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Commodities Briefing - Category | Oil more

World’s Biggest Oil Trader Sees $50 Floor for Crude Prices

Posted on 22 April 2015 by VRS  |  Email |Print

Vitol Group, the world’s biggest independent oil trader, said crude prices won’t drop below $50 a barrel for sustained periods because that’s a level some producers need in order to invest in new supply. Gunvor Group said a rout is over.
“We still subscribe to the likelihood that over time prices still have to go back up again because you still need to invest,” Vitol’s Chief Executive Officer Ian Taylor said in an interview at the FT Commodities Global Summit in Lausanne, Switzerland on Tuesday. “People won’t invest unless they can make the upstream business work and it’s not just U.S. shale, at $50 a barrel it doesn’t work.”………………………………….Full Article: Source

Oil unlikely to hit new 2015 lows, say traders

Posted on 22 April 2015 by VRS  |  Email |Print

Oil prices could weaken again but they are unlikely to plumb new depths this year, leading commodities traders said on Tuesday, citing strengthening demand. Ian Taylor, head of the world’s largest oil trader, Vitol, told Reuters he thought global benchmark Brent crude oil, which tumbled 60% to just above US$45 (RM163) a barrel in January, could dip again briefly.
But the oil market had likely already seen its 2015 lows. “We will probably see one more dip in the second quarter but prices probably won’t go below this year’s lows,” Taylor told Reuters on the sidelines of the FT Commodities Summit in Lausanne…………………………………..Full Article: Source

Oil Market Uncertain As US Shale Boom “Goes Bust”

Posted on 22 April 2015 by VRS  |  Email |Print

Oil market is uncertain as the US shale oil output is expected to fall for the first time in four years, and the coming months are likely to see a continuing price war between OPEC producers. Deutsche Bank, Goldman Sachs and HIS are now projecting that US oil production growth will now end. The global oil price rose slightly in the morning of April 14.
Citing the April 13, 2015 US Energy Information Administration prediction on the US shale production Andy Rowell writes in Oil Change International: The production would fall by 57,000 barrels per day in May this year. The report says: “The EIA forecasted that the seven major shale formations in the US: Bakken, Eagle Ford, Haynesville, Marcellus, Niobrara, Permian and Utica will produce a total of 5.56 million barrels of crude oil daily next month, down from 5.62 million barrels per day in April…………………………………..Full Article: Source

Fed could be to blame for oil’s decline: Analyst

Posted on 21 April 2015 by VRS  |  Email |Print

The dramatic 10-month drop in the price of oil could be due to ultra-loose monetary policy by the U.S. Federal Reserve, according to a senior analyst at a major financial services company. Mark Lewis from Kepler Cheuvreux said on Monday that the boom in U.S. shale gas production over the last few years that had helped push down oil prices was partly driven by the Fed’s “very, very low interest rates.”
“The financial dimension to the shale story is hugely important,” he told CNBC. “I think it’s questionable whether we would ever have had the increase in oil production we’ve had out of the shale plays over the last three or four years if we hadn’t been in this environment.”………………………………….Full Article: Source

Sluggish Oil Demand Emerges As A Potent Factor In The Peak Oil Debate

Posted on 21 April 2015 by VRS  |  Email |Print

Peak oil isn’t what it used to be. That’s not simply because the theory of global oil supply peaking has been postponed courtesy of the U.S. production rebound, it is also because a second meaning to the expression is making a return, and that’s peak demand. A fresh glimpse of demand for oil peaking came last week in the release of the April edition of Oil Market Report by the International Energy Agency.
While most interest was in oil supply, a natural focus given the glut which has depressed the price of oil, there was a more important factor in the report and that was the modest demand growth forecast from the agency…………………………………..Full Article: Source

Researchers Warn of Global Oil Price Crisis as Investors Shy Away

Posted on 20 April 2015 by VRS  |  Email |Print

The drop oil prices has changed the longstanding laws of the energy market and made investors deeply insecure about financing expensive projects in the future. The risk of a global oil crisis has increased and investors are becoming more and more cautious about financing expensive projects, according to a study by the Hamburg Research Office Energycomment, presented by the German magazine “Der Spiegel”.
The researchers stated that low oil prices resulted in a drastic cut of investments in long-term energy projects, including the development of the Arctic and production of synthetic and biological fuels. Oil prices have almost halved since the summer of 2014, and currently lie below the level of 60 dollars per barrel. For the first time, the drop was caused not by an economic crisis, but tough competition in the global oil market, experts claim……………………………………Full Article: Source

OPEC Should Consider Return To Oil Quotas-Delegate

Posted on 20 April 2015 by VRS  |  Email |Print

A proposal to reintroduce quotas would spark a fierce debate in OPEC as national prestige and market share are at stake. OPEC should consider re-introducing individual output quotas, shuffled quietly to one side in 2008, to prevent oversupply hitting prices should Iran increase its oil exports following a deal over its nuclear work, an OPEC delegate said.
A proposal to reintroduce quotas would spark a fierce debate in the Organization of the Petroleum Exporting Countries as national prestige and market share are at stake. After refusing to cut output last year, OPEC is pumping much more than its overall output target of 30 million barrels per day (bpd) because of record Saudi Arabian output, higher Iraqi exports and a partial return of Libyan crude……………………………………Full Article: Source

Nigeria, Algeria See Oil Prices Staying Low for a Long Time

Posted on 20 April 2015 by VRS  |  Email |Print

Oil prices are likely to stay low for a long time after falling more than 40 percent in the past year, said officials from two OPEC nations. Nigeria and Algeria both warned that oil prices, currently at around $60 a barrel, probably won’t recover to the 2011-2013 level of more than $100 a barrel.
“You forecast at your own risk, but it seems to me that we should be regarding this as a permanent shock,” Ngozi Okonjo-Iweala, the Nigerian finance minister, said on a panel discussion Sunday in Washington near the end of the International Monetary Fund’s spring meetings. “We should prepare our economies for that eventuality.”…………………………………..Full Article: Source

Three Reasons Oil Will Continue to Run the World

Posted on 20 April 2015 by VRS  |  Email |Print

While all the buzz surrounds oil prices, the global demand side remains on solid footing: up. Supplying 33% of all energy, oil is the world’s primary fuel. Oil is so important that global demand is ever-growing: 67 million b/d in 1990, 77 million b/d in 2000, and 91 million b/d in 2014.
I’ll never understand the animosity of some Westerners toward critical fuels that they depend on everyday, making their lives easier in ways their great grandparents only dreamed of. Oil, after all, is the reason the world is truly globalized. And it’s oil that takes a grandson living in Atlanta back home to Seattle for his grandmother’s funeral…the very same day he learned she passed……………………………………Full Article: Source

Citi: Q2 Commodities Outlook Hinges On Oil

Posted on 16 April 2015 by VRS  |  Email |Print

In a new report, analysts at Citi Research looked at the slumping commodity market and updated their forecast for 2Q15 and beyond. One of the topics that analysts addressed is whether or not the worst of the slump is over or if there is downside remaining in oil and other commodities.
Analysts believe that many commodities have found near-term support at current levels, but that this support could be short-lived. The center of the collapse in commodity prices is crude oil, and Citi analysts to not feel that crude oil has bottomed just yet. According to the report, demand for crude oil will be seasonably low in Q2 due to refinery turnarounds. In addition, investment outflows from physically-backed crude oil ETFs will likely push crude prices lower………………………………………..Full Article: Source

Price controls on oil to halve global growth boost: IMF

Posted on 16 April 2015 by VRS  |  Email |Print

Countries that fail to pass on steep declines in global oil prices to consumers could cost the world half a per cent in economic growth next year, according to the International Monetary Fund. Modelling by the IMF in its April World Economic Outlook report predicts GDP growth of 3.5 per cent this year and 3.8 per cent next year.
The report shows the oil slump could boost GDP in 2016 by 1 per cent, excluding nations that are increasing their oil supply. But that assumes a complete “pass-through” of the low prices. Countries such as Russia, India, China and Brazil, which manage their oil prices, would halve the 1 per cent gain by using the oil windfall to prop up their nations’ finances instead………………………………………..Full Article: Source

Oil just hit $56 — its highest price in 2015

Posted on 16 April 2015 by VRS  |  Email |Print

Oil peaked above $56 for the first time in 2015 on Wednesday. It’s the fifth straight day the price for a barrel of oil has nudged up. Investors are cheering and buying energy stocks while American drivers are cringing at the prospect of higher costs at the pump.
Consumers have loved low gas prices this year. The average gallon of gas costs a mere $2.39. That’s way below the average a year ago, $3.63, according to AAA, although it’s off the rock bottom levels of $2 a gallon that many Americans saw around the New Year………………………………………..Full Article: Source

IEA Says Oil Market Recovery Could Be Delayed

Posted on 16 April 2015 by VRS  |  Email |Print

The prospect of Iranian crude oil flooding the market and Saudi Arabia pumping at near-record levels could delay a recovery in an oil market slammed by a historic price collapse, the International Energy Agency said.
The IEA, which tracks oil data for Western countries, and others have predicted that the world’s supply of oil would fall back in line with demand starting from the second half of this year, when U.S. producers are expected to begin cutting back production because of low prices………………………………………..Full Article: Source

Saudi Arabia Leads OPEC Oil Boom as U.S. Shale Growth Slows

Posted on 16 April 2015 by VRS  |  Email |Print

Saudi Arabia pumped close to a record amount of crude oil last month, leading the biggest surge in OPEC output in almost four years just as the U.S. shale boom shows signs of slowing, the International Energy Agency said.
The Organization of Petroleum Exporting Countries may extend its biggest output gain since June 2011 into next month as recovery in Libya and Iraq adds to the Saudi increase, the IEA said. Average U.S. oil production of 12.6 million barrels a day in the first six months of 2015 will slide to 12.5 million by the fourth quarter as companies curb drilling, the agency said………………………………………..Full Article: Source

Russia in Active Consultations with OPEC

Posted on 16 April 2015 by VRS  |  Email |Print

Russia is conducting “unprecedentedly active” consultations with the Organization of the Petroleum Exporting Countries but isn’t discussing oil production cuts to support prices, Russian officials said on Wednesday.
The consultations come after several months of low oil prices that are putting pressure on Russia’s budget and currency, but Russian officials poured cold water on any suggestion of coordinated production cuts………………………………………..Full Article: Source

IMF: oil price collapse will cripple North Sea producers

Posted on 15 April 2015 by VRS  |  Email |Print

Fund’s analysis suggests industry’s crisis is worse than feared, as IMF claims oil price slump has hit UK “earlier and more intensely” than in other countries. Britain’s oil industry faces a deep and long-lasting crisis, according to the International Monetary Fund, which said the collapse in oil prices would stifle investment and hit production at a much faster pace than other countries.
Analysis by the IMF and Rystad Energy showed North Sea oil producers would be among the hardest hit by the slump in prices because huge operating costs meant they could not absorb the decline as easily as countries such as Kuwait, Iraq and Saudi Arabia………………………………………..Full Article: Source

Oil price could recover to $70 per barrel by year end: Fitch

Posted on 15 April 2015 by VRS  |  Email |Print

Crude oil prices could rise quickly in the second half of the year and may reach $70 per barrel by the end of 2015 as US shale production tapers and seasonal variations increase demand, a top analyst at ratings agency Fitch said on Tuesday.
However, Alex Griffiths, the head of oil and gas research at Fitch, said it might take several years for oil to reach $80 — the price level where supply and demand is seen as balanced based on current production costs. “We see US shale oil as reacting most quickly to balancing the supply with demand,” Griffiths told Reuters on the sidelines of a conference in Oslo………………………………………..Full Article: Source

US Shale oil production may have maxed out - EIA

Posted on 15 April 2015 by VRS  |  Email |Print

The shale oil boom may be over, judging from the latest report from the US Energy Information Administration, which said oil output from America’s seven most productive shale formations will decrease for the first time in four years.
The report has had an effect on the oil market with Brent, the benchmark for more than half of the world’s oil, trading above $58.25 per barrel, a 0.55 percent increase, and WTI, the North American blend, advancing one percent to $52.44 at the time of publication………………………………………..Full Article: Source

Iran Oil Minister Wants OPEC to Cut Output by 5% Ahead of June Meeting

Posted on 15 April 2015 by VRS  |  Email |Print

Iranian Oil Minister Bijan Namdar Zangeneh on Tuesday called on the Organization of the Petroleum Exporting Countries to reduce production by at least 5% to boost prices that have collapsed since last summer, signaling the possibility of another tense meeting when the organization gathers in June.
OPEC has been pumping more than 30 million barrels a day since December, when the cartel decided against cutting production in the face of precipitously falling crude prices. Led by Saudi Arabia, and over the objections of countries such as Iran, Iraq and Venezuela, the cartel agreed to keep production high so that countries could protect their market share………………………………………..Full Article: Source

Don’t expect OPEC to budge on Iran’s call for oil-output cuts

Posted on 15 April 2015 by VRS  |  Email |Print

A call for the Organization of the Petroleum Exporting Countries to cut production helped rally prices on Tuesday. But the request from Iran isn’t likely to sway the crude-oil cartel, experts say.
“We have heard the same line from Iran since sanctions were imposed,” said James Williams, an energy economist at WTRG Economics. “It is hard to recall an OPEC meeting when Iran was not asking others to cut so that the price would rise.”……………………………………….Full Article: Source

Look out OPEC! Oil ETF investors head for exit, risking new slump

Posted on 15 April 2015 by VRS  |  Email |Print

Oil investors who amassed a $6 billion long position in exchange traded funds, occupying as much as a third of the U.S. futures market, are now racing for the exit at a near record pace.
Outflows from four of the largest oil-specific exchange traded funds, including the largest U.S. Oil Fund (USO), reached $338 million in two weeks to April 8, according to data from ThomsonReuters Lipper. That is the first two-week outflow since September and the biggest since early 2014, marking a turnaround from heavy inflows in December and January on bets that oil prices would quickly rebound from six-year lows………………………………………..Full Article: Source

Canada’s economy is a disaster from low oil prices

Posted on 14 April 2015 by VRS  |  Email |Print

Low oil prices are threatening the health of Canada’s oil and gas sector, which in turn, is causing turmoil in Canada’s economy as a whole. The fall in oil prices is forcing billions of dollars in spending reductions for Canada’s oil and gas industry.
In February, Royal Dutch Shell (RDSA) shelved plans for a tar sands project in Alberta that would have produced 200,000 barrels per day. Last year, Petronas put off plans to build a massive LNG export terminal on Canada’s west coast………………………………………..Full Article: Source

Shale Oil Boom Could End in May After Price Collapse

Posted on 14 April 2015 by VRS  |  Email |Print

The shale oil boom that pushed U.S. crude production to the highest level in four decades is grinding to a halt. Output from the prolific tight-rock formations such as North Dakota’s Bakken shale will decline 57,000 barrels a day in May, the Energy Information Administration said Monday.
It’s the first time the agency has forecast a drop in output since it began issuing a monthly drilling productivity report in 2013. Deutsch Bank AG, Goldman Sachs Group Inc. and IHS Inc. have projected that U.S. oil production growth will end, at least temporarily, with futures near a six-year low………………………………………..Full Article: Source

OPEC slams oil producers with ‘go-it-alone’ attitudes

Posted on 14 April 2015 by VRS  |  Email |Print

The Organization of the Petroleum Exporting Countries published a stinging critique on Monday of oil-producing countries that had refused to follow its lead in holding back supply in an effort to boost prices.
“Today, operating purely through self-interest is quite simply frowned upon,” said the intergovernmental organization in a bulletin. “Yet, when it comes to the supply of petroleum, there is a stubborn willingness of some non-OPEC producers to adopt a go-it-alone attitude, with scant regard for the consequences.”……………………………………….Full Article: Source

Who’s winning the oil battle: OPEC or the United States?

Posted on 14 April 2015 by VRS  |  Email |Print

It’s been more than four months since the Organization of Petroleum Exporting Countries put global oil prices into a virtual free-fall when it decided at its semi-annual meeting in Vienna to not cut production. That has put a tremendous amount of pressure on what’s been called the shale oil revolution in North America and in the United States in particular.
Who’s winning so far? Well, that seems like trying to read tea leaves in a barrel of crude. “I think it’s two freight trains running at each other,” said Chris Faulkner, CEO at Dallas-based Brietling Energy………………………………………..Full Article: Source

How Much Longer Can OPEC Hold Out?

Posted on 14 April 2015 by VRS  |  Email |Print

OPEC has been the most talked about international organization among investors, analysts and international political lobbies in the last few months. When OPEC speaks, the world listens in rapt attention as it accounts for nearly 40 % of the world’s total crude output.
With its headquarters in Vienna, Austria, one of the mandates of 12- member OPEC is to “ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry.” ……………………………………….Full Article: Source

IEA Chief Economist: No Immediate Oil Market Impact After Iran Deal

Posted on 14 April 2015 by VRS  |  Email |Print

It could take three to five years for a new wave of Iranian oil to significantly increase world petroleum supplies and have a lasting impact on prices, the chief economist of the International Energy Agency said Monday.
The prospect of a deal to lift Western sanctions in exchange for limits on Iran’s nuclear program has added a new layer of volatility to an oil market reeling from a historic collapse in prices, from about $115 a barrel last summer to a low of $47 in January. Brent crude, the global benchmark, was trading at about $59 Monday afternoon in London………………………………………..Full Article: Source

Oil price down, coffers full: now Big Petroleum is in the mood for mergers

Posted on 13 April 2015 by VRS  |  Email |Print

The world of Big Oil looks set for another round of mega-mergers and acquisitions after Shell set the ball rolling this week with its $70bn agreement to take over BG. All eyes are on ExxonMobil. The world’s largest shareholder-funded energy giant has plenty of cash – and opportunities, now that the drop in oil prices has produced an army of willing sellers.
At one of the company’s rare meetings with Wall Street analysts recently, Exxon executives boasted it had a serious call from investment bankers acting on behalf of distressed oil companies looking for a saviour. Although Brent blend has only recently dived to less than $60 per barrel, from the highs of $115 seen last June, many energy companies are over-extended after a three-year period when they grew fat and over-ambitious, feasting on very high oil prices………………………………………..Full Article: Source

Oil Rate Of $55-60 Is To Remain For A Long Time

Posted on 13 April 2015 by VRS  |  Email |Print

There is not even a single positive sign indicating the possible improvement of the oil prices in the near future. The rate of $55-60 is to remain for a long time. Oil production is still at its peak and even a little higher after Saudi Arabia made announcements about maintaining production at 10.5 million barrels. Part of it will be required for meeting the local demand during summer season while ensuring to keep a firm grip on its global market share.
Oil prices are still within the range of $53-55 without any hope of increasing to $60 per barrel which is the market expectation. These prices are bound to remain for some time even though some oil analysts are predicting that the prices could fall to as low as $40 due to introduction of more oil into the market by Iran and Iraq, while Saudi Arabia is pushing for higher daily production of more than 10 million barrels………………………………………..Full Article: Source

Iran’s return to market to delay oil price recovery

Posted on 13 April 2015 by VRS  |  Email |Print

With Iran and the West reaching an understanding on the nuclear issue, questions about impact of the deal on Iran’s crude output and the global energy balance continued to confound the pundits. Speculation is rampant, adeal would result in further softening of the crude markets. But the question is if yes, then, to what extent?
If oil-related sanctions against Iran are lifted, world oil prices next year could be $5 to $15 a barrel lower than the current forecasts, the US Energy Information Agency is now saying. In its latest short-term energy outlook released last week, the agency left its current price forecasts unchanged, putting Brent at $59 this year and $75 a barrel next year underlining downside risks from Iran’s return. ……………………………………….Full Article: Source

Saudis struggle to keep its global oil market share

Posted on 13 April 2015 by VRS  |  Email |Print

Saudi Arabia is struggling to maintain its share of the global oil market in a contest that pits the world’s largest crude exporter against traditional allies in the US and Persian Gulf. The Saudi kingdom’s oil exports declined 5.7 per cent in 2014 compared with 2013. Oil shipments to its fastest-expanding customer, China, reached their lowest levels since 2011 in the first two months of 2015, according to the China General Customs Administration.
And its US sales nearly halved in January compared with a year earlier, according to the US Energy Information Administration. China and the US are Saudi Arabia’s biggest importers, with 10 per cent and 8 per cent, respectively, of the kingdom’s production………………………………………..Full Article: Source

World Oil Demand On The Rise Says Saudi Oil Minister

Posted on 13 April 2015 by VRS  |  Email |Print

Saudi Arabia’s oil production was up to 10.3 million barrels in March, and an senior Saudi energy official says that will meet an annual global rise in demand of as much as 1 million barrels a day. In fact, total yearly demand around the world is expected to reach 105 million barrels a day by 2025, Ibrahim al-Muhanna told an energy conference in Riyadh on April 10.
Al-Muhanna, an adviser to Saudi Oil Minister Ali al-Naimi, said the current depression in both oil prices and demand is a “temporary, unnatural situation,” and that in the foreseeable future there will be “continued growth in demand for the various types of energy, including oil.”……………………………………….Full Article: Source

OPEC’s no-cut strategy is not working, Iran says

Posted on 10 April 2015 by VRS  |  Email |Print

OPEC’s strategy of holding output steady is not working and the group’s members should discuss production levels before its next meeting in June, Iran’s oil minister said, a sign of the pain lower prices are causing OPEC’s less wealthy producers.
However, Bijan Zanganeh also told Reuters it was up to other members of the Organization of Petroleum Exporting Countries (OPEC) to make way for any extra Iranian crude that reaches world markets if Western sanctions on Tehran are lifted………………………………………..Full Article: Source

Saudi oil adviser says too early to say what OPEC will do in June

Posted on 10 April 2015 by VRS  |  Email |Print

It is too soon to say what OPEC will do when it meets to set output policy in June, an adviser to Saudi Arabia’s oil minister said on Thursday.”It is too early,” said Ibrahim al-Muhanna in response to a question at an energy conference in Riyadh.
“Any decision about the outcome will depend in the first place on the ministers themselves. When they meet they will decide,” he said. Top exporter Saudi Arabia was the driving force behind OPEC’s landmark decision, at its last meeting in November, not to cut oil output to support prices, and instead seek to defend market share………………………………………..Full Article: Source

Iran’s Strategic Petroleum Reversal for Oil Markets

Posted on 10 April 2015 by VRS  |  Email |Print

The Strategic Petroleum Reserve is America’s insurance against war with adversaries such as Iran. Now a potential deal between the two countries could end up creating an SPR-sized problem for oil bulls.
If sanctions on Iran are lifted quickly, the extra oil that could find its way to market by the end of 2016 could add up to an amount similar to the SPR’s roughly 691 million barrels. There may yet be no deal with Iran come the end of June. But if there is, and sanctions are lifted, a big tap will open up in the global oil market………………………………………..Full Article: Source

Why rising demand will determine the oil price

Posted on 10 April 2015 by VRS  |  Email |Print

The Saudi oil minister Ali Al Naimi noted this week that the kingdom’s production in March reached 10.3 million barrels per day (bpd). This is 700,000 bpd more than in December, when the kingdom announced that it would not cut production to support prices. Most of the output gain has come in just the past month.
For the kingdom to refuse a production cut is one matter. But ramping up crude supply to the market, at prices well below global marginal cost, is another. Why has Saudi Arabia chosen this strategy? There are two competing explanations………………………………………..Full Article: Source

Goldman Sachs Commodities Guru Jeff Currie On Why Oil Is Still Heading To $39 (Video)

Posted on 09 April 2015 by VRS  |  Email |Print

There have been signs that U.S. oil production is starting to roll over. That has put a spark under the price of oil in recent days. But Jeff Currie still sees oil going lower. His reasoning is that Russia, Saudi Arabia and Iraq are all producing at all-time highs. He sees oil staying in the $40s at least until the third quarter.……………………………………….Full Article: Source

If History Is Any Guide, Big Deals Signal the Oil Market Is Bottoming

Posted on 09 April 2015 by VRS  |  Email |Print

Oil companies have a knack for picking the bottom in crude prices, and history may be about to repeat itself. Traders and analysts are speculating that Royal Dutch Shell Plc’s takeover of BG Group Plc for $70 billion announced Wednesday may be the first in a wave of acquisitions as Big Oil seeks to drive out costs following the rout in oil.
That happening would resemble the massive deals of the late 1990s that restructured the industry. As oil slid then, BP Plc bought Amoco Corp. for $56 billion in August 1998 and Exxon took over Mobil Corp. for $80 billion in December………………………………………..Full Article: Source

Many are still betting on oil comeback in 2015

Posted on 09 April 2015 by VRS  |  Email |Print

Surprisingly, the flow of crude oil is still accelerating, much like the money going into crude oil funds. Three of the largest crude oil funds include USO, OIL, and UCO. UCO is unique due to the fact that it’s an exchange-traded fund that uses leverage, mostly in the form of derivatives, to correspond to twice (200%) the daily performance of its underlying benchmark, the Bloomberg WTI Crude Oil Sub-index.
Since the fund corresponds to 2X the daily performance rather than total performance of its underlying index, mainly day traders, hedge funds, and speculators predicting an oil rebound would invest in such a risky investment………………………………………..Full Article: Source

Oil Prices Tumble as Supplies Hit New Record

Posted on 09 April 2015 by VRS  |  Email |Print

The most volatile oil market in three years was hit with another sharp swing on Wednesday, as a huge buildup in crude supplies sent U.S. prices to their biggest loss in two months. Crude oil for May delivery slid 6.6%, a day after rising 3.5% to set a high for the year.
Prices have moved more than 2% up or down on 42 trading days this year, more than the total number of such moves in any of the past three years. Wednesday slide was triggered by a report from the U.S. Energy Information Administration showing the nation’s crude stockpiles soared to a new record last week, posting the biggest increase in 14 years as oil production rose………………………………………..Full Article: Source

Future oil sector mergers set to be more modest

Posted on 09 April 2015 by VRS  |  Email |Print

Oil prices were at multiyear lows. The world’s largest oil and gas companies were slashing jobs and cutting spending. But their stock prices were sagging and executives were under pressure to replenish reserves. The situation sounds like the backdrop to Wednesday’s announcement by Royal Dutch Shell, the oil group with a market value of nearly £127bn, that it plans to buy smaller UK rival BG Group for £47bn excluding debt.
But similar conditions existed in 1998. Back then the oil industry reacted by unveiling an unprecedented string of megadeals, which created the consolidated behemoths that dominate the energy market today………………………………………..Full Article: Source

Libya seeks cut in OPEC production

Posted on 09 April 2015 by VRS  |  Email |Print

OPEC should change course and cut oil supply by 800,000 barrels per day (bpd) or more to prevent an expected return of Iranian exports from weighing on prices, Libya’s OPEC governor said.
The comments underline how the halving of oil prices from $115 a barrel in June on global oversupply is hurting OPEC’s less wealthy members outside the Gulf and suggests the 12-nation group remains divided over the impact of its 2014 policy shift to defend market share, not prices. “OPEC members, as a unit, need to re-evaluate their strategies,” Samir Kamal, Libya’s OPEC governor and head of planning at the North African country’s oil ministry, said………………………………………..Full Article: Source

Iran Nuclear Deal May Cut Oil Prices by $15 a Barrel, EIA Says

Posted on 08 April 2015 by VRS  |  Email |Print

Oil prices could tumble $15 a barrel next year if sanctions are lifted following a final nuclear deal with Iran, according to the Energy Information Administration. Iran and world powers reached a preliminary agreement on April 2 that set the parameters for further negotiations needed to complete an agreement by a June 30 deadline. The re-entry of more Iranian barrels could cut the agency’s price projection by $5 to $15 a barrel, the EIA said Tuesday.
“If a comprehensive agreement that results in the lifting of Iranian oil-related sanctions is reached, then this could significantly change the STEO forecast for oil supply, demand, and prices,” the EIA said in the report. “However, the timing and order that sanctions could be suspended is uncertain.”……………………………………….Full Article: Source

U.S. Oil Prices Rise to 2015 High

Posted on 08 April 2015 by VRS  |  Email |Print

The benchmark U.S. oil price jumped to a 2015 high on Tuesday, on fresh signs the nation’s production is on the brink of a decline. The U.S. Energy Information Administration said U.S. crude-oil output, which hit a 42-year high in March, would peak in April and May before falling from June to September.
The forecast comes a day after analysts at Goldman Sachs predicted production would peak this month. These estimates reinforce the view that the boom in U.S. oil output, which helped drive a more than 50% plunge in oil prices in 2014, will ease this year. That situation could set the stage for a period of relative price stability, investors and analysts say………………………………………..Full Article: Source

U.S. Leads Global Oil and Gas Production for Third Year

Posted on 08 April 2015 by VRS  |  Email |Print

For the third year running, the U.S. produced more crude oil and natural gas than any other country in the world in 2014. More oil than Saudi Arabia. More gas than Russia. And it’s happening at time when the U.S. is trying to take a leadership role in slashing greenhouse gas emissions to avert the worst consequences of climate change.
The U.S. is the Earth’s hydrocarbon production leader because of fracking, which has allowed shale oil fields in North Dakota, Texas and elsewhere to gush oil, and shale gas fields in Pennsylvania and other eastern states to produce ever more natural gas………………………………………..Full Article: Source

OPEC … Your Days are Numbered

Posted on 08 April 2015 by VRS  |  Email |Print

Crude oil jumped this week to its highest price since mid-February. Is the energy sector’s worst pain over? “Don’t count on it,” says Goldman Sachs (GS). They say oil prices can’t rise much until oil production shrinks — which will take months, maybe years. OPEC’s monopoly isn’t so valuable anymore. In fact, it isn’t even a monopoly. The sun is setting on OPEC.
Say what you will about Goldman Sachs; they’ve been mostly right about oil prices lately. Their analysts forecasted $75 oil last October, weeks before the big drop. Goldman’s only mistake was being too optimistic………………………………………..Full Article: Source

Who’s to Blame for the Oil Price Crash?

Posted on 07 April 2015 by VRS  |  Email |Print

When we think of the recent drop in oil prices , the question is not only who started it, but who’s responsible for keeping the prices falling. Probably no one would dispute that the price plunge began with the eager and copious production of oil from shale formations in the United States. From the American perspective, that was beneficial because it was bringing energy self-sufficiency to a country with the reputation as the world’s largest importer of oil.
Despite unproven concerns about hydraulic fracturing, or fracking, a common way to extract oil and gas from underground shale rock, the practice has proven extremely productive. And that’s the source of the oil glut that began driving down prices in late June 2014………………………………………..Full Article: Source

Big Oil Companies Brace for Weak Quarter After Fall in Prices

Posted on 07 April 2015 by VRS  |  Email |Print

The world’s big oil companies and their investors are bracing for some of the worst quarterly financial results in recent memory as the first three months of the year closed with oil trading at about half of its 2014 peak.
The final quarter of 2014 was bad enough. British giant BP PLC announced its biggest quarterly loss since the Deepwater Horizon spill in the Gulf of Mexico in 2010. Exxon Mobil Corp’s. cash flow fell to its lowest level since the midst of the financial crisis in 2009. The year-end carnage was for a three-month period in which a barrel of oil traded at $77. In the latest quarter, the Brent international oil benchmark averaged $55.13 a barrel………………………………………..Full Article: Source

Oil Surges on Signs of Growing Demand

Posted on 07 April 2015 by VRS  |  Email |Print

Oil prices surged to their biggest gains in two months on signs of rising demand in both the U.S. and Asia. Light, sweet crude for May delivery rose $3, or 6.1%, to $52.14 a barrel on the New York Mercantile Exchange. It was the U.S. benchmark’s biggest day of gains since Feb. 3 and its highest settlement since Feb. 17.
Data provider Genscape Inc. reported that supplies in Cushing, Okla., a key storage hub and the delivery point for the benchmark U.S. futures contract, fell by nearly 300,000 barrels between March 31 and April 3, according to a broker………………………………………..Full Article: Source

OPEC has lost its swagger — and may never get it back

Posted on 07 April 2015 by VRS  |  Email |Print

OPEC is losing its clout. The Organization of the Petroleum Exporting Countries, or OPEC, which controls more than 80% of the world’s oil reserves (as of 2013), isn’t wielding the unrivaled sway over crude-oil prices that it has been credited with in the past.
Since the 12-nation organization announced last year that it wouldn’t slash oil production to curb a mounting supply glut fueled, in part, by U.S. shale producers, a growing chorus of market watchers are declaring the cartel dead — or at least significantly neutered. Bank of America’s Head of Commodities Francisco Blanch is the latest Wall Streeter writing OPEC’s epitaph………………………………………..Full Article: Source

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