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Commodities Briefing - Category | Oil more

Oil soars over 10 percent, biggest gain in six years as shorts scramble

Posted on 28 August 2015 by VRS  |  Email |Print

Oil rocketed more than 10 percent higher on Thursday, posting its biggest one-day rally in over six years as recovering equity markets and news of diminished crude supplies set off a short-covering scramble by bearish traders.
Snapping back from a deep two-month slump that knocked U.S. crude to 6-1/2 year lows below $40 this week, oil climbed as world stock markets rose on hopes Chinese government measures to stimulate the economy would pay off, while the dollar strengthened as risk aversion eased………………………………………..Full Article: Source

Venezuela Asks OPEC for Emergency Meeting on Oil Prices

Posted on 28 August 2015 by VRS  |  Email |Print

Hard-hit Venezuela has been contacting other OPEC members to push for an emergency meeting in coordination with Russia to come up with a strategy to stop the current oil price rout, people familiar with the matter said.
According to these people, Venezuela has been in touch with some members of the Organization of the Petroleum Exporting Countries, including Qatar’s oil minister and president of the OPEC conference, Mohammed al-Sada, to try again to find common ground to defend crude prices………………………………………..Full Article: Source

Lessons from the oil market’s ‘lost decade’: Kemp

Posted on 28 August 2015 by VRS  |  Email |Print

Saudi Arabia and its OPEC allies are counting on strong growth in demand coupled with slower growth in non-OPEC supply to rebalance the oil market in 2016. But the experience of the “lost decade” after prices slumped in 1986 suggests rebalancing could take longer than some OPEC members and market analysts expect.
Following the price slump in 1985/86, the oil market struggled with persistent surpluses for much of the next 17 years. In real terms, oil prices did not rise above the 1986 crisis level on a sustained basis until 2003……………………………………….Full Article: Source

Iran says some in Opec do not want high oil price

Posted on 28 August 2015 by VRS  |  Email |Print

Iran’s Oil Minister Bijan Zanganeh blamed the latest drop in oil prices on some members of Opec and questioned whether any Opec emergency meeting would reach an agreement, the oil ministry’s news agency Shana reported.
“To balance the oil price… Opec members should balance their production. An emergency meeting has been requested and we don’t have a problem with that,” Shana cited Zanganeh as saying. “But as you know the result of Opec meetings should be approved by all members, I think some members do not want the price of oil to be high and they want to damage other countries by low prices.”……………………………………….Full Article: Source

Oil Prices Fall on Less Gas Demand, Growing Glut

Posted on 27 August 2015 by VRS  |  Email |Print

Oil prices resumed falling after U.S. stockpile data showed a surprise drop in gasoline demand and record supplies of crude oil and petroleum products. The data reaffirmed growing concerns that the global oil market will remain awash in crude through the end of the year.
Oil prices have plunged in recent weeks on worries that the global glut of crude that halved oil prices in 2014 has yet to shrink. U.S. crude production remains near multidecade highs, despite large spending cuts by producers, and members of the Organization of the Petroleum Exporting Countries continue to pump at high levels………………………………………..Full Article: Source

Why the oil price could be depressed for a generation

Posted on 27 August 2015 by VRS  |  Email |Print

The oil price may have fallen to its lowest level since the financial crisis, but Chris Taylor believes it will get cheaper. The oil price has been one of the major casualties of the downturn in global markets over the last few weeks, tumbling to levels not seen since the depths of the financial crisis.
A barrel of Brent crude oil now costs $43.67, and fell as low as $42.23 during the Black Monday sell-off. It is down 62% since its most recent peak, of nearly $115, set in June last year. Chris Taylor, head of research at fund group Neptune, believes oil has further to fall, and thinks its price could remain in the doldrums for a generation. He argues that investors are still failing to appreciate the implications of fracking, and the shale oil it produces………………………………………..Full Article: Source

OPEC Unable to Control Oil Production in Member States

Posted on 27 August 2015 by VRS  |  Email |Print

The Organization of the Petroleum Exporting Countries (OPEC) is irrelevant because it can’t control oil production volumes within it’s own member-countries, the president of PKVerleger LLC, an US energy consulting firm, told Sputnik. “OPEC is irrelevant today. Producing countries set their levels of production… Prices will probably fluctuate between 30 and 50 [dollars per barrel]. OPEC <…> has no power,” Dr. Philip K. Verleger said.
Global oil prices have significantly dropped compared to summer 2014, falling from $100 to $43 per barrel for Brent crude, primarily a result of worldwide oversupply. According to the International Energy Agency (IEA), global oil prices will fall further in 2016 in response to decreased demand. ……………………………………….Full Article: Source

Ecuador Reveals Pain Inside OPEC: It’s Pumping Oil at a Loss

Posted on 27 August 2015 by VRS  |  Email |Print

Ecuador has revealed the financial stress inside OPEC created by low oil prices, becoming the first member of the group to say it’s pumping at a loss. President Rafael Correa said on Tuesday that the South American nation is receiving as little as $30 a barrel for its crude, while production costs average about $39.
The warning comes after several other members of the Organization of Petroleum Exporting Countries, including Algeria and Libya, said the group should consider holding an emergency meeting to respond to the drop in oil prices. “We are going through a very difficult year economically because the price of oil collapsed,” Correa said in a speech in the central highland province of Cotopaxi………………………………………..Full Article: Source

Natural Gas Rises as Commodities Rebound From Global Selloff

Posted on 26 August 2015 by VRS  |  Email |Print

Natural gas futures gained for the first time in three days, rebounding from an 11-week low Monday amid a global rout in commodities, as hotter weather may spur demand from power plants. Temperatures in New York may reach 89 degrees Fahrenheit (32 degrees Celsius) on Aug. 29, 8 above normal, according to AccuWeather Inc.
The heat may put a dent in a gas glut while traders claw back some of yesterday’s across-the-board losses stemming from a currency devaluation in China, according to Bob Yawger, director of the futures division for Mizuho Securities USA Inc………………………………………..Full Article: Source

Oil price dips below $43 – how low can it go?

Posted on 26 August 2015 by VRS  |  Email |Print

An acceleration in the recent fall in oil prices has continued, as the international benchmark dropped by more than seven per cent to settle close to $42 a barrel on Monday after a rout on global equity and commodity markets. Brent was recovering slightly on Tuesday morning and stood at $43.42 a barrel, but this still remains well below the $45 nadir it had reached in January.
Having been at fresh six-year lows, the Financial Times suggests it could remain depressed as traders remain cautious over demand from China, the world’s second-largest oil consumer, which is in the throes of a fresh financial panic, as well as resilient global exports that remain well ahead of consumption………………………………………..Full Article: Source

Why the oil price could be depressed for a generation

Posted on 26 August 2015 by VRS  |  Email |Print

Shale oil is undergoing an unheralded productivity boom – the scale of which has not been seen since the early days of IT – that will depress oil prices for a generation. That is the stark view of Neptune head of research Chris Taylor, which has led his firm to minimise exposure to the oil majors across its fund range.
Oil bulls are admittedly a rare breed in the current climate, with recent moves in the futures market signalling that the price will recover much more slowly than many have predicted. The Black Monday sell-off saw oil prices sink to a six-year low and down to levels not seen since the height of the financial crisis………………………………………..Full Article: Source

Lessons from the oil market’s “lost decade”: Kemp

Posted on 26 August 2015 by VRS  |  Email |Print

Saudi Arabia and its OPEC allies are counting on strong growth in demand coupled with slower growth in non-OPEC supply to rebalance the oil market in 2016. But the experience of the “lost decade” after prices slumped in 1986 suggests rebalancing could take longer than some OPEC members and market analysts expect.
Following the price slump in 1985/86, the oil market struggled with persistent surpluses for much of the next 17 years. In real terms, oil prices did not rise above the 1986 crisis level on a sustained basis until 2003……………………………………….Full Article: Source

Will the oil price crash spur a Saudi/Opec rethink?

Posted on 26 August 2015 by VRS  |  Email |Print

The slide in crude oil prices to the lowest levels since early 2009 is truly alarming for all oil producers but a boost for major consumers, including the world’s shipowners. However, if turmoil in financial markets leads to a global economic slowdown then lower prices will be a mixed blessing.
The surplus of oil supply over demand — averaging nearly 2m barrels per day in 2015 and expected to still be 1m bpd in the first half of 2016 — is clearly the main factor behind lower prices but it now seems that oil is caught up in the wider collapse in commodities and equities markets fuelled by China’s stock market woes………………………………………..Full Article: Source

Iran says Will Reclaim Full Oil Market Share

Posted on 26 August 2015 by VRS  |  Email |Print

Iran will ramp up crude oil production and reclaim its lost share of exports shortly after international sanctions on the OPEC member are lifted, Iran’s oil minister Bijan Zanganeh said on Tuesday. Iran and six world powers agreed a deal in July to curb Tehran’s nuclear program, but sanctions imposed in 2012 will not be lifted until Iran has complied with all the terms of the pact.
Britain’s foreign minister said on Monday that international sanctions on Iran could start to be lifted as early as spring next year. At a news conference in Tehran, Zanganeh said Iran should sell its crude regardless of the oil price………………………………………..Full Article: Source

Oil price drop leads to renewed speculation on Saudi riyal

Posted on 26 August 2015 by VRS  |  Email |Print

Plummeting oil prices have led to renewed speculation against the Saudi riyal, heaping pressure on Riyadh as it burns through its foreign reserves and taps domestic debt markets to make up for a widening budget deficit.
Saudi Arabia, along with other emerging markets, has been the target of traders’ bets that the oil-rich economy will eventually be forced into a devaluation as oil prices fall to new lows on a weaker demand outlook triggered by Chinese economic stress………………………………………..Full Article: Source

Iron ore and oil plunge as China sharemarket rout hits commodities

Posted on 25 August 2015 by VRS  |  Email |Print

Iron ore’s period of relative price stability has come to an abrupt end as China fears rattle commodity markets. The price of iron ore at the Port of Qingdao slumped 5 per cent to $US53.28 per cent on Monday as a savage sell-off gripped Asian markets.
It’s the first significant fall in commodity’s price since early July, when it traded as low as $US44.59. Since then, iron ore has traded in a relatively narrow range compared to the volatility it has experienced through the year. Expectations remain for iron ore’s price to regain its downward march and Australian miners were hit hard overnight as selling swept through European markets………………………………………..Full Article: Source

Oil slides to 6-year low as commodities tumble

Posted on 25 August 2015 by VRS  |  Email |Print

Oil plummeted more than 6 per cent to levels last seen during the financial crisis and a broad index of commodity prices slid to the lowest point of this century as economic doubts gathered over China, the engine room of demand growth over the past decade.
China is the world’s largest importer of raw materials and the biggest energy consumer globally. Mounting signs of a sputtering economy, including a plunge in the Shanghai equity market Monday, have raised the prospect of softer demand for oil and other commodities, removing another support for prices laid low by plentiful supply………………………………………..Full Article: Source

Opec powerless to halt oil price slide, warns former group president

Posted on 25 August 2015 by VRS  |  Email |Print

Opec is powerless to arrest the slide in oil prices unless producers outside the group such as Russia match any cuts in output, according to a former president of the group. With oil prices plummeting due to global oversupply, the Organisation of the Petroleum Exporting Countries (Opec) would be unable to stabilise the market on its own, Abdullah bin Hamad Al-Attiyah said.
The group - which is mainly comprised of Middle Eastern and South American oil producers - would need agreement from other oil-producing nations. “I don’t see any light at the end of the tunnel,” said Mr al-Attiyah. “Opec and non-Opec need to agree to support the market.” Brent crude is down 57pc over the last year to $43 per barrel with pressure mounting within Opec for an emergency meeting of oil ministers to discuss the price slide………………………………………..Full Article: Source

Will they or won’t they? Nerves fray over potential OPEC cut as oil gets routed

Posted on 25 August 2015 by VRS  |  Email |Print

As the selloff in global markets converge with growth concerns to drive down oil prices, analysts are weighing the odds that OPEC could be forced into a production cut. In the middle of mounting speculation that major oil producing countries could cut output to put a floor under falling prices, crude tumbled to fresh six and half year lows on Monday.
The moves followed last week’s losses that drove U.S. light crude below the $40 mark on Friday, with the international Brent contract following a similar path downward. The next scheduled meeting for OPEC is not until December 4th 2015. Yet with oil getting walloped daily, some think it could come much sooner—and that the oil cartel may be forced to send a message to stanch the bloodbath in crude markets………………………………………..Full Article: Source

Oil market loses faith in Saudi oil strategy

Posted on 25 August 2015 by VRS  |  Email |Print

Saudi Arabia’s strategy for rebalancing the oil market through a period of lower prices shows few signs of working so far - with rival producers claiming they will raise output even as prices slide to new lows.
Saudi policymakers insist the kingdom will maintain its market share and let low prices take care of the surplus by forcing cuts from higher cost producers and stimulating fuel demand. With prices down by more than half compared with the same point in 2014, oil consumption is growing at some of the fastest rates for a decade………………………………………..Full Article: Source

Iran says an OPEC emergency meeting may stop oil price slide: Shana

Posted on 24 August 2015 by VRS  |  Email |Print

Iran’s Oil Minister, Bijan Zanganeh, said on Sunday that holding an emergency OPEC meeting may be “effective” in stabilizing the oil price, Iran’s oil ministry news agency Shana reported. Algeria said earlier this month that the Organization of Petroleum Exporting Countries could hold an emergency meeting to discuss the drop in oil prices but other OPEC delegates said no meeting was planned.
“Iran endorses an emergency OPEC meeting and would not disagree with it,” Zanganeh told reporters in Tehran, according to Shana. U.S. oil prices CLc1 fell below $40 a barrel on Friday for the first time since the 2009 financial crisis, pressured by signs of oversupply in the United States and weak Chinese manufacturing data………………………………………..Full Article: Source

Don’t Dive Into Oil Yet

Posted on 24 August 2015 by VRS  |  Email |Print

With oil dipping below $40, is it time to dive in? A roughly 30% drop in the oil price since June naturally has both bulls and bears making pitches. For example, hedge funds have adopted an unusually short position in oil futures, signaling expectations of further declines, according to Ole Hansen at Saxo Bank.
Yet more than $1 billion has flowed into energy exchange-traded funds over the past month, suggesting other institutions and retail investors think the collapse is overdone. This is echoed somewhat in oil stocks. The SPDR S&P Oil & Gas Exploration & Production ETF initially staged a rally this month before succumbing to a selloff. Even so, it is down only about 7% versus a drop of around 14% for oil………………………………………..Full Article: Source

Iran to Raise Oil Output ‘at Any Cost’ to Defend Market Share

Posted on 24 August 2015 by VRS  |  Email |Print

Iran plans to raise oil production “at any cost” to defend the country’s market share and joins calls for an emergency OPEC meeting to help shore up crude prices. “We will be raising our oil production at any cost and we have no other alternative,” said Oil Minister Bijan Namdar Zanganeh, according to his ministry’s news website Shana. “If Iran’s oil production hike is not done promptly, we will be losing our market share permanently.”
Iran had the second-biggest output in the Organization of Petroleum Exporting Countries before U.S.-led sanctions banning the purchase, transport, finance and insuring of its crude began July 2012. Oil producers such as BP Plc and Royal Dutch Shell Plc have expressed interest in developing its reserves, the world’s fourth-biggest, once sanctions are removed………………………………………..Full Article: Source

Oil markets stabilizing, OPEC supply may rise

Posted on 24 August 2015 by VRS  |  Email |Print

Oil prices ticked up and volatility declined during second quarter 2015. However, significant downside risks to prices remain because of supply increases by the Organization of Petroleum Exporting Countries, in particular by Iraq and Saudi Arabia.
The lifting of sanctions on Iran also has the potential to introduce another 700,000 barrels per day to the global market by the end of 2016, possibly depressing global prices by $5-15 per barrel. In the U.S., the drop in rig counts has slowed, but production continued to grow during the second quarter, though growth is expected to level off in the second half of 2015………………………………………..Full Article: Source

The Saudis could face an open revolt at the next OPEC meeting

Posted on 24 August 2015 by VRS  |  Email |Print

OPEC next gathers December 4 in Vienna, just over a year since Saudi Oil Minister Ali Al-Naimi announced at the previous OPEC winter meeting the Saudi decision to let the oil market determine oil prices rather than to continue Saudi Arabia’s role of guarantor of $100+/bbl oil.
Despite the intense financial and economic pain this decision has inflicted on Saudi Arabia, its fellow OPEC members, and other oil producers, the Saudis have given no indication they plan to alter course. In fact, Saudis have downplayed the impact of lower prices on their country, asserting that the kingdom has the financial wherewithal to withstand lower oil prices………………………………………..Full Article: Source

The oil bottom is in when the handcuffs come out

Posted on 21 August 2015 by VRS  |  Email |Print

As vicious as it’s already been, the oil-price collapse probably ain’t over just yet. These boom-bust cycles—whether in tech, housing, or commodities—are so powerful they tend to overwhelm most traditional market mechanisms and follow a path of their own. Sometimes those cycles end with drama, bankruptcies and arrests.
The good news for investors is that these cycles do tend to follow a general pattern. The trouble, particularly for those desperate to find a bottom in oil or other hard-hit commodities, is that this particular cycle hasn’t yet seemed to reach its nadir………………………………………..Full Article: Source

Iran Looms Large Over the International Oil Market

Posted on 21 August 2015 by VRS  |  Email |Print

About 60% of oil market experts view supply as the main driver of prices today, compared to the dollar’s value at 20%. Iran’s nuclear deal with the West could lift crushing sanctions and unleash millions of barrels of Iranian oil onto an already saturated market.
Iran could now be hoarding over 50 million barrels on tankers in the Persian Gulf, versus the 30-40 million barrels previously thought. This is well over double what Iran was believed to be holding 16 months ago and would exacerbate the glut that has plummeted oil prices to six-year lows at $41/barrel, down from $100 last year………………………………………..Full Article: Source

How cheap oil will hurt Iran’s comeback

Posted on 21 August 2015 by VRS  |  Email |Print

Western companies eye Iran’s business potential. Iran may be about to emerge from decades of economic isolation — at an absolutely terrible time for an oil-producing country. Years of painful economic sanctions by the West have ravaged Iran’s economy, sending unemployment and inflation soaring.
Now there’s a glimmer of hope for Iran. The historic nuclear deal with the U.S. and its allies paves the way for sanctions relief. If the agreement is ratified, Iran will be able to export oil to Western nations and generate badly-needed revenue. Here’s the catch: Oil prices are tanking and may stay depressed for some time………………………………………..Full Article: Source

Opec unity cracks as disgruntled members call for meeting to stem oil slump

Posted on 21 August 2015 by VRS  |  Email |Print

Divisions emerge within Opec as members frustrated by the oil price rout call on Saudi Arabia to scale back production in a bid to restore prices. Pressure is building on Saudi Arabia from members within the Organisation of the Petroleum Exporting Countries (Opec) to agree to an emergency meeting to arrest plummeting oil prices.
The Telegraph understands that Opec’s secretary general, Abdulla Salem el-Badri, has spoken to Saudi officials on behalf of members within the group who are coming under extreme economic pressure from oil prices dropping towards levels of $40 per barrel………………………………………..Full Article: Source

Three Reasons Oil Will Surge Past $70 By the End of the Year

Posted on 20 August 2015 by VRS  |  Email |Print

Oil has been demolished over the past year, falling from $100 a barrel to the low 40s. But one oil expert says things are about to turn the corner once again, and Brent crude is going to surge to $71 a barrel by the end of the year. Credit Suisse energy economist Jan Stuart spoke on Bloomberg TV yesterday, giving the reasons behind his big target.
I admit, my target looks very ambitious. The thinking behind it is that production is rolling already. We know that it’s higher than we thought it was going to be at this stage, but it is rolling. The question is going to be how fast, how far. We think United States crude oil production ends the year below 9 million barrels a day from the 9.6 high…Number two, demand is growing………………………………………….Full Article: Source

Oil bear market will end in panic liquidation: Gartman

Posted on 20 August 2015 by VRS  |  Email |Print

The bear market in U.S. crude will continue, eventually ending one day in “panic liquidation,” widely followed investor Dennis Gartman predicted Wednesday. “It will end when you’ve had an announcement of five or six bankruptcies. It will end when mergers and acquisitions step in and take over,” the founder and editor of The Gartman Letter said
U.S. crude (WTI) futures closed at their lowest in more than six years on Wednesday at $40.80 a barrel after U.S. data showed an unexpected rise in crude stockpiles. Oil has lost about a third of its value since June. U.S. oil production is at record levels and producer costs appear to be declining, with no output scaleback anticipated………………………………………..Full Article: Source

Get used to cheap oil, derivatives markets say

Posted on 20 August 2015 by VRS  |  Email |Print

Oil prices will stay low for years to come, derivatives markets say, keeping a lid on inflation and helping boost global growth. Oil has more than halved in value over the last year, thanks to huge oversupply, and many oil companies, particularly in the United States, say they may soon have to rein in production, tightening supply, unless the market recovers.
That has led many analysts to predict that oil - on average around 5 percent of companies’ costs - will see price rises later this year or in 2016, pushing up inflation. But oil derivatives tell another story………………………………………..Full Article: Source

Why oil prices could sink to $15 a barrel

Posted on 19 August 2015 by VRS  |  Email |Print

Oil prices have already taken a dramatic fall that’s saved consumers big time at the pump. Last week, crude tumbled below $42 a barrel, down from $100 last year. One big-name investor is predicting an even sharper drop. “There is no evidence whatsoever to suggest we have bottomed. You could have $15 or $20 oil — easily,” influential money manager David Kotok told CNNMoney.
A further decline to $15 a barrel would be huge. Oil hasn’t traded that low since early 1999, when gasoline at the pump was selling for under $1 a gallon. Kotok’s views on the economy and financial markets are closely watched. The 72-year-old co-founder of Cumberland Advisors manages more than $2 billion in assets and hosts an annual invite-only fishing trip that doubles as an economic summit. Known as “Camp Kotok,” the event lures leaders in finance to Maine each summer………………………………………..Full Article: Source

How Much Pressure Will Iran Put On Oil Prices?

Posted on 19 August 2015 by VRS  |  Email |Print

With the removal of sanctions on Iranian crude exports underway, the bearish price trend may continue through the end of the year, increasing the intensity of competition between oil exporters on a global scale. The preliminary agreement on lifting sanctions raised the prospect of more Iranian oil hitting the market, resulting in oil futures contracts’ prices hitting the lowest benchmark of a more than six-year lows on August 14.
Light sweet crude slid to $41.35 U.S. a barrel on New York Mercantile Exchange due to concerns over the global oil supply glut and staggering level of global demand shaken by slowdown in Chinese and Asian markets. Such low oil price level was reached last on March 4, 2009………………………………………..Full Article: Source

OPEC’s ‘Fragile Five’ Face Rising Cost in the Fight for Oil Market Share

Posted on 19 August 2015 by VRS  |  Email |Print

The costs of OPEC’s plan to protect members’ share of the oil market by out-producing rivals are mounting. As oil prices slump to six-year lows, the risks of worsening political turmoil are rising in the organization’s most vulnerable nations. This includes Algeria, Iraq, Libya, Nigeria and Venezuela, a group dubbed the `Fragile Five’ by RBC Capital Markets Ltd.
The pain doesn’t end there. With even Saudi Arabia facing its biggest budget deficit in almost three decades, consultant Petromatrix GmbH says the plan to produce at full throttle was a “strategic mistake.” Oil prices slumped to near $40 a barrel in New York on Aug. 14 as a global surplus endures almost nine months after the Organization of Petroleum Exporting Countries unveiled its plan to squeeze rivals led by U.S. shale drillers. American production has stubbornly refused to buckle………………………………………..Full Article: Source

U.S. Oil Price Hits New Six-Year Low

Posted on 18 August 2015 by VRS  |  Email |Print

U. S. oil prices fell Monday to a fresh six-year low on concerns that the glut of crude oil is set to grow. Light, sweet crude for September delivery fell 63 cents, or 1.5%, to $41.87 a barrel on the New York Mercantile Exchange, the lowest settlement since March 3, 2009. Brent, the global benchmark, fell 45 cents, or 0.9%, to $48.74 a barrel on ICE Futures Europe.
U.S. oil prices have slid 11% so far this month as concerns mounted that persistently high crude-oil production from the U.S. and the Organization of the Petroleum Exporting Countries would keep the global market oversupplied through 2015………………………………………..Full Article: Source

Algeria Calls for Non-OPEC Output Cut to Stop Oil Price Slump

Posted on 18 August 2015 by VRS  |  Email |Print

The Organization of Petroleum Exporting Countries can do little to halt the oil price decline on its own and needs producers from outside the group to help in reducing global supplies, Algeria’s Energy Minister said.
“A supply reduction by OPEC alone cannot really guarantee a return to oil market stability,” Salah Khebri said at an event in Algiers, according to Liberte newspaper. As the 12-member group of crude producing nations accounts for 40 percent of the world’s supply, “there should be steps taken within OPEC and with non-OPECs.”……………………………………….Full Article: Source

Oil Prices Are Heading Toward $20 a Barrel

Posted on 18 August 2015 by VRS  |  Email |Print

Oil prices, which skidded to a 6½ year low of $41.35 a barrel last week, could fall to $20 as professional speculators sell. That’s the prediction of Steve Briese, editor of the Bullish Review of Commodity Insiders, and a key source for Barron’s prescient March 31, 2014, cover story, “Here Comes $75 Oil.” A $20 capitulation low could lead to a rebound, he says.
With West Texas Intermediate, the U.S. benchmark crude, trading at $100 a barrel in March 2014, our cover story struck many readers as too bearish by half. It turned out to be too modest by half. Investors can use exchange-traded funds such as the United States Oil fund (USO) to invest in oil futures; ETFs such as the Energy Select Sector SPDR (XLE) target energy stocks. Both funds may have further to fall………………………………………..Full Article: Source

Saudi Arabia’s hard choices on oil and regional influence

Posted on 17 August 2015 by VRS  |  Email |Print

The year 2015 is not going well for Saudi Arabia. The attempts of King Salman bin Abdulaziz al-Saud and his son Prince Mohammed bin Salman — who, not quite 30, is not just deputy crown prince and chief of the Royal Court but also defence minister and chairman of the supreme council of state oil company Aramco — to assert their authority in the region and in the oil market are failing.
Barack Obama, US president, pointedly overrode Saudi concerns to reach­ a deal with Iran that is already transforming the regional balance of power. Concerns about Iranian influence led Saudi Arabia to intervene in Yemen, but the ill-conceived air campaign has achieved little beyond demonstrating the limitations of the Saudi military. The result is a humanitarian disaster with Houthi forces still in control of much of the north of Yemen………………………………………..Full Article: Source

The oil industry is acting like the worst is over

Posted on 17 August 2015 by VRS  |  Email |Print

This week, oil prices fell to their lowest level in 6 years. But data from oil driller Baker Hughes and the Federal Reserve this week indicated that oil companies are starting to reverse their behavior of shutting down wells and halting production, a sign that some companies may think the worst is over for the oil market.
On Friday, data from Baker Hughes showed that for the fourth straight week, the number of rigs in use rose, with the total number of rigs online now back to April levels. Meanwhile, the Fed’s latest report on industrial and manufacturing output showed that production at oil and gas wells rose 1.3% in July, the first monthly increase since September 2014 when the price of West Texas Intermediate crude oil was closer to $95 a barrel………………………………………..Full Article: Source

Is the Saudi oil price war backfiring ?

Posted on 17 August 2015 by VRS  |  Email |Print

Saudi Arabia has long enjoyed the status of being the top crude oil exporter in the world. With record production of 10.564 million barrels per day in June 2015, Saudi Arabia has been one of the major driving forces behind the current oil price slump. The Saudis have kept their production levels high since last year in order to drive other players (especially U.S. shale drillers) out of business. Equally clear is the fact that this strategy of maintaining the glut and driving out rivals hasn’t worked so far.
Even when we look at the refining sector, we see that the oil kingdom has been following a similar strategy of flooding the markets with refined fuel. The Saudis have already sparked an oil price war with the Asian refiners downstream by offering close to 2.8 million barrels of low sulfur diesel to the European and Asian markets………………………………………..Full Article: Source

OPEC May Boost Oil Output to Record With Iran Back Amid Glut

Posted on 17 August 2015 by VRS  |  Email |Print

OPEC could potentially boost crude oil production to 33 million barrels a day, the most ever, after international sanctions are removed against Iran amid a global supply glut, according to the country’s OPEC representative.
The global oil market is already in surplus by about 3 million barrels a day, with Saudi Arabia and Iraq responsible for OPEC’s oversupply in the past six months, Iran’s state-run Islamic Republic News Agency reported Sunday, citing Mehdi Asali. Iran can boost output by 500,000 barrels a day within one week after sanctions are lifted, Oil Minister Bijan Namdar Zanganeh said earlier this month………………………………………..Full Article: Source

Oil prices set for recovery through 2016

Posted on 17 August 2015 by VRS  |  Email |Print

Energy equities offer value over the next 12 months, world’s leading wealth manager UBS Wealth Management forecast. It predicted an end to the downside momentum of crude oil prices through to 2016. Despite the dramatic slide in Brent oil prices since the middle of last year, the bank’s latest assessments show that greater clarity on geopolitical issues, including Iran’s proposed deal with the so-called “Six World Powers,” will allow the market to shift to near-term fundamentals, such as improved supply-demand balance.
Investors are being cautioned to keep an eye on non-OPEC producers as the oil price recovers. While OPEC will likely continue its output-maximizing strategy, a sharply lower rig count and significant reductions in drilling capex in the United States will slow production to rates that will sharply impact the oil market next year. Growth is projected at only 0.1-0.2mbpd in 2016, compared to 2.4mbpd in 2014………………………………………..Full Article: Source

Hedge Funds Resume Flight From Oil as Prices Sink to 6-Year Lows

Posted on 17 August 2015 by VRS  |  Email |Print

After showing some short-lived optimism, hedge funds resumed their retreat from the U.S. oil market, cutting bullish positions for the seventh time in eight weeks as prices dropped to the lowest since 2009.
Money managers’ net-long position in West Texas Intermediate crude declined 11 percent in the week ended Aug. 11, U.S. Commodity Futures Trading Commission data show. Short positions climbed to the highest level since March, a signal speculators see prices continuing to fall………………………………………..Full Article: Source

Oil market adjustment is about more than just shale

Posted on 14 August 2015 by VRS  |  Email |Print

U.S. shale oil production amounted to just 5 million barrels per day (bpd) at the end of 2014, less than 6 percent of world production and consumption. Despite the shale sector’s small market share, it has disrupted the entire oil industry because it emerged in the middle of the cost curve and has accounted for more than half of the increase in global supplies since 2010.
Between 2010 and 2014, shale output rose by 4 million bpd, accounting for more than half of the 7 million bpd increase in global liquids production over the same period, according to the U.S. Energy Information Administration (EIA)………………………………………..Full Article: Source

U.S. Oil Prices Fall to Six-Year Low

Posted on 14 August 2015 by VRS  |  Email |Print

U.S. oil prices fell to a new six-year low Thursday as a combination of worries about global economic growth to a strengthening dollar, increasing crude supplies and a major U.S. refinery outage weighed on the market. Light sweet crude for September delivery fell $1.07, or 2.5%, to $42.23 a barrel, slipping below the low for the year set Tuesday and touching its lowest point since March 3, 2009.
It was the latest new blow for oil prices, which have been in a 14-month tailspin as surging U.S. production and an unwillingness on the world’s oil cartel to cut back on production have led to abundant supplies………………………………………..Full Article: Source

Iran Targets 45 Oil and Gas Projects in Plan to Boost Output

Posted on 14 August 2015 by VRS  |  Email |Print

Iran has selected 45 oil and gas projects to show international companies at a conference in London in December when new oil contract models will be discussed ahead of exploration auctions to double the country’s crude output.
The projects, including oil and gas exploration, will be discussed along with details of a new oil contract model at the Dec. 14-16 conference, Mehdi Hosseini, chairman of Iran’s oil contracts restructuring committee, said in an interview in Tehran. Iran hopes to boost crude production to 5.7 million barrels a day, he said………………………………………..Full Article: Source

Iran is hiding more oil at sea than we realized

Posted on 14 August 2015 by VRS  |  Email |Print

One of the biggest mysteries in the oil market surrounds just how much oil Iran is hoarding at sea. That’s a key question because Iran’s nuclear deal with the West could lift crippling sanctions, and pave the way for tons of Iranian oil to hit the market. A surge in Iranian exports would only deepen the oil supply glut that has sent prices to fresh six-year lows this week to below $43.
Iran claims it’s not stockpiling oil in tankers in the Persian Gulf, but no one believes it. Up until recently, energy experts thought Iran’s vessels held 30 million to 40 million barrels of oil. But maritime surveillance firm Windward has harnessed sophisticated technology to determine Iran is actually hoarding 50 million barrels of oil………………………………………..Full Article: Source

Oil wars: OPEC is winning

Posted on 13 August 2015 by VRS  |  Email |Print

OPEC’s strategy to pump like crazy despite collapsing oil prices seems to be finally paying off: The U.S. oil industry is showing cracks. Oil supply from non-OPEC countries is set to slow dramatically next year and slip into its first contraction since 2008, the International Energy Agency said Wednesday in its monthly oil market report.
And the IEA said the U.S. will be the hardest hit, as more oil producers rethink their priorities and cut production. “While some producers might be successful in lifting output in the short-run, we expect the majority will struggle to sustain higher rates over longer periods due to steep spending curbs,” the report said. The IEA monitors energy market trends for the world’s richest nations………………………………………..Full Article: Source

Global oil supply grows at ‘breakneck speed’, says IEA

Posted on 13 August 2015 by VRS  |  Email |Print

The global oil glut will persist well into 2016, the world’s leading energy body said on Wednesday, even as the collapse in prices is pushing up demand at the fastest pace in five years. The International Energy Agency, the west’s oil watchdog, said global oil supplies are still growing at “breakneck speed” and outstripped consumption in the second quarter by 3m barrels a day, the most since 1998.
“While a rebalancing has clearly begun, the process is likely to be prolonged,” the IEA said in its closely watched monthly oil market report. “Global inventories will pile up further,” it said, adding that demand will not cut into the surplus until late 2016 at the earliest………………………………………..Full Article: Source

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