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Commodities Briefing - Category | Oil more

Qatar Petroleum Sees Rising OPEC Demand as Price Drop Hits Shale

Posted on 18 May 2015 by VRS  |  Email |Print

Demand for OPEC’s crude will rise as the drop in oil prices below $100 a barrel continues to hinder shale production, Qatar Petroleum International’s Chief Executive Officer Nasser Khalil Al-Jaidah said.
“The coming period will witness an improvement in prices but they will not reach $100,” he said in an interview published Saturday by the official Qatar News Agency. Current prices will hinder the expansion in shale oil, “which signals an improvement in demand for OPEC’s oil.”……………………………………….Full Article: Source

OPEC Claims Victory in Oil Price Battle — But the War Is Far From Over

Posted on 18 May 2015 by VRS  |  Email |Print

The drop in oil prices from over $100 per barrel a year ago to as low as $46 per barrel in early 2015 was driven by a number of factors, but one of the most important was OPEC’s desire to squash the U.S. fracking market. Saudi Arabia, in particular, has seen the rise of fracking in the United States as a threat to its market share, and as prices have fallen the country has actually increased oil production to a record 10.3 million barrels per day in April.
Now that U.S. producers are shutting down drilling rigs, and some U.S. drillers appear to be in financial trouble, certain OPEC leaders are claiming victory. But we need to consider the bigger picture before accepting that the fight over U.S. shale oil is over………………………………………..Full Article: Source

Will Oil’s Price Surge Continue? Don’t Bet on It

Posted on 15 May 2015 by VRS  |  Email |Print

The recent weakening of the US dollar and building of speculative long positions by hedge funds and other investors resulted in significant support for many commodities, except for precious metals. Because the fundamentals have not changed, and the situation of oil oversupply lingers on, we see downside risks to oil prices
The support for those commodities was driven by hopes of economic recovery (which would lead to increased demand) as well as fear of supply disruptions. The weakening of the US dollar was the result of disappointing US data, in combination with fears of delayed Fed action…………………………………..Full Article: Source

Shale-Oil Companies Ready to Raise Output—Energy Journal

Posted on 15 May 2015 by VRS  |  Email |Print

U.S. shale-oil companies that cut production when prices plunged are prepared to return rigs to operation as prices rise, Georgi Kantchev and Bill Spindle report. The companies are being seen as so-called swing producers that can boost production when prices are high and cut back when they fall. U.S. benchmark West Texas Intermediate settled at $60.50 a barrel on Wednesday in the wake of a 40% rally in crude prices since March, and some companies said they would resume production if WTI reaches $70.
U.S. shale companies could provide some counterbalance to big global market swings, although that flexibility hasn’t been fully tested in a major market downturn. Big cuts have left the industry with 930 fewer rigs, a 58% reduction from their 1,609 peak in October, according to Baker Hughes Inc., which tracks drilling activity…………………………………..Full Article: Source

Oil Prices Fall on Steady Production

Posted on 15 May 2015 by VRS  |  Email |Print

Oil prices fell slightly Thursday as concerns about steady production captured the market’s attention. Light, sweet crude for June delivery settled down 62 cents, or 1%, to $59.88 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 22 cents, or 0.3%, to $66.59 a barrel on ICE Futures Europe.
Traders have been weighing signs that production cutbacks may have bottomed out. Several U.S. producers said in recent quarterly reports that they have met or exceeded their production targets, said Kyle Cooper, managing director of research at IAF Advisors, a Houston consulting firm…………………………………..Full Article: Source

IEA: OPEC Battle for Oil Market Share Just Beginning

Posted on 14 May 2015 by VRS  |  Email |Print

A global battle for market share between OPEC and non-OPEC producers that has rocked oil markets and fed into the biggest price slump since the financial crisis is just getting started, the International Energy Agency said Wednesday.
Oil prices have plunged since June amid a glut in oil production driven by booming U.S. output and sluggish demand, a combination that threatened the market position of some of the world’s largest oil producers…………………………………….Full Article: Source

US shale has ‘blinked’ in battle against OPEC: IEA

Posted on 14 May 2015 by VRS  |  Email |Print

U.S. oil producers appear to have lost their battle with OPEC (Organization of the Petroleum Exporting Countries) over market share, but the war is only just beginning, the International Energy Agency (IEA) warned Wednesday..
“In the supposed standoff between OPEC and U.S. light tight oil (LTO), LTO appears to have blinked,” the Paris-based energy think tank said in its new monthly report. “Following months of cost cutting and a 60 percent plunge in the U.S. rig count, the relentless rise in U.S. supply seems to be finally abating.”……………………………………Full Article: Source

Why Goldman Sachs Might Be Wrong In Expecting Crude Oil To Fall Again

Posted on 14 May 2015 by VRS  |  Email |Print

WTI crude broke the $60 barrel mark recently. However according to a note published by analysts at Goldman Sachs the rally in crude might have extended itself and the prices will correct soon. Ken Sill of Global Hunter Securities was on CNBC to discuss why he thinks analysts at Goldman might be wrong.
$70: The Equilibrium: “We think that oil below $50 probably overcorrected to the downside,” Sill said. “We know we don’t need $100 per barrel and 1,600 oil rigs drilling in the United States, but somewhere between $50 and $100 is and we think $70 is kind of where the market will ultimately equalize around, but it’s going to go up and down, but we think $60 plus or minus five bucks is kind of where the market seems to want to be.”……………………………………Full Article: Source

Saudis spend like there’s no oil price drop

Posted on 14 May 2015 by VRS  |  Email |Print

If lower oil prices are straining Saudi Arabia’s economy, it certainly does not show. In Riyadh, dozens of cranes loom over the King Abdullah Financial District, destined to be the kingdom’s answer to Canary Wharf in London, with around 60 gleaming towers and its own monorail. Across the city, immigrant workers toil on new residential developments aimed at plugging the country’s acute housing gap. Meanwhile, roads are being dug up for a new metro system.
It is quite a transformation for a place that started off as a mud-brick stopover on a desert trading route. With its glass-clad skyscrapers, spanking new universities, five-star hotels and outposts of western department stores like Harvey Nichols, Riyadh is transforming itself from a somewhat shabby city into a gleaming symbol of the kingdom’s oil wealth…………………………………….Full Article: Source

Oil Markets: Use Your Illusion

Posted on 14 May 2015 by VRS  |  Email |Print

Misdirection is how magicians distract you from what is really happening with that card you picked. The oil market similarly seems to be taking its cues away from the real action. Oil inventories provide a ready way of tracking how supply is matching up with demand. If supply is ample, some of it will flow into tanks and inventories will rise. This has been the story for much of the past six months or so.
Recently, though, U.S. crude oil stocks have begun falling slightly, which has added fuel to prices. On Wednesday, the Energy Information Administration reported that commercial stocks of crude oil and refined products fell by 5.5 million barrels in the week ended May 8. West Texas Intermediate rose above $61 a barrel; two months ago it was at less than $50…………………………………….Full Article: Source

Volatile Oil Market May Hurt Global Economy

Posted on 13 May 2015 by VRS  |  Email |Print

The dramatic fall in oil prices since last summer has been a boon for global consumers taking advantage of cheaper fuel and lower utility bills. But the price rout has increased the volatility of the crude market, which could end up hurting the global economy, a new report warns.
Volatile energy prices can lead to delays in business investment and slower job growth, according to the report co-authored by Nicholas Stern, former U.K. Treasury official and a prominent climate economist………………………………………..Full Article: Source

EIA ups 2015 crude-price forecasts, cuts 2016 view

Posted on 13 May 2015 by VRS  |  Email |Print

The U.S. Energy Information Administration raised its 2015 forecasts for West Texas Intermediate and Brent crude prices in a monthly report issued Tuesday. The government agency said it expects WTI prices to average $54.32 a barrel this year, up from a previous forecast of $52.52.
The EIA, however, said it expects WTI crude to average $65.57 a barrel in 2016, down from the prior view of $70.07. Brent crude is forecast at $60.79 this year, up from a previous forecast of $59.39. The EIA said it expects natural-gas prices to average $2.93 per million British thermal units this year, down from the earlier estimate of $3.07………………………………………..Full Article: Source

OPEC sees oil price below $100 a barrel in the next decade

Posted on 13 May 2015 by VRS  |  Email |Print

The Organization of the Petroleum Exporting Countries doesn’t see oil prices consistently trading at $100 barrel again in the next decade, a pessimistic assessment that has the group considering the return of production limits to influence the market, according to people familiar with a recent strategy report.
The report, seen by The Wall Street Journal, predicts that oil prices will be about $76 a barrel in 2025 in its most optimistic scenario, the people said, a reflection of the cartel’s worries that American competitors will be able to cope with low prices and keep pumping out supplies. It also contemplates situations where crude oil costs below $40 a barrel in 2025, the people said………………………………………..Full Article: Source

Opec revises up oil demand and cuts US supply forecast

Posted on 13 May 2015 by VRS  |  Email |Print

Oil cartel has upgraded its demand forecast on stronger European growth as US drillers struggle. The Organisation of the Petroleum Exporting Countries (Opec) has revised up its forecast for world oil demand this year on higher consumption in Europe’s biggest economies and cut its estimate for the growth in US supply.
The group of 12 major oil producers now expects demand for crude to increase by 1.18m barrels per day (bpd) of crude to 92.5m bpd in 2015. Opec’s latest closely watched market report said: “The upward movement of European oil demand during the second half of 2014 has continued and been enhanced during the first three months of 2015………………………………………..Full Article: Source

Gartman: Forget OPEC, here’s why I’m getting long oil

Posted on 13 May 2015 by VRS  |  Email |Print

OPEC’s latest warning that crude could stay below $100 a barrel for the next decade wasn’t enough to keep Dennis Gartman on the sidelines in the oil market. To the contrary, the founder of “The Gartman Letter” said that he’s now bullish on crude oil for the first time “in a very, very long while.”
The Organization of the Petroleum Exporting Countries said in a draft of its latest strategy report that it doesn’t expect crude to trade consistently above $100 per barrel in the next decade, according to the Wall Street Journal. The draft reportedly forecasted crude trading at around $76 per barrel in 2025, and also modeled scenarios where crude would trade below $40 per barrel in 2025………………………………………..Full Article: Source

Here’s why Iran and Iraq should worry OPEC

Posted on 13 May 2015 by VRS  |  Email |Print

Caveat emptor! The big Organization of Petroleum Exporting Countries (OPEC) summer pow-wow is only 24 days away now and ceteris paribus we should see a continuation of the status quo. Right that’s enough Latin, the only languages that really count at the meeting will be Arabic, Farsi, Kurdish and money, namely petrodollars.
As far as I can see, this one is about how Saudi Arabia, Iran and Iraq solve a growing problem of how you cap OPEC production – and thereby falling prices - at a time when Baghdad and Tehran are desperate to up output………………………………………..Full Article: Source

Saudi April oil output hits record high

Posted on 13 May 2015 by VRS  |  Email |Print

Saudi Arabia, the world’s biggest exporter, increased its production of crude oil to a record high in April to meet demand from Asian buyers and to satisfy the needs of domestic power stations and refineries.
The Kingdom pumped 10.308m barrels of oil a day last month, up from 10.294m b/d in March, according to information given by Riyadh to Opec for the cartel’s monthly oil report, reports Anjli Raval in London. Saudi Arabia’s oil minister Ali Al Naimi last month indicated that there are no plans to slow its production which has risen above 10m barrels per day in recent months………………………………………..Full Article: Source

OPEC Sees Oil Price Below $100 a Barrel in the Next Decade

Posted on 12 May 2015 by VRS  |  Email |Print

The Organization of the Petroleum Exporting Countries doesn’t see oil prices consistently trading at $100 a barrel again in the next decade, a pessimistic assessment that has the group considering the return of production limits to influence the market, according to people familiar with a recent strategy report.
The report predicted that oil prices will be about $76 a barrel in 2025 in OPEC’s most optimistic scenario, the people said, a reflection of the cartel’s worries that American competitors will be able to cope with low prices and keep pumping out supplies. It also contemplated situations where crude oil costs below $40 a barrel in 2025, the people said………………………………………..Full Article: Source

Saudi Arabia will stick to non-intervention as oil prices rise

Posted on 12 May 2015 by VRS  |  Email |Print

Next month’s Opec meeting likely to leave current output quotas in place while it lets market work. High quality global journalism requires investment. As oil prices halved last year, investors and traders kept expecting Saudi Arabia to intervene. It took oil minister Ali al-Naimi and his officials months to persuade everyone that the kingdom was quite content to let market forces determine prices and clean up excess supply.
Now that oil is on the way up again — Brent at $65 a barrel has risen by nearly 50 per cent from its January low — markets are once more waiting for Saudi to act: this time to stop prices from rising too rapidly so that they do not choke off a global recovery and encourage battered US shale oil producers to redeploy rigs……………………………………….Full Article: Source

Oil prices have been soaring—now look for them to plunge again

Posted on 12 May 2015 by VRS  |  Email |Print

After falling roughly 60% from July through March, oil prices are now up around 44% from their bottom. The chatter among many investors and industry players is that the worst is over. The only questions remaining, they say, are how high prices will go from here and how soon oil drillers can resume counting their profits.
Others suggest that the market is getting giddy—oil prices will turn back down, they counter, namely because the conditions that produced the breathtaking plunge over the last 11 months largely still persist. The recent rebound is “likely a false dawn, I’m afraid,” Jamie Webster, an analyst with IHS CERA, tells Quartz………………………………………..Full Article: Source

Oil holds under $60 as traders weigh China demand

Posted on 12 May 2015 by VRS  |  Email |Print

Oil futures settled lower Monday, lingering below $60 a barrel, as traders considered the outlook for crude demand after China stepped up efforts to boost its economy. Analysts, meanwhile, remained cautious about the recent strength in oil markets.
Over the weekend, China, the world’s second-largest consumer of oil, cut interest rates for the third time in six months in an effort to stimulate its economy. “China’s economy is slowing but they are buying oil like it’s going out of style,” said Phil Flynn, senior market analyst at Price Futures Group………………………………………..Full Article: Source

OPEC members unlikely allow Iran to regain market share

Posted on 12 May 2015 by VRS  |  Email |Print

OPEC member countries unlikely to allow Iran to regain market share, Thomas Pugh, commodities economist at British economic research and consulting company Capital Economics believes. Iran’s oil minister, Bijan Zanganeh this week said the country will increase oil exports by more than one million barrels per day and urged other oil-producing countries “to pave the way for the return of Iranian oil to the world market” after the removal of international sanctions.
Zanganeh said Iran’s oil export has decreased by 60 percent since “crucial international sanctions” against the country were imposed (in mid-2012), adding that oil producers should make room for Iranian oil export resumption after sanctions are removed, Shana news agency reported………………………………………..Full Article: Source

Exodus of Oil ETF Investors Signals Expected Market Weakness

Posted on 12 May 2015 by VRS  |  Email |Print

Oil investors are hastening their exit from exchange-traded funds, a move that some analysts argue is a form of protection in light of weak market fundamentals ahead.
Four of the largest oil-specific exchange traded funds, including the U.S. Oil Fund (USO), had outflows of $478 million in the three weeks to May 6, according to data from ThomsonReuters Lipper, marking the biggest withdrawal since the start of 2014………………………………………..Full Article: Source

Markets to rule oil prices in the coming years

Posted on 11 May 2015 by VRS  |  Email |Print

Despite the recent blip - oversupply continues to weigh on crude markets. In recent weeks, oil prices went up by around 50 percent - from January’s six-year low - posting their largest monthly gain in almost six years in April. Over the past one month, markets soared $15 a barrel - interestingly during a season when historically prices tend to be weak.
Yet the buzz is a growing - this rally is unsustainable. A consensus seems emerging. The upswing indicates a deep disconnect with the physical markets - Reuters quoted traders as saying - as tens of millions of West African, Azeri and North Sea barrels appeared struggling to find buyers………………………………………..Full Article: Source

Rebound in US shale will limit oil price recovery

Posted on 11 May 2015 by VRS  |  Email |Print

It has been one of the less widely noticed oil price surges. Since January, benchmark Brent crude has risen from less than $47 per barrel to more than $65 per barrel, an increase of about 40 per cent.
The rise has reversed less than a third of the plunge in oil from its peak above $115 per barrel last summer, but there have already been signs that the increase is starting to unsettle debt and equity markets………………………………………..Full Article: Source

Reports of demise of oil “exaggerated”: OPEC research chief

Posted on 11 May 2015 by VRS  |  Email |Print

Demand for oil will continue to rise for the next 25 years, driven by emerging economies, particularly those from Asia, according to Omar Abdul-Hamid, the director of OPEC’s Research Division. “News of the end of oil has been exaggerated,” Abdul-Hamid said in a recent interview with an in-house magazine published by Siemens. “We saw on average 91 million barrels of demand every single day in 2014. By 2040 we expect 111 million barrels of demand per day.”
“Demand growth mainly comes from emerging economies and developing countries, particularly in Asia, and from OPEC member states. Their demand more than compensates for shrinking use in highly developed countries,” he said. He added that OPEC saw that there remained sufficient global oil resources to satisfy the growing demand………………………………………..Full Article: Source

Iran Sees Oil Rising to $80 by End-2016 on Slower U.S. Drilling

Posted on 08 May 2015 by VRS  |  Email |Print

Current crude prices at about $68 a barrel are unsustainable and will rise to $80 by the end of next year as U.S. supply slows, Iran’s deputy oil minister said. “From a commercial point of view, we believe today’s price is not sustainable,” Roknoddin Javadi, who is also managing director of state-run National Iranian Oil Co., said Thursday at a news conference in Tehran.
“Based on trends and information we have and what’s happening in the U.S. drilling sector and consequences for the related industry, our expectation is that by the end of 2016 we can see this figure of $80.”……………………………………….Full Article: Source

Oil settles under $60 as traders fret about Iran

Posted on 08 May 2015 by VRS  |  Email |Print

Oil futures settled back under $60 a barrel on Thursday, with traders increasingly worried about how much oil Iran can add to the global market should sanctions be lifted as part of a deal with world powers over its nuclear program.
June crude fell $1.99, or 3.3%, to settle at $58.94 a barrel on the New York Mercantile Exchange. Prices had settled near $61 Wednesday at their highest level of the year. Brent crude for June delivery on London’s ICE Futures exchange settled lower by $2.23, or 3.3%, lower at $65.54 a barrel………………………………………..Full Article: Source

Oil’s wild ride: where will prices go?

Posted on 08 May 2015 by VRS  |  Email |Print

Over the next six months, we may expect a Goldilocks scenario in which prices are neither too high nor too low. From Main Street to Wall Street, Beijing to Paris, people are interested in whether oil prices will rise or fall.
I suggest that we begin to examine this question by asking why oil prices dropped like a rocket from over $105 per barrel on the New York Mercantile Exchange in summer 2014 to around $47 per barrel in January 2015. We can then see if the causes of the price collapse are likely to reverse going forward………………………………………..Full Article: Source

Oil market ‘not out of the woods yet’

Posted on 08 May 2015 by VRS  |  Email |Print

The price of oil has made minor gains over the past few weeks or so but analysts tell CNBC it’s not yet time to celebrate. Crude prices have made steady gains this spring, rising nearly every week since mid-March. Brent is up nearly 25 percent since March 16, with WTI jumping 35 percent over the same period. Brent was edging near $68 as of 14:00 GMT Thursday, with WTI up near $60.
But some analysts say the recovery won’t hold. “We don’t think we’re out of the woods yet when it comes to oil markets improving,” Barclays oil analyst Miswin Mahesh told Worldwide Exchange Thursday………………………………………..Full Article: Source

Indonesia Considers Rejoining OPEC

Posted on 08 May 2015 by VRS  |  Email |Print

Indonesia is considering rejoining the Organization of the Petroleum Exporting Countries as an observer after leaving the group six years ago, a minister said Thursday. “We want to have an interaction with the market [by becoming an observer in OPEC],” the Minister of Energy and Mineral Resources Sudirman Said said. He said Indonesia has in the past been invited by OPEC to attend meetings as an observer.
Indonesia discontinued its OPEC membership when it expired on Jan. 1, 2009. It has been a net oil importer since the early 2000s. The government is struggling to increase the country’s crude-oil production from about 830,000 barrels a day currently, while domestic consumption continues to rise………………………………………..Full Article: Source

Saudi Arabia: More to the market than oil

Posted on 08 May 2015 by VRS  |  Email |Print

Oil may be Saudi Arabia’s bread and butter but as the Middle East’s largest bourse gets set to open its doors to foreigners, investors may want to focus their attention outside the energy sector.
“There are 162 listed companies and the largest by market cap is a pretty diverse group: Technology, construction, financial services, retail, and chemicals. There are lots of different sectors that an international investor can enter,” said Joel Whitaker, senior vice president of global research at Frontier Strategy Group………………………………………..Full Article: Source

Oil price rises above $US60 as commodity’s bull run continues

Posted on 07 May 2015 by VRS  |  Email |Print

Oil extended its advance above $US60 a barrel on signs the US supply glut is easing. Futures gained as much as 1 per cent in New York, rising from the highest close since December. Crude inventories fell by 1.5 million barrels through May 1, the first drop in industry data in eight weeks, the American Petroleum Institute was said to have reported Tuesday.
An increase of 1.5 million barrels is forecast in a Bloomberg survey before a government report Wednesday. Oil is recovering from a six-year low in March as US companies reduced the number of active rigs to the fewest since September 2010, bolstering speculation that output will slow………………………………………..Full Article: Source

Why the oil price will keep rising - in five charts

Posted on 07 May 2015 by VRS  |  Email |Print

Oil prices have hit new highs for 2015, with Opec having won its war. Here are five charts which explain why it will keep on going. Oil prices have pushed new highs for 2015 this week and continue to defy the forecasts of many analysts who have tipped prices to return to levels of around $50 per barrel.
However, a collapse in drilling work in North America; turmoil across the Middle East and the hope that China’s economy will stage a recovery in the second half of this year have all acted to support prices close to $70 per barrel. Here are five charts that prove the Organisation of Petroleum Exporting Countries (Opec) has already won its oil price war that was launched in November………………………………………..Full Article: Source

The Great Oil Price Recovery Of 2015: Wait, What?

Posted on 07 May 2015 by VRS  |  Email |Print

In one month, oil prices soared $15 a barrel during a season when historical prices tend towards weakness. This at the same time that criticism of shale producers for wasting money is in the headlines, as well as suggestions that the current price is roughly enough to cause a drilling turn around.
Given the weakness in the upstream sector, this is as welcome as a rope to a man in quicksand. The price bears who thought rising inventories would mean continuing weakness, with prices as low as $20, are eating crow, but that’s a regular menu item for bulls and bears in this business………………………………………..Full Article: Source

What’s next for oil prices?

Posted on 07 May 2015 by VRS  |  Email |Print

Has the recent historic drop in crude oil prices reversed course? American consumers have been watching as gasoline prices have been creeping upward in recent weeks, although pump prices are still on average more than dollar lower per gallon than they were this time last year.
But industry analysts are divided about where prices on the global oil market will be heading during the next several months. Andrew Critchlow, commodities editor at The Telegraph, recently submitted five reasons he believes the oil prices will keep rising………………………………………..Full Article: Source

OPEC unlikely to cut in June without non-OPEC as oil rebounds

Posted on 07 May 2015 by VRS  |  Email |Print

The jump in oil prices has been supported by stronger-than-expected demand growth and a slowdown in crude supply, and is likely to continue into the second half of this year, a senior Gulf OPEC delegate said on Wednesday.
Some OPEC members are trying to bring major non-OPEC producers such as Russia on board in cutting supplies, as the Organization of the Petroleum Exporting Countries is unlikely to curb output alone when it meets on June 5 without the participation of non-OPEC countries, the delegate said………………………………………..Full Article: Source

Hedge funds are in love with crude oil

Posted on 07 May 2015 by VRS  |  Email |Print

Hedge funds love crude oil. Oil prices are recovering from the crash, and hedge funds have made big bets that oil prices will keep rallying.
According to a report from Societe Generale, hedge funds are most bullish on crude oil among major commodities, or betting that the price of oil will rise. Overall, hedge funds are still negative on commodity prices………………………………………..Full Article: Source

Saudi Arabia’s oil minister Ali al-Naimi: ‘Only Allah can set the price of oil’

Posted on 06 May 2015 by VRS  |  Email |Print

Saudi Arabia’s oil minister has turned to divinity over the issue of slumping prices in oil, claiming that “it’s up to Allah”. Speaking to CNBC, oil minister Ali al-Naimi said that “no one can set the price of oil – it’s up to Allah”.
Saudi Arabia is the world’s biggest producer of oil and, while oil prices have been staying low on the market, the country has decided to increase its production of the substance rather than cut it. Sanctions currently placed on Iran could soon be lifted as part of international nuclear negotiations, which would mean the country’s crude oil would come back on to the market and cause prices to plunge further………………………………………..Full Article: Source

Oil Prices Are Rebounding Now, But A Permanent Plunge May Be Coming

Posted on 06 May 2015 by VRS  |  Email |Print

The recent fall in oil prices has received so much coverage that its recent recovery is almost unnoticed by the wider market. And yet oil has recovered exactly as predicted and to the point generally predicted by most experts, high enough to support the continued flow of much of the unconventional oil which the market was consuming before the price spike led to temporary excess capacity. The drop was self-correcting.
The sell off in energy stocks triggered by this market event was indiscriminate. Even SolarCity wasn’t immune, though it is quite hard to make a case that it’s current business model is threatened by cheap oil. But will that always be the case?……………………………………….Full Article: Source

Shale Giants See Growth Again After 40% Price Climb

Posted on 06 May 2015 by VRS  |  Email |Print

EOG Resources Inc. and Pioneer Natural Resources Co., two of the largest shale-oil producers, are preparing to boost drilling again after oil prices climbed 40 percent in the past seven weeks. EOG Chairman and Chief Executive Officer William Thomas said Tuesday his company will increase drilling as soon as oil prices, which closed above $60 a barrel for the first time this year, stabilize at $65. Pioneer is planning to add drilling rigs starting in July, subject to oil price movements and the sale of other assets.
New drilling now means the companies can add to production in 2016. The statements come a month before the Organization of Petroleum Exporting Countries is scheduled to meet to discuss supply quotas………………………………………..Full Article: Source

OPEC policy rollover likely in June as oil rebounds -delegates

Posted on 06 May 2015 by VRS  |  Email |Print

OPEC countries are set to maintain current production levels at a meeting next month, three delegates said, as Gulf states continue to focus on market share and a rally in crude prices mutes calls from other members for supply cuts.
While the June 5 meeting in Vienna is likely to hear demands from some members of the Organization of the Petroleum Exporting Countries for a reduction in the amount of oil pumped, even officials from countries which favour a curb see it as unlikely………………………………………..Full Article: Source

More oil on tap for OPEC member Angola

Posted on 06 May 2015 by VRS  |  Email |Print

Italian energy company Eni announced Tuesday it was ahead of the curve with what its partners described as a breakthrough operation offshore Angola. Eni holds a 20 percent stake in a section of the Kizomba project off the coast of Angola. The Italian company said production there has started ahead of schedule.
Kizomba is part of the country’s Kakocha, Bavuca and Mondo South fields. “The project develops approximately 190 million barrels of oil with peak production currently estimated at 70,000 barrels of oil per day,” the Italian company said in a statement………………………………………..Full Article: Source

Oil hits 2015 high as China data spur stimulus bets

Posted on 05 May 2015 by VRS  |  Email |Print

Brent crude oil touched $67 a barrel in intraday trade on Monday, its highest in 2015, as dismal Chinese factory activity enhanced expectations the world’s second-largest economy would roll out stimulus measures to arrest a slowdown.
The North Sea crude variety rose 39 cents to $66.85 a barrel by 1046 GMT, having scaled the 2015 peak of $67 earlier in the session. US crude, which had hit its highest this year at $59.90 per barrel on Friday, inched up by 22 cents to $59.37 a barrel. Brent crude oil has surged by over 40% from an almost six-year low of $45.19 in January on expectations of a tighter demand-supply balance and tension in West Asia………………………………………..Full Article: Source

OPEC blames speculation for much of the drop in oil prices

Posted on 05 May 2015 by VRS  |  Email |Print

Oil supply and demand don’t fully justify the 60 per cent drop in prices between June and January as speculation also played a role, OPEC said. A rise in supply from outside the Organization of Petroleum Exporting Countries at a time when demand for oil was weak was the main reason for the drop, OPEC said in its monthly bulletin on Monday.
Brent oil, benchmark for more than half of the world’s crude, tumbled from mid-June to a six-year low in January as U.S. output climbed to the highest level in more than four decades and OPEC members pumped more barrels. “There was one other important factor that contributed to the downturn, especially as the price decline gained momentum,” OPEC said. “That was speculation.”……………………………………….Full Article: Source

Forward oil prices anchor around $75: Kemp

Posted on 04 May 2015 by VRS  |  Email |Print

Market participants expect the price of Brent to average around $75 per barrel through the rest of the decade, not much above the current level. Spot Brent prices have risen around $20 per barrel from their mid-January low, from $46 to $66, an increase of more than 40 percent.
Over the same period, however, futures prices for oil delivered at the end of 2017 have increased just $4.50 per barrel and remain semi-fixed a little over $70. As spot prices have risen, the slope of the forward curve has become flatter, ensuring prices for 2017 and beyond are almost unchanged……………………………………….Full Article: Source

The Shale Boom Has Already Gone Bust - At Least For Now

Posted on 04 May 2015 by VRS  |  Email |Print

The meteoric rise in U.S. oil production has ended, easing a global glut and driving a rebound in crude prices from below $50 a barrel, according to crude trader and hedge fund manager Andrew J. Hall.
Oil production from Texas to North Dakota peaked at almost 10 million barrels a day in February and has been falling since then, Hall said in a letter Friday to investors in Astenbeck Capital Management LLC, his commodities hedge fund. A drastic reduction in drilling rigs is starting to shrink U.S. oil output, according to U.S. government data cited by Hall………………………………………..Full Article: Source

Oil Builds Bullish Momentum Following Breakout

Posted on 04 May 2015 by VRS  |  Email |Print

Much like gold, this past week was an interesting week for oil which until Thursday, had struggled to breach the well developed area of resistance that had been building in the $58.50 per barrel region on the daily chart, above. Until then, oil had struggled to continue its recent bullish momentum, trading between the ceiling of resistance at this level, and the floor of support in the $55.80 per barrel region.
However, with the arrival of two pivot lows, the current bullish tone for the commodity was established. Wednesday’s run higher was also accompanied by good volume, with Thursday’s price action then taking oil through the key $58.50 level, a price point I have highlighted several times in previous market analyses………………………………………..Full Article: Source

Saudi prince sees power grow in oil restructuring

Posted on 04 May 2015 by VRS  |  Email |Print

Saudi Arabia, the world’s largest oil exporter, has restructured its hydrocarbon sector by splitting the state oil company from the oil ministry in a move that consolidates the power of the king’s son over the economy. King Salman bin Abdel Aziz al-Saud formed the 10-member Supreme Council for Saudi Aramco, headed by his son, Deputy Crown Prince Mohammed bin Salman, to oversee Saudi Aramco, the state oil company.
The council will include the ministers of oil, finance, economy and the central bank governor, among others. It is the latest measure to concentrate power in the hands of the prince, who this week was picked as second in line to the throne. In January, his father appointed him defense minister and head of the council on economic and development affairs, which will co-ordinate economic reforms as the kingdom copes with lower oil prices………………………………………..Full Article: Source

OPEC Production Highest Since 2012

Posted on 04 May 2015 by VRS  |  Email |Print

OPEC supply rose to 31.04 MMBOPD in April, the highest in more than two years, according to a Reuters survey. The increase puts the cartel’s production even further above demand forecasts for OPEC oil in the first half of the year, although second-half demand is expected to be stronger.
If the total remains unrevised, April’s supply would be OPEC’s highest since 31.06 MMBOPD in November 2012. Iraq increased production in the north following a deal between Baghdad and the Kurdistan Regional Government, offsetting a slight decline in flows from the south which produces most of the country’s oil. Based on the survey, Iraqi exports this month look set to exceed March’s record high of 2.98 MMBOPD. Iraq hoped to reach 3.10 MMBOPD in April………………………………………..Full Article: Source

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