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Why Saudi Arabia Makes So Much Money on Oil

Posted on 14 July 2015 by VRS  |  Email |Print

Hint: it has to do with how many new wells the kingdom has to drill each year compared to other oil producers. A lot of reasons have been given as to why Saudi Arabia is allowing the oil price to not only fall but remain weak. Some suggest it’s because it’s seeking to harm emerging rivals like the U.S. and Russia.
Others have suggested that the move is because it wants to keep its regional rival Iran at bay. While both could be true, the reason Saudi Arabia isn’t worried about the oil price is because it doesn’t need a high oil price to justify the drilling costs needed to maintain or grow its production. This is due to the fact Saudi Arabia only needed to drill 399 new wells last year just to keep its daily production at 11.4 million barrels of oil………………………………………..Full Article: Source

Will China stocks burn oil?

Posted on 14 July 2015 by VRS  |  Email |Print

It took until July, but the crude-oil markets have managed to ignore Chinafor most of the year so far. The price volatility that saw an 11-percent selloff in oil futures in the first quarter followed by a 25-percent climb in the second quarter was driven primarily by uncertainties regarding the situations in Greeceand Iran along with inconclusive data in the U.S. on rig counts and inventory levels.
Meanwhile, China, one of the largest consumers of crude oil in the world, has been largely overlooked. To the extent that oil investors were paying attention to China, it was mostly as a source of bullishness………………………………………..Full Article: Source

Oil price has further to fall, says IEA

Posted on 13 July 2015 by VRS  |  Email |Print

Oil prices are set to come under further pressure from easing global demand and an expanding glut of crude while a rebalancing of the markets may last well into next year, the International Energy Agency has said. The IEA said it expected global demand growth to slow next year to 1.2m per day (bpd) from 1.4m this year - far less than needed to balance stubbornly growing non-OPEC and OPEC supply.
“The bottom of the market may still be ahead,” the IEA said in its monthly report. “The rebalancing that began when oil markets set off on an initial 60pc price drop a year ago has yet to run its course. Recent developments suggest that the process will extend well into 2016………………………………………..Full Article: Source

Oil prices fall as Iran nuclear deal seems likely

Posted on 13 July 2015 by VRS  |  Email |Print

Oil prices opened up lower on Monday as Iran and six world powers were close to nailing down a nuclear deal, while Greece and its creditors failed to find a bailout agreement over the weekend. The potential of Iran soon adding to global oil oversupply and the demand side weakening over China and Europe led several analysts to say that crude would fall further.
Iran and six world powers were on the brink of finding a nuclear deal that would bring sanctions relief in exchange for curbs on Tehran’s nuclear program. In Europe, the Greek debt crisis continued as political leaders argued late into the night at an emergency summit, so far without result………………………………………..Full Article: Source

Saudi Arabia borrows $4bn as oil price reality hits home

Posted on 13 July 2015 by VRS  |  Email |Print

Saudi Arabia needs an oil price of $105 a barrel to meet planned spending requirements, but the average price for the year is estimated at $58 a barrel, John Sfakianakis, director for the Gulf region at Ashmore, a fund manager said. “If the government continues business as usual and draws down like this it will deplete reserves faster than expected, by the end of 2018 or early 2019,” he added.
Saudi Arabia has borrowed $4bn from local markets in the past year, selling its first bonds for eight years as part of efforts to sustain high levels of public spending as oil prices slump. Fahad al-Mubarak, the governor of the Saudi Arabian Monetary Agency, said the government would use a combination of bonds and reserves to maintain spending and cover a deficit that would be larger than expected………………………………………..Full Article: Source

Oil glut: Greece, Iran, China drive down energy prices

Posted on 13 July 2015 by VRS  |  Email |Print

Fear and fundamentals are driving down oil prices. The fear arises from the unknown risks of the Greek and Iranian negotiations, and the panic in China’s stockmarkets. These fears have acted as triggers, bringing much greater clarity to the fundamentals of an oversupplied oil market.
Oil has lately become a very volatile commodity. Early this year, it fell below $US50 a barrel. By mid-May, it had rebounded to $US67 a barrel, which was thought to be a “new normal” on which plans could be based. But in the last few weeks, prices fell almost 20 per cent — though they’ve bounced back a little in the past few days………………………………………..Full Article: Source

Indonesia eyes return to Opec

Posted on 13 July 2015 by VRS  |  Email |Print

Indonesia is seeking to rejoin Opec to get access to cheaper oil supplies as demand soars and domestic production falls, but critics say the move is an unwelcome distraction from efforts to overhaul the country’s troubled energy sector. Resource-rich Indonesia, Southeast Asia’s largest economy, was part of the Organisation of the Petroleum Exporting Countries (Opec) for almost 50 years until suspending its membership in 2009 after becoming a net oil importer.
The switch to becoming an importer came as domestic demand soared and output dropped due to a lack of investment from foreign companies, put off by complex regulations, corruption and growing economic nationalism………………………………………..Full Article: Source

IMF sees average oil price of $59 per barrel in 2015

Posted on 10 July 2015 by VRS  |  Email |Print

A report from the IMF (International Monetary Fund) has found oil prices have rebounded more than expected, after falling by more than half a year ago. The findings were revealed in the latest World Economic Outlook which said the rise in the price of oil reflected higher demand and expectations that oil production growth in the US would slow faster than previously forecast.
It predicted the average price of oil to be $59 per barrel over the year. But the IMF warned despite the rise in oil prices, inflation in advanced economies remained broadly stable and well below inflation objectives………………………………………..Full Article: Source

Oil prices have fallen again, and a ‘negative feedback loop’ will push them even lower

Posted on 10 July 2015 by VRS  |  Email |Print

This week’s tumble in oil prices might not be the end of it. “While significant uncertainty remains around what long-term price levels will ultimately generate a new set of equilibria to create stability in both the macroeconomic and micro commodity markets, we do have confidence that they are likely lower than current long dated price levels,” Goldman Sachs’ Jeff Currie said.
Currie added that with credit remaining easily accessible for oil drillers and prices stabilized, producers are still pumping oil into an already oversupplied market. And so to Currie, the more than 50% decline we saw in oil prices last year still hasn’t balanced the market………………………………………..Full Article: Source

OPEC’s silence is deafening

Posted on 10 July 2015 by VRS  |  Email |Print

Well I see that the rest of the world is trying to hold its ground this morning, but it’s still America that has to lead. After the EIA stats, you’d think that OPEC would finally get the picture. It’s as clear as Justin Bieber’s boat picture and the longer they hold out on a production cut, the longer they look a lot like the highlight of that pic.
In the United States we’re continuing to support the OPEC oil portfolio by adjusting week to week who falls in favor and gets to the United States. Last week the Saudis (+286K b/d), Iraq (+102K) and finally Nigeria (27K) found their way into the refineries and pockets of U.S. consumers………………………………………..Full Article: Source

Will OPEC allow Iran to increase oil supply?

Posted on 10 July 2015 by VRS  |  Email |Print

Iran, as never before, is close to resolve its problems related to the economic sanctions. Despite the protraction of the talks between the P5+ 1 (the US, UK, Russia, China, France and Germany) and Iran, there are quite real chances for success. One of the results of lifting the sanctions imposed on Iran will be the country’s access to the world energy resources’ market.
Iranian authorities have already expressed readiness to double the oil supply from the current 1.2 million barrels per day to 2.3 million barrels if the sanctions are lifted. The country started to prepare the ground for his several months ago: it said that OPEC member states should make room for Iran to allow it to increase the export. Currently, Iran calls for returning to the individual quotas for oil production for the OPEC members………………………………………..Full Article: Source

Oil under $60 beyond 2016 suggests market rethinking shale

Posted on 09 July 2015 by VRS  |  Email |Print

The almost 10 percent nosedive in headline oil prices this week has many hallmarks of a shocking but short-lived slump, triggered by a confluence of external events and exacerbated by safety-seeking investors and momentum-chasing traders.
By Tuesday afternoon, the crowded race to the exit was winding down, with prices recovering from three-month lows as traders reassessed the factors they blamed for the worst slide in four months: Greece’s debt woes; China’s stock market meltdown; talks with Iran over its nuclear program; a stronger dollar; a rise in the number of U.S. oil rigs; a breach of key technical triggers………………………………………..Full Article: Source

Goldman: $50 oil crushes hopes for U.S. drilling recovery this year

Posted on 09 July 2015 by VRS  |  Email |Print

Goldman Sachs says lower oil prices will probably disappoint the U.S. petroleum industry’s hope of a drilling recovery in the second half of the year. The U.S. oil price’s recent fall to around $52 a barrel will rule out the possibility that oil companies will send 100 to 150 drilling rigs to U.S. oil fields this year – a bullish market expectation born out of two months of stable $60 oil, which ended late last week. Goldman Sachs analysts wrote they project only 20 to 50 rigs will return to work by the end of the year.
That $8-a-barrel difference could have big implications for the oil field job market: Each rig employs scores of workers, directly and indirectly. The nation’s land rig count has fallen 61 percent from its peak last October, and predictably, the oil field service industry’s workforce has shrunk dramatically since the beginning of the year, with the four biggest firms cutting a combined 49,500 jobs in the first half of the year………………………………………..Full Article: Source

The Story Behind Inflated World Oil Reserves

Posted on 09 July 2015 by VRS  |  Email |Print

There’s an old joke about lab rats in which the teller says he or she secretly suspects that all lab rats are prone to cancer and so all research about the risk of cancer in humans based on tests in rats is likely useless. The Committee for Independent Research and Information on Genetic Engineering, a European-based research group, thought it would look into such a possibility.
Last week the group released its findings and that joke became a reality. The diet fed to most lab rats is so laced with pesticides, heavy metals, genetically engineered feed and other man-made contaminants that lab rats worldwide are indeed at much higher risk of developing cancer and other diseases and disabilities just from the food they are reared on………………………………………..Full Article: Source

Oil market: The Iranians are coming

Posted on 09 July 2015 by VRS  |  Email |Print

The decade-long standoff between the West and Iran, with respect to its nuclear programme, is about to enter a new phase of possible resolution - although the July 7 deadline has been extended to the 10th to reach an agreement. This is the second time a deadline has been missed and there may be a bumpy road ahead.
The permanent members of the Security Council plus Germany have been negotiating with Iran since December 2013 and they arrived at a framework for a final deal last April. It was supposed to be finalised by the end of June, then July 7, and now July 10………………………………………..Full Article: Source

Oil is grounded in a sub-$60 bear market

Posted on 08 July 2015 by VRS  |  Email |Print

The oil price is grounded in a sub-$60 bear market. On July 6, Brent crude fell over 6 percent on the back of worries about Greece and the prospect of an Iran nuclear deal. The latter has a much bigger, if delayed, impact. Oil steadied on July 7 to just above $57 a barrel, but plenty of other factors are likely to keep a lid on prices.
On one level, the steep drop looks overdone. True, the outcome of the Greek referendum has shortened the odds on its exit from the euro zone. But equity and bond markets greeted the news with relative calm on the assumption that the European Central Bank will respond to any signs of contagion by cranking up bond purchases………………………………………..Full Article: Source

Why oil could revisit its lows and then some

Posted on 08 July 2015 by VRS  |  Email |Print

After another volatile session, oil looks increasingly set to test its lows of the year, and that could mean a temporary decline of near 20 percent. Analysts say crude futures could continue to trade lower for now if the twin pressures on risk markets from Greece and China continue, and Iran succeeds in striking a nuclear deal that would ultimately mean more oil would hit an already oversupplied crude market.
On Tuesday, West Texas Intermediate futures for August traded higher early in the session and then plunged, touching the psychologically key $50 area before again reversing course. Already about 8 percent lower than at the start of the week, WTI futures lost just 20 cents Tuesday to finish at $52.33 per barrel………………………………………..Full Article: Source

Cramer: $30 oil could be around the corner

Posted on 08 July 2015 by VRS  |  Email |Print

While most investors are freaking out about Greece, Jim Cramer thinks it would be more prudent to take a closer look at the price of oil, which has much more of a direct impact to U.S. companies. The price of oil has been hit hard lately, dropping to about $50 during the day on Tuesday from $59 a week ago.
Cramer is still in shock, because when oil was hovering around $60 he was convinced that the independent oil companies might provide some real leadership in the market. But after the latest session of crude being put through the meat grinder, Cramer’s opinion has been thrown out the window………………………………………..Full Article: Source

OPEC keeps plugging away

Posted on 08 July 2015 by VRS  |  Email |Print

Output from Saudi Arabia and Iraq helped lead to the fourth straight monthly increase from the Organization of Petroleum Exporting Countries, a survey found. A survey by energy reporting service Platts finds OPEC production in June reached 31.3 million barrels per day, a 5.5 percent increase from May and the fourth straight month of gains from the 12-member group.
Saudi Arabia, the de facto leader of OPEC, produced an average 10.3 million bpd in June, about 1 million barrels more than the United States. The increase in production from U.S. shale basins is keeping markets weighted on the supply side. Saudi Arabia has said it would keep its output higher despite the glut in an effort to stay competitive and keep its Asian consumers satiated………………………………………..Full Article: Source

In the maelstrom of oil price news, has bias triggered trading mistakes? Petrodollars

Posted on 07 July 2015 by VRS  |  Email |Print

How often did one read this year that the oil market is in terrible shape – weak, lackluster, oversupplied, bearish, limp? That there were sharp losses last year as prices collapsed, spiraled down, crashed? Most of the words used to describe oil getting cheaper had a negative connotation.
To any casual observer or consumer of oil, however, the market could be seen in wonderful shape with pump prices more accessible than before. A commodity that is being produced in a far greater quantity than can be consumed has seen its price go down. So is there a bias in oil journalism focusing more on the potential gains or losses to producers or those “long” oil? A significant place to look is the trend of long-only investors pouring into oil futures contracts in various forms, which began in the mid-2000s………………………………………..Full Article: Source

OPEC Pumps 31.28 Million Barrels of Crude Oil Per Day in June

Posted on 07 July 2015 by VRS  |  Email |Print

Oil production from the Organization of the Petroleum Exporting Countries (OPEC) totaled 31.28 million barrels per day (b/d) in June, up 170,000 b/d from May and the fourth consecutive monthly increase since February, as Saudi Arabia and Iraq pushed out more oil, a Platts survey of OPEC and oil industry officials and analysts showed Monday.
“This is the highest monthly level since August 2012, when the survey estimated output at 31.54 million b/d,” said Margaret McQuaile, senior correspondent for Platts, a leading global provider of energy and commodities information. “At that point, output was on the way down. Now, output seems to be on the way up, and at a time when the market could be looking at a lot more oil from Iran.” The June total leaves OPEC pumping nearly 1.3 million b/d in excess of its official 30 million b/d ceiling. (Press Release)

Oil crushed by worries on Europe, Iran

Posted on 07 July 2015 by VRS  |  Email |Print

Oil is expected to spiral even lower, as concerns about global growth collide with record production and the potential for more supply from Iran. West Texas Intermediate crude futures plunged 7.7 percent Monday and were in official correction territory, with a decline of more than 11.5 percent since July 1. Brent was more than 6 percent lower.
Oil plummeted on fresh worries that Greece’s anti-austerity referendum could lead to its exit from the euro zone, creating negative fallout across the region’s economy. “The drop in oil is going to stop, but not for now,” said Francisco Blanch, head of global commodities and derivatives research at Bank of America Merrill Lynch. “You’ve got every cylinder pointing south. You don’t want to try to grab this falling knife.”……………………………………….Full Article: Source

Oil Prices Tumble Nearly 8%

Posted on 07 July 2015 by VRS  |  Email |Print

Oil prices on Monday skidded to their biggest single-day declines in more than three months, as gyrations in Chinese stocks and the prospect of more crude from the U.S. and Iran revived worries about the global supply glut.
China’s stock markets have plunged in recent weeks, which sparked worries among investors about oil demand in the world’s second-largest consumer. Iranian officials also have signaled they want to export even more crude than traders had expected if diplomats can hammer out a final deal on Iran’s nuclear program in the coming days………………………………………..Full Article: Source

Iran Wants to Double Oil Exports After Sanctions Lifted

Posted on 06 July 2015 by VRS  |  Email |Print

Iran wants to double its crude exports soon after sanctions are lifted and is pushing other members of the Organization of the Petroleum Exporting Countries to renew the cartel’s quota system, a top Iranian official said. Both developments could set up a clash with Saudi Arabia, which is scrambling to raise its own export numbers and has opposed the return of production limits on individual OPEC members.
Iran’s efforts underscore how the country’s full return to the export market would upend the status quo among leading producers if Tehran clinches a deal with six world powers that would lift sanctions in exchange for curbs on its nuclear activities………………………………………..Full Article: Source

Russia Seen as Biggest Oil-Market Loser When Iran Comes Back

Posted on 06 July 2015 by VRS  |  Email |Print

In Iran’s push for a nuclear deal, it’s had few better allies than Moscow. But if an agreement is reached this week, President Vladimir Putin’s regime will have at least one reason to reflect on its support.
Russia, which vies with Saudi Arabia and the U.S. to be the world’s largest oil producer, has the most to lose when Iran returns to the global energy market, according to a dozen analysts and executives at oil companies, banks and trading houses interviewed by Bloomberg. “Iran is going to be competing in Europe head-on with Russia,” said Ed Morse, head of commodities research at Citigroup Inc………………………………………..Full Article: Source

International companies ’seek’ Iranian oil fields

Posted on 06 July 2015 by VRS  |  Email |Print

Some European countries have already started direct talks with Iran’s oil officials regarding future relations after the embargo on Iran is lifted. Shell, Eni and Russian Luke Oil companies have launched discussions both in Vienna and Tehran. American companies have not yet taken a step in this regard but they are on alert waiting by the second for the official announcement of lifting of the embargo on Iran.
The investments of international oil companies in this country dates back to many years. They always had their ups and downs throughout their longstanding history since year 1901 starting with the first concession; then the rest of the major American oil companies poured in followed by Royal Dutch Shell and Total of France………………………………………..Full Article: Source

OPEC output update

Posted on 06 July 2015 by VRS  |  Email |Print

OPEC recorded its highest output since August 2012 in June as the bloc pumped over 32.1 million b/d. Total production is 2 million b/d higher than OPEC’s recently rolled over production target and is 744k b/d higher than a month earlier, according to Emirate NBD.
The biggest increase came from Iraq, where production surged by 567,000 b/d to 4.39 million b/d, its highest ever recorded output. Saudi Arabia raised production by 150k b/d to 10.45m b/d as OPEC’s largest producer maintained its policy of increasing output to secure market share………………………………………..Full Article: Source

New oil bull market in sight as Brazil, Iraq cut output targets

Posted on 03 July 2015 by VRS  |  Email |Print

Massive downward revisions to oil output in Brazil and Iraq have increased the risks for oil markets of going from the current feast to famine within just a few years, leading to a price spike that would give a new boost to the U.S. shale industry.
Brazil and Iraq had been expected to add over 2 million barrels per day to global supply by 2020 and another 2.5 million by 2025, becoming the two biggest contributors to help meet rising global demand, according to the long-term forecast of the International Energy Agency………………………………………..Full Article: Source

Oil Oversupply Meets Rising Demand in Quietest Market Since 2013

Posted on 03 July 2015 by VRS  |  Email |Print

The sleepiest oil market since 2013 will probably limp through the second half of the year as well. Crude traded in a $5 range in June, the narrowest in 19 months. Volume was the lowest since December and open interest - - the number of futures contracts outstanding — was the least since January.
New York-traded futures, which have swirled around $60 a barrel for the past two months, will average about $59 in third quarter and $63 in the fourth, according to forecasts of 22 analysts compiled by Bloomberg. Neither the potential return of Iranian crude to the market nor the long-anticipated decline in U.S. production is stirring a reaction………………………………………..Full Article: Source

Oil Price Forecast: Shale 2.0 Will Keep Supply Abundant

Posted on 03 July 2015 by VRS  |  Email |Print

When we first started getting substantial oil from fracking and horizontal drilling, the news about costs indicated that oil production would decline at a fast rate when prices were low, pushing prices back up. New data, however, argue for rising productivity of shale oil development—meaning plenty of petroleum to keep prices low.
Price cycles vary widely across industries based on how much of total cost is up-front expense versus on-going expense, as I explained in the best book about economics for business. When costs are mostly front-loaded (oil, airlines, ocean shipping) and capital assets last a long time, then price cycles are volatile………………………………………..Full Article: Source

Oil Falters After Rig Count Grows

Posted on 03 July 2015 by VRS  |  Email |Print

The amount of rigs drilling for oil in the U.S. rose for the first time in seven months, triggering a slump in crude oil prices to their lowest settlement in two months. U.S. oil producers added 12 rigs last week, breaking 29 straight weeks of cuts, in response to prices that have rebound to- and stayed at $60 a barrel since late April.
That convinced producers to end months of massive cutbacks that started after the U.S. shale drilling boom flooded the market and sent prices crashing. But the increase in rigs is scaring investors and analysts who have warned that oil could be on the verge of another sharp fall. Production has kept making small gains even as drilling has declined and stockpiles have hit historic levels around the world………………………………………..Full Article: Source

China launches new oil and gas trading platform - Xinhua

Posted on 02 July 2015 by VRS  |  Email |Print

A new trading platform for oil and gas was launched in China on Wednesday, state media reported, as the world’s largest energy consumer looks to extend its influence over global commodity pricing. The Shanghai Petroleum and Natural Gas Exchange (SHPGX), which is registered in the Shanghai free trade zone, will initially only handle natural gas transactions during a test run.
“We expect (gas) trading volumes at SHPGX would range from 5 billion cubic meters to 6 billion cubic meters in second half of 2015 and annual trading volumes at SHPGX would be more than 10 billion cubic meters in 2016,” Guo Xu, an official with SHPGX, was quoted as saying by the official Xinhua News Agency, which is a shareholder in the exchange………………………………………..Full Article: Source

Iran eyes $100bn of western investment in oil industry

Posted on 02 July 2015 by VRS  |  Email |Print

Iran is finalising a contract system to secure about $100bn of new oil and gas deals with western companies if sanctions are lifted. The move marks a big shift for a regime traditionally wary of of foreign groups participating in its energy sector.
Mehdi Hosseini, an adviser to Iran’s oil ministry who has been drafting a new energy contract for the past two years, said he expected President Hassan Rouhani to approve it in the coming months………………………………………..Full Article: Source

U.S. crude prices tumble most since April on surprise stock build

Posted on 02 July 2015 by VRS  |  Email |Print

U.S. crude prices fell 4 percent on Wednesday, posting their biggest daily drop since April after oil stockpiles in the United States rose for the first time in more than two months. The selloff was a jolt to crude traders and investors who have seen U.S. prices in fairly tight trading ranges over the past 10 weeks versus sharper moves down in European oil.
But many were not counting yet on a sustained break lower, pointing to the summer demand for oil in the United States, which seasonally supports prices through August. “I don’t think the transition to another price freefall will happen as quickly this time,” said Scott Shelton, a commodities specialist, who also trades energy, for broker ICAP in Durham, North Carolina. “I see a slower grind lower and I don’t think this the tipping point.”……………………………………….Full Article: Source

Oil Prices Hit Two-Month Low on U.S. Inventory Data

Posted on 02 July 2015 by VRS  |  Email |Print

The U.S. oil glut is growing again, spurred by a sharp ramp up in production and threatening to put renewed pressure on crude prices. U.S. crude-oil stockpiles rose last week for the first time in nine weeks, according to a Wednesday report from the Energy Information Administration.
That unexpected increase comes on the heels of data released Tuesday showing that the nation’s oil producers ramped up output in April to the fastest pace since 1971. The news sent oil prices skidding to their lowest level in two months on Wednesday………………………………………..Full Article: Source

OPEC oil output hits three-year high in June on Iraq: Reuters survey

Posted on 02 July 2015 by VRS  |  Email |Print

OPEC oil supply in June has climbed to a three-year high due to record or near-record output from Iraq and Saudi Arabia, a Reuters survey found, underlining the focus of the group’s top exporters on market share.
The boost from the Organization of the Petroleum Exporting Countries puts output further above its target of 30 million barrels per day (bpd) and comes despite outages in Libya and Nigeria that curbed supplies. OPEC supply has risen in June to 31.60 million bpd from a revised 31.30 million bpd in May, according to the survey, based on shipping data and information from sources at oil companies, OPEC and consultants………………………………………..Full Article: Source

Why an Iran deal could mean lower oil prices

Posted on 01 July 2015 by VRS  |  Email |Print

A final accord to curtail Tehran’s nuclear ambitions could lead to a glut of Iranian oil hitting an already “oversupplied market,” which would serve to pressure prices, oil expert John Kilduff said Tuesday, as negotiators in Vienna face a deadline that’s expected to be extended.
Returning to the talks after consultations at home, Iran ’s chief diplomat insisted Tuesday he has a mandate to finalize a nuclear agreement, despite increased signs of backtracking. “Right now the happy talks is flowing … that things are looking good for a deal,” said Kilduff, founding partner of Again Capital, an alternative investment manager specializing energy and metals………………………………………..Full Article: Source

Oil Prices Gain in Second Quarter

Posted on 01 July 2015 by VRS  |  Email |Print

U.S. oil prices rose on Tuesday, posting a 25% quarterly gain, after Iran and six world powers extended the deadline for nuclear talks until July 7. Prices posted their largest single-quarter percentage gain since 2009 on expectations of a drop in U.S. production and growing demand after slumping to near-six-year lows earlier in the year.
So far, however, U.S. oil output hasn’t slowed, and prices have stabilized around $60 a barrel in recent weeks as traders looked for direction. The U.S. benchmark fell 1.4% this month. The Iranian talks, aimed at blocking the country’s path to a nuclear weapon in exchange for lifting international sanctions, could eventually allow Iran to increase its oil exports………………………………………..Full Article: Source

BP’s chief economist sees U.S. shale weathering oil surplus

Posted on 01 July 2015 by VRS  |  Email |Print

Shale output in the United States will prove resilient to low oil prices likely to be prolonged by the prospect of half a million barrels per day of Iranian crude making its way back to the market, BP’s chief economist said on Tuesday.
Talks in Vienna between world powers trying to end sanctions on Tehran in return for limits on Iran’s most sensitive nuclear activities could bring a significant increase in Iranian oil exports. BP’s Spencer Dale, however, told Reuters that it would probably take time for any easing of sanctions to filter through to oil markets if an Iran deal is agreed………………………………………..Full Article: Source

Oil uptrend breakout

Posted on 01 July 2015 by VRS  |  Email |Print

The NYMEX oil price remains bullish and could be headed for $63, technical analysis shows. It’s developed a double bottom pattern near $45 as the downtrend consolidation developed. When the height of the double bottom is measured, this value is projected above the peak of the double bottom pattern near $53. This pattern is also called a W trend reversal pattern.
The upside target for the double bottom rebound is near $63. This target has not been achieved as the price has consolidated between $58 and $61. But this remains a bullish chart pattern because support at $58 is consistent. The consolidation behavior is a pause in the full development of the double bottom pattern so the $63 target remains achievable………………………………………..Full Article: Source

New oil bull market in sight as Brazil, Iraq cut output targets

Posted on 01 July 2015 by VRS  |  Email |Print

Massive downward revisions to oil output in Brazil and Iraq have increased the risks for oil markets of going from the current feast to famine within just a few years, leading to a price spike that would give a new boost to the U.S. shale industry.
Brazil and Iraq had been expected to add over 2 million barrels per day to global supply by 2020 and another 2.5 million by 2025, becoming the two biggest contributors to help meet rising global demand, according to the long-term forecast of the International Energy Agency………………………………………..Full Article: Source

Is there a huge investing opportunity in the oil markets?

Posted on 01 July 2015 by VRS  |  Email |Print

A rare occurrence now happening on oil markets might be a huge opportunity for investors who play it right, says Tim Pickering, president and chief investment officer at Auspice Capital Advisors Ltd.
Pickering said Canadian crude prices are currently in “backwardation,” which means the future price is expected to be lower than the spot price, but every other crude oil market in the world is in contango, meaning the future price is expected to be higher than the spot. “For long-term investors in oil, this is a positive thing because it means they will not lose money as the market rolls over time,” he said in a commentary to clients………………………………………..Full Article: Source

OPEC output surges as Iraq accelerates production

Posted on 01 July 2015 by VRS  |  Email |Print

Iraqi crude production climbed to a record this month, helping send OPEC output to the highest level since August 2012. Output by the Organisation of Petroleum Exporting Countries climbed 744,000 barrels to 32.134 million a day this month, according to a Bloomberg survey of oil companies, producers and analysts. Last month’s total was revised 189,000 barrels lower to 31.39 million a day, because of changes to the Saudi, Iraqi, Algerian and Nigerian estimates.
OPEC has been boosting supply as it seeks to force higher-cost producers to cut output. The 12-member group agreed on June 5 to retain its collective output target of 30 million barrels a day, a level that it’s exceeded for 13 months, according to data compiled by Bloomberg………………………………………..Full Article: Source

OPEC oil output hits 3-year high in June on Iraq - Reuters survey

Posted on 01 July 2015 by VRS  |  Email |Print

OPEC oil supply in June has climbed to a three-year high due to record or near-record output from Iraq and Saudi Arabia, a Reuters survey found, underlining the focus of the group’s top exporters on market share.
The boost from the Organization of the Petroleum Exporting Countries puts output further above its target of 30 million barrels per day (bpd) and comes despite outages in Libya and Nigeria that curbed supplies. OPEC supply has risen in June to 31.60 million bpd from a revised 31.30 million bpd in May, according to the survey, based on shipping data and information from sources at oil companies, OPEC and consultants………………………………………..Full Article: Source

How Will An Iran Deal Impact The Global Oil Market?

Posted on 30 June 2015 by VRS  |  Email |Print

Analysts at Morgan Stanley Research recently polled 299 investors about the impact that a potential Iranian nuclear deal would have on the global oil market. Analyst Haythem Rashed summarized the survey results and noted important upcoming deadlines for oil investors to watch when it comes to the Iran negotiations.
Morgan Stanley asked poll participants how much Iranian oil exports will increase by the end of 2015 and into 2016. The most popular choice for 2015 was an incremental Iranian export increase of 200kb/d. Nearly 40 percent of respondents anticipate Iranian exports to increase by 200-300kb/d, while 15 percent of those polled see no change to Iran’s oil exports this year………………………………………..Full Article: Source

Will Opec gain with higher production?

Posted on 30 June 2015 by VRS  |  Email |Print

What is common between the production and marketing approaches of the 12-member Organization of the Petroleum Exporting Countries (Opec) and the world’s three largest producers of iron ore - Vale, BHP Billiton and Rio Tinto? The fall in prices of crude oil from $115 a barrel in June 2014 to $64 now and of iron ore from $205 a tonne to $62.5 have not proved enough disincentive for leading producers of the two most globally traded commodities to apply a production brake.
Opec and the ore triumvirate do not see merit in restricting production at lowest cost enterprises, which will allow high-cost producers to stay in business. As big miners remain engaged in commissioning large new capacity and others that cannot abandon projects nearing completion, the seaborne ore glut could rise to 260 million tonnes (mt) by the end of next year………………………………………..Full Article: Source

Oil Speculators Least Bullish in 10 Weeks on Iran Talks

Posted on 30 June 2015 by VRS  |  Email |Print

Hedge funds are the least bullish on crude in 10 weeks as talks resumed on a nuclear accord with Iran that could lift sanctions and swell supply. Money managers trimmed their net-long wagers on West Texas Intermediate by 1.3 percent in the week ended June 23, U.S. Commodity Futures Trading Commission data show.
Shorts rose 8.9 percent while long positions increased 0.7 percent. Speculators curbed bullish bets on Brent crude, the European benchmark, to the lowest in three months. U.S. Secretary of State John Kerry and Iranian Foreign Minister Mohammad Javad Zarif met June 27 in Vienna. Iran says it could double oil exports from 1 million barrels a day within six months if sanctions are lifted………………………………………..Full Article: Source

Saudi Kingdom, Russia vie for global oil market foothold

Posted on 29 June 2015 by VRS  |  Email |Print

In the rapidly changing geopolitical environment, Saudi Arabia and Russia are forging ahead - fostering a closer relationship - in major sectors including the all important energy sector. When the Saudi Deputy Crown prince Mohammad bin Salman, accompanied not only by the Foreign Minister Adel bin Jubeir but also the Petroleum Minister Ali Al-Naimi called on Russian President Vladimir Putin in St. Petersburg on June 18, six major deals were signed between the world’s two top crude producers.
The deals ranged from agreement in defense sector to enhanced cooperation in energy development. It also covered greater cooperation on nuclear energy development. Citing unnamed sources, Al-Arabiya reported the kingdom planned to build 16 nuclear reactors and Russia has agreed to play a significant role in operating them………………………………………..Full Article: Source

US becomes biggest oil producer in 2014, surpasses Saudi Arabia

Posted on 29 June 2015 by VRS  |  Email |Print

The United States has overtaken Saudi Arabia as the world’s biggest oil producer in 2014 while India has recorded the highest growth in energy consumption among major economies. The US produced 15.9 per cent more oil in 2014 at 11.6 million barrels of oil per day to topple Saudi Arabia’s 11.5 million bpd production, according to BP Plc’s Statistical Review of World Energy released on Wednesday.
Russia with 10.8 million bpd oil production was placed third. The US surpassed Russia as the world’s largest producer of oil and gas, producing 1,250.4 million tons of oil and oil equivalent natural gas in 2014. This compared with Russia’s 1,062 million tons of oil equivalent. BP said the US shale revolution helped it overtake “Saudi Arabia as the world’s biggest oil producer and surpass Russia as the world’s largest producer of oil and gas.”……………………………………….Full Article: Source

Experts say Iran oil output to rise 500 bpd before 2016

Posted on 29 June 2015 by VRS  |  Email |Print

Many may have already started to speculate when economic sanctions against Iran will be lifted in case the country manages to seal a deal with the P5+1 group of countries. Nevertheless, some have even gone further to speculate when Iran will see the economic objectives it has set for a post-sanctions era become materialized.
Many may agree that the most important objective that Iran has set for itself is to increase its oil production capacity. Iranian officials had already voiced optimism that the country will be able to increase its crude oil production by 500,000 barrels per day before the end of 2015 if anti-Iran sanctions are lifted. However, what many may want to know is what the impacts of an increased Iran oil production will be on the market already under the pressure of excessive supplies………………………………………..Full Article: Source

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