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Commodities Briefing - Category | Oil more

Oil Starts Move Down to $20

Posted on 24 March 2015 by VRS  |  Email |Print

CNBC ran an article about a prediction by FACTS Global Energy that oil could drop to $35 a barrel soon, and then go much lower. Saudi officials say they will keep production at the levels they are now. Slowing economies in the European Union and China will cripple demand for crude. Citigroup analysts have not retracted their prediction that oil will drop to $20. The forecasts of a collapse of oil prices, so loud in February, have returned.
While some of the forecasts for the fall in oil prices are bogus, others have some merit. Perhaps companies holding crude will find more tankers to keep oil out at sea. No one knows how many tankers that might be, or whether their capacity has been filled………………………………………..Full Article: Source

Keeping oil below $100 will shut shale out of market, says Saudi official

Posted on 24 March 2015 by VRS  |  Email |Print

Oil prices won’t rebound to $100 a barrel because increased prices would draw more shale and other output from higher-cost producers to the market, said Mohammad al-Madi, Saudi Arabia’s governor to OPEC. “I think it will be difficult to reach $100 or $120 another time,” Madi said at a conference in Riyadh on Sunday. “This will let the high-cost producers come back again.”
Saudi Arabia, the nation leading OPEC in defending its share of the global oil market, will keep investing to maintain its current output capacity, he said. Brent oil, the global benchmark, declined almost 50 percent in the past year as Saudi Arabia and others in the Organization of Petroleum Exporting Countries committed to maintaining output amid a global surplus. U.S. output is the highest in three decades as drillers pump crude from shale………………………………………..Full Article: Source

Oil won’t breach $100 again - OPEC exec

Posted on 24 March 2015 by VRS  |  Email |Print

Oil prices won’t rebound to $100 a barrel because increased prices would draw more shale and other output from higher-cost producers to the market, according to Saudi Arabia’s governor to OPEC.
“I think it will be difficult to reach $100 or $120 another time,” Mohammed al-Madi said at a conference in Riyadh yesterday. “This will let the high-cost producers come back again.” Saudi Arabia, the nation leading OPEC in defending its share of the global oil market, will keep investing to maintain its current output capacity, he said………………………………………..Full Article: Source

Lower oil prices proving a bonus for China even as demand falls

Posted on 24 March 2015 by VRS  |  Email |Print

The “new normal” of lower growth that premier Li Keqiang talks about is also having an impact on demand for oil and other commodities. Lower prices for oil and other commodities are delivering China serious savings in its purchases of oil, iron ore and copper – by some estimates up to €232 billion a year.
At the same time, China, the world’s number two oil consumer, topped up its strategic petroleum reserves last year with cheap crude and now the tanks are nearly full. China’s goal is to fill the tanks to have a 90-day supply by 2020, from a current level of 30-40 days………………………………………..Full Article: Source

Hedge funds get short of US oil as storage fills

Posted on 24 March 2015 by VRS  |  Email |Print

Hedge funds have turned super-bearish about US oil prices as concerns about running out of storage trump the drop in the number of rigs drilling new wells. Money managers had amassed a record number of short positions in futures and options contracts linked to WTI (West Texas Intermediate) by the end of March 17, equivalent to 209 million barrels of oil, according to the US Commodity Futures Trading Commission’s (CFTC) latest commitments of traders report published on Friday.
Money managers still have long positions equivalent to 381 million barrels, so overall the sector is still running a net long position. Hedge fund managers have a natural bullish bias. Not once have hedge funds as a whole been net short of WTI futures and options in the last nine years………………………………………..Full Article: Source

Return to $100 Oil Seen Unlikely by Saudis Amid Shale Surge

Posted on 23 March 2015 by VRS  |  Email |Print

Oil prices won’t rebound to $100 a barrel because increased prices would draw more shale and other output from higher-cost producers to the market, said Mohammed al-Madi, Saudi Arabia’s governor to OPEC.
“I think it will be difficult to reach $100 or $120 another time,” al-Madi said at a conference in Riyadh on Sunday. “This will let the high-cost producers come back again.” Saudi Arabia, the nation leading OPEC in defending its share of the global oil market, will keep investing to maintain its current output capacity, he said………………………………………..Full Article: Source

OPEC won’t support oil’s price alone, says Saudi minister

Posted on 23 March 2015 by VRS  |  Email |Print

OPEC will not take sole responsibility for propping up the oil price, Saudi Arabia’s oil minister said on Sunday, signalling the world’s top petroleum exporter is determined to ride out a market slump that has roughly halved prices since last June.
Last November, the Organization of Petroleum Exporting Countries kingpin Saudi Arabia persuaded members to keep production unchanged to defend market share. The move accelerated an already sharp oil price drop from peaks last year of more than $100 (U.S.) a barrel that was precipitated by an oversupply of crude and weakening demand………………………………………..Full Article: Source

Keeping oil below $100 will shut shale out of market: Saudi official

Posted on 23 March 2015 by VRS  |  Email |Print

Oil prices won’t rebound to $100 a barrel because increased prices would draw more shale and other output from higher-cost producers to the market, said Mohammad al-Madi, Saudi Arabia’s governor to OPEC. “I think it will be difficult to reach $100 or $120 another time,” Madi said at a conference in Riyadh on Sunday. “This will let the high-cost producers come back again.”
Saudi Arabia, the nation leading OPEC in defending its share of the global oil market, will keep investing to maintain its current output capacity, he said. Brent oil, the global benchmark, declined almost 50 percent in the past year as Saudi Arabia and others in the Organization of Petroleum Exporting Countries committed to maintaining output amid a global surplus. U.S. output is the highest in three decades as drillers pump crude from shale………………………………………..Full Article: Source

Oil Price Drop Hurts Spending on Business Investments

Posted on 23 March 2015 by VRS  |  Email |Print

Prospects for an uptick in business investment this year are facing a major drag: The collapse in oil prices is spurring significant cutbacks by the energy-production industry, which had been a standout in an otherwise lackluster U.S. economic expansion.
Business capital spending rose 6% last year due to gains from a broad base of U.S. industries. The drag from energy this year could cut that growth rate in half in 2015, according to economists at Goldman Sachs………………………………………..Full Article: Source

Kuwait Says OPEC Has No Choice But to Keep Oil Production Target

Posted on 20 March 2015 by VRS  |  Email |Print

OPEC has no plans for an extraordinary meeting to discuss ways to shore up oil prices and doesn’t have a choice but to keep its crude production unchanged to maintain market share, Kuwait Oil Minister Ali Al-Omair said.
If other producers want to cut supply, “we will be very happy,” al-Omair said in Kuwait City. No “serious” requests have come from OPEC members to hold early talks so “accordingly the next meeting will be in June,” he said………………………………………..Full Article: Source

Preparing for a Brent Benchmark With No Brent Oil

Posted on 20 March 2015 by VRS  |  Email |Print

It was once a behemoth, a massive North Sea oil field whose importance to the world crude market was summed up by its name atop the global benchmark price: Brent. Today, the Brent field, northeast of Scotland’s remote Shetland Islands, is all but tapped dry. It produces about 1,000 barrels a day in a global market of 93 million daily barrels.
Royal Dutch Shell PLC is awaiting approval to scrap the first of four Eiffel Tower-sized platforms that have sucked Brent-branded crude from the seabed for almost 40 years. In a few years, the Brent benchmark—a crucial metric for global oil prices—will contain no actual Brent at all………………………………………..Full Article: Source

The World’s Biggest Oil And Gas Companies

Posted on 20 March 2015 by VRS  |  Email |Print

Big Oil is in a panic. The global price of crude has fallen further and faster than anyone could have predicted. At $43 a barrel oil is down about 70% from June 2014. Record oil supplies have outstripped demand, and now storage tanks are filling up. By June we might just run out of room to stick all this crude. If that happens $43 a barrel might look great compared with how far oil prices could fall.
It’s remarkable that the world finds itself swimming in Too Much Oil. A decade ago Earth was using about 83 million barrels per day. That’s grown to 93 million bpd now. Remember back in 2008 when the worryworts were prognosticating that record prices of $147 were just the beginning of a Peak Oil super spike? We don’t hear much of them anymore………………………………………..Full Article: Source

India Uses Oil Price Drop To Fill Strategic Reserves

Posted on 20 March 2015 by VRS  |  Email |Print

The world’s fourth biggest oil consumer, India last month built its first underground SPR in Andhra Pradesh. India is set to import 8 million barrels of Iraqi oil to fill its first strategic petroleum reserve (SPR), taking advantage of cheap prices and lending some support to a market suffering from oversupply.
India’s SPR purchases could temporarily help offset the impact of an expected pause in China’s strategic stocks build and the start of spring maintenance at Asian refiners. India’s oil ministry on Tuesday instructed state refiners Indian Oil Corp and Hindustan Petroleum Corp Ltd to each seek two very large crude carriers (VLCC) of Basra oil for arrival in May-June, totalling 8 million barrels, two sources familiar with the matter said………………………………………..Full Article: Source

Growth in non-OPEC oil output to keep crude prices in check

Posted on 20 March 2015 by VRS  |  Email |Print

The unravelling of crude oil prices has been the biggest story of 2014. A combination of factors have led to crude oil prices correcting sharply. While demand-supply mismatches happen to be a big reason for the fall, increase in output from non-OPEC oil producing countries have also played a big role in price movements.
The Organization of Petroleum Exporting Countries in its monthly oil market report dated 16 March has given an indication of demand-supply conditions that are expected to play out in 2015. The cartel of oil producing countries says that it has seen price of the OPEC Reference Basket average at $54.06/barrel in February, representing a gain of 22 per cent, on higher demand and expectations that oil prices have hit a bottom………………………………………..Full Article: Source

Iran on course to regain OPEC position

Posted on 20 March 2015 by VRS  |  Email |Print

Industry observers say Iran is able to reclaim its position as the second largest oil producer in OPEC once US-led sanctions are lifted. Iran has said it could add a million barrels to daily oil production shortly after a deal to lift sanctions.
Minister of Petroleum Bijan Namdar Zangeneh says Iran would bring its oil production to 3.8 million “within a few months” placing it behind only Saudi Arabia in the Organization of Petroleum Exporting Countries. “While such a boost would take months because sanctions may be rolled back slowly, industry observers agree the capacity is there,” Bloomberg admitted………………………………………..Full Article: Source

Everything you want to know about falling oil prices

Posted on 19 March 2015 by VRS  |  Email |Print

Why is the oil price falling? Mostly because of increased supply from America—up by 4m barrels a day since 2009. Although most crude exports are still banned, American imports have plummeted, contributing to a glut on world markets. Other producers have decided not to try to curb their production and keep the price up.
Why? The Organisation of Petroleum Exporting Countries is dominated by Gulf producers, notably Saudi Arabia. They have huge reserves to cushion the impact of low prices. They also hope that the slump will eventually shut down high-cost production, tightening the market again………………………………………..Full Article: Source

Oil prices rebound sharply after Fed move

Posted on 19 March 2015 by VRS  |  Email |Print

Oil prices staged a sharp rebound after the US Federal Reserve scrapped its low-rates guidance on Wednesday, weakening the dollar. US crude had marked a fresh six-year low earlier on Wednesday before the Fed ended a monetary policy committee meeting by dropping a pledge to be “patient” before raising rates, but cutting growth and inflation forecasts.
The new message pushed down the dollar, which tends to move in the opposite direction to commodities that are priced in dollars. Nymex April West Texas Intermediate crude, the US oil yardstick, rose $1.20 to settle at $44.66, erasing losses caused by data showing surging oil inventories inside the US………………………………………..Full Article: Source

Crude Oil Prices Drop Again, but They’re Unlikely to Hit $20

Posted on 19 March 2015 by VRS  |  Email |Print

The most pessimistic prediction has come from Citibank, which has said crude oil could fall as low as $20 a barrel this year, but prospects for $20 oil are as unlikely as the predictions for $60 oil were only a few weeks ago when it looked like an imminent and sustained recovery was just over the horizon. Fundamentally, there is little to stop oil’s slide right now. An interim January low of $43 was broken on Wednesday, and the chart analysts are finding it difficult to predict a bottom.
Oil stockpiles are still increasing, with 458 million barrels in storage, by far a new record. At the rate of increases in stockpiles, it is estimated that storage will be completely used up by the middle of May. With virtually nowhere to put oil, prices will again have nowhere to go but down………………………………………..Full Article: Source

Iran calls for non-OPEC producers to cut oil output: IRNA

Posted on 19 March 2015 by VRS  |  Email |Print

Iran Oil Minister Bijan Zanganeh said non-OPEC producers should cut oil output to prop up prices, adding that he did not see “good cooperation” among producers, the OPEC member country’s official IRNA news agency reported on Wednesday.
“We must also work toward non-OPEC (producers) cutting their production because currently there is not good co-operation,” IRNA quoted Zanganeh as saying………………………………………..Full Article: Source

Will The Oil Markets (And Shale Producers) Capitulate Before Demand Recovers?

Posted on 19 March 2015 by VRS  |  Email |Print

Is the U.S. shale industry at a tipping point? Oil prices fell to a six-week low on Friday after the International Energy Agency warned that the U.S. may soon run out of room to store all the oil being pumped out of shale plays across the country.
As oil starts to back up, the worry is that prices could fall like a rock. But despite this grave warning, bullish oil traders are keeping their cool. They believe that the low prices will ultimately decimate the U.S. shale industry, removing a large chunk of supply from the market indefinitely, similar to what happened during the last major oil price crash 30 years ago………………………………………..Full Article: Source

Oil price slump is choking this OPEC economy

Posted on 19 March 2015 by VRS  |  Email |Print

Plunging oil prices are taking a heavy toll on one of Africa’s top producers. Nigeria’s currency is trading at a record low against the U.S. dollar, the stock market has slumped 15% this year — making it the worst performer in Africa — and financial reserves are being depleted.
“It’s going to be a very difficult year,” Nigeria’s Finance Minister Ngozi Okonjo-Iweala told CNN. “We’ve had a more than 50% fall in the price of oil and that has naturally impacted the economy.” Nigeria is currently pumping about 1.8 million barrels of crude oil per day, making it OPEC’s 7th biggest producer — alongside Angola………………………………………..Full Article: Source

Iran’s Nuclear Deal Could Open Oil Flood

Posted on 18 March 2015 by VRS  |  Email |Print

Iran, the U.S. and its allies are pushing ahead with talks over a nuclear deal that would change many things—perhaps none faster than the price of oil. Iranian exports in recent years have been essentially capped by Western sanctions aimed at pressuring Tehran over its nuclear ambitions.
A deal easing those sanctions could eventually translate into half a million barrels or more a day in Iranian crude heading into a currently glutted global market, analysts estimate. With global crude prices already under pressure, a deal could quickly knock them lower. U.S. oil prices slumped to a six-year low Monday on fresh signs that supplies are swamping the market………………………………………..Full Article: Source

Iran oil supply concerns are ‘unduly bearish’: Analyst

Posted on 18 March 2015 by VRS  |  Email |Print

Concerns that a nuclear deal with Iran could end sanctions on that country and flood an oversupplied market with oil are “unduly bearish,” the managing director at Clearview Energy Partners said. “The deal they have probably won’t bring back crude exports to their full level right away,” Kevin Book said. “It’s probably going to be a series of gates and steps, a process where Iran has to do some things, the West will give some sanctions relief.”
Oil prices began another leg downward last week as participants in negotiations over Iran’s nuclear program suggested they are making progress toward a deal. The April contract for U.S. crude touched a six-year low below $43 on Monday after prices rebounded slightly in January and February………………………………………..Full Article: Source

Oil touches six-year low as Iran talks weigh

Posted on 18 March 2015 by VRS  |  Email |Print

Fears of a supply glut popped a rebound in the price of oil on Tuesday, with comments from Iran about higher production and a possible lifting of sanctions piling on further pressure.
West Texas Intermediate (WTI) futures fell as low as $42.63 a barrel—their weakest level since the March 2009 nadir of $42.51—before paring some losses. Brent crude futures hovered near six-year lows below $53 a barrel, before also paring some losses………………………………………..Full Article: Source

The U.S.’s 12 richest oil and gas CEOs

Posted on 18 March 2015 by VRS  |  Email |Print

Not only does oil and gas provide the life-giving fuel that powers our modern lifestyle, it also has a legacy of often leaving wealth and abundance in its wake. Following the devastating real estate collapse of 2007-2009, it was oil and gas that virtually single-handedly filled Texas and North Dakota’s state surplus budgets to over $2 Billion each within 4 years.
The top-paid CEO in America comes from the natural gas sector. No shock, many of the highly compensated executives the last two years work in the fossil fuel sector; oil and gas in particular. Of curious note however, no CEO from the coal industry appeared on this list, which extends through Robert Walker of Anadarko Petroleum at US$15.7 million, although Consol Energy Inc’s J. Brett Harvey was not far behind at US$15.1 million………………………………………..Full Article: Source

US shale boom may be over by end of 2015 – OPEC

Posted on 18 March 2015 by VRS  |  Email |Print

OPEC is forecasting a possible decrease in US shale oil production by the end of 2015. The number of operating drilling rigs working shale deposits is likely to fall since the price of oil has more than halved since June 2014. The cartel questions the ability of US producers to withstand the dramatic collapse in oil prices and predicts that global oil supply will equal demand, it said in its monthly report published Monday.
“Tight crude producers are aware that typical oil wells in shale plays decline 60 percent annually, and that losses can only be recouped by drilling new wells,” says the report. “As drilling subsides due to high costs and a potentially sustained low oil price, a drop in production [in the US – Ed.] can be expected to follow, possibly by late 2015.”……………………………………….Full Article: Source

The gold:oil ratio is speaking

Posted on 18 March 2015 by VRS  |  Email |Print

As a believer in the power of diversification and inflation protection a basket of commodities can provide in a passive index framework, it is hard to grasp how much investors love oil and gold. It must be that oil is the biggest, most economically significant commodity, and gold is the shiniest, most prized metal – arguably a currency in its own right.
From the largest pensions in the world to the smallest mom-and-pop retail investors, oil and gold dominate the conversation. In Taipei this week, gold and oil were louder than ever. It is an exciting time for greater China as the first commodity futures exchange-traded funds are soon to be launched………………………………………..Full Article: Source

OPEC Warns U.S. Oil Boom Could Be Over by Year-End

Posted on 17 March 2015 by VRS  |  Email |Print

OPEC said Monday the U.S. oil boom could be over by the end of this year, offering a pessimistic view of American producers’ ability to withstand a historic collapse in crude prices and predicting that global petroleum supplies would realign with demand.
The cartel, in its closely watched monthly oil-market report, cited spending cuts by U.S. producers and the falling number of American rigs drilling for oil in recent months after crude prices fell by about 60% from last summer to January before rallying in February. For instance, rig counts fell faster in February than they did in January, according to the latest Baker Hughes report………………………………………..Full Article: Source

China and Middle East will drive oil demand: OPEC

Posted on 17 March 2015 by VRS  |  Email |Print

Almost half of this year’s oil demand growth is likely to come from China and the Middle East, the Organization of the Petroleum Exporting Countries (OPEC) said Monday.
In its monthly report, Opec forecast that global oil demand growth would increase by an average 1.17 million barrels a day to 92.37 million barrels a day, little changed from estimates made in February, as the recent slide in oil prices supports consumption………………………………………..Full Article: Source

Oil plunges to a 6-year low. Is $30 a barrel next?

Posted on 17 March 2015 by VRS  |  Email |Print

Extremely cheap oil is back, and it may get even cheaper. Crude plunged 4% to as low as $42.85 a barrel on Monday. That’s the lowest price since March 2009 and marks the fifth consecutive day of losses. This should bring smiles to the faces of the millions of American drivers who have watched gasoline prices creep higher in recent weeks.
A month ago, people were talking about an “oil comeback.” Now that looks like just a mirage. More and more analysts predict prices of $40 or lower, at least in the near term. “I think the market almost has to have a $30-handle on it before it gets this out of its system,” said Tom Kloza, chief oil analyst at the Oil Price Information Service………………………………………..Full Article: Source

One key reason why oil prices may have further to fall

Posted on 17 March 2015 by VRS  |  Email |Print

Crude prices may be in a holding pattern for the time being, but the conditions under which they appear to have stabilized are anything but reassuring. Despite a saturated world market, North American production, whether it’s bitumen from Alberta’s oil sands or light oil from North Dakota or Texas, continues to increase. So why haven’t prices, in the face of all this supply, continued to fall?
The answer is storage or, more precisely, the record amount of oil that’s being poured into U.S. storage tanks and salt caverns, despite inventory levels that are already at all-time highs. Putting oil into storage is attractive to oil companies right now for two reasons. First, it effectively takes excess oil out of an already glutted market, which alleviates downward pressure on spot prices………………………………………..Full Article: Source

Algeria Seeks Global Oil Producers’ Accord to Halt Price Decline

Posted on 17 March 2015 by VRS  |  Email |Print

Algeria is seeking to coordinate a global response from oil-producing nations to tumbling prices, Algeria Press Service reported, citing Energy Minister Youcef Yousfi. Crude fell to a six-year low in New York on Monday.
“The drastic fall in oil prices has had an extremely negative impact on the economies of all exporting countries, whether OPEC or not members of the Organization of Petroleum Exporting Countries,” Yousfi said after a meeting in Algiers with Angolan Oil Minister Jose Maria Botelho de Vasconcelos. Nigeria’s ambassador to Algiers also attended the discussions………………………………………..Full Article: Source

Non-Opec oil production growth to weaken in 2015

Posted on 17 March 2015 by VRS  |  Email |Print

Slower growth in non-Opec oil production is expected in 2015, but it will take some time yet to assess the full impact of lower prices on North American output, Opec said on Monday. Oil prices have halved since levels reached in mid June last year, triggering a pullback in the number of rigs drilling for oil and a slew of announcements by energy companies about spending cuts.
But the full impact on “US tight [or shale] oil and Canadian oil sands output, will become more evident in the coming months,” the oil producers’ group said in its monthly report………………………………………..Full Article: Source

Asian Buyers Seize on Oil-Price Spread

Posted on 16 March 2015 by VRS  |  Email |Print

It isn’t just the sharp drop in crude prices since last summer that has roiled the global oil industry. It is the way they have fallen. During the slump, U.S. oil prices have dropped further relative to Brent prices traded on London’s Intercontinental Exchange.
That has made it increasingly attractive for crude buyers in Asia to purchase oil from places such as Latin America, where producers set selling prices in line with the U.S.’s main West Texas Intermediate benchmark, instead of traditional providers in the Middle East that price off Brent………………………………………..Full Article: Source

Oil prices stabilizing, will continue to firm up: Saudi adviser

Posted on 16 March 2015 by VRS  |  Email |Print

Oil prices have started to stabilize around $60 a barrel in past weeks and will continue to firm up, while crude demand will grow stronger, an adviser to Saudi Arabia’s oil minister said on Sunday. The comments by Saudi oil adviser Ibrahim al-Muhanna suggested that the top oil exporter sees no need to reverse its policy of allowing the market to correct itself without cutting output, despite the steep price drop since June last year.
Kuwait’s OPEC governor said last week that OPEC was likely to extend its current production policy at the June meeting, in the first public comment on what will be a crucial decision determining the direction of global oil prices in the second half of this year………………………………………..Full Article: Source

American Oil Production Is Still Skyrocketing: Will Oil Prices Tumble?

Posted on 16 March 2015 by VRS  |  Email |Print

With oil prices having dropped by roughly 50% since last summer, U.S. oil companies have quickly reduced their investment plans and idled drilling rigs. Many pundits have assumed these actions would quickly be followed by falling production numbers.
While that might seem intuitive, it did not prove true. At some point, reduced drilling activity will inevitably lead to a fall in crude oil output — but that point could be far in the future. For the moment, domestic oil production is still rising steadily………………………………………..Full Article: Source

OPEC Yet To ‘Taste’ Bottom Of The Barrel

Posted on 16 March 2015 by VRS  |  Email |Print

Saudi Arabia will not cut its oil production to satisfy others. The lesson is learned and others must act accordingly. Finally, Saudi Arabia has reached its conclusion and it will keep on producing more oil as long as its customers demand for oil. This time, the biggest oil exporter is determined to push for more crude oil production and lower prices until other non-OPEC producers reduce their oil production.
Last November, a meeting in Vienna witnessed total shift in Saudi oil policy in terms of giving up its traditional ‘swing’ role producer to become an integral part of the global oil policy. Countries like Russia, Brazil and other higher cost oil producers were asked to participate and reduce their production until such time that the global market can take all available crude oil or to share the burden equally………………………………………..Full Article: Source

Economists expect oil prices to average above $60 despite current volatility

Posted on 16 March 2015 by VRS  |  Email |Print

Oil prices may remain volatile for some time to come but will ultimately average above $60 for Brent. This is despite the fact that they presently remain below $60, which is due to the dollar’s unrelenting rally that is putting pressure on stocks and commodities, regional analysts say.
The dollar index posted a back-to-back weekly gain of more than two percent, setting up its strongest two-week performance in more than six years. John Sfakianakis, Middle East director at Ashmore Group, told Arab News: “A stronger dollar is good when it comes to purchasing power and cost of imports, especially as we are in a global deflationary environment. The dollar always plays a role when it comes to commodities and oil.”……………………………………….Full Article: Source

Tomorrow’s oil price? Guesses range from $20 to $200

Posted on 13 March 2015 by VRS  |  Email |Print

Predicting and diagnosing the trajectory of oil prices has become something of a cottage industry in the past year. Along with all of the excess crude flowing from the oil patch, there is also an abundance of market indicators that, while important, tend to produce a lot of noise that makes any accurate estimate nearly impossible.
First there is the oil price itself. The crash began last summer, and accelerated in November. Since then, predictions for oil prices for 2015 have been all over the map — from Citigroup’s $20 per barrel, to T. Boone Pickens’ prediction of a return to $100 per barrel. OPEC’s Secretary-General even said prices could shoot up to $200 in the coming years as a result of overly drastic cutbacks and a failure to invest in new production………………………………………..Full Article: Source

The U.S. Has Too Much Oil and Nowhere to Put It

Posted on 13 March 2015 by VRS  |  Email |Print

Not only are the tanks at Cushing filling up, so are those across much of the U.S. Facilities in the Midwest are about 70 percent full, while the East Coast is at about 85 percent capacity. This has some analysts beginning to wonder if the U.S. has enough room to store all its oil.
Ed Morse, the global head of commodities research at Citigroup, raised that concern on Feb. 23 at an oil symposium hosted by the Council on Foreign Relations in New York. “The fact of the matter is, we’re running out of storage capacity in the U.S.,” he said………………………………………..Full Article: Source

Why Analysts Expect Oil Price To Plummet Further

Posted on 13 March 2015 by VRS  |  Email |Print

The Energy Information Administration (EIA) of the US reported oil inventory data of the country on Wednesday. EIA report showed an increase of 4.5 million barrels in crude oil supplies during the last week, taking the inventory to 448.9 million barrels.
According to the EIA, this is the ninth weekly gain and represents an 80-year high level. Compared to this time last year, crude inventories are approximately 20% higher. West Texas Intermediate (WTI) futures are the benchmark of crude oil price in the US. The physical point of its delivery is in Cushing, Oklahoma, where crude oil supply has increased by 2.3 million barrels to reach 51.5 million barrels………………………………………..Full Article: Source

Have Oil Prices Hit Their Floor?

Posted on 13 March 2015 by VRS  |  Email |Print

After their sharp drop late last year, oil prices have been trading in a relatively steady band for more than a month, raising an obvious question: Has the market hit a bottom? A number of fundamentals suggest not yet: Global storage levels are brimming. Economies in the U.S., Europe and Asia are all mixed, clouding demand forecasts.
And some of the world’s biggest producers—including Saudi Arabia, its fellow OPEC members and Russia—are still pumping at full speed. All of that means the global glut of oil that caused the big price drop in the first place isn’t likely to ease soon………………………………………..Full Article: Source

China, India drive global energy needs: Ex-OPEC official

Posted on 13 March 2015 by VRS  |  Email |Print

The global energy industry has seen huge demand from two fast-growing major economies - China and India - even as consumption dropped in Europe. “These two countries have launched themselves to a high growth zone,” said Abdullah bin Hamad al-Attiyah President of the Administrative Control and Transparency Authority ( ACTA).
“Take the case of India, from a very classical agrarian-based economy with just textile exports, India has become a giant in industry, IT and many sectors,” Abdullah was quoted as saying by the Gulf Times. China and India would need huge amounts of energy to achieve their growth targets………………………………………..Full Article: Source

OPEC story is not over

Posted on 13 March 2015 by VRS  |  Email |Print

Despite OPEC losing its influence, which might not be recoverable, people are still highly dependent on traditional fossil fuel which means the organization will still be important in the future, economist Max Fraad Wolff told RT. A new report by the World Bank claims the cartel of oil producing nations will lose its influence due to changing market conditions and technological advances.
We’ve seen this forecast before. It is very easy for various parties to forecast outcomes they would sort of like to see happen. It is clear that OPEC has suffered a diminution or decreased in its influence. It is likely to be a case where this influence might not be recoverable in its total. But I don’t think the days are numbered completely, I don’t think this story is over here………………………………………..Full Article: Source

The Real Reason Behind the Oil Price Collapse

Posted on 13 March 2015 by VRS  |  Email |Print

It’s not overproduction in shale fields, and it’s not global economic stagnation. It’s something far more threatening to Big Oil’s business model. Many reasons have been provided for the dramatic plunge in the price of oil to about $60 per barrel (nearly half of what it was a year ago): slowing demand due to global economic stagnation; overproduction at shale fields in the United States;
The decision of the Saudis and other Middle Eastern OPEC producers to maintain output at current levels (presumably to punish higher-cost producers in the U.S. and elsewhere); and the increased value of the dollar relative to other currencies. There is, however, one reason that’s not being discussed, and yet it could be the most important of all: the complete collapse of Big Oil’s production-maximizing business model………………………………………..Full Article: Source

How long will the oil price war last?

Posted on 12 March 2015 by VRS  |  Email |Print

There are two very serious games of chicken being played in the world today. While Greece vs the Eurogroup has the soundbites and summit showdowns to catch more attention, the stare off between the OPEC oil cartel and US shale producers might end up having the greater economic consequences.
OPEC’s historic dominance of the oil market has been rocked by the re-emergence of Russia and the US as major producers, the latter led by a technological revolution known as hydraulic fracking (possibly coming to a field near you). Both OPEC and the American shale producers are pumping crude at record levels, which has led to a collapse in the oil price since the summer. Brent crude is currently trading at $56.5 (£36.9) a barrel, down from over $100 nine months ago………………………………………..Full Article: Source

Did lower oil prices help the economy at all?

Posted on 12 March 2015 by VRS  |  Email |Print

The oil price plunge has been touted as a global growth elixir, but so far the impact on the economy has been subtle and it’s unclear when that will change.
“Local fuel prices have almost fully adjusted to lower crude oil prices,” Goldman Sachs said in a note last week after tracking data from 24 countries. But it expects the stimulus impact on the economy won’t be straightforward, depending on whether low prices are perceived as likely to persist and government policy responses………………………………………..Full Article: Source

Fall in energy prices to impact oil and gas investments

Posted on 12 March 2015 by VRS  |  Email |Print

The rapid decline in energy prices is expected to have a large impact on investment in oil and gas projects worldwide. Since June 2014, the price of Brent crude oil price has collapsed due to a supply glut fuelled by a rise in US shale oil production, as well as weaker global demand, particularly in China and Europe.
Speaking during the Middle East Oil and Gas Show in Manama, Bahrain, Amin Nasser, Senior Vice President for Upstream Operations at Saudi Aramco, told local press: “Challenges during down cycles are more complicated today than before. At this moment the global industry is poised to potentially cancel about US$1 trillion in capital funding.” This figure includes delayed projects as well as those that could be cancelled outright………………………………………..Full Article: Source

Iraq builds up arrears to majors as oil price drops - sources

Posted on 12 March 2015 by VRS  |  Email |Print

Iraq is building up debts to the oil companies developing its giant fields, industry sources said, a further sign of how the oil-price drop is putting a squeeze on revenues in OPEC’s second-largest producer. Western oil companies including Royal Dutch Shell, BP and Exxon Mobil are working at Iraq’s southern oilfields under service contracts, which are currently based on a fixed dollar fee for additional volumes produced.
As a result of the halving of oil prices to around $56 a barrel from $115 in June, the amount of crude needed to pay the companies has roughly doubled - reducing revenue to a government fighting an Islamic State insurgency………………………………………..Full Article: Source

Saudi’s oil market strategy makes sense

Posted on 12 March 2015 by VRS  |  Email |Print

In December Saudi Arabia’s oil minister Ali al-Naimi posed an interesting question: “Is there a black swan out there that we don’t know about which will come by 2050 and we will have no demand?”
Obviously, we do not know the answer. However, it is almost certain that prospects for a big innovation that validates his anxiety have been increased by very high oil prices. This suggests that Saudi Arabia did itself no favours in the past by cutting production to support such prices………………………………………..Full Article: Source

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