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Here’s Why Some Huge Hedge Funds Think Oil Prices Could Plunge Again

Posted on 26 July 2016 by VRS  |  Email |Print

Hedge funds have been liquidating their former record bullish position in crude futures and options putting downward pressure on oil prices in recent weeks. But now the liquidation of old long positions is being replaced by the establishment of new short positions as fund managers try to capitalize on the downward cycle in prices.
Hedge funds and other money managers cut their net long position in Brent and WTI futures and options by 31 million barrels to 453 million in the week ending on July 19………………………………………..Full Article: Source

Oil Market: American Frackers And Iran Are Ready To Spoil Saudi Arabia’s Grand Plan

Posted on 26 July 2016 by VRS  |  Email |Print

Saudi Arabia has a grand plan: sell shares of state-owned company Aramco to the public to finance its vision 2030, which will make its economy less dependent on oil. The success of Aramco’s IPO, which promises to be the biggest in history, relies heavily on the state of the oil and equity markets, at the time for the “road show”–the marketing of IPO.
The higher the oil prices, the easier is to sell it to the institutional investors at a high price. “The actual IPO timeframe will also be subject to a number of external factors including equity market conditions, oil price outlook, and domestic capital market readiness,” Falih told a German newspaper back in January………………………………………..Full Article: Source

The oil price may have bottomed out – but there could be turbulence ahead

Posted on 26 July 2016 by VRS  |  Email |Print

That’s it. We’ve seen the bottom for the oil market. At least, that’s what two of the biggest oilfield services companies in the world – Schlumberger and Halliburton – believe.
“We now appear to have reached the bottom of the cycle”, said Schlumberger boss Paal Kibsgaard last week, presenting the second quarter results. Meanwhile, Halliburton boss David Lesar said: “Our customers are thinking about growing their businesses again, rather than being focused on survival.” Are they right?……………………………………….Full Article: Source

How Much Oil Is in Storage Globally? Take a Guess

Posted on 25 July 2016 by VRS  |  Email |Print

The historic fall in oil prices has created a pileup of inventories, much of it stashed in tanks in the U.S. and other industrialized countries that are committed to disclosing the latest tally, but millions of barrels of oil are flowing to locations outside the scope of industry trackers.
Some countries, such as Russia and China, choose not to report their oil-storage levels. And traders and oil companies that park supertankers have no obligation to make public their supply. This makes for more cryptic and volatile oil markets. How much crude is in these locations, and how quickly it can be resold into the market, can affect oil prices………………………………………..Full Article: Source

Is This The News Oil Investors Have Been Waiting For?

Posted on 25 July 2016 by VRS  |  Email |Print

The U.S. Energy Information Administration says that American oil companies are getting closer to balancing capital investment and operating cash flows. This is great news for energy investors, but it doesn’t mean every oil company is worth investing in.
On July 18, the U.S. Energy Information Administration released a report that shows a great trend: U.S. oil companies have begun steadily narrowing the gap between capital investments and operating cash flows………………………………………..Full Article: Source

Serious Concerns Over Oil Demand Could Trigger Another Market Slump

Posted on 25 July 2016 by VRS  |  Email |Print

Towards the middle of the current trading year, a glut ridden oil market had started showing some signs of rebalancing. Decline in US oil production was being reflected in the data, much to the delight of the Organization of Petroleum Exporting Countries (OPEC).
So when the oil producers’ collective met at its Viennese Headquarters in June, there was some degree of satisfaction that a policy of keeping the taps open was finally hurting US shale. As such OPEC did what it has done since the supply glut came into view in July 2014, i.e. do nothing and offer no indication of its official production quota………………………………………..Full Article: Source

Global oil companies keen to tap opportunities in India

Posted on 25 July 2016 by VRS  |  Email |Print

Despite low crude oil prices, global companies in exploration and production are keen to tap the opportunities in India, the “happening spot” for investments, Dharmendra Pradhan, Minister for State (Independent Charge) for Petroleum and Natural Gas, said.
Investor interest was apparent at a recent road show he had attended in the US ahead of the planned bidding for some of the small discovered fields. At $45-50 a barrel, oil prices are not lucrative for companies in exploration and production but “nobody wants to miss the bus in India,” he said………………………………………..Full Article: Source

Why Oil Traders Are Writing Love Poems to Yahoo

Posted on 22 July 2016 by VRS  |  Email |Print

Powerful forces have been roiling oil markets this year. There are the vagaries of Chinese demand, shifts in American production, the enigma of OPEC policy. And then, of course, there’s the imminent demise of Yahoo Messenger’s old software version.
“I’m very upset,” said Andy Lebow, an energy analyst and former oil broker who is lamenting the final days of the old version, which Yahoo plans to scrap Aug. 5 to steer customers to its new Messenger system. “My username is attached to all the people that I talk to. That’s important to me.”……………………………………….Full Article: Source

Russia rules out cooperation with OPEC

Posted on 22 July 2016 by VRS  |  Email |Print

The embarrassing failure of the ‘Doha talks’ in April still weighing over oil politics. Both OPEC and non-OPEC producers met in Doha with the hope that there could be global coordination on oil production but Saudi Arabia’s stance that they will not cut without the participation of Iran came as a big surprise.
Russian energy minister Alexander Novak speaking in an interview this week ruled out any possibility of coordination with the OPEC producers. Mr. Novak said, “We do not discuss the issues of coordination of actions between Russia and OPEC… We can’t agree on production cuts as we don’t have such tools and mechanisms”………………………………………..Full Article: Source

Oil prices set to peak sooner than expected on supply shortage, Barclays says

Posted on 21 July 2016 by VRS  |  Email |Print

Barclays is the latest bank to raise its forecast for medium-term oil prices, saying it now expects them to peak sooner than expected as a supply shortage develops.
The bank said Tuesday it now sees oil prices averaging $85 a barrel by 2019, slightly higher than its prior view and one year ahead of its last assessment in October. Barclays previously saw Brent at $83 a barrel in 2019 and $85 a barrel in 2020. It now expects the oil price to peak in 2019 before declining to $78 in 2021………………………………………..Full Article: Source

Saudi Aramco Boss Says Drilling, IPO Unaffected by Oil Price

Posted on 21 July 2016 by VRS  |  Email |Print

Saudi Arabia’s oil and natural gas production and drilling activities are unaffected by crude prices at current levels, the state-run producer’s chief executive officer said, signaling that the world’s biggest oil exporter will continue to protect its market share.
Saudi Arabian Oil Co., known as Saudi Aramco, will keep investing in oil projects for the long term, and its sales to buyers in East Asia are rising, Amin Nasser told reporters Wednesday at a signing ceremony for a gas-processing plant near the eastern city of Jubail………………………………………..Full Article: Source

Libya: OPEC member plots big oil comeback

Posted on 21 July 2016 by VRS  |  Email |Print

One of the biggest mysteries in the oil market resides in the war-torn nation of Libya. A long civil war and the rise of ISIS have limited Libya’s oil production to just a fraction of what it was in 2010, before the uprising that ousted and ultimately killed the country’s longtime dictator Moammar Gadhafi.
Libya, a large global oil producer, appeared to reach a breakthrough earlier this month when rival governments in the east and west agreed to merge their competing oil companies. The agreement was hailed as a positive step and some even predicted Libya could quickly double its oil production, flooding the oversaturated market with tons of high-quality crude………………………………………..Full Article: Source

Oil prices won’t suffer a 2015-style price collapse, says Citi’s Morse

Posted on 20 July 2016 by VRS  |  Email |Print

Oil prices are following a familiar — and potentially troubling — trend that took hold last year, but investors shouldn’t fear a 2015-style, second-half price collapse, Citigroup’s global head of commodities research said Tuesday.
Commodities were the top performing asset class in the first half of 2016, roughly tracing last year’s rally through June. And just like last year, crude oil futures are plateauing at the half point. That pause was followed by a plunge to 12-year lows last winter, but Citi’s Ed Morse said things will be different this year………………………………………..Full Article: Source

Why Oil Prices Might Not Rebound Until 2019

Posted on 20 July 2016 by VRS  |  Email |Print

It’s a safe bet that investors are getting increasingly tired of all the conflicting forecasts about oil and gas prices. Some argue that oil is heading back to $20 thanks to the continuing excess supply. Others claim that the excess is overestimated and crude is well on its way to reach $80 or more by the end of the year.
The likely truth, as usual, is somewhere in the middle, at least for the time being. But according to energy consultants Douglas-Westwood, prices will remain where they are now until about 2019, when offshore oil production will finally peak………………………………………..Full Article: Source

What does a balanced oil market mean?

Posted on 20 July 2016 by VRS  |  Email |Print

Supply and demand might come back into line this year, but without the kind of price rises the industry hopes for. If one bit of jargon captures the hopes of the oil industry right now, it’s “rebalancing”. The term has become ubiquitous and it means that the glut will have ended. Supply and demand will be in balance. Things can get back to normal.
Elsewhere in our July/August issue, we note the consensus: that the rebalancing is underway. The International Energy Agency (IEA) thinks so. It says faster-than-expected demand growth in the first half of the year and recent supply outages have combined to mean the market will be “balanced” in the second half. Stocks will fall in the third quarter. Demand, says the IEA, will rise by a robust 1.3m barrels a day this year and at the same pace in 2017………………………………………..Full Article: Source

How the Turkish Coup Attempt Impacted Oil Prices

Posted on 19 July 2016 by VRS  |  Email |Print

Oil prices fell on Monday as traders shrugged off the impact of the attempted coup in Turkey and the market turned its attention to bearish fundamentals, while disruptions to crude exports in Libya lent prices some support.
Brent crude futures fell 36 cents to $47.25 a barrel by 1131 GMT, while U.S. crude futures were 31 cents lower at $45.64 a barrel. “The market is looking past the coup,” CMC Markets’ chief market analyst in Sydney Ric Spooner said………………………………………..Full Article: Source

Oil Prices Shrug Off Attempted Coup in Turkey

Posted on 19 July 2016 by VRS  |  Email |Print

Despite an attempted military coup in Turkey oil prices were steady on Monday, supported by favorable growth data reported by the U.S. and China. But a looming glut of oil products could put pressure on the market, The Wall Street Journal reports.
The global benchmark, Brent, was trading up 0.1% at $47.66 a barrel. Its U.S. counterpart, West Texas Intermediate, was trading down 0.02% at $45.94 a barrel. The instability over the weekend in Turkey fueled fears that the flow of oil through Turkish waters, an important route for shipping and trading, could be hindered………………………………………..Full Article: Source

Who Really Won The Oil Price War?

Posted on 19 July 2016 by VRS  |  Email |Print

The rise in oil prices over the past six months has come as a blessing for the battered U.S. shale producers. Oil prices have risen more than 50 percent since January, giving a glimmer of hope to the U.S. oil industry that the worst of the oil crisis might finally be behind them.
Moreover, it forced the shale producers to adapt by reducing production costs and increasing efficiency. According to data publicized by Reuters, the decline rates of oil wells in the most productive fields in the U.S. – the Permian and Bakken Basins – were almost halved over the past several years………………………………………..Full Article: Source

OPEC’s pyrrhic market share victory: Fuel for Thought

Posted on 19 July 2016 by VRS  |  Email |Print

OPEC’s decision to defend its market share by opting for freewheeling crude oil production appears to be working. It was only a few months ago the International Energy Agency said the market was “drowning in oil” and prices plummeted to less than $30/b. Fast forward to July and the IEA said there had been an “extraordinary transformation” from a major surplus in the first quarter to near-balance in the second.
Non-OPEC production remains on course to fall 900,000 b/d this year before staging a modest recovery in 2017, according to the IEA………………………………………..Full Article: Source

OPEC June output nears eight-year high

Posted on 19 July 2016 by VRS  |  Email |Print

OPEC crude output continued to grow in June, climbing close to an eight-year high. According to S&P Global Platts, OPEC’s crude oil output grew by 300,000 barrels per day to 32.73 million bpd.
The gains came despite disruptions in Nigeria, where militants have been attacking oil and gas infrastructure. Nigeria booked the largest output gain in June, with the country’s production rising by 150,000 bpd to 1.57 million bpd………………………………………..Full Article: Source

Oil Must Go to $40 and Stay There to Buy Russia Reforms at Last

Posted on 18 July 2016 by VRS  |  Email |Print

At an oil price of $40 or below, Russian President Vladimir Putin introduced a flat income tax, built a sovereign wealth fund and delivered speeches to the Bundestag in German. When it was over $100, he fought two wars with neighbors and splashed over $40 billion on a Winter Olympics.
Brent crude at $40 is the key threshold for Russia, so low that institutional reforms become unavoidable but high enough to prevent a financial meltdown, according to a Bloomberg survey of economists. While more than a decade of booming revenue brought a $2.1 trillion energy windfall — and with it prosperity the like of which Russia has never seen — the economy hasn’t grown faster than 5 percent in eight years and has spent the last two in recession………………………………………..Full Article: Source

Why is the oil recovery taking so long?

Posted on 18 July 2016 by VRS  |  Email |Print

Why aren’t oil prices rising faster? The recent recovery in oil prices has largely stalled out and investors looking at historical figures could be forgiven for not understanding why prices cannot move higher for now.
Oil is stuck in neutral despite the fact that even after prices started to crash, many investors once saw $60 as a remarkably cheap threshold. Today, prices remain firmly below that level, and investors will probably have to wait for more positive data before getting close to that level. The problem is not production or a glut of oil. U.S. oil output is falling slowly but steadily over time………………………………………..Full Article: Source

Oil market seesaws as gains capped by glut worries

Posted on 18 July 2016 by VRS  |  Email |Print

The world oil market see-sawed this week as traders tracked growing investor risk appetite, fluctuations in the US dollar and stubborn supply glut worries. “Oil prices are continuing their rollercoaster ride,” Commerzbank analysts wrote in a research note.
Crude futures began on the back foot on Monday, sliding as an increase in US drilling activity and a strong dollar reversed gains from last week’s better-than-forecast US jobs report. A strong greenback makes dollar-priced commodities like oil more expensive for those using other currencies. That tends to weigh on demand and price levels………………………………………..Full Article: Source

Iran wins back 80% of its European oil market

Posted on 18 July 2016 by VRS  |  Email |Print

An NIOC official has announced that Iran has managed to regain 80 per cent of its lost share in the European oil market. Executive Director for International Affairs at National Iranian Oil Company (NIOC) Seyyed Mohsen Ghamsari said Iran has no stored oil on water asserting “a negligible amount of gas condensate exists on water since these materials do not have constant use and shall remain on water until customers demand them.”
The official pointed to oil sales in single-piece shipment maintaining “normally, customers purchase their required oil by inking long-term agreements with providers though they supply about 20 per cent of their demand within the framework of spot contracts in order to move in line with market trends as well as to buy crude oil at lower prices.”……………………………………….Full Article: Source

Saudi always reacts to oil supply and demand, watching market - minister

Posted on 18 July 2016 by VRS  |  Email |Print

Saudi Arabia’s energy minister said on Sunday the kingdom always reacts to oil market supply and demand and it would continue to monitor crude markets for any developments. Khalid al-Falih also said that final agreements with foreign investors taking part in state oil giant Saudi Aramco’s IPO huge ship repair and shipbuilding complex that it is developing at Ras al-Khair would be signed “over the next few weeks and months”.
The complex, on the kingdom’s east coast, is due to be fully operational by 2021. Lamprell, Aramco, National Shipping Company of Saudi Arabia (Bahri) and Hyundai Heavy Industries signed a potential partnership agreement relating to the yard earlier this year………………………………………..Full Article: Source

Oil Market: What’s Saudi Arabia Up To?

Posted on 15 July 2016 by VRS  |  Email |Print

Saudi Arabia wants higher oil prices. Really. At least, that’s what its oil minister has been saying in recent interviews in the US and Europe. But higher oil prices require a higher world demand for oil, a lower supply of oil, or a combination of both.
The trouble is that Saudi Arabia doesn’t control the world demand for oil, which is growing at a slow pace, tracking a weak global economy. And while Saudi Arabia has some control of the supply of oil, it does nothing to make oil prices go higher………………………………………..Full Article: Source

Oil rebounds as investors join global market rally

Posted on 15 July 2016 by VRS  |  Email |Print

Oil prices rebounded Thursday in tandem with a rally on global equity markets as risk appetites grew and a weaker dollar helped to boost demand. Snapping back from two-month lows Wednesday on disappointing US inventories, prices advanced as investors joined the bullish mood on markets expecting more stimulus in major economies.
US benchmark West Texas Intermediate for delivery in August rose 93 US cents to US$45.68 a barrel on the New York Mercantile Exchange. In London, Brent North Sea crude for September delivery, the global benchmark, finished at US$47.37 a barrel, up US$1.11 from Wednesday’s settlement………………………………………..Full Article: Source

Is Middle East displacing Russia from European oil market?

Posted on 15 July 2016 by VRS  |  Email |Print

A price war between Russia and the oil producers of the Middle East is becoming more intense, the International Energy Agency (IEA) said in its report. The document notes that Iran, Iraq, Saudi Arabia and Kuwait are trying to win Russia’s traditional market.
Recently, Iran began oil supplies to Poland after Saudi Arabia, the report says. Saudi Aramco, in turn, has reduced oil prices for Mediterranean Europe customers with delivery in August, and competitors from the Middle East are expected to follow suit………………………………………..Full Article: Source

Pump It Up: Downward Pressure on Oil Mounts as OPEC Increases Production

Posted on 15 July 2016 by VRS  |  Email |Print

Oil prices dropped by roughly 4 percent on Wednesday as OPEC’s output hit a record high amid the downward pressure exerted by mounting fuel inventories in the US, suggesting another possible wave of bearishness in the commodity markets.
Given the lower-than-expected fuel consumption, which stems from sluggish economic growth throughout the developed economies, the oil glut hasn’t been compensated for by managed production cuts, as crude producers are currently inclined to ship at any cost. According to a report by the US Energy Information Administration (EIA), US oil inventories declined less than previously forecast in the second week of July, despite the traditionally busy driving season………………………………………..Full Article: Source

OPEC’s cheap oil strategy

Posted on 15 July 2016 by VRS  |  Email |Print

Keeping fuel prices low doesn’t benefit OPEC in the short term, but it could lead to long-term benefits for oil-producing countries when the supply of oil is low. If you’re like most car-owners, you’re of two minds when it comes to gasoline.
Obviously, part of you is happy about today’s low fuel costs. However, another part of you–perhaps the pessimistic part–wonders why gas is so cheap these days. Consciously or subconsciously, you’re waiting for the other shoe to drop………………………………………..Full Article: Source

IEA, WoodMac raise worries about global oil market recovery

Posted on 14 July 2016 by VRS  |  Email |Print

Two influential think tanks on Wednesday raised worries about the pace of recovery in the world oil market. The International Energy Agency, the oil-consuming countries’ main energy watchdog, warned in its monthly oil market report on Wednesday that despite continued signs that the market is more balanced, the huge supply overhang built up over recent years still weighs on oil prices.
“Although market balance is upon us, the existence of very high oil stocks is a threat to the recent stability of oil prices,” the IEA report said. “There are signs that [demand] momentum is easing,” especially in the US and China, while Europe’s surprisingly robust demand “is unlikely to last”, it said………………………………………..Full Article: Source

IEA warns that oil demand is ebbing while supply remains at ‘elevated levels’

Posted on 14 July 2016 by VRS  |  Email |Print

There are warning signs that global oil demand is ebbing while oil stocks remain at “elevated levels,” threatening a rebalancing act in oil markets, the International Energy Agency (IEA) warned on Wednesday.
With oil prices rising since the lows seen at the start of the year, hopes have risen that a “balancing act” between supply and demand in oil markets was finally taking place after two years of declining prices due to a supply glut………………………………………..Full Article: Source

The Oil Market Cannot Live by Shale Alone

Posted on 14 July 2016 by VRS  |  Email |Print

During the bull market in oil, it became fashionable to say something like “$100 is the new $20.” These days, it’s more common to hear “something less than $100 is the new $100.”Wood Mackenzie made its own contribution to the conversation with a new study released on Wednesday.
The energy consultancy expects most of the oil projects currently planned over the next decade to be economic at oil prices of $60 a barrel or less. The bulk of those barrels are projected to come from shale deposits in the U.S., where costs have fallen rapidly in recent years………………………………………..Full Article: Source

In World Of $50 Oil, Shale Beats Deepwater

Posted on 14 July 2016 by VRS  |  Email |Print

U.S. shale is the lowest cost option for new oil production and is likely to be more competitive than conventional offshore drilling, according to a new report from Wood Mackenzie. The U.S. shale industry has weathered the oil price downturn, tweaking drilling practices and cutting costs in order to stay in business.
A new report from Wood Mackenzie finds that the industry is proving to be resilient and flexible in the face of the worst oil market crisis in three decades. The report concludes that U.S. shale companies have managed to cut costs by as much as 40 percent since 2014………………………………………..Full Article: Source

OPEC Is Winning the Market Share War

Posted on 14 July 2016 by VRS  |  Email |Print

The Middle East is back as the world’s dominant oil-producing region, a report said Wednesday, churning out its biggest chunk of global output since the 1970s and giving OPEC an edge in its fight for market share.
The rise of American oil production from shale formations had reduced consumer reliance on Middle East crude in recent years. But a surge in production from Saudi Arabia, Iraq and Iran this year—coupled with falling shale oil output during a price slump—has changed the equation, according to the International Energy Agency’s closely watched monthly report………………………………………..Full Article: Source

No balance: oil markets still oversupplied, now growth is stuttering

Posted on 14 July 2016 by VRS  |  Email |Print

Oil industry hopes that markets are about return to balance, ending a global glut that pulled down prices by over 70 percent between 2014 and early 2016, might be abruptly dashed. Despite recent disruptions and output cuts, there is mounting evidence that plentiful supplies and brimming inventories will delay a much-quoted rebalancing of oil markets.
“The market needs to stop worrying about this balance and concentrate on the now,” said Matt Stanley, a fuel broker at Freight Investor Services in Dubai………………………………………..Full Article: Source

Uncertain Oil Traders Look to Clashing Stockpile Data for Signs

Posted on 14 July 2016 by VRS  |  Email |Print

Oil traders don’t know who to follow these days. Weekly inventory reports that help set prices for crude futures come primarily from two sources: The industry-funded American Petroleum Institute and the U.S. government’s Energy Information Administration.
In six of the past 10 weeks, however, the data reported by the two groups has differed by at least 2 million barrels, with the gap for the week ended May 6 at 6.9 million. That week, the API showed a stockpile gain while the EIA saw a decline, one of eight weeks this year with diametrically opposed results………………………………………..Full Article: Source

Brexit Could Dampen European Oil Demand

Posted on 13 July 2016 by VRS  |  Email |Print

The U.K.’s vote to leave the European Union could dampen Europe’s appetite for oil and pose a risk to global economic growth, according to OPEC. The Organization of Petroleum Exporting Countries’ assessment of oil demand growth in 2017 remained unchanged at 1.2 million barrels a day.
But the Vienna-based group downgraded its forecast of global economic growth in 2017 to 3%, down from 3.1%, and said growth in the eurozone would slow to 1.2% in 2017, down from 1.5% in 2016. Since economic growth and demand for crude are tied together, OPEC fears a spillover effect into oil………………………………………..Full Article: Source

OPEC upbeat on demand growth as oil lingers at 2.5-month lows

Posted on 13 July 2016 by VRS  |  Email |Print

With global oil demand growth forecast to rise in 2017 and non-OPEC supply expected to fall, OPEC said in its latest monthly report on Tuesday that “market conditions will help remove overall excess oil stocks in 2017.”
In its July report, the 14-member oil producing group said that oil demand growth for 2017 is expected at 1.2 million barrels a day (mb/d), around 0.3 mb/d above the last ten years’ average………………………………………..Full Article: Source

Oil price could drop below $40 as bullish bets slashed

Posted on 13 July 2016 by VRS  |  Email |Print

After falling to another two-month low overnight, the oil price was recovering a little during London trading this morning. International benchmark Brent crude was around 1.7 per cent higher to $47 a barrel. In New York on Monday, it fell below $46 at one point, its lowest since early May.
This was below the nadir reached last Thursday, in a week that saw an eight per cent overall decline, the worst in six months. Brent had previously been hovering around $50 a barrel………………………………………..Full Article: Source

EIA ups oil price forecasts for this year and next

Posted on 13 July 2016 by VRS  |  Email |Print

The U.S. Energy Information Administration on Tuesday raised its 2016 and 2017 forecasts for West Texas Intermediate and Brent crude prices. In its monthly energy outlook report, the government agency forecast an average price of $43.57 a barrel for WTI this year, up from a previous estimate of $42.83.
Brent crude is seen averaging $43.73 this year, up from the $43.03 June forecast. For 2017, the EIA sees an average of $52.15 for both WTI and Brent. The EIA left its U.S. oil production estimates for 2016 and 2017 at 8.6 million barrels a day and 8.19 million barrels a day, respectively. August WTI crude traded at $46.59 a barrel, up $1.83, or 4.1%………………………………………..Full Article: Source

Hedge funds push oil prices lower: Kemp

Posted on 12 July 2016 by VRS  |  Email |Print

Continued hedge fund liquidation of former bullish bets on oil and the establishment of new short positions have kept crude prices on the defensive over the last month. Hedge funds and other money managers cut their bullish bets on crude oil by another 22 million barrels over the seven days ending on July 5.
Hedge funds have cut their net long position in crude futures and options by almost a quarter, from 633 million barrels to 485 million, over the last four weeks……………………………………….Full Article: Source

When Will the Oil Price Return to $100?

Posted on 12 July 2016 by VRS  |  Email |Print

Instead of a return to high long-term prices, the industry needs to find the oil price that can keep a lid on US shale activity, which analysts think will be $60 per barrel. The most pressing question on the minds of energy investors: How long will it take for the industry to work through the current period of oversupply and rebalance itself?
The answer: Not anytime soon. Current supply imbalances are such that oil production as of today is effectively running two years ahead of demand. Thanks to ongoing productivity improvements, cost reductions, and slowing decline rates, US shale’s cost-competitive growth potential is much greater than the market currently realizes………………………………………..Full Article: Source

Iran regains 80% of its pre-sanctions oil market share

Posted on 12 July 2016 by VRS  |  Email |Print

Tehran is exporting about two million barrels of its 3.8 million daily crude output and plans to double that, Mohsen Ghamsari, a senior official at state-run National Iranian Oil Co (NIOC) told Bloomberg.
Ghamsari says the country has regained about 80 percent of the market share it held before the US and EU imposed sanctions on its oil industry in 2012………………………………………..Full Article: Source

Iran Plans to Double Crude Exports to Regain Market Share

Posted on 12 July 2016 by VRS  |  Email |Print

Iran plans to double crude exports so long as the increase in shipments is absorbed by global markets, which it sees as stable for the rest of the year, according to a senior official at state-run National Iranian Oil Co.
The country is exporting about 2 million barrels of its daily output of 3.8 million, said Mohsen Ghamsari, NIOC’s director of international affairs. It has regained about 80 percent of the market share it held before the U.S. and European Union tightened sanctions on its oil industry in 2012, he said. Iran plans to double crude exports………………………………………..Full Article: Source

Booms and busts in oil prices

Posted on 11 July 2016 by VRS  |  Email |Print

Better regulation in commodity markets could have mitigated oil-price bubbles and their fallout. Oil prices have been excessively volatile since the mid-2000s, ranging from $147 in 2007 to $30 in 2015, with sharp swings in between. Apart from the fallout of the global financial cycle (GFC), this volatility is a major reason for continued slow global growth.
Volatility leads to gainers and losers who create spillovers for each other, dampening growth. For example, India’s actual gains from the 2014 oil price crash were less than expected, since the slowdown in global export growth moderated gains. Commodity exporting nations are in dire straits………………………………………..Full Article: Source

Oil’s rebound is over, so expect a third-quarter slide: Barclays

Posted on 11 July 2016 by VRS  |  Email |Print

A massive global stockpile of oil could mean trouble ahead for the global crude market, according to Barclays. Crude oil prices dropped to a two month low on Thursday, after the Energy Information Administration reported a smaller-than-expected decrease in oil stockpiles. That may be a canary in the coalmine, a top energy market watcher explained.
“For the last 6 quarters there’s been this discrepancy between global supply and global demand,” Michael Cohen, head of energy commodities research at Barclays, said……………………………………….Full Article: Source

Why an oil price crash remains unlikely

Posted on 11 July 2016 by VRS  |  Email |Print

There has been a lot of optimism returning to the energy markets of late as oil prices have climbed to the $50 a barrel region. Ironically, while a few years ago $50 a barrel would have been seen as an unthinkably low oil price, today it is regarded as much needed relief from prices that ran in the $25 a barrel region earlier this year.
Yet with the climb in prices, analysts are now starting to forecast prices per barrel of as much as $80 in the next year. That view is not the mainstream though. Instead most analysts are looking for oil prices to remain in the $50 range over the next year, and that has some investors forgetting about the possibility of a renewed downside in oil which could create more losses. ……………………………………….Full Article: Source

Oil Funds Hold Down Risk, Eye Volatility After Weak First Half

Posted on 11 July 2016 by VRS  |  Email |Print

Oil—and the hedge funds invested in it—are still uncertain. Oil’s big rebound in the first half of the year was a squandered opportunity for most hedge funds with positions in crude, and a surge in volatility is likely to make it harder for them to call the market in the second half.
The majority of hedge funds in the oil universe posted sparse returns in the six months to June even as crude rebounded from 12-year lows to post a 30% gain………………………………………..Full Article: Source

UBS upgrades oil price forecast

Posted on 08 July 2016 by VRS  |  Email |Print

Strong demand and supply interruptions have encouraged UBS to increase its oil price forecasts, with the bank now expecting Brent to average more than $50 per barrel in the second half of the year.
The bank increased second-half forecasts for Brent crude and West Texas Intermediate to $51 and $48 a barrel respectively (from $46.50 and $43.50 previously), with a further increase to $60 and $57 a barrel in 2017 (from $55 and $52)………………………………………..Full Article: Source

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