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Oil Demand Growing at Fastest Pace in Five Years, Says IEA

Posted on 13 August 2015 by VRS  |  Email |Print

Demand for oil is increasing at its fastest pace in five years, boosted by an oil-price drop below $50 a barrel, a top energy watchdog said Wednesday, as it sharply upgraded its consumption-growth forecast for the commodity. But in a blow to the Organization of the Petroleum Exporting Countries’ strategy to defend its market share, the International Energy Agency said lower oil prices would only start to dent rival production next year.
In its closely watched monthly report, the IEA said global oil demand would grow by 1.6 million barrels a day this year, an upward revision of 200,000 barrels a day from its previous forecast, and would keep rising by 1.4 million barrels a day next year………………………………………..Full Article: Source

China strengthens hold over oil market as price maker

Posted on 13 August 2015 by VRS  |  Email |Print

China’s growing ability to buy and sell millions of barrels of crude oil on the Asian physical market in a matter of minutes through its main trading firms has given China so much clout that other traders are often forced to follow its agreed prices.
Leading Chinese oil traders have cornered the market on several occasions since October last year. Early this month, Chinaoil, the trading arm of PetroChina, bought 5 million barrels of crude in just 30 minutes through Asia’s main price-finding mechanism organised by Platts, part of McGraw Hill Financial Inc………………………………………..Full Article: Source

Iran’s oil output up 32,300 bpd in July: OPEC

Posted on 13 August 2015 by VRS  |  Email |Print

Iran’s oil production reached 2.861 million barrels per day (bpd) in July, with 32,300 bpd growth from June, the Organization of Petroleum Exporting Countries (OPEC) said in its latest report. The report put the OPEC’s member countries’ total oil output at 31.513 million bpd in July, showing 101,000 bpd rise from 31.412 million bpd in June, the Fars News Agency reported on Wednesday.
Iran, once OPEC’s second-largest producer after Saudi Arabia, is seeking to clear space for its gradual return to the market after lifting of sanctions. The country’s current oil production is estimated to be around 2.7 million bpd………………………………………..Full Article: Source

EIA cuts 2016 oil price forecast as crude trades below 6-year low

Posted on 12 August 2015 by VRS  |  Email |Print

The U.S. Energy Information Administration pushed its 2016 crude oil forecast lower Tuesday, as shaky global growth and higher production sent U.S. crude oil futures below the lowest closing price in six-years in midday trading. The federal Energy Information Administration said in its monthly Short-Term Energy Outlook that it had lowered its 2016 forecast price for U.S. benchmark oil by $8 to $54 per barrel in 2016 and its 2015 forecast by $6 to $49 per barrel.
The administration said it expects Brent, the global benchmark, to average about $59 per barrel in 2016 and about $54 per barrel in 2015. “The recent price declines reflect concerns about lower economic growth in emerging markets, expectations of higher oil exports from Iran, and continuing actual and expected growth in global inventories,” the agency said in its analysis………………………………………..Full Article: Source

The New Oil Order: in charts

Posted on 12 August 2015 by VRS  |  Email |Print

The Financial Times has been investigating what the plunge in the oil price since the summer of 2014 has meant for the industry, consumers and producers. Brent crude has more than halved since June last year, with the slide accelerating after Opec’s decision last November not to cut output, despite a US supply glut and weaker than expected demand in Asia.
The drop has inflicted massive pain on oil-exporting countries, widening budget deficits and weakening currencies. Energy companies have laid off an estimated 70,000 workers and scrapped projects worth billions of dollars, especially in high-cost areas such as Canada’s oil sands and the deepwater fields of the Gulf of Mexico………………………………………..Full Article: Source

China’s Yuan Move Undercuts Oil

Posted on 12 August 2015 by VRS  |  Email |Print

China’s move to weaken the yuan is the next shoe to drop in the oil market. Unlike the earlier ones—resilient U.S. shale output and OPEC’s frantic pumping—this one is all about demand. A weaker yuan is bad news for oil bulls on two fronts. First, the surprise move, coming after the summer’s debacle in the Chinese stock market, suggests Beijing is worried about capital flight offsetting efforts to stimulate a weakening economy.
Given that the International Energy Agency expects China to account for 23% of the growth in global oil consumption this year, any anxieties about it hurts sentiment. Then there is the direct effect of a weaker currency, which raises the domestic price of oil (subsidies often distort pump prices but the bill ultimately falls due at some level in the economy.)……………………………………….Full Article: Source

OPEC raises 2015 oil demand forecast despite bearish markets

Posted on 12 August 2015 by VRS  |  Email |Print

OPEC on Tuesday revised upward its growth forecast for global oil demand in 2015 and maintained projected record levels of world consumption next year, despite turbulent market conditions spurred by financial instability in Greece and China.
In its August monthly report, the Organization of the Petroleum Exporting Countries said it was expecting world oil demand to grow by 1.38 million barrels per day — some 90,000 more than announced in its July estimates………………………………………..Full Article: Source

July OPEC output hits 3yr-high as Iran oil returns to market

Posted on 12 August 2015 by VRS  |  Email |Print

OPEC pumped 31.5 million barrels per day (bpd) last month as Iran raised its production to 2.86 million bpd, the highest since international sanctions against the country were toughened in June 2012. The return of Iranian oil to the market could make oil even cheaper than the current lows of about $49.50 a barrel.
“According to secondary sources, total OPEC crude oil production averaged 31.51 million barrels per day in July, an increase of 101,000 barrels per day over the previous month. Crude oil output increased mostly from Iraq, Angola, Saudi Arabia and Iran, while production in Libya showed the largest drop,” OPEC said……………………………………….Full Article: Source

OPEC just kicked oil into the $30s

Posted on 12 August 2015 by VRS  |  Email |Print

Increased pumping by OPEC as Chinese demand appears to be slackening could drive oil to the lowest prices since the peak of the financial crisis. West Texas Intermediate crude futures skidded through the year’s lows and looked set to break into the $30s-per-barrel range after the Organization of the Petroleum Exporting Countries admitted to more pumping and China devalued its currency, sending ripples through global markets.
“The familiar theme of oversupply and shaky demand is getting punctuated today,” said Again Capital partner John Kilduff, who has expected WTI to aim for $30 per barrel. WTI futures for September fell more than 4 percent Tuesday and traded below $43.26 per barrel, the March 17 low………………………………………..Full Article: Source

Who will survive and who will thrive when the oil price war is over?

Posted on 11 August 2015 by VRS  |  Email |Print

The trouble with price wars is that they almost never turn out the way the participants hope they are going to. It is too late for OPEC to stop the shale revolution. The cartel faces the prospect of surging U.S. output whenever oil prices rise, says Ambrose Evans Pritchard. For example, when Rupert Murdoch slashed the price of The Times of London newspaper in 1993, it sparked a price war with the Daily Telegraph that lasted a decade and roped in other “quality” papers in the U.K.
In the end, nobody really won, and perhaps least of all the Times. Its circulation increased over the decade, but it spent gobs to acquire those readers while other factors were overtaking the newspaper industry — such as declining advertising revenue — which eventually helped make low, low prices unsustainable………………………………………..Full Article: Source

Oil speculators move in, but price slide continues

Posted on 11 August 2015 by VRS  |  Email |Print

Speculators increased bullish bets for the first time in seven weeks, a move that came too early in a market that continues to slide. Money managers’ net-long position in crude climbed 13 percent in the week ended Aug. 4, U.S. Commodity Futures Trading Commission data show. That’s a rebound from last week’s figure, which was the lowest level since 2010.
Major oil companies are preparing for a longer downturn and banks including Societe Generale SA are reducing their price forecasts as crude approaches a six-year low. The plunge has gathered strength as U.S. producers return drilling rigs to service and Iran seeks to increase exports after last month’s nuclear agreement with world powers………………………………………..Full Article: Source

Are oil production hikes the sole defense against crude’s lows?

Posted on 11 August 2015 by VRS  |  Email |Print

The only way for oil producers to cope with the low price of crude is to hike rather than cut production, an industry analyst told CNBC. Natixis Lead Oil Market Analyst Abhishek Deshpande said that both the Organization of Petroleum Exporting Countries (OPEC) and Western producers were working hard to maintain oil levels—simply as a matter of self-preservation.
“They’re left with no choice,” Deshpande told CNBC on Monday. Both OPEC and Western producers want to keep production high, but their motivations are different, said Deshpande………………………………………..Full Article: Source

OPEC has no plan for special meeting on oil drop: Delegates

Posted on 11 August 2015 by VRS  |  Email |Print

OPEC oil exporters have no plans for an emergency meeting to discuss the drop in oil prices before a next scheduled gathering in December, two OPEC delegates said on Monday. Algerian Energy Minister Salah Khebri said discussions about potentially holding such a meeting were ongoing, state news agency APS reported on Monday as oil prices fell towards $48 a barrel, their lowest since January.
Algeria is one of the Organization of the Petroleum Exporting Countries members which had misgivings about its 2014 shift in policy to defend market share rather than prop up prices, and has been seeking supply cuts………………………………………..Full Article: Source

Oil Futures Signal Weak Prices Could Last Years

Posted on 10 August 2015 by VRS  |  Email |Print

The oil market is signaling that prices could stay lower for longer, delivering a fresh blow to hard-hit energy exploration-and-production companies. Benchmark U.S. oil futures for September delivery are nearing the six-year low hit in March. But contracts for delivery in later years have taken an even bigger hit, with prices for 2016 and 2017 already trading below their March lows. That indicates that investors, traders and oil companies see the global glut of crude oil persisting beyond this year.
Companies making long-term investment decisions rely on the prices of futures contracts one or more years in advance. Producers trade futures and options contracts for coming years to lock in prices for the oil they plan to sell in those years………………………………………..Full Article: Source

Oil bulls’ hope for quick price dip dimmed by 2020 crude under $70

Posted on 10 August 2015 by VRS  |  Email |Print

Oil prices have continued their gloomy spell as the market is flooded with extra supply from the OEPC and US shale producers. As oil prices entered a second steep slide a few weeks ago, bullish traders and analysts had hoped for a repeat of the sharp but short dip that occurred early in the year – a speculative slide below $50 a barrel followed by a quick recovery.
Some are now reconsidering that view, as long-term oil prices take the lead in the market’s latest dive, swaying sentiment toward a lengthier slump that would mean prolonged pain for big producers, from Exxon Mobil Corp to Saudi Arabia………………………………………..Full Article: Source

Venezuela: ‘Terrorised by oil price drop’

Posted on 10 August 2015 by VRS  |  Email |Print

When a frustrated mother threw a mango at Nicolás Maduro in April, hitting him on the head, she could never have guessed the outcome: the Venezuelan president promised his homeless attacker a new apartment.
Others are not so lucky. Lolimar Gelis and her family lost their home in 2010 when a mudslide destroyed their shanty town, forcing them to take shelter at a military garrison in the west of the capital, Caracas. Despite appeals to the country’s leaders, the family is still waiting to be rehoused via a scheme launched by Mr Maduro’s predecessor, Hugo Chávez………………………………………..Full Article: Source

U.S. gas prices fall alongside crude oil -Lundberg survey

Posted on 10 August 2015 by VRS  |  Email |Print

The average price of a gallon of gasoline in the United States fell 11 cents in the past two weeks, pulled down by the ongoing slump in crude oil prices, according to the Lundberg survey released on Sunday. Regular grade gasoline fell to an average price of $2.71 per gallon, according to the biweekly survey dated Aug. 7, down 11 cents from the previous survey on July 24.
Gasoline is down 81 cents a gallon from the same year-ago period, according to the survey. “This is a continuation of dynamics that have been building in the past several weeks, as both U.S. and global benchmarks are down steeply again,” said survey publisher Trilby Lundberg in Camarillo, California………………………………………..Full Article: Source

What’s happening in the oil market right now is ‘unprecedented’

Posted on 10 August 2015 by VRS  |  Email |Print

The price of oil has collapsed again. And now the oil market is looking at a future that is “unprecedented.” In a note to clients this week, analysts at Goldman Sachs took a look at the market and the supply glut that has been blamed for the collapse in oil prices over the last year.
And as Goldman sees it, quite simply, the rules of the market have changed. “The market structure of the New Oil Order is unprecedented,” the firm writes, adding that the balance of power between the market’s largest and smallest companies has changed………………………………………..Full Article: Source

6 Investments Suffering in Commodities Rout

Posted on 07 August 2015 by VRS  |  Email |Print

Factors have been conspiring to take the commodities market on a stiff ride—downwards. Nervous investors have watched everything from oil and natural gas to sugar, industrial metals and even precious metals plunge, with some items hitting price levels not seen in more than a decade.
Oil, of course, has been in the headlines for months as its price has moved downward, but there’s plenty of other turmoil bedeviling investors. Some of the downward pressure has come from the possibility—or threat—of the Fed raising interest rates at long last, which would boost the dollar against gold. But there are other forces at work, too. A slowing economy in China has lessened demand for raw materials, but it’s not just China—and it’s not just the slowing economy………………………………………..Full Article: Source

Why oil prices could stay lower for longer

Posted on 07 August 2015 by VRS  |  Email |Print

The oil market is setting up for a prolonged period of low prices, unless there’s a dramatic shift in strategy by producers. Those producers range from Saudi Arabia and Iraq, to the upstart shale drillers of Texas and North Dakota whose surprising success initially set off a market share battle with the world’s largest oil exporters.
“What you’re seeing now is the price crisis some had expected last winter. Just a few weeks ago, confidence was coming back and people were saying, ‘$70 was the new $100.’ Reality intruded,” said Daniel Yergin, vice chairman of IHS………………………………………..Full Article: Source

Oil’s $4.4 Trillion Hole: Deflation spreads through the global oil industry

Posted on 07 August 2015 by VRS  |  Email |Print

It rankles when you lose $20. But hey, at least it isn’t $4.4 trillion. That is roughly how much revenue the world’s oil producers will forego over the next three years, based on the current outlook for prices and demand, relative to what was expected just a year ago.
With Brent crude having tumbled back below $50 a barrel, the industry has entered a vicious, and spreading, bout of deflation. A year ago, futures indicated an average Brent crude-oil price in 2016 through 2018 of about $101 a barrel. Today, that is just under $60. Estimates of future demand have also been marked down slightly. The implied hit to oil producers’ revenue is about $4.4 trillion spread across those three years………………………………………..Full Article: Source

Saudis Cede China Oil Market Share to Russia as Iran Risk Looms

Posted on 07 August 2015 by VRS  |  Email |Print

Saudi Arabia has a challenge in Asia as it battles to maintain market share: The Russians are coming and other OPEC members want a bigger slice. It’s a market the Saudis have vowed to defend, leading the decision by the Organization of Petroleum Exporting Countries to sustain output as surging U.S. production crippled prices and pushed cargoes to Asia.
While the origins of this competitive shift started with the American shale boom, the return of Iranian exports poses another test for the kingdom. “No other region needs more oil in the future than the Asia Pacific,” Sushant Gupta, the head of Asia downstream research at Wood Mackenzie in Singapore, said by phone. “It’s an absolutely important market for Saudi Arabia.”……………………………………….Full Article: Source

OPEC leader Saudi Arabia is having to borrow money

Posted on 07 August 2015 by VRS  |  Email |Print

The oil kingdom is facing a big hole in its budget, caused by the slump in oil prices and a sharp rise in military spending. That’s forcing the government to raid its reserves, and it may even borrow from foreign investors, analysts say.
Saudi Arabia has already burned through almost $62 billion of its foreign currency reserves this year, and borrowed $4 billion from local banks in July — its first bond issue since 2007. Its budget deficit is expected to reach 20% of GDP in 2015. That’s extraordinarily high for a country used to running surpluses. Capital Economics estimates that government revenues will fall by $82 billion in 2015, equivalent to 8% of GDP. The IMF is forecasting budget……………………………………….Full Article: Source

The ‘God’ of oil trading is getting crushed by the commodities slump

Posted on 07 August 2015 by VRS  |  Email |Print

A commodities hedge fund run by star trader Andy Hall is getting hammered by the collapsing oil price. Hall’s Astenbeck Capital Management fund lost about 17% in July, Reuters reports, citing an investor letter.
That is the second largest loss the fund has ever experienced. Its assets under management are now about $2.8 billion, down from $500 million in June, according to Reuters. The oil fund also posted losses in May and June, according to Reuters………………………………………..Full Article: Source

Oil bulls’ hope for quick price dip dimmed by 2020 crude under $70

Posted on 06 August 2015 by VRS  |  Email |Print

As oil prices entered a second steep slide a few weeks ago, bullish traders and analysts had hoped for a repeat of the sharp but short dip that occurred early in the year - a speculative slide below $50 a barrel followed by a quick recovery. Some are now reconsidering that view, as long-term oil prices take the lead in the market’s latest dive, swaying sentiment toward a lengthier slump that would mean prolonged pain for big producers, from Exxon Mobil Corp to Saudi Arabia.
While immediate delivery benchmark global Brent crude oil futures at $50 a barrel are still about $4 higher than they were at their lowest point in January, prices for delivery in December 2020 are nearly $8 lower than the start of this year, trading at a contract low of less than $67 on Tuesday. A year ago the contract hovered at around $100 a barrel………………………………………..Full Article: Source

Oil settles at $45.15 a barrel, hits fresh 5-month low

Posted on 06 August 2015 by VRS  |  Email |Print

Oil prices fell to a fresh March low on Wednesday after a surge in U.S. gasoline stockpiles as the summer season, the country’s biggest demand period for motor fuels, nears its end. U.S. crude for September delivery closed down 59 cents, at $45.15 a barrel—its lowest since March 19. September Brent crude futures were flat at $49.50 a barrel after hitting a fresh six-month low earlier in the session.
U.S. crude stocks fell last week, while gasoline and distillate inventories rose, data from the Energy Information Administration showed Wednesday. Crude inventories fell by 4.4 million barrels in the last week, compared with analysts’ expectations for a decrease of 1.5 million barrels………………………………………..Full Article: Source

Global Oil Supply More Fragile Than You Think

Posted on 06 August 2015 by VRS  |  Email |Print

Many oil companies had trimmed their budgets heading into 2015 to deal with lower oil prices. But the rebound in April and May to $60 per barrel from the mid-$40s suggested that the severe drop was merely temporary.
But the collapse of prices in July – owing to the Iran nuclear deal, an ongoing production surplus, and economic and financial concerns in Greece and China – have darkened the mood. Now a prevailing sense that oil prices may stay lower for longer has hit the markets………………………………………..Full Article: Source

A fundamental change might be coming to the world’s oil markets

Posted on 06 August 2015 by VRS  |  Email |Print

A flood of bearish news has pushed down oil prices to their lowest levels in months, with WTI nearing $45 per barrel and Brent flirting with sub-$50 territory. With a bear market back, there is pessimism throughout the oil markets. Goldman Sachs is even predicting oil stays at $50 through 2020, a profoundly grim view of the state of oil supplies.
On the other hand, the contraction in U.S. shale is underway, so it is just a matter of time before the mismatch between supply and demand balances out………………………………………..Full Article: Source

Caught in the cross-fire: Non-OPEC, non-shale producers

Posted on 06 August 2015 by VRS  |  Email |Print

The biggest losers from the current price war between OPEC and the shale producers seem set to be producers outside the Middle East and North America caught in the cross-fire. Expensive production from the North Sea, Canada’s oil sands, offshore mega projects, weaker African and Latin American members of OPEC, and frontier exploration areas around the world are all being squeezed hard by the price slump.
According to oil field services company Baker Hughes, the number of rigs drilling for oil outside North America has fallen by over 200, or about 19 percent, since July 2014. Rig counts have fallen in every region, with 28 fewer active rigs in Europe, 47 fewer in the Middle East, 33 in Africa, 66 in Latin America and 34 in Asia Pacific………………………………………..Full Article: Source

As oil falls below $50, analysts eye ‘mid-price’ era

Posted on 05 August 2015 by VRS  |  Email |Print

A slump in oil below $50 a barrel—a level it has held above for most of the past decade—has raised the prospect of a new era of lower prices, although a return to super-cheap oil seems unlikely. Prices below $50 for the two crude oil benchmarks, North Sea Brent and U.S. West Texas Intermediate, were the norm prior to 2005. Brent averaged just $18.37 a barrel in the 1990s, WTI $19.70 a barrel, and both only broke above $50 for the first time in late 2004.
China’s explosive economic growth over the past decade, coupled with flatlining global output, saw Brent soar above $140 in 2008 and it has spent more than 90 percent of the past decade above the $50 mark………………………………………..Full Article: Source

Oil price unlikely to recover as Saudi refining hits market

Posted on 05 August 2015 by VRS  |  Email |Print

Oil prices are unlikely to recover soon as Saudi Arabia’s drive to boost its refining activities is expected to force refineries elsewhere to slow down their operations, thus creating an even bigger glut of unwanted crude oil.
Two big new refineries in Saudi Arabia are adding to growing supplies of diesel and jet fuel, which could mean other refiners will use less crude as they respond to the oversupply of oil products. ……………………………………….Full Article: Source

Oil Companies’ Spending Cuts Unlikely to Be Enough

Posted on 05 August 2015 by VRS  |  Email |Print

The world’s biggest oil companies have vowed to bring down the costs of big projects in the face of slumping oil prices, but the unrelenting price weakness—with crude below $50 a barrel—suggests they could have to dig deeper still.
In the past year, as oil prices plunged 60% from highs of $114 in 2014, U.K. energy giant BP PLC began testing new projects for profitability around $60 a barrel, down from $80 a barrel last year. Its Anglo-Dutch rival Royal Dutch Shell is testing projects at prices as low as $50 a barrel, though its overall price outlook is between $70 and $110 a barrel………………………………………..Full Article: Source

In the oil market, $30 is the new $50

Posted on 05 August 2015 by VRS  |  Email |Print

Even as oil bounces back, analysts say market fundamentals are very bearish, and it would not be surprising to see crude take a temporary dive into the $30s per barrel in the next several months.
“There’s no reason why oil won’t go down to the $30s. That’s the level that will really shut in current production and have a bigger edge than current capex (cuts) will have on the oversupply,” said Edward Morse, global head of commodities research at Citigroup………………………………………..Full Article: Source

It would be very difficult for oil prices to stabilize in 2016

Posted on 05 August 2015 by VRS  |  Email |Print

It would be very difficult for oil prices to stabilize in 2016, Jamie Webster, senior director of IHS Energy Downstream Research told Trend. “Oil is still very oversupplied, indicating it would be difficult to maintain stable pricing,” he said. “I disagree that prices are stable,” he said. “They were fairly flat from about May to early July but since then have broken sharply downward, with Brent down nearly $15 per barrel.”
Webster said OPEC is not able to control prices at all, and its current stance of not curtailing production will further ensure it has no effect on price setting. The greatest chance is if there is a substantial price drop from the US in the next few months, he added………………………………………..Full Article: Source

Oil and Commodities Continue to Slump Worldwide

Posted on 04 August 2015 by VRS  |  Email |Print

Mining companies and oil producers tumbled worldwide as a renewed slide in commodity prices saw oil drop to a six-month low and copper neared a bear market. The Bloomberg World Oil & Gas Index of 65 of the leading producers declined 1.4 percent to its lowest in five years. The Bloomberg World Mining Index of the biggest mining stocks fell 1.5 percent to near its lowest since 2009.
More than $450 billion has been erased this year from the value of both indexes. Commodities dropped after an official gauge of Chinese manufacturing slid to a five-month low and Iran said it will be able to bolster crude production within a week of sanctions ending………………………………………..Full Article: Source

Brent Crude Falls Below $50 a Barrel

Posted on 04 August 2015 by VRS  |  Email |Print

Record U.S. production has led to international competition to produce more, cut prices, fight for customers. The world’s benchmark oil price fell to less than $50 a barrel Monday for the first time in six months as a sluggish global economy and rampant oil boom keep crude markets falling.
Monday’s selloff widens losses from July that plunged oil into a bear market. Record production in the U.S. has led to an international competition to produce even more, cut prices and fight for customers around the world. The past week brought signs that production is still going strong, dashing hopes that low prices may force producers to slow down………………………………………..Full Article: Source

Oil price: Majors braced as $50 barrel looms

Posted on 04 August 2015 by VRS  |  Email |Print

A recent renewed decline in the price of oil is gathering pace, with international benchmark Brent crude hurtling towards the $50-a-barrel threshold it last breached in January at the nadir of its year-long slump. In London the price per barrel was hovering a little above $51 on Monday morning, after it shed close to 2.3 per cent following a similar fall in New York.
It is now more than 25 per cent below the peak of its spring recovery in May and is firmly entrenched in bear market territory, with many predicting a continued slide. The Wall Street Journal said the latest selloff followed another round of data showing a persistent supply glut, with US producers continuing to increase output and, crucially, a significant decline in manufacturing activity in China………………………………………..Full Article: Source

Oil-and-Gas Debt Deals Sting Investors

Posted on 04 August 2015 by VRS  |  Email |Print

Funds face paper losses on substantial investments this year in exploration-and-production companies. It is shaping up as a cruel summer for debt investors wagering on a rebound in the oil-and-gas business.
Funds managed by Franklin Resources Inc., Blackstone Group LP and Oaktree Capital Group LLC, among others, are facing paper losses on substantial investments this year in exploration-and-production companies. The sector is coming under further pressure as oil prices have turned downward again, dropping below $46 a barrel in New York to a four-month low………………………………………..Full Article: Source

Oil Falls to Near $50 After OPEC Monthly Supply Rises

Posted on 04 August 2015 by VRS  |  Email |Print

Oil slid to six-month lows on Monday, hit by fresh evidence of growing oversupply, investor bearishness and slowing demand in China, leaving crude prices on course for their weakest third-quarter performance since the financial crisis in 2008.
A Reuters survey last week showed oil output by the Organization of the Petroleum Exporting Countries (OPEC) reached the highest monthly level in recent history in July. Saudi Arabia and other key members are showing no sign of wavering in their focus on defending market share instead of prices, which have fallen 9 per cent this year………………………………………..Full Article: Source

Caught in the cross-fire - non-OPEC, non-shale producers: Kemp

Posted on 04 August 2015 by VRS  |  Email |Print

The biggest losers from the current price war between OPEC and the shale producers seem set to be producers outside the Middle East and North America caught in the cross-fire. Expensive production from the North Sea, Canada’s oil sands, offshore megaprojects, weaker African and Latin American members of OPEC, and frontier exploration areas around the world are all being squeezed hard by the price slump.
According to oilfield services company Baker Hughes, the number of rigs drilling for oil outside North America has fallen by over 200, or about 19 percent, since July 2014. Rig counts have fallen in every region, with 28 fewer active rigs in Europe, 47 fewer in the Middle East, 33 in Africa, 66 in Latin America and 34 in Asia Pacific………………………………………..Full Article: Source

Oil prices could be as low as $50 by 2020: Goldman

Posted on 03 August 2015 by VRS  |  Email |Print

The price of oil could be stuck firmly at around $50 a barrel by 2020, a Goldman Sachs analyst told CNBC, raising new fears about the energy companies that have already started to cut costs, projects and jobs to cope with falling revenues.
Several big oil and gas companies announced this week they intend to make cutbacks to stay afloat in this sinking environment. Royal Dutch Shell expects to cut 6,500 jobs, 6,000 for Centrica, and at Chevron, a 2 percent slash to its global workforce………………………………………..Full Article: Source

Iran sees oil output up 1 mln bpd after curbs end

Posted on 03 August 2015 by VRS  |  Email |Print

Iran expects to raise oil output by 500,000 barrels per day (bpd) as soon as sanctions are lifted and by a million bpd within months, Oil Minister Bijan Zanganeh said in remarks broadcast on Sunday. “We are already doing marketing, and within a day after the lifting of sanctions we will raise (production) by 500,000 barrels per day,” Zanganeh said.
He said Iran’s crude production had fallen about one million bpd from about four million bpd under the sanctions, state television reported. “Within the next few months, we will return to the level of 3.8-3.9 million barrels,” Zanganeh added………………………………………..Full Article: Source

Iran warns Opec it plans to recapture market share

Posted on 03 August 2015 by VRS  |  Email |Print

Iran’s oil minister warned fellow Opec members that it aims to recapture market share and plans to step up oil output by 1 million barrels per day “within months” of sanctions being lifted, Iran state news organisations reported.
The Iranian oil minister Bijan Zanganeh was repeating the bullish output assessment he has been making for months. In June, for example, he said that Iran could increase production by 1 million bpd within seven months of sanctions being lifted, bringing it back to its 2011 pre-sanctions level of 3.7 million bpd………………………………………..Full Article: Source

OPEC says oil should not fall further, sees stability in 2016

Posted on 31 July 2015 by VRS  |  Email |Print

OPEC expects increasing oil demand to prevent a further fall in prices and sees a more balanced market in 2016, its secretary-general said on Thursday, the latest sign the group is sticking to its policy of defending market share.
Oil has dropped about 15 percent this month and halved in value in the past year but neither OPEC nor Russia, the world’s top producer, have cut output to support prices, hoping cheaper oil will hit U.S. shale and other rival sources. “I would not expect they (prices) are going to fall because demand is growing,” OPEC Secretary-General Abdullah al-Badri told reporters in Moscow. OPEC pumps around 40 percent of global oil production………………………………………..Full Article: Source

OPEC, Russia: ‘Oil market to stabilize’

Posted on 31 July 2015 by VRS  |  Email |Print

OPEC and Russia expressed confidence the global oil market would become more balanced and stable in 2016 after recent sharp drops. At a meeting between OPEC Secretary-General Abdullah El-Badri and Russian Energy Minister Alexander Novak in Moscow on Thursday, both sides made clear they didn’t expect oil prices to experience any more sharp falls.
While Badri and Novak insisted talks on possible cuts in oil output were not on the agenda, the OPEC representative reiterated the stance communicated at the cartel’s meeting earlier this year. “We met in December, and we met in June; and we decided to keep out production at 30 million barrels a day. And we’re not ready to reduce our production,” Badri said after the talks in Moscow………………………………………..Full Article: Source

ABN Amro keeps 2015 oil price forecasts, cuts 2016 view

Posted on 31 July 2015 by VRS  |  Email |Print

ABN Amro kept its 2015 oil price forecasts, but reduced its 2016 prices significantly, citing a worsening oil oversupply situation. The bank maintained its 2015 Brent and West Texas Intermediate (WTI) forecasts of $60 and $55 per barrel, respectively. But it cut 2016 Brent and WTI price forecasts by $10 to $65 and $60 per barrel, respectively.
ABN Amro said it expects a recovery with the market returning to balance with lower oversupply, mainly due to marginally higher demand and a weaker dollar during the course of 2016. “However, the oversupply will remain larger than previously expected as the OPEC produces above its quota, and also the US crude production will remain elevated,” Hans van Cleef, senior energy economist at the bank said in a note Tuesday………………………………………..Full Article: Source

Oil prices sinking - even without Iran

Posted on 31 July 2015 by VRS  |  Email |Print

Oil prices worldwide have been falling for the past year. And the return of oil from Iran - following its landmark nuclear deal - is expected to put further pressure on the prices. DW examines the global oil market.
“A year ago, the price of a barrel of Brent North Sea crude stood at around $110. It is currently hovering at about half that price - around $55,” recalled Alexander von Gersdorff of the Berlin-based Association of the German Petroleum Industry (MWV). The price of West Texas Intermediate (WTI) crude has even dipped to below $50 a barrel recently. This slump in prices came even before Iran scaling up its oil exports………………………………………..Full Article: Source

Oil Market Embraces Lower-for-Longer Price View as Futures Sink

Posted on 31 July 2015 by VRS  |  Email |Print

The global oil surplus increasingly looks like a problem that’ll take years rather than months to solve — and the market is pricing that in. U.S. crude futures for delivery in five years have broken below levels seen during the financial crisis. With leading OPEC members pumping at a record, supplies from elsewhere holding up and Iran close to reviving exports, the market is signaling the glut will persist.
The global oversupply has already prompted oil companies to warn that the price rout will continue. Royal Dutch Shell Plc said Thursday it’s braced for a “prolonged downturn,” echoing a forecast from BP Plc Chief Executive Officer Bob Dudley that prices will stay “lower for longer.”……………………………………….Full Article: Source

Oil Price Fluctuations at $50-$65 per Barrel ‘Normal’

Posted on 30 July 2015 by VRS  |  Email |Print

Oil price fluctuations between $50 and $65 per barrel are normal because the situation on the world market depends on the level of supply and demand, Russian Energy Minister Alexander Novak said Wednesday.
“I think that the diapason of fluctuations, of which we spoke about before, from $50 to $65 [per barrel] is a normal and expected process and there are no supra-fluctuations that we see. The global situation on the markets depends on supply and demand and in today’s case, this is how it’s unfolding,” Novak said………………………………………..Full Article: Source

Demand not enough to boost oil price

Posted on 30 July 2015 by VRS  |  Email |Print

Strong global demand for oil is insufficient to offset a robust supply outlook that has driven prices back below US$50 per barrel, and Saudi Arabia no longer appears to have the necessary market clout to change prices.
“This remains a supply-driven market,” said Michael Tran, a New York-based commodity strategist at RBC Capital Markets. “Supply drove us into this low price environment and supply will have to be what ultimately digs us out.” Tran thinks oil could retest the lows from earlier in 2015, but he thinks WTI prices will ultimately average somewhere in the low US$50s for the remainder of the year………………………………………..Full Article: Source

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