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Commodities Briefing - Category | Oil more

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

Posted on 20 January 2015 by VRS  |  Email |Print

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

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

Posted on 19 January 2015 by VRS  |  Email |Print

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

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

Posted on 19 January 2015 by VRS  |  Email |Print

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

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

Posted on 19 January 2015 by VRS  |  Email |Print

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

OPEC’s Future Seen in Mining Slump as Oil Price Pummeled

Posted on 19 January 2015 by VRS  |  Email |Print

Oil producers reluctant to curb output even as prices tumble to five-and-a-half year lows don’t need to guess what the future holds. They can ask a miner.
In coal to iron ore markets, suppliers have raised volumes even as prices slumped, boosting global gluts and jeopardizing profits as the most dominant players seek to maintain revenue and squeeze out higher cost rivals………………………………………..Full Article: Source

What is the future direction of oil prices?

Posted on 16 January 2015 by VRS  |  Email |Print

Economics and history suggest that today’s $50 price should be viewed as a probable ceiling for a much lower trading range, which may stretch all the way down toward $20. If one number determines the fate of the world economy, it is the price of a barrel of oil. Every global recession since 1970 has been preceded by at least a doubling of the oil price, and every time the oil price has fallen by half and stayed down for six months or so, a major acceleration of global growth has followed.
Having fallen from $100 to $50, the oil price is now hovering at exactly this critical level. So should we expect $50 to be the floor or the ceiling of the new trading range for oil?……………………………………….Full Article: Source

2015 Oil and Gas Trends

Posted on 16 January 2015 by VRS  |  Email |Print

Leave the worrying about the highs and lows of oil prices to obsessed analysts and headline writers. That volatile aspect of the energy business is largely out of the control of industry leaders. Instead, oil and gas companies (producers or refiners) whose strategic future is still a puzzle should be asking a couple of simple questions, mostly divorced from the cost of oil:
Where do we go to lock in demand? Are we prepared to thrive in a business environment that is oversupplied? If both questions are adequately — and, in some cases, fearlessly — addressed, oil and gas companies should be able to forge a pathway for success, no matter how uncertain the prices for their products………………………………………..Full Article: Source

Opec claims first blood in oil war with US frackers

Posted on 16 January 2015 by VRS  |  Email |Print

Oil production growth outside Opec seen to slow this year as Opec price takes its toll on US shale frackers. Opec has given the first indication that it may be winning its price war with US shale oil producers as it now forecasts that growth production outside the cartel will slow this year.
The 12-member Organisation of the Petroleum Exporting Countries (Opec) said in its latest market report that producers outside the group will pump additional 1.28m barrels per day (bpd) in 2015, which represents a downward revision of 800,000 bpd from its previous estimate………………………………………..Full Article: Source

OPEC sees 2015 supply surplus rising, even as oil slump slows shale boom

Posted on 16 January 2015 by VRS  |  Email |Print

The collapse in oil prices is starting to slow growth in U.S. output, OPEC said on Thursday, although the slowdown will not prevent an increasing global surplus in 2015 and demand for the exporter group’s oil falling to its lowest in a decade.
In a monthly report, the Organization of the Petroleum Exporting Countries (OPEC) forecast demand for the group’s oil would drop to 28.78 million barrels per day (bpd) in 2015, down 140,000 bpd from its prior estimate and well over 1 million bpd less than it is currently producing………………………………………..Full Article: Source

‘Crude’ Dismantling of The Commodities Supercycle

Posted on 15 January 2015 by VRS  |  Email |Print

It has barely been a few weeks into the new trading year and the Brent front month oil futures contract is already down by over 11% on its opening level for 2 January. Together with the WTI and OPEC basket of crude oil, the global proxy benchmark is well below $50 per barrel with airwaves and internet forums full of chatter about new “six-year lows.”
In more ways than one, the sense of false shock and horror expressed by some commentators is mildly amusing. Saudi pricing strategy coupled with leading oil producers pumping out more and more of the crude stuff have made yet newer record lows all but inevitable until a supply correction kicks in at some point around the midway point of this year………………………………………..Full Article: Source

World Bank cuts global economic outlook despite oil price drop

Posted on 15 January 2015 by VRS  |  Email |Print

The World Bank on Tuesday lowered its global growth forecast for 2015 and next year due to disappointing economic prospects in the euro zone, Japan and some major emerging economies that offset the benefit of lower oil prices.
The global development lender predicted the global economy would grow 3 percent this year, below a forecast of 3.4 percent made in June, according to its twice-yearly Global Economic Prospects report………………………………………..Full Article: Source

$50 Per Barrel May Be The New Ceiling For Oil Prices

Posted on 15 January 2015 by VRS  |  Email |Print

If one number determines the fate of the world economy, it is the price of a barrel of oil. Every global recession since 1970 has been preceded by at least a doubling of the oil price, and every time the oil price has fallen by half and stayed down for six months or so, a major acceleration of global growth has followed.
Having fallen from $100 to $50, the oil price is now hovering at exactly this critical level. So should we expect $50 to be the floor or the ceiling of the new trading range for oil?……………………………………….Full Article: Source

Oil Continues Down Its Slippery Slope: Where’s The Bottom?

Posted on 15 January 2015 by VRS  |  Email |Print

A fundamental shift is underway in the energy complex. The price of oil, as measured by West Texas Light Sweet Crude, has fallen from its most recent high near $107 per barrel in late June of last year, to a current level under $47. This represents a decline in excess of 55%. What’s causing this most precious commodity to plummet?
Perhaps more importantly, where’s the bottom of the barrel for crude? In this article, we’ll look at a the factors behind the slide and explore a more clandestine point of view. On August 25, 2014, the 50 day exponential moving average on oil fell below the 200 day moving average, marking what technical analysts refer to as the death cross………………………………………..Full Article: Source

Oil projects worth billions put on hold

Posted on 15 January 2015 by VRS  |  Email |Print

Billions of dollars of spending on oil and petrochemicals projects has been scrapped or put on hold, with Royal Dutch Shell and UK-based Premier Oil announcing the first big cost-cutting moves of 2015 after a brutal slide in crude prices.
The Anglo-Dutch oil major on Wednesday abandoned plans for one of the world’s biggest petrochemical plants, a $6.5bn project with Qatar Petroleum, blaming “the current economic climate prevailing in the energy industry”………………………………………..Full Article: Source

The end of OPEC as we have known it is here

Posted on 15 January 2015 by VRS  |  Email |Print

Unless oil prices fall so low that it forces oil fields to shut down and investors to abandon drilling projects, expect prolong chaos in the market for oil, says George L. Perry, senior fellow at Brookings Institution.
Early last Fall, when oil prices had fallen by about $25 a barrel and it became clear the decline was more than a temporary blip, the big question was how far prices would fall? And that would depend on whether and when Saudi Arabia and its partners at the Organization of the Petroleum Exporting Countries would support the world oil price by cutting their own production………………………………………..Full Article: Source

A guide to the inner workings of Opec

Posted on 15 January 2015 by VRS  |  Email |Print

Opec was founded in 1960 to help governments gain a bigger share of revenue from oil production in their own countries. At the time, the oil companies in places such as Saudi Arabia and Venezuela were owned by the oil majors – for example, Shell, Exxon and BP. The dominant global producer of oil was Texas, and its ability to produce unlimited volumes enabled the international oil companies to drive hard bargains with the governments of the countries which would ultimately come to form Opec.
Opec was intended as a counterweight to Anglo-American dominance. For the exporting countries, the early decades of Opec were scrappy – a fight against far better financed, politically connected and technologically sophisticated western oil companies………………………………………..Full Article: Source

Oil Prices And The Significant, Long-Lasting Impact On The Economy

Posted on 14 January 2015 by VRS  |  Email |Print

In 2014, a number of events will go down in history as major, market-moving events. From an economic viewpoint, though, perhaps no other event will have a more significant and long-lasting impact than the collapse of oil prices. At this time last year, oil was trading well above $100 per barrel. Last week, the price of a barrel of West Texas Intermediate oil traded at less than $50.
Over the years, oil prices have fluctuated. The last two major oil price declines were driven by central bank policy errors – monetary contractions which led to global economic recessions. During an economic recession, the world economic activity contracts and demand for oil declines. When demand for any commodity contracts, prices decline………………………………………..Full Article: Source

Iran will weather oil price slide, Saudi Arabia will suffer – Rouhani

Posted on 14 January 2015 by VRS  |  Email |Print

Iranian President Hassan Rouhani said Tuesday that Iran can cope with the economic turmoil of falling oil prices, adding that Saudi Arabia and Kuwait will be harder hit. Rouhani said that while oil now only accounts for one-third of Tehran’s budget, some of the Gulf states are up to 95 percent reliant on it.
“If Iran suffers from the drop in oil prices, know that other oil-producing countries such as Saudi Arabia and Kuwait will suffer more than Iran,” he said. He added that “Kuwait’s budget is 95 percent reliant on oil,” and 90 percent of Saudi Arabia’s “annual exports are related to oil.”……………………………………….Full Article: Source

UAE says OPEC will no longer shore up oil price

Posted on 14 January 2015 by VRS  |  Email |Print

The United Arab Emirates said on Tuesday that OPEC will no longer move to shore up crude prices, arguing that rising North American shale oil output needed to be curbed. World prices have been falling since June but the pace of the slide accelerated in November when the Organisation of the Petroleum Exporting Countries (OPEC) decided to maintain its production unchanged at 30 million barrels per day.
Analysts say that richer cartel members like the UAE have been ready to accept the price fall in the hope that it will force higher-cost shale producers out of the market………………………………………..Full Article: Source

Here’s why the price of oil is dropping so fast

Posted on 14 January 2015 by VRS  |  Email |Print

This a complicated question, but it boils down to the simple economics of supply and demand. US domestic production has nearly doubled over the last six years, pushing out oil imports that need to find another home. Saudi, Nigerian and Algerian oil that once found a home in the United States is suddenly competing for Asian markets, and the producers are forced to drop prices.
On the demand side, the economies of Europe and developing countries are weakening and vehicles are becoming more energy-efficient. So demand for fuel is lagging a bit………………………………………..Full Article: Source

OPEC vs. U.S.: Who will blink first on oil?

Posted on 14 January 2015 by VRS  |  Email |Print

The Merriam-Webster dictionary offers this definition for the word capitulate: “to stop fighting an enemy or opponent; to admit that an enemy or opponent has won.” I’m not sure who oil companies are fighting, whether it’s oil traders, OPEC, Russia, or some invisible market force, but they’re losing. The domestic standard, West Texas Intermediate crude oil, fell below $45 per barrel on Tuesday, while the global standard, Brent crude oil, is now well under $50.
Who is going to stop the bleeding? OPEC is not cutting production, the U.S. is expected to increase output in 2015, and Russia has little choice but to sell whatever crude oil it can just to make money. But someone will have to capitulate if these players aim to halt the slide in oil prices………………………………………..Full Article: Source

Oil hits six-year low as Goldman Sachs slashes price forecast

Posted on 13 January 2015 by VRS  |  Email |Print

US investment bank expects oil to fall to around $40 per barrel as Opec price war intensifies. Oil prices hit a new six-year low on Monday as Goldman Sachs, the bank that once predicted that the cost of a barrel would hit $200, lowered its forecast for crude.
Brent oil - a global benchmark of crude blended from 15 North Sea fields – crashed by almost 5pc by the close of trading in London to around $47.63 per barrel. Goldman Sachs earlier lowered its three-month estimate for Brent to $42 per barrel from a previous forecast of $80 and reduced US crude to a price of $41……………………………………….Full Article: Source

America’s Going to Lose the Oil Price War

Posted on 13 January 2015 by VRS  |  Email |Print

The financial debacle that has befallen Russia as the price of Brent crude dropped 50 percent in the last four months has overshadowed the one that potentially awaits the U.S. shale industry in 2015. It’s time to heed it, because Saudi Arabia and other major Middle Eastern oil producers are unlikely to blink and cut output, and the price is now approaching a level where U.S. production will begin shutting down.
Representatives of the leading members of the Organization of Petroleum Exporting countries have been saying for weeks they would not pump less oil no matter how low its price goes. Saudi Arabian Oil Minister Ali Al-Naimi has said even $20 per barrel wouldn’t trigger a change of heart. ……………………………………….Full Article: Source

Oil Prices: What Is Behind the Drop? Simple Economics

Posted on 13 January 2015 by VRS  |  Email |Print

The oil industry, with its history of booms and busts, appears to be in the early stages of its latest downturn. The price of oil has plunged more than 55 percent to under $50 a barrel since June. That is the lowest price since the depths of the 2009 recession.
Oil analysts predict that the price could fall below $40 before beginning to rebound. But even optimists say $70 a barrel by the end of the year is highly doubtful………………………………………..Full Article: Source

OPEC price war in Asia intensifies as oil falls below $50

Posted on 13 January 2015 by VRS  |  Email |Print

Even as Saudi Arabia and its Gulf OPEC allies appear united in their refusal to cut output to boost global oil prices, they are becoming locked in an increasingly fierce battle to secure market share in Asia.
Oil prices have slumped below $50 a barrel, the weakest since 2009, triggering a price war between producers to secure customers in Asia. And the price outlook remains grim with Goldman Sachs slashing its three-month benchmark crude forecasts to just above $40………………………………………..Full Article: Source

The Economic Impact Of Falling Oil Prices: ‘Expansionary Disinflation’

Posted on 13 January 2015 by VRS  |  Email |Print

Forget about the “secular stagnation” theory of an ailing U.S. economy. Accordingly to the Labor Department, payrolls grew at a seasonally adjusted increase of 242,000 in December adding to the soaring U.S. job growth of 2014 which represents the strongest annual job creation since 1999. The unemployment rate also fell to 5.6% in December, down from 7% a year earlier and far below predictions made by economists at the beginning of 2014.
In addition, the past 2 quarters of GDP growth have been well above an annualized 4%. What complicates this rosy picture however for the Federal Reserve and its dual mandate is that core CPI inflation has fallen to 1.3%, well below the Fed’s 2% target and will likely continue to fall given the recent significant decline in the price of crude oil, an input to several products included in core inflation………………………………………..Full Article: Source

The days of $100 oil are gone: Saudi prince

Posted on 13 January 2015 by VRS  |  Email |Print

Prince Alwaleed bin Talal, billionaire businessman and a memeber of the Saudi royal family, told USA Today that $100 oil prices are history. “I’m sure we’re never going to see $100 anymore,” said Al-Waleed. “I said a year ago, the price of oil above $100 is artificial. It’s not correct.”
The prince, who was recently estimated to have an estimated wealth of $31.2 billion, said the decline is due to both too much supply and weak global demand. He noted that Iraq and Libya, despite unrest, are both producing a lot of oil. Many major economies, except the US, are weak………………………………………..Full Article: Source

Decoding the oil price fall

Posted on 12 January 2015 by VRS  |  Email |Print

Year 2015 will be crucial as shale oil firms begin to feel the pinch of low prices. Are falling oil prices good or bad for the global economy? And how do they work for India? Till recently these questions were no-brainers. Cheaper oil is obviously good for the global economy; for an energy-intensive economy such as India’s, which also depends on imported oil for meeting four-fifths of its needs, a fall in oil price is like manna from heaven.
Yet, the biggest fall in the stock market in five-and-a-half years last week was triggered by crude oil piercing the $50 a barrel mark on its unrelenting downward journey. Isn’t that ironic?……………………………………….Full Article: Source

Most developing countries will benefit from oil price slump

Posted on 12 January 2015 by VRS  |  Email |Print

Gains from low oil prices can be substantial for developing-country importers if supported by stronger global growth, says a World Bank Group analysis of the oil price decline, contained in the latest edition of Global Economic Prospects.
The decline in oil prices reflects a confluence of factors, including several years of upward surprises in oil supply and downward surprises in demand, receding geopolitical risks in some areas of the world, a significant change in policy objectives of the Organization of the Petroleum Exporting Countries (OPEC), and appreciation of the U.S. dollar. Although the relative strength of the forces driving the recent plunge in prices remains uncertain, supply related factors appear to have played a dominant role………………………………………..Full Article: Source

Saudi Arabia’s crude oil price war

Posted on 12 January 2015 by VRS  |  Email |Print

What exactly is driving the price of oil down in today’s markets — and ultimately at the gas pump? The primary driver is that our ally, Saudi Arabia, has declared war on the booming American shale and energy exploration industry. Yes, America, we are in an all-out energy war against the Middle East’s oil heavyweight champions.
The Saudis’ latest move tips their hand to a price war. While oil inventories are already sky-high, and US exploration and production is at a 25-year high, why would our “friends” the Saudis announce this week that they will raise the price of oil for Asia and other buyers but cut the price for oil it sells here in America?……………………………………….Full Article: Source

Venezuela’s Maduro seeks support from Saudi Arabia on oil prices

Posted on 12 January 2015 by VRS  |  Email |Print

Venezuelan President Nicolas Maduro met Saudi Arabia’s Crown Prince Salman in Riyadh on Sunday as part of a diplomatic tour of OPEC members to discuss falling oil prices, which have hit its economy hard.
The Saudi side in the meeting included Oil Minister Ali al-Naimi and several princes including Deputy Crown Prince Muqrin, intelligence chief Prince Khaled bin Bandar and three sons of King Abdullah, who is in hospital, state media reported………………………………………..Full Article: Source

Oil Producers Betting on Price Drop With OPEC Not Curbing Output

Posted on 12 January 2015 by VRS  |  Email |Print

The oil industry was listening as OPEC talked down crude prices to a more than five-year low. Drillers, refiners and other merchants increased bets on lower prices to the most in three years in the week ended Jan. 6, government data show. Producers idled the most rigs since 1991, with some paying to break leases on drilling equipment.
Producers are hedging more and drilling less on concern that the biggest plunge in prices since 2008 will continue. Oil fell for a seventh week after officials from Saudi Arabia, the United Arab Emirates and Kuwait reiterated they won’t curb output to halt the decline………………………………………..Full Article: Source

Oil Declines From 5 1/2-Year Low as OPEC Members Seek Recovery

Posted on 12 January 2015 by VRS  |  Email |Print

Oil extended losses from the lowest level in more than 5 1/2 years as Venezuela and Iran called for members of the Organization of Petroleum Exporting Countries to work together to assist in a recovery of the crude market.
Futures slid as much as 1.5 percent in London after a seventh weekly drop. Prices need to return to $100 a barrel for economic equilibrium, Venezuelan President Nicolas Maduro said in comments broadcast on state television during a tour of OPEC producers in the Middle East………………………………………..Full Article: Source

Cheaper oil complicates war on climate change

Posted on 12 January 2015 by VRS  |  Email |Print

The drastic fall in global crude oil prices over the past six months could reduce the chance of a universal agreement on climate change policy this year, according to HSBC.
Environmentalists hope the widely-anticipated Paris Climate Summit in December will bring about two key outcomes: a universal accord that enables the world to transition to a low-carbon future as well as concrete measures to limit global warming to 2 degrees Celsius above pre-industrial times. Discussions in Peru last month saw all participating countries commit to lowering greenhouse gas emissions for the first time ever………………………………………..Full Article: Source

Demoralized oil traders give up betting on how low prices can go

Posted on 09 January 2015 by VRS  |  Email |Print

Crude oil’s freefall from $100 a barrel to under $50 has struck at the heart of a core belief in the markets: that Saudi Arabia would always ride to the rescue. Oil traders can agree on only one thing about when the second-biggest price rout on record will be over: not yet.
Crude oil’s freefall from more than $100 a barrel last summer to a near six-year low under $50 a barrel has been unrelenting, shocking traders and baffling analysts who have all but given up trying to pinpoint the bottom of the market. The scale of the uncertainty reflects a market stripped of a core belief that has underpinned prices for the past decade: that top oil exporter Saudi Arabia would always ride to the rescue………………………………………..Full Article: Source

US investors buy into oil price dip

Posted on 09 January 2015 by VRS  |  Email |Print

Funds tracking oil experienced large inflows last month as US investors bet on a recovery in crude prices. Almost $1.7bn was ploughed into oil exchange traded products in December, according to ETF Securities, as US crude prices approached $50 a barrel for the first time in five and a half years.
“This is clear indication that investors are buying into the price dip,” said Nitesh Shah, analyst at ETF Securities, an investment group which runs some of the biggest exchange traded commodity funds. “They are taking a contrarian view.”……………………………………….Full Article: Source

No chance of OPEC output cut, even after oil dips below $50

Posted on 09 January 2015 by VRS  |  Email |Print

Saudi Arabia and its Gulf OPEC allies are showing no sign of considering cutting output to boost oil prices, even though they dipped below $50 a barrel this week.
OPEC decided against limiting production at its last meeting on Nov 27, despite misgivings from non-Gulf members, after Saudi Oil Minister Ali al-Naimi said the group needed to defend market share against U.S. shale oil and other competing sources………………………………………..Full Article: Source

OPEC Finds Everyone Else Guilty in Oil-Glut Blame Game

Posted on 09 January 2015 by VRS  |  Email |Print

When OPEC blames everyone else for a glut that’s sent oil prices to the lowest in 5 1/2 years, it’s not without some merit. The CHART OF THE DAY shows crude production in the U.S. increased 75 percent over the past 5 years while output from the Organization of Petroleum Exporting Countries grew 5 percent.
Canada boosted supplies by 42 percent while Brazil pumped 24 percent more, according to data from New York-based Energy Intelligence Group. Brent crude collapsed by 48 percent in 2014, its biggest price slide since 2008, as OPEC resisted calls to cut output amid a global surplus that Qatar estimates at 2 million barrels a day………………………………………..Full Article: Source

Oil investors pile most money into funds in four year as price rout continues

Posted on 08 January 2015 by VRS  |  Email |Print

Investors poured the most money in more than four years into funds that track crude oil on speculation prices will rebound from a five-year low. The four biggest oil exchange-traded products listed in the U.S. received a combined US$1.23 billion in December, the most since May 2010, according to data compiled by Bloomberg. Another US$109.9 million was added this month through Jan. 5.
Investors are piling into oil ETFs even after West Texas Intermediate crude, the U.S. benchmark, tumbled the most since 2008 last year amid signs of rising supply and weak demand. Shares outstanding of the four funds surged to the highest since 2009………………………………………..Full Article: Source

Oil price crashes through $50 barrier

Posted on 08 January 2015 by VRS  |  Email |Print

A barrel of Brent crude cost less than $50 for the first time in nearly six years on Wednesday morning, continuing the rout of oil prices. Brent slumped as low as $49.92 in early trading, the first time it has been below the psychological $50 level since April 2009. It later crept back above $50.
Equity markets appeared unmoved at the latest fall in the oil price, having previously responded by selling shares and buying so-called ’safe haven’ assets such as gold. The FTSE 100 was up 0.6pc before 9am. London’s benchmark stock index has already been particularly hard hit by the commodity’s plunge as oil and mining stocks account for about 20pc of the FTSE 100………………………………………..Full Article: Source

No OPEC Member Has Formally Requested Emergency Meeting

Posted on 08 January 2015 by VRS  |  Email |Print

OPEC members have so far refrained from formally asking for the group to hold an emergency meeting despite Brent oil prices dipping below $50 a barrel for the first time in 5½ years, delegates from the oil cartel said. Brent crude fell below $50 a barrel earlier Wednesday, though it recovered later to around $50.9 per barrel.
The Organization of the Petroleum Exporting Countries, led by its top producer Saudi Arabia, decided in November to keep their production ceiling unchanged, instead of cutting back output to bolster falling prices………………………………………..Full Article: Source

How low could oil prices go?

Posted on 07 January 2015 by VRS  |  Email |Print

With US crude falling below the $50 mark for the first time in nearly six years, some traders are betting on $20 a barrel. It’s textbook economics: falling demand and rising supply. The United States has ramped up domestic oil production, by investing in highly-polluting fracking projects. US oil production increased by around 48% between 2008-13, taking output to 11m barrels a day by early 2014.
At first, the US surge in output was offset by supply disruptions elsewhere: western sanctions on Iran, turmoil in Iraq and Libya . But some supply problems have abated. Last month, Iraq’s oil exports were at their highest since 1980. Russia produced more oil in 2014 than at any time since the collapse of the Soviet Union………………………………………..Full Article: Source

Oil Price Q&A: What the Plunge Means for Gas Prices, the Economy and Markets

Posted on 07 January 2015 by VRS  |  Email |Print

Oil prices dropped this week below $50 a barrel for the first time since April 2009. What do those dropping prices mean for the markets? For jobs? For GDP? And for you? National economics correspondent Josh Zumbrun and Brian Baskin, commodities and emerging markets editor, answered your questions about plummeting oil prices in a Q&A on Facebook. Below are excerpts from that exchange.
Question: “Oil price drop is mostly demand-driven. Weaker global demand, more U.S. independence, and China and India demanding less oil. So it has resulted in overproduction, so the glut of oil caused prices to fall down drastically.” Zumbrun: “That’s probably one factor. But it’s impossible to ignore the role of supply. Just look at this chart of U.S. oil production. There’s a huge supply shift here:……………………………………….Full Article: Source

OPEC trying to punish US oil frackers: Kovacevich

Posted on 07 January 2015 by VRS  |  Email |Print

The refusal by OPEC to cut production in the face of prices plunging to 5½-year lows shows the cartel is looking to put a lid on the U.S. fracking boom, former Wells Fargo Chairman and CEO Richard Kovacevich told CNBC on Tuesday.
U.S. crude prices were lower again in early Tuesday trading—below $49 a barrel at one point—following Monday’s 5 percent drop in New York to lows not seen since April 2009. The price collapse has been pressuring stocks, which saw the Dow Jones Industrial Average fall 331 points Monday, the worst session in three months………………………………………..Full Article: Source

Gold and Oil: Who’s going to bottom out soon?

Posted on 07 January 2015 by VRS  |  Email |Print

In recent days, I have encountered a few questions related to gold and whether it would be right time to invest. In November, we had expected an uptrend in gold in the beginning of New Year and now the break of $1200 resistance levels, analysts may be watching for the next breach at $1230, 1250 upto $1280 per ounce levels.
Time and again I have told that gold price in India is basically a function of global spot prices plus import duties and local taxes. Gold demand has been fairly inelastic in the country with higher prices only raising the urge to buy more so that they don’t end up buying at still higher prices………………………………………..Full Article: Source

US oil price falls below $50 on supply glut fears

Posted on 06 January 2015 by VRS  |  Email |Print

The US oil price fell below the symbolic threshold of $50 a barrel for the first time since April 2009, before finishing the day at $50.05. The price of Brent crude also fell on Monday, dipping 6% to $53 a barrel.
The price of both Brent crude and US oil, known as West Texas Intermediate crude, have now lost more than half of their value since mid-2014. Investors are worried that combination of a global supply glut and weak demand could cause prices to tumble further………………………………………..Full Article: Source

Sheiks vs. Shale: the Future of O.P.E.C.

Posted on 06 January 2015 by VRS  |  Email |Print

America enjoys scolding the rest of the world. It certainly enjoys ragging on the Organization of Petroleum Exporting Countries (O.P.E.C.), which the West largely credits for holding the magic wand of setting world oil prices. As the price of crude benchmarks has plunged by nearly 50 percent since June, many commentators are now calling into question O.P.E.C.’s ability to control pricing and bring stability to the markets.
Accordingly, U.S. shale producers and their Wall Street investors are hanging on the every word of O.P.E.C.’s de-facto leader — Saudi oil minister Ali al-Naimi — as if he is either an oracle to be heralded or an untrustworthy demon to be castigated………………………………………..Full Article: Source

Why OPEC is Playing a Dangerous Game With Oil Markets

Posted on 06 January 2015 by VRS  |  Email |Print

OPEC appears to be standing firm to its commitment of keeping oil exports constant in an effort to squeeze marginal oil producers in the U.S., Russia, and elsewhere out of the market. The theory is, pain today for gain tomorrow.
This general plan has been done before, as fellow Fool Tyler Crowe recently pointed out here. The oil glut of the early 1980s shocked the market and countries like the U.S., who were growing oil production, suddenly stopped drilling and became major OPEC oil importers. The flood of supply stoked increased consumption, lower production, and higher market share and revenue for OPEC. But will the strategy work again?……………………………………….Full Article: Source

Energy Sector Outlook for 2015

Posted on 06 January 2015 by VRS  |  Email |Print

It appears that crude oil prices are starting to stabilize. At least they’ve started to decline slower. Most of the “experts” who send me their price forecasts have the low being set in the $45 to $55 range. This week we will see the first major winter storm of the season, which should draw more attention to the energy sector.
The first “Clipper” of the season will bring heavy snow, high winds and very cold temperatures to an area of the country that burns a lot of natural gas for residential space heating. People in the Northeast still use a lot of heating oil to heat their homes, so this may have some impact on oil demand………………………………………..Full Article: Source

Oil Drops Most Since 2008 as OPEC Battles Shale

Posted on 05 January 2015 by VRS  |  Email |Print

Crude oil slumps the most in 2014 amid a battle for market share between Opec and shale oil producers Oil fell in 2014 by the most since the 2008 global financial crisis as US producers and the Organisation of Petroleum Exporting Countries ceded no ground in their battle for market share amid a supply glut.
The US benchmark ended at a five-year low on 31 December, capping a 46 percent drop in 2014, as stockpiles of crude oil and petrol reached seasonal record highs and as OPEC produced more than its quota in December for a seventh month. Goldman Sachs Group Inc. said it expects a “far lower” new normal for prices and Barclays Plc said oil has “further downside risk”………………………………………..Full Article: Source

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