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Commodities Briefing - Category | Oil more

Iran’s oil already factored in, minister says

Posted on 02 June 2016 by VRS  |  Email |Print

The global market for crude oil is moving closer toward balance, suggesting Iran’s return had already been factored in, the country’s oil minister said. Total crude oil production from members of the Organization of Petroleum Exporting Countries for April, the last full month for which data are available, was 32.4 million barrels per day, about 180,000 bpd higher than for March. Increased production from member states Iraq and Iran offset declines in Kuwait and Nigeria.
According to OPEC’s latest figures, Iranian crude oil production for April of 3.4 million bpd was 20 percent higher than the average for the fourth quarter of 2015. Iranian Oil Minister Bijan Zangeneh said exports, meanwhile, have doubled, but that increase in supply has not pushed crude oil prices lower………………………………………..Full Article: Source

Commodity Hedge Funds Get $5 Billion Embrace on Oil Gain

Posted on 01 June 2016 by VRS  |  Email |Print

The rally in oil has given a fillip to long-suffering commodities hedge funds. After four years of hemorrhaging cash and clients, managers are once again making money and winning back investors.
About $5 billion has coursed into the funds in 2016, with the first quarter seeing the biggest inflows since 2009, according to data compiled by eVestment. Investors are being drawn by gains such as the more than 18 percent increase reported in a letter to clients by Stuart Zimmer’s ZP Energy Fund in New York and the 12.7 percent posted by oil trader Pierre Andurand’s $1.1 billion Commodities Master Fund in London……………………………………….Full Article: Source

Why $US50 is the new normal price ceiling for global oil prices

Posted on 01 June 2016 by VRS  |  Email |Print

For the first time since last October, the price of a barrel of oil has broken through $US50. So it seems a good time to update the analysis I presented in January 2015. Back then, I argued that $50 or thereabouts would turn out to be a long-term ceiling for the oil price. At the time, with crude prices still above $US60, almost everyone believed that $US50 would be the rock-bottom floor.
After all, futures markets predicted prices of $US75 or higher; the Saudi and Russian governments needed $US100 to balance their budgets; and any price much below $US50 was considered unsustainable, because it would put the US shale-oil industry out of business………………………………………..Full Article: Source

Oil Price Forecasts Get More Bullish as Oversupply Concerns Ease

Posted on 01 June 2016 by VRS  |  Email |Print

Analysts are again raising their oil-price forecasts, in a reflection of falling concerns over the glut in crude supply. That helps relieve the pressure on members of the Organization of the Petroleum Exporting Countries—who are set to meet on Thursday—following months of fervent debate over production levels within the cartel.
Investment banks surveyed by The Wall Street Journal raised their price forecast for the third consecutive month in May, predicting that Brent crude, the international benchmark, would average $43 a barrel in 2016. That is up $2 from April’s survey………………………………………..Full Article: Source

UAE minister says happy with oil market

Posted on 01 June 2016 by VRS  |  Email |Print

UAE Oil Minister Suhail bin Mohammed al-Mazroui said on Tuesday he was happy with the oil market, noting that prices had been correcting higher. “We are optimistic. We are seeing that the market is correcting upward,” Mazroui told reporters in Vienna.
Oil ministers from the Organization of the Petroleum Exporting Countries meet on Thursday in the Austrian capital. Oil prices rose on Tuesday, heading for the fourth straight monthly gain, with investors betting on higher U.S. fuel demand as peak driving season arrived in the No. 1 oil consumer………………………………………..Full Article: Source

New Saudi energy minister shows he takes Opec seriously

Posted on 01 June 2016 by VRS  |  Email |Print

For Opec watchers, every little detail matters. When the oil producer group holds its half-yearly meetings, what time the ministers arrive in Vienna, how they speak and which hotel they stay in - anything will be analysed in an attempt to predict its policies.
So it was seen as a sign that new Saudi Energy Minister Khalid al-Falih takes Opec seriously when he turned up in the Austrian capital on Monday, three days before the Organization of the Petroleum Exporting Countries’ upcoming discussions………………………………………..Full Article: Source

Forget gold, oil is the star investment right now!

Posted on 01 June 2016 by VRS  |  Email |Print

Since the turn of the year, the price of gold has risen by around 18%. As a result, many investors are highly optimistic about the prospects for the precious metal and it has clearly been a strong performer in 2016.
A key reason for this is the fact that US interest rates have risen at a much slower pace than expected. When the Federal Reserve increased interest rates in December, it was expected that there would be as many as four rate rises this year, but with none by May, this figure is unlikely to be met. As such, interest-producing assets have been less enticing than was anticipated and the price of gold has risen………………………………………..Full Article: Source

Is Opec relevant in an oil market of falling prices and overproduction?

Posted on 31 May 2016 by VRS  |  Email |Print

The Organization of Petroleum Exporting Countries’ inability to reach consensus amid low point in commodity cycle comes under question before 2 June meeting. As the Organization of Petroleum Exporting Countries (Opec) meets on 2 June, questions are rising about the oil cartel’s continuing relevance.
Many Opec members have suffered as the oil price has collapsed and countries, most notably Saudi Arabia and Iran, have fought to retain market share rather than set prices by adjusting production. Crude-oil prices briefly fell under $30 a barrel for both Brent and West Texas Intermediate earlier this year, but have rebounded, with values touching $50 for Brent Thursday………………………………………..Full Article: Source

Crude oil price at $60 per barrel gains more backers

Posted on 31 May 2016 by VRS  |  Email |Print

The United Arab Emirates’s economy minister joined forecasters looking for $60 crude this year with demand and production moving more in line. “It’s possible for oil prices to reach $60 or more during this summer” as demand increases in the US, UAE Economy Minister Sultan Bin Saeed Al Mansoori said at a conference in Abu Dhabi on Monday. Crude will end the year higher than $60 a barrel, Mario Maratheftis, global chief economist at Standard Chartered, said.
SEB Bank forecast last week that Brent would touch $60 at times in 2016. Oil futures jumped 31 per cent this year, climbing above $50 a barrel last week, as US crude stockpiles declined, trimming a glut. Robust demand in India and other emerging nations led the International Energy Agency in May to reduce its estimate of the global oil surplus for the first half. Brent last traded above $60 in July………………………………………..Full Article: Source

Sberbank CEO: Oil price of $45 per barrel to boost Russian economy

Posted on 31 May 2016 by VRS  |  Email |Print

Russia’s economy may grow next year if oil prices stay at around $45 per barrel, Sberbank CEO Herman Gref said. “If the curernt trend continues, and the oil price will be around $45 per barrel,… next year, most likely, we will be a small growth of the Russian economy,” he said.
Gref added that oil price in 2020 could reach $60 per barrel, and by 2024 could increase to $80 per barrel. On May 26 the price of Brent crude oil exceeded the mark of $50 per barrel for the first time since November 4, 2015. The maximum price for July Brent crude oil futures contract reached $50.08 per barrel, according to the London’s ICE Futures Europe………………………………………..Full Article: Source

Why India could be the oil market’s next big driver of consumption

Posted on 31 May 2016 by VRS  |  Email |Print

Oil’s rise to US$50 a barrel earlier this month proved to be short-lived, but at least it suggested that oil prices had established a new and higher range. We might not be looking at a return to US$100-a-barrel WTI anytime soon, but prices seem to have stabilized somewhat, remaining north of US$40 for several weeks now.
Who knows how long this will last, of course. Support for higher prices has come at least in part from supply disruptions — in Nigeria and Libya, as well as Alberta, thanks to the Fort McMurray fires. Recent U.S. Energy Information Administration data suggest that stockpiles of crude are coming down………………………………………..Full Article: Source

Global Oil Market May Recover by End of 2017 - Russian Energy Minister

Posted on 30 May 2016 by VRS  |  Email |Print

Global oil market recovery can be expected by the end of 2017, Russian Energy Minister Alexander Novak said Sunday. “It seems to me that by the end of 2017 we will see the end of the respective cycle [of low oil prices] and the recovery of the market,” Novak stated at the Vestifinance forum.
The supply will be below the level of 2015 during the second, third and the fourth quarter of the current year and only by the year-end, it will reach the previous year’s notch, he noted, citing experts’ forecast and assessment………………………………………..Full Article: Source

The only certain thing about oil’s price is its uncertainty

Posted on 30 May 2016 by VRS  |  Email |Print

A large number of clever people backed by deep-pocketed employers spend a great deal of time trying to work out where the oil price is heading. It’s rather surprising, therefore, how wrong most of their predictions are. Forecasts generally amount to extrapolating the recent past.
When the oil price hit $150 a barrel in 2008, many thought that it would reach $200; earlier this year when the price of Brent crude hit $26, experts (often the same ones who were warning of the price spike eight years ago) predicted further falls to $15………………………………………..Full Article: Source

Why oil prices will head back toward $20 next winter

Posted on 30 May 2016 by VRS  |  Email |Print

One of today’s more fascinating examples of a widespread misunderstandings of cause and effect is that of the relationship between the U.S. dollar and crude oil or, if you prefer, the larger definition of the same problem — the dollar vs. commodity prices.
Commodity prices are down over the last two years, but not because the dollar is strong. They are down because there is too much supply and not enough demand. That causes commodity-related currencies — such as the Brazilian real, Russian ruble, South African rand, and the Canadian and Australian dollars — to be weak against the U.S. dollar (from a long-term perspective, not a couple of months)………………………………………..Full Article: Source

Oil States Expected to Stick With Saudis : OPEC Reality Check

Posted on 30 May 2016 by VRS  |  Email |Print

OPEC members gathering in Vienna June 2 are expected to go along with a Saudi Arabia-led policy focused on squeezing out rivals amid signs the strategy is working. That means the meeting may be less fraught than the previous summit in December, which ended with public criticism of the Saudi position from Venezuela and Iran.
By allowing prices to fall, high-cost producers are being forced out, easing the supply glut and spurring a rally of 80 percent since January to about $50 a barrel. All but one of 27 analysts surveyed by Bloomberg said the Organization of Petroleum Exporting Countries will stick with the strategy. An alternative proposal — to freeze output — was finally rejected in Doha last month………………………………………..Full Article: Source

Oil Pessimists Exit Market as Supplies Seen Closer to Balance

Posted on 30 May 2016 by VRS  |  Email |Print

The oil market doomsayers are beginning to capitulate. Speculators reduced bets on falling prices to the lowest level in 11 months as oil briefly breached $50 a barrel on signs supplies are coming into balance.
Crude climbed 7.4 percent this month in New York amid lower U.S. production and unplanned disruptions in Canada and Nigeria. Prices are up almost 90 percent since February. Money managers’ short position in U.S. benchmark crude reached the least since June, according to data from the Commodity Futures Trading Commission………………………………………..Full Article: Source

Iran soon to regain its oil market share: Rouhani

Posted on 30 May 2016 by VRS  |  Email |Print

Iran will retake its pre-sanction oil market share in the near future, Shana quoted President Hassan Rouhani as saying on Saturday. The president made the remarks in the inauguration ceremony held Saturday morning for the start of new Iranian parliament.
In the event, Rouhani noted that during the past four years Iran lost $180 million of its oil revenues per day because of the sanctions, “If we had those financial resources, which we lost due to the sanctions, we could have had a better employment condition and higher economic growth today”, he added………………………………………..Full Article: Source

The Real Question for OPEC: Who’ll Be Its New Top Official?

Posted on 30 May 2016 by VRS  |  Email |Print

As internal opposition to Saudi Arabia’s plan to squeeze rival suppliers fades, OPEC might not have a big policy question to debate when it meets next week. Nevertheless, the group will still have one thing to argue about: Who will replace Abdalla El-Badri as the next secretary-general?
El-Badri, a Libyan, was originally due to stand down in 2012 after serving the maximum six years in the position. The group has been extending the 76-year-old’s term ever since as squabbling members failed to agree on a successor………………………………………..Full Article: Source

Commodities hit by oil and metal falls amid flat pre-holiday trade

Posted on 30 May 2016 by VRS  |  Email |Print

Commodities producers were knocked by a sudden reversal in metal and oil prices, as the rally in Brent crude that began earlier this year gave way.
The price of a barrel of Brent, an oil benchmark, slid from the seven-month peak of $50 it touched on Thursday, to tumble beneath $49 as the week drew to a close. Coupled with declines in hard commodities, the moves weighed down the minerals- heavy FTSE 100………………………………………..Full Article: Source

Oil hits $50, global commodities dragged higher

Posted on 27 May 2016 by VRS  |  Email |Print

Oil’s advance through $50 a barrel in line with a softer dollar is energising the commodity sector, but bourses are otherwise under pressure as the latest global rally struggles to maintain momentum.
After a mixed Asia-Pacific session, the pan-European Stoxx 600 equity index is slipping 0.2 per cent while US futures point to the S&P 500 easing 0.1 per cent to 2,088, writes Jamie Chisholm. The cautious mood in stocks is encouraging buyers of government bonds, nudging down Treasury yields. The gold price is higher, and so is the yen………………………………………..Full Article: Source

Oil price rises above $50 a barrel

Posted on 27 May 2016 by VRS  |  Email |Print

Data suggests global glut is easing due to fall in US output and supply disruption in Canada, Libya and Nigeria. Oil prices have broken through the $50 per barrel mark for the first time in almost seven months after storage figures suggested that the glut in global crude supplies was easing.
Many analysts have predicted that the recovery, which will help the North Sea oil industry and could steady the global economy but hurt motorists through higher petrol costs, could be short-lived. The price of Brent crude edged up 0.9% to $50.2 a barrel, boosted by data from the US government showing a sharper than expected fall in crude stocks last week, and it later fell back slightly………………………………………..Full Article: Source

Oil Prices Poised to Hit Sweet Spot for Global Economy

Posted on 27 May 2016 by VRS  |  Email |Print

Oil prices, which have been on a jagged rise to near $50 a barrel, are poised to hit a sweet spot for global growth, traders, economists and investors say. On Thursday oil prices rose above $50 a barrel for the first time since November as a combination of supply disruption and declines in U.S. oil inventories raised hopes the oversupplied market was inching toward a better balance.
That puts crude back within a range between $50 and $60 in which almost everybody benefits, economists and investors say. In a so-called goldilocks scenario, oil is not too pricey for consumers and industry, which have benefited from cheap crude for almost two years. But it is priced well enough to help profits in the beleaguered oil industry………………………………………..Full Article: Source

This is what makes OPEC even less relevant

Posted on 27 May 2016 by VRS  |  Email |Print

A series of unexpected disruptions in the world oil market has driven crude to the $50 per barrel level more swiftly than expected — a factor that makes OPEC and its meeting next week less relevant. Both international Brent and West Texas Intermediate crude futures crossed above $50 Thursday, though analysts expect prices to temporarily head lower again in the next couple of months as some supply returns and demand drops off as it does every year after summer driving season peaks.
By year end, however, $50 or above is expected to be the norm. Oil production in the last several weeks has dropped by several million barrels a day due to everything from forest fires in Canada to rebel attacks in Nigeria………………………………………..Full Article: Source

OPEC Likely to Choose New Secretary-General Next Week

Posted on 27 May 2016 by VRS  |  Email |Print

Abdalla Salem el-Badri has been set to retire since 2013 but has stayed on because the fractious oil cartel has been unable to agree a new leader. The Organization of the Petroleum Exporting Countries is likely to choose a new secretary-general at its meeting next week, the only concrete action the cartel is expected to take, said national delegates of the group.
The 13-nation group that controls more than a third of the world’s crude-oil output has been unable to agree on much since petroleum prices began a long swoon nearly two years ago. Once able to swing production up or down to influence prices, OPEC has stayed on the sidelines during this downturn as an American oil boom floods the market and prices remain far below what the group’s members want………………………………………..Full Article: Source

Saudi Arabia Aims to Protect Share of Global Oil Market

Posted on 27 May 2016 by VRS  |  Email |Print

Saudi Arabia is not politicizing the oil problem and is acting solely on economic reasoning in discussion of oil prices and production output, Saudi Foreign Minister Adel al-Jubeir said Thursday. In an interview with Russia Today television, al-Jubeir dismissed assertions that Riyadh was using the oil issue to achieve political goals and insisted that Saudi Arabia approached the current situation on the global oil market solely from the economic standpoint.
“The market determines the oil price depending on demand and offer. The goal of Saudi Arabia is to protect its share of the market and not to support producers that have high oil prices,” the minister stressed………………………………………..Full Article: Source

Oil Is the Odd Commodity Out. Is that Bad for Crude?

Posted on 26 May 2016 by VRS  |  Email |Print

Oil is riding high these days, even as other commodities and emerging markets have turned lower. That may mean one of two things is taking place: Either oil prices will fall back into line, or oil will lose its place a key driver of the financial markets.
The price of West Texas Intermediate crude futures is up 0.6% on the day, on pace to settle at a new 2016 high. It’s on the cusp of climbing back over $50 per barrel, a key psychological level at which firms like Pioneer Natural Resources have said that they’ll look to ramp up production………………………………………..Full Article: Source

Oil price nears seven-month high – will it break $50?

Posted on 26 May 2016 by VRS  |  Email |Print

The oil price broke out of a four-session mini-slump overnight and was hovering close to seven-month highs this morning after a positive report on supply boosted sentiment. US benchmark West Texas Intermediate jumped 2.5 per cent to $49.27 a barrel in afternoon trading in New York yesterday, a new 2016 peak and the highest price since October.
It was holding within 10 cents of this at around 9.45am in London this morning. International benchmark Brent crude peaked last night at around $49.24, around 25 cents below its six-month high of last Monday, and was similarly steady in early London trading………………………………………..Full Article: Source

5 key issues OPEC must wrestle with at its June meeting

Posted on 26 May 2016 by VRS  |  Email |Print

The oil market has given members of the Organization of the Petroleum Exporting Countries a reason to crack a cautious smile at next week’s meeting in Vienna. Signs of a more stable oil market have emerged since the cartel members last held a regularly-scheduled meeting. Oil prices have gained more than 30% so far this year, with West Texas Intermediate crude oil trading at its highest price in seven months in early trade Wednesday on the New York Mercantile Exchange, surpassing $49 a barrel.
Global production is on the decline following a larger-than-expected weekly decline in crude supplies, according to a report from the American Petroleum Institute late Tuesday………………………………………..Full Article: Source

Iran-Saudi row threatens any OPEC deal, puts role in question

Posted on 26 May 2016 by VRS  |  Email |Print

OPEC’s thorniest dilemma of the past year - at least from a purely oil standpoint - is about to disappear. Less than six months after the lifting of Western sanctions, Iran is close to regaining normal oil export volumes, adding extra barrels to the market in an unexpectedly smooth way and helped by supply disruptions from Canada to Nigeria.
But the development will do little to repair dialogue, let alone help clinch a production deal, when OPEC meets next week amid rising political tensions between arch-rivals Iran and oil superpower Saudi Arabia, OPEC sources and delegates say………………………………………..Full Article: Source

Oil Rebound Has Citigroup Seeing Worst Over for Commodities

Posted on 25 May 2016 by VRS  |  Email |Print

The commodities market has turned a corner and prices are unlikely to return to lows seen in the first quarter, according to Citigroup Inc., which boosted forecasts from metals to grains amid an oil-led recovery.
The bottom was likely hit earlier this year when weak fundamentals across all commodities were reinforced by selling after the collapse of China’s equity markets, Citigroup analysts including Ed Morse wrote in a report Tuesday. The bank is now predicting Brent oil will climb to $50 a barrel in the third quarter, earlier than its previous forecast for the fourth quarter, while increasing its year-end gold estimate by $100 an ounce to $1,250………………………………………..Full Article: Source

$65 oil price ‘badly needed’ for investment says Qatar

Posted on 25 May 2016 by VRS  |  Email |Print

Oil markets are rebalancing but crude is not at a fair price yet, Qatar’s energy minister and current Opec president told the Associated Press in an interview published on Tuesday, saying a minimum price of $65 a barrel was “badly needed at the moment”.
“The oil market is recovering slowly but steadily. Luckily, the fundamentals show it is heading in the right direction,” Mohammed Al-Sada was quoted as saying. “I don’t think we are yet at a fair price. We need to have a fairer price so that we can have the ability to invest more in order to secure the energy supply to the world and avoid any price shock,” he said………………………………………..Full Article: Source

OPEC’s Ability to Ease An Oil Supply Shock is Now Fading

Posted on 25 May 2016 by VRS  |  Email |Print

OPEC’s ability to ease the pain of an oil-supply shock is slipping. For half a century, the Organization of the Petroleum Exporting Countries has buffered global crude markets, curtailing production to ease oil gluts and boosting output to prevent shortages.
Now, as it heads into a June 2 meeting to discuss how to stabilize world oil markets, the cartel has neither the political consensus to cut output nor the technical capability to significantly raise production. Since last year, OPEC members haven’t been able to agree on supply cuts to stem a glut that drove prices down by more than 50% since 2014. Instead they kept pumping full blast………………………………………..Full Article: Source

Oil market entering a phase of rebalancing claims Goldman Sachs

Posted on 25 May 2016 by VRS  |  Email |Print

Increased oil production from countries with lower costs is going to hold down the price of crude, according to industry experts at Goldman Sachs. Goldman commodity analysts claim the “new oil order” means that output from the likes of Iran and Iraq will soon entirely offset disruption from higher cost producers.
Recently the oil price has been buoyed by production problems in Canada, Nigeria, and Venezuela. The price of crude came close to crossing the $50 per barrel mark at the end of last week but has since fallen back from the psychological barrier………………………………………..Full Article: Source

Saudi Oil Policy Is Set In Stone

Posted on 25 May 2016 by VRS  |  Email |Print

Next week, OPEC will hold its first meeting since talks on freezing production between the bloc’s major producers and their non-OPEC peers fell apart in April. The June 2 convention will also mark the first time OPEC members have come together in Vienna since Saudi Oil Minister Ali al-Naimi stepped down, making way for Khalid al-Falih to take his place.
Both events have raised questions about what direction Riyadh’s oil policies will take in the months ahead, and how they will affect the kingdom’s relationships with its fellow producers………………………………………..Full Article: Source

Commodities Prices Will Remain Low For Some Time, Here’s Why

Posted on 24 May 2016 by VRS  |  Email |Print

The oil price is recovering. As I wrote in previous pieces, low oil prices are a cure for low oil prices. This is because energy is the foundation of economic activity. Cheap energy is great, but the principle of the ‘greedy algorithm’ where grabbing as much as you can is the way to prosper means it can’t stay extremely cheap for very long.
The read through is that this rally in oil should mean a rally in other natural resources. You might look at gold and say, oil up means gold up means other commodities to follow………………………………………..Full Article: Source

Oil will soon stage a ‘fundamental price recovery’: Analyst

Posted on 24 May 2016 by VRS  |  Email |Print

Supply outages and growing demand from China mean crude prices will come into “much better balance” in the next few months, an energy analyst told CNBC. Jefferies’ Jason Gammel told CNBC on Monday the oil market had swung from oversupply to undersupply in April thanks to disruptions in production in Nigeria and Alberta, Canada, taking around 2 million barrels per day out of the market.
“I think with continued demand growth over the course of this year and continued declines in non-OPEC supply that we are already seeing in places like the United States, the market actually comes into much better balance by the end of the third quarter and that’s the stage for fundamental price recovery,” he told CNBC television in London………………………………………..Full Article: Source

The oil market’s biggest problem is still far from solved

Posted on 24 May 2016 by VRS  |  Email |Print

The worst of the crude oil supply glut may not be over. In the last few weeks, sentiment about the oil market has improved. This happened, in part, after supply disruptions hit Nigeria and Canada. Additionally, Goldman Sachs analysts said the imbalance between supply and demand may be correcting faster than they had expected.
But Adam Longson, head of commodity research at Morgan Stanley, is not yet convinced. In a note Monday, he said the physical oil market is barely responding to supply disruptions. Rising oil storage floating in tankers on the world’s oceans and global gasoline stocks were among the concerning signs he pointed out………………………………………..Full Article: Source

The Market May Crowd Out the OPEC Cartel

Posted on 24 May 2016 by VRS  |  Email |Print

Daniel Yergin’s excellent “Where Oil Prices go From Here” (op-ed, May 16) suggests that shale-oil production in the U.S. will increase once the world’s crude-oil supply and consumption return to balance later this year. This is a very optimistic scenario as it is unlikely that the Saudis will reverse their production policy.
Market forces will also ensure that other members of OPEC will start increasing production rather than sticking to their quotas. This is happening with Saudi Arabia, which is likely to produce 12 million barrels a day within 18 months to counteract the increasing surge in Iranian production. Venezuelan production will also increase within a few years after there is a more oil-company friendly government in power………………………………………..Full Article: Source

What Does The Next OPEC Meeting Have In Store?

Posted on 24 May 2016 by VRS  |  Email |Print

The next OPEC meeting on the 2nd of June will act as little more than a forum for continued altercations between Saudi Arabia and Iran. The 2 June 2016 OPEC meeting will be held amid a backdrop of oil prices near $50 per barrel, a sharp drop in Nigerian production due to sabotage, turmoil in Venezuela, Saudi Arabia operating with a new oil minister, and Iran aggressively pumping close to pre-sanction levels.
OPEC interactions have become a direct altercation between Saudi Arabia and Iran, with the remaining members reduced to mere observers. The new Saudi oil minister, Khalid al-Falih, will be attending his first OPEC meeting, but experts doubt he will have the same clout and skills as the outgoing Saudi oil minister, Ali bin Ibrahim Al-Naimi………………………………………..Full Article: Source

Energy Expert Says Oil Prices Won’t Top $100 a Barrel

Posted on 23 May 2016 by VRS  |  Email |Print

Following a stunning decline, oil prices have clawed back near the $50 level this year. Production boomed in the U.S. but is now slumping. Globally, OPEC is in disarray and major producers can’t agree on steps to boost prices. Daniel Yergin is the vice chairman of research firm IHS Inc. He has written two books on energy, including the Pulitzer-winning opus “The Prize: The Epic Quest for Oil, Money and Power,” which is essential reading for anyone interested in the subject.
Prices where they are today (around $48) are not going to provide a signal for the investment that will be needed to meet demand by 2020, so I think we will see higher prices. But unless there is some big surprise or disruption they wouldn’t go back to $100 a barrel………………………………………..Full Article: Source

Tom Ward: The ‘dirty little secret’ about $50 oil

Posted on 23 May 2016 by VRS  |  Email |Print

Chesapeake Energy co-founder Tom Ward said Friday that oil prices need to recover to about $75 a barrel in order for most drillers to ramp up production. Crude futures have recently approached $50 a barrel after rebounding more than 80 percent from this year’s lows in the mid-$20 range.
Some worry those prices will incentivize high-cost U.S. oil producers to put more rigs to work, worsening a global supply glut and putting off a sustainable price recovery. U.S. oil production has fallen from a high of nearly 9.7 million barrels per day last year to about 8.8 million barrels per day………………………………………..Full Article: Source

Iran Won’t Freeze Oil Output Before OPEC Meeting

Posted on 23 May 2016 by VRS  |  Email |Print

Iran, which is due to meet with OPEC partners on June 2, has no plan to join any freeze in crude output as the country won’t be done ramping up oil exports to pre-sanctions levels before the second half of the year, the head of the state oil company said.
The Persian Gulf state’s oil exports will likely surpass 2.2 million barrels a day by the middle of the summer, Rokneddin Javadi, managing director of National Iranian Oil Co., told Mehr news agency. Iran last exported at this level before sanctions were imposed on the country for its nuclear program more than four years ago. Sanctions were eased in January, and Iranian officials said they won’t discuss any output freeze or cut before reaching pre-sanctions levels………………………………………..Full Article: Source

Kuwait wants Iran in oil freeze deal

Posted on 23 May 2016 by VRS  |  Email |Print

Kuwait said on Friday that it is in favor of signing an agreement to freeze oil production at the OPEC summit in early June, but emphasized that such an agreement will be impossible without the participation of Iran.
The announcement was made by Abdulaziz al-Adwani, Kuwait’s ambassador to Russia. Al-Adwani has told the Russian news agency Interfax that Kuwait wants an agreement to freeze oil production to be reached at the upcoming OPEC summit, but that agreement should also include Iran. Such a step would be effective and impact the oil price if Iran also agreed to it, he said……………………………………….Full Article: Source

OPEC Set for Another Meeting With No Deal After Doha Failure

Posted on 23 May 2016 by VRS  |  Email |Print

After failing to reach an accord on oil supply in Doha last month, OPEC is poised to go another meeting with no agreement on how much crude to produce. All but 1 of 27 analysts surveyed by Bloomberg said the Organization of Petroleum Exporting Countries won’t set an output target on June 2, as it sticks with Saudi Arabia’s strategy to squeeze out rivals including U.S. shale drillers by pumping near-record volumes.
An accord on an output cap with non-members such as Russia collapsed in Doha last month when Saudi officials insisted Iran would need to take part………………………………………..Full Article: Source

How The U.S. Dollar Influences Oil Prices

Posted on 23 May 2016 by VRS  |  Email |Print

Crude oil has reached a critical technical level, which is likely to test the resolve of the bulls to push prices higher. The bulls have a favorable tailwind with production outages reducing the supply glut. Till about two weeks ago, the drop in the U.S. dollar was also supportive of the crude oil prices, but since then, the dollar has recovered, putting pressure on the crude oil prices.
The U.S. dollar and the various commodities have an inverse correlation. The chart below shows the correlation between crude and the U.S. dollar index for the past 12 years………………………………………..Full Article: Source

Saudi Kills US Shale Oil Industry and Buys it for Pennies

Posted on 20 May 2016 by VRS  |  Email |Print

The Saudi Kingdom saw American oil companies invest in the research and development of oil fields and fracking, and then crashed the market so they could scavenge US natural resources and technology on the cheap.
In 2015, the world stared into a global economic recession, with startling downgrades for Chinese economic growth due to an explosion in their stock market, fueled by speculative excess. While the Chinese economy roiled, unrest brewed in much of the world, including in the war-torn Middle East and on European shores, upon which refugees descended en masse. Even the US economy, once stoked by a shale oil renaissance, was not spared the effects………………………………………..Full Article: Source

Oil could easily be headed back to $35 a barrel

Posted on 20 May 2016 by VRS  |  Email |Print

After a long and eventful decline in prices, the crude-oil market has suddenly been experiencing the other side of the supply-demand coin, something that it has not had to deal with in a while: a bull run cobbled together from a series of unplanned supply outages.
It started last month, with the Kuwait oil workers’ strike, and those lost barrels were added to lost production from seemingly everywhere, ranging from the North Sea to Libya and Nigeria. The ongoing wildfire in the tar sands region of Canada was another outlier event, knocking out over 1 million barrels of production per day………………………………………..Full Article: Source

Oil prices have probably bottomed: Woodside

Posted on 20 May 2016 by VRS  |  Email |Print

Woodside Petroleum chief Peter Coleman says oil prices have probably bottomed and are likely to firm, but he doesn’t think a strong rebound is on the cards, warning prices will remain “rangebound” as gains inspire more production.
Coleman is fronting investors in Sydney this morning in the company’s annual investor briefing day. “We think there will be a firming over the next 18 months,” Mr Coleman said. “We’re not going to see any real increase in prices … but we’ve probably bottomed out in a range.”……………………………………….Full Article: Source

What Does The Next OPEC Meeting Have In Store?

Posted on 20 May 2016 by VRS  |  Email |Print

The next OPEC meeting on the 2nd of June will act as little more than a forum for continued altercations between Saudi Arabia and Iran. The 2 June 2016 OPEC meeting will be held amid a backdrop of oil prices near $50 per barrel, a sharp drop in Nigerian production due to sabotage, turmoil in Venezuela, Saudi Arabia operating with a new oil minister, and Iran aggressively pumping close to pre-sanction levels.
OPEC interactions have become a direct altercation between Saudi Arabia and Iran, with the remaining members reduced to mere observers………………………………………..Full Article: Source

OPEC strategy working as Kuwait sees oil rising to $50

Posted on 20 May 2016 by VRS  |  Email |Print

OPEC’s strategy to defend market share rather than target a price is working as crude gains amid rising demand and declining output from producers including U.S. shale wells, Kuwait’s acting oil minister said.
Oil will end the year at $50/bbl and the market will rebalance in the third or fourth quarter, Anas Al-Saleh said in an interview Wednesday in Kuwait City. Kuwait will stick to OPEC’s strategy of pumping to win customers, he said. Demand is growing and about 3 MMbpd of crude supply have been lost to interruptions or because some producers have been priced out of the market, he said………………………………………..Full Article: Source

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