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BP’s Latest Estimate Says World’s Oil Will Last 53.3 Years

Posted on 14 July 2014 by VRS  |  Email |Print

According to BP, drivers whose vehicles rely on burning oil have a little more than a half-century to find alternate sources of energy. Or walk. BP’s annual report on proved global oil reserves says that as of the end of 2013, Earth has nearly 1.688 trillion barrels of crude, which will last 53.3 years at current rates of extraction. This figure is 1.1 percent higher than that of the previous year. In fact, during the past 10 years proven reserves have risen by 27 percent, or more than 350 billion barrels.
The increased amount of oil in the report include 900 million barrels detected in Russia and 800 million barrels in Venezuela. OPEC nations continue to lead the world by having a large majority of the planet’s reserves, or 71.9 percent………………………………………..Full Article: Source

Oil Hedging Seen in Decline as Banks Exit Commodities

Posted on 11 July 2014 by VRS  |  Email |Print

Oil-price hedging by producers and consumers is declining as a result of stricter of regulation that’s caused banks to exit commodities markets, according to Threadneedle Asset Management Ltd.
Trading of futures for delivery later this decade has diminished as some banks either leave commodities altogether or curb trading, Nicolas Robin, a fund manager at Threadneedle, said at a presentation in London yesterday. Increased regulatory oversight has caused a slump in energy trading on exchanges, Platts, a company publishing prices for commodities including oil, said the day before………………………………………..Full Article: Source

OPEC’s oil market share to shrink in 2015, despite growing demand

Posted on 11 July 2014 by VRS  |  Email |Print

OPEC expects its share of the world oil market to shrink in 2015 for a third year running, due in part to the U.S. shale oil boom, giving the exporter group little comfort from an acceleration in global demand.
Making its first 2015 forecast in a monthly report, the Organization of the Petroleum Exporting Countries said demand for its oil next year would average 29.37 million barrels per day (bpd), down 310,000 bpd from 2014………………………………………..Full Article: Source

Global oil demand expected to grow along with economy, cartel says

Posted on 11 July 2014 by VRS  |  Email |Print

The Organization of Petroleum Exporting Counties said Thursday it expected the world will need more oil because of improvements in the global economy. Global oil demand for 2015 is expected to grow by 1.2 million bpd to average 92.3 million bpd as the world economy picks up steam, OPEC said in its monthly market report.
“Despite some weakness in the first half of the year, the world economy continues to recover,” the report said. “Global gross domestic production growth in 2014 is now forecast at 3.1 percent, slightly higher than the estimated 2.9 percent for 2013.”……………………………………….Full Article: Source

OPEC Sees U.S. Fueling Acceleration in Global Oil Demand Next Year

Posted on 11 July 2014 by VRS  |  Email |Print

Rising U.S. oil consumption will reverse a four-year demand decline in rich nations and drive a pick up world-wide next year, the Organization of the Petroleum Exporting Countries said Thursday. The assessment—the first given for 2015 by the oil producers’ group—shows the U.S. is scooping more of its own oil amid a production boom just as OPEC’s role continues to decrease.
In its monthly oil market report, OPEC said global oil demand growth will pick up next year amid robust economic growth. World consumption will increase by 1.21 million barrels a day in 2015, compared with a rise of 1.13 million barrels a day this year, the group said………………………………………..Full Article: Source

IEEJ sees 2015 non-OPEC oil supply rising 1.6 mil b/d, led by US exports

Posted on 11 July 2014 by VRS  |  Email |Print

Non-OPEC oil supply is expected to rise by 1.6 million b/d in 2015 from a year earlier, led by increasing US liquids exports, a senior oil analyst at the Institute of Energy Economics, Japan said Thursday. Yoshikazu Kobayashi, oil group manager at IEEJ’s fossil fuels and electric power industry unit, said the outlook considered rising LPG supplies from the US and a recent US Commerce Department decision allowing exports of lightly processed condensates.
“We expect to see US condensates flowing into the Asian market from now on,” he said, adding that US condensate export volumes would be limited but would nevertheless help reduce procurement prices of naphtha and light crudes in Asia………………………………………..Full Article: Source

Natural-Gas Prices Drop on Greater-Than-Expected Surplus

Posted on 11 July 2014 by VRS  |  Email |Print

Energy prices are tumbling, a setback for investors who were betting that supply shortfalls would drive markets higher. Natural-gas futures hit a six-month low on Thursday. U.S. oil futures ended slightly higher, snapping a nine-session losing streak, the longest since December 2009.
It is a sharp turnaround for both markets, where investors until recently were overwhelmingly bullish, and a welcome relief for consumers, who had watched gasoline climb steadily for much of this year………………………………………..Full Article: Source

Libya’s oil industry remains vulnerable to protests

Posted on 10 July 2014 by VRS  |  Email |Print

Libya’s oil industry hopes life will return to normal now that a wave of protests has ebbed, but it will take months to ramp up production and more unrest is in prospect as political chaos spreads in the North African country. A group of eastern rebels agreed last week to clear two major ports they had seized almost a year ago in a drive for regional autonomy.
Together with the freeing of the southern El Sharara oilfield, where a separate group has ended a blockade of its own, the ports’ reopening could boost oil exports by 650,000 barrels a day in the next few weeks - helping to restore much of the 1.4 million bpd Libya used to pump before protests paralysed the sector………………………………………..Full Article: Source

Pentagon uses wrong oil price and fails to hedge fuel bill: Kemp

Posted on 10 July 2014 by VRS  |  Email |Print

The U.S. Department of Defense has been using the wrong oil price in its budget, leaving the largest single buyer of fuel in the world with liabilities potentially hitting billions of dollars. The Pentagon continues to rely on WTI prices even though Brent oil is more relevant to the cost of fuels it buys on behalf of the armed forces.
Using the wrong benchmark has introduced increasing risk into the military budget, according to a critical report published on Tuesday by the Government Accountability Office (GAO) (“Bulk Fuel Pricing: DOD needs to re-evaluate its approach to better manage the effect of market fluctuations”)………………………………………..Full Article: Source

Future of Oil Hangs on Iraqi Politics

Posted on 10 July 2014 by VRS  |  Email |Print

Fears that events in Iraq will send global oil prices soaring have abated. Yet, the crisis has potentially huge implications for oil. Under any conceivable outcome to the current situation, oil production from Iraq will fail to meet recent expectations. The reason for this dire prognosis is that politics – not security or logistics – will be the biggest determinant of Iraq’s oil trajectory in the years ahead.
In 2012, the International Energy Agency forecast that Iraq would account for 45 percent of the growth in global oil supply from 2012 to 2035. In its projection, the IEA anticipated that Iraq would move to producing more than 6 million barrels a day in the next five and a half years, from 3.3 million barrels a day………………………………………..Full Article: Source

How low could crude oil go?

Posted on 10 July 2014 by VRS  |  Email |Print

At the beginning of this year — long before extreme winter weather and the Islamic State seizing Iraq’s largest oil refinery, and everything that’s followed — a high-profile analyst said oil prices could drop by $20 a barrel. His belief was that the oil supply would surge this year thanks to Iraq, Libya and the U.S. being able to increase their production.
On top of that, the lifting of some Iranian sanctions would allow it to increase its oil production as well. Oil prices have been stabilizing over the past few days as the threat in the Middle East has lessened………………………………………..Full Article: Source

LNG market grows at 2.8% CAGR, to reach US$196.4 mn by 2019

Posted on 10 July 2014 by VRS  |  Email |Print

Liquefied Natural Gas market is growing at a compounded annual growth rate (CAGR) of 2.8% from 2013 and will extend up to 2019 when total market value will rise to US$196.4 mn from $161.4 mn in 2012, according to a new report titled “Liquefied Naturla Gas Market: Global Industry Analysis, size, share, growth, trends and forecast, 2013-19.
Key end-user segments analyzed in the study include industrial sector, electric power and other segments such as transportation and commercial. In terms of volume, industrial sector was the largest segment, accounting for around 43.0% of the total market share in 2012. Industries such as fertilizers and petrochemicals are major consumers of LNG as large share of LNG is consumed by these sectors………………………………………..Full Article: Source

EIA bumps up oil, gasoline and natural gas price predictions

Posted on 09 July 2014 by VRS  |  Email |Print

The U.S. Energy Information Administration raised its 2014 and 2015 average price estimates for crude oil, gasoline and natural gas, according to a monthly report released Tuesday. “The escalating conflict in Iraq, continued record-high levels of Chinese crude oil imports in 2014, and ongoing delays to Libyan oil exports have contributed to upward price pressure,” the government agency said.
For 2014, the EIA forecast average prices of $100.98 a barrel for West Texas Intermediate crude oil , up from an estimate of $98.67 in the previous monthly report. It estimates an average 2015 price of $95.17, up from $90.92……………………………………Full Article: Source

EIA Raises Oil Price Forecasts on Surge in Iraq Violence

Posted on 09 July 2014 by VRS  |  Email |Print

The U.S. Energy Information Administration increased its 2014 and 2015 price forecasts for West Texas Intermediate and Brent crudes because of the upsurge of violence in Iraq. WTI will average $100.98 a barrel this year versus the June projection of $98.67, the EIA, the Energy Department’s statistical unit, said today in its monthly Short-Term Energy Outlook. The U.S. benchmark grade will average $95.17 in 2015, up from the previous month’s estimate of $90.92.
The EIA boosted the forecast for Brent to $109.55 for this year from $107.82. Next year’s forecast was raised to $104.92 from $101.92. “Price forecasts were raised primarily because the problems in Iraq caused us to scale back our production projections,” Tancred Lidderdale, an economist with the EIA in Washington who helped write the report……………………………………Full Article: Source

US EIA: Cuts 2014 World Oil Demnd Outlk,Raises Non-OPEC Supply

Posted on 09 July 2014 by VRS  |  Email |Print

The U.S. Energy Information Administration Tuesday slashed its forecasts for how much it sees world oil demand growing in 2014, while increasing its expectation for how supply will come from non-OPEC producers this year. The agency reported in its July Short Term Energy Outlook that U.S. oil output in 2015 will likely average its highest level in 42 years, while also raising its forecast for U.S. and international oil prices.
U.S. crude oil production is expected to increase from an estimated 7.4 million barrels per day in 2013 to 8.5 million bpd in 2014 and 9.3 million bpd in 2015. “The 2015 forecast represents the highest annual average level of oil production since 1972,” the EIA said……………………………………Full Article: Source

Would Bursting Asset Bubbles Affect Oil Prices?

Posted on 09 July 2014 by VRS  |  Email |Print

The DOW drop below 17,000 has seemed to some a sign that maybe a correction is here. Talk of bubbles in some asset classes is spreading, the potential for less quantitative easing and higher interest rates, and the crying need for profit taking in stocks suggests to some analysts that the equities market will at least pause, possibly pull back notably. As always, there are those that disagree.
But, if there is an equities correction, such as a drop of 20%, would that affect oil prices? Two schools of thought exist on this (don’t you hate that?), one suggesting that a bear market on Wall Street would pull down oil prices, the other that oil might become a perceived safe haven, or at least a parking spot, for the cash which institutions would have……………………………………Full Article: Source

Oil and gas cyber security

Posted on 08 July 2014 by VRS  |  Email |Print

In the past, most operational technology (OT) networks were isolated (air gaped) from the internet and office networks and operated independently, using proprietary hardware, software and communications protocols.
However, in recent years, demand for business insight, requirements for remote network access and the spread of hardware and software from traditional IT (e.g. TCP/IP networking, Windows based platforms) caused many oil and gas companies to integrate control systems and their enterprise IT systems……………………………………..Full Article: Source

Iraq fighting doesn’t raise oil prices, yet

Posted on 08 July 2014 by VRS  |  Email |Print

Iraq is one of the world’s top oil exporters, so you would think that a recent attack by militants on its largest oil refinery amid a deteriorating security situation in the country would prompt global fears of oil shortages and spark a spike in prices.
Instead, ​prices are about where they were a year ago, although they have been creeping up in recent months. Why no panic? Iraq’s vast crude supplies are safe for the time being because the bulk of its oil production — about 2.5 million barrels a day — takes place in the south, far from the current insurgency, analysts say……………………………………..Full Article: Source

Oil Price Stable as Iraq Conflict Continues

Posted on 08 July 2014 by VRS  |  Email |Print

Iraq is one of the world’s top oil exporters, so you would think that a recent attack by militants on its largest oil refinery amid a deteriorating security situation in the country would prompt global fears of oil shortages and spark a spike in prices.
Instead, ​prices are about where they were a year ago, although they have been creeping up in recent months. Why no panic? Iraq’s vast crude supplies are safe for the time being because the bulk of its oil production—about 2.5 million barrels a day—takes place in the south, far from the current insurgency, analysts say……………………………………..Full Article: Source

Algeria, Tanzania close to deal on oil, gas exploration

Posted on 08 July 2014 by VRS  |  Email |Print

OPEC member and gas exporter Algeria is in advanced talks for a first deal to start oil and gas exploration in Tanzania, boosting its ambitions to expand in east Africa, Algerian and Tanzanian energy ministers said on Monday.
“We want to use the Algeria’s experience to explore for oil and gas in several areas in Tanzania,” Tanzanian Energy Minister Sospeter Muhongo after talks with his Algerian counterpart Youcef Yousfi, according to Algerian state news agency APS……………………………………..Full Article: Source

US is world’s biggest oil producer

Posted on 07 July 2014 by VRS  |  Email |Print

The U.S. will remain the world’s biggest oil producer this year after overtaking Saudi Arabia and Russia as extraction of energy from shale rock spurs the nation’s economic recovery, Bank of America Corp. said.
U.S. production of crude oil, along with liquids separated from natural gas, surpassed all other countries this year with daily output exceeding 11 million barrels in the first quarter, the bank said in a report Friday. The country became the world’s largest natural gas producer in 2010. The International Energy Agency said in June that the U.S. was the biggest producer of oil and natural gas liquids………………………………………..Full Article: Source

Oil Price Fall Shouldn’t Worry BP plc Or Royal Dutch Shell Plc

Posted on 07 July 2014 by VRS  |  Email |Print

Until recently, the price of oil had been making higher highs as unrest in the Middle East continued. However, in recent weeks there has been a sharp fall, with the price of Brent Crude falling from $115 per barrel to under $111 per barrel as Libya announced that it would be increasing its supply to the global energy market.
Of course, as producers of oil, a higher oil price generally means more profit for BP and Shell, as it does not impact upon costs but does help to boost revenue. However, a sharp fall in the oil price does not spell disaster for either company, with them both offering great long-term potential………………………………………..Full Article: Source

Crude oil prices dip as Iraq fears ebb

Posted on 04 July 2014 by VRS  |  Email |Print

The price of oil dropped below $104 a barrel Thursday as the risk of supply disruptions in Iraq continued to recede and two key export terminals in Libya were expected to reopen soon.
By early afternoon in Europe, benchmark U.S. crude for August delivery was down 68 cents to $103.80 a barrel in electronic trading on the New York Mercantile Exchange, its sixth day of declines. On Wednesday, the contract fell 86 cents to $104.48. Brent crude, a benchmark for international oils, was down 61 cents to $110.63 a barrel on the ICE Futures exchange in London………………………………………..Full Article: Source

Texas Set To Overtake Iraq In Oil Production

Posted on 04 July 2014 by VRS  |  Email |Print

America’s increasing reliance on hydraulic fracturing to recover energy trapped in shale will soon lead Texas to generate more oil than Iraq, OPEC’s No. 2 producer.
Texas produced just over 3 million barrels a day in April for the first time in nearly four decades, according to a new report by the U.S. Energy Information Administration (EIA). That accounted for 36 percent of the United States’ total production for the month — 8.4 billion barrels per day………………………………………..Full Article: Source

Technology paves road to freedom from OPEC

Posted on 04 July 2014 by VRS  |  Email |Print

News out of Iraq has helped drive oil prices higher in recent weeks. One of the predictable results has been a slew of articles about how rising oil prices could thwart a U.S. economic resurgence. While that might be partially and temporarily true in the very short run, the reality is that the U.S. will have relatively stable energy prices for the foreseeable future.
In general, most of the articles miss the real reasons behind slow economic growth and are just breathy attempts to get pageviews. The main reason for the rangebound energy prices in America — which I discussed here — is the rapid pace of energy-related technology the past decade. ……………………………………….Full Article: Source

Petrochemicals latest China commodity to be hit by potential fraud

Posted on 03 July 2014 by VRS  |  Email |Print

Chinese petrochemical imports have become the latest commodity financing tool to come under investigation for possible fraud, highlighting the risks from the widespread use of raw materials as collateral to raise loans and skirt credit restrictions.
Commodity financing deals in China, which Goldman Sachs has estimated to be worth as much as $160 billion, have come under close scrutiny after an alleged metal financing fraud at Qingdao Port, a huge trading hub in eastern China………………………………………..Full Article: Source

Kuwait expects oil price to ease

Posted on 03 July 2014 by VRS  |  Email |Print

Kuwait Oil Minister Ali Al-Omair said he expects oil prices to ease following a rise prompted by unrest in oil-producing OPEC members Iraq and Libya. “Markets have witnessed a slight increase recently, but this rise will not last for long as prices will stabilize.
They have already started to ease and return to normal levels,” said Omair, cited by the KUNA news agency. He attributed the prise rise to violence in Iraq and Libya, both key oil producers and exporters in the Organization of Petroleum Exporting Countries………………………………………..Full Article: Source

The Peak Oil Crisis: Iraq on the Precipice

Posted on 03 July 2014 by VRS  |  Email |Print

The daily newspapers are now full of stories predicting that Iraq, as we know it, will soon disintegrate into three or more warring states. In the last two weeks Sunni insurgents led by the extremist ISIS have routed a good part of the Iraqi army, taken over much of northern Iraq not controlled by the Kurds, and now are moving close to Baghdad.
Despite the dispatch of American and Iranian military advisors to at least assess the situation, most observers say government forces are too weak to drive back the insurgents and retake the lost territory. Washington is refusing to get involved unless the Shiite-dominated Iraqi government makes radical changes in its relations with the Sunnis and Kurds………………………………………..Full Article: Source

World Oil Markets Can Deal With Situation In Iraq – Lew

Posted on 03 July 2014 by VRS  |  Email |Print

US Treasury Secretary Jack Lew said on Tuesday there was ample oil production capacity to offset any supply disruptions that may occur due to the violence in Iraq. “I believe that world energy markets will be able to deal with the situation as it goes forward,” Lew said.
“I don’t think it’s in the interest of any of the parties in Iraq for there to be a severe disruption in supply,” he added. “There is sufficient capacity in the world right now to deal with whatever we need to deal with.”……………………………………….Full Article: Source

Opec output slips in June over Iraq crisis

Posted on 03 July 2014 by VRS  |  Email |Print

Opec’s oil output has fallen in June from May’s three-month high, a survey found on Monday, as fighting in Iraq closed its largest oil refinery and technical problems slowed its southern exports.
The slight decline underlines how unrest and outages in the Middle East and Africa are taking their toll on Opec supply, just as the International Energy Agency is highlighting a greater need for Opec oil in the rest of the year………………………………………..Full Article: Source

Texas oil production set to top No. 2 OPEC country

Posted on 03 July 2014 by VRS  |  Email |Print

Texas now is pumping 36 percent of the nation’s oil, more than doubling its production in three years, according to new federal data. The Energy Information Administration reports that Texas oil production topped 3 million barrels per day in April, for the first time since the late 1970s.
Nearly as much crude flowed from Texas as from Iraq, which was the second largest OPEC producer in April at 3.2 million barrels per day, according to estimates from Bloomberg. The news agency estimates that Iraq’s production fell to 2.9 million barrels in June amid insurgent violence, which would drop it below Texas oil if the state’s supply continued to rise as it did every month since 2011………………………………………..Full Article: Source

Iraq conflict gives a jolt to oil prices

Posted on 02 July 2014 by VRS  |  Email |Print

Oman crude oil on the Dubai Mercantile Exchange last month reached levels not achieved since last September on renewed tensions in Iraq and the potential threat to oil production.
The DME August-delivery Oman crude contract settled at US$109.44 per barrel, up $2.98 from the closing May price of $106.46 when the July contract settled. The monthly average of the DME, which is used by Oman and Dubai to set their official selling price, was $108.08 a barrel, up from $105.65 in May and also the highest since September. The $2.43 a barrel increase was the largest monthly rise since August, as crude oil prices finally broke out of the narrow trading ranges that had characterised the market this year………………………………………..Full Article: Source

Increase in oil prices over the years have spurred innovations that have led to efficient use of energy inputs

Posted on 02 July 2014 by VRS  |  Email |Print

Oil is a critical source of energy. In the past, a major oil price shock meant devastation for economic growth. “Our obsession with oil prices comes with good reason,” writes Morgan Stanley economist Ellen Zentner. “Abrupt and sharp increases in oil prices have played a key role in precipitating recessions in 1973-75, 1980-81, 1990-91, 2001 and 2008-09.”
Recent turmoil in Iraq has sent oil prices much higher. But economists aren’t ready to freak out just yet. “Over time, however, those shocks to the relative price of oil have spurred innovations that have led to a more efficient use of energy inputs,” continued Zentner………………………………………..Full Article: Source

Where The US Got Its Oil in 2013

Posted on 02 July 2014 by VRS  |  Email |Print

As events in Iraq continue to unfold, we have been getting quite a few queries on just how much oil the US imports from Iraq. In my previous post – The Top 10 Oil Producers in 2013 — I showed that even though the US is a major oil producer, we are an even greater oil consumer. So we import millions of barrels a day of oil from over 40 countries — one of which is in fact Iraq.
The Energy Information Administration (EIA) tracks US oil imports and finished product exports, and I have tabulated our Top 10 sources of crude oil imports from 2013. Overall, the US imported 7.7 million barrels per day (bpd) of crude oil in 2013, a 2 million bpd decline since 2008………………………………………..Full Article: Source

Opec’s crude output climbs as members fill in for loss

Posted on 02 July 2014 by VRS  |  Email |Print

Opec crude production climbed for a second month in June as gains in Saudi Arabia and Nigeria made up for the loss of Iraqi barrels, a Bloomberg survey showed.
Production by the 12-member Organisation of Petroleum Exporting Countries (Opec) rose by 278,000 barrels a day to 30.223 million, according to the survey of oil companies, producers and analysts. Last month’s total was revised 43,000 barrels a day lower to 29.945 million because of changes to the Kuwaiti, Libyan and Ecuadorian estimates………………………………………..Full Article: Source

SocGen: Iraq supply shock could drive oil price to $150

Posted on 01 July 2014 by VRS  |  Email |Print

The oil price could spike to $150 per barrel briefly if the conflict in Iraq hits operations in the country’s major southern oil fields, Société Générale (SocGen) has warned. A report by the bank noted that this kind of supply shock could affect up to 2.6 million barrels per day of Iraqi oil exports, CNBC reported.
A disruption of this scale could then spark a co-ordinated release of strategic oil reserves by member states of the International Energy Agency, although SocGen acknowledged this was an unlikely event. Meanwhile, Saudi Arabia could also put more oil onto the market to mitigate the impact on the global economy………………………………………..Full Article: Source

Could Lower Oil Prices Bring Chaos to Oil Exporters?

Posted on 01 July 2014 by VRS  |  Email |Print

The growth in oil production in the United States is forecasted to cause financial strain on oil exporters by lowering oil prices; as Edward Morse put it, “Lost market share and lower prices could pose a devastating challenge to oil producers dependent on exports for government revenue.”
Such statements are common, but they are not very credible. Even if we assume that oil prices will fall (they have not yet), the financial impact on oil exporters will vary—and many oil exporters are much better prepared to cope with lower oil prices than in the 1980s………………………………………..Full Article: Source

OPEC oil output slips in June on Iraq

Posted on 01 July 2014 by VRS  |  Email |Print

OPEC’s oil output has fallen in June from May’s three-month high, a Reuters survey found on Monday, as fighting in Iraq closed its largest oil refinery and technical problems slowed its southern exports.
The slight decline underlines how unrest and outages in the Middle East and Africa are taking their toll on OPEC supply, just as the International Energy Agency is highlighting a greater need for OPEC oil in the rest of the year………………………………………..Full Article: Source

Iraq and the oil market: How much will prices rise?

Posted on 01 July 2014 by VRS  |  Email |Print

It stands to reason that one of the effects of the turmoil in Iraq will be a change in oil prices. Indeed, the violence in OPEC’s second-largest producer has already sent oil prices to 10-month highs.
A recent report from the International Energy Agency (IEA) put it well: “While Iraq’s production is huge, so are the political hurdles it is facing — and nothing provides a clearer example of that risk than the military campaign.” Yet this is no time to panic. For one, Iraq is not the only dark cloud hovering over the world oil market………………………………………..Full Article: Source

Rising Oil Prices Loom Over World Economic Recovery

Posted on 27 June 2014 by VRS  |  Email |Print

The global economy faces a new threat from an old enemy: oil. A spike in the price of crude foreshadowed economic slumps in each of the last four decades. So economists are worrying because the price of Brent crude, considered the benchmark for the industry, recently reached its highest point in nine months—above $115 a barrel.
The jump in price came amid fresh violence in Iraq, the Organization of the Petroleum Exporting Countries’ second-biggest producer after Saudi Arabia. Brent started the year about $6 cheaper………………………………………..Full Article: Source

What would an oil price shock mean for EM?

Posted on 27 June 2014 by VRS  |  Email |Print

Although the violence in Iraq has so far had a muted impact on global oil markets, if prices continue to rise there could be some nasty consequences in store for the more fragile of emerging market economies. And while a spike would hurt countries that rely on energy imports, it won’t necessarily translate into quick and easy economic gains for EM hydrocarbon exporters, say analysts.
The price of a barrel of Brent crude has risen from $109 to $114 since large swaths of Iraq began falling to extremist militias of the Islamic State of Iraq and the Levant (Isis) two weeks ago………………………………………..Full Article: Source

What is driving fear out of nat gas market?

Posted on 27 June 2014 by VRS  |  Email |Print

Rising U.S. shale gas production is driving fear out of the futures market, says Goldman Sachs Group Inc., and will constrain prices for the next two decades. Gone will be the near tripling of costs to $15.78 as in 2005 as traders remain confident the fuel will be there when needed.
Natural gas will trade “largely” at $4 to $5 per million British thermal units for the next 20 years, says Goldman Sachs. Societe Generale SA sees prices at $5 through 2019. Bank of America Corp. forecasts $5.50 for 2017, while BlackRock Inc. projects $4 to $5 for the next decade………………………………………..Full Article: Source

Oil markets poised for record as Iraq crisis deepens

Posted on 26 June 2014 by VRS  |  Email |Print

Oil markets have staged only a muted reaction to the bloody insurgency gripping OPEC’s number two producer Iraq, but analysts warn any disruption to supplies could push prices to record peaks. The offensive led by extremists that has swept through the north of the country and is now threatening to rip Iraq apart has sent prices to nine-month highs but they remain $30 below the peaks hit in 2008.
“This contrasts with the period of civil war in Libya in early 2011 that halted production. Back then, oil prices, volatility and skew all reacted far more aggressively,” said BNP Paribas analysts Harry Tchilinguirian and Gareth Lewis-Davies………………………………………..Full Article: Source

Two Key Issues That Will Determine Next Year’s Oil Prices

Posted on 26 June 2014 by VRS  |  Email |Print

Rising oil production in the US and slowing oil demand growth in the rest of the world were expected to bring Brent oil prices below $100 a barrel, but supply disruptions in the Middle East and North Africa have kept them from happening.
Now that ISIS is holding substantial territory in Iraq, Raymond James analysts have increased their estimates for 2014 and 2015, but they also warn that there is a huge range of possible prices depending on how Mideast conflicts and US politics play out………………………………………..Full Article: Source

The US To Allow Crude Oil Exports; Not That It Will Make Much Difference

Posted on 26 June 2014 by VRS  |  Email |Print

We’ve the news that the US is to allow some crude oil exports for the first time since the ban on them was set in place in the 1970s. This is good news as it removes an economic inefficiency (and removing economic inefficiencies is always good news) but it’s not going to make all that much difference to the nation as a whole.
It’s really all a fight between the independent crude producers and the independent refiners. They, obviously, care about how this goes, crude exports or no crude exports, but it makes very little difference to the rest of us………………………………………..Full Article: Source

What If the U.S. Set Oil Prices?

Posted on 26 June 2014 by VRS  |  Email |Print

For decades now, the U.S. has essentially had to accept the oil prices set by world markets. Starting in 1973 with the OPEC-driven oil shock, the major producers have been foreign countries. If the U.S. wanted the oil, we had to pay the price. But are things starting to change?
U.S. moves toward allowing exports: Federal policy currently prohibits the export of oil, but today we saw the first crack in that wall: two companies have reportedly received permission to export a specific type of unrefined oil. Although the rulings haven’t been officially announced, and the Commerce Department says there’s been “no change in policy on crude oil exports,” the implications are clear………………………………………..Full Article: Source

World saved $3.5 trillion from emergency oil stocks: IEA

Posted on 26 June 2014 by VRS  |  Email |Print

The world has saved $3.5 trillion over the last 30 years by maintaining emergency oil stocks to offset supply shocks and curb price surges, the West’s energy watchdog said on Wednesday. The International Energy Agency (IEA) said in a report that emergency oil stocks held by member and non-member states have acted as an ” insurance” against oil supply disruptions.
Spiralling violence in key oil producer Iraq in recent weeks has pushed global oil prices to nine-month highs, reviving speculation of a release of strategic stocks in case of severe supply disruptions………………………………………..Full Article: Source

Oil price hike about fear, not Iraq output: OPEC chief

Posted on 25 June 2014 by VRS  |  Email |Print

The head of OPEC, the group of major oil exporters, says recent crude price increases are to blame on market fears caused by the crisis in Iraq but not on a drop in output. OPEC Secretary General Abdullah Al-Badry said Tuesday that Iraq is “still producing as normal,” with 95 per cent of its capacity in the country’s south being unaffected by the violence.
The price for a barrel of Brent crude, the key international benchmark, has risen from a stable level of $110 held over the past four years to about $115 following the takeover of some parts of Iraq by Sunni insurgents………………………………………..Full Article: Source

OPEC secretary general says no shortage of oil

Posted on 25 June 2014 by VRS  |  Email |Print

OPEC is ready to pump extra oil in the event of any supply disruptions caused by Iraq and its biggest producer, Saudi Arabia, can ramp up to capacity if needed, oil officials said on Tuesday.
For now the market is well-supplied and prices above $114 a barrel are the result of market nervousness, OPEC Secretary General Abdullah al-Badri said. An official from Saudi Arabia, the only OPEC member with significant spare capacity, said it was committed to supplying the market if needed………………………………………..Full Article: Source

Major Global Oil Price Shock Unlikely Despite Iraq Violence, says Standard Life

Posted on 25 June 2014 by VRS  |  Email |Print

Global oil prices are unlikely to experience a major shock in the near future despite continuing violence in Iraq, says Standard Life. In a market briefing report for investors, the financial firm said that even if the political situation continues to diminish Iraqi oil production is unlikely to be damaged further.
“After a period of unusual calm in global oil markets, the benchmark ICE Brent oil spot price spiked to just under $116 per barrel (bbl) late last week, its highest level since September last year,” said analysts in a statement………………………………………..Full Article: Source

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