage for protecting American jobs is in regards to privately operated projects, like the US-REG venture, that do not fall under the same guidelines.

Senate Committee members are pushing for new legislation that would require private project venturers to create jobs in the United States if they are taking advantage of federal grants. Under current law, the government has no jurisdiction to intercede by withholding grants even if the companies relying on government incentives perform all of the manufacturing abroad.

The U.S. retained its lead with the most wind power capacity, followed by Germany, China and Spain. (Courtesy GWEC)

The Global Wind Energy Council, a group largely responsible for tracking wind energy around the world, published these statistics earlier today. The results of their research indicate that wind energy increased 31% globally from 120.5 GW to almost 157.9 GW in 2009.

China’s focus on wind energy results from its stated dedication toward reducing CO2 emissions that are produced from more traditional fuel sources, while meeting the demands of its ever growing energy and economic needs.

China’s increase in its wind energy capabilities accounted for more than one third of the 39.1% increases around the world.

“The continued rapid growth of wind power despite the financial crisis and economic downturn is testament to the inherent attractiveness of the technology, which is clean, reliable and quick to install,” according to Steve Sawyer, secretary general of the GWEC.

The largest contingency of wind energy sits in the European Union which collectively produces 76.1 GW of wind power per year. Spain was at the forefront of Europe’s 2009 wind energy developers by increasing their production 2.45 GW which reflected 6.6% of the world’s growth.

China leads the list of the top 10 countries with newly installed wind power in 2009. (Courtesy GWEC)

The United States remains the largest individual producer of wind energy with about 35 GW, nearly a 10 GW increase from a year prior. The domestic increase in wind energy came as a surprise to financial analysts who predicted that the recession would force the U.S. to cut its existing wind plants. Rather than scaling back, the United States was the second largest developer of new wind energy last year.

Diane Bode, CEO of the American Wind Energy Association, attributed the surprising trend to the American Recovery and Reinvestment Act of 2009. Under the Act, $68 billion dollars was apportioned to various renewable energy sources. However, Bode cautioned, “U.S. wind turbine manufacturing is down compared to last year’s levels, and needs long-term policy certainty and market pull in order to grow.”

If the 2009 trends continue, China will be the largest developer of wind energy in a few years. Their present goal is to produce 150 GW annually by the year 2020. That is a greater quantity of wind power than the world collectively produced at the start of last year. While their target may sound highly ambitious, at their current rate of growth, China will reach its wind energy goal well before the end of the decade.

1. Volatility in the oil markets

My top choice for this year is the same as my top choice from last year. While not as dramatic as last year’s action when oil prices ran from $100 to $147 and then collapsed back to $30, oil prices still more than doubled from where they began 2009. That happened without the benefit of an economic recovery, so I continue to wonder how long it will take to come out of recession when oil prices are at recession-inducing levels. Further, coming out of recession will spur demand, which will keep upward pressure on oil prices. That’s why I say we may be in The Long Recession.

2. The year of natural gas

This could have easily been my top story, because there were so many natural gas-related stories this year. There were stories of shale gas in such abundance that it would make peak oil irrelevant, stories of shale gas skeptics, and stories of big companies making major investments into converting their fleets to natural gas.

Whether the abundance ultimately pans out, the appearance of abundance is certainly helping to keep a lid on natural gas prices. By failing to keep up with rising oil prices, an unprecedented oil price/natural gas price ratio developed. If you look at prices on the NYMEX in the years ahead, the markets are anticipating that this ratio will continue to be high. And as I write this, you can pick up a natural gas contract in 2019 for under $5/MMBtu.

3. U.S. demand for oil continues to decline

As crude oil prices skyrocketed in 2008, demand for crude oil and petroleum products fell from 20.7 million barrels per day in 2007 to 19.5 million bpd in 2008 (Source: EIA). Through September 2009, year-to-date demand is averaging 18.6 million bpd – the lowest level since 1997. Globally, demand was on a downward trend as well, but at a less dramatic pace partially due to demand growth in both China and India.

4. Shifting fortunes for refiners

The Jamnagar Refinery Complex in India became the biggest in the world, China brought several new refineries online, and several U.S. refiners shut down facilities. This is a trend that I expect to continue as refining moves closer to the source of the crude oil and to cheap labor. This does not bode well for a U.S. refining industry with a capacity to refine 17.7 million barrels per day when total North American production is only 10.5 million bpd (crude plus condensate).

5. China

China was everywhere in 2009. They were making deals to develop oil fields in Iraq, signing contracts with Hugo Chavez, and they got into a bidding war with ExxonMobil in Ghana. My own opinion is that China will be the single-biggest driver of oil prices over at least the next 5-10 years.

6. U.S. oil companies losing access to reserves

As China increases their global presence in the oil markets, one casualty has been U.S. access to reserves. Shut out of Iraq during the recent oil field auctions there, U.S. oil companies continue to lose ground against the major national oil companies. But no worries. Many of my friends e-mailed to tell me that the Bakken has enough crude to fuel the U.S. for the next 41 years…

7. EU slaps tariffs on U.S. biodiesel

With the aid of generous government subsidies, U.S. biodiesel producers had been able to put their product into the EU for cheaper than local producers could make it. The EU put the brakes on this practice by imposing five-year tariffs on U.S. biodiesel – a big blow to U.S. biodiesel producers.

8. Big Oil buys Big Ethanol

I find it amusing when people suggest that the ethanol industry is a threat to the oil industry. I don’t think those people appreciate the difference in the scale of the two industries.

As I have argued many times before, the oil industry could easily buy up all of the assets of ethanol producers if they thought the business outlook for ethanol was good. It would make sense that the first to take an interest would be the pure refiners, because they are the ones with the most to lose from ethanol mandates. They already have to buy their feedstock (oil), so if they make ethanol they just buy a different feedstock, corn, and they get to sell a mandated product.

In February, Valero became the first major refiner to buy up assets of an ethanol company; bankrupt ethanol producer Verasun. Following the Valero purchase, Sunoco picked up the assets of another bankrupt ethanol company. If ExxonMobil ever decides to get involved, they could buy out the entire industry.

9. The climate wars heat up

There were several big climate-related stories in the news this year, so I decided to lump them all into a single category. First was the EPA decision to declare CO2 a pollutant that endangers public health, opening the door for regulation of CO2 for the first time in the U.S.

Then came Climategate, which gave the skeptics even more reason to be skeptical. A number of people have suggested to me that this story will just fade away, but I don’t think so. This is one that the skeptics can rally around for years to come. The number of Americans who believe that humans are causing climate change was already on the decline, and the injection of Climategate into the issue will make it that much harder to get any meaningful legislation passed.

Closing out the year was the United Nations Climate Change Conference in Copenhagen. All I can say is that I expected a circus, and we got a circus. It just goes to show the difficulty of getting countries to agree on issues when the stakes are high and the issues complex. Just wait until they try to get together to figure out a plan for peak oil mitigation.

10. Exxon buys XTO for $41 billion

In a move that signaled ExxonMobil’s expectation that the future for shale gas is promising, XOM shelled out $41 billion for shale gas specialist XTO. The deal means XOM is picking up XTO’s proved reserves for around $3 per thousand cubic feet, which is less than half of what ConocoPhillips paid for the reserves of Burlington Resources in 2005.

Honorable Mention

There were a number of stories that I considered putting in my Top 10, and some of these stories will likely end up on other Top 10 lists. A few of the stories that almost made the final cut:

The IEA puts a date on peak oil production

The statement they made was that barring any major new discoveries “the output of conventional oil will peak in 2020 if oil demand grows on a business-as-usual basis.”

AltaRock Energy Shuts Down

Turns out that deep geothermal, which the Obama administration had hoped “could be quickly tapped as a clean and almost limitless energy source” – triggers earthquakes. Who knew? I thought these were interesting comments from the story: “Some of these startup companies got out in front and convinced some venture capitalists that they were very close to commercial deployment” and “What we’ve discovered is that it’s harder to make those improvements than some people believed.” I am still waiting to see a bonafide success story from some of these VCs.

The biggest energy bill in history was passed

In total, $80 billion in the stimulus bill earmarked for energy was a big story, but I don’t know how much of that money was actually utilized.

The Pickens Plan derails

The website is still there, but the hype of 2008 turned into a big disappointment in 2009 after oil prices failed to remain high enough to make the project economical. Pickens lost about 2/3rds of his net worth as oil prices unwound, he took a beating in the press, and he announced in July that we would probably abandon the plan.

So what did I miss? And what are early predictions for 2010’s top stories? I think China’s moves are going to continue to make waves, there will be more delays (and excuses) from those attempting to produce fuel from algae and cellulose, and there will be little relief from oil prices.

Oil on the Brain by Lisa Margonelli was recommended by Paul Sankey at the 2009 Energy Information Administration Conference as a book that provided great insight into the oil industry. I have had it on my list of books to read, and recently picked it up to read during my travels. I have been traveling a lot lately, and I like to read while I travel, so I knocked it out over the past couple of trips I have taken.

The premise of the book is that a person who doesn’t know much about the oil industry sets out to find out what it is really like on the inside. It reminded me in some ways of Crude World by Peter Maass (which I reviewed here). The biggest difference is that Margonelli was approaching the subject from a pretty basic starting point, and Maass had written quite a bit about the industry when he tackled Crude World.

I guess I never cease to be amazed by what people think the oil industry is like, and what it is really like. People seem to think that the oil industry is a bunch of guys in a smoke-filled room who conspire to set prices. To be honest, that’s probably the way I viewed the industry when I was growing up. And still, my first reaction to my cable bill going up is “Those greedy cable companies are ripping me off.” The big difference with the cable companies, though, is that their profits aren’t thrust in everyone’s faces at the end of every quarter. Every time oil prices do spike up and oil companies show nice profits, people do feel like they have been taken advantage of. But I digress a bit.

For this book, Margonelli embedded herself within various sectors of the oil industry. She spent time throughout the supply chain, hanging out at a gas station in California where she found that the owners made more money on candy and soda than they did on gasoline. She spent a day with a tanker truck driver and his dispatcher, and spent time in a refinery and on an oil rig. She even got inside the Strategic Petroleum Reserve, which is typically off limits to visitors. She traveled abroad to Chad, Venezuela, Nigeria, and even Iran to understand the world of oil and what is has meant to these regions.

Here were what I thought were some of Margonelli’s more interesting observations. She spoke a lot about the indirect costs of using oil. In talking about oil spills, she mentioned that her view of an oil spill had always been dominated by the Exxon Valdez. She had never connected these spills to her own fuel usage, but learned that drivers and boaters spill more oil every year than did the Exxon Valdez. The number she cited was 19 million gallons of oil products spilled each year in our waterways by boaters and auto drivers.

She wrote about the notion that oil companies are in a conspiracy to set prices. A jobber she spoke with – someone who has to buy fuel from the oil companies – said “There are eleven studies which show there isn’t a conspiracy. Chevron, Shell, Exxon – they hate each other. It’s like war daily. For them to collude is insanity, but people believe what they want to believe.”

On that topic, she noted an episode of hypocrisy displayed by Nancy Pelosi. One day in 2006 Pelosi told a group of school children that we hadn’t done enough to reduce our dependence on gasoline, and so demand was high and that’s why the price was high. Then she got in front of the cameras and she cited the conspiracy of big oil and the Republicans working for their interests. But as Margonelli noted, “the myth of conspiracy overwhelms reason, particularly when pump prices and oil company profits are high.” I think the lesson there is “If the talking point is working, keep pushing it.”

She met an old-time wildcatter named Michel Halbouty (now deceased) who complained that the country has not had a coherent energy policy in 30 years. He advocated more promotion of domestic energy exploration, and fears a slow slide into deindustrialization. He noted that the main problem is that “People. Don’t. Care.” As long as they can pull in and fill up, they just don’t care about energy policy.

In China, she met with someone within the government who was involved with energy policy. He noted that it would be a disaster for China to move toward an American way of life, but he says that cars are clearly there to stay in China. On GDP, Margonelli wrote that China requires 4 or 5 times as much energy as Japan per point of GDP. Finally, the minister commented that China needs “a bigger space to survive under U.S. hegemony.” On that point, she also spoke with a European analyst who said that U.S. hegemony is a part of China’s strategy; that if they can get the U.S. to bear the expense of maintaining the energy status quo, they will have the time and resources to retool their economy.

In the epilogue, Margonelli comments that there is no such thing as cheap gas; that there are hidden costs throughout the supply chain. But the population has come to expect cheap gas as a “grand bargain” with the government and the oil companies. When the price goes high, they look to the government to punish the oil companies so prices will come back down.

One weakness in the book is that it really didn’t address the question of depletion. It seemed to take at face value that oil will continue to be available and business will continue as normal for decades. However, I note that Margonelli was at the ASPO Conference this year (along with Peter Maas; I am sorry I missed that) so she got a heavy dose of peak oil information. Some very interesting comments by her can be found at this story covering the conference.

As one might expect, Margonelli emerged from her experience with a radically different view of how the oil industry works. I have to agree with Paul Sankey’s assessment that it does provide great insight into the industry, from a very basic starting point and with a balanced view. As one reviewer pointed out, it could have been titled “The Petro-economy for Dummies”, which is to say it is a book that is easily understood by those with zero knowledge of the industry. This book would be on my short list of books to recommend to people who want to know what the industry is really like.

Chinese oil consumption is expected to grow by 20% in the next 6 years, and the country already imports more than half of what they currently consume.

The firms are taking a couple of steps toward getting a solid foothold in the market, such as extending loans to foreign companies. Rosneft, a Russian company, has made a deal with China to accept a $10 million loan in exchange for a percentage of the company’s output. Also, Petrobras (Brazil) has worked out a similar deal with China. Currently Petrobras is creating a new major oil field just off the coast.

In addition to extending loans to foreign oil companies, China has also expressed an interest in purchasing either part of Argentina’s YPF or the whole company for $14.5 billion, although the deal is far from set in stone. There is also speculation afoot that China may be looking to purchase a majority of the Rumaila oilfield in Iraq, a field that produces over 1 million barrels of oil each day, from BP.

There are several different reasons that China has been making moves to gain more control in the oil production business. First, China has managed to accumulate a large amount of cash. There is speculation that the unbridled spending from the United States government will have a serious negative pact on the value of the cash, so China is attempting to purchase these stakes in order to diversify their portfolios quickly without causing further destabilization of the US dollar.

Another reason that China has been making purchases is that they do not have much faith in free market economies, spurred by their failed attempt to purchase Unocal.

Currently, China imports over half of the oil used in their country, and they project oil consumption to grow by almost 20% in the next six years.

As for being a rival to western companies, China National Petroleum Corporation already has a production rate that is nearly equal to that of Exxon. With a growing stake in worldwide production, China is poised to be a serious contender in the global market.

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China Tightens Grip on Africa’s Energy Resources with Stake in Offshore Field

By Jason Simpkins Managing EditorMoney Morning

CNOOC Ltd. (NYSE ADR: CEO) and Sinopec Corp. (NYSE ADR: SHI) have agreed to buy a 20% stake in an oil field off the shore of Angola for $1.3 billion, illustrating China’s persistent attempts to acquire resources for its economic expansion at a time of weakness for many Western oil majors.

CNOOC and Sinopec will form a 50-50 joint venture to buy the stake in the so-called Angola Block 32, which has 12 previously announced discoveries. The Chinese energy giants purchased the stake from U.S.-based Marathon Oil Corp. (NYSE: MRO), but the sale is still subject to government and regulatory approval.

Marathon’s existing partners in the block – France’s Total SA (NYSE ADR: TOT), Portugal’s Galp Energia SGPS SA, Exxon Mobil Corp. (NYSE: XOM), and Sonangal, Angola’s state-owned oil company – have a right of first refusal. Marathon will keep a 10% interest in the block.

The oil field “is a significant resource base with estimated recoverable light crude oil reserves of 1.5 billion barrels,” Goldman Sachs Group Inc. (NYSE: GS) analysts wrote in a report, according to MarketWatch. “The $1.3 billion consideration compares with our valuation of $1.4 billion to $1.65 billion and Marathon’s publicly disclosed offer of $1.8 billion to $2 billion.”

The acquisition will build on CNOOC’s “growing deepwater exposure” and values the recoverable reserves at $4.30 a barrel, the analysts said.

The acquisition will also build on two of Beijing’s broader objectives: Securing long-term energy resources and expanding its presence in underdeveloped, and riskier, countries in Africa and the Middle East.

Since last fall, China has been using the Western world’s financial crisis as an opportunity to stock up on commodities while prices are low.

Sinopec recently paid $7.22 billion to acquire the Addax Petroleum Corp., a Canada-based energy company with operations in West Africa and Iraq. Meanwhile, Sinopec’s rival, China National Petroleum Corp. (CNPC), made its own foray into Iraq, winning the first contract in more than 30 years to develop the Rumaila oil field.

China’s involvement in Africa has an even richer history. In 2006, Beijing hosted the China-Africa Cooperation Forum – an event attended by more than 40 African heads of state. At the forum, China unveiled $9 billion in preferential loans, export credits, and trade incentives – all part of a strategic plan to achieve a preferential status with key African nations.The meeting was more than a mere publicity stunt to play up Beijing’s humanitarian efforts. It was a symbolic acknowledgment of growing cooperation between the regions.China has invested tens of billions of dollars directly into African-infrastructure and social-development projects, all in an effort to tighten its grip on the continent’s resources. Some examples:

And Money Morning Investment Director Keith Fitz-Gerald says this is only the beginning.
“It’s a virtual certainty that China will maintain this policy going forward,” Fitz-Gerald said. “My contacts in China and Africa have told me point blank that China’s leaders ‘don’t care about human rights or nukes or hostile governments.’ What matters is anyone who provides oil to China no matter what the rest of the world thinks.”

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The challenge for green energy: how to store excess electricity

So with grid parity now looming, finding ways to store millions of watts of excess electricity for times when the wind doesn’t blow and the sun doesn’t shine is the new Holy Grail. And there are signs that this goal — the day when large-scale energy storage becomes practical and cost-effective — might be within reach, as well. Some technologies that can store sizeable amounts of intermittent power are already deployed. Others, including at least a few with great promise, lie somewhere over the technological horizon.

I have used the “Holy Grail” term several times to describe cost effective storage of electricity. I have also given “energy storage” as an answer when people ask what we should be focusing more attention on. While this article is perhaps overly optimistic, it provides a good overview of what people are working on.

I also read a good article last night on renewable energy in India:

A Growing India Sets Goal to Harness Renewable Energy

Despite the deepening energy crisis, renewable energy, predominantly wind and biomass, make up 3 percent of India’s total electricity production. Solar energy is not even a fraction of that, though India receives abundant sunshine throughout the year.

But India hopes to move from near-zero to 20,000 megawatts of solar electricity by 2020, as part of the National Action Plan on Climate Change. Announced in June 2008, the plan is a structured response to combat global warming and part of a proposal India intends to pitch at a climate change summit in Copenhagen this December.

If there is one thing the world desperately needs, it is for India and China to embrace renewable energy as their economies grow. If they do not, I think their growth is going to encounter fierce economic resistance as their growing energy needs start to put serious pressure on oil prices.

Precarious Petroleum

It was good to finally put a face and voice with the name, even if he was delivering news that most of the U.S. won’t want to hear.

Thanks to a reader for sending the link.

In the course of doing a little research, I ran across a couple of interesting graphs that I want to share. The first comes courtesy of a post by Khebab at Graphoilogy: How Probable is a US Recession if the Oil Supply is Shrinking?

Figure 1. Variations of the per capita GDP per capita and consumed oil barrels.

Note that this data was through 2005, and the trend over the past couple of years has already changed direction. But it shows the difficulty in growing the economy if the oil supply isn’t growing. This is the reason that I recently posed the question of whether peak oil – or even a supply plateau – would cause the U.S. economy to stop growing. I think the trends in the credit and stock markets will continue – at least for a while – if supplies can’t get ahead of demand and oil prices remain extremely high.

The next figure is courtesy of the Wall Street Journal:

Figure 2. The global per capita picture.

This figure shows that per capita consumption growth in the U.S. has slowed to a halt. And while this slowdown has mostly been accompanied by an expanding stock market, I think $100+ oil provides so much headwind that the stock market is going to flounder for a while. I think the U.S. economy is in a slow squeeze (I think Stuart Staniford first coined this phrase) brought on by higher oil prices, which are directly related to stagnant production. As long as oil prices continue to remain at these lofty levels, I don’t see light at the end of the tunnel yet.

On the other hand, based on Figure 1, the global per capita picture may be a good indicator that the markets will continue to fare well in places where global per capita consumption is increasing – especially in net exporting countries like Saudi Arabia and Russia. It may be time for me to start looking at some Russian mutual funds. China has certainly been growing quickly, but high oil prices have the potential to do a lot more damage to the Chinese economy than to the Russian economy – which will likely benefit as long as they remain an exporting country. Brazil would also be an interesting case, as their recent oil discoveries promise to turn them back into an exporting nation.

Of course certain sectors that aren’t especially sensitive to energy prices may fare well. There are lots of companies within the energy sector itself that should provide protection against high oil prices – since they benefit from high oil prices.