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Commodities Briefing - Category | Oil more

Is there a huge investing opportunity in the oil markets?

Posted on 01 July 2015 by VRS  |  Email |Print

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

OPEC output surges as Iraq accelerates production

Posted on 01 July 2015 by VRS  |  Email |Print

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

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

Posted on 01 July 2015 by VRS  |  Email |Print

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

How Will An Iran Deal Impact The Global Oil Market?

Posted on 30 June 2015 by VRS  |  Email |Print

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

Will Opec gain with higher production?

Posted on 30 June 2015 by VRS  |  Email |Print

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

Oil Speculators Least Bullish in 10 Weeks on Iran Talks

Posted on 30 June 2015 by VRS  |  Email |Print

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

Saudi Kingdom, Russia vie for global oil market foothold

Posted on 29 June 2015 by VRS  |  Email |Print

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

US becomes biggest oil producer in 2014, surpasses Saudi Arabia

Posted on 29 June 2015 by VRS  |  Email |Print

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

Experts say Iran oil output to rise 500 bpd before 2016

Posted on 29 June 2015 by VRS  |  Email |Print

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

This could be the tipping point for oil prices

Posted on 29 June 2015 by VRS  |  Email |Print

Record oil production meeting a wave of surprisingly strong demand has reined in world oil prices, creating a delicate balance that could be tipped either way—and the most immediate catalyst may be Iran’s nuclear talks.
The market has been awaiting the outcome of the negotiations ahead of a June 30 deadline, as an agreement could put 1 million barrels of Iranian crude back on the market eventually. U.S. crude futures have been locked between $57 and $62 per barrel—since late April………………………………………..Full Article: Source

OPEC crude market share shrinks to 12-year low

Posted on 29 June 2015 by VRS  |  Email |Print

Booming U.S. shale production helped cut OPEC’s global crude market share to a 12 year low last year. According to OPEC’s Annual Statistical Bulletin, the group’s share of the global crude market sank to 41.8 percent in 2014, down from 43.3 percent the year before.
The 1.5 percent slide marks OPEC’s lowest crude market share level since 2003, Bloomberg News said. According to the bulletin, Libya accounted for over half of OPEC’s output decline as two rival governments continue to fight for control of the oil rich country………………………………………..Full Article: Source

OPEC petroleum exports fall below $1 trillion in 2014 on oil slump

Posted on 26 June 2015 by VRS  |  Email |Print

The value of OPEC members’ petroleum exports fell below $1 trillion in 2014 for the first time since 2010, according to its annual statistical report, illustrating the impact of last year’s slump in oil prices on the producer group.
The data includes some refined fuel and light oil condensate as well as crude oil. Exports from the Organization of the Petroleum Exporting Countries fell in value to $964.6 billion last year from $1.10 trillion in 2013, according to OPEC’s Annual Statistical Bulletin 2015 issued on Wednesday………………………………………..Full Article: Source

Iran Deal’s Sanction Plan Could Affect Oil Prices

Posted on 26 June 2015 by VRS  |  Email |Print

An Iranian nuclear deal could bring an influx of oil, but when and how sanctions are lifted could also affect prices. The deadline for a nuclear deal is June 30, which could lead to the lifting of sanctions on Iran. Oil is believed to make up 80% of Iran’s exports, and current sanctions have chopped those exports in half.
Iran could potentially add another 800,000 barrels of oil a day to the market within six to nine months, according to Robin Mills, an energy strategist for Manaar Energy. Even though the potential for pumping oil in Iran is strong, deal makers are pushing for sanctions to be lifted gradually instead of immediately………………………………………..Full Article: Source

Oil Tankers Are Filling Up and Raking It In

Posted on 26 June 2015 by VRS  |  Email |Print

The oil-tanker market is heating up, a development some analysts say is a warning flare that signals further price declines for crude. The Baltic Dirty Tanker Index, which tracks the rates to hire oil tankers plying 16 routes, has shot up 25% this month, as global oil output continues to grow. The index is now at its highest level since January 2014.
But an increasing number of these oil cargoes have nowhere to go. Oil producers and traders are rushing to lease tankers while they scramble to find buyers, effectively turning these ships into floating storage facilities. The oil-supply glut has worsened since the Organization of the Petroleum Exporting Countries earlier this month decided to maintain crude-output levels………………………………………..Full Article: Source

Oil prices around $60 as demand balances glut

Posted on 26 June 2015 by VRS  |  Email |Print

Crude oil prices steadied on Thursday as strong demand for oil products helped to balance a global overhang of crude oil for immediate delivery. North Sea Brent crude oil traded within a fairly narrow range as investors eyed a weak physical crude market in the Atlantic basin amid reports of stronger demand for gasoline and diesel in the United States and Europe.
Official prices for Nigerian crude have hit their lowest in at least a decade with as much as 10 million barrels of unsold light, sweet crude oil capping Atlantic basin prices. But demand for oil products is fairly strong. U.S. gasoline demand in the week to June 19 hit the highest seasonal level since 1991, according to the U.S. Energy Information Administration (EIA)………………………………………..Full Article: Source

Calculus on oil price changing as Iran talks wobble

Posted on 25 June 2015 by VRS  |  Email |Print

Iran has been a wild card in the oil market, and it looks like it could stay that way for awhile. The deadline for a nuclear agreement with the U.S. and five other countries is Tuesday. But the timing appears to be slipping, as the walkup to that date has been met with negative rhetoric from Iranian hardliners.
“From a geopolitical standpoint, it could add a lot of uncertainty. From a short-term standpoint, I think the oil implications are that anyone who is thinking Iranian oil is getting to the market soon will have to reconsider,” said Greg Valliere, chief political strategist at Potomac Research………………………………………..Full Article: Source

OPEC’s Oil Revenues Have Dropped Below $1 Trillion - Here’s What That Looks Like

Posted on 25 June 2015 by VRS  |  Email |Print

OPEC nations’ oil revenues dropped last year below the psychological $1 trillion mark for the first time since 2010, in the clearest sign yet of the economic impact of lower prices for oil-rich nations.
The Organisation of the Petroleum Exporting Countries said on Wednesday in its annual statistical report that its 12-members earned $964.6 billion selling their petroleum, down 12.7 per cent from $1.1 trillion in 2013 and the lowest amount since 2010. Oil export revenues hit a nominal record of $1.2 trillion in 2012, according to OPEC data………………………………………..Full Article: Source

OPEC’s crude market share fell to lowest since ’03 last year

Posted on 25 June 2015 by VRS  |  Email |Print

OPEC said its share of the global crude oil market last year declined to the lowest level since 2003, underscoring the motive for the group’s current push to defend sales volumes. The Organization of Petroleum Exporting Countries’ share of the global crude market dwindled to 41.8% in 2014, from 43.3% the previous year, according to the group’s Annual Statistical Bulletin.
Libya accounted for more than half the output reduction. OPEC’s 12 members pumped an average of 30.68 MMbopd last year, according to the report by the group’s Vienna-based secretariat………………………………………..Full Article: Source

Oil Prices Fall After Inventory Data

Posted on 25 June 2015 by VRS  |  Email |Print

Oil prices declined Wednesday after data showed that crude-oil supplies shrank last week but inventories of refined products rose. Light, sweet crude for August delivery settled down 74 cents, or 1.2%, to $60.27 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 96 cents, or 1.5%, to $63.49 a barrel on ICE Futures Europe.
U.S. oil prices have gained 13% this year on expectations that the global glut of crude oil is due to shrink. U.S. commercial crude-oil supplies fell by 4.9 million barrels in the week ended June 19, the U.S. Energy Information Administration said Wednesday………………………………………..Full Article: Source

OPEC’s Strategy and Iran’s Sanctions Impact the Crude Oil Market

Posted on 25 June 2015 by VRS  |  Email |Print

OPEC (Organization of the Petroleum Exporting Countries) produces 40% of the global crude oil production. It has a 60% share in global crude oil exports. OPEC member nations produced 31.2 MMbpd (million barrels per day) of crude oil in May 2015—compared to its target of 30 MMbpd.
On June 5, 2015, OPEC decided to maintain its collective output target of 30 MMbpd of crude oil for the next six months. The consensus of a massive production strategy will drive crude oil prices lower. Lower oil prices impact US shale oil producers like Whiting Petroleum (WLL), Continental Resources (CLR), and Marathon Oil (MRO). They also impact oil and gas ETFs like the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and the Select Sector SPDR Fund ETF (XLE)………………………………………..Full Article: Source

Kuwait oil minister says oil price drop unlikely

Posted on 24 June 2015 by VRS  |  Email |Print

Kuwait’s oil minister said on Tuesday he expected oil prices to continue rising, predicting gains in the final quarter of 2015 on the back of global growth. “All indicators point to an improvement in prices … today we have reached the stage where a fall is difficult, a fall has now become unlikely,” Ali Saleh al-Omair told reporters.
Omair also said costs for the country’s al-Zour refinery were expected to increase by around 1 billion Kuwaiti dinars ($3.31 billion) pushing up total cost to more than 5 billion dinars. A Kuwait National Petroleum Company spokesman had said on Monday the start-up of the refinery would be delayed as the company was seeking more financing on the back of rising construction costs………………………………………..Full Article: Source

Iran may usher a quick return to $50 U.S. oil prices

Posted on 24 June 2015 by VRS  |  Email |Print

The oil market’s mostly focused on U.S. supply data this week, but next week should be all about Iran and the deadline for a final agreement over its nuclear program. If a deal between Iran and six world powers is reached by the June 30 deadline, Iran could soon start dumping millions of barrels of oil into the global market, ushering a quick return of $50 oil prices.
“Iran has at least 34 large tankers full of oil — about 50 million barrels or more — ready to “sell and sail” if sanctions are lifted, said Byron King, editor of investment newsletter Outstanding Investments………………………………………..Full Article: Source

Oil At $60: How Marginal Producers Cope Will Shape Market Direction

Posted on 24 June 2015 by VRS  |  Email |Print

As we approach the midway point of the current trading year, it has become apparent that oil benchmarks would find it hard to escape the $50-$75 per barrel range for the rest of the year, and much of 2016. Macroeconomics of the day also does not point to a dip below $50 barring the occurrence of an unforeseen financial tsunami.
As most producers are looking at non-OECD markets to export to, and demand there is holding up, if not firing on all cylinders, a steep price drop is highly unlikely. Atop the much asserted claim of too much oil coming on the market – in the region of 1.1 to 1.3 million barrels per day (bpd) by some accounts – each time there is minor uptick in price, a swift downward correction follows suit. Trading in recent weeks offers ample proof of this………………………………………..Full Article: Source

Oil price to reach $82 per barrel in early 2016, hedge fund says

Posted on 24 June 2015 by VRS  |  Email |Print

Insch Capital Management, a Swiss hedge fund, said that the market is oversold and projected that crude oil will be trading at more than $80 per barrel by early 2016. Such an increase would equate to a near-50 percent surge in price. The optimistic forecast forms the basis of Insch Capital Management plans to increase its positions in the sector.
The hedge fund said it is looking to add oil properties to its portfolio, as some producers will be forced to sell off assets at bargain prices to cover lower income. “After the recent crude oil price declines, the oil rig count has dropped precipitously,” Insch said. “Many oil companies are being forced to sell properties in order to repay bank debt.”……………………………………….Full Article: Source

Russia Pips Saudi Arabia in Race to Grab China Oil Market Share

Posted on 24 June 2015 by VRS  |  Email |Print

Russia surpassed Saudi Arabia to become China’s top crude supplier as the fight for market share in the world’s second-largest oil consumer intensifies. China imported a record 3.92 million metric tons from its northern neighbor in May, according to data emailed by the Beijing-based General Administration of Customs on Tuesday.
That’s equivalent to 927,000 barrels a day, a 20 percent increase from the previous month. Saudi sales slumped 42 percent from April to 3.05 million tons. China is becoming a key market for global oil exporters as surging output from shale fields from Texas to North Dakota allows the U.S., the biggest crude consumer, to rely less on overseas supplies……………………………………….Full Article: Source

The world is awash in oil — is Canada making it worse?

Posted on 24 June 2015 by VRS  |  Email |Print

Collectively, Canada’s energy sector lost more than $600 million in the first three months of this year, and the Canadian economy shrank in the same period, as the collapse in oil prices took its toll. Now, nearly 18 months after it started, the oil glut continues.
At its worst point this spring, the world was producing four million barrels per day more than was being consumed. And Canada is playing a role in that oversupply. Just last week, in fact, Imperial Oil announced that the second phase of its Kearl oilsands operation had started production ahead of schedule. When it fully ramps up in the coming months, the expansion alone will add 110,000 barrels per day to Kearl’s production. That’s around 40 million barrels in a year just from one expansion………………………………………..Full Article: Source

Oil investors betting on crude hitting $82 per barrel

Posted on 23 June 2015 by VRS  |  Email |Print

European hedge fund believes market for crude is oversold as demand picks up. Investors are beginning to bet on a sharp rebound in the oil price by the end of the year, on the back of rising demand and a slowdown in US production.
Insch Capital Management, a Swiss hedge fund, is predicting that prices will be trading at about $82 per barrel by the beginning of next year, and already claims the market is oversold. The Lugano-based fund says it plans to ramp up investments in the sector in preparation for an expected 50pc uptick in the price of crude by 2016………………………………………..Full Article: Source

Iran has better chance to be a global supplier of gas than oil: expert

Posted on 23 June 2015 by VRS  |  Email |Print

Sara Bazoobandi, a lecturer in international political economy at Regent’s University London, says Iran has a better chance to become a “global gas supplier than oil” by developing its infrastructure. “With developing the infrastructure the country will stand a much better chance to be a global supplier of gas than oil,” Bazoobandi said.
Bazoobandi also says as many other goods the price of oil is “determined by the supply and demand” and “as long as the global production remains unchanged at the current level, the prices will not have dramatic changes.”……………………………………….Full Article: Source

Do not see oil prices going beyond $80-85: CEA Arvind Subramanian

Posted on 23 June 2015 by VRS  |  Email |Print

Chief Economic Advisor Arvind Subramanian today said he does not see oil prices going beyond 80 to 85 dollars, a price which will help India manage its macro economy reasonably.
“… yes oil prices could go up, but given the fundamental changes (in the market), the likelihood of it (oil price) going up to anywhere beyond 80 or 85 dollars I (think) relatively (should be) ignored and as long as oil prices stay, don’t go beyond that I think we can manage our macro economy reasonably,” he said………………………………………..Full Article: Source

Oil markets stable, Russian minister says

Posted on 23 June 2015 by VRS  |  Email |Print

From the Russian perspective, the situation in the global crude oil market is starting to stabilize, the minister of economic development said. Crude oil prices starting in June 2014 began a steady decline, dropping from levels above the $100 per barrel mark to below $50 per barrel in early 2015. A year on, Russian Minister for Economic Development Alexei Ulyukayev said “the oil market has attained certain stability.”
Brent crude oil prices have hovered in a range between $63 per barrel and $65 per barrel for most of June. Oil prices have been responding to signs an oversupplied market scenario was easing in a tepid, but steadily growing, global economy………………………………………..Full Article: Source

Oil Price War Continues As OPEC Tightens The Screws

Posted on 23 June 2015 by VRS  |  Email |Print

As we come towards the end of another trading month, crude oil price remains firmly range-bound as OPEC’s policy of taking on the alternative energy suppliers in a price war continues.
Judging by its recent statements, OPEC is clearly intent on taking the long view to squeeze these companies out of business, and as the rhetoric and oversupply builds, oil prices are likely to continue to remain waterlogged, with intraday movements more likely to be driven either by the US dollar or local fundamentals in the short term. Even the recent transition on the weekly oil inventories from a build to a draw has failed to provide any meaningful momentum for the commodity………………………………………..Full Article: Source

Speculators Retreat From Oil as OPEC Oversupply Crowds Out Shale

Posted on 22 June 2015 by VRS  |  Email |Print

Hedge funds reduced both bullish and bearish bets on oil for a fourth week as rising OPEC output was met with forecasts for a contraction in U.S. supply. Money managers trimmed their short wagers in West Texas Intermediate oil by 4.3 percent and long bets by 0.2 percent, leading to a 0.8 percent gain in the net-long position, U.S. Commodity Futures Trading Commission data for the seven days ended June 16 show.
Trading in futures is falling as WTI swings in a $5 range, the narrowest in 19 months. The Organization of Petroleum Exporting Countries pumped the most oil last month since October 2012, while the U.S. government says output will start falling from this month………………………………………..Full Article: Source

Oil market buzzes in the wake of big options trades

Posted on 22 June 2015 by VRS  |  Email |Print

The oil market is buzzing with intrigue over two derivatives deals last week that bore the signature of a large producer guarding against a price collapse. A public database showed purchases of put options that pay out if crude falls below $53 a barrel in 2016. “Everybody was talking about it,” said Sean Ryan, co-head of oil options at ICAP, the broker.
Put options, common in commodity markets, give their owners the right to sell something at a given price by a future date. These two deals raised eyebrows because they were consistent with past transactions associated with Mexico’s programme for hedging its oil exports, the largest of its kind in commodity markets………………………………………..Full Article: Source

Where The Price Of Oil Is Heading Next

Posted on 22 June 2015 by VRS  |  Email |Print

Last month, OPEC held its 167th meeting in Vienna, Austria. The two main takeaways? One: The oil cartel will maintain production at 30 million barrels per day (bpd), with unofficial numbers above that.
Two: Saudi Arabia’s price war against U.S. shale producers will continue. By resolving to preserve its already high production ceiling, OPEC is keeping prices low and putting the squeeze on all non-OPEC output… Especially companies working in shale, where costs are significantly higher………………………………………..Full Article: Source

Decline in Oil Prices Has No Serious Impact on Russian Economy – BP Chief

Posted on 22 June 2015 by VRS  |  Email |Print

The weakening of the ruble helped Russia deal with the recent decline in global oil prices much better than other countries, BP CEO Robert Dudley said. Russia is dealing with the price shock over the decline in global oil prices much better than other countries because of the weaker ruble, Robert Dudley, CEO of British oil-giant BP, said during the International Economic Forum in St. Petersburg.
According to Dudley, cost adjustment is now highly needed in the oil industry, because hopes for increasing prices cannot be used as a real strategy. “We are getting out of the heavy shock period after the decline in oil prices,” he said……………………………………….Full Article: Source

Rising U.S. Oil Demand in 2015 - and Beyond

Posted on 22 June 2015 by VRS  |  Email |Print

The constant writing on the oil market today largely focuses on mounting global supply. That’s perfectly understandable: shale oil productivity has increased 50% over the past five years, U.S. crude output is up 90% since 2008, and OPEC infighting on how to deal with the U.S. shale oil revolution is interesting discussion to say the least.
But, oil demand is now becoming more of a focus, as rising global use remains a steady drumbeat. For the U.S., the largest oil consumer in the world at nearly double 2nd place China, demand for the week of June 12 hit 20 million b/d, an 8% increase year-over-year. Overall, U.S. oil demand has seesawed between 18.5 and 20.5 million b/d for years………………………………………..Full Article: Source

Shale Watch: Lower Breakeven Prices Mean U.S. Can Keep Oil Flowing

Posted on 22 June 2015 by VRS  |  Email |Print

U.S. shale has nothing to fear from the current low oil price environment, which has seen crude prices fall 40 percent since June last year. Research by Bloomberg New Energy Finance shows that a reduction in the cost of drilling and completing wells has brought breakeven prices for the big tight oil plays several dollars below the current WTI price of around $60 a barrel.
The “Big Three” U.S. light tight oil plays — the Eagle Ford, Bakken and Permian — all break even several dollars below WTI, at $47, $53 and $52 a barrel, respectively, according to BNEF research. The collapse in oil prices has led to a corresponding downturn in the costs of drilling and completion services. This means that the same well that may have cost $8 million when oil was trading cost $6 million. This, in turn, means that breakeven prices have come down by as much as $20 a barrel………………………………………..Full Article: Source

Iran and Iraq are Opec’s biggest wild cards

Posted on 22 June 2015 by VRS  |  Email |Print

Iran and Iraq have taken over from North American shale oil as the biggest wild card facing Opec and the world oil market in the year ahead, according to a number of leading market analysts. New research by the Edinburgh oil consultancy Wood Mackenzie, for example, reckons that the combined additional production from the two countries could be running as much as 500,000 to 600,000 barrels per day (bpd) higher in the coming months.
On the other hand, the volatile conditions the two countries face mean output from the two could end up little changed, the consultancy adds. If the higher forecasts prove correct, the extra oil would significantly increase the surplus already swamping the market, according to the International Energy Agency (IEA) based in Paris………………………………………..Full Article: Source

Russia’s much-needed oil price bump unlikely to come any time soon

Posted on 19 June 2015 by VRS  |  Email |Print

Russia desperately needs high oil prices to lift its energy-fuelled economy out of recession. But according to some of Europe’s top oil executives and ministers who attended Russia’s version of the World Economic Forum in Davos, there will be no return to triple-digit oil any time soon.
Speaking on a panel at the St. Petersburg International Economic Forum (SPIEF), the showpiece business and investment conference of Russian President Vladimir Putin, Russian Energy Minister Alexander Novak said oil at about $65 (all figures U.S.) a barrel could endure for “two to three years.”……………………………………….Full Article: Source

How Big Oil Was Saved From the Oil Price Crash

Posted on 19 June 2015 by VRS  |  Email |Print

Low oil prices have been less of a drag on the big integrated oil companies than it has for smaller producers. Diversified portfolios have allowed the largest oil companies to weather the storm better than their smaller competitors.
To be sure, Big Oil has not gotten off lightly. In fact, some of the largest megaprojects that are only undertaken by the oil majors appear to be huge financial burdens. Having spent billions of dollars on extraordinarily large and complex projects — ultra-deepwater, LNG, large oil sands projects — the costs are a colossal weight around the necks of the oil majors. The oil industry has scrapped an estimated $200 billion in future offshore and LNG projects as the industry backs away from the massive costs………………………………………..Full Article: Source

Saudis seen escalating battle for global oil market share

Posted on 19 June 2015 by VRS  |  Email |Print

Not content with the blow it’s dealt to US oil drillers, Saudi Arabia is set to escalate the battle for market share by raising production to maximum levels. The world’s largest oil exporter has already increased output to a 30-year high of 10.3 million barrels a day in a bid to check growth from nations including the US, Canada and Brazil. It will add even more to the global glut, according to Goldman Sachs Group.
Citigroup predicts the kingdom will push toward its maximum daily capacity, which the bank estimates at about 11 million barrels, in the second half of 2015. Saudi Arabia steered the Organisation of Petroleum Exporting Countries in November to protect its market share in the face of swelling US crude output, rather than cut supplies to shore up prices as it did in the past………………………………………..Full Article: Source

Saudi’s Naimi optimistic about oil market in months ahead - SPA

Posted on 19 June 2015 by VRS  |  Email |Print

Saudi Arabia’s Oil Minister Ali al-Naimi is optimistic about the market in the coming months, he said after a meeting with Russian Energy Minister Alexander Novak, Saudi state media reported on Thursday.
“I am optimistic about the market in the months ahead, considering the continued improvement and increased global demand, and reduction in the level of commercial stocks, and regarding the improvement in the level of prices,” he was quoted as saying in Moscow by the official Saudi Press Agency (SPA)………………………………………..Full Article: Source

Saudis Said to Discuss Sweetening India Oil Deals With Own Ships

Posted on 19 June 2015 by VRS  |  Email |Print

Saudi Arabia is said to be in talks with Indian oil buyers to ship crude on the Middle East supplier’s own tankers, potentially cutting the cost of cargoes. While the world’s biggest crude exporter won’t offer to sell its crude at a discount to its official selling price, it may pass on the benefit of lower shipping costs, four people with knowledge of the matter said, asking not to be identified because the talks are confidential.
The use of vessels owned by Saudi Arabia may reduce the cost of its supplies by 25 to 30 cents a barrel, two officials at two Indian refiners said. OPEC’s biggest member is seeking to defend market share amid competition from other suppliers and as refiners across Asia look for bargains from Europe to Mexico………………………………………..Full Article: Source

Forget $100: Will the oil market remember $80?

Posted on 18 June 2015 by VRS  |  Email |Print

May felt like a déjà vu month in the oil markets with crude attempting another rally, much like the one we saw in February, albeit at slightly higher levels, and once again failing to lift off. A strengthening US dollar and renewed focus on bearish supply-side fundamentals took the bounce out of Brent, which at one point in early May was perched at the year’s high within sight of $68/barrel.
The 5 June decision by the Organization of the Petroleum Exporting Countries (Opec) to leave its production ceiling untouched—predictable as it was—dragged the benchmark light sweet crude back to $62/barrel levels as the second week of June got underway………………………………………..Full Article: Source

Low oil price hits $200 billion in mega-projects

Posted on 18 June 2015 by VRS  |  Email |Print

Deepwater oil projects and complex gas facilities worth around $200 billion have been cancelled or put on hold worldwide in recent months due to the sharp drop in oil prices over the past year, consultancy Ernst and Young said on Tuesday. Further project cuts and delays are likely as the industry braces for an extended period of lower oil prices as a result of a supply glut.
“The mind set in the industry at the moment is that prices are unlikely to be bouncing up materially in the near term,” the consultancy’s Andy Brogan said in a presentation. “There is an expectation that volatility is with us for a reasonable period of time to come and companies need to cope with that.”……………………………………….Full Article: Source

Oil and gas chief says sector needs to adjust to $60 a barrel future

Posted on 18 June 2015 by VRS  |  Email |Print

The new boss of the UK’s oil and gas body has warned that the sector faces a future in which long term oil prices are about $60 a barrel. Deirdre Michie told a gathering in Aberdeen that the industry needed to adjust and find a fresh way forward.
Oil prices have fallen from about $115 a barrel to $63 since last June. The annual oil and gas industry conference also heard from First Minister Nicola Sturgeon, who wants no new tax rises for the sector………………………………………..Full Article: Source

Rouhani: Iran isolated from weak oil market

Posted on 18 June 2015 by VRS  |  Email |Print

Iran is less squeezed by the low price of oil than other export-dependent nations because of budgetary moves away from energy, the country’s president said. Iranian President Hassan Rouhani said the budget for the current Iranian year, which started March 21, is the least dependent on oil revenue ever for the country.
Crude oil prices are robbing major exporters like Russia of revenue, though Iran’s president said his country was largely shielded from those constraints. “All oil exporting countries, even those who plotted for an oil price decline, are facing problems due to this issue and our problems might be even less than this group,” he said………………………………………..Full Article: Source

OPEC Export Revenue Below $1 Trillion Lowest Since 2010

Posted on 18 June 2015 by VRS  |  Email |Print

According to the report, released on Tuesday, the value of the 12-member organization’s combined petroleum exports dropped from $1.1 trillion in 2013 to $993.3 billion in 2014, the year when oil prices plummeted to less half their prior value.
OPEC upheld its production quota of 30 million barrels per day at its meeting in Vienna on June 5. The group surpassed its self-imposed limits for the past 11 months, according to analysis conducted by Bloomberg………………………………………..Full Article: Source

Russia’s Sechin says U.S., not OPEC, rules oil markets

Posted on 18 June 2015 by VRS  |  Email |Print

Igor Sechin, the head of Russia’s top oil producer Rosneft, said on Wednesday the United States is calling the shots on global oil markets, while the influence of OPEC has shrunk. The United States emerged with renewed vigour as a top producer thanks to its shale boom. By refusing to curb its output to prop up oil prices, OPEC has tried to maintain its share in the global market, shrugging off lower prices which damage U.S. producers.
“In essence, the sole market, which has all the sets of financial and technological tools, is the U.S. market, which has became the key regulator,” Sechin told reporters, adding that oil prices in the United States set the tone of the global industry………………………………………..Full Article: Source

OPEC’s epiphany: Shale production in the US is here

Posted on 18 June 2015 by VRS  |  Email |Print

It probably had to happen sooner or later: OPEC’s oil ministers have now come to the realization that shale production in the United States is not a passing fad. Here in Texas, of course, we can only remark that it’s about time they noticed.
Without a doubt, the events of the past few years have completely turned traditional assumptions about the oil-and-gas industry on their head. The genie is out of the bottle, and there is no turning back………………………………………..Full Article: Source

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