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Saudi Arabia may be ready to budge on its punishing 2-year oil price policy

Posted on 16 August 2016 by VRS  |  Email |Print

Saudi Arabia may finally be willing to work with producer nations to put a floor under oil prices after allowing market forces to determine the cost of a barrel of crude since November 2014, according to Jan Stuart, global energy economist at Credit Suisse.
In fact, the nearly 2-year-old policy, which has sent benchmark crude prices as low as $26 a barrel and hammered the kingdom’s competitors, is not incompatible with intervening in oil markets, Stuart said………………………………………..Full Article: Source

Russia warms to discussions with Saudi Arabia ahead of OPEC meeting in Algeria

Posted on 16 August 2016 by VRS  |  Email |Print

Russia’s Energy Minister Alexander Novak said his country was cooperating with Saudi Arabia to achieve of international oil market stability. He added that the ongoing dialogue between Moscow and Riyadh was witnessing concrete progress in this regard and expressed Russia’s readiness to adopt common measures to reach the aspired goals.
In an interview with Asharq al-Awsat newspaper, Novak said that Saudi-Russian bilateral cooperation was not only focused on building nuclear energy, but further covers wider areas such as nuclear medicine and radio-logic technology………………………………………..Full Article: Source

OPEC Could Still Tip Next Year’s Oil Deficit Into Surplus

Posted on 16 August 2016 by VRS  |  Email |Print

The re-balancing of oversupplied oil markets is on track as demand climbs and U.S. shale production falters, according to the International Energy Agency. The world will face a 560,000 barrel-a-day supply deficit in 2017 if OPEC members pump at the same rate as this year, IEA data show.
If Iran and Iraq add just some of the new capacity they’re planning, Libya recoups a fraction of the supplies lost to political conflict and Nigeria restarts oil fields halted by militant attacks, there’ll be an 810,000 barrel-a-day excess — a fourth year of oversupply………………………………………..Full Article: Source

OPEC deal a tough task, as oil output freeze expectations rise

Posted on 16 August 2016 by VRS  |  Email |Print

OPEC will probably revive talks on freezing oil output levels when it meets non-OPEC nations next month as top exporter Saudi Arabia appears to want higher prices, according to OPEC sources, although Iran, Iraq and Russia present obstacles to a deal.
OPEC will probably revive talks on freezing oil output levels when it meets non-OPEC nations next month as top exporter Saudi Arabia appears to want higher prices, according to OPEC sources, although Iran, Iraq and Russia present obstacles to a deal………………………………………..Full Article: Source

Oil Bulls Take Heart as OPEC Rekindles Hopes of Output Freeze

Posted on 15 August 2016 by VRS  |  Email |Print

All it took was a few words from OPEC to encourage oil bulls. Money managers increased wagers on rising crude prices by the most since January as futures rebounded from a three-month low.
Prices jumped after OPEC’s president said Aug. 8 the group will hold informal talks in Algiers next month and Saudi Arabia signaled Aug. 11 it’s prepared to discuss taking action to stabilize markets. “The statement certainly achieved its purpose,” said Daniel Yergin, vice chairman of IHS Markit. “The Saudis saw bearish bets had really driven down the prices.”……………………………………….Full Article: Source

Chakib Khelil is optimistic about OPEC meeting in Algiers

Posted on 15 August 2016 by VRS  |  Email |Print

Former Algerian Minister of Energy and former president of the Organization of Petroleum Exporting Countries OPEC, Chakib Khelil, is optimistic about the informal meeting of OPEC, to be held in Algiers on the sidelines of the International Forum on Energy on September 26 to 28, especially after the statements of Saudi oil Minister that shows a willingness to move towards market stabilization.
Chakib Khelil believes in his statement to Ennahar TV that OPEC members will fail to rebalance the market as supply remains high compared to demand. Former Algerian Energy Minister added that during the last meeting, “almost all oil producers had reached their maximum production level, they therefore had nothing to lose by deciding a freez.”……………………………………….Full Article: Source

Saudi oil witnessing high demand, says Al-Falih

Posted on 15 August 2016 by VRS  |  Email |Print

Saudi Arabia’s Minister of Energy, Industry and Mineral Resources Khalid Al-Falih has stressed that the Kingdom’s production of crude oil is witnessing high demand in most parts of the world. It has gone up in part to meet the increase in seasonal demand during summer and in part to meet higher demand from our customers.
Despite the bearish sentiment engulfing the market, we still see strong demand for our crude in most parts of the world, especially as supply outside OPEC has been declining fast, supply outages increasing, and global demand still showing signs of strength………………………………………..Full Article: Source

Why oil companies must look beyond oil

Posted on 15 August 2016 by VRS  |  Email |Print

Persistently low oil prices have had a devastating effect on the economies of all major oil producers/exporters who are accustomed to a price regime of over $100/b. The lifting of sanctions on Iran and its ability to quickly ramp up to pre-sanction (2012) levels of production and exports has made the market even more liquid and exerted downward pressure on oil prices.
Suddenly when oil prices collapsed, the major oil producers and exporters found themselves in a challenging situation, as falling oil revenues were not sufficient to balance government budgets………………………………………..Full Article: Source

Oil demand likely rising in sweltering Middle East: Kemp

Posted on 12 August 2016 by VRS  |  Email |Print

Saudi Arabia raised its oil production to a record last month while much of the kingdom sweltered in record temperatures that have also hit neighbouring countries across the Middle East.
There is not enough statistical data to draw a direct connection between the two but it is likely most if not all the extra oil production was burned in the kingdom’s power plants to meet electricity demand. Saudi Arabia’s power generators rely heavily on burning unrefined crude as well as residual fuel oil and diesel to meet electricity demand………………………………………..Full Article: Source

IEA: ‘Massive’ stock overhang is capping oil price

Posted on 12 August 2016 by VRS  |  Email |Print

The International Energy Agency on Thursday trimmed its forecast for the rise in global oil demand next year on a dimmer economic outlook, warning that the “massive” stock overhang is keeping a lid on crude oil prices.
In its closely watched monthly oil market report, the Paris-based energy watchdog said it expects global oil demand to grow by 1.2 million barrels a day in 2017, a decrease of 100,000 barrels a day compared with last month’s forecast and down by 200,000 barrels a day from this year. “Some momentum will be lost in 2017 due to downgrades in economic growth projections, but the forecast expansion of 1.2 million b/d is still above-trend,” it said in the report………………………………………..Full Article: Source

Saudi minister: Algeria meeting may discuss stabilising oil market

Posted on 12 August 2016 by VRS  |  Email |Print

Saudi Arabia will work with OPEC and non-OPEC members to help stabilise oil markets, it said on Thursday a month ahead of an informal meeting of major producing countries in Algeria. Members of the Organization of the Petroleum Exporting Countries will meet on the sidelines of the International Energy Forum (IEF), which groups producers and consumers, in Algeria from Sept. 26-28, Qatar’s energy ministry said.
“We are going to have a ministerial meeting of IEF in Algeria next month, and there is an opportunity for OPEC and major exporting non-OPEC ministers to meet and discuss the market situation, including any possible action that may be required to stabilize the market,” Saudi Energy Minister Khalid al-Falih said in a statement………………………………………..Full Article: Source

Saudi Energy Minister Says Kingdom Willing to Help Rebalance Oil Market

Posted on 12 August 2016 by VRS  |  Email |Print

Saudi Arabia would “take any action to help” the crude-oil market and will discuss acting in coordination with other producing countries at a meeting in September, the kingdom’s energy minister said on Thursday.
The comments by Khalid al-Falih, named energy minister in May, come as several nations in the Organization of the Petroleum Exporting Countries push for a revival of limits on oil production. Oil prices have remained stuck below $50 a barrel for much of the summer, well below what many in OPEC, the 14-nation oil cartel, need to balance national budgets………………………………………..Full Article: Source

Here’s proof that Saudi Arabia doesn’t care about killing oil prices - only the competition

Posted on 12 August 2016 by VRS  |  Email |Print

There is proof that Saudi Arabia is more interested in trying to kill competition in the oil industry at the expense of cratering oil prices - its oil production just hit a record high.
The country said output increased by 123,000 barrels per day, which pushed overall production for July to 10.67 million barrels per day. This surpasses the previous record of 10.56 million per day from June last year. While Saudi does pump out more oil usually in the summer months to sate domestic demand, the record production level is likely to be scrutinised because oil prices are still around 55% lower than they were since June 2014………………………………………..Full Article: Source

Saudi Arabia has a $2 trillion reason to play ball with OPEC this fall

Posted on 12 August 2016 by VRS  |  Email |Print

Saudi Arabia just made it much more likely that OPEC and other oil producers will take action if crude prices weaken. Word that the cartel will meet on the sidelines of an energy conference in Algeria in late September had already stirred up the oil market this week, but confirmation Thursday from Saudi Energy Minister Khalid al-Falih gave much more credibility to the idea that OPEC will consider action if oil prices remain low.
West Texas Intermediate futures soared as much as 5 percent in trading Thursday after the Saudi comments, and later settled at $43.49 per barrel, up 4.3 percent………………………………………..Full Article: Source

Oil markets are falling into a bear trap and it’s way overdone: RBC

Posted on 11 August 2016 by VRS  |  Email |Print

Oil markets have been prone to over-bearishness of late with fears over supply returning to the market largely “overdone,” according to the latest oil market analysis by RBC Capital Markets.
Oil prices are oscillating on hopes that a rebalancing is taking place in the markets and fears of a continuing global oversupply – and the potential for more oil to return to the market from the likes of Libya and Nigeria, producers which have seen supply disruptions. Helima Croft, RBC’s head of commodity strategy and commodity strategists Michael Tran and Christopher Louney said in a note on Wednesday that market caution was overdone, however………………………………………..Full Article: Source

Here’s One Reason for Optimism on Oil Prices

Posted on 11 August 2016 by VRS  |  Email |Print

Hedge funds are betting that swelling inventories will help push the price of oil lower, but this glut still looks milder than past bearish cycles in crude. The price of oil has fallen roughly 14% since its most recent peak in June, as investors worry that large stocks of gasoline and crude, coupled with the continued strength of global production, will put pressure on this market.
The gasoline glut could hurt profits at refineries, pushing them to buy less oil, some investors say. More than 40% of the bets made by “managed money,” mostly hedge funds, are for the price of the U.S. benchmark—West Texas Intermediate—and petroleum products to fall, according to data from the U.S. Commodity Futures Trading Commission………………………………………..Full Article: Source

Saudis And Iranians Slug It Out For Oil Market Share

Posted on 11 August 2016 by VRS  |  Email |Print

Saudi Arabia recently discounted the price of its crude to maintain its share of the Asian market, one of the biggest in the world. China is the world’s second largest oil importer after the U.S., while Japan is currently the third largest crude importer.
Saudi Aramco dropped its prices on July 31 for September purchases by Asian customers, between 70 cents and $1.30 a barrel (depending on the oil grade) – one of the contributing factors that sent oil below $42 per barrel that week………………………………………..Full Article: Source

Saudi Oil Output Sets Record Despite Global Glut

Posted on 11 August 2016 by VRS  |  Email |Print

OPEC says kingdom’s July output rose to nearly 11 million barrels as it focused on market share over prices. The fight for market share among the world’s biggest oil producers is still raging, pushing output from OPEC members close to an all-time high in July and suggesting the group isn’t yet seriously considering a meaningful curtailing of production.
Output by Saudi Arabia, OPEC’s key member, reached a high last month, as part of a broader ramp-up by the Organization of the Petroleum Exporting Countries, according to OPEC data published Wednesday………………………………………..Full Article: Source

OPEC Says Weak Oil Demand Is Here to Stay

Posted on 11 August 2016 by VRS  |  Email |Print

Weakness in global oil markets, which has dragged prices to a three-month low, may persist as demand slows seasonally and fuel inventories remain abundant, OPEC predicted.
There are “lingering concerns” that U.S. and European refiners may reduce processing rates as profits fade amid a continuing “overhang” of crude and refined fuels, the Organization of Petroleum Exporting Countries said in its monthly report. Gasoline consumption will taper off in the U.S. with the end of the summer-vacation driving season, it said………………………………………..Full Article: Source

OPEC upbeat on demand as oil basket posts first fall in five months

Posted on 11 August 2016 by VRS  |  Email |Print

OPEC upgraded its forecast for 2016 oil demand growth on Wednesday, in a report that may dampen hopes for a deal on a production freeze at its meeting next month. In its August report, OPEC forecast demand growth of 1.22 million barrels a day (mb/d) year on year, which was 30,000 barrels higher than forecast in July.
The new forecast would put global oil demand across 2016 at 94.26 mb/d. OPEC, which represents 14 major oil-producing countries, attributed the upgrade to better-than-expected economic performance in advanced European economies and some Asian ones, including India, in the first half of the year………………………………………..Full Article: Source

OPEC points to 2017 oil surplus as Saudi output hits record

Posted on 11 August 2016 by VRS  |  Email |Print

Top oil exporter Saudi Arabia boosted its oil output to a record high in July, it told OPEC, in a sign key members remain focused on market share rather than tackling a supply glut by curbing production.
The monthly report from the Organization of the Petroleum Exporting Countries also said output from the 14-member group hit a new high last month, indicating excess global supply may persist into next year. Oil declined almost 15 percent in July on concern about a glut of crude and finished products that would delay a long-awaited rebalancing of the market………………………………………..Full Article: Source

Hedge funds double down on bets against oil

Posted on 11 August 2016 by VRS  |  Email |Print

Oil bears are betting the recent rally is over. Hedge funds nearly doubled their bets against West Texas Intermediate crude oil over the last month as prices pulled back from their June highs in the low $50s, according to Bloomberg data.
Short interest — betting that the price will fall further — in “black gold” is even greater than it was in January, when the price of oil plunged to the low-$30s. Bearish oil bets likely reflect traders’ belief that the supply glut will continue weighing on the market, despite chatter from some oil-rich nations about setting new limits on production to pump up prices………………………………………..Full Article: Source

Oil: Watch $35 A Barrel, Morgan Stanley Says

Posted on 10 August 2016 by VRS  |  Email |Print

Oil prices have risen in four out of the past five sessions since dipping under $40 a barrel last week. Morgan Stanley’s research team led by energy strategist Adam Longson says not to get too comfortable. “Fundamental oil issues have not been addressed,” he says. “Physical oil markets likely need to get worse before they get better.”
“Physical market stress due to fundamental headwinds is still ahead. A profit-taking and short-covering bounce in oil late in the week (partly on a US gasoline draw driven by lower imports) has led some to declare that the troubles in oil are behind us………………………………………..Full Article: Source

OPEC smoke and mirrors’ may be all it needs to boost oil

Posted on 10 August 2016 by VRS  |  Email |Print

Just the whiff of an OPEC meeting has driven oil prices higher, squeezed shorts in the futures market — and made further inaction by the cartel more likely. But that hasn’t stopped market chatter that the Organization of Petroleum Exporting Countries could revisit the idea of a production freeze when it meets informally on the sidelines of an energy conference in Algeria late next month.
Oil’s recent dip back into the $30s per barrel may be enough to get some OPEC members to curb their bickering and consider joint action — if crude plummets again. But for now, analysts see the cartel just talking, with the more needy members pushing for relief through a freeze or other deal………………………………………..Full Article: Source

OPEC Under Pressure After Oil’s Slide Into a Bear Market (Video)

Posted on 10 August 2016 by VRS  |  Email |Print

The Organization of Petroleum Exporting Countries is talking about oil prices and special meetings in September, a sign it’s under pressure again after crude fell back into a bear market last week. The producers of about 40 percent of the world’s crude found unity and optimism when they last met in June, thanks in large part to the almost 90 percent recovery in prices from a 12-year low.
The market has since renewed its decline as the global supply glut proves more resilient than expected, but there’s little reason to think OPEC is any closer to taking action to eliminate the surplus………………………………………..Full Article: Source

This oil bear says prices are headed back below $30

Posted on 10 August 2016 by VRS  |  Email |Print

Oil bulls were relieved when Brent crude rallied in recent days after having fallen nearly 20% from its recent peak above $52. But those who expect oil to retake those highs may be sadly disappointed, and indeed oil prices fell modestly on Tuesday. One prominent industry observer, who has been consistently bearish on oil for the last two years, says crude prices have only one way to go — down, way down.
Stephen Schork, editor of The Schork Report, based in Radnor, Pa., attributes the recent rally, in which crude prices doubled from their mid-$20s lows in January and February, to a massive short squeeze………………………………………..Full Article: Source

Oil short-selling cycle may be at or near turning point: Kemp

Posted on 10 August 2016 by VRS  |  Email |Print

The enormous concentration of bearish short positions in U.S. crude oil futures and options contracts by hedge funds and other money managers left the market ripe for a short-covering rally.
The rebound in futures prices, with the September WTI contract up by 10 percent since Aug 2, has all the characteristics of a short-covering rally. Price moves in the next few trading sessions should give some indication about whether hedge funds have embarked on the liquidation phase of the shorting cycle or are extending their short positions even further………………………………………..Full Article: Source

Oil prices: OPEC may finally take action if crude’s slide continues

Posted on 09 August 2016 by VRS  |  Email |Print

Oil’s recent dip back into the $30s per barrel may be enough to get some OPEC members to curb their bickering and consider joint action — especially if oil plummets again. Considering a deal and agreeing to one are two different things, but talk that the cartel would discuss its options sparked a rally in oil prices Monday.
“All of a sudden, the price narrative was divergent from the OPEC message. They see the wisdom of changing the rhetoric … It’s no surprise they’d go back to the playbook that worked successfully,” said RBC’s head of commodity strategy Helima Croft………………………………………..Full Article: Source

Here’s Why Oil Prices Just Rose

Posted on 09 August 2016 by VRS  |  Email |Print

The price rise came on the back of renewed calls by some OPEC members to freeze production.Oil prices rose in early trading on Monday, lifted by reports of renewed talks by some members of the Organization of the Petroleum Exporting Countries (OPEC) to restrain output.
“OPEC members including Venezuela, Ecuador and Kuwait are said to be behind this latest reincarnation. But just like previous endeavors, it seems doomed to fail, given key OPEC members (think: Saudi Arabia, Iraq, and Iran) persist in their battle for market share, ramping up exports apace,” said Matt Smith of ClipperData in a note………………………………………..Full Article: Source

Oil market déjà vu sets in as OPEC plans ‘informal’ meeting

Posted on 09 August 2016 by VRS  |  Email |Print

Traders can’t shake off a sense of déjà vu following an oil futures rally Monday that appeared to be inspired by major producing countries’ plans to discuss ways to stabilize the market. The Organization of the Petroleum Exporting Countries on Monday said members will hold an “informal meeting” on the sidelines of the 15th International Energy Forum in Algeria on Sept. 26 to Sept. 28.
But this isn’t the first time OPEC has promised to talk about restoring stability and order to the oil market. After all, major oil producers failed to reach a pact to freeze production levels at a meeting in Doha, Qatar earlier this year………………………………………..Full Article: Source

Oil market on path to rebalancing, OPEC monitoring situation - Qatar

Posted on 09 August 2016 by VRS  |  Email |Print

Qatar’s energy minister, and current OPEC president, said on Monday the oil market is on the path to rebalancing despite the recent decline in global oil prices, adding that OPEC was in continuous talks to stabilise the market.
“The recent decline observed in oil prices and the current market volatility is only temporary,” Mohammad bin Saleh al-Sada, Qatar’s minister of energy and industry said in a statement. “OPEC continues to monitor developments closely, and is in constant deliberations with all member states on ways and means to help restore stability and order to the oil market.”……………………………………….Full Article: Source

OPEC Still Faces the Same Obstacles to Agreeing Oil-Output Limit

Posted on 09 August 2016 by VRS  |  Email |Print

An informal OPEC meeting next month is unlikely to deliver any agreement to limit production because several members including Iran are still pumping below capacity. Members of the Organization of Petroleum Exporting Countries are planning to hold talks next month on the sidelines of the International Energy Forum in Algeria, the group’s president Mohammed Al Sada said.
But the same obstacles that prevented an agreement on proposals to freeze output in April or fix a new production target in June are still there, according to UBS Group AG………………………………………..Full Article: Source

US EIA chief shares short-term outlook for oil market: Fuel for Thought

Posted on 09 August 2016 by VRS  |  Email |Print

The 100th episode of the weekly S&P Global Platts Capitol Crude podcast, which aims to demystify the complex world of US oil policy, featured Adam Sieminski, head of the US Energy Information Administration.
The forecast in the STEO (Short-Term Energy Outlook) is probably pretty good. And what it says is we’re expecting the markets to begin to rebalance as we get towards the end of this year and as we get into the middle of 2017 we should see prices beginning to come back up again………………………………………..Full Article: Source

Oil Bear Market Attracts Record Bets on Further Price Slide

Posted on 08 August 2016 by VRS  |  Email |Print

Hedge funds have gone all-in on lower oil prices, counting on seasonal weakness to play out again this year. Money managers increased wagers on declining crude prices to a record as futures dropped to the lowest in more than three months. U.S. crude inventories climbed for a second week as imports arrived at the fastest pace since 2012.
The supply gain comes on the cusp of seasonal refinery maintenance that will curb crude demand. Futures have declined in each of the past five Septembers. “We’re are entering a period of seasonal maintenance, which should put some downward pressure on prices,” said Scott Roberts, co-head of high yield investments and manager of $2.7 billion at Invesco Advisers Inc. in Atlanta………………………………………..Full Article: Source

Oil prices to stabilise at $55/barrel in 2017, says QNB

Posted on 08 August 2016 by VRS  |  Email |Print

Qatar National Bank (QNB) has revised its oil price forecast to average $44.7 per barrel in 2016, up from its previous forecast of $40.8/barrel, state news agency QNA said. In its monthly market update, QNB said rebalancing in the oil market has been “stronger than expected”.
Continued rebalancing is expected to lift prices to an average of $55/barrel in 2017, up from a previous forecast of $51.3 in 2017 and $57.9 in 2018. The revised forecast is based on rising demand growth – the International Energy Agency (IEA) expects global demand growth to reach 1.4 million barrels per day (bpd) this year, up from a previous forecast of 1.2 million bpd, QNB said………………………………………..Full Article: Source

How Saudi Arabia Has Been Mastering The Oil Market

Posted on 08 August 2016 by VRS  |  Email |Print

Ever since it turned into the world’s largest oil producer back in the 1970s, Saudi Arabia has been the master the oil market by playing three roles effectively. The first role has been that of the “sole stabilizer,” filling the occasional gaps created by production shortfalls by major oil producers to stabilize the oil market.
Like the 1970-72 gap created by the decline in US oil production; the 1978-80 gaps created by the Iranian revolution; and the 1990-1 gaps created by the Iraq-Kuwait war. Sometimes, Saudi Arabia filled this role at great cost………………………………………..Full Article: Source

Western Europe’s Biggest Oil Producer Has a Surprise for Markets

Posted on 08 August 2016 by VRS  |  Email |Print

For Norway, the collapse in crude prices has a silver lining: output has exceeded expectations every month for the past two years. That’s likely to continue as oil companies boost efficiency and pump at full pace as revenue dwindles, according to the head of Petoro AS, the state-owned oil company that owns more than a quarter of the petroleum output in Western Europe’s biggest producer.
“Improvement efforts and the focus on profitability have led to very high regularity,” Chief Executive Officer Grethe Moen said in a phone interview on Friday from Stavanger, Norway’s oil hub. “There’s no sign this won’t last, at least thus far.”……………………………………….Full Article: Source

Oil’s Slope of Hope Is Getting Less Slippery

Posted on 08 August 2016 by VRS  |  Email |Print

Latest crude rally sputters, but seeds of eventual recovery have been planted by severe cuts to investment. Blastoff aborted. It seems to have been a fuel problem this time. Now two years into a bear market, oil prices have failed to sustain a major rally once again.
Rather than a further slide in demand, overzealous refiners are the likely cause. U.S. inventories of gasoline and distillates are nearly 10% and 6% higher than year-ago levels, respectively. Meanwhile, spring supply disruptions in Canada, Nigeria and elsewhere have lessened………………………………………..Full Article: Source

Oil could hit $70 next year but expect another plunge soon, says BoA analyst

Posted on 05 August 2016 by VRS  |  Email |Print

Oil may be wobbling around the $40 a barrel mark, but one strategist has said that crude is only heading higher in the near term but in the years to come, there’ll be wild swings. “We’re seeing a bottom right now for the second half of the year,” said Francisco Blanch, the head of global commodities and derivatives research at Bank of America Merrill Lynch, the corporate and investing arm of the American bank.
“We think what’s happening in the market is very seasonal. Supply is actually going down pretty quickly, demand is moving higher, and this is going to move the market into a deficit.”……………………………………….Full Article: Source

As oil enters a bear market, what’s next for prices?

Posted on 05 August 2016 by VRS  |  Email |Print

The oil price entered a bear market this week, as West Texas Intermediate Crude slipped below $40 a barrel for the first time in more than three months and higher-than-expected output weighed on investor fears of a continuing global glut. Brent crude, the more widely used international benchmark, also dipped below $42 a barrel, having passed the $54 mark at the beginning of June.
The price falls came despite concerns around the weakness of the dollar - normally a positive signal for energy prices - and data from the American Petrol Institute that suggested the country’s oil stockpiles were falling in line with expectations………………………………………..Full Article: Source

Oil Price Rally May Be Short Lived

Posted on 05 August 2016 by VRS  |  Email |Print

Oil prices traded up more than 3% yesterday following the release of crude oil inventory data from the U.S. Department of Energy. Inventories for the week ended July 29 showed an increase in crude oil of 1.4 million barrels.
Market analysts were expecting a decrease of around 1.5 million barrels. The increase in inventories suggests a slowdown in the amount of crude being refined into products such as gasoline. This was viewed as broadly positive by the market, because it means less refined products are being produced and contributing to an already oversupplied market………………………………………..Full Article: Source

Venezuela oil minister talks to OPEC head, seeks higher oil price

Posted on 05 August 2016 by VRS  |  Email |Print

Venezuela’s Oil Minister Eulogio del Pino has spoken to OPEC Secretary-General Mohammed Barkindo ahead of a meeting between OPEC and non-OPEC producers in hope of boosting the global oil price, President Nicolas Maduro said on Thursday.
“He spoke with the secretary of OPEC, we are making efforts for a new meeting soon between OPEC and non-OPEC members, with Russia at the head … to stabilize the price towards $40 (per barrel) and over $50 and $60,” Maduro said on state TV. He did not give any further details on the meeting………………………………………..Full Article: Source

These 3 factors are affecting the oil market

Posted on 05 August 2016 by VRS  |  Email |Print

There are three trends at play when it comes to the North American oil industry. These are supply drops, seasonality and consumer behaviour changes, says Scott Vali, vice-president, equity, for CIBC Asset Management. He manages the Renaissance Global Resources Fund.
First, “if we look at supply in North America, we’ve seen production drop by about a million barrels per day since the peak in June of 2015,” he explains. “To put that in context, the U.S. had been growing production by about a million barrels a day, so that’s a two-million-barrel-a-day delta relative to the trend we were on going into June of 2015.”……………………………………….Full Article: Source

Why is oil market rebalancing taking so long? Kemp

Posted on 04 August 2016 by VRS  |  Email |Print

Rebalancing the oil market is proving a long and frustrating process because the oil-exporting countries hit hardest by the slump were the themselves some of the fastest growing oil consumers before prices tumbled.
As oil revenues have shrivelled, their economies have slowed or gone into recession, removing one of the most dynamic drivers of oil demand, and leaving the rest of the world economy to fill the gap. The slowdown in demand from oil-exporting countries has worsened the oversupply situation and prolonged the market rebalancing process……………………………………….Full Article: Source

Beware oil inventory data, experts warn it’s misleading markets

Posted on 04 August 2016 by VRS  |  Email |Print

Oil markets are once again in the doldrums amid fears of a persistent oversupply and concerns over the slow drawdown in U.S. inventories, but oil experts say those concerns are overdone.
“We are at the start of the rebalancing, we haven’t finished it yet, whereas the market almost priced in that everything was done but now it’s gone almost the other way, saying that no rebalancing has been done whatsoever,” Amrita Sen, the co-founder and chief oil analyst at Energy Aspects said………………………………………..Full Article: Source

Why oil bears shouldn’t count on U.S. shale rebound

Posted on 04 August 2016 by VRS  |  Email |Print

Oil market bears argue that rebounding production in U.S. shale regions will add to the global glut of crude, slowing the rebalancing of the market. Don’t be so sure, say skeptics.
Production-rebound proponents argue that the recent rise in U.S. rig counts reflects a new reality in the oil market. In this scenario, the U.S. crude benchmark’s spring rebound, which saw prices push back above $50 a barrel by early June, and a continued fall in production costs were likely to entice previously hard-hit shale producers to reopen closed wells and rejoin the fray………………………………………..Full Article: Source

Nigeria’s Barkindo assumes OPEC Sec-Gen job

Posted on 04 August 2016 by VRS  |  Email |Print

Barkindo would occupy the position for three years in the first instance with effect from August 1, 2016. Nigeria’s Mohammed Barkindo tenure as the secretary-general of the Organisation of Petroleum Exporting Countries (OPEC) assumed his post, following his appointment at the 169th Meeting of the cartel in Vienna, Austria, on June 2, 2016.
He succeeded Libyan Oil Minister, Abdalla El-Badri, whose tenure ended on July. The new secretary-general came to the position with a 23-year experience in the oil and gas industry, mainly in the Nigerian National Petroleum Corporation (NNPC)………………………………………..Full Article: Source

Oil Options Traders Don’t See Dip to $40 Leading to Market Rout

Posted on 03 August 2016 by VRS  |  Email |Print

Oil analysts from Citigroup Inc. to Bank of America Merrill Lynch are confident that the new bear market in crude will be short-lived. The options market increasingly agrees with them. Investors are paying the smallest premium in two months to protect against a drop in prices from now through the end of the year, even after oil entered a bear market.
The so-called put skew on December Brent and West Texas Intermediate options — the premium traders will pay for insurance that prices will fall rather than rise — has narrowed more than 30 percent since early July. The skew on second-month WTI contracts has fallen by almost half………………………………………..Full Article: Source

Analysts look beyond bear market, forecast average oil price of $57 in 2017

Posted on 03 August 2016 by VRS  |  Email |Print

Despite closing in a bear market Monday, analysts are looking beyond oil’s current slide for a rebound next year. Crude has plunged by more than a fifth in less than two months as refineries created a glut of gasoline while failing to eliminate excess supply of crude. That wrecked refining margins and hurt the earnings of Exxon Mobil Corp., BP Plc and Royal Dutch Shell Plc.
Yet, global oil prices will average $57 a barrel in 2017, according to the median of at least 20 analyst estimates compiled by Bloomberg. Progress will be slow. The crude glut will take a long time to dissipate, meaning only gradual price gains, said Michael Hsueh, a strategist at Deutsche Bank AG………………………………………..Full Article: Source

Oil Prices Fall Below $40 As OPEC Ramps Up Output

Posted on 03 August 2016 by VRS  |  Email |Print

Global oil prices fell below $40 a barrel on Monday, after Reuters’ new survey tallying oil output from OPEC countries showed outputs for the 13-member bloc at record highs when compared to figures in recent history.
The overall increase in global crude output has dragged oil prices down 20 percent since they broke above $50 in June. Friday’s survey found that Iraq increased oil output in July, as the national army made gains against the Islamic State’s (ISIS) oil production and supply network………………………………………..Full Article: Source

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