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What the oil price crash means for investors

Posted on 18 February 2015 by VRS  |  Email |Print

Why has the oil price crashed? The oil price has nearly halved over the last eight months. The cost of a barrel of Brent crude, the most common measure of oil, hit $115 last June but stands at just $62 today. Price falls this dramatic are down to one of two things: a drying-up of demand or a glut of supply.
Experts side with the latter. Figures for oil demand can paint a confusing picture. The International Monetary Fund (IMF) has estimated that between 35% and 40% of the fall in the oil price in the second half of 2014 can be accounted for by a decline in demand. However, monthly data from the US Energy Information Association shows global oil demand rising at a steady pace up to December………………………………………..Full Article: Source

Oil prices to recover partially from record low: IEA

Posted on 18 February 2015 by VRS  |  Email |Print

Global oil prices are expected to recover only partially from their current $50-$60 a barrel range, the International Energy Agency (IEA) says in its five-year forecast. The agency said on Tuesday that crude prices will continue to remain well below the level of more than $100, last seen in June 2014.
“The global oil market looks set to begin a new chapter of its history, with markedly changing demand dynamics, sweeping shifts in crude trade and product supply, and dramatically different roles for Organization of the Petroleum Exporting Countries, OPEC, and non-OPEC producers in regulating upstream supply,” the report said………………………………………..Full Article: Source

Oil prices rise to $62, reach close to 2015 high

Posted on 18 February 2015 by VRS  |  Email |Print

Oil rose to $62 a barrel on Tuesday, close to its 2015 high, supported by threats to Middle East supplies and expectations lower prices may prompt a slowdown in US output. Egypt on Monday bombed Islamic State targets in Libya, where violence has reined in most oil output, and Iraq’s semi-autonomous Kurdistan Regional Government threatened to withhold oil exports if Baghdad failed to send its share of the budget.
“The oil price is finding additional support from renewed greater perception of the risks to supply,” said Carsten Fritsch, analyst at Commerzbank. “In the short term, the momentum suggests that prices will climb further.” Brent crude rose 60 cents to $62.00 a barrel by 1101 GMT. It reached a 2015 high of $62.57 on Monday. US crude was 43 cents higher at $53.21 a barrel……………………………………….Full Article: Source

BP’s 2035 outlook sees OPEC oil gaining ground as U.S. shale slows

Posted on 18 February 2015 by VRS  |  Email |Print

OPEC will regain ground and exceed its historic record production levels by 2030 as U.S. shale oil growth flattens out in the coming years, energy company BP said on Tuesday. In the near term, demand for oil from the Organization of the Petroleum Exporting Countries (OPEC) is likely to remain under pressure as U.S. shale oil production remains strong, BP said in its annual benchmark Energy Outlook 2035.
Production of tight or shale oil in the United States has been the main driver in supply growth that prompted the near halving of oil prices since July as OPEC opted not to cut its own production………………………………………..Full Article: Source

More oil project delays to return price to $110 – Rosneft CEO

Posted on 17 February 2015 by VRS  |  Email |Print

The key market indicators show the oil prices could soon rebound to about $80 a barrel, Rosneft CEO Igor Sechin said, adding that the price may even bounce back to $110 a barrel if more projects are shelved. “Look at the market fundamentals and it seems prices should soon rebound to the $60 or $80 a barrel levels that would make it worth building the wells that the world needs,” Sechin wrote in an article for the FT.
However, if markets are distorted, and the recovery takes longer than expected, many projects will be scrapped, and with demand returning, the price could rise to $90-110 a barrel or even higher. Many experts compare the current oil crisis to the one of the mid-80’s when the oil price fell more than 70 percent and remained at low levels for more than a decade………………………………………..Full Article: Source

How Will the Global Oil Price Slump Impact the US Economy?

Posted on 17 February 2015 by VRS  |  Email |Print

With the unexpected shock of the global crude oil price collapse enveloping the second half of 2014, with few signs of letup, its effect on the 2015 U.S. economy is starting to take a long-term downside position. Although most media economic analysts dwell on the benefits to America’s predominant consumer sector, a rational analysis of the pluses and minuses of this dramatic price reversal paint a mixed picture.
In order to make a fair and balanced assessment of the sudden drop of both worldwide Brent crude, and U.S.-based West Texas Intermediate, starting in mid-year 2014, there’s little question that the American consumer, as well as many businesses focusing on that sector, come out as clear winners. This is true not only of the unprecedented price drop “at the pump,” but in the many-faceted consumer expenditures for heating and air conditioning, in addition to the other myriad consumer users impacted by this price plunge………………………………………..Full Article: Source

Oil traders celebrate market rout

Posted on 17 February 2015 by VRS  |  Email |Print

For some the lavish party thrown by Socar, the state oil company of Azerbaijan, during International Petroleum Week, was a chance to drown their sorrows and forget about the market. But for others enjoying the hospitality at the Grosvenor House Hotel on London’s Park Lane there were reasons to celebrate.
After several years of flat markets, falling profits and declining margins, oil traders are enjoying the most favourable trading conditions they have seen since the global financial crisis in 2008. For the big players such as Glencore, Gunvor, Mercuria, Trafigura and Vitol, which source, store and transport crude oil and related products, the market rout may be a boon………………………………………..Full Article: Source

Did OPEC engineer the oil crisis?

Posted on 17 February 2015 by VRS  |  Email |Print

Richard Fischer, President, Dallas Federal Reserve, on February 11 said that OPEC engineered the drop in oil prices to put US oil producers out of business. However, Fisher is not the only one calling out OPEC for taking aim at US shale. Dan K. Eberhart, CEO of Canary LLC, picked up on this proactive action months ago.
During an interview on CNBC in early December last year, Eberhart said, “what’s shaping up is a battle royale between the US shale producers and OPEC. It’s a case of who’s going to blink first. I think OPEC, by deciding not to change their production quota, is betting on the US.”Eberhart explained that OPEC is applying downward pressure on oil prices by significantly contributing to excess oil supplies during a period of lessened demand………………………………………..Full Article: Source

Global oil demand estimated to have grown in 2014: OPEC

Posted on 16 February 2015 by VRS  |  Email |Print

Global oil demand is estimated to have grown by 0.95 million barrels per day (mb/d) in 2014, representing an upward revision of 20 thousand barrels per day (tb/d) from the previous month, according to OPEC Monthly Oil Market Report (MOMR).
According to a report by UAE’s official news agency Wam, quoting OPEC MOMR, the adjustment mainly reflects better-than-expected oil demand data from OECD America and China. In 2015, world oil demand is anticipated to rise by 1.15 mb/d, following an upward revision of 30 tb/d due to expectations of higher oil requirements in OECD America and Other Asia, the MOMR said……………………………………….Full Article: Source

Could Oil Still Drop To $20?

Posted on 16 February 2015 by VRS  |  Email |Print

Last week analysts at Citigroup slashed their forecast for crude oil to $20 a barrel before prices begin to recover. They see prices dropping to that point by the end of the first quarter or the beginning of the second quarter. The forecast is based on two points: the amount of crude oil in storage and the end of OPEC’s role as the so-called swing supplier.
WTI crude oil for March delivery closed at around $44 a barrel on January 29th and at $52.65 this past Friday, about where it traded before Citi’s forecast was published. Crude dipped to around $49 last Wednesday before climbing back up on Thursday and Friday………………………………………..Full Article: Source

Economist expects oil price rising in second half

Posted on 16 February 2015 by VRS  |  Email |Print

Oil prices are likely to increase in the second half of 2015 due to lesser investments in shale projects, says a senior economist. “Additional supplies of oil in the market will be gradually removed, which will contribute to higher oil prices in the second half of this year,” Said A. Al-Shaikh, group chief economist at the National Commercial Bank (NCB), said.
He was speaking on the sidelines of a press conference in Jeddah where Dun & Bradstreet South Asia Middle East Ltd. (D&B) in association with the NCB released the D&B Business Optimism Index (BOI) survey for Saudi Arabia for Q1, 2015. The BOI survey highlights mixed trends in the optimism levels of both the hydrocarbon and non-hydrocarbon sectors in Saudi Arabia………………………………………..Full Article: Source

Three important questions for the oil market

Posted on 16 February 2015 by VRS  |  Email |Print

The oil market is in a state of flux, says former Bank of England economist Spencer Dale. Is it now on the road to recovery? The oil market is in a state of flux. Prices have fallen by over 50pc since last summer. The Organisation of the Petroleum Exporting Countries (Opec) seems to have forgotten its lines. There are howls of pain from large and small oil producers alike.
Against such a backdrop, it is tempting to focus on the here and now. Although prices may be down for some years, the world’s demand for energy is likely to increase by almost 40pc over the next 20 years or so, driven by growth in developing economies………………………………………..Full Article: Source

Higher Oil Forecasts Suggest OPEC Tactics Are Paying Off

Posted on 16 February 2015 by VRS  |  Email |Print

The world’s three big energy agencies are forecasting higher demand for OPEC’s crude oil this year, a sign the producing nations’ strategy to let prices fall is starting to win them back market share from rivals who are cutting output. After an oversupply of world oil sent prices tumbling in 2014, top OPEC exporter Saudi Arabia urged fellow members not to prop up the market and to try to knock out competing sources like U.S. shale, which, because it has higher production costs, had to cut output when prices fell.
In reports this week, The International Energy Agency and the Organization of the Petroleum Exporting Countries have raised by at least 200,000 barrels per day (bpd) their estimates of demand for OPEC crude in 2015, while the U.S. government’s Energy Information Administration forecasts OPEC will pump 140,000 bpd more………………………………………..Full Article: Source

Here’s how a $50 drop in oil prices affects every country in the world

Posted on 13 February 2015 by VRS  |  Email |Print

The oil crash has impacted oil importers and exporters differently. The 50% plunge in oil prices will be a roughly $1.7 trillion gain for consumers in oil importing nations, according to BlackRock. But exporters will suffer, especially countries that are counting on revenues from higher oil prices to balance their budgets.
“Winners in this climate should be global consumers, oil importers such as India and Japan, and the transport and retailing industries,” BlackRock’s Jean Boivin wrote in a research report. “Oil-exporting nations and companies with limited cash buffers and poor access to debt markets (think Venezuela or over-leveraged U.S. shale plays) look to be the biggest losers.”……………………………………….Full Article: Source

Private equity and energy: Refilling the pipeline

Posted on 13 February 2015 by VRS  |  Email |Print

Oil’s plunge may have helped consumers, but it has hurt big private-equity firms. Earlier this month Apollo Global Management announced that profits were down by 79% year on year in the three months to December 31st. This week KKR and the Carlyle Group said they were smarting too, with KKR’s profits down by 94% and Carlyle’s by 68%. Energy-related assets, whose valuations have fallen with the oil price, are largely to blame.
Spurred on by the shale boom in America, private-equity funds have invested heavily in the energy sector. More money was raised for energy buy-outs in America in 2014, and more deals were made, than ever before, according to Preqin, a data provider………………………………………..Full Article: Source

Iraq minister predicts oil price recovery

Posted on 13 February 2015 by VRS  |  Email |Print

An eight-month slump in the oil market has reached a bottom and prices will recover, Iraq’s oil minister predicted Tuesday. Oil prices have slumped more than 50% since June amid a surge in oil supply led by U.S. shale oil production and sluggish demand.
Iraq and other members of the Organization of the Petroleum Exporting Countries have taken a hands-off approach to the selloff, opting to defend market share rather than cut production to bolster prices as the group had done in the past………………………………………..Full Article: Source

IEA Sees Oil Prices Bottoming Out, But Not Surging Back To $100-Plus Levels

Posted on 13 February 2015 by VRS  |  Email |Print

The International Energy Agency says the price of crude, which plunged since June, will end fairly soon, but cautions oil producers that they won’t see a barrel of oil selling at over $100 as they did before the crash, the International Energy Agency (IEA) reports.
The cause of the decline was a case study in elementary economics: The supply of oil rose dramatically due to prodigious production in the United States, while sluggish economies, particularly in Europe and China, depressed demand. Now there is a glut, North American drilling is being curtailed and energy companies are slashing spending………………………………………..Full Article: Source

Low oil price won’t spur global growth: Moody’s

Posted on 12 February 2015 by VRS  |  Email |Print

Lower oil prices will be sustained throughout 2015 but don’t expect any boost for the majority of the world’s countries, according to a global growth forecast from Moody’s Investor Service. “Lower oil prices, which we expect to be sustained, would in principle provide a significant boost to global growth,” Marie Diron, senior vice-president of Credit Policy at Moody’s and author of the agency’s “Global Macro Outlook 2015-16″ report published Wednesday.
“However, we are maintaining our G-20 forecast,” she said. “For the G-20 economies, we expect gross domestic product (GDP) growth of just under 3 percent each year in 2015 and 2016, unchanged from 2014 and from our November 2014 Global Macro Outlook,” Diron added………………………………………..Full Article: Source

Why Oil Prices Will Rebound Before We Know It

Posted on 12 February 2015 by VRS  |  Email |Print

Oil industry analysts have been engaging in a burning debate: Have prices hit bottom or do they have further to fall? Energy company CEOs have been voicing their views on the question as they report their quarterly earnings results. The International Energy Agency weighed in as well in a somewhat bearish five-year forecast released Tuesday, saying that oil prices will eventually rebound from current levels but still stay below the $100 a barrel mark.
The group said global stockpiles would rise, putting prices under more pressure before spending cuts by oil producers kick in to ease the supply glut. Here’s a safe call: Get ready for plenty of thrills, chills and volatility along the way. Let’s take a look at five key lessons from energy company conference calls so far this earnings season, and at several stocks that will benefit from the next chapter that’s about to play out in the ongoing saga of oil price volatility………………………………………..Full Article: Source

Top oil analyst: The worst is yet to come

Posted on 12 February 2015 by VRS  |  Email |Print

Oil prices will get a heck of a lot worse before they get better, a top industry analyst said on Tuesday. Tom Kloza, chief oil analyst at Oil Price Information Service, predicted that oil prices would bottom during the second quarter of the year “simultaneously to one of the expirations of the WTI contracts.”
He warned that the price of West Texas Intermediate crude could be in the $30s at some point in the second quarter. “I think the cycle has a long way to run out,” Kloza said on CNBC’s “Fast Money,” adding that the spread between Brent and WTI could widen to about $10 or so………………………………………..Full Article: Source

Beware: The End of OPEC Could Mean a Plunge to $20 Oil

Posted on 12 February 2015 by VRS  |  Email |Print

Just when investors thought the oil rout was over, an analyst at Citi warned that the recent 20% rally in the price of oil is just a “head fake.” Worse yet, Citi sees the price of oil resuming its plunge and going all the way down to $20 per barrel. That’s quite the opposite view of many others as OPEC said it thinks that oil has already bottomed and could zoom higher while the International Energy Agency, or IEA, sees $55 oil being here to stay this year.
However, as we’ve seen in this market, anything is possible once OPEC steps aside. A big drop in the U.S. rig count over the past few weeks should lead to a slowdown in U.S. oil production growth, which has largely fueled the rally off the bottom in recent weeks………………………………………..Full Article: Source

IEA: New normal for oil as cheap prices fail to ignite demand

Posted on 12 February 2015 by VRS  |  Email |Print

The global oil market is entering a new phase where cheap oil is failing to ignite growth in demand, the International Energy Agency (IEA) says. Demand growth will remain sluggish because of fuel switching, more fuel-efficient cars, reduced oil subsidies and structural changes in the global economy, according to the IEA’s Medium-Term Oil Market Report.
Market dynamics suggest oil demand should increase strongly in response to falling oil prices, which have halved since last summer. But the IEA argues oil markets are entering a “business-as-unusual” phase, where the usual rules of supply and demand have changed………………………………………..Full Article: Source

Shale and Non-OPEC Producers Hit Hardest By Low Oil Prices

Posted on 12 February 2015 by VRS  |  Email |Print

The plunge in global crude prices makes it difficult for North American shale oil producers to survive, the chairman of Russian gas giant Gazprom said in Saudi Arabia on Wednesday. Viktor Zubkov told an industry gathering that “a lot” of shale producers are suffering from the drop in oil prices and current conditions make shale production “nonsense.”
“The low price of oil, $45, $50, or even $60 (per barrel), it’s not a driver for shale business,” he told the International Energy Forum (IEF) in Riyadh. Crude prices dropped from around $100 to below $50 per barrel over the past year on concerns over a supply glut and weakening demand………………………………………..Full Article: Source

OPEC prediction of $200 a-barrel-oil ignores market realities — or maybe not

Posted on 12 February 2015 by VRS  |  Email |Print

OPEC’s Secretary General Abdulla al-Badri announced that the oil price may have bottomed out and predicted “you will see more than $200 when it comes to future oil prices.” In the current reduced-oil-price environment, we see oil companies cut back on budgets, curtail exploration, and pull in rigs — in many places it costs more to get the oil out of the ground than the present sales price.
In today’s market for crude oil, a reduction in the number of drilling rigs in the United States does not mean overall production declines. It means less production in the future. Tim Snyder, an energy economist with Lubbock, Texas-based Pro Petroleum Inc., who analyzes trends to help his company and others make educated decisions and manage risk, told me: “We anticipate a decrease in ‘new’ production in the U.S. as exploration and production companies reallocate capital expenditures and reduce drilling exposure.”……………………………………….Full Article: Source

Citigroup; Oil’s Heading To $20 And Opec’s Days Are Over

Posted on 11 February 2015 by VRS  |  Email |Print

Citigroup is telling us that oil is going to head down to $20 a barrel soon enough. Further, that Opec’s hold over the oil price is now definitively broken. That’s a pair of pretty strong claims and of course we need to take them both with the appropriate amount of salt. But I think the first is possible and the second is likely.
Even though I agree that that second, the days of Opec’s control being over, is the more remarkable claim I do think it is the stronger of the two. The reason for this is two little bits of economics. The first being that monopolies and cartels do indeed exist but in the end they always fall over. If it’s not because of legal action against them, or because of cheating among the cartel’s members, then in the end technological advance will indeed get them………………………………………..Full Article: Source

Oil market rebalancing ‘could take years’: IEA

Posted on 11 February 2015 by VRS  |  Email |Print

The global oil market could be out of balance for years, and it will never be the same because of U.S. shale production, the International Energy Agency said Tuesday.
“A partial rebound in oil prices over the last month following a 60 percent crash since June suggests market participants are seeing light at the end of the tunnel and growing confident that spending cuts by oil companies will lead to a market recovery,” the IEA said in its February oil market report……………………………………….Full Article: Source

US to remain world’s top source of oil supply growth up to 2020: IEA

Posted on 11 February 2015 by VRS  |  Email |Print

The United States will remain the world’s top source of oil supply growth up to 2020, even after the recent collapse in prices, the International Energy Agency said, defying expectations of a more dramatic slowdown in shale growth.
The agency also said in its Medium Term Oil Market report that oil prices, which slid from US$115 a barrel in June to a near six-year low close to US$45 in January, would likely stabilise at levels substantially below the highs of the last three years………………………………………..Full Article: Source

Russia will be biggest loser from oil price fall, warns IEA

Posted on 11 February 2015 by VRS  |  Email |Print

International Energy Agency uses market report to point to biggest potential loser from oil price slump. Russia will be the biggest loser from the current downturn in oil prices as the Organisation of the Petroleum Exporting Countries (Opec) seizes back a bigger share of the world crude market, the world’s top energy watchdog has said.
In its closely-watched medium-term market report the International Energy Agency (IEA) said that Russia’s output of crude would contract by 560,000 barrels per day (bpd) through to 2020. “Russia facing a perfect storm of collapsing prices, international sanctions and currency depreciation, will likely emerge as the industry’s top loser,” said the IEA………………………………………..Full Article: Source

Oil drops sharply as IEA expects inventories to rise

Posted on 11 February 2015 by VRS  |  Email |Print

Crude oil prices fell for the first time in four sessions on Tuesday after the International Energy Agency (IEA) warned that ample supplies will raise global inventories before investment cuts begin to significantly dent production.
Oil stockpiles in member countries of the Paris-based Organization for Economic Cooperation and Development (OECD) may approach a record 2.83 billion barrels by mid-2015, said the IEA, advisor on energy policy to a group of Western nations. US March crude futures fell US$2.84, or 5.37 per cent, to settle at US$50.02 a barrel, after dropping to US$49.86………………………………………..Full Article: Source

Why oil price could halve again

Posted on 11 February 2015 by VRS  |  Email |Print

Oil prices have surged by 20% since the end of January. The bounce has led some to call an end to the eight-month long rout during which the cost of a barrel of both Brent crude and West Texas Intermediate (WTI) has more than halved. Not everyone, however, is so confident. This rally has been driven by a drop in US rig count, massive cuts in upstream capital expenditure, the reading of technical charts, and investor short position-covering.
“Chartists…are strutting their stuff at the moment as their support levels are being held and upward resistance being tested,” says industry expert Malcolm Graham-Wood. “For Brent, support is seen as being at $53.99 and $52.40 while resistance is at $59.15 and after that at $69.23. Brent’s intra-day high yesterday was $59.61 and whilst we are well off that at the moment if it should close above that level then they are in Nirvana.”……………………………………….Full Article: Source

Rosneft’s Sechin Accuses OPEC of ‘Destabilizing’ Oil Market

Posted on 11 February 2015 by VRS  |  Email |Print

The head of top Russian oil producer Rosneft on Tuesday criticized OPEC policy and warned lower oil output as a result of falls in crude prices may lead to a supply shortage as early as the fourth quarter. Igor Sechin, speaking at the International Petroleum Week industry forum in London, said producer group OPEC had “lost its teeth” and its policy had led to “destabilization” of the oil market.
Oil prices collapsed in 2014 in a decline that deepened after the Organization of the Petroleum Exporting Countries in November shifted strategy and chose not to cut its own output. The 12-country group instead moved to retain its market share, which has been eroded by rival supply sources such as U.S. shale oil………………………………………..Full Article: Source

US shale oil boom could become next ‘dotcom bubble’, says Russian oil boss

Posted on 11 February 2015 by VRS  |  Email |Print

The head of top Russian oil producer Rosneft has ​said the US shale ​energy boom could become the next “dotcom bubble”. Igor Sechin also accused Opec ​of destabilising the market by allowing the oil price to halve in six months.
​​He predicted that​ the rapid growth of fracking in the US would start to peter out after 2020. “We know that revolutions are short-lived and the US production increase is not well supported by reserves,” ​Sechin told an industry conference in London on Tuesday………………………………………..Full Article: Source

The Facts Behind Oil’s Price Collapse

Posted on 10 February 2015 by VRS  |  Email |Print

The dramatic drop we have seen in oil prices over the last few months has many economic forecasters worried about future growth. The problem with declining oil prices is that too much of a good thing can turn frightening. Someone who goes on a modest diet and loses five pounds over the course of a month might be elated.
Someone who loses 75 pounds under those same circumstances would worry they have a serious illness. Conceivably, the precipitous fall in oil prices could mean that the global economy’s health has started to fail. While that would account for the drop in oil prices, most leading indicators do not confirm that economic diagnosis………………………………………..Full Article: Source

Forecasts Of Oil Price Bottom And Recovery

Posted on 10 February 2015 by VRS  |  Email |Print

For oil price forecasters, it is all but mandatory to start with self-deprecating humor, because the track record is so bad. Late 2013, surveys showed predictions for 2014 of $104 per barrel for Brent. Citi’s forecast of a significant drop raised eyebrows, in fact. Now, one reporter noted that expert forecasts range from $30-200, which is both true and funny, but doesn’t capture the actual expectations, primarily because of the time differential.
But once prices were clearly falling, there was a rush to be the most bearish. (I suggested back in December that a floor seemed to have been reached at about $50, although at other points on the way down I believed OPEC would manage to stabilize prices at those levels.)……………………………………….Full Article: Source

CITI: Here comes $20 oil …

Posted on 10 February 2015 by VRS  |  Email |Print

Oil prices are heading lower. In a note Monday, Ed Morse, global head of commodity research at Citi, wrote that with evidence of oversupply in the oil market, the bottom is not yet in for oil prices. “It’s impossible to call a bottom point,” Morse wrote, “which could, as a result of oversupply and the economics of storage, fall well below $40 a barrel for WTI, perhaps as low as the $20 range for a while.”
“The oil market should bottom sometime between the end of Q1 and beginning of Q2 at a significantly lower price level in the $40 range - after which markets should start to balance, first with an end to inventory builds and later on with a period of sustained inventory draws,” Morse wrote………………………………………..Full Article: Source

Is OPEC winning an oil price war against the US?

Posted on 10 February 2015 by VRS  |  Email |Print

The latest oil market report from the Organization of the Petroleum Exporting Countries paints a not-so-rosy picture for US drillers under pressure from lower oil prices. But even OPEC admits that US oil production has remained surprisingly stable despite collapsed oil prices and cutbacks in US energy.
Demand for oil from the Organization of the Petroleum Exporting Countries is set to rise this year, while growth in US oil production will slow as American energy firms cut back on drilling. That’s the conclusion of the latest monthly oil report from OPEC, the 12-member oil cartel that accounts for about 40 percent of the world’s oil production. If the forecasts prove true, it suggests that OPEC is winning an undeclared price war against a growing rival: namely, the US………………………………………..Full Article: Source

Oil Rises on Optimism For Higher Demand, Lower Supply

Posted on 10 February 2015 by VRS  |  Email |Print

Oil prices rallied for a third-straight session on signs of higher demand and lower supply, including more bullish forecasts from both the Organization of the Petroleum Exporting Countries and the U.S. government.
OPEC’s new monthly oil-market report said demand for its crude will rise this year as the U.S. produces less and consumes more. It estimates that demand will grow to 29.2 million barrels a day, 100,000 more than a year ago. That reverses a forecast for a 300,000 barrel-a-day decline in demand. It also reduced non-OPEC supply growth estimates by 420,000 barrels a day………………………………………..Full Article: Source

Oil-Price Rebound Predicted

Posted on 10 February 2015 by VRS  |  Email |Print

In the latest sign that the seven-month selloff in crude-oil prices may be nearing a bottom, an energy watchdog said that a recovery seems “inevitable” and the glut that has driven down prices by more than 50% since June could start to ease as soon as the second half.
A wave of spending cuts by oil producers and a sharp decline in the number of rigs drilling for crude in the U.S. likely will slow the nation’s oil-output growth, spurring a rebound in prices, the International Energy Agency said in a report released Tuesday U.K. time. The benchmark U.S. oil price rose 2.3% to $52.86 a barrel on Monday and is up 19% from a nearly six-year low hit last month………………………………………..Full Article: Source

OPEC Blamed for Low Crude Oil Prices

Posted on 09 February 2015 by VRS  |  Email |Print

The Bank for International Settlements (BIS), the global clearinghouse for sovereign banks, released on Saturday an update to its report on global liquidity conditions. As part of this update, BIS included its explanation of what’s happened in the oil markets and its safe to say that the members of OPEC are not likely to be impressed with the Bank’s conclusion.
Comparing the current 50% drop in crude prices to other episodes of oil price declines in 1996 and 2008, BIS notes that both previous price collapses “were associated with sizeable reductions in oil consumption and, in 1996, with a significant expansion of production.”……………………………………….Full Article: Source

New Mideast Oil Refineries Could Stir Up Fuel-Market Dynamics

Posted on 09 February 2015 by VRS  |  Email |Print

The startup of two huge oil refineries earlier this year in the Middle East is set to shake up fuel markets from Asia to Europe as the oil-producing region expands its influence beyond just exporting vast amounts of unprocessed crude.
The projects, together with a third large refinery that began operating in Saudi Arabia last year, are expected to process 1.2 million barrels of oil a day at full capacity in the next few months, equivalent to slightly more than 1% of the world’s total oil-refining capacity………………………………………..Full Article: Source

Oil Prices: 5 Things You Need to Know Now

Posted on 09 February 2015 by VRS  |  Email |Print

If you’re looking for a bottom for oil prices, you might be tempted to think the recent bounce represents the end of a historic, six-month crash. But the next move for the price of crude is anybody’s guess. A lot depends on how producers and consumers react to the new bargain price.
If you’d like to try come up with your own forecast, here’s what you’ll need to keep in mind: Why are oil prices falling so far so fast? Just like a hot ticket on Stubhub, the global price of oil is set by middlemen who broker sales based on supply and demand. Lately, they’ve got a lot of unsold product to deal with. Simply put, the world is awash in oil………………………………………..Full Article: Source

Hedge Funds Most Bearish on Crude in 4 Years After Rally: Energy

Posted on 09 February 2015 by VRS  |  Email |Print

Hedge funds raised bearish bets on oil to the highest in more than four years, a sign they’re skeptical that a two-week 14 percent rally will last. Short bets on West Texas Intermediate climbed 1.2 percent in the week ended Feb. 3 to the most since August 2010, U.S. Commodity Futures Trading Commission data show.
Net-long positions slipped for a third week, the longest stretch of declines since August. Prices jumped during the report week as a shrinking number of U.S. rigs drilling for crude raised speculation that output would soon retreat from a three-decade high………………………………………..Full Article: Source

Oil heading for $30, currency war coming: Analysts

Posted on 06 February 2015 by VRS  |  Email |Print

So much for the rally. Oil will likely still head as low as $30, analyst John Kilduff told CNBC on Thursday. “I still believe we’re going to go to that $30 to $33 area, which is the low point from the financial crisis in 2008, 2009. What you saw over the past several days was technical in nature, a short squeeze. This volatility is a little crazy and I think that $30 target is a downside target is for technicians that are in this market,” the founding partner of Again Capital said.
U.S. crude tumbled 9 percent on Wednesday to settle at $48.45, erasing nearly all of its gains in the previous two sessions. The benchmark commodity—West Texas Intermediate—had soared 22 percent from a nearly six-year low of $43.58 last Thursday, ending the day at $53.05 on Tuesday………………………………………..Full Article: Source

OPEC delegates see scant hope of rapid oil price recovery

Posted on 06 February 2015 by VRS  |  Email |Print

Growing numbers of OPEC delegates say they expect no rapid recovery in oil prices, even as the market shows signs of a tentative rally from near six-year lows. One delegate from a country outside the Gulf and a relative price hawk in OPEC said he doubted oil would revisit $100 a barrel this year or next, and that this should encourage less dependence on oil revenue in national budgets.
“Based on supply and demand, the price for this year and next will probably not go beyond $100,” the delegate told Reuters on condition of anonymity. “We have to get a lesson from this. The budgets should not depend on a high oil price.”……………………………………….Full Article: Source

Saudis Increase Oil Price in U.S., Cut It for Asia

Posted on 06 February 2015 by VRS  |  Email |Print

Saudi Arabia on Thursday increased the oil prices it charges U.S. buyers, reversing months of cuts. But the world’s largest oil exporter has reduced its prices in Asia as it shifts a battle over market share from America to the Far East.
In an email to clients, Saudi Aramco said it was increasing its U.S. prices for light oil delivery in March by 15 cents a barrel, reversing at least three months of price cuts in the American market. But the state oil company reduced its prices for Asia by 90 cents a barrel………………………………………..Full Article: Source

OPEC Says Oil Could Reach $200 Per Barrel: Here’s Why Investors Shouldn’t Bet on It

Posted on 06 February 2015 by VRS  |  Email |Print

The most severe oil collapse since the credit crisis has caused many energy stocks to crash to six-year lows and spurred countless “experts” to predict when the oil markets will bottom and where they might head next. In reality, no one can accurately predict the short- to medium-term price of oil — nor should most investors try — but that hasn’t stopped legendary oil tycoon T. Boone Pickens from boldly predicting that oil will return to $100 per barrel within 12-18 months.
On the other side of the argument, Saudi Prince Alwaleed bin Talal is even more confident in his counter claim “I’m sure we’re never going to see $100 anymore.” However, now, OPEC’s Secretary General Abdulla al-Badri has upped the speculative prediction stakes with the boldest prediction of all — that oil prices have not only bottomed but may soon soar past $200 per barrel………………………………………..Full Article: Source

Oil spikes in ‘super volatile’ market amid supply gain

Posted on 06 February 2015 by VRS  |  Email |Print

Oil traded at the greatest volatility since April 2009 after U.S. crude supplies rose from the highest level in more than three decades. West Texas Intermediate gained as much as 7.5%, erasing an earlier 2.3% decline. Prices have moved an average of US$1.74 a day this year, up from 92 cents during the first 24 days of 2014.
Crude inventories expanded by 6.33 million barrels to 413.1 million last week, the highest level in weekly records compiled since August 1982, the Energy Information Administration reported Wednesday. Oil’s swings have intensified since the Organization of Petroleum Exporting Countries decided in November to let rival producers deal with a global surplus that Iran’s oil minister pegged at 2 million barrels a day in an interview with state television………………………………………..Full Article: Source

Why Cheaper Oil Doesn’t Always Lead to Economic Growth

Posted on 05 February 2015 by VRS  |  Email |Print

Tumbling oil prices were supposed to boost growth in a host of major oil-importing economies. It isn’t necessarily working out that way. Some governments have moved already to shore up their revenues by raising gasoline taxes or cutting fuel subsidies. At the same time, falling oil costs have pumped up deflation fears across Europe and Japan, adding to the risk that consumers and businesses will hold back on spending and investment, dragging on growth.
China has raised fuel-consumption taxes by 50% since November. Gasoline prices have soared in Indonesia as the authorities eliminated subsidies altogether………………………………………..Full Article: Source

Citi: The oil (and gas) plunge isn’t over yet

Posted on 05 February 2015 by VRS  |  Email |Print

The oil crash — and cheap gas bonanza — probably isn’t over yet. For a few days, oil was showing real signs of life following last year’s meltdown. Prices spiked above $54 a barrel on Tuesday after oil’s best three-day performance in six years. Drivers may have even noticed a little pop in gas prices. The national average price of gasoline jumped nearly five cents a gallon on Wednesday, according to AAA. The oil bounce also caused stock prices to surge on Tuesday.
But the rebound is already looking like it may be short lived. Oil plummeted nearly 9% on Wednesday to settle at $48.45 a barrel. That’s the commodity’s worst day since November 28 when OPEC rattled the market by deciding to keep production steady………………………………………..Full Article: Source

Oil’s Surge to Bull Market Viewed as Temporary Bounce

Posted on 05 February 2015 by VRS  |  Email |Print

Oil is back! Or maybe not. After suffering its longest rout in history, crude rebounded Tuesday, entering a bull market after soaring 24 percent from a six-year low reached in January. Behind the gain was speculation that curbs in investment will cut production.
For all the optimism among traders, firms from Barclays Plc to Societe Generale SA and UBS Group AG say the rally is just temporary because less spending won’t eliminate a glut overnight. Instead of heading back to $100 a barrel, oil could fall as low as $30 because supply surpluses won’t disappear overnight, said Miswin Mahesh, a commodities analyst at Barclays………………………………………..Full Article: Source

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