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Commodities Briefing - Category | Oil more

Goldman Sachs, Barclays predict oil’s recovery to be a way off

Posted on 30 January 2015 by VRS  |  Email |Print

Those hoping for a quick recovery in the price of oil might end up being disappointed, with Goldman Sachs and Barclays forecasting the slump to continue for much of 2015. Barclays has slashed its forecast average price of Brent crude for this year to $US44 a barrel, down nearly $US30 from its early-December forecast of $US72 a barrel, before recovering to $US60 in 2016.
Goldman Sachs is forecasting WTI oil to trade about $US44 a barrel for the first three-quarters of this year, lifting to $US65 a barrel by the end of the year as sharp cuts in capital spending and rising demand weigh on supply………………………………………..Full Article: Source

Energy Economist: Shale oil’s response to prices may call for industry re-evaluation

Posted on 30 January 2015 by VRS  |  Email |Print

Shale oil’s investment cycle is shorter and its decline profile sharper than conventional oil production. Current indicators suggest legacy declines from shale will catch up fast with the industry. This points to a sharp deceleration in US shale oil output. But, while conventional oil takes time to slow down, it also takes time to speed up.
It will be shale that is best placed to benefit from any oil price recovery, as Ross McCracken, managing editor of Platts Energy Economist, explains in this month’s selection from the publication. The full analysis can be found in the February 2015 issue, which is also issue 400 of Energy Economist. Global crude oil production has only fallen in six years since 1984 and then generally as a result of geopolitical disruptions to supply or restraint by OPEC, rather than as a reaction to price………………………………………..Full Article: Source

Why the OPEC Secretary General Believes Oil Prices Have Bottomed

Posted on 30 January 2015 by VRS  |  Email |Print

Nowadays, you’ll find plenty of predictions about the future direction of oil prices. But some are worth paying particular attention to. On Monday, Abdullah al-Badri, the Secretary-General of OPEC, said that he expects oil prices to bottom out around current levels. He would know as well as anyone. That said, what makes US$45 per barrel such a logical bottom for oil prices? Is there a risk that prices could fall lower? And how should you react as an investor?
There are reasons to believe the Secretary-General. With such low prices, producers have already been cutting back. According to oil services giant Baker Hughes, the number of oil rigs fell for the seventh straight week, and is now at its lowest level since January 2013………………………………………..Full Article: Source

How far will OPEC go?

Posted on 30 January 2015 by VRS  |  Email |Print

If you are a business-news junkie like me, you could hardly miss the trends of the past two months that presumably predict the 2015 economy. Before the holiday season and on into January, retailing was a priority fiscal indicator. Now we have oil production as a runner-up for the most crucial headline of the day.
I already vented my dismay over the emphasis of shopping for deals on Thanksgiving Day and the public’s apparent monthlong need to storm the stores and crowd the Internet right up to Christmas Day in my Jan. 1 column (“Spirit of Christmas centers on malls”). Despite my reaction to commercial exploitation of family traditions, the retailers loved it………………………………………..Full Article: Source

Barclays, Goldman forecast bearish first half for oil prices

Posted on 29 January 2015 by VRS  |  Email |Print

Barclays Plc and Goldman Sachs Group Inc issued even more bearish forecasts for oil prices on Wednesday, predicting no significant recovery in the first half of 2015.
Barclays slashed its 2015 Brent crude oil price forecast to $44 a barrel from $72, while Goldman said it expected prices for West Texas Intermediate crude to trade close to $40 per barrel for most of the first half of 2015………………………………………..Full Article: Source

Crude oil bottom seen at $40: CNBC Fed survey

Posted on 29 January 2015 by VRS  |  Email |Print

Crude oil’s free fall may be close to bottoming, according to CNBC’s January Fed Survey. Wall Streeters in the survey forecast that the lowest price for WTI crude in the current downturn will be $40 on average per barrel, about $6 below its current price.
Among the 33 economists, money managers and investment strategists surveyed, the range of bottom estimates was $25 to $48. Crude oil futures have tumbled nearly 60 percent from the recent peak of $107 in June………………………………………..Full Article: Source

Former US Official Says OPEC Can No Longer Control Oil Price

Posted on 29 January 2015 by VRS  |  Email |Print

The Organization of the Petroleum Exporting Countries (OPEC) can no longer control the oil price, as there are new independent markets, such as those in Russia and the United States, Charles McConnell, a former Obama administration energy official told RIA Novosti.
“Forty years ago they [Middle Eastern oil producers] formed a cartel. And they controlled the price, and the entire world was dependent. And control from the Middle East is no longer true. The world has changed — Russia has and produces significant volumes of oil, as does the US and Canada,” he stated………………………………………..Full Article: Source

Iraq oil surge to fan OPEC rivalry that triggered slump

Posted on 29 January 2015 by VRS  |  Email |Print

The battle for customers among OPEC members that helped trigger oil’s collapse is about to escalate. Iraqi crude production is climbing from a 35-year high as it adds growing Kurdish supplies to its exports, while southern oilfields remain unscathed by Islamic State militants. Finding buyers for the new output means offering more attractive terms than rivals in the Organization of Petroleum Exporting Countries, say Citigroup, DNB and Barclays.
Oil’s biggest slump in six years gained momentum in October as a wave of discounts by Middle Eastern producers signaled OPEC members were intent on defending market share against booming shale output from the U.S. The price of Saudi crude for Asian buyers was cut to the lowest in at least 14 years last month, a move followed by Iraq, Kuwait and Iran………………………………………..Full Article: Source

Where Is All That Excess Oil Going?

Posted on 29 January 2015 by VRS  |  Email |Print

There’s a term traders use when the price of a commodity like oil has fallen because of oversupply but seems guaranteed to rise again. It’s a market that’s “in contango,” says Brenda Shaffer, an energy specialist at Georgetown University. “It almost sounds like a sort of great oil dance or something.”
And Shaffer says that some oil speculators see an oil market that is in contango in a major way. “Some people out there think that oil is going to get more expensive so it’s worthwhile now to buy oil, lock it in, and have those supplies, have them stored and have them available to sell a few months down the line, if you actually believe it’s going to go up,” she says………………………………………..Full Article: Source

Oil’s price slump may have lasting impact on non-OPEC countries

Posted on 29 January 2015 by VRS  |  Email |Print

Crude prices dropped sharply Wednesday as global producers pump surplus supply into the world’s bulging storage tanks, resulting in record-high inventories in the United States. As the market focuses on the booming U.S. industry for signs of slowdown, analysts say the price slump may have a more pronounced and longer-lasting impact outside of North America, particularly in non-OPEC countries such as Russia, Mexico and Brazil.
Fuelled by $100 (U.S.)-a-barrel prices, crude production has grown sharply in the past two years among countries outside the Organization of the Petroleum Exporting Countries, after being in the doldrums – other than in Canada and the United States – following the price collapse of 2008-09………………………………………..Full Article: Source

Commodities collapse could wipe out entire year’s profits at Standard Chartered

Posted on 29 January 2015 by VRS  |  Email |Print

Macquarie analysis predicts that 1980s-style oil price slump and default spike will mean huge losses at under-pressure bank. Standard Chartered faces losing a year’s profits from the recent collapse in commodity prices as loan defaults spike in a repeat of the 1980s crisis, according to the Australian bank Macquarie.
The Asia-focused British bank is believed to be one of the biggest losers from the slump in oil, iron ore and copper prices, with $61bn (£40.2bn) of exposures to producers and traders………………………………………..Full Article: Source

Oil price ‘too low’: Saudi Aramco chief

Posted on 28 January 2015 by VRS  |  Email |Print

World oil prices have fallen too far, the president of state-owned energy giant Saudi Aramco said, insisting that market forces, not deliberate production cuts, must take their course. “It’s too low for everybody,” Khalid al-Falih told a conference. “I think even consumers start to suffer in the long term.”
Falih also said American shale oil production is important for the world’s long-term energy future and Saudi Aramco has marked an additional US$7 billion for its own shale projects. Saudi Aramco is the world’s largest oil company in terms of crude production and exports………………………………………..Full Article: Source

Budget: Iraq lowers oil price forecast to $55

Posted on 28 January 2015 by VRS  |  Email |Print

Falling oil prices forced Iraq’s cabinet to revise its draft 2105 budget, trimming its forecast for oil to $55 a barrel from $60. It trimmed spending to 119 trillion Iraqi dinars ($105 billion) for 2015. Even so, the budget deficit will rise to 25 trillion dinars.
The decision to lower the forecast oil price may satisfy some MPs who saw the previous estimate as unrealistic, but Brent crude is trading still lower at under $50, down from $115 in June. Prime Minister Haider Al-Abadi said last week he feared lower revenues from falling global oil prices could hurt Iraq’s military campaign against Islamic State………………………………………..Full Article: Source

World price of oil - where is OPEC now?

Posted on 28 January 2015 by VRS  |  Email |Print

The world price of crude oil, which has been around 100 dollars a barrel for the past 6 years, has suddenly collapsed and is now tending below 50 dollars. Many are trying to understand this rapid decrease and have proposed various explanations.
Of course, the ready explanation is simply in terms of supply and demand; but this just begs the question. The supply of oil has increased sharply in recent months – mainly because of the prolific production of shale oil in the United States, thanks to the technologies of fracking and horizontal drilling. In fact, the US is now the world’s largest producer of crude oil and US imports of oil have dropped to the lowest level in 10 years………………………………………..Full Article: Source

Why $50 Oil Won’t Last

Posted on 28 January 2015 by VRS  |  Email |Print

In the past few weeks I have received numerous questions about the role of a “drop in demand” in the oil price decline. These questions are driven by many stories in the media that have referenced a drop in demand. There are two primary reasons given for this so-called demand drop. One is that years of high oil prices have resulted in reductions in consumption through conservation and improvements in vehicle fleet efficiency.
The second reason is due to the strengthening dollar, oil has become more expensive for many countries since oil is generally traded in dollars. There are elements of truth behind both reasons. There has indeed been reduced oil consumption in recent years in most developed regions of the world. It is also true that the dollar has strengthened against many currencies………………………………………..Full Article: Source

Prices of Russia’s Top Export Commodities Fall Amid Oil Price Drop

Posted on 27 January 2015 by VRS  |  Email |Print

While the plummeting price of oil has occupied headlines in recent months, it’s not the only commodity of key importance to the Russian economy whose price is dropping. In fact, all nine of the World Bank’s key commodity price indices are currently in decline, pulled down by abundant supplies, disheartening global growth forecasts and the appreciation of the U.S. dollar, the World Bank said in a report.
At the present time, the World Bank sees little hope for a rebound. “[This year] is a rare case in which all nine key commodity price indices are expected (as of January) to decline for the year,” the report said………………………………………..Full Article: Source

U.S. regulators should study oil slump -CFTC official

Posted on 27 January 2015 by VRS  |  Email |Print

U.S. futures market regulators should review the sharp drop in crude oil prices to gain a better understanding of the slide as they pursue rules to crack down on speculation in commodities, a top official said on Monday.
The Commodity Futures Trading Commission is considering regulations to rein in speculation in energy, grain and metals markets with new rules on position limits. However, the agency needs more data to justify sweeping changes, Commissioner Christopher Giancarlo told a commodities conference in Miami………………………………………..Full Article: Source

Opec’s Badri expects some oil price rebound soon

Posted on 27 January 2015 by VRS  |  Email |Print

Oil prices at current levels may have reached a floor and could move higher very soon, Opec Secretary-General Abdullah al-Badri said on Monday. “Now the prices are around US$45-US$55 and I think maybe they reached the bottom and will see some rebound very soon,” Mr Badri said in an interview.
Asked about the prospects for Saudi Arabian oil policy under a new king, Mr Badri said: “Saudi Arabia is a stable country, is a stable government, and I think things will be normal.”……………………………………….Full Article: Source

Where’s the oil price outrage?

Posted on 27 January 2015 by VRS  |  Email |Print

When gasoline prices spiked in 2005 after Hurricane Katrina, Congress and the public demanded a federal probe of price manipulation. The same thing happened three years later, when oil prices shot to $145 a barrel and gas prices topped $4 a gallon.
But now that prices are moving in the other direction — down more than 50% per barrel in about six months — virtually no one is clamoring for an investigation. As Bob Dole memorably put it in his presidential campaign, where’s the outrage?……………………………………….Full Article: Source

OPEC minister sees oil price floor at $45

Posted on 27 January 2015 by VRS  |  Email |Print

An OPEC official predicted that oil prices had bottomed out on Monday, briefly raising hopes that the steep slide might be easing. West Texas Intermediate crude, the benchmark contract in the U.S., moved up early in the morning, but ended the day down 45 cents at $45.16 US a barrel at mid-afternoon on Monday, while Brent crude was down 67 cents at $48.12. Western Canada Select oil is now at $31.81.
“Now the prices are around $45-$55 and I think maybe they reached the bottom and will see some rebound very soon,” Abdullah al-Badri, Secretary-General of OPEC, said in an interview on Monday………………………………………..Full Article: Source

OPEC’s El-Badri: $200 Oil Possible If There’s Lack of Investment

Posted on 27 January 2015 by VRS  |  Email |Print

OPEC’s secretary-general said oil prices as high as $200 a barrel are possible if producers fail to invest in new supply. “If you don’t invest in oil and gas, you will see more than $200,” Abdalla El-Badri said in an interview in London on Monday, without giving a timeframe. West Texas Intermediate, the U.S. crude benchmark, erased a decline of as much as 2.7 percent following his comments.
Crude prices tumbled 46 percent last year as Saudi Arabia and other members of the Organization of Petroleum Exporting Countries said they wouldn’t curb output in response to a supply glut caused in part by surging U.S. shale oil production………………………………………..Full Article: Source

Oil Is Never Going To Reach $200, Not For Any Length Of Time At Least

Posted on 27 January 2015 by VRS  |  Email |Print

We’ve two interesting announcements from various players in Opec today, one that the oil price might have hit bottom just at the moment and the second that oil might reach $200 at some point in the future. It’s possible that oil might have reached bottom: but the idea that oil will ever reach $200 a barrel in real terms for any significant length of time is extraordinarily unlikely.
It’s as if people really still don’t get the deep economic change that has happened in the oil market as a result of the fracking revolution. We are simply no longer in a world where the development of an oil field is a tens of billions of dollars problem taking a couple of decades to bring to fruition. Because we’re no longer in that world we’re simply not going to end up with the sort of supply and demand mismatches that could lead to a $200 oil price………………………………………..Full Article: Source

Hedge Funds Bet Oil Has Further to Fall as Glut Grows: Energy

Posted on 26 January 2015 by VRS  |  Email |Print

Hedge funds boosted bearish wagers on oil to a four-year high as U.S. supplies grew the most since 2001. Money managers increased short positions in West Texas Intermediate crude to the highest level since September 2010 in the week ended Jan. 20, U.S. Commodity Futures Trading Commission data show. Net-long positions slipped for the first time in three weeks.
U.S. crude supplies rose by 10.1 million barrels to 397.9 million in the week ended Jan. 16 and the country will pump the most oil since 1972 this year, the Energy Information Administration says………………………………………..Full Article: Source

Who needs a ‘long-term economic plan’ when the oil price is falling like this?

Posted on 26 January 2015 by VRS  |  Email |Print

The Tories must know their strategy has failed. But, unlike the governments of the 1970s, the energy market has saved them. I have taken part in many a pub discussion about the perennial question of whether governments lose elections or oppositions win them, or a mixture of both. If ever a postwar British government deserved to lose an election it is this one. That is why the Labour party has got to get its act together, and soon.
The gravamen of the charge against this government is that, for all the triumphalism about a long-delayed period of economic growth, it woefully mishandled the economy when it came in – and plans an assault on our already deteriorating public services, if it is re-elected, that would quite seriously threaten the social fabric of the nation………………………………………..Full Article: Source

Why Oil Prices May Not Recover Anytime Soon

Posted on 26 January 2015 by VRS  |  Email |Print

Oil prices have collapsed in stunning fashion in the past few months. The spot price of Brent crude reached $115 a barrel in June, and was above $100 a barrel as recently as September. Since then, it has plummeted to less than $50 a barrel.
There is a sharp split among energy experts about the future direction of oil prices. Saudi Prince Alwaleed bin Talal recently stated that oil prices could keep falling for quite a while and opined that $100 a barrel oil will never come back. Earlier this month, investment bank Goldman Sachs weighed in by slashing its short-term oil price target from $80 a barrel all the way to $42 a barrel………………………………………..Full Article: Source

OPEC is in for long war with US shale producers

Posted on 26 January 2015 by VRS  |  Email |Print

It is in the interests of the Organisation of the Petroleum Exporting Countries to slow that process. The situation is analogous to chemotherapy: OPEC hopes low oil prices will curtail shale before they destroy its own finances. That explains why the death of Saudi Arabia’s King Abdullah is unlikely to mean a shift in strategy. But OPEC could be in for a longer struggle than many expect.
Oil’s collapse is affecting drilling. By Friday, the US rig count had fallen by 15 per cent since its most recent peak in September, according to Baker Hughes. Meanwhile, surveying 50 North American exploration and production companies that have ­issued guidance so far, Tudor, Pickering, Holt & Co finds their aggregate capital expenditure budget for 2015 is about a third lower than last year………………………………………..Full Article: Source

Oil price could spike to US$200 a barrel

Posted on 23 January 2015 by VRS  |  Email |Print

Rampant speculation by hedge funds and a rare confluence of short-term shocks have driven the price of oil far below its natural clearing level, coiling the springs for a fresh spike this year that may catch markets badly off guard once again. “The price will rebound and we will go back to normal very soon,” said Abdullah Al-Badri, Opec’s secretary-general. “Yes, there is an oversupply, but fundamentals don’t justify this 50% fall in price.”
Claudio Descalzi, chief executive of Italy’s oil giant ENI, said the last phase of the price crash from US$75 a barrel to around US$45 was driven by wild moves on the derivatives markets. “What we need is stability: a central bank for oil. Prices could jump to US$150 or even US$200 over the next four or five years,” he said………………………………………..Full Article: Source

This is the price point to beware for falling oil

Posted on 23 January 2015 by VRS  |  Email |Print

Many investors believe that declining oil prices are a good thing—for now—though some see $30 a barrel as the break point when the trend turns negative. Earnings season has provided a good glimpse at how energy is impacting corporate America. Outside the sector, this is turning into a pretty good quarter. Include energy, though, and things are fairly gloomy.
About 75 percent of S&P 500 companies that reported through Wednesday beat sharply lowered analyst expectations, according to S&P Capital IQ. That’s come, however, amid a brutal quarter for energy companies, with the sector projected to show a 22.6 percent profit decline………………………………………..Full Article: Source

OPEC’s Badri says oil won’t fall to $20: Bloomberg

Posted on 23 January 2015 by VRS  |  Email |Print

Oil prices will not fall to $20 or $25 a barrel, OPEC Secretary-General Abdullah al-Badri said in an interview with Bloomberg. “The price will not go to $20 or $25, I think the price will stay at where we are now,” Badri said, Bloomberg reported.
Producers outside the Organization of Petroleum Exporting Countries (OPEC) should be first to reduce their output to remove a global surplus, Badri said, rather than OPEC. OPEC decided against cutting its own output at a meeting in November, a move that helped to extend a slide in oil prices………………………………………..Full Article: Source

OPEC Will Blink in Battle With U.S. Shale Drillers, Poll Shows

Posted on 23 January 2015 by VRS  |  Email |Print

U.S. shale drillers won’t scale back output quickly enough for OPEC to avoid production cuts this year, according to a quarterly poll of Bloomberg subscribers.
Forty-nine percent of analysts, traders and investors surveyed said the Organization of Petroleum Exporting Countries will have to lower its production target this year, while 34 percent said shale drillers will lower output in time. Seventeen percent weren’t sure………………………………………..Full Article: Source

OPEC, oil companies clash at Davos over price collapse

Posted on 22 January 2015 by VRS  |  Email |Print

OPEC defended on Wednesday its decision not to intervene to halt the oil price collapse, shrugging off warnings by top energy firms that the cartel’s policy could lead to a huge supply shortage as investments dry up.
The strain the halving of oil prices since June is putting on producers was laid bare when non-member Oman voiced its first direct, public criticism of the Organization of the Petroleum Exporting Countries’ November decision not to cut production but instead to focus on market share………………………………………..Full Article: Source

Oman Joins Other Oil Nations Saying OPEC Decision Wrong

Posted on 22 January 2015 by VRS  |  Email |Print

Oman, the biggest Middle Eastern oil producer that’s not a member of OPEC, joined Venezuela and Iran in questioning the group’s decision to keep its output target unchanged even with crude prices falling.
Oman is having a “really difficult time” because of low oil prices, Oman’s Oil Minister Mohammed Al-Rumhy said at a conference in Kuwait City. Standard & Poor’s lowered the country’s outlook to negative from stable on Dec. 5, citing a risk that oil may drop more than expected………………………………………..Full Article: Source

Oil prices will normalise soon: OPEC

Posted on 22 January 2015 by VRS  |  Email |Print

The current slump in oil prices will be short-lived, OPEC’s secretary-general said, defending the oil-producing group’s November decision not to cut its production. “I tell you, the price will rebound and we will go back to normal very soon,” Abdalla Salem el-Badri said while speaking at the World Economic Forum in Davos, Switzerland.
Oil prices have fallen more than 50 per cent since June amid surging production in the US and steadfast output from the Organization of the Petroleum Exporting Countries, despite an increasingly sluggish demand picture. In the past, OPEC has cut its output to prop up oil prices, but Mr el-Badri said the producer group couldn’t keep cutting back to prop up non-OPEC suppliers………………………………………..Full Article: Source

IEA economist sees upward pressure on oil prices by year-end

Posted on 22 January 2015 by VRS  |  Email |Print

Oil prices will face upward pressure by the end of the year, the chief economist of the International Energy Agency (IEA) said on Wednesday, as a fall of more than 50 percent in the price of crude since last June is expected to eventually curtail some production.
Fatih Birol of the IEA was appearing on a panel with OPEC Secretary General Abdullah al-Badri at the World Economic Forum in Davos, Switzerland. Badri argued that OPEC oil producers were right not to cut production despite the price fall………………………………………..Full Article: Source

Oil price drop is ‘economic warfare against US enemies’

Posted on 22 January 2015 by VRS  |  Email |Print

The current oil price decline can be explained by heavy selling in US future markets which is part of an all-out economic war between the US and countries like Russia, Iran and Venezuela, says financial journalist, Willem Middelkoop. The current price can only partially be explained by technical factors like growing US oil production which increased by a million barrels per day in the last year.
But I think it’s quite reasonable to expect that the price declines, which we’ve seen over the last few months, were also caused by heavy selling in the American future markets, and you could call that a form of economic warfare – it is an [all]-out economic war between the US and Russia now. If we see who has more problems [caused] by current oil – they are Russia, Iran, Venezuela – these countries can be seen as enemies of the US………………………………………..Full Article: Source

Average Oil Price per Barrel in 2015 is Expected at $56.7 — IMF

Posted on 21 January 2015 by VRS  |  Email |Print

The IMF expects this year the average price of oil on world markets to hover around $56.73 per barrel, and in the future — $63.88, the agency reported on Tuesday at the World Economy prospects presentation in Beijing. The average price was determined by simple arithmetic — by taking the average prices of Brent, Dubai and West Texas oil. For the sake of comparison, the report mentioned that the average price of oil in 2014 was $96.3 per barrel.
The commentary to the report provides background to the falling oil prices, for example that since September 2014, the price of oil fell by approximately 55%. This decrease is a result of the unexpected low demand for oil in some major economies, especially in the emerging markets………………………………………..Full Article: Source

Oil slides as IMF cuts global growth forecast

Posted on 21 January 2015 by VRS  |  Email |Print

World oil prices fell on Tuesday after the International Monetary Fund slashed its world economic growth forecast, stoking fresh fears over the strength of global crude demand. In late afternoon London deals, Brent North Sea crude for delivery in March dropped 55 cents to US$48.29 (S$64.60) a barrel.
US benchmark West Texas Intermediate for February sank US$1.97 to trade at US$46.72 per barrel. “Oil prices fell back … dented by the global demand outlook suggested by the IMF,” said Jasper Lawler, analyst at CMC Markets………………………………………..Full Article: Source

Is the Oil Price Collapse Temporary?

Posted on 21 January 2015 by VRS  |  Email |Print

What can we expect from the oil price in next six months and beyond? And what impact does this have on the expectations for global growth. If the collapse of crude oil quotes was temporary, it would only add noise to the global economic landscape and, apart from fuelling volatility, would have no lasting consequences.
Yet, there are reasons to believe the fall is not temporary. As Saudi Arabia has made crystal-clear, its strategy is to preserve global market share, not support market prices. This is rational: back in the early 1980s, Saudi Arabia did the opposite, cutting production to support prices, thereby subsidising its competitors, especially outside OPEC. Only in late 1985 did Saudi Arabia reverse gears and double production to regain market power………………………………………..Full Article: Source

Iran Sees ‘No Threat’ From Oil at $25 as Prices Keep Falling

Posted on 21 January 2015 by VRS  |  Email |Print

OPEC has no immediate plan to cut its output target for crude, and Iran is strong enough to withstand a deeper slump in prices even if the country must sell at $25 a barrel, Oil Minister Bijan Namdar Zanganeh said.
“If the oil prices drop to $25 a barrel, there will yet again be no threat posed to Iran’s oil industry,” Zanganeh told reporters on Jan. 19 at a conference in Tehran, according to the state-run Fars news agency………………………………………..Full Article: Source

Low Oil Prices Force OPEC Members To Rethink 2015 Budgets

Posted on 21 January 2015 by VRS  |  Email |Print

The persistent drop in oil prices is prompting more oil-rich OPEC countries to revise the projected revenues in their coming budgets. Already, Saudi Arabia, the world’s largest producer of oil and OPEC’s richest member, has acknowledged that the steep fall in oil prices since June will leave the Riyadh government with its first budget deficit since 2011 and the largest in its history.
The Saudi budget, announced on Dec. 25, will include spending during fiscal 2015 of $229.3 billion, higher than in 2014, despite revenues estimated at only $190.7 billion, lower than in the current fiscal year. That would leave a deficit of $38.6 billion………………………………………..Full Article: Source

Economists Predict Africa’s Growth to Go Beyond Oil, Commodities in 2015

Posted on 20 January 2015 by VRS  |  Email |Print

Economic experts from across the African continent say this may be an exciting year for African economies, which could be ready to move out of their traditional roles and into new sectors. African nations have struggled for decades to go beyond their role as providers of basic raw materials, like oil, gas, minerals and agricultural products.
Their efforts have had mixed success. While nations like South Africa and Kenya have managed to diversify their economies, others, like Angola and Nigeria, are largely known to investors as energy sources………………………………………..Full Article: Source

Former Saudi oil boss says it can cope with low price

Posted on 20 January 2015 by VRS  |  Email |Print

Saudi Arabia can cope with low oil prices for “at least eight years”, Saudi Arabia’s minister of petroleum’s former senior adviser has told the BBC. Mohammed al-Sabban said the country’s policy was to defend its current market share by enduring low prices.
“You need to allow prices to go as low as possible in order to see those marginal producers move out of the market,” he said. Mr al-Sabban advised the ministry for 27 years, leaving last year………………………………………..Full Article: Source

As oil prices plunge the politics are pivotal

Posted on 20 January 2015 by VRS  |  Email |Print

The oil price collapse has taught us a lesson about the dangers of overestimating the influence of political machinations on markets. The assumption that politics, whether Saudi manipulation or collusion in the Opec oil producers’ cartel, would keep prices eternally above $100 a barrel was proved wrong. Now people are flipping to an opposite view, where market forces are king and politics no longer matters.
Instead of reading the tea leaves in Riyadh and Vienna, they are focusing narrowly on how commodities and capital markets will adjust to low prices — which in isolation is just as wrong and just as dangerous………………………………………..Full Article: Source

How Low Can Oil Go? And When’s It Going Back Up?

Posted on 20 January 2015 by VRS  |  Email |Print

What a difference a year makes. In January 2014, Goldman Sachs said it did not “expect a material collapse in oil prices,” citing Saudi Arabia’s preference for prices of around $100 per barrel, and the country’s position on being ready to cut production to support those levels. One year later, crude prices are hovering around $50 a barrel and the Saudi Arabia-led Organization of the Petroleum Exporting Countries has repeatedly declined to cut the supply.
Consequently, Goldman slashed its 2015 oil price forecasts last week, predicting that “this bear market will likely be characterized by more of a U-shaped recovery and will likely rebound to far lower price levels from where they sold off.”……………………………………….Full Article: Source

Not your usual oil-price decline effect

Posted on 20 January 2015 by VRS  |  Email |Print

Yup. Analysts and economists still can’t decide whether the fall in oil prices is net positive or net negative for the global economy. Unfortunately for the net positive camp, it looks increasingly like global demand and growth figures are beginning to side with the negativity team.
Indeed, the longer the oil price stays low, the more it looks like global stimulus hopes were overdone due to poor understanding of financial feedback loops in the commodity space. So what’s behind the anomaly? How did a whole school of economists get this potentially so wrong?……………………………………….Full Article: Source

Iran sees no OPEC shift toward a cut, says oil industry could withstand $25 crude

Posted on 20 January 2015 by VRS  |  Email |Print

Iran sees no sign of a shift within OPEC toward action to support oil prices, its oil minister said, adding its oil industry could ride out a further price slump to $25 a barrel. The comments are a further sign that despite lobbying by Iran and Venezuela, there is little chance of collective action by the 12-member OPEC to prop up prices - entrenching the reluctance of individual members to curb their own supplies.
In remarks posted on the Iranian oil ministry’s website SHANA, Oil Minister Bijan Zanganeh called for increased cooperation between members of the Organization of the Petroleum Exporting Countries………………………………………..Full Article: Source

After the oil price crash, it’s time for a carbon tax

Posted on 20 January 2015 by VRS  |  Email |Print

The reduction in oil prices should be a good opportunity for Europe to put in place the appropriate tools for combating climate change, and to start the transition to a sustainable economy. In just over a year, the price of Brent crude has plummeted from $107.78 to $47.44, a fall of over 55%.
At a time when the European economy is suffering from a severe recession and looming deflation has yet to be dealt with by courageous decisions from the European Central Bank, the reduction in the cost of energy should be a positive shock from the supply side and provide a boost in production. ……………………………………….Full Article: Source

No oil price recovery yet despite U.S. shale slowdown: IEA

Posted on 19 January 2015 by VRS  |  Email |Print

Oil prices may have further to fall and a rebound could take some time, despite increasing signs that the downtrend will end, possibly in the second half of this year as North American supply growth slows, the West’s energy watchdog said on Friday.
Crude oil prices have fallen almost 60 percent over the last six months with both of the world’s crude oil benchmarks now trading below $50 a barrel as supplies of high quality, light oil from the United States and Canada have overwhelmed demand at a time of lacklustre global economic growth………………………………………..Full Article: Source

Iran minister’s Saudi visit delayed due to oil price fall: Tehran

Posted on 19 January 2015 by VRS  |  Email |Print

Iran’s Foreign Minister Mohammad Javad Zarif has postponed a visit to Saudi Arabia in protest against Riyadh’s reluctance to cut oil production, a senior Iranian official said on Sunday.
Oil prices have fallen 60 percent from their June 2014 peaks, driven down by rising production, particularly of U.S. shale oil, and weaker-than-expected demand in Europe and Asia………………………………………..Full Article: Source

Saudis Kept Oil Exports at 7-Month High as OPEC Met

Posted on 19 January 2015 by VRS  |  Email |Print

Saudi Arabia’s oil exports rose to a seven-month high in November when it led OPEC to keep production unchanged as the largest crude shipper fought to keep market share with output rising from the U.S. to Russia.
Saudi Arabia’s oil exports rose to 7.3 million barrels a day from 6.9 million barrels in October, according to data yesterday on the website of the Joint Organisations Data Initiative. Crude stockpiles at the end of the month stood at 305.8 million barrels, the highest level since at least January 2002, figures on the group’s website showed………………………………………..Full Article: Source

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