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Is the oil price fall more than just a coincidence?

Posted on 21 October 2014 by VRS  |  Email |Print

The recent drop in oil prices could be due to more than just lower demand, according to some analysts, who have suggested that the U.S. could be deliberately manipulating the market to hurt Russia at a time of geopolitical stress.
Patrick Legland, the global head of research at Societe Generale, conceded that he had no in depth knowledge of the situation but claimed that it was an “interesting coincidence” that the two events were happening at the same time………………………………………..Full Article: Source

Oil prices unlikely to exceed $100 per barrel in near future - Russian finance ministry

Posted on 21 October 2014 by VRS  |  Email |Print

Russia’s finance ministry thinks that oil prices are unlikely to exceed 100 U.S. dollars per barrel in the short-time perspective, Maxim Oreshkin, the director of the ministry’s long-term strategic planning department, said on Sunday.
“In general, the current downward price movement is structural,” he told RBС-TV. “Investments in oil production have increased dramatically in the past decade. The market is featuring excessive offer. That is why price reduction is inevitable, it will have a structural character. We are unlikely to see prices higher than 100 U.S. dollars per barrel in the near future.”……………………………………….Full Article: Source

Iran Shuns Image as OPEC Hawk While Seeking Sanctions End

Posted on 21 October 2014 by VRS  |  Email |Print

Iran, eager for an end to sanctions that have restricted its oil exports, is shunning its image as OPEC’s price hawk by avoiding calls for an emergency session of the group to support prices. Oil Minister Bijan Namdar Zanganeh consulted with Iranian President Hassan Rouhani about political and economic reasons for the price collapse, the ministry’s news website Shana reported.
No emergency meeting of the Organization of Petroleum Exporting Countries is necessary to discuss the slide, Shana said. Rouhani told Zanganeh to use the “oil diplomacy tool” to try to prevent a further decrease, the state-run Mehr news agency said Oct. 19, without elaborating………………………………………..Full Article: Source

Falling Oil Prices Make Double-Edged Sword

Posted on 21 October 2014 by VRS  |  Email |Print

Falling oil prices are a double edged sword. On one hand they reflect the positive impact from rising US oil production and provide an economic stimulus shot. On the other hand they reflect a struggling global economy that is seeing falling demand as well as falling confidence.
As deflation and stagnation pressures mount the ECB acts to try to stem the sinking mood in the European Union. European Central bank President Mario Draghi used one of the tools at his disposal, one that he did not need German approval on and decided to buy short term French covered bonds………………………………………..Full Article: Source

Why some global commodities players are shipping less Canadian crude by rail now

Posted on 21 October 2014 by VRS  |  Email |Print

Spot crude-by-rail volumes are down in Canada as traders and marketers including Glencore PLC are deterred by stronger heavy oil prices that have erased arbitrage opportunities to ship cheap crude from landlocked Alberta to higher-priced U.S. markets, industry sources said.
Since early August, heavy Canadian crude’s discount to U.S. futures has narrowed to about half of what it was last year, barely covering rail shipping costs, mainly due to extra demand to fill Enbridge Inc’s new pipeline to flow the Canadian glut to U.S. Gulf Coast refining hub………………………………………..Full Article: Source

Crude Falls on OPEC Production Concerns

Posted on 21 October 2014 by VRS  |  Email |Print

U.S. and global crude benchmarks ended lower Monday amid choppy trading and concerns that member nations of the Organization of the Petroleum Exporting Countries will maintain high production levels in a bid to compete for market share despite growing global crude supplies.
Light sweet crude futures for front-month November delivery ended the day down 4 cents at $82.71 a barrel on the New York Mercantile Exchange. The contract was steady in early trading but slipped through midmorning, and stabilized in the afternoon. November futures expire Tuesday and most of the volume in the market has moved forward into the December contract, which ended down 15 cents at $81.91 a barrel………………………………………..Full Article: Source

IEA reduces global oil demand forecast again on slower economic growth

Posted on 21 October 2014 by VRS  |  Email |Print

The International Energy Agency’s Oil Market Report (OMR) for October continues to reduce its forecast of global oil demand for 2014 by 200,000 b/d from the previous month, to 92.4 million b/d, in line with lower expectations of economic growth and the weak recent trend. Annual demand growth for 2014 is now projected at 700,000 b/d, rising tentatively to 1.1 million b/d in 2015, as the macroeconomic backdrop improves.
In its October World Economic Outlook, the International Monetary Fund (IMF) cut its forecast of economic growth for 2014 and 2015 for the third time this year to 3.3% and 3.8% (vs. July’s 3.4% for 2014 and 4% for 2015) respectively, led by revisions for Europe, China, Brazil, and Russia………………………………………..Full Article: Source

IEA reduces global oil demand forecast again on slower economic growth

Posted on 21 October 2014 by VRS  |  Email |Print

The International Energy Agency’s Oil Market Report (OMR) for October continues to reduce its forecast of global oil demand for 2014 by 200,000 b/d from the previous month, to 92.4 million b/d, in line with lower expectations of economic growth and the weak recent trend. Annual demand growth for 2014 is now projected at 700,000 b/d, rising tentatively to 1.1 million b/d in 2015, as the macroeconomic backdrop improves.
In its October World Economic Outlook, the International Monetary Fund (IMF) cut its forecast of economic growth for 2014 and 2015 for the third time this year to 3.3% and 3.8% (vs. July’s 3.4% for 2014 and 4% for 2015) respectively, led by revisions for Europe, China, Brazil, and Russia………………………………………..Full Article: Source

More clarity needed in the most volatile commodity oil

Posted on 20 October 2014 by VRS  |  Email |Print

Companies need to know what returns they will get after investing risk capital. When the previous government wanted to double natural gas prices, the oil industry said the new price was, at best, a good interim step towards total market freedom. The government needs to keep in mind two things: one, India needs new discoveries; two, state-run firms have failed to make significant discoveries for a long time.
In framing policies, the government cannot take comfort from the fact that global crude oil prices are in a bear market, having fallen 25% since the June peak of $115. India should be prepared for sudden jumps in prices even as the short-term outlook is rosy for consumers. The International Monetary Fund has downgraded its forecast for global economic growth, while the International Energy Agency has scaled down its forecast for oil demand for the fourth consecutive month………………………………………..Full Article: Source

Falling oil prices put pressure on Russia, Iran and Venezuela

Posted on 20 October 2014 by VRS  |  Email |Print

The silver lining in the recent financial market turbulence has been the continued decline in the price of oil, which is down about 25 percent since June. In addition to creating a windfall for U.S. consumers — one analysis reckoned the savings could amount to $600 per household — the drop, if sustained, will place considerable pressure on three problematic petrostates: Russia, Iran and Venezuela.
The aggressively anti-American foreign policies pursued by all three countries in recent years have been financed in large part by soaring oil revenue. Though separated by culture and continent, the regimes of Vladi­mir Putin, Ali Khamenei and Nicolás Maduro have in common autocratic government and ambitions to dominate their regions………………………………………..Full Article: Source

Low oil price means high anxiety for Opec as US flexes its muscles

Posted on 20 October 2014 by VRS  |  Email |Print

Motorists, airlines and industry are enjoying low energy costs, the US is relishing its reduced reliance on the Middle East – and Opec is wondering how to reassert its authority. During a week of turmoil on the global stock markets, the energy sector played out a drama that could have even bigger consequences: a standoff between the US and the Opec oil-producing nations.
While pension holders and investors watched aghast as billions of pounds were lost to market gyrations, a fossil-fuel glut and a slowing global economy have driven the oil price down to a level that could save the world $1.8bn a day on fuel costs. If this is some consolation for households everywhere after last week’s hit on stock market wealth, it means pain for the Opec cartel, composed mainly of Middle East producers………………………………………..Full Article: Source

Russia can withstand lower oil prices but not for very long

Posted on 20 October 2014 by VRS  |  Email |Print

Russia does not face an immediate threat from the sharp fall in oil prices over recent months. While the economy is heavily dependent on oil, the country’s accumulated reserves and the floating rouble will mitigate the shock, and Russia should be able to withstand levels of $80 to $90 a barrel for about two years. But in the longer term, persistently low prices – reinforced by the pressure imposed by western sanctions – could pose an existential challenge to Vladimir Putin’s regime.
The 25 per cent drop in the oil price over the past three months did come as a shock to the Russian government. The latest draft of the 2015-17 budget assumes a price of $100 a barrel (and average annual gross domestic product growth of 2.6 per cent)……………………………………….Full Article: Source

Hedge Funds Say Oil Is Going to $0

Posted on 20 October 2014 by VRS  |  Email |Print

Supply and demand are what typically fuel oil prices . However, market fundamentals aren’t the only factors at play. Speculators, like hedge funds and other big money investors, play a role in the price of oil as well. They can push it up past market fundamentals or, as they have recently, cause it to plunge — the latest dip sent global oil benchmark Brent down 25% to around $85 per barrel, and U.S. oil benchmark WTI even lower.
Energy traders are betting that oil prices will keep falling. In a recent Bloomberg article, Citigroup’s global head of energy strategy, Seth Kleinman, was quoted as saying that, “several big, smart commodity hedge funds said oil is going to zero.” He went on to say, “they are being somewhat dramatic, but they were incredibly bearish.”……………………………………….Full Article: Source

Hedge Funds Cut Bullish Bets on Crude as Prices Tumble

Posted on 20 October 2014 by VRS  |  Email |Print

Plunging oil prices spurred hedge funds to cut bullish wagers by the most in six weeks, losing confidence in the willingness of producers to constrict supply. Money managers cut net-long positions in West Texas Intermediate by 8.1 percent in the week ended Oct. 14. Short positions jumped to the highest level in 22 months, U.S. Commodity Futures Trading Commission data show.
WTI tumbled 9.2 percent this month as U.S. production expanded to a 29-year high. That added to signs of a global supply glut just as the International Energy Agency cut its forecast for demand growth. Crude is now trading in a bear market, underpinned by speculation that OPEC members are favoring market share over prices………………………………………..Full Article: Source

The oil price is tumbling. Is that good or bad news for the world economy?

Posted on 17 October 2014 by VRS  |  Email |Print

After declining gradually for three months, oil prices suddenly tumbled almost $4 on October 14th alone. It was the largest single-day fall in more than a year and brought the price of Brent crude, an international benchmark, to $85 a barrel. At its peak in June, a barrel had cost $115.
Normally, falling oil prices would boost global growth. A $10-a-barrel fall in the oil price transfers around 0.5% of world GDP from oil exporters to oil importers. Consumers in importing countries are more likely to spend the money quickly than cash-rich oil exporters. By boosting spending cheaper oil therefore tends to boost global output………………………………………..Full Article: Source

Recent decline in crude oil price artificial: Jim Rogers

Posted on 17 October 2014 by VRS  |  Email |Print

Even as crude oil prices have dipped to all-time lows, Jim Rogers of Rogers Holdings told ET Now that the decline is ‘artificial’. “Some of this (oil price decline) is artificial. OPEC is trying to drive down prices because of Shale competition. The oil situation is very artificial at the moment.”
“It looks like a lot of people are dumping. This is artificial. Though I would not be dumping oil myself,” Rogers said. Asked about the US Shale gas boom, Rogers said, The Shale boom will not continue very strong especially if prices do come down. That is high cost oil, and remember those are very short lived wells,” Rogers said. “The production runs down very quickly,” he added. ……………………………………….Full Article: Source

Saudi Arabia tests US ties with oil price

Posted on 17 October 2014 by VRS  |  Email |Print

By encouraging oil prices to fall, Saudi Arabia is taking a calculated gamble in its already strained relationship with the US, hoping that the potential damage to America’s shale industry will be offset by the geopolitical and economic prizes on offer to Washington.
At a time when the US and Saudi Arabia are fighting a new war together in Iraq and Syria, the Saudis have taken the bold step of asserting their pivotal role in the oil market and subtly squeezing the finances of some of America’s fledgling shale companies………………………………………..Full Article: Source

Saudis, other Gulf states to oppose OPEC output cuts

Posted on 17 October 2014 by VRS  |  Email |Print

Gulf nations including Saudi Arabia, Kuwait and the United Arab Emirates are set to oppose any cut to OPEC’s oil production ceiling at next month’s meeting despite the continuing fall in global oil prices, according to several people familiar with the situation. Despite the drop in prices, Gulf nations fear any lowering of the limit on the amount that can be produced by the Organization of the Petroleum Exporting Countries would lead to members of the cartel losing share in global oil markets.
“Saudi Arabia and the rest of the Gulf countries have no intention whatsoever to accept the idea of a cut at the November meeting,” a Gulf OPEC official said……………………………………….Full Article: Source

Global Oil Glut Sends Prices Plunging

Posted on 16 October 2014 by VRS  |  Email |Print

Oil prices posted their biggest one-day drop in nearly two years Tuesday as a U.S.-led wave of crude has crashed into weak global demand, threatening the stability of some countries and providing an economic lifeline to others.
Tuesday’s slide of 4.5% by U.S. crude oil to $81.84 a barrel on the New York Mercantile Exchange left the price down 20% since the start of June. That was the lowest closing price since June 2012, and some analysts predict the price will fall as much as $10 a barrel lower………………………………………..Full Article: Source

Winners and losers from oil price plunge

Posted on 16 October 2014 by VRS  |  Email |Print

Crude oil prices have plunged by $25, or more than 20 per cent, since mid-June, raising many questions. How low might prices go? If they rebound, at what level will they stabilise? Will Saudi Arabia and Opec move to cut output when they meet next month? At what price level might US shale oil production be affected and how severely?
One thing is certain: even the current lower prices are rapidly creating winners and losers. Losers are producers, countries and governments. If Brent falls to $80, Opec countries would lose some $200bn of their recent $1tn in earnings, affecting not only their ability to earn enough to cover the post-Arab Spring expanded budgets, but also their capacity to service debt without triggering defaults………………………………………..Full Article: Source

What’s behind the drop in oil prices?

Posted on 16 October 2014 by VRS  |  Email |Print

From oversupply and waning demand to economic concerns and politics — experts offer their views. Oil prices have been in a free-fall for nearly four months, and Tuesday’s $4 plunge was the biggest drop in more than two years.
Since hitting a peak of over $107 in June, the price of West Texas Intermediate crude oil has since fallen over 24%. It dropped as far as $80 a barrel on Wednesday, the lowest since June 2012. Brent crude oil has also struggled, falling as low as $84.85 a barrel Wednesday. That’s the lowest since November 2010………………………………………..Full Article: Source

Oil-Price Slump Is Double-Edged Sword for Asia

Posted on 16 October 2014 by VRS  |  Email |Print

Falling crude prices are a boon to Asia, reducing costs for businesses and consumers and giving authorities room to lower interest rates amid slow global economic growth. Yet the world’s largest oil-importing region still could suffer if crude prices fall further, after declining this week to two-year lows in the U.S.
While the decline would reduce Asia’s bill for imports, it also would signal slowing demand from China and Europe, which would risk hurting Asia’s exporters. “Falling crude is a double-edged sword for Asia,” said Frederic Neumann, an economist with HSBC Holdings PLC in Hong Kong. “The worry is it reflects weakening global demand. But it offers a bit of a cushion for many economies in Asia.”……………………………………….Full Article: Source

Saudi supply games expose OPEC impotence

Posted on 16 October 2014 by VRS  |  Email |Print

The oil price is in free fall, down 27 per cent since June and 13 per cent so far in October. Saudi Arabia, the world’s traditional swing producer, has done nothing to defend the $100 (U.S.) a barrel floor price for Brent crude, which had not been breached since July, 2012. Why?
The indifference seems to be intentional. The kingdom increased production last month despite concerns that rapid growth in U.S. shale oil production, recovering output in Libya and Iraq and a slowing pace of demand growth may tip the market into surplus. Reuters reported on Monday that Saudi sources were comfortable with the price trends – although Prince Alwaleed bin Talal, the billionaire Saudi businessman, has expressed reservations on Twitter………………………………………..Full Article: Source

Oil market proves mightier than OPEC: Kemp

Posted on 16 October 2014 by VRS  |  Email |Print

There is nothing remotely surprising about the sharp fall in oil prices over the last four months, except perhaps the timing. The fundamental forces driving prices lower (rising supply outside OPEC from shale and sluggish demand growth as result of conservation and substitution) have been clearly visible for at least two years.
“If the shale revolution can be sustained in the United States, and successfully exported to other countries, some combination of OPEC production cuts or lower oil prices to encourage demand and forestall more investment, will be inevitable by 2015-16,” I wrote last year……………………………………….Full Article: Source

Oil prices continue to slide on IEA report

Posted on 15 October 2014 by VRS  |  Email |Print

Global oil prices have fallen further after the International Energy Agency (IEA) reported higher output and cut its forecast for demand growth. Brent crude fell $2.72 to $86.17 a barrel before seeing a slight recovery, while US crude dropped $1.75 to $83.99.
The price of Brent has fallen by 20% since the summer on concerns of oversupply, as output increases and demand wanes. “Recent price drops appear both supply and demand driven,” the IEA said……………………………………….Full Article: Source

Saudi Prince Alwaleed says falling oil prices ‘catastrophic’

Posted on 15 October 2014 by VRS  |  Email |Print

Intervention of Saudi royal may pressure Opec to cut production at its forethcoming meeting to arrest the slide in prices. Saudi Arabia’s most high-profile billionaire and foreign investor, Prince Alwaleed bin Talal, has launched an extraordinary attack on the country’s oil minister for allowing prices to fall.
In a letter in Arabic addressed to ministers and posted on his website, Prince Alwaleed described the idea of the kingdom tolerating lower prices below $100 per barrel as potentially “catastrophic” for the economy of the desert kingdom………………………………………..Full Article: Source

In shift, OPEC price hawk Iran says can live with lower oil

Posted on 15 October 2014 by VRS  |  Email |Print

Iran, in a change of tack, is saying it can live with lower oil prices, moving closer to the views of Saudi Arabia and other Gulf OPEC members and reducing the likelihood of any collective cut in OPEC output to support prices.
OPEC’s traditionally second-largest producer is normally among the first members of the Organization of the Petroleum Exporting Countries to call for supply cuts to support prices. Iran needs relatively high oil prices to balance its budget, analysts say………………………………………..Full Article: Source

Oil’s Price Drop Stands to Help Refiners

Posted on 15 October 2014 by VRS  |  Email |Print

Falling oil prices mean energy companies and their investors can expect lower profits in the coming months. But big, integrated oil companies are likely to find that a recently unloved part of their business—oil refining—provides a cushion.
Companies reporting earnings in the weeks ahead should show the early effects of the oil-price drop. Brent crude fell 16% in the third quarter. It has continued falling this month, hitting $88 a barrel Tuesday, down from $112.40 a barrel at the end of June………………………………………..Full Article: Source

IEA, OPEC Officials Say Shale Can Cope With $80 a Barrel

Posted on 15 October 2014 by VRS  |  Email |Print

Most U.S. shale production would remain profitable even if oil prices fall to $80 a barrel, energy watchdog the International Energy Agency said Tuesday. Its estimate, which is shared by some OPEC officials, suggests crude prices could fall further before supply starts to come out of the market.
In its monthly report for September the IEA said “further oil price drops would likely be needed for supply to take a hit” because most of shale oil “remains profitable at $80 a barrel.” Its comments came as crude prices sank further Tuesday. At 1545 GMT, Brent crude oil for November delivery was down 2.5% to $86.76 a barrel on ICE Futures Europe, on track to settle at a fresh near four-year low………………………………………..Full Article: Source

OPEC ‘may no longer play swing producer role’

Posted on 15 October 2014 by VRS  |  Email |Print

The Organization of the Petroleum Exporting Countries may no longer necessarily play a role of a swing producer in the oil market, the chief analyst of the West’s energy watchdog, the International Energy Agency, Antoine Halff said.
Higher cost projects including US shale, Canadian oil sands or deep-water Brazilian oil production may instead be required to cut output to balance the market when prices fall, he said. Two OPEC sources, meanwhile, said OPEC is unlikely to call an emergency meeting as proposed by Venezuela. The next scheduled OPEC meeting is on Nov. 27 at OPEC’s Vienna headquarters………………………………………..Full Article: Source

World LPG prices plummet on financial market weakness

Posted on 15 October 2014 by VRS  |  Email |Print

NYC-based PIRA Energy Group reports that PIRA’s restructured U.S. gasoline balances provide greater clarity and insight. In the U.S., large crude stock build, small product stock draw, and widening commercial stock excess. In Japan, crude stocks build despite higher runs. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:
PIRA’s restructured US Gasoline balances provide greater clarity and insight: PIRA’s restructured gasoline balances are in response to the steep decline in volume and the relevance of finished gasoline stocks and imports. The changes to the EIA’s finished balance came about as a result of the decline in MTBE and the rise in ethanol, as the oxygenate of choice………………………………………..Full Article: Source

Crude Oil - So Very Bearish, But Is There A Price Floor At $80?

Posted on 15 October 2014 by VRS  |  Email |Print

Oil prices have dropped over 10% since September 1. OPEC increased production in September. Global economic conditions are weak. Oil is moving toward contango. Is this a free market response to current conditions, or is it all managed?
The oil price is denominated around the world in US dollars. The US dollar was up better than 7.5% during the third quarter. A stronger dollar weighs heavily on many commodity prices including crude oil………………………………………..Full Article: Source

Oil price slump yet to hit US shale oil production: IEA chief

Posted on 14 October 2014 by VRS  |  Email |Print

The vast majority of shale oil in the United States is produced at costs far below the current price of crude, the head of the west’s energy watchdog said, which means U.S. projects can withstand the market slump squeezing other producers.
Brent oil stands at around $88 per barrel, down more than 23 percent from the year’s peak above $115 in June, raising concern that some shale oil projects will become un-economic. However Maria van der Hoeven, executive director of the International Energy Agency said that only a tiny minority of shale oil production would be affected by the slump in prices to near-four-year lows………………………………………..Full Article: Source

Iraq Follows Saudi Price Cuts as Brent Oil Falls With WTI

Posted on 14 October 2014 by VRS  |  Email |Print

Iraq will sell its Basrah Light crude to Asia at the biggest discount since January 2009 as it follows Saudi Arabia and Iran in cutting prices amid a slump in Brent futures to the lowest in almost four years.
Brent crude, the European benchmark, fell 2 percent in London today while West Texas Intermediate lost 1.4 percent in New York. Iraq, the second-biggest producer in the Organization of Petroleum Exporting Countries, trimmed the price differentials for supplies to Asia and Europe for November, the country’s State Oil Marketing Co., known as SOMO, said………………………………………..Full Article: Source

Oil Prices Hit 3-Year Low

Posted on 14 October 2014 by VRS  |  Email |Print

As OPEC squabbles over sharing pain of lower prices. The price of crude oil fell to a new three-year low Monday as a split between the world’s most important producers on how to share the pain of lower prices becomes increasingly apparent.
Prices for the U.S. and European benchmark blends fell nearly 2% in early trading Monday, on a Reuters report suggesting that Saudi Arabia was willing to accept a price of as low as $80 a barrel for the next year or two, in order to defend its share of the global market. The New York Mercantile Exchange’s crude contract traded at $84.65 by 0700 EDT, down from a peak of over $107 a barrel as recently as June………………………………………..Full Article: Source

OPEC’s Strife Deepens

Posted on 14 October 2014 by VRS  |  Email |Print

The latest comments from different OPEC sources suggest there is indeed a deep malaise within the cartel that for so long has been key to the path of oil prices. What seems increasingly clear is that OPEC members are in deep disarray over how to respond to the once-in-a-generation supply shock that is the U.S. shale revolution. Rather than looking to cooperate with each other to stem oil’s fall, individual cartel members are instead engaged in a desperate scramble for market share.
That means they are still pumping as much oil as they can, rather than working together to try to cap supply. And with OPEC in theory working these days to a collective supply quota, rather than setting individual output quotas for each country, the penalties for producing too much crude are much now weaker than in the past………………………………………..Full Article: Source

Global Glut Keeps Pressure on Oil Prices

Posted on 14 October 2014 by VRS  |  Email |Print

Traders are becoming increasingly convinced that the world will remain awash in oil. Crude prices have tumbled more than 20% since mid-June. The global benchmark, Brent oil, dropped to a near-four-year low of $88.89 a barrel on Monday, and the U.S. benchmark dropped to $85.74, a 22-month low.
Instead of cutting back on output, to help reduce supplies and increase prices, oil producers—from U.S. corporations to oil-rich nations—are keeping the spigots open. And there is little sign that global demand will rise quickly enough to help erase the glut………………………………………..Full Article: Source

Oil prices could fall below $80 as Opec keeps pumping

Posted on 14 October 2014 by VRS  |  Email |Print

Top energy watchdog says most oil produced in the world is still profitable at prices around $80 per barrel in potential boost for global growth. Oil prices are anticipated to fall below $80 per barrel as the Organisation of Petroleum Exporting Countries (Opec) is increasingly expected to keep its spigots open as the world’s biggest drillers fight for market share.
Brent crude has fallen 23pc this year and was down briefly below $87 per barrel in London trading hours Monday after Saudi Arabia - the world’s biggest exporter - had indicated it would be comfortable for prices to remain depressed in the short term………………………………………..Full Article: Source

Iran warns Opec indecision will hit oil prices as crude slumps

Posted on 13 October 2014 by VRS  |  Email |Print

Iranian oil adviser reminds group of production mistakes made in 1998 which sent crude to levels below $10 per barrel. Oil prices will slump further if the Organisation of Petroleum Exporting Countries (Opec) repeats its mistakes of the 1990s and fails to cuts its production fast enough to cope with a glut of crude now flooding the international market, Iran’s Oil Ministry has warned.
“In 1998 inadequate reaction by Opec sent oil prices to as low as $6 to $8 per barrel,” said Mehran Amirmoeini, a top energy adviser, quoted by the official Iranian Oil Ministry news service. “When the market is faced with falling demand and simultaneously rising supply, naturally some countries try to absorb customers by offering discounts.”……………………………………….Full Article: Source

OPEC Members’ Rift Deepens Amid Falling Oil Prices

Posted on 13 October 2014 by VRS  |  Email |Print

A rift between OPEC members deepened over the weekend, as producers in the cartel moved in different directions amid falling oil prices. Venezuela, which has been one of the most outspoken proponents of a production cut by the Organization of the Petroleum Exporting Countries, called over the weekend for an emergency meeting of the group to respond to falling prices. But Kuwait said Sunday that OPEC was unlikely to act to rein in output.
Saudi Arabia, meanwhile, appeared to expand on its recent move to defend its market share at the expense of other members by aggressively courting customers in Europe. Traders said Saudi Arabia is now asking for stronger commitments from some of its buyers in Europe, a move that would lock in those customers, including any new ones it would gain with recent price reductions………………………………………..Full Article: Source

Kuwait says OPEC unlikely to cut output to support prices -KUNA

Posted on 13 October 2014 by VRS  |  Email |Print

OPEC is unlikely to cut oil production in an effort to prop up prices because such a move would not necessarily be effective, Kuwait’s oil minister Ali al-Omair was quoted as saying by state news agency KUNA on Sunday.
Brent crude oil settled at $90.21 a barrel on Friday after earlier falling to $88.11, the lowest since December 2010, as Saudi Arabia said it raised production last month, adding to perceptions that the kingdom is looking to defend market share, rather than prices. Oil ministers from the Organization of the Petroleum Exporting Countries (OPEC) are scheduled to meet in Vienna on Nov. 27 to consider whether to adjust their output target of 30 million barrels per day (bpd) for early 2015………………………………………..Full Article: Source

Saudi Arabia Tells OPEC It Raised Output In Sept Despite Oil Drop

Posted on 13 October 2014 by VRS  |  Email |Print

The lack of a Saudi cut could add to perceptions of traders and analysts that the Kingdom is looking to defend market share, not prices. Top oil exporter Saudi Arabia told OPEC it raised its oil production in September by 100,000 barrels per day, adding to signs it has yet to respond to a drop in prices well below $100 a barrel by trimming output.
In a monthly report issued on Friday, the Organization of the Petroleum Exporting Countries (OPEC) said Saudi Arabia reported September production of 9.704 million barrels per day (bpd), up from 9.597 million in August………………………………………..Full Article: Source

Venezuela calls for OPEC emergency meeting

Posted on 13 October 2014 by VRS  |  Email |Print

Venezuela has called on the Organization of the Petroleum Exporting Countries (OPEC) to convene an emergency meeting to prevent sharp reduction in the oil prices in the global market. “We are going to ask for an extraordinary OPEC meeting. We need to try to coordinate some sort of action to stop falling oil prices,” Venezuela’s Foreign Minister Rafael Ramirez said at a Friday news conference in Caracas.
“I am convinced this is not due to market conditions, but is price manipulation to create economic problems for large oil-producing businesses,” Ramirez added………………………………………..Full Article: Source

Oil price unlikely to go down to $60 per barrel

Posted on 13 October 2014 by VRS  |  Email |Print

The oil price on the international market is unlikely to drop to $60 per barrel, although it may go down for some time to $80-$85, but should stabilize around $90, says Russian Finance Ministry long-term strategic planning department head Maxim Oreshkin. “I don’t really believe in $60.
What looks more realistic is $90, and we already talked about this level. When oil cost $100, we said that $90 was the level where it could stabilize. It goes without saying that we could drop to $85 or $80 for a short period of time, but we will orient ourselves at $90 in the midterm,” Oreshkin told journalists. To make forecasts regarding oil prices, it is important to understand the causes of and the nature of price shocks, Oreshkin said………………………………………..Full Article: Source

Oil price fall disrupts Mexico’s hedging and threatens spending

Posted on 13 October 2014 by VRS  |  Email |Print

Falling crude prices have disrupted Mexico’s annual oil hedging programme – the largest of its kind in commodity markets – and raised fears the government may have to trim spending just as the economy starts to pick up steam.
Luis Videgaray, the finance minister, took the extraordinary step this month of confirming that the highly secretive programme had kicked off. His comments came after the Financial Times uncovered terms of Mexico’s hedging contracts from a new derivatives database………………………………………..Full Article: Source

Oil Prices Dip Below $90 for First Time in Two Years

Posted on 10 October 2014 by VRS  |  Email |Print

Global oil prices dipped below $90 a barrel for the first time in more than two years Thursday as investors saw new signs that global supplies will continue to surpass demand. Both Brent, the global benchmark, and the U.S. standard are trading more than 20% below a recent high, meeting the definition of a bear market. Prices have slumped for nearly four months as global supplies remain ample.
At the start of PIRA Energy Group’s widely attended seminar in New York on Thursday, the research firm predicted oil prices have further to fall, Reuters reported. PIRA is typically considered optimistic on energy prices, market participants say. The seminar is closed to the press………………………………………..Full Article: Source

Oil prices have plunged through another psychological barrier

Posted on 10 October 2014 by VRS  |  Email |Print

Global oil prices today fell below $90 a barrel—good news for the global economy at a time of fears of a renewed contraction, but a risk for Saudi Arabia, whose unremitting war for market share is one reason for the plummet.
The price of the internationally traded Brent benchmark fell to $89.46 in after-hours trading, about 22% lower than its 2014 peak of $115.71 on June 19. US and European GDP could get a lift if oil prices stay this low for awhile, which is not far-fetched given projections of a continuing US oil production surge in 2015………………………………………..Full Article: Source

No Panic In OPEC Yet

Posted on 10 October 2014 by VRS  |  Email |Print

As Brent threatens to break $90, the lack of concern in most OPEC nations is interesting, but probably won’t last long. The fact that the dollar has appreciated in recent weeks is no doubt helpful to oil exporters, offsetting about one-third of the recent oil price decline. But the fear that the price will continue to slide as the market psychology appears to be increasingly bearish should motivate some to action.
The current dip in prices is hardly severe, more like the small drop in 1983 than the collapse in 1986. This is partly because temporary factors appear to be dominating oil price weakness, especially the worsening economic situation in Europe and parts of Asia………………………………………..Full Article: Source

What OPEC Is Really Telling The IMF

Posted on 10 October 2014 by VRS  |  Email |Print

The Secretary General for the Organization of the Petroleum Exporting Countries (OPEC), H.E. Abdalla Salem El-Badri, issued a statement to the International Monetary Fund (IMF) on Thursday. He touched on a few key points of crude oil prices, the global economic forecast, and emerging markets, to name a few.
What we would stress to our readers is what OPEC sees for global demand and output — that thing called the US Energy Boom hangs in the balance. The underlying message from this statement is that as production in North America continues to grow it will outpace production in the rest of world, driving the demand of oil down over time. Crude oil prices in September fell to their lowest level this year………………………………………..Full Article: Source

Oil market bulls say price war is unlikely

Posted on 10 October 2014 by VRS  |  Email |Print

Ignore the talk of an OPEC price war, say crude market bulls. Oil’s next move was spelled out in Saudi Arabia’s own words. Price cuts announced by the Saudis, including the biggest discounts for Asia since 2008, sparked speculation that the world’s biggest crude exporter would let oil tumble rather than cede market share to rivals in OPEC.
This is misguided, said UBS AG and BNP Paribas SA. Brent is below the $95-to-$110 range endorsed by Saudi Oil Minister Ali al-Naimi, ensuring the country will curb output, they said. Brent, the European benchmark, fell into a bear market amid a surplus of U.S. shale oil and weaker economic growth. The discounts prompted predictions that Saudi Arabia would tolerate lower prices to deter investment in higher-cost U.S. shale………………………………………..Full Article: Source

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