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Commodities Briefing - Category | Oil more

Damaged OPEC has lost the power to influence a world broken by debt

Posted on 15 April 2016 by VRS  |  Email |Print

OPEC and non-OPEC oil producers meet in Doha this Sunday to decide on what to do about the still depressed oil price. On the agenda is a proposal to freeze production at January or February levels, with a view to possibly cutting it at the following meeting in June.
Time was when such machinations would be front page news. Journalists would hang on the every word of OPEC’s vainglorious overlords, and their pronouncements would be major market moving events, with sometimes profound repercussions for the global economy………………………………………..Full Article: Source

Why the oil price could jump to $60 - or ‘collapse’ again

Posted on 14 April 2016 by VRS  |  Email |Print

Traders seem convinced the market has bottomed, but analysts remain doubtful the Doha summit will achieve anything. Traders are broadly convinced there will be a deal to freeze most global oil production this weekend and that as a result, the oil price will not return to February’s 13-year low.
In fact, while most are predicting that international benchmark Brent crude will at least hold steady above $40 a barrel, some believe the recent rally will continue to push the price back towards the $60 a barrel level seen as the eventual “new normal”………………………………………..Full Article: Source

OPEC cuts 2016 oil demand growth forecast, warns of more

Posted on 14 April 2016 by VRS  |  Email |Print

OPEC on Wednesday cut its forecast for global oil demand growth in 2016 and warned of further reductions citing concern about Latin America and China, pointing to a larger supply surplus this year.
The Organization of the Petroleum Exporting Countries also said top exporter Saudi Arabia kept output steady in March - a sign Riyadh is serious about a plan to be discussed this weekend to freeze output and support prices - while OPEC supply overall rose only slightly………………………………………..Full Article: Source

Chill winds still blow through the oil market

Posted on 14 April 2016 by VRS  |  Email |Print

Spring is coming in the oil market. That was the message from the heads of the world’s largest trading houses at the FT’s commodities conference in Lausanne this week. The overwhelming consensus among these influential figures in the market is that crude is unlikely to return to the prices below $30 per barrel that it reached in January, and the trend is now upwards.
The markets do seem to support that interpretation. After a 4 per cent jump on Tuesday, internationally traded Brent crude is almost 60 per cent above its low point in January………………………………………..Full Article: Source

OPEC Sees Bigger Drop in Non-Cartel Output

Posted on 14 April 2016 by VRS  |  Email |Print

The Wall Street Journal’s Benoit Faucon reported that the Organization of the Petroleum Exporting Countries, a group of some of the world’s biggest producers, forecast on Wednesday that a long-expected contraction in non-OPEC oil supply was shaping up to be steeper than expected.
In March, it forecast non-OPEC output would fall by 700,000 barrels a day this year. It is now estimating that drop will be 730,000 barrels a day. The downgrade was due to lower expectations for oil production from China’s onshore mature fields and further declines in the U.S. and the U.K., where projects have been deferred because of lower oil prices………………………………………..Full Article: Source

World’s Top Traders Say the Worst Is Over for Oil

Posted on 13 April 2016 by VRS  |  Email |Print

Top executives at the world’s largest oil-trading houses said the worst of the market’s woes are probably over, with some predicting prices will climb to $50 a barrel by next year. “The down market is behind us,” Torbjorn Tornqvist, chief executive officer of Gunvor Group Ltd., said on Tuesday at the FT Global Commodities Summit in Lausanne. “It is the beginning of the end of that for sure.”
Oil has rebounded after falling to the lowest level in more than 12 years amid signs a global glut will ease as U.S. output declines. The world’s largest oil traders were meeting in Switzerland as members of OPEC and other major producers prepare to assemble in Doha on April 17 to discuss an output freeze. Oil traders benefited from a surge in volatility last year and that should continue, according to Tornqvist………………………………………..Full Article: Source

Traders Call Bottom of Oil Price Slump

Posted on 13 April 2016 by VRS  |  Email |Print

Global oil markets have hit the bottom of the barrel, according to a host of the world’s most senior oil traders. The chief executives of some of the world’s biggest energy merchants said Tuesday that the end is in sight for a near two-year slump in crude prices that has hammered energy companies’ earnings and sent shock waves through the global financial system.
“We’re going to have a lot of volatility going forward, but from here on, the trend is up,” Swiss trading house Gunvor Group’s CEO Torbjorn Tornqvist told the FT Commodities Global Summit in Lausanne, predicting a slow recovery to around $60 to $70 a barrel………………………………………..Full Article: Source

Why the oil price spike is a risk for markets

Posted on 13 April 2016 by VRS  |  Email |Print

Oil spiked on Tuesday as Russia’s Interfax news agency said that Russia and Saudi Arabia had agreed on a production freeze ahead of the upcoming OPEC meeting in Doha, regardless of whether other OPEC members participate or not.
Oil immediately spiked to its highest level since December. More importantly, it moved over the 200-day moving average for the first time since October 2014. In a range-bound market, a breakout to new highs is a big story………………………………………..Full Article: Source

Damaged Opec has lost the power to influence a world broken by debt

Posted on 13 April 2016 by VRS  |  Email |Print

Opec and non-Opec oil producers meet in Doha next Sunday to decide on what to do about the still depressed oil price. On the agenda is a proposal to freeze production at January or February levels, with a view to possibly cutting it at the following meeting in June.
Time was when such machinations would be front page news. Journalists would hang on the every word of Opec’s vainglorious overlords, and their pronouncements would be major market moving events, with sometimes profound repercussions for the global economy………………………………………..Full Article: Source

Goldman Sachs warns Opec meeting in Doha will not deliver ‘bullish surprise’ for oil prices

Posted on 13 April 2016 by VRS  |  Email |Print

The meeting of oil producing nations scheduled at the end of the week in Doha was unlikely to result in a “bullish surprise” for oil prices, Goldman Sachs has warned. The investment bank said there was a very low chance that the 17 April meeting could result in a freeze of oil production that is required to lift global prices of the commodity, which has fallen more than 70% since June 2014.
Oil prices would maintain its earlier price forecast of $35 (£24.58, €30.68) per barrel in the second quarter, it added………………………………………..Full Article: Source

Commodity Currencies Lifted By Strengthening Oil and Ore

Posted on 13 April 2016 by VRS  |  Email |Print

Signs of strength in commodities are lifting currencies from Australia to Canada. Crude oil futures rose 2.2% on Tuesday morning, pushing further above $40 per barrel. Iron ore jumped 4.6% to $59.22 per dry metric ton, based on ore fines with 62% iron, according to Metal Bulletin.
“Oil in general continues to be a key driver of broader financial markets,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange. “With crude above $40 a barrel, we’re seeing that playing out in firmer commodity currencies.”……………………………………….Full Article: Source

Opec meeting could spell oil price slump, warns Goldman Sachs

Posted on 12 April 2016 by VRS  |  Email |Print

The highly anticipated meeting of the world’s largest oil producing nations in Doha this weekend is unlikely to offer a “bullish surprise” for the embattled oil market, and may cause prices to reverse from recent gains, Goldman Sachs has warned.
Members of the Organization of Petroleum Exporting Countries (Opec) are due to meet with non-Opec producers to thrash out a deal to limit oil production in a bid to ease the oversupply which has crippled prices for almost two years………………………………………..Full Article: Source

Why oil is about to tank

Posted on 12 April 2016 by VRS  |  Email |Print

Oil prices are on the march higher, again. It has been a volatile few weeks, with prices rallying fifty percent off their low from February, when they hit $26.05. After surging to $41.50, they then promptly fell to $35.24. Forty dollars beckons again this week.
The focus of the market has turned to the upcoming meeting among OPEC producers and Russia, this Sunday, in Doha, Qatar. Market participants are increasingly of the belief that the low prices have produced enough collective suffering to generate common cause among this increasingly disparate group………………………………………..Full Article: Source

OPEC oil output climbs 40,000 barrels a day in March: Platts

Posted on 12 April 2016 by VRS  |  Email |Print

Oil production from members of the Organization of the Petroleum Exporting Countries rose by 40,000 barrels a day in March from a month earlier, to 32.38 million barrels a day, according to a Platts survey released late Monday.
Platts attributed the increase to higher output from Iran, which climbed by 110,000 barrels a day to 3.23 million barrels a day. Iraqi output also rose by 30,000 barrels a day to 4.16 million barrels a day, according to the survey of OPEC and oil industry officials and analysts conducted by Platts………………………………………..Full Article: Source

$40 Per Barrel May Be The New $100 For Oil

Posted on 11 April 2016 by VRS  |  Email |Print

Who has been quickly preparing for a prolonged period of lower oil prices. Clearing out the rubble will be a good thing for the sector. Prolonging the inevitable would be a big mistake.
Why any market intervention will make things worse over the long term. The oil sector is a complicated market because there are a lot of conflicting interests becoming increasingly evident because of the emergence of the U.S. shale industry………………………………………..Full Article: Source

Iran and Oil: You Ain’t Seen Nothing Yet

Posted on 11 April 2016 by VRS  |  Email |Print

“Freeze” is a word rarely heard in balmy Doha, but it will be the talk of the town this week. That isn’t because a delegation from frigid Moscow plans an unusual appearance at a meeting of oil exporters being held in Qatar’s capital next Sunday. The star of the show, and quite possibly the spoiler, will be from nearby Iran.
Several large oil producers have pledged to freeze output at current levels if others do the same. But Iran, recently freed from sanctions, is in the process of ramping up output and in no mood to stop………………………………………..Full Article: Source

Kuwait expert sees efforts to stabilize oil market

Posted on 11 April 2016 by VRS  |  Email |Print

Oil producing countries plan to stabilize the crude output, and probably trim it, in case the prices failed to “balance” in the markets, according to a Kuwaiti expert. Affirming that the collectively desired price is in the range of $ 50-60 per barrel, Mohammad Al-Shatti said that a number of these countries, during their upcoming meeting in Doha, Qatar, would first seek to firm the production for months, and in case the balance could not be restored, they would slash it.
Oil prices have already recovered, amid various factors related to the world economy and supply and demand, he said, adding that positive reports by the US Federal Reserve diminished concerns about the American and Chinese economies………………………………………..Full Article: Source

Opec’s days as economic force are ‘over’

Posted on 11 April 2016 by VRS  |  Email |Print

‘The era of Opec as a decisive force in the world economy is over’ argues Daniel Yergin. Opec’s economic power is broken, says the unofficial historian of the oil industry, who has argued that the association of oil exporting countries has become irretrievably divided and is unable to reverse the current slump in crude prices.
Daniel Yergin, whose Pulitzer-prize winning book The Prize provides a comprehensive history of oil and power, said he believes the association’s economic prowess has been undone by its inability to agree on how to stop the oil crisis.Yergin, who is also vice-chairman of data provider IHS, said the recent disagreements among Opec members have revealed how weak the organisation now is………………………………………..Full Article: Source

Iraq to lower oil price forecast to $32 a barrel in 2016 budget

Posted on 08 April 2016 by VRS  |  Email |Print

Iraq plans to lower the oil price forecast in its 2016 budget to about $32 a barrel from $45, widening its fiscal deficit by several billion dollars, the International Monetary Fund (IMF) and a senior government official told Reuters.
The new price estimate is based on the continued low level of global oil prices in recent months, said Marwa al-Nasaa, Amman-based IMF resident representative for Iraq. “We’re setting it closer to $30 based on the climate of international futures prices since November,” she told Reuters on Thursday………………………………………..Full Article: Source

Oil price flirts with $40 - but don’t expect it to go any higher

Posted on 08 April 2016 by VRS  |  Email |Print

The oil price has dipped below $40 a barrel, reversing strong gains earlier in the week, as analysts warn the price of Brent crude will struggle to move higher as stockpiles begin to flood the market.
“Millions of barrels of extra oil” could enter the market in the coming weeks and scupper future price gains, according to analysts at Saxo Bank. Ole Hansen, head of strategy at Saxo, said that oil traders have been snapping up cheap crude and storing it while they wait for higher prices, when they will then cash in………………………………………..Full Article: Source

Goldman Says Oil at $35 Is ‘Goldilocks’ Ideal for U.S. Explorers

Posted on 08 April 2016 by VRS  |  Email |Print

Oil at $35 a barrel is neither too high nor too low but just right to make shares of U.S. explorers worth buying, according to Goldman Sachs Group Inc. While prices of crude at that level are above cash costs of production, they will deter a rebound in shale output from occurring too early, the bank’s New York-based analysts including Brian Singer said in a report dated April 6.
Oil at $30 to $35 a barrel should keep the behavior of U.S. companies unchanged and help lift West Texas Intermediate to $55 to $60 a barrel in 2017, according to Goldman………………………………………..Full Article: Source

Iran says determined to regain oil market share

Posted on 08 April 2016 by VRS  |  Email |Print

Iran’s foreign minister said on Thursday that Tehran was determined to regain its share of the oil market after sanctions imposed on the country were lifted under a deal reached with six major powers, the semi-official Tasnim news agency reported.
“Iran wants to regain its place on the oil market … in cooperation with other oil producing countries,” Mohammad Javad Zarif said after a meeting in Baku with Russian Foreign Minister Sergei Lavrov and Azerbaijan Foreign Minister Elmar Mammadyarov………………………………………..Full Article: Source

OPEC’s political agenda and the price of oil

Posted on 08 April 2016 by VRS  |  Email |Print

Because we trade ProShares Ultra Bloomberg Crude Oil and ProShares UltraShort Bloomberg Crude Oil as that relates to West Texas Intermediate (WTI), and because the words of OPEC largely influence those prices, the politics surrounding oil is immediately entertaining, and of special interest, to me.
In this case, I’m talking specifically about Saudi Arabia and Iran. Of course, there’s more going on in the oil space than just what we’re seeing from these two countries, but the price of oil has recently been influenced what Saudi Arabia has said about participating in a production freeze when OPEC meets with Russia on April 17………………………………………..Full Article: Source

Russia, OPEC Said Likely To Freeze Oil Output Without Iran

Posted on 08 April 2016 by VRS  |  Email |Print

Russia and the Organization of Petroleum Exporting Countries can reach an agreement to freeze oil production, even if Iran doesn’t join in, a top OPEC official told Bloomberg News. Kuwaiti OPEC governor Nawal al-Fezaia’s prediction of an output freeze excluding Iran in an interview with Bloomberg helped send oil prices soaring more than 5 percent on world markets on April 6 and 7.
Fezaia said oil-producing countries have no alternative but to reach an agreement to freeze output when they meet on April 17 in Doha, Qatar, because prices are too low………………………………………..Full Article: Source

Why oil price slump hasn’t boosted global economy – yet

Posted on 07 April 2016 by VRS  |  Email |Print

Goldman Sachs predicts rise back to $70 a barrel by the end of decade will drive improved growth. A steep and prolonged fall from grace for the international oil price, from around $115 a barrel in the summer of 2014 to as low as $27 earlier this year, was expected by the International Monetary Fund (IMF) to be a “shot in the arm” for the global economy, reports the Financial Times.
Oil has been stuck around $40 a barrel in recent weeks and was a little shy of $39 this morning. Last year, the IMF predicted a 0.5 per cent boost for every $20 drop. Instead, the fund this week warned that the already underwhelming global economic recovery is running out of momentum………………………………………..Full Article: Source

Russia sees oil price of $45-$50 per barrel ‘acceptable’ as it prepares for freeze deal

Posted on 07 April 2016 by VRS  |  Email |Print

Russia believes an oil price at $45-$50 per barrel is acceptable to allow the global oil market to balance, as it prepares to meet leading oil producers in Doha later this month, sources familiar with Russian plans said on Wednesday.
Leading oil producers plan to meet in Doha on April 17 to cement a preliminary deal reached between Russia, Venezuela, Qatar and Saudi Arabia in February to freeze oil output at levels reached in January, to curb a surplus on the oil market. “Now there is discussion of how long production will be frozen and ways to monitor the agreement,” one of the sources said………………………………………..Full Article: Source

From crude glut to a balanced oil market?

Posted on 07 April 2016 by VRS  |  Email |Print

How long it will take the oil market to bounce back is a frequently asked question by energy investors. According to one equity analyst, the answer is looking beyond the coming months. “I think [there's] very little visibility over the next six months,” Kris Kelley of Janus Capital Group said Wednesday on CNBC’s “Power Lunch.”
“But I think that if you step out beyond six months, it actually gets very visible.” He contends that as supply comes off the U.S. market, if production reaches 8 to 8 ½ million barrels a day, oil will balance out by the end of the year………………………………………..Full Article: Source

Oil prices lower on IMF’s ‘not-so-good news’

Posted on 06 April 2016 by VRS  |  Email |Print

Crude oil prices moved lower for a second straight day as the International Monetary Fund gauged the prospects of “mediocre” economy momentum. The IMF warned Chinese growth patterns may have a lingering ripple effect on the global economy.
Chinese slowdown last year dragged on broader economic momentum and 2016 started with a hiccup following steep declines in the benchmark Shanghai Composite Index. Speaking in Germany, IMF Managing Director Christine Lagarde said the global economy was moving forward and there were no signs of imminent crisis………………………………………..Full Article: Source

Oil price ‘can easily revisit’ sub-$30 lows

Posted on 06 April 2016 by VRS  |  Email |Print

The oil price “can easily revisit the lows seen earlier this year”, French bank BNP Paribas said in a note to clients, as bearish demand data added to concern over a deal to freeze excess supply.
Reuters cites the commentary after a report in the US showed purchases of gasoline products fell in January for the first time in 14 months and that overall crude oil consumption was down one per cent compared to last year. This comes ahead of a second quarter period that typically sees a dip in demand as refinery maintenance peaks………………………………………..Full Article: Source

Oil prices will slowly rebound, energy analysts predict

Posted on 06 April 2016 by VRS  |  Email |Print

Oil prices will gradually rebound over the next several years as the global surplus slowly gets used up, according to a forecast released on Tuesday. The analysis by Deloitte’s resource evaluation and advisory team predicts the price of West Texas Intermediate (WTI) crude will average $44 US this year, climbing to $55 US by 2018, $70 US by 2020 and $80 US by 2022.
“Our view is that the market has reached a relative bottom and the trend for the next number of months will be a shallow but rocky upward slope as certainty increases in the global ability to chew through oversupply in the coming months and years,” the report says………………………………………..Full Article: Source

Cheap Oil Means Record U.S. Trade Surplus With OPEC

Posted on 06 April 2016 by VRS  |  Email |Print

The U.S. has posted a surplus with the oil-producing bloc in 10 of the past 12 months, hitting a record $1.8 billion for February. Cheap oil, a strong dollar and slow growth abroad continue to break historical U.S. trade patterns.
In February, the average price per barrel of imported crude slipped to $27.48, the lowest mark since December 2003. Petroleum imports fell to the lowest level since September 2002. And the U.S. registered a trade surplus with Organization of the Petroleum Exporting Countries nations–the highest on record–according to Census Bureau data………………………………………..Full Article: Source

Kuwait’s Opec governor says all signs point to freeze deal

Posted on 06 April 2016 by VRS  |  Email |Print

Kuwait has said that all signs point to a freeze deal at a meeting between Opec and the world’s biggest oil producers later this month. In a speech at the oil ministry, Kuwait’s Opec governor Nawal Al-Fuzaia, didn’t elaborate on which signs point to an agreement at the talks in Doha on 17 April.
This year’s oil price rally stalled recently after Saudi Arabia said it wouldn’t freeze oil production without participation from Iran. It had previously indicated a willingness to hold production steady even if the Opec rebel did not. Fuzaia added that producers might agree to freeze their output at February levels, or at an average of January and February levels………………………………………..Full Article: Source

Iran expects 4 mbpd oil output by March 2017

Posted on 06 April 2016 by VRS  |  Email |Print

Iranian Oil Minister Bijan Namdar Zanganeh said the country’s crude output would reach four million barrels per day (bpd) by March 2017. “In the annual budget, the amount of oil export has been predicted around 2,250,000 bpd. This means our production this (Iranian) year will reach four mbpd,” Zanganeh said.
Zanganeh said Iran’s oil output has increased after the lifting of international sanctions in January under a nuclear deal with six major powers………………………………………..Full Article: Source

Oil price falls again as Iran backs away from production cuts

Posted on 05 April 2016 by VRS  |  Email |Print

Oil prices fell after Iran indicated it would continue to increase production and exports until it reaches the market position it enjoyed before the imposition of sanctions, oil minister Bijan Zanganeh was quoted by the semi-official Mehr news agency as saying.
Brent crude, the European benchmark for oil, down 0.36pc to $38.54 a barrel on Monday morning. West Texas Intermediate, the US benchmark, slumped 0.8pc to $36.49, extending Friday’s 4pc tumble………………………………………..Full Article: Source

Crude oil market to rebalance in 2016-17: Adnoc CEO

Posted on 05 April 2016 by VRS  |  Email |Print

Global crude oil prices should increase slowly over 2016 and 2017, as supply and demand rebalances, the CEO of state-owned Abu Dhabi National Oil Co., or ADNOC, said Monday. “Over the last few weeks, we have seen some recovery in prices. While we expect to experience continue volatility in the short term, we expect to see a slow but upward improvement in prices in the medium term”, ADNOC CEO Sultan al-Jaber said in an interview with official news agency Wam.
“Overall, we think 2016 and 2017 will be the years during which markets will start to rebalance the gap between demand and supply, barring unforeseen events”, he added………………………………………..Full Article: Source

Saudi Arabia acts to slow Iran’s oil exports

Posted on 05 April 2016 by VRS  |  Email |Print

Iranian ships carrying crude restricted from entering ports in Saudi Arabia and Bahrain. Saudi Arabia has taken steps to slow Iran’s efforts at increasing oil exports, banning vessels that transport Iranian crude from entering their waters, according to traders and shipbrokers.
Iran already faces insurance, financing and legal obstacles despite the lifting of sanctions linked to its oil industry in January. Under a nuclear deal with world powers, Iran was allowed to resume crude exports to Europe and other destinations………………………………………..Full Article: Source

Chance of workable OPEC freeze at Doha is ‘minimal’: CIO

Posted on 05 April 2016 by VRS  |  Email |Print

Any hope of a coordinated output freeze between leading oil producers and an end to the recent sharp swings in the commodity’s price are likely to be dashed, one expert has told CNBC. “I think the prospect of a tangible production freeze (in April) is minimal. I think the fact that they’re actually talking about one is a thing that the markets will jump on,” Simon Fentham-Fletcher, CIO at Freedom Asset Management, told CNBC Monday.
“Russia will not and has never held to any production freezes ever and I can’t see it doing so now. The Saudis are in the same situation, they’ve been trying to grab market share and we have Iran coming back online, they were very unsure about the levels of the Iranian oil production,” Fentham-Fletcher added………………………………………..Full Article: Source

A former Opec insider tells how global oil pricing got flipped on its head

Posted on 04 April 2016 by VRS  |  Email |Print

From 2004 to 2008 and 2010 to 2014, oil production and prices both rose. The price increases were completely divorced from the market principle of a supply-demand balance. In the middle of 2014, the price momentum ran out of steam and prices began sinking in a bog of unconsumed, overproduced, expensive new oil.
That market disorder should have been a reason for concern. Unfortunately, greed suppressed the voices that raised the alarm and warned of the long-term dangers of short-term gains. Today, the producers who used to be price setters through supply control can produce only what costs less than the market price, which they no longer influence. Things will become normal only when we have the horse back before the cart………………………………………..Full Article: Source

Iran oil exports surpass 2m barrels per day: minister

Posted on 04 April 2016 by VRS  |  Email |Print

Iran’s oil exports have surpassed 2 million barrels per day following the lifting of sanctions under its nuclear deal with world powers, Oil Minister Bijan Zanganeh said on Sunday.
“Iran’s oil and gas condensate exports are now at more than 2 million barrels per day” after rising by 250,000 bpd since March 1, the ministry’s Shana news service quoted Zanganeh as saying. Iran has doubled exports since its nuclear accord took effect on January 16………………………………………..Full Article: Source

Kuwait hopes for OPEC, non-OPEC oil coordination to stabilise market

Posted on 04 April 2016 by VRS  |  Email |Print

Kuwait hopes that coordination among oil producers inside and outside OPEC will help to stabilise the market, acting oil minister Anas al-Saleh told reporters on Sunday. “As long as there is coordination among major producers in OPEC and outside OPEC, that will certainly help stabilise prices,” he said.
Saudi Arabian Deputy Crown Prince Mohammed bin Salman said on Thursday that Riyadh would not join an output freeze without the participation of Iran and other major producers, Bloomberg reported. A meeting to discuss the production freeze has been scheduled in Doha on April 17………………………………………..Full Article: Source

A former Opec insider tells how global oil pricing got flipped on its head

Posted on 04 April 2016 by VRS  |  Email |Print

From 2004 to 2008 and 2010 to 2014, oil production and prices both rose. The price increases were completely divorced from the market principle of a supply-demand balance. In the middle of 2014, the price momentum ran out of steam and prices began sinking in a bog of unconsumed, overproduced, expensive new oil.
That market disorder should have been a reason for concern. Unfortunately, greed suppressed the voices that raised the alarm and warned of the long-term dangers of short-term gains………………………………………..Full Article: Source

Oil Speculators Bet Rally’s Over as Doubts Grow on Output Freeze

Posted on 04 April 2016 by VRS  |  Email |Print

Money managers lost faith in oil’s recent rally as doubts grew over whether major producers will be able to agree on an output freeze.Futures in West Texas Intermediate oil retreated last week for the first time since mid-February.
Prices had surged from a low of almost 13 years on a proposal by Saudi Arabia, Russia, Venezuela and Qatar to cap oil output and reduce a global surplus. They’ll meet with other countries in Doha on April 17. While Iran said it would attend the talks, it ruled out limiting supply as it restores exports after sanctions were lifted in January………………………………………..Full Article: Source

Saudi Arabia will only freeze its oil output if Iran does so - and it won’t

Posted on 04 April 2016 by VRS  |  Email |Print

The recovery in the price of oil may not be sustainable as Iran chooses to play hard ball. There’s quite a way to go yet. Burgeoning oil-producer unity, which was leading toward an accord in Doha to cap output, came under immense strain as Saudi Arabia’s deputy crown prince said the kingdom’s commitment depended on regional rival Iran, which has already ruled out its participation.
If any producer increases output - and Iran has made clear its intention to do so - Saudi Arabia will likewise boost sales, Mohammed bin Salman said this weekend in an interview with Bloomberg………………………………………..Full Article: Source

Does OPEC have a future?

Posted on 04 April 2016 by VRS  |  Email |Print

With oil prices down by almost 70 per cent from mid-2014, and touching multi-year lows recently, economies across the globe are gradually adjusting to the ‘new oil normal’ and the massive transfer of real income from producers to consumers.
The market has changed radically from the days when the Organisation of the Petroleum Exporting Countries was formed in the 1960s. Set up with the objective of coordinating and unifying petroleum policies among its member countries to “secure fair and stable prices” and “maintain efficient, economic and regular supply of petroleum”, OPEC is a cartel. ……………………………………….Full Article: Source

Banks Raise Oil Price Forecasts But Remain Cautious

Posted on 01 April 2016 by VRS  |  Email |Print

Big banks have slightly raised their oil-price forecasts for the first time since August but remain cautious about crude’s outlook. A survey of 13 investment banks by The Wall Street Journal shows their average forecast increased by a dollar from the previous month, while U.S. crude prices have rallied by nearly 50% since their February lows.
The banks see Brent crude, the international oil-price benchmark, averaging $40 a barrel this year, and West Texas Intermediate, the U.S. oil gauge, averaging $39 a barrel………………………………………..Full Article: Source

FG nominates Barkindo for OPEC secretary-general

Posted on 01 April 2016 by VRS  |  Email |Print

The Federal Government has put forward the name of a former Group Managing Director of the Nigerian National Petroleum Corporation, Mohammed Barkindo, for the position of Secretary-General of the Organisation of Petroleum Exporting Countries.
Barkindo worked at NNPC until 2010 and served as acting secretary-general of OPEC in 2006, as well as representing Nigeria at the group. Bloomberg reported that two persons privy to the development confirmed the nomination but asked not to be identified because it had yet to be made public………………………………………..Full Article: Source

The OPEC Meeting Will Boost Prices Following Never-Before-Seen Agreement

Posted on 01 April 2016 by VRS  |  Email |Print

Anticipation for next month’s OPEC meeting has been building, and it’s showing in the recent oil price rally. News of the OPEC meeting has put crude oil prices on track for their best month in almost a year.
The cartel’s sit-down next month will push prices higher due to a historic change expected to come out of the meeting. And one country’s reluctance to comply won’t be a factor, despite what some analysts think now…But before we get to that, here’s just how big oil’s rally was in March………………………………………….Full Article: Source

Moody’s: Challenging oil market conditions keep hurting offshore drillers’ credit profiles

Posted on 01 April 2016 by VRS  |  Email |Print

Low oil prices and waning demand for drilling services will continue to put the credit profiles of Brazilian offshore drilling vessel projects under pressure for the next three to five years, says Moody’s Investors Service.
Petróleo Brasileiro S.A. (Petrobras, B3 negative), Brazil’s national oil company, slashed its projected capital spending budget by more than a third earlier this year. Much of the reduction in spending will affect exploration and production activities, impacting drillers that have significant re-contracting risk and a large amount of debt outstanding………………………………………..Full Article: Source

Hedge funds up bullish bets on rising oil prices

Posted on 31 March 2016 by VRS  |  Email |Print

Hedge funds and other money managers have amassed a near-record number of bullish bets on increasing oil prices, helping push the main international benchmark well above $40 per barrel.
By the close of business on March 22, money managers held a net long position equivalent to almost 579 million barrels in the three largest crude oil futures and options contracts. Hedge funds have more than doubled their net long position from just 242 million barrels at the end of last year, according to an analysis of data published by regulators and exchanges………………………………………..Full Article: Source

Oil Prices Give Up Gains

Posted on 31 March 2016 by VRS  |  Email |Print

Oil prices inched higher Wednesday but sold off through most of the afternoon with opinions divided about the latest addition to U.S. stockpiles. The U.S. Energy Information Administration said Wednesday that stockpiles rose, but by less than analysts had expected, initially adding to overnight gains.
But stockpiles are still near record highs and the EIA data show refiners ramping up strongly, suggesting the oil industry is still willing to send more oil and gasoline onto already flooded markets, said Donald Morton, senior vice president at Herbert J. Sims & Co., who runs an energy-trading desk………………………………………..Full Article: Source

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