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Oil-Led Slump Spurring Fastest Investor Exit From Commodities Since 2008

Posted on 19 December 2014 by VRS  |  Email |Print

Investors are exiting commodities at the fastest pace in six years, betting a slump in prices isn’t over as corn, oil and gold drop close to their cost of production. Open interest in raw-material futures and options is down 6.5 percent since June, heading for the biggest second-half slump since 2008, exchange data show.
U.S. exchange-traded products tracking metals, energy and agriculture saw net withdrawals of $169.4 million in 2014, marking the first two-year slump since the funds were created a decade ago………………………………………..Full Article: Source

Oil prices not going up soon: IEA director

Posted on 19 December 2014 by VRS  |  Email |Print

The International Energy Agency does not see oil prices bouncing back to a higher level very soon, the organization’s executive director said. The IEA cut its forecast for oil demand in 2015 to 93.3 million barrels per day last week, shaving 230,000 bpd of growth from an earlier projection.
The organization sees demand growth slowing next year in the former Soviet Union area, China and a number of oil-producing nations, said the IEA’s Maria van der Hoeven. At the same time, the organization believes the market is “well supplied,” she said………………………………………..Full Article: Source

Oil price fall is temporary, says Saudi minister

Posted on 19 December 2014 by VRS  |  Email |Print

Recent falls in the price of oil are likely to be temporary, says the oil minister for Saudi Arabia, Opec’s biggest producing nation. Ali al-Naimi said commodity price fluctuations were to be expected and said he was hopeful for the future.
He added it was “difficult, or even impossible, for Saudi Arabia or Opec to undertake any measure that would lead to a reduction in [their] share of the market and an increase in of others”. The price of oil has halved since June. On Thursday, the price of Brent crude was just below $63 a barrel, while US crude was near $58………………………………………..Full Article: Source

Naimi: OPEC needs more support for output cutdown

Posted on 19 December 2014 by VRS  |  Email |Print

Saudi Arabia’s powerful oil minister said on Thursday that OPEC could not cut output without the support of other big producers and attempts to get them on board had not worked.
Ali al-Naimi said it was impossible for OPEC to cut alone to reverse the oil price slump—which he called temporary—when others were pumping more, saying that could lead to losing market share and with no guarantee of supporting prices………………………………………..Full Article: Source

Opec: Iran blames falling oil price on ‘political plot’

Posted on 19 December 2014 by VRS  |  Email |Print

Brent oil up in London as Iran’s oil minister turns up the pressure on Opec to act on falling prices. Iran’s oil minister has said that a “political conspiracy” is to blame for the dramatic slump in the price of crude in remarks that could signal that the Islamic Republic will try to exert pressure on the Organisation of Petroleum Exporting Countries (Opec) to again consider cutting output.
Bijan Zanganeh told the country’s state petroleum news agency: “The prolongation of the downward trend of the oil price in world markets is a political conspiracy going to extremes.”……………………………………….Full Article: Source

Oil Price Forecast: 2015-2016

Posted on 19 December 2014 by VRS  |  Email |Print

The sharp drop in oil prices in the past few weeks confirms the oil price forecast that I published back in May 2013, when West Texas crude sold for $94.50: “Oil prices are headed down, and I mean down at least $20 a barrel. The key reason is that prices have been high. It’s not a paradox, but a result of the long time lags in oil production.”
Before going into the forecast, it’s worth mentioning that price can change faster than the fundamentals of supply and demand. In a recent 30-day period the price of oil fell by 20 percent. There was no change in the demand or supply over that month to justify such a large change. ……………………………………….Full Article: Source

U.S. Should Save Nuclear Industry From Fracking Peril: IEA

Posted on 19 December 2014 by VRS  |  Email |Print

The United States needs to develop clear policies to support its ailing nuclear industry—which is prone to seeing old reactors close rather than new reactors open largely because of the impact on energy prices of cheap natural gas from fracking, the International Energy Agency said.
“The domestic nuclear industry is therefore at a critical juncture as a consequence of its declining economic competitiveness, and existing market mechanisms do not favour investment in high capital-intensive nuclear technology,” according to the IEA’s comprehensive review of U.S. energy policy for 2014………………………………………..Full Article: Source

Oil price shockwave ripples across world markets

Posted on 18 December 2014 by VRS  |  Email |Print

The financial turmoil engulfing Russia is a symptom of a wider world markets earthquake that has its epicenter in oil’s collapse and Western disinflation but is now rippling far and wide across investors’ portfolios.
Not unlike other bouts of global financial contagion in the late 1990s and again in 2008-09, the growing interdependency of world finance means seismic activity in one area can often lead to a chain reaction of seemingly random events…………………………………….Full Article: Source

Oil price shockwave ripples across world markets

Posted on 18 December 2014 by VRS  |  Email |Print

The financial turmoil engulfing Russia is a symptom of a wider world markets earthquake that has its epicenter in oil’s collapse and Western disinflation but is now rippling far and wide across investors’ portfolios.
Not unlike other bouts of global financial contagion in the late 1990s and again in 2008-09, the growing interdependency of world finance means seismic activity in one area can often lead to a chain reaction of seemingly random events…………………………………….Full Article: Source

Winners And Losers From The Oil Price Plunge

Posted on 18 December 2014 by VRS  |  Email |Print

World oil prices have plunged over the last six months with a surge in production and weaker than expected global demand. For several years, global oil prices were fairly stable, sitting at around $110 a barrel. But since June prices have almost halved to around $60 a barrel.
This is good news for countries which import oil, with motorists having to pay less to fill up their cars, but not for exporters, which have seen a significant drop in income…………………………………….Full Article: Source

Why Opec is increasingly irrelevant

Posted on 18 December 2014 by VRS  |  Email |Print

Ali al-Naimi, Saudi Arabia’s oil minister, expects the oil market ‘to stabilise itself eventually’. When the Saudis, the leaders of Opec, decided at the cartel’s recent meeting in Vienna to maintain their oil production levels, it sent a strong message to the world: the market, not Opec, should decide oil prices. As a result, oil prices dropped, falling below $60 per barrel this week.
This is a big change for the world’s largest oil exporter, which has in the past attempted to manage the global oil markets by altering production levels. The Kingdom essentially decided to pursue a policy that not only preserves its market share in the long term but also heralds the coming end of Opec as a united organisation that still has a collective say in export decisions…………………………………….Full Article: Source

Opec’s 2015 oil revenues to slump to $446bn - EIA

Posted on 18 December 2014 by VRS  |  Email |Print

The amount Opec countries, excluding Iran, earn from net oil revenues next year is set to tumble to levels not seen for a decade as the dramatic slide in prices shows no signs of relenting.
Forecasts from the US Energy Information Administration - the wealthy nations’ energy watchdog - suggests revenue from oil exports next year will dip to $446bn - down 46 per cent on 2013’s income - as Brent crude is projected to average just $68 a barrel in 2015, compared to $109 a barrel last year…………………………………….Full Article: Source

Saudi Arabia Has its Reason for an Oil Price Drop, Others Need a Plan

Posted on 18 December 2014 by VRS  |  Email |Print

Not all producers will be hurt by a few years of lower prices. Let’s not forget that OPEC’s leading member, Saudi Arabia, has long believed that if oil prices are too high they undermine long-term demand for the country’s main export.
When prices hovered around $100/barrel, oil importing countries in the global north and the faster growing south, poured money into energy diversification and technologies to reduce emissions…………………………………….Full Article: Source

Oil Trades Near 5-Year Low as Russia Echoes OPEC Output Policy

Posted on 18 December 2014 by VRS  |  Email |Print

Oil traded near a five-year low in New York as Russia reiterated that it will keep crude production steady next year, echoing OPEC’s strategy of refraining from curbing supply to tackle a global surplus. Futures fell as much as 3.1 percent after sliding below $54 a barrel yesterday for the first time since May 2009.
Output from Russia, the world’s largest crude producer, will be similar to this year’s 10.6 million barrels a day, according to Energy Minister Alexander Novak. Iran is offering shipments to Asia at the deepest discount in at least 14 years, according to four people with knowledge of the decision. Iraq may revisit its oil-production plans, the country’s Deputy Prime Minister said today in London…………………………………….Full Article: Source

Brent oil price falls below $60 a barrel

Posted on 17 December 2014 by VRS  |  Email |Print

Oil’s fall below $60 a barrel to five and a half year lows gathered pace on Tuesday after data showed Chinese factory activity had weakened. ICE January Brent — the international oil benchmark — dropped $1.45 to $59.61 a barrel in afternoon trading, after falling as low as $58.50 a barrel. This is almost half the level it reached in mid-June.
China’s manufacturing sector shrank for the first time in seven months in December, according to figures released on Tuesday, adding to a series of data releases pointing to slowing economic growth in the world’s largest oil importer……………………………………..Full Article: Source

Ticking time bombs: Where oil’s fall is dangerous

Posted on 17 December 2014 by VRS  |  Email |Print

Lower oil prices are good for some countries, and bad for others. But there are a handful of oil-dependent economies where things could get especially ugly. Crude prices were lower Tuesday after OPEC repeated its refusal on Monday to cut oil output despite fears of a looming glut and a UAE official rebuffed calls for an emergency meeting to fix prices.
The recent stance marks an about-face from the cartel’s decades-old policy of tightening supplies in order to support prices. Since peaking at just over $100 a barrel this summer, prices have fallen by more than 40 percent, including a slide last week that wiped out about $8, or more than 10 percent……………………………………..Full Article: Source

Oil’s Price Decline Weighs On High Yield Debt

Posted on 17 December 2014 by VRS  |  Email |Print

The price of oil has been falling since June but the pace of oil’s price decline has accelerated since about mid-November. You may have noticed cheaper gasoline prices at your local gas station as a result. From this standpoint the falling price of oil is a good thing.
On the other hand the falling price of oil has been putting downward market pressure on high yield bonds. But what does the falling price of oil have to do with high yield bonds? It turns out–a great deal. High yield bond portfolios contain many debt issues of U.S. energy companies……………………………………..Full Article: Source

OPEC signals ‘wait and see’ approach could last a year

Posted on 17 December 2014 by VRS  |  Email |Print

Core Gulf OPEC oil producers signaled this week they are prepared to wait as long as six months to a year to see the market stabilize, quashing hopes for any quick intervention to stop the price rout that took crude to under $60 per barrel.
Some OPEC watchers had identified $60 as a potential red line at which the group, which produces a third of global oil, was expected to send a signal to the market that the decline had been too fast and too steep……………………………………..Full Article: Source

OPEC will not step in to support oil prices: Kuwait

Posted on 17 December 2014 by VRS  |  Email |Print

OPEC has no plans to intervene in the oil market to shore up sagging crude prices, the Kuwaiti oil minister said Tuesday, as Brent crude breached the $60 mark. “At OPEC’s meeting in November, we took two decisions,” Ali al-Omair said at a lecture in Kuwait City.
“The first was to keep the production ceiling unchanged and the second to hold the next meeting in June. So far, nothing has changed and there are no calls for holding an emergency meeting,” Omair said. He declined to answer a question on what price would force the Organisation of Petroleum Exporting Countries to step in to bolster the market……………………………………..Full Article: Source

Oil price: Opec ‘will let oil price fall below $40′

Posted on 16 December 2014 by VRS  |  Email |Print

The most powerful nations in Opec are willing to push prices as low as $40 a barrel in their bid to take on Russia and US shale, according to a high-profile Gulf oil minister.
Suhail al-Mazrouei, energy minister of the United Arab Emirates, said that the organisation will let prices fall by more than $20 per barrel before they consider an emergency meeting to cut production. “We are not going to change our minds because the prices went to $60, or to $40,” he said………………………………………Full Article: Source

Opec boss: Oil price drop will not prompt supply cut

Posted on 16 December 2014 by VRS  |  Email |Print

The head of Opec has reiterated that it will not try to shore up plunging oil prices by reducing production. “The decision has been made. Things will be left as is,” said Abdallah Salem el-Badri, secretary general of the oil producers’ cartel, speaking in Dubai. On Friday Brent crude dropped below $62 a barrel, its lowest price since 2009.
“The fundamentals should not lead to this dramatic reduction [in price],” Mr el-Badri added. Mr el-Badri said Opec was “assessing the situation to determine what the real reasons behind the decrease in oil prices are”. The comments are Mr el-Badri’s first since Opec’s meeting in Vienna last month, where it decided to leave production levels unchanged………………………………………Full Article: Source

Brent Seen Falling to $50 in 2015 as OPEC Fails to Act

Posted on 16 December 2014 by VRS  |  Email |Print

Crude oil prices are poised to fall below half where they were six months ago, before producers begin dealing with a global glut. Brent, the global benchmark, will slide to as low as $50 a barrel in 2015, according to the median in a Bloomberg survey yesterday of 17 analysts, down from the $115.71 a barrel high for the year on June 19.
The grade has already collapsed 47 percent since then and needs to fall further before producers clear the current glut, said five out of six respondents who gave a reason………………………………………Full Article: Source

Falling oil price poses new threat to banks

Posted on 16 December 2014 by VRS  |  Email |Print

The world’s big banks would like to draw a line under their recent troubles. The losses from the financial crisis, the costs of regulatory change and the fines from mis-selling and market manipulation scandals appear largely in the past.
For once, another sector is suffering a series of blows. Within a matter of months, the falling oil price has wiped as much as 25 per cent off the market values of the oil majors. But might the bankers be smiling too soon? Could the oil market turmoil become the banks’ next nightmare?……………………………………..Full Article: Source

Predicting The Oil Price: Smart Vs Lucky

Posted on 16 December 2014 by VRS  |  Email |Print

Paul Krugman made the point recently that the only stock market forecasters who correctly predicted a market drop were those who always predicted falling markets. This is known as the ‘stopped watch’ approach to forecasting: constantly make one prediction and eventually the market will move in that direction.
Especially for oil prices, which are highly variable, this works wonders to the point where the great Adam Sieminski often joked that you should predict the price or the date, but not both………………………………………Full Article: Source

Natural Gas Tops Commodity Gains as Traders Brace for Cold Month

Posted on 16 December 2014 by VRS  |  Email |Print

Natural gas climbed the most in almost two weeks as traders braced for a colder end of the month than previously forecast. Futures rose as much as 3.7 percent, the most since Dec. 2, making the fuel the best performer among 22 raw materials in the Bloomberg Commodity Index. Colder-than-normal temperatures are expected for the upper Midwest by Dec. 26, for Texas by Dec. 27 and the east coast by Dec. 28, forecaster Commodity Weather Group LLC in Bethesda, Maryland, said in an e-mailed report.
“The market is reacting to new forecasts pointing to a colder end to December,” Moses Rahnama, an analyst at London-based consultants Energy Aspects Ltd., said by e-mail today. “We don’t know how cold it will get, but definitely colder than previously forecast. Models are also pointing to possibly a colder January.”……………………………………..Full Article: Source

OPEC’s Badri says oil price drop beyond market fundamentals

Posted on 15 December 2014 by VRS  |  Email |Print

The secretary-general of the Organization of the Petroleum Exporting Countries (OPEC) said on Sunday the price of oil had fallen further than market fundamentals would have dictated.
Speaking at an event in Dubai, Abdullah al-Badri added that the November meeting which ruled out a cut in production by members of the group was not aimed at anyone specific………………………………………..Full Article: Source

Opec willing to push oil price to $40 says Gulf oil minister

Posted on 15 December 2014 by VRS  |  Email |Print

Senior Opec ministers says cartel has no fear of oil prices falling to levels as low as $40 per barrel amid price war with Russia and US shale. Opec’s most influential producers are willing to allow oil prices to fall to $40 per barrel before discussing whether the cartel should hold an emergency meeting to discuss cutting output.
According to Suhail al-Mazrouei, energy minister of the United Arab Emirates and a high profile delegate of the cartel: “We are not going to change our minds because the prices went to $60, or to $40.”……………………………………….Full Article: Source

U.A.E. Sees OPEC Output Unchanged Even If Oil Price Drops to $40

Posted on 15 December 2014 by VRS  |  Email |Print

OPEC will stand by its decision not to cut output even if oil prices fall as low as $40 a barrel and will wait at least three months before considering an emergency meeting, the United Arab Emirates’ energy minister said.
OPEC won’t immediately change its Nov. 27 decision to keep the group’s collective output target unchanged at 30 million barrels a day, Suhail Al-Mazrouei said. Venezuela supports an OPEC meeting given the price slide, though the country hasn’t officially requested one, an official at Venezuela’s foreign ministry said Dec. 12. The group is due to meet again on June 5………………………………………..Full Article: Source

Market fundamentals don’t justify oil price freefall: OPEC

Posted on 15 December 2014 by VRS  |  Email |Print

The rise in oil supplies on global markets does not justify the sharp drop in crude prices, a top OPEC official said Sunday, arguing speculation might be a contributor. “We want to know the main reasons that have led to such a drop in oil prices,” said Abdalla Salem el-Badri, secretary general of the Organization of the Petroleum Exporting Countries.
“When we look at supply and demand, there is a rise (in supply) but only a modest one that should not have led to this 50-percent drop,” he told reporters at a conference in Dubai. “Speculation is strongly contributing to pushing prices down,” he added………………………………………..Full Article: Source

Is Fracking the Cause of Slumping Commodities?

Posted on 12 December 2014 by VRS  |  Email |Print

What is fracking? Fracking is the process of injecting liquid at high pressure into subterranean rocks, fissures, etc., in order to force them open and allow more oil and gas to flow out of the formation, allowing it to be extracted at greater volumes.
Are you aware that fracking stocks are down 40% in just over 5 months? If that doesn’t sound like a bubble about to burst, I don’t know what does………………………………………..Full Article: Source

US oil price below $60 a barrel

Posted on 12 December 2014 by VRS  |  Email |Print

US crude closed below $60 a barrel for the first time in five and-a-half years, sliding amid new concerns consumption will lag far behind surging output. Ian Taylor, chief executive of Vitol, the world’s largest independent oil trading house, said on Thursday that official estimates on consumption had been overshooting actual demand and suggested the cheapest oil since 2009 could linger.
“Over the last few months it’s become increasingly clear that demand predictions have been and continue to be consistently on the high side,” he told the Platts Global Energy Outlook Forum in New York………………………………………..Full Article: Source

$60 oil will be norm for next 5 years: Economist

Posted on 12 December 2014 by VRS  |  Email |Print

Oil prices will stay around $60 a barrel for the next five years as China’s economy cools down, economist Andy Xie told CNBC on Thursday. Oil prices had risen so high because of China’s boom, the former Morgan Stanley and IMF senior economist said in a “Squawk Box” interview.
China is now transitioning from a 15-year super cycle that built up a massive industrial machine, and the economy must cool down to digest overinvestment, which will drag down commodity prices, he said. “When China goes into normal situation, I think that the oil price will become normal, too, so $60 would be the normal price for the next five years or so,” he said………………………………………..Full Article: Source

Oil’s Drop Spills Into Other Assets

Posted on 12 December 2014 by VRS  |  Email |Print

The benchmark U.S. oil price tumbled below $60 a barrel for the first time in five years, intensifying the pain across financial markets and jolting the central banks of some oil-dependent economies into action.
The decline in oil weighed on U.S. stocks on Thursday. The Dow Jones Industrial Average was up as much as 225 points on strong U.S. economic data before paring gains amid a renewed descent in crude. The blue-chip index ended up 63.19 points, or 0.4%, to 17596.34………………………………………..Full Article: Source

Opec veteran says oil price a ‘disaster’ and cartel powerless

Posted on 12 December 2014 by VRS  |  Email |Print

Opec is now “powerless” on its own to prevent oil prices falling further because of a 2m barrels per day (bpd) surplus of supply in the market and the cartel should seek a deal with Russia, Norway and Mexico to arrest the decline, according to a senior Gulf official.
Speaking exclusively to the Telegraph, Abdullah bin Hamad al-Attiyah, a senior adviser to the Emir of Qatar and a former president of the Organisation of Petroleum Exporting countries (Opec) said: “Opec can’t solve this problem alone like before, now it’s a different story. Russia, Norway and Mexico all must sit down with Opec to discuss making cuts.”……………………………………….Full Article: Source

OPEC: RIP? Not So Fast

Posted on 12 December 2014 by VRS  |  Email |Print

Many observers have proclaimed the death of OPEC. This seems to be a premature judgment, and may reflect a misunderstanding of oligopolistic practices. The decision not to cut production is not a sign of the OPEC impotence as has been argued. If OPEC would have cut output, and lost market share as a consequence, would OPEC’s future really been brighter?
OPEC is an unusual oligopoly. Its market share is less than 50%. There are important political and economic differences between members. Discrepancies of size, oil reserves and population are significant. Nevertheless, it has survived for nearly 55 years………………………………………..Full Article: Source

Oil Wars: Why OPEC Will Win

Posted on 12 December 2014 by VRS  |  Email |Print

In the green corner we have the US shale producers. In the red corner we have the oil exporting countries of OPEC. Assuming the fight is fought to a conclusion, who wins? OPEC wins. The US shale producers will shut down first. The reasons are: The US shale producers are motivated by economics, and all other things being equal will have an incentive to cut production at or around the point where production cost exceeds sales price.
The OPEC countries are motivated by social imperatives. They have historically used their oil wealth to finance social programs, build infrastructure and subsidize basic foodstuffs and other items such as gasoline (which costs one cent/liter in Venezuela)………………………………………..Full Article: Source

Do oil and gold mix?

Posted on 12 December 2014 by VRS  |  Email |Print

Has gold finally bottomed out? And what does its prospects tell us about the outlook for oil? Three weeks ago, you may recall, I reached a bearish conclusion from my array of gold timing indicators that are based on the performance of the top-performing advisers.
Gold today is $33 higher than where it stood then, or 2.8%—largely on the basis of a big rally on Tuesday of this week, when bullion shot up by more than $40 an ounce. Have any of the top performers changed their minds because of recent action? As always in Hulbert On Markets, I turn to the top performers for answers………………………………………..Full Article: Source

Oil and Gold Warning Signs

Posted on 11 December 2014 by VRS  |  Email |Print

A big spike in gold prices and continued weakness in oil is sending warning signs about the health of the global economy. As China reported Tuesday its consumer price index rose only 1.4% last month — the slowest pace in five years — global deflation fears are mounting. In Greece, a snap election is causing turmoil in the Greek bond market as they try to negotiate their debt financing and independence away from its European bailout strictures.
OPEC is reporting the demand for its oil will be at the lowest level in 12 years. So if deflation is the fear, than the spike in gold yesterday is very troubling. Safe haven buying in US bonds and metals signal fears that the globe is on the verge of a downward deflationary spiral………………………………………..Full Article: Source

Oil hits new five-year low as OPEC trims 2015 demand forecast

Posted on 11 December 2014 by VRS  |  Email |Print

Brent crude oil fell more than a dollar to a new five-year low on Wednesday as producers forecast lower demand for their oil next year. In a monthly report, the Organization of the Petroleum Exporting Countries ( OPEC) forecast demand for the group’s oil will drop to 28.92 million barrels per day (bpd) in 2015, down 280,000 bpd from its previous expectation.
The price of the North Sea oil benchmark has fallen more than 40 percent since June as new supplies of high-quality crude from North America have fed a glut in many parts of the world. “There is a growing realisation that the first half of next year is going to look very weak,” said Gareth Lewis-Davies, strategist at BNP Paribas. “You start to price that in now.”……………………………………….Full Article: Source

Oil Price Hit by OPEC Numbers as Saudis Stand Firm on Output

Posted on 11 December 2014 by VRS  |  Email |Print

Crude took a fresh drubbing yesterday as OPEC reduced its estimate for 2015 demand, Kuwait offered new discounts to Asian customers and the Saudi oil minister questioned the need for an output cut.
“Why should I cut production?” Ali Al-Naimi, Saudi Arabia’s oil minister, said in response to reporters’ questions yesterday in Lima, where he’s attending United Nations climate talks. “This is a market and I’m selling in a market. Why should I cut?”……………………………………….Full Article: Source

Opec opens door to emergency meeting with oil downgrade

Posted on 11 December 2014 by VRS  |  Email |Print

Drop in global oil demand growth will raise bets that Opec will meet early next year to review output quotas amid ongoing slump in prices. Opec has slashed its oil demand growth forecast for next year in a move that could bring its members to the table in an emergency meeting to agree on cutting production in the first quarter of 2015.
The group, which is comprised of 12 oil producing states mainly from the Middle East, said Wednesday that it now expects the world will require 70,000 barrels per day (bpd) less oil next year than it had previously anticipated. The cartel now expects that total global oil demand could reach 92.26m bpd next year………………………………………..Full Article: Source

Oil Resumes Drop as Iran Sees $40 If There’s OPEC Discord

Posted on 11 December 2014 by VRS  |  Email |Print

Brent crude fell near to a five-year low as OPEC said it expects demand for its crude next year to be the lowest since 2003. West Texas Intermediate also sank. Futures slid as much as 2.2 percent in London. The Organization of Petroleum Exporting Countries lowered its estimate for demand for its crude in 2015 by about 300,000 barrels a day to 28.9 million.
Crude could fall as low as $40 a barrel amid a price war or if divisions emerge in OPEC, said an official at Iran’s oil ministry. The U.S. Energy Information Administration reduced its price forecasts for next year while also downgrading its production outlook for a second month………………………………………..Full Article: Source

Oil price falls below $65 for first time in 5 years

Posted on 11 December 2014 by VRS  |  Email |Print

The price of internationally traded oil fell below $65 for the first time in more than five years on Wednesday after Opec lowered forecasts of demand for its crude to their lowest level in a decade.
The report by Opec, the producers’ cartel, underlined the looming supply glut facing oil markets amid surging US shale output and weakening global demand, raising hopes of a boost for consumers but piling further pressure on to oil companies………………………………………..Full Article: Source

Oil price fall a ‘golden’ chance to shift to clean energy: IEA

Posted on 11 December 2014 by VRS  |  Email |Print

World leaders have a “golden opportunity” with plunging oil prices to put a price on carbon emissions since cheaper fuel makes the move less risky politically, the International Energy Agency (IEA) said on Tuesday.
Crude prices have dropped about 40 percent since June to their lowest levels since 2010 and the IEA is concerned that the fall could threaten a transition to renewable energy, Maria van der Hoeven, the IEA’s executive director, said on the sidelines of the Lima climate summit………………………………………..Full Article: Source

Market, not OPEC, will determine oil price: UAE official

Posted on 10 December 2014 by VRS  |  Email |Print

Market forces and the response of high-cost crude producers to the recent fall in prices will determine the cost of oil in the coming months, rather than OPEC, a United Arab Emirates (UAE) oil official said on Tuesday.
Prices have fallen more than 40 percent since June and Brent crude for January delivery hit $65.33 a barrel on Tuesday, its lowest since September 2009………………………………………..Full Article: Source

Bank of America sees $50 oil as Opec dies

Posted on 10 December 2014 by VRS  |  Email |Print

“Our biggest worry is the end of the liquidity cycle. The Fed is done. The reach for yield that we have seen since 2009 is going into reverse”, said Bank of America. The Opec oil cartel no longer exists in any meaningful sense and crude prices will slump to $50 a barrel over coming months as market forces shake out the weakest producers, Bank of America has warned.
Revolutionary changes sweeping the world’s energy industry will drive down the price of liquefied natural gas (LNG), creating a “multi-year” glut and a mucher cheaper source of gas for Europe………………………………………..Full Article: Source

Oil price hits a five-year low: What does this mean for markets?

Posted on 10 December 2014 by VRS  |  Email |Print

Equities could see a lift, but it’s bad news for oil exporters. Looking ahead to 2015, there’s plenty for markets to fret about. Rate hikes in the UK and US are a near certainty – after years of extraordinary monetary stimulus that propped up asset prices and kept sovereign bond yields low – as are continued worries over the fallout from an economic slowdown and possible “hard landing” in China.
The Bank for International Settlements, meanwhile, known as the central bankers’ bank, yesterday issued a warning over the “growing fragility” of global markets, especially as an increasingly strong dollar makes dollar-denominated loans in emerging markets more expensive to repay………………………………………..Full Article: Source

For Saudi Arabia, plunging oil prices are a political weapon

Posted on 10 December 2014 by VRS  |  Email |Print

As the price of oil plummets to a five-year low, Saudi Arabia – owner of the world’s largest proven crude reserves – is behaving with almost preternatural calm. So much so that Prince Alwaleed bin Talal Al Saud, the kingdom’s highest-profile investor, a few weeks ago professed himself astonished by official complacency in the face of this “catastrophe” – and that was when the price was still above $90 a barrel.
Now, there are doubtless technical reasons why the Saudis remain sanguine as the price dips well below $70, and the kingdom’s oil technocracy has been prodigal in providing them. This is no different, they say, from any other commodities cycle, in which the market sets prices………………………………………..Full Article: Source

Kuwait Sees Oil Stuck at $65 for Six Months Until OPEC Moves

Posted on 10 December 2014 by VRS  |  Email |Print

Oil prices will stay at about $65 a barrel for at least half a year until OPEC changes its collective production or world economic growth revives, said the head of state-run Kuwait Petroleum Corp.
Oil is trading in a bear market as the U.S. pumps at the fastest rate in more than three decades and demand expands more slowly. OPEC decided on Nov. 27 to maintain its output target, prompting a drop in European benchmark Brent crude to less than $70 a barrel for the first time since May 2010………………………………………..Full Article: Source

Oil price slump a “golden opportunity” to price carbon – IEA

Posted on 10 December 2014 by VRS  |  Email |Print

Oil prices have plummeted in recent months, from US$115 a barrel in June to less than US$70. That dramatic shift could increase greenhouse gas emissions in the short term, as consumers take advantage of cheap fuel. It also gives policymakers a “golden opportunity” to scrap fossil fuel subsidies and bring in carbon pricing, a leading energy expert argued on Tuesday.
Maria van der Hoeven, executive director of the International Energy Agency, said they could consider measures that “would have been unthinkable a year ago”. She was addressing media at the UN climate talks in Lima, where negotiators are considering a target of net zero emissions by 2050………………………………………..Full Article: Source

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