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Commodities Briefing - Category | Oil more

Why the oil market isn’t worried about world turmoil

Posted on 25 May 2015 by VRS  |  Email |Print

When Islamic State fighters in Iraq captured the town of Ramadi this week, just 80 miles (129 kilometres) from the capital of the Middle East’s second-largest oil producer, crude markets shrugged.
Rather than the spikes that have historically accompanied geopolitical disturbances, oil prices actually fell that day. Elsewhere, Libya is on the verge of becoming a failed state and Saudi Arabia is waging an air war against rebels in neighbouring Yemen. Again, the markets seem blissfully indifferent………………………………………..Full Article: Source

Oil price slide puts producers under pressure

Posted on 25 May 2015 by VRS  |  Email |Print

The oil price plunge has triggered a string of bankruptcies, debt defaults and rescue measures to save companies nearing collapse, with almost two dozen oil and gas groups now under stress. A 40 per cent slide in Brent crude prices from a peak of $115 a barrel last June, has put smaller, cash-strapped producers in financial trouble, according to City analysts, with up to a quarter of a million barrels a day of oil supply at risk of being curtailed.
Even after a rebound in prices from January’s lows to about $66 a barrel, there have been “numerous small corporate casualties” across the globe, and especially in the US and Canada, says a report by Bernstein Research………………………………………..Full Article: Source

Iran says OPEC unlikely to change output ceiling: Mehr news agency

Posted on 25 May 2015 by VRS  |  Email |Print

OPEC is unlikely to change its production ceiling when the group meets in June, Iran’s Oil Minister Bijan Zanganeh said on Sunday, according to the semi-official Mehr news agency. “Lowering OPEC’s production ceiling requires consensus between all members … under current conditions it seems unlikely that the OPEC production ceiling will change,” Zanganeh was quoted as saying.
Last month, Zanganeh said the producing group should cut its target daily crude production by at least 5 percent, or approximately 1.5 million barrels per day. The Organization of the Petroleum Exporting Countries will meet on June 5. At its last meeting in November, OPEC, led by oil kingpin Saudi Arabia, decided against cutting output to defend its market share, resisting calls by some members such as Iran and Venezuela to reduce production to shore up prices………………………………………..Full Article: Source

Saudi Arabia rewrites oil game with refining might

Posted on 25 May 2015 by VRS  |  Email |Print

Saudi Arabia’s rapid transition into one of the world’s largest oil refiners has added an extra dimension to the oil exporter’s role as the driver of Opec (Organization of the Petroleum Exporting Countries) policy, say experts.
When it attends Opec’s next meeting in two weeks, it does so with major new state-of-the-art oil refineries that can profit from cheaper crude and reviving world fuel demand - exactly as international oil firms have over the past six months………………………………………..Full Article: Source

OPEC Struggling To Keep Up The Pace In Oil Price War

Posted on 22 May 2015 by VRS  |  Email |Print

Some market watchers, such as Cornerstone Analytics (CA), have consistently stated that the underestimation of demand, coupled with over-estimation of supply, will mask the growing call on OPEC oil in the second half of this year. CA recently noted that global demand outstripped supply by some 4 million barrels in April .
This comes in addition to the mounting evidence that the oil market, via rig count declines, slowing production growth, higher demand and huge API crude inventory declines, is starting to readjust. Be that as it may, Goldman Sachs (GS) seems to believe oil must fall to $45 by October (like it previously thought $30 oil was a certainty) to clear the market and rebalance, despite signs that a readjustment is already underway………………………………………..Full Article: Source

Prolonged drop in oil price reshaping the oil and gas sector

Posted on 22 May 2015 by VRS  |  Email |Print

A new report from leading business and financial advisor Grant Thornton UK LLP finds that a prolonged drop in the global oil price is forcing companies in the sector to dramatically reassess and reshape their operations. Based on a survey of senior oil and gas executives, the report finds that 42% have put some plans on hold, while 11% need to raise extra finance or sell existing assets to remain operational.
Moreover, a further 11% suggest they will need to engage in significant financial restructuring before the end of the year. Asked for a prediction on oil prices by the end of the year, a divergence between existing producers and early stage companies was clear, with 63% of early stage respondents predicting the price of oil to be between $55 - $65 per barrel, as opposed to 46% of existing producers who saw the price within this range………………………………………..Full Article: Source

Oil Market Shrugging Off Turmoil in Middle East

Posted on 22 May 2015 by VRS  |  Email |Print

When Islamic State fighters in Iraq captured the town of Ramadi this week, just 80 miles (129 kilometers) from the capital of the Middle East’s second-largest oil producer, crude markets shrugged. Rather than the spikes that have historically accompanied geopolitical disturbances, oil prices actually fell that day.
Elsewhere, Libya is on the verge of becoming a failed state and Saudi Arabia is waging an air war against rebels in neighboring Yemen. Again, the markets seem blissfully indifferent………………………………………..Full Article: Source

OPEC Seen Unyielding in Battle With Shale for Oil-Market Share

Posted on 22 May 2015 by VRS  |  Email |Print

OPEC will stick with the strategy of favoring market share over prices when it meets next month because rival producers are already starting to buckle. All but one of the 34 analysts and traders surveyed by Bloomberg said the Organization of Petroleum Exporting Countries will maintain its daily production target of 30 million barrels when it meets in Vienna on June 5.
Saudi Arabia, the biggest of OPEC’s 12 members, shaped the strategy at the last meeting in November, arguing that the usual response of cutting output to boost prices would not address the threat from shale and other higher-cost suppliers………………………………………..Full Article: Source

Kingdom built on oil foresees fossil fuel phase-out this century

Posted on 22 May 2015 by VRS  |  Email |Print

Saudi Arabia, the world’s largest crude exporter, could phase out the use of fossil fuels by the middle of this century, Ali al-Naimi, the kingdom’s oil minister, said on Thursday. The statement represents a stunning admission by a nation whose wealth, power and outsize influence in the world are predicated on its vast reserves of crude oil.
Naimi, whose comments on oil supply routinely move markets, told a conference in Paris on business and climate change: “In Saudi Arabia, we recognise that eventually, one of these days, we are not going to need fossil fuels. I don’t know when, in 2040, 2050 or thereafter.”……………………………………….Full Article: Source

Oil market buoyed by product demand

Posted on 21 May 2015 by VRS  |  Email |Print

The oil market is coping with storage capacity limits because demand for products such as petrol has been unexpectedly strong, says a senior executive at the world’s biggest independent oil trader. Demand growth was “back up to 1.4-1.5m barrels a day” because of “strong pockets” in the US, Europe, the Gulf region and Asia, said Chris Bake, executive director at Vitol.
Last year, demand growth was just 700,000 b/d, according to the International Energy Agency, the west’s energy watchdog, and was one of the key factors behind the 50 per cent collapse in crude oil prices between June and January………………………………………..Full Article: Source

Oil prices gain on ‘bullish’ US petroleum report

Posted on 21 May 2015 by VRS  |  Email |Print

Oil prices rose on Wednesday after data showed a drop in US petroleum supplies and production. US benchmark West Texas Intermediate for delivery in July rose 99 cents to finish at US$58.98 a barrel on the New York Mercantile Exchange.
European benchmark Brent oil for delivery in July gained US$1.01 at US$65.03 a barrel in London. Data from the US Department of Energy showed US crude supplies fell by 2.4 million barrels in the week ending May 15, with daily production of oil dropping 112,000 barrels a day to 9.26 million barrels a day………………………………………..Full Article: Source

Crude Oil Market Outlook

Posted on 21 May 2015 by VRS  |  Email |Print

The North Sea crude oil market showed mixed signals May 15, with Dated Brent versus second-month cash up $0.21/barrel at minus $0.94/b, even as Forties came off a touch. A late May cargo traded at Dated Brent minus $1.00/b, Gunvor to Unipec.
However traders were not convinced this signaled Forties as a whole would continue to trade weaker, with June still seen as tighter due to two or three VLCC fixtures this week. “Maybe, it is just that Forties cargo is too prompt,” said one trader………………………………………..Full Article: Source

Where Are Oil Prices and the Ruble Going Next?

Posted on 21 May 2015 by VRS  |  Email |Print

The strong rally in the oil price over the past four months has confounded most forecasters. Instead of continuing the late 2014 slide to test the 2009 low of $42 per barrel, the price of Brent came close to $45 on Jan. 13 before starting a steady climb, which brought it close to $68 late last week.
That price rally, which has been replicated in Russia’s Urals contract, is a big part of the reason why the ruble has rallied strongly since early February and why there is so much optimism that Russia’s economy has weathered the economic crisis relatively unscathed. It is also the main reason why the RDXUSD, the index of Russian equities traded on international bourses, is one of the best in the world so far in 2015 with a gain of 34 percent………………………………………..Full Article: Source

Saudi Arabia, OPEC partners turn down Chinese requests for extra oil

Posted on 21 May 2015 by VRS  |  Email |Print

Saudi Arabia and its main Middle East OPEC partners are turning down Chinese requests for extra oil as they hold back fuel for their own refineries just as demand from the world’s biggest crude importer hits new records.
While the Saudi and other refusals for additional crude supplies may not be part of a new pricing strategy, the rejections to their biggest client help explain a 40 percent rise in oil prices this year as Chinese importers have had to seek more oil from other suppliers in what analysts say is still an oversupplied market………………………………………..Full Article: Source

Is US Shale Becoming The Global Swing Producer?

Posted on 21 May 2015 by VRS  |  Email |Print

Many industry experts predicted that US shale oil companies would quickly go bankrupt when oil prices started to decline in the last quarter of 2014. Jobs would be forever lost, financing would dry up and OPEC would remain the world’s oil cartel.
Instead, merger activity has been relatively muted, companies are driving down costs, and drilling activity appears to be picking up again in the second quarter of 2015 as the oil market finds its equilibrium. All this means that US shale is likely to remain a permanent feature of the global energy landscape, with the US, not only OPEC, as the new “swing producer” in the global oil market………………………………………..Full Article: Source

Oil Prices: Where Next? Here Are the Forecasts

Posted on 20 May 2015 by VRS  |  Email |Print

What’s next for oil prices? After rallying by about 40% since their lows earlier this year, forecasts now by major banks paint a mixed picture but one that increasingly looks like a W-shaped recovery. The average forecast in a MoneyBeat survey of 10 banks is for Brent, the global benchmark, to fall to an average of $63.35 a barrel in the third quarter of this year, down from around $66 on Tuesday.
West Texas Intermediate, the U.S. marker, will average $58.40 a barrel next quarter, down from about $59 a barrel on Tuesday, according to the survey. Looking beyond, the outlook gets murkier. Some, like Bank of America Merrill Lynch, see prices hovering below $60 for the rest of the year while others, like Standard Chartered, project a fast rebound to $90 a barrel by the end of the year………………………………………..Full Article: Source

This innovation will help U.S. win oil price war

Posted on 20 May 2015 by VRS  |  Email |Print

Although some US oil companies are struggling with low oil prices, a new wave of innovation is hitting the oil patch, allowing for a significant reduction in drilling costs. A variety of different improvements in production are starting to show up at all levels across the industry from small firms to oil majors. Statoil for example recently noted that it is experimenting with different types of sand and chemicals to improve production.
And a number of companies have noted that they are moving from drilling wells one at a time, on an ad hoc basis, to drilling multiple wells at once. GE Oil & Gas has produced variable-use pumps that can be turned on and off in order to save energy versus the previous 24-hour a day operation cycle………………………………………..Full Article: Source

Shell still optimistic about oil price: chairman

Posted on 20 May 2015 by VRS  |  Email |Print

Royal Dutch Shell PLC (RDSA) remains optimistic about the future of the oil price, despite its dramatic slump in recent months, Chairman Jorma Ollila told investors at the company’s annual general meeting Tuesday. “Volatility is a fact of life in our industry. It is what it is and we have to manage through it. Short-term movements in oil prices can be driven by perception and prices tend to overreact,” Ollila said, adding that “we have not changed our long-term planning assumptions.”
Oil prices have fallen dramatically since June as a rapid increase in U.S. shale oil production coupled with lackluster demand created a market glut. The fall in prices has hammered big oil companies’ bottom lines and left them scrambling to cut costs and reduce spending………………………………………..Full Article: Source

Moody’s Predicts Big Jump in Oil and Gas Defaults

Posted on 20 May 2015 by VRS  |  Email |Print

So far oil and gas companies have largely weathered the sharp drop in oil prices with minimal carnage. But that carnage is coming, according to a new report from Moody’s Investors Service. Analysts at Moody’s predicts that the default rate for oil and gas companies with lower credit ratings — B2 or lower — could increase to 7.4% by March 2016 from 2.7%.
Moody’s Senior Vice President David Keisman said in the report that even if energy prices recover gradually to roughly $70 to $75 per barrel in 2016, the “weaker oil & gas issuers” will still be positioned for a “much greater risk of default.”……………………………………….Full Article: Source

Oil to rebound further this year: Opec’s Kuwait official

Posted on 20 May 2015 by VRS  |  Email |Print

Oil prices could continue to rebound in the second half of 2015 following signs of growth in demand and a drop in high-cost production, an Opec official said yesterday. “It is expected that a kind of a balance will exist in the oil market in the second half of 2015 which will support prices,” Kuwait’s governor at Opec Nawal Al Fuzai told reporters. “Prices are improving, growth in supplies from outside Opec - especially shale oil - is lower than before and demand is recovering.”
This has pushed both the Organisation of Petroleum Exporting Countries and the International Energy Agency to adjust upward their forecasts for crude demand, Fuzai said. She said it was too early to predict any decision by Opec at its meeting next month………………………………………..Full Article: Source

Libya’s NOC chief sees higher oil prices, not relying on OPEC

Posted on 20 May 2015 by VRS  |  Email |Print

The head of Libya’s National Oil Corp (NOC) sees higher oil prices and said the company is working to boost output and regain market share taken by other producers. Speaking on a visit to London, NOC Chairman Mustafa Sanallah said he saw signs of oil demand increasing across the globe and a fall in the supply of shale oil in the United States.
“There is a general consensus that oil prices will recover. The worst of the market is behind us now,” he said on Tuesday at the Platts Global Crude Oil Summit. “It is expected that the oil price will start to rise by the beginning of the second half of this year and continue to rise in 2016.”……………………………………….Full Article: Source

Global Oil and Gas Sector M&A Activity Remains Sluggish

Posted on 19 May 2015 by VRS  |  Email |Print

Various factors ranging from the lack of availability of quality assets to sellers holding out for better prices are coming together to paint a mixed mergers and acquisitions (M&A) picture in the oil and gas sector, according to industry experts.
Despite an appetite being there, the market is not quite firing up as some were hoping. Speaking at Baker & McKenzie’s Oil & Gas Institute in Houston, USA on Monday, Stephen Trauber, Global Head of Energy at Citigroup’s corporate and investment banking division, said, “When commodities prices started falling around the second quarter of 2014, M&A enthusiasts put their pencils down………………………………………..Full Article: Source

Goldman cuts crude outlook and oil company forecasts

Posted on 19 May 2015 by VRS  |  Email |Print

Goldman Sachs has cut its long-term crude oil price forecasts and recommended investors sell shares in two major oil companies, saying that improved U.S. shale efficiency and higher production from OPEC will more than cover future demand.
The U.S. investment bank’s equities team, in a note published on Saturday, raised its projection for the average Brent crude oil price this year to $58 a barrel from $52 and lifted its outlook for U.S. light crude futures to $52 a barrel from $48. But Goldman, closely followed investors including large pensions and hedge funds, said it expects Brent to fall over time, reaching $55 a barrel by 2020………………………………………..Full Article: Source

Oil prices to recover, says BHP

Posted on 19 May 2015 by VRS  |  Email |Print

Cheap oil prices will not last for long, with significant rises to come in two to three years because of a lack of new discoveries, BHP Billiton’s petroleum boss says. Equally weak natural gas prices will take longer to bounce back though, according to industry leaders attending Australia’s largest oil and gas conference.
The predictions on gas are good news for consumers, particularly manufacturers, but not the energy companies that have invested an estimated $75 billion on three new liquefied natural gas projects in Queensland that about to come online………………………………………..Full Article: Source

Iran deputy oil minister says OPEC unlikely to cut output

Posted on 19 May 2015 by VRS  |  Email |Print

The Organisation of the Petroleum Exporting Countries (OPEC) is unlikely to implement a production cut at its next meeting in June, a senior Iranian official said on Monday. Asked if OPEC would cut output at the upcoming June 5 meeting, Iran’s Deputy Oil Minister Rokneddin Javadi told Reuters: “I don’t think so.”
Iran, along with Venezuela, has repeatedly called for OPEC to cut output to shore up low prices that have eaten into producers’ oil revenues. Javadi’s comments signal an admission that the group was unlikely to agree to a reduction, especially after its current strategy has succeeded in curbing non-OPEC output and allowed OPEC to regain market share………………………………………..Full Article: Source

Oil price to reach $80 by 2017 – Iranian oil minister

Posted on 19 May 2015 by VRS  |  Email |Print

Iran hopes its crude oil exports will be back to the pre-sanctions level of 2.5 million barrels per day (bpd) and the oil price to rise to around $80 a barrel by end of 2016, according to Iran’s Deputy Oil Minister Rokneddin Javadi.
“It depends on the market situation and price level, but we will come back to the traditional trade that we had before,” Javadi said, Reuters reported on Monday. Asia could take more than 50 percent of Iran’s exports, he added. This can happen in three to six months once a deal with major powers to lift the oil embargo is finalized, the minister said………………………………………..Full Article: Source

Oil Falls as Bearish Fundamentals Outweigh Mideast Tensions

Posted on 19 May 2015 by VRS  |  Email |Print

Oil prices edged lower Monday after Saudi Arabia posted its highest level of monthly exports in nearly 10 years and an Iranian official said OPEC would likely decide to keep production steady at its meeting next month.
The two developments added to a bearish backdrop colored by a stronger dollar that discouraged foreign buyers and data from a private forecasting agency that showed U.S. oil inventories fell less than expected last week………………………………………..Full Article: Source

Saudi oil exports hit highest in a decade

Posted on 19 May 2015 by VRS  |  Email |Print

Saudi Arabia wasn’t bluffing. The Kingdom increased its oil exports to the highest level since 2005 in March, official data from the Joint Organisations Data Initiative (JODI) showed, as Opec’s most powerful member made good on its promise to try to take back market share from other producers, reports David Sheppard, deputy commodities editor.
Its oil exports were 7.89 million barrels a day in March, a 10 per cent increase on the same month last year, despite rising domestic demand. This was the highest since November 2005 when it reached 7.96m b/d………………………………………..Full Article: Source

Hedge funds dumping oil position as OPEC may raise supply level

Posted on 19 May 2015 by VRS  |  Email |Print

Hedge funds and oil speculators are losing faith in the oil rally on concerns the Organization of Petroleum Exporting Countries (OPEC) will increase supply to its highest level since 2012, according to Bloomberg. Data from the U.S. Commodity Futures Trading Commission (CFTC) shows that hedge funds’ net-long position in West Texas Intermediate (WTI) crude fell 2.1%.
Futures advanced 35 cents to $60.75 a barrel on the New York Mercantile Exchange in the period covered by the CFTC report, before retreating to close at $59.69 on May 15. The net-long position in WTI slipped from a nine-month high to 262,575 futures and options. Shorts dropped 17% to 52,973 and longs fell to 315,548………………………………………..Full Article: Source

Hope of $100 per Barrel Oil Price Dims

Posted on 18 May 2015 by VRS  |  Email |Print

Ahead of the June 2015 meeting of energy ministers of member countries of the Organisation of Petroleum Exporting Countries (OPEC) in Vienna, Austria, there are indications that the oil cartel may have given up hope of any near upsurge and significant rebound in the global prices of crude oil. Also, Nigeria’s oil output recorded a marginal decline for the month of April.
According to a draft paper leaked to the Wall Street Journal, OPEC had in its most optimistic scenario, projected that oil price will not exceed $76 a barrel until after 2025. The cartel, it was reported, also considered a scenario in which oil price fell below $40, although it denied that the draft document existed, but industry pundits note that such conclusions may be true considering that the chances of a return to triple-digit crude prices now look slimmer than it had ever been recently………………………………………..Full Article: Source

Oil price will break $70 barrier next winter: Expert

Posted on 18 May 2015 by VRS  |  Email |Print

The subsidies bill for petroleum products will drop in fiscal year 2014/2015 to nearly EGP 60bn compared to EGP 100bn especially allocated from the state’s budget, according to petroleum expert Mohamed Shoaib’s predictions.
Oil prices began to increase with the start of trade in May, with an average price of $67 per Brent barrel, compared to $57 as a maximum price last April. This came as a result of the increase of demand on crude oil in international markets, and the suspension of air strikes on Houthis in Yemen………………………………………..Full Article: Source

Oil Investors Take a Closer Look at Production

Posted on 18 May 2015 by VRS  |  Email |Print

A spotlight has landed on a previously overlooked metric as oil traders drill deeper for clues on price movement. A spotlight has landed on a previously overlooked metric as oil traders drill deeper for clues on price movement.
More often, investors are looking to weekly U.S. oil-production data from the U.S. Energy Information Administration for signs the global glut of crude that sunk prices last year is starting to shrink. That data point, however, has some significant, well-known limitations, and some analysts say traders are giving too much credence to it………………………………………..Full Article: Source

Hedge Funds Lose Faith in Oil Rally as OPEC Seen Boosting Supply

Posted on 18 May 2015 by VRS  |  Email |Print

Speculators are losing faith in the oil rally, judging that OPEC will keep increasing supply from the highest level since 2012. Their net-long position in West Texas Intermediate crude dropped 2.1 percent, as long wagers fell the most in two months and short bets declined to the lowest since August, U.S. Commodity Futures Trading Commission data show.
OPEC’s push to defend its share of the global oil market has just begun and its members may further increase production, the International Energy Agency said May 13. Saudi Arabia said it boosted output to the highest level in at least three decades………………………………………..Full Article: Source

Qatar Petroleum Sees Rising OPEC Demand as Price Drop Hits Shale

Posted on 18 May 2015 by VRS  |  Email |Print

Demand for OPEC’s crude will rise as the drop in oil prices below $100 a barrel continues to hinder shale production, Qatar Petroleum International’s Chief Executive Officer Nasser Khalil Al-Jaidah said.
“The coming period will witness an improvement in prices but they will not reach $100,” he said in an interview published Saturday by the official Qatar News Agency. Current prices will hinder the expansion in shale oil, “which signals an improvement in demand for OPEC’s oil.”……………………………………….Full Article: Source

OPEC Claims Victory in Oil Price Battle — But the War Is Far From Over

Posted on 18 May 2015 by VRS  |  Email |Print

The drop in oil prices from over $100 per barrel a year ago to as low as $46 per barrel in early 2015 was driven by a number of factors, but one of the most important was OPEC’s desire to squash the U.S. fracking market. Saudi Arabia, in particular, has seen the rise of fracking in the United States as a threat to its market share, and as prices have fallen the country has actually increased oil production to a record 10.3 million barrels per day in April.
Now that U.S. producers are shutting down drilling rigs, and some U.S. drillers appear to be in financial trouble, certain OPEC leaders are claiming victory. But we need to consider the bigger picture before accepting that the fight over U.S. shale oil is over………………………………………..Full Article: Source

Will Oil’s Price Surge Continue? Don’t Bet on It

Posted on 15 May 2015 by VRS  |  Email |Print

The recent weakening of the US dollar and building of speculative long positions by hedge funds and other investors resulted in significant support for many commodities, except for precious metals. Because the fundamentals have not changed, and the situation of oil oversupply lingers on, we see downside risks to oil prices
The support for those commodities was driven by hopes of economic recovery (which would lead to increased demand) as well as fear of supply disruptions. The weakening of the US dollar was the result of disappointing US data, in combination with fears of delayed Fed action…………………………………..Full Article: Source

Shale-Oil Companies Ready to Raise Output—Energy Journal

Posted on 15 May 2015 by VRS  |  Email |Print

U.S. shale-oil companies that cut production when prices plunged are prepared to return rigs to operation as prices rise, Georgi Kantchev and Bill Spindle report. The companies are being seen as so-called swing producers that can boost production when prices are high and cut back when they fall. U.S. benchmark West Texas Intermediate settled at $60.50 a barrel on Wednesday in the wake of a 40% rally in crude prices since March, and some companies said they would resume production if WTI reaches $70.
U.S. shale companies could provide some counterbalance to big global market swings, although that flexibility hasn’t been fully tested in a major market downturn. Big cuts have left the industry with 930 fewer rigs, a 58% reduction from their 1,609 peak in October, according to Baker Hughes Inc., which tracks drilling activity…………………………………..Full Article: Source

Oil Prices Fall on Steady Production

Posted on 15 May 2015 by VRS  |  Email |Print

Oil prices fell slightly Thursday as concerns about steady production captured the market’s attention. Light, sweet crude for June delivery settled down 62 cents, or 1%, to $59.88 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 22 cents, or 0.3%, to $66.59 a barrel on ICE Futures Europe.
Traders have been weighing signs that production cutbacks may have bottomed out. Several U.S. producers said in recent quarterly reports that they have met or exceeded their production targets, said Kyle Cooper, managing director of research at IAF Advisors, a Houston consulting firm…………………………………..Full Article: Source

IEA: OPEC Battle for Oil Market Share Just Beginning

Posted on 14 May 2015 by VRS  |  Email |Print

A global battle for market share between OPEC and non-OPEC producers that has rocked oil markets and fed into the biggest price slump since the financial crisis is just getting started, the International Energy Agency said Wednesday.
Oil prices have plunged since June amid a glut in oil production driven by booming U.S. output and sluggish demand, a combination that threatened the market position of some of the world’s largest oil producers…………………………………….Full Article: Source

US shale has ‘blinked’ in battle against OPEC: IEA

Posted on 14 May 2015 by VRS  |  Email |Print

U.S. oil producers appear to have lost their battle with OPEC (Organization of the Petroleum Exporting Countries) over market share, but the war is only just beginning, the International Energy Agency (IEA) warned Wednesday..
“In the supposed standoff between OPEC and U.S. light tight oil (LTO), LTO appears to have blinked,” the Paris-based energy think tank said in its new monthly report. “Following months of cost cutting and a 60 percent plunge in the U.S. rig count, the relentless rise in U.S. supply seems to be finally abating.”……………………………………Full Article: Source

Why Goldman Sachs Might Be Wrong In Expecting Crude Oil To Fall Again

Posted on 14 May 2015 by VRS  |  Email |Print

WTI crude broke the $60 barrel mark recently. However according to a note published by analysts at Goldman Sachs the rally in crude might have extended itself and the prices will correct soon. Ken Sill of Global Hunter Securities was on CNBC to discuss why he thinks analysts at Goldman might be wrong.
$70: The Equilibrium: “We think that oil below $50 probably overcorrected to the downside,” Sill said. “We know we don’t need $100 per barrel and 1,600 oil rigs drilling in the United States, but somewhere between $50 and $100 is and we think $70 is kind of where the market will ultimately equalize around, but it’s going to go up and down, but we think $60 plus or minus five bucks is kind of where the market seems to want to be.”……………………………………Full Article: Source

Saudis spend like there’s no oil price drop

Posted on 14 May 2015 by VRS  |  Email |Print

If lower oil prices are straining Saudi Arabia’s economy, it certainly does not show. In Riyadh, dozens of cranes loom over the King Abdullah Financial District, destined to be the kingdom’s answer to Canary Wharf in London, with around 60 gleaming towers and its own monorail. Across the city, immigrant workers toil on new residential developments aimed at plugging the country’s acute housing gap. Meanwhile, roads are being dug up for a new metro system.
It is quite a transformation for a place that started off as a mud-brick stopover on a desert trading route. With its glass-clad skyscrapers, spanking new universities, five-star hotels and outposts of western department stores like Harvey Nichols, Riyadh is transforming itself from a somewhat shabby city into a gleaming symbol of the kingdom’s oil wealth…………………………………….Full Article: Source

Oil Markets: Use Your Illusion

Posted on 14 May 2015 by VRS  |  Email |Print

Misdirection is how magicians distract you from what is really happening with that card you picked. The oil market similarly seems to be taking its cues away from the real action. Oil inventories provide a ready way of tracking how supply is matching up with demand. If supply is ample, some of it will flow into tanks and inventories will rise. This has been the story for much of the past six months or so.
Recently, though, U.S. crude oil stocks have begun falling slightly, which has added fuel to prices. On Wednesday, the Energy Information Administration reported that commercial stocks of crude oil and refined products fell by 5.5 million barrels in the week ended May 8. West Texas Intermediate rose above $61 a barrel; two months ago it was at less than $50…………………………………….Full Article: Source

Volatile Oil Market May Hurt Global Economy

Posted on 13 May 2015 by VRS  |  Email |Print

The dramatic fall in oil prices since last summer has been a boon for global consumers taking advantage of cheaper fuel and lower utility bills. But the price rout has increased the volatility of the crude market, which could end up hurting the global economy, a new report warns.
Volatile energy prices can lead to delays in business investment and slower job growth, according to the report co-authored by Nicholas Stern, former U.K. Treasury official and a prominent climate economist………………………………………..Full Article: Source

EIA ups 2015 crude-price forecasts, cuts 2016 view

Posted on 13 May 2015 by VRS  |  Email |Print

The U.S. Energy Information Administration raised its 2015 forecasts for West Texas Intermediate and Brent crude prices in a monthly report issued Tuesday. The government agency said it expects WTI prices to average $54.32 a barrel this year, up from a previous forecast of $52.52.
The EIA, however, said it expects WTI crude to average $65.57 a barrel in 2016, down from the prior view of $70.07. Brent crude is forecast at $60.79 this year, up from a previous forecast of $59.39. The EIA said it expects natural-gas prices to average $2.93 per million British thermal units this year, down from the earlier estimate of $3.07………………………………………..Full Article: Source

OPEC sees oil price below $100 a barrel in the next decade

Posted on 13 May 2015 by VRS  |  Email |Print

The Organization of the Petroleum Exporting Countries doesn’t see oil prices consistently trading at $100 barrel again in the next decade, a pessimistic assessment that has the group considering the return of production limits to influence the market, according to people familiar with a recent strategy report.
The report, seen by The Wall Street Journal, predicts that oil prices will be about $76 a barrel in 2025 in its most optimistic scenario, the people said, a reflection of the cartel’s worries that American competitors will be able to cope with low prices and keep pumping out supplies. It also contemplates situations where crude oil costs below $40 a barrel in 2025, the people said………………………………………..Full Article: Source

Opec revises up oil demand and cuts US supply forecast

Posted on 13 May 2015 by VRS  |  Email |Print

Oil cartel has upgraded its demand forecast on stronger European growth as US drillers struggle. The Organisation of the Petroleum Exporting Countries (Opec) has revised up its forecast for world oil demand this year on higher consumption in Europe’s biggest economies and cut its estimate for the growth in US supply.
The group of 12 major oil producers now expects demand for crude to increase by 1.18m barrels per day (bpd) of crude to 92.5m bpd in 2015. Opec’s latest closely watched market report said: “The upward movement of European oil demand during the second half of 2014 has continued and been enhanced during the first three months of 2015………………………………………..Full Article: Source

Gartman: Forget OPEC, here’s why I’m getting long oil

Posted on 13 May 2015 by VRS  |  Email |Print

OPEC’s latest warning that crude could stay below $100 a barrel for the next decade wasn’t enough to keep Dennis Gartman on the sidelines in the oil market. To the contrary, the founder of “The Gartman Letter” said that he’s now bullish on crude oil for the first time “in a very, very long while.”
The Organization of the Petroleum Exporting Countries said in a draft of its latest strategy report that it doesn’t expect crude to trade consistently above $100 per barrel in the next decade, according to the Wall Street Journal. The draft reportedly forecasted crude trading at around $76 per barrel in 2025, and also modeled scenarios where crude would trade below $40 per barrel in 2025………………………………………..Full Article: Source

Here’s why Iran and Iraq should worry OPEC

Posted on 13 May 2015 by VRS  |  Email |Print

Caveat emptor! The big Organization of Petroleum Exporting Countries (OPEC) summer pow-wow is only 24 days away now and ceteris paribus we should see a continuation of the status quo. Right that’s enough Latin, the only languages that really count at the meeting will be Arabic, Farsi, Kurdish and money, namely petrodollars.
As far as I can see, this one is about how Saudi Arabia, Iran and Iraq solve a growing problem of how you cap OPEC production – and thereby falling prices - at a time when Baghdad and Tehran are desperate to up output………………………………………..Full Article: Source

Saudi April oil output hits record high

Posted on 13 May 2015 by VRS  |  Email |Print

Saudi Arabia, the world’s biggest exporter, increased its production of crude oil to a record high in April to meet demand from Asian buyers and to satisfy the needs of domestic power stations and refineries.
The Kingdom pumped 10.308m barrels of oil a day last month, up from 10.294m b/d in March, according to information given by Riyadh to Opec for the cartel’s monthly oil report, reports Anjli Raval in London. Saudi Arabia’s oil minister Ali Al Naimi last month indicated that there are no plans to slow its production which has risen above 10m barrels per day in recent months………………………………………..Full Article: Source

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