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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

LNG focus on China,key old growth markets of Japan, Korea: PIRA Energy

Posted on 10 October 2014 by VRS  |  Email |Print

NYC-based PIRA Energy Group reports that new import capacity in Japan and Korea enhances buying flexibility. In the U.S., NYMEX falloff after hefty build highlights market’s lack of direction. In Europe, gas year begins with high stocks but even higher risks. Specifically, PIRA’s analysis of natural gas market fundamentals has revealed the following:
New import capacity in Japan and Korea enhances buying flexibility: Much attention is focused on China as the key growth market for Asian LNG both in the short and long term, but import capacity is quietly being added in the old growth markets of Japan and Korea as well, adding much needed flexibility and storage capacity for Asia’s two largest buyers, even if the demand growth outlook appears weak for now………………………………………..Full Article: Source

OPEC’s Oil Price Falls Below $90 for First Time Since June 2012

Posted on 09 October 2014 by VRS  |  Email |Print

The average price of benchmark OPEC crudes dropped below $90 a barrel for the first time in more than two years amid muted demand and ample supplies.
The so-called OPEC basket, a weighted average of the main grades produced by the Organization of Petroleum Exporting Countries, slipped to $89.37 a barrel yesterday, the group’s Vienna-based secretariat said by e-mail today. It’s the first time their reference price has dropped below $90 since June 25, 2012………………………………………..Full Article: Source

IMF forecasts weigh on oil

Posted on 09 October 2014 by VRS  |  Email |Print

Oil prices fell further in Asian trade on Wednesday on demand concerns after the International Monetary Fund (IMF) cut its the global economic growth forecasts, analysts said. The US benchmark, West Texas Intermediate for November delivery, was down 35 cents at a 17-month low of $88.50 a barrel in late-morning trade and Brent crude eased 36 cents to $91.75 - lows not seen since mid-2012. Both contracts tumbled on Tuesday.
Singapore’s United Overseas Bank said in a note that prices were being “pressured by reduced economic and demand growth forecasts”. The IMF on Tuesday said the global economy would grow 3.3 percent this year, down 0.1 percentage point from July’s estimate and 0.4 points off its April forecast………………………………………..Full Article: Source

Is OPEC heading for a sinkhole?

Posted on 09 October 2014 by VRS  |  Email |Print

Turmoil is rarely good for the bottom line. Saudi Arabia, Qatar and the United Arab Emirates are joining Washington’s anti-Islamic State air strikes within the borders of neighboring OPEC member Iraq. Fellow OPEC partner Nigeria just barely dodged an Ebola scare, while founding member Iran remains under sanctions aimed to curb its nuclear ambitions.
Meanwhile, Russia, which last year produced an estimated 10.4 million barrels of crude oil a day, doesn’t look set to extricate itself from Ukraine any time soon. Much of the oil-producing world is in turmoil, yet OPEC prices have fallen almost 20 percent since June. The reasons for this are complex, but include significant increases in the U.S. production of shale oil—also known as “tight oil”—over the past few years, which have eroded the American demand for imported oil………………………………………..Full Article: Source

It’s a super market price war! (in oil)

Posted on 09 October 2014 by VRS  |  Email |Print

That Saudi Arabia and the Opec cartel were going to be “disrupted” by North Dakota millionaires was hardly difficult to foresee. What was always harder to figure out, however, was how Saudi would react. Would Opec’s most important swing-producing state cave in and give up on market share for the sake of price control?
Or, conversely, would it be more inclined to follow along the lines of the Great UK Supermarket Price War, and enter a clear-cut race to the bottom? So far, it seems, the strategy is focused on the latter course. Which means people are finally beginning to wonder just how sustainable a path that really is………………………………………..Full Article: Source

Iran denies oil “price wars” as crude continues to slip

Posted on 09 October 2014 by VRS  |  Email |Print

Iran will not be reducing its oil prices in order to match its competitors on the global market, Iran’s oil minister said on Tuesday, amid fears that discounts offered by Saudi Arabia to US and Asian customers in November could trigger a price war among OPEC members.
“There is no oil price war in the [crude] market,” Iranian Minister of Petroleum Bijan Namdar Zanganeh told reporters on Tuesday, in comments carried by state-owned Iranian news channel Press TV. He added that Iran’s state-owned oil company, the National Iranian Oil Company, was currently setting prices in a “professional” manner………………………………………..Full Article: Source

Saudi Arabia absorbs lower oil prices

Posted on 09 October 2014 by VRS  |  Email |Print

As the price of Brent crude continues its seemingly relentless slide – down more than 20 per cent since a mid-June high of $115 a barrel to $90 on Wednesday – a number of conspiracy theories have started to do the rounds.
Most focus on Saudi Arabia – Opec’s largest producer – and its apparent reluctance to cut production in any meaningful way to support the oil price. Before we examine them, some context………………………………………..Full Article: Source

Can Saudis beat North Dakota in an oil price war?

Posted on 09 October 2014 by VRS  |  Email |Print

With oil prices tumbling — and dragging gasoline prices at U.S. pumps further below $4 a gallon — investors wonder if Saudi Arabia will cut production in an effort to stop the slide. Don’t count on it.
In a note, commodity strategists led by Seth Kleinman at Citi argue that the Saudis aren’t likely to throttle back output, in part because they apparently “think that they can win any price war” with U.S. shale producers. In other words, Saudi producers are playing a long game, confident that “full cycle” shale production costs are considerably more than their own………………………………………..Full Article: Source

Commodity themes 2015: Expect metals to be bullish, Oil to fall further

Posted on 08 October 2014 by VRS  |  Email |Print

Amidst a strengthening US dollar, rise in equity markets, commodities are likely to underperform in the coming months. However, metals complex appears bullish,according to a new report titled Commodity Themes 2015 released by Deutsche Bank.
Brent oil physical fundamentals are weak and appearance of contango in Brent oil market will eventually be met with OPEC production cuts to tighten fundamentals and restore backwardation.Falling Brent crude oil prices are already impacting budgetary positions among the major oil producers. History shows that when OPEC takes action and cuts production, their efforts to stabilise and push oil prices are successful. However, this is contingent on world GDP growth in excess of 2.5%………………………………………..Full Article: Source

EIA sees lower OPEC output, weaker demand growth in 2015

Posted on 08 October 2014 by VRS  |  Email |Print

The U.S. Energy Information Administration trimmed its forecast of world oil demand growth next year and made even deeper cuts in its outlook for OPEC production, the latest signs of a shift toward surplus supplies next year. The EIA cut its 2014 global demand forecast to 91.47 million barrels a day, compared with 91.55 million bpd expected last month, according to a monthly report from the agency on Tuesday.
As a result, it now expects consumption to rise by 1.24 million bpd, down 100,000 bpd from the previous month’s report but still higher than the 1 mln bpd increase estimated for 2014. On the backdrop of weakening demand, the agency curbed its forecasts for OPEC oil and other liquid fuels production to 35.51 million barrels a day in 2015, down 350,000 bpd from last month’s forecast………………………………………..Full Article: Source

Oil Prices Drop on Weaker Demand Forecasts

Posted on 08 October 2014 by VRS  |  Email |Print

U.S. oil prices fell to fresh multi-month lows Tuesday as economic data and forecasts suggested slower demand growth next year than previously expected. Weak oil demand, particularly in Europe and Asia, has weighed on oil prices in recent months, as global supplies have remained ample and producers have had to cut prices to lure buyers.
On Tuesday, the International Monetary Fund lowered its global economic growth outlook by 0.2 percentage point to 3.8%. Earlier in the day, German factory data showed a 4% slump in August, well below expectations for a 1.5% decline. Prices fell further midday after the U.S. Energy Information Administration cuts its forecast for global oil-demand growth and oil prices in 2015………………………………………..Full Article: Source

Oil Plunge Magnifies Russia’s Sanctions Pain: Chart of the Day

Posted on 08 October 2014 by VRS  |  Email |Print

Oil prices that have plunged to a 27-month low are inflicting damage on a Russian economy already contending with escalating sanctions from the U.S. and European Union over its role in Ukraine. The CHART OF THE DAY shows how an average oil price of $90 a barrel, close to where prices are now, would give Russia a budget deficit of 1.2 percent of gross domestic product next year, according to Sberbank CIB, the investment bank of Russia’s biggest lender.
The right axis shows the budget balance as a percentage of GDP under different oil-price scenarios. The left axis measures spending and revenues in trillions of rubles………………………………………..Full Article: Source

Iran says no plan for OPEC emergency meeting on price fall

Posted on 08 October 2014 by VRS  |  Email |Print

Iran Oil Minister Bijan Zanganeh said on Tuesday that OPEC has no plans to hold an emergency meeting to discuss the recent slide in oil prices, Iran’s oil ministry news agency Shana reported. Brent crude oil fell towards $92 a barrel on Tuesday, pushing towards 27-month lows as weak demand and ample supply outweighed the price support from a weaker dollar.
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. “For the moment, there is no plan for an OPEC emergency meeting,” Shana quoted Zanganeh as saying………………………………………..Full Article: Source

Saudi Arabia initiating a price war among OPEC members?

Posted on 08 October 2014 by VRS  |  Email |Print

Crude oil is poised to extend the biggest slump in more than two years after Saudi Arabia signaled it is ready for a price war with other OPEC members. Saudi Aramco, the state-run oil producer of the world’s biggest exporter, cut prices on October 1 for all its exports, reducing those for Asia to the lowest level since 2008. The move suggests that the biggest member of the Organization of Petroleum Exporting Countries is prepared to let prices fall rather than cede market share by paring output to clear a supply surplus.
Aramco reduced official selling prices, or OSPs, for all grades of crudes to all regions for November. It lowered the OSP for Arab Light to Asia by $1/bbl to a discount of $1.05 to the average of Oman and Dubai crude, the lowest level since December 2008. OSPs are regional adjustments Aramco makes to price formulas to compete against oil from other countries………………………………………..Full Article: Source

As crude oil prices tumble, why isn’t gas cheaper?

Posted on 07 October 2014 by VRS  |  Email |Print

Despite cheap crude oil prices and a seasonal dip in the cost of gas, Canadians are not seeing a big discount at the pumps because of a backlog at the country’s largest refinery. The cost of a barrel of crude oil was US$101.70 on Sunday – more than $5 cheaper than it was on the same day last year. But gas in many Canadian cities is actually more expensive now because of refinery issues, experts say.
“Gasoline is made from crude oil and crude oil needs to be refined,” EnPro chief petroleum analyst Roger McKnight told CTV News. McKnight said that while Canada has a strong supply of cheap crude oil, its largest refinery has been slow to turn that crude into gasoline, meaning the gas supply isn’t as plentiful………………………………………..Full Article: Source

Why the oil price decline is failing to boost Europe

Posted on 07 October 2014 by VRS  |  Email |Print

Forget quantitative easing by the European Central Bank. Surely the precipitous oil price decline in the last couple of weeks will finally be the catalyst to give the down-trodden European economy the big boost it needs. I mean, after three years of prices north of $100 a barrel surely a big cut in the European energy bill will provide the stimulus effect that ECB President Mario Draghi could only dream of?
Well, I’m afraid it appears there will be no energy-induced bonanza as, like many other peculiar aspects of the European economy, consumers will hardly see the benefits of market falls in commodities………………………………………..Full Article: Source

Higher oil prices coming in 2015?

Posted on 07 October 2014 by VRS  |  Email |Print

Let’s kick off this last quarter of 2014 right. See, this is the quarter when we get to see those thousand page reports on the forecasts for 2015. This is when all of those overpaid commodity analysts get to tell the trading community how it’s going to be. They’ll throw out charts and statistics that are going to back each other up. We’ve already heard about declining demand and $80 oil.
How the world is going to grind to a halt, U.S. oil production is going to become unprofitable and we’ll be once again leaning on the great and powerful OPEC to be the best barrel out there. Hold on there Cassandra. First off, we’d raise tariffs on foreign imports before we would let our pride and joy of US crude oil production fall apart………………………………………..Full Article: Source

OPEC Discord Weighs on Oil Prices

Posted on 07 October 2014 by VRS  |  Email |Print

Discord at OPEC is turning into a price war, loosening the cartel’s grip on the oil market and exacerbating a recent steep selloff. Fissures have widened as Mideast turmoil frays political alliances and producers vie for customers amid a flood of oil from the U.S. and slowing growth in Asia. “No one is telling anyone what they are up to,” one Gulf oil official said.
Saudi Arabia last week unilaterally lowered the price it charges for crude scheduled for delivery next month—without the typical consultation with other members of the Organization of the Petroleum Exporting Countries, according to OPEC officials. The decision surprised many market watchers, who were expecting the Saudis to cut output to help boost prices, and sent prices hurtling lower………………………………………..Full Article: Source

Global imbalances succumb to the dwindling price of oil

Posted on 06 October 2014 by VRS  |  Email |Print

The surplus run by the eurozone represents an implicit attempt to Germanise the union. Whatever happened to the global imbalances? Remember them? Not so many years ago, the large current account surpluses run by various countries, led by China, and the large current account deficits run by others, were believed to be at the root of the world’s economic problems.
But now you hardly hear about them. Have they gone away? Or were they never that much of a problem in the first place? The concern about global imbalances arose because surpluses represented extra savings………………………………………..Full Article: Source

World on brink of an oil price war

Posted on 06 October 2014 by VRS  |  Email |Print

Next month’s Opec meeting will take place against a background of dissension between two power blocs in an organisation that controls the lifeblood of the global economy. A secretive group of the world’s most powerful oil ministers will soon gather in Vienna to take arguably one of the most important decisions that could affect the still fragile world economy: whether to cut production of crude to defend prices at US$100 per barrel, or keep open the spigots as winter looms among the biggest energy-consuming nations.
A sudden slump in the price of crude has exposed deep divisions within the Organisation of Petroleum Exporting Countries (Opec) ahead of its final scheduled meeting of the year next month to decide on how much oil to pump………………………………………..Full Article: Source

OPEC rift sets of price war in bid to woo customers

Posted on 06 October 2014 by VRS  |  Email |Print

Discord at OPEC is turning into a price war, loosening the cartel’s grip on the oil market and exacerbating a recent steep sell-off. Fissures have widened as Mideast turmoil frays political alliances and producers vie for customers amid a flood of oil from the US and slowing growth in Asia. “No one is telling anyone what they are up to,” one Gulf oil official said.
Saudi Arabia this week unilaterally lowered the price it charges for crude scheduled for delivery next month – without the typical consultation with other members of the Organisation of the Petroleum Exporting Countries, according to OPEC officials. The decision surprised many market watchers, who were expecting the Saudis to cut output to help boost prices, and sent prices hurtling lower………………………………………..Full Article: Source

Commodity prices: Oil and trouble

Posted on 03 October 2014 by VRS  |  Email |Print

Give commodity markets credit: they are anything but boring. Between 2000 and 2011 broad indices of commodity prices tripled, easily outpacing global growth and stoking Malthusian hysteria. Jeremy Grantham, a wealthy financier, noted at the time that it was not so much “peak oil” that would undo humanity but “peak everything else”.
Yet since then commodity prices have slumped by about a quarter, and roughly 11% since June alone. That is not, however, an unalloyed good. This reversal of fortunes, naturally, is much better news for net importers of resources than for net exporters. For consumers, a drop in the price of natural gas or rice is like a tax cut: it leaves households with more disposable income………………………………………..Full Article: Source

Oil price hits two-year low after Saudi price cut

Posted on 03 October 2014 by VRS  |  Email |Print

Global oil prices have fallen to their lowest level in more than two years after Saudi Arabia cut its official selling price. Concerns of oversupply after higher output in the US, together with forecasts of lower global demand by the International Energy Agency (IEA), are driving prices down.
Brent crude fell by more than 1% to $93 a barrel, its lowest since June 2012. US light crude dipped below $90 for the first time in 17 months. In late London trading it was barely changed on the day at $90.63 a barrel………………………………………..Full Article: Source

Oil Prices Are Falling, Not Oil Regimes

Posted on 03 October 2014 by VRS  |  Email |Print

Oil prices continued falling Thursday, dipping to levels last seen almost two years ago, despite a steady drumbeat of perilous developments from Ukraine to Iraq to Hong Kong. But for all the turmoil in oil markets, not all petrostates are panicking. Although big producers, from Saudi Arabia to Russia, rely on high crude prices to balance their budgets, the price hasn’t dropped low enough, or long enough, to fiscally squeeze them just yet.
Crude oil traded in New York slipped below $90 a barrel in midday trading Thursday before settling slightly higher; Brent crude traded in London fell to about $93 a barrel, continuing a plunge that began in June. Oil prices had reached $115 a barrel over the summer, at the height of the Islamic State’s territorial gains in Iraq………………………………………..Full Article: Source

How the oil and gas boom is changing America

Posted on 03 October 2014 by VRS  |  Email |Print

The US oil and gas boom has been one of the biggest and most consequential energy stories of the last decade. And one of the best books for understanding how that boom is affecting America is Michael Levi’s The Power Surge, published back in 2013.
As Levi explained when I interviewed him last year, his book is actually about two different energy revolutions going on in the United States — each with its own set of supporters. On the one hand, US oil and gas production has been surging since 2005, thanks to hydraulic fracturing and other drilling techniques. But at the same time, alternative energy sources like wind power and electric vehicles had been making surprising advances………………………………………..Full Article: Source

Some in OPEC worried by oil drop, but no plan yet-sources

Posted on 03 October 2014 by VRS  |  Email |Print

Some OPEC countries are calling for supply cuts after a drop in oil prices, but core Gulf members are betting winter demand will revive the market, suggesting the group is no closer to any collective steps.
The differing views within the 12-member Organization of the Petroleum Exporting Countries (OPEC) highlight a split between Saudi Arabia and its Gulf Arab allies and other members, such as Iran, who face greater budget pressures from sub-$100 oil………………………………………..Full Article: Source

OPEC Price War Signaled by Saudi Move Risks Deeper Drop

Posted on 03 October 2014 by VRS  |  Email |Print

Crude oil is poised to extend the biggest slump in more than two years after Saudi Arabia signaled it’s ready for a price war with other OPEC members, according to Commerzbank AG and Citigroup Inc.
Saudi Aramco, the state-run oil producer of the world’s biggest exporter, cut prices on Oct. 1 for all its exports, reducing those for Asia to the lowest level since 2008. The move suggests that the biggest member of the Organization of Petroleum Exporting Countries is prepared to let prices fall rather than cede market share by paring output to clear a supply surplus, according to Commerzbank………………………………………..Full Article: Source

Oil Prices Hit Fresh Lows on Saudi Price Cut

Posted on 02 October 2014 by VRS  |  Email |Print

Oil prices tumbled to more-than-one-year lows Wednesday on news that Saudi Arabia lowered the official selling prices for its crude oil. The price cuts suggest the Kingdom may not reduce output in the coming months to keep prices high.
Ample global oil supplies have weighed on prices in recent months, sending Brent, the global benchmark, to below $100 a barrel for the first time in 16 months Sept. 9. Brent futures haven’t traded above that level since. Some investors have bet that the Organization of the Petroleum Exporting Countries, especially Saudi Arabia, will cut production to keep prices above $100 a barrel………………………………………..Full Article: Source

Oil price forecasts cut, to stay subdued in 2015

Posted on 02 October 2014 by VRS  |  Email |Print

Energy analysts have made the largest downward revision to their oil price forecasts in almost two years, a monthly Reuters poll showed on Wednesday, with the marked weakness in the price of Brent seen persisting into 2015.
The survey results pose a challenge to members of the Organization of the Petroleum Exporting Countries (OPEC), who have largely argued prices will recover from two-year lows hit below $95 a barrel this week on stronger demand in the fourth quarter………………………………………..Full Article: Source

Oil price plunge to $60 per barrel unlikely — Russia’s Finance Ministry

Posted on 02 October 2014 by VRS  |  Email |Print

A world oil price plunge to $60 per barrel is an unlikely scenario, Russian Finance Minister Anton Siluanov said on Wednesday. “We believe this is unlikely,” the finance minister said, adding the budget of Saudi Arabia, a major oil exporter, was balanced at the oil price of $80-85 per barrel.
Russia’s draft budget for 2015, which envisages a deficit of 0.6% of GDP, is based on an oil price of $96 per barrel. The Russian finance minister said the ministry has not examined a stress scenario of an oil plunge to $60 per barrel………………………………………..Full Article: Source

Global Oil market balances to deteriorate in 2015: PIRA Energy

Posted on 02 October 2014 by VRS  |  Email |Print

NYC-based PIRA Energy Group reports that PIRA is cautiously optimistic the global economy will withstand the Fed’s policy shift. In the U.S., stock build slows. In Japan, crude runs perk up, crude stocks draw. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:
World Oil market forecast, September 2014: PIRA is cautiously optimistic the global economy will withstand the Fed’s policy shift and lift into next year with growth above trend. Despite this, and a rebound in oil demand growth, oil market balances are forecast to deteriorate in 2015. Low first half 2014 stocks hid blemishes but now that inventories have rebuilt………………………………………..Full Article: Source

News Of OPEC’s Death Might Not Be An Exaggeration

Posted on 02 October 2014 by VRS  |  Email |Print

Reports about the death of the Organization of Petroleum Exporting Countries (OPEC) have generally proved to be as accurate as reports about the death of Mark Twain – until now. Back in 1897 the great story teller Twain was able to skewer inaccurate accounts of his passing with an immortal comment that “the report of my death was an exaggeration”.
OPEC, an oil marketing cartel comprised mainly of Arab states, plus a few outliers such as Venezuela, has been able to say the same thing for the past 30 years………………………………………..Full Article: Source

OPEC clout on price movement weakens

Posted on 02 October 2014 by VRS  |  Email |Print

The Organization of Petroleum Exporting Countries (OPEC) is steadily losing control of the oil market with the rise of two new industry leaders, Russia and the US. And neither of the member countries has an interest in perpetuating oil-price fixing which is the primary motivation behind OPEC.
Under this scenario, some industry analysts and traders were seeing a bleak future for the organization, anticipating an eventual demise of the 54-year old oil body. Russia needs to produce as much oil and gas as possible to try and balance its budget which is dangerously dependent on petroleum while the broadly diversified US economy is enjoying the benefits of rising domestic production and falling prices………………………………………..Full Article: Source

How the U.S. Can Break OPEC

Posted on 02 October 2014 by VRS  |  Email |Print

The U.S. and global economy has been all but crushed by the cartel pricing power of OPEC (Organization of the Petroleum Exporting Countries) for far too long. Worse than a consumption tax, high oil prices, because of our current dependence on internal combustion and compression engines using oil products, have been a burden for decades.
The perpetrators of the cartel force U.S. and global consumers to pay not only for oil but for the costs of social welfare, such as it is, infrastructure and military capability in their respective countries. With the ability to reduce production and their refusal to increase production, despite their available reserves, OPEC members charge what they think the market will bear against what price might otherwise throw the world into recession………………………………………..Full Article: Source

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