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Commodities Briefing - Category | Oil more

BofA cuts forecasts for crude oil price in 2016, 2017

Posted on 12 January 2016 by VRS  |  Email |Print

Bank of America Merrill Lynch on Monday lowered its forecasts for crude oil prices for this year and next, amid a global glut in supply that looked poised to continue and a likely swift yuan depreciation in China.
The investment bank cut its 2016 Brent price forecast to $46 per barrel from $50, and lowered its price view for West Texas Intermediate (WTI) to $45 per barrel from $48. BofA said impending Iranian supplies that are about to hit the market, coupled with yuan depreciation, could push oil prices down to the mid-$20s, given the extremely high inventories already………………………………………..Full Article: Source

Crude reckoning: what will oil price slump mean for the global economy?

Posted on 12 January 2016 by VRS  |  Email |Print

Oil hits new low of less than $32 per barrel and could plunge further, increasing pressure on US and Middle East producers. The current oil rout is now worse than any since 1970, with the price of Brent crude slumping from $115 a barrel in the summer of 2014 to an 11-year low below $32.
The slump has roiled global financial markets and oil exporters. But for many of us, cheaper oil is a good thing. However, the strain of cheap crude is beginning to mount. Who will the winners and losers be if oil prices stay low?……………………………………….Full Article: Source

OPEC waiting for US oil companies’ bankruptcy

Posted on 12 January 2016 by VRS  |  Email |Print

OPEC will cut crude production and export in order to raise oil prices, after the US companies extracting hydrocarbons go bankrupt due to the current low energy prices, said Alexander Razuvayev, economist and director of the analytical department at Russian company Alpari.
Alpari is one of the leading companies offering forex trading in Russia. “The price war will end sooner or later,” he told Trend Jan. 11. “We can expect positive changes this year. As a result of falling oil prices, budgets are running out, shale companies go bankrupt. Those, who survive the crisis, will take the new position on the market at comfortable prices.”……………………………………….Full Article: Source

Pain to gain: Crude prices to triple?

Posted on 11 January 2016 by VRS  |  Email |Print

Oil investors are trying to survive a brutal start to the year. They’re coping with crude prices sinking to 12-year lows as Chinese demand falls and ballooning U.S. stockpiles fuel fear. Relief, however, may be on the way. One top analyst expects prices to triple back into the $90 a barrel range by 2018. At present, few analysts expect crude prices to recover that sharply.
But before the markets get there, the pain could intensify. “It looks like a rough year,” Wolfe Research managing director and senior oil and gas analyst Paul Sankey told CNBC’s “Fast Money” recently. “Our base-case scenario is not for a full-blown recession,” but the firm is “pretty negative” on the year………………………………………..Full Article: Source

The Odd Consequences of the Oil Price Crash

Posted on 11 January 2016 by VRS  |  Email |Print

In the middle of 2014, oil traded for more than $100 a barrel. Today, it is below $35. Traditionally, there would be numerous positives from low oil prices, but many of these have yet to materialize or may no longer be relevant at all. The U.S. shale boom, one of the great American growth stories, appears to be rolling over, and the jobs are drying up.
China, as it is with the vast majority of commodities, is both a dominant force behind growth, and a significant participant in its decline. And for the traditional energy power brokers in the Middle East, the harsh reality of low oil has already begun to destabilize the region………………………………………..Full Article: Source

What does 2016 hold for the oil-hit GCC market?

Posted on 11 January 2016 by VRS  |  Email |Print

Last week, renowned Saudi Arabian contractor Abdullah A M Al-Khodari Sons claimed that the Kingdom’s rising energy and electricity prices would significantly increase its operational costs for outstanding projects over the next five years. Al-Khodari predicted that these changes would increase its expenses by $11.81m (SAR44.3m) between 2016 and 2020.
In a bourse statement to Tadawul, the contractor added that its operational costs would increase by $5.8m (SAR22.1m) in 2016, “which may possibly be of a significant impact on the net profit of the said financial year”………………………………………..Full Article: Source

OPEC’s Trillion-Dollar Miscalculation

Posted on 11 January 2016 by VRS  |  Email |Print

I suspect if Saudi Arabia were able to travel back in time to OPEC’s November 2014 meeting, the oil markets would look very different today. Because at that meeting the group made a decision that has thus far proven to be very costly to OPEC members.
The decision left me scratching my head at the time. Whenever I try to anticipate an OPEC decision, I first ask myself, “What would I do if I were responsible for making that decision?” Of course to OPEC, the self-interests of its members are more important than the interests of the rest of the world………………………………………..Full Article: Source

Oil down again to 12-year low; $30 handle looks more likely

Posted on 08 January 2016 by VRS  |  Email |Print

Oil prices fell for a fourth day on Thursday, lurching again to 12-year lows as new financial market tumult in China brought a $30 per barrel handle within view. Oil has fallen every day this year, losing nearly 10 percent in a sudden dive that makes last year’s Goldman Sachs warning of sub-$30 crude seem not so outlandish after all.
“Can we go down another $3 a barrel? In percent terms, that’s another 10 percent and could happen in a matter of one or two days of trading,” said Greg Sharenow, executive vice-president overseeing a $16 billion commodities portfolio for the Pacific Investment Management Company in Newport Beach, California………………………………………..Full Article: Source

Oil options lurch closer to $20 Goldman doomsday forecast

Posted on 08 January 2016 by VRS  |  Email |Print

When U.S. investment bank Goldman Sachs said last year that oil could fall as low as $20 per barrel, it assigned a fairly low probability to that scenario. Fast-forward five months and in some parts of the world the forecast has already proved correct. Canadian physical crude has been selling this week at below $20 per barrel, less than it costs to extract and transport.
Traders in the options market, meanwhile, are taking protection against prices falling below $25. The developments reflect growing concerns that a market already awash in too much oil is now suffering the double-whammy of a sharp slowdown in U.S. and Chinese demand………………………………………..Full Article: Source

Statoil CEO says expects oil price to rise over time

Posted on 08 January 2016 by VRS  |  Email |Print

The price of crude oil is likely to rise over time despite the recent fall to levels last seen in 2004, Statoil Chief Executive Eldar Saetre told Reuters on Thursday. “It’s difficult to predict how the price will develop in the short term. There will probably be volatility and big swings. We firmly believe prices will rise because there is little new production capacity entering the market,” he said.
“I also believe that the longer it takes before the oil price rises, the more powerful that increase will become.”……………………………………….Full Article: Source

Oil’s Big Bang: Saudis Mull IPO of World’s Biggest Producer

Posted on 08 January 2016 by VRS  |  Email |Print

Saudi Arabia is considering its own Big Bang. The world biggest crude exporter is considering selling a stake in its state-owned company, which controls more than a tenth of the global oil market.
A potential initial public offering is under review for Saudi Arabian Oil Co., also known as Aramco, Mohammed bin Salman, the kingdom’s deputy crown prince, said in an interview with The Economist. A decision will probably be taken in the next few months, he said, without giving further details………………………………………..Full Article: Source

Oil market ‘more fragile’ than prices show: Citi

Posted on 08 January 2016 by VRS  |  Email |Print

U.S. oil prices of around $20 per barrel could still happen, Citigroup’s Ed Morse, said Thursday as crude briefly hit 12-year lows of just over $32 per barrel.
“You never know where the bottom is,” Morse told CNBC’s “Squawk Box.” He said the recent tumble has been more severe than he’d anticipated. “We think the pressure is still going to be on for lower prices,” he added. West Texas Intermediate crude was falling around 3 percent early Thursday, after a decline of 5.5 percent on Wednesday………………………………………..Full Article: Source

Oil price: three reasons it has fallen below $35 a barrel

Posted on 07 January 2016 by VRS  |  Email |Print

Renewed hostility between Saudi Arabia and Iran, two major military powers in the Middle East and two of its most significant oil producers, might have been expected to boost a weak oil price. Typically when unrest erupts in the region, the oil price surges as investors worry output will be affected.
But while both the US and international benchmarks did surge as much as 4 per cent on Monday, this proved to be short-lived and Brent crude, the gauge that defines prices around the world and for exports from the North Sea, hit a new 11-year low around $35.70 a barrel this morning………………………………………..Full Article: Source

Deloitte says oil price to stay below $50 US into 2017

Posted on 07 January 2016 by VRS  |  Email |Print

Deloitte says oversupply in the oil market will lead to a continued slump in 2016, with the price per barrel staying below $50 US into 2017 before starting a slow rise to $80 US a barrel by 2022. The Edmonton Light price forecast anticipates an average 2016 price of $51 Cdn a barrel — keeping in mind a low exchange rate is propping up Canadian oil prices — the company said in a release Wednesday.
Demand for oil has increased this past year, most likely attributed to the drop in prices making consumption more affordable. But the trend is not expected to continue into the next year, according to Deloitte’s fourth quarter oil and gas price forecast………………………………………..Full Article: Source

How low can the oil price go - and what is the impact?

Posted on 07 January 2016 by VRS  |  Email |Print

The oil price has tumbled again, with Brent crude sinking by 4.2% to $34.88 a barrel on Wednesday, taking the price to its lowest level since 1 July 2004. But how much further could the price fall? What could be the factors that might lead to a recovery? And how much longer can the current volatility last?
Is North Sea oil production viable at $35 a barrel or below? To some extent we already know the answer. There have been thousands of job losses in the North Sea oil industry and the major producers have scaled back billions of pounds of investment in exploration. So far, oil majors such as BP, Shell, Total, and Exxon Mobil have weathered the storm created by the collapse in the price of Brent crude………………………………………..Full Article: Source

New round of Opec wars sees oil price crash towards $34

Posted on 07 January 2016 by VRS  |  Email |Print

Iran and Saudi Arabia’s escalating conflict makes the possibility of Opec regaining control of the world markets all but impossible, say traders.
Oil prices slumped to below $35-a-barrel for the first time in over a decade as a new round Opec warfare and the world’s record supply glut weighed on traders. The price of brent crude, the world’s benchmark, fell by as much as 5pc to $34.27 on Wednesday, hitting lows not seen since 2004………………………………………..Full Article: Source

Moody’s: Oil, gas companies to cut investments by quarter

Posted on 07 January 2016 by VRS  |  Email |Print

World’s oil and gas companies will cut capital investments by 20-25 percent against the background of lower oil prices, the international ratings agency Moody’s forecasts. Oil and gas sector expects an increase in the number of defaults in 2016, the agency said in a report Jan. 6.
The excess supply of oil will continue to put pressure on the world oil market, according to analysts of the agency. Moody’s noted that the oil-producing countries, including the non-OPEC states, won’t limit the volume of production due to the struggle for market share………………………………………..Full Article: Source

Oil and gas deals to ‘ramp up’ in 2016, says report

Posted on 07 January 2016 by VRS  |  Email |Print

A wave of oil and gas deals is set to reshape the energy industry this year, following a collapse in crude prices to their lowest level in eleven years, according to consultants Wood Mackenzie. After the slowest period for deals in more than a decade in 2015, Wood Mac is forecasting a “ramp up” in mergers and acquisitions during 2016 regardless of what happens to oil prices.
The consultancy’s report, published on Wednesday, said that if the price of internationally traded Brent stayed at or near current lows of less than $35 a barrel, oil and gas companies would be forced to sell assets and merge businesses “to free up capital, to cut costs and to survive amid growing financial pressures”………………………………………..Full Article: Source

Global oil and gas prices to remain weak in 2016

Posted on 06 January 2016 by VRS  |  Email |Print

Global oil and gas prices will remain weak in 2016 on continued oversupply resulting in at least 20-25 percent reduction in investment in oil and gas exploration and production, Moody’s Investors Service said on Tuesday.
“The oil and gas sector will see a rise in distressed exchanges and defaults amid the continued low commodity prices that we expect in 2016,” Moody’s said in its report “Oil and Natural Gas Industry - Global: Persistent Weak Prices in 2016 Rein in Capital Spending, Heighten Financing Risk”………………………………………..Full Article: Source

OPEC December oil output slips, still near record

Posted on 06 January 2016 by VRS  |  Email |Print

OPEC oil output fell in December, a Reuters survey found on Tuesday, led by lower supply from Iraq following a record-breaking month in November and smaller declines elsewhere in the producer group.
The Organization of the Petroleum Exporting Countries is still pumping close to record amounts as Saudi Arabia and other big producers focus on market share, weighing on any recovery in oil prices from near 11-year lows………………………………………..Full Article: Source

Saudi Arabia-Iran conflict will crush oil prices further

Posted on 06 January 2016 by VRS  |  Email |Print

Rising tensions in the Middle East typically trigger a knee-jerk increase in the price of oil. But these are not typical times for the oil market. With several factors already weighing on the price of oil, increasing frictions in this historically tumultuous region are poised to counter-intuitively exacerbate the negative outlook for oil.
Analysts have a plethora of reasons to support the consensus view that oil will remain low for the foreseeable future — the slowing Chinese and stagnant European economies, Saudi Arabia’s reduced public subsidies, the impending resumption of Iranian exports, and the recent repeal of the U.S. export ban, just to name a few………………………………………..Full Article: Source

Saudi Arabia Cuts European Oil Prices

Posted on 06 January 2016 by VRS  |  Email |Print

Saudi Arabia on Tuesday sharply cut the prices it charges for crude oil in Europe, a move that could undercut Iran as sectarian tensions escalate between the rival Middle Eastern nations.
The Saudi move appears to pave the way for a competition over European oil markets later this year when Iran is expected to increase its exports after the expected end of western sanctions over its nuclear program………………………………………..Full Article: Source

UBS: Brent oil may touch $30, commodities may fall 10%

Posted on 05 January 2016 by VRS  |  Email |Print

Brent oil may decline to near $30 abarrel before a reduction in US output helps rebalance global markets in the second half of the year, says UBS Group.
Commodity prices may drop another 10% because of oversupplied markets, said Dominic Schnider, head of commodities and Asia-Pacific foreign exchange at UBS’s wealth-management unit in Hong Kong. Oil’s advance on Monday after Saudi Arabia cut ties with Iran could last a week or two, he said………………………………………..Full Article: Source

Oil price: why it is so volatile amid Middle East tension

Posted on 05 January 2016 by VRS  |  Email |Print

The oil price remains stubbornly weak, but renewed tensions in the Middle East have prompted intense volatility and, eventually, a steady rally through this afternoon. During the Asian session overnight the US and international benchmarks rose as much as 3.4 and 2.4 per cent respectively compared to where they had ended 2015, touching close to $38.50 a barrel.
Gains were later pared and Brent crude, which determines prices paid around the world including for oil exported from the North Sea, was up just 0.4 per cent to $37.40 a barrel this morning. But this again turned as the day wore on and by late afternoon in London Brent was up 3.9 per cent at $38.70………………………………………..Full Article: Source

Why Oil Could Hit $55: Saudis, Iran & U.S. Sanctions

Posted on 05 January 2016 by VRS  |  Email |Print

Saudi Arabia ia the world’s largest oil producer, and the latest sparring with Iran could contribute to higher oil prices, Capital Economics says. Over the weekend, Saudi Arabia executed a prominent Shiite cleric, Sheikh Nimr al-Nimr, along with scores of others accused of crimes including terrorism.
Pro-Shiite protesters in Iran took to the street in Tehran, and Saudi Arabia severed diplomatic ties. In a Reuters video on the Saudi execution, an Iranian official blamed the United States and Israel for the sheikh’s death. But the impact isn’t direct on oil prices, which are already deeply discounted after the Organization of Petroleum Exporting Countries (OPEC) refused to cut production in December– and more signs of slowing Chinese demand………………………………………..Full Article: Source

Tension Between Iran and Saudi Arabia Presents New Test for OPEC

Posted on 05 January 2016 by VRS  |  Email |Print

The diplomatic crisis between Saudi Arabia and Iran presents a new test for the Organization of the Petroleum Exporting Countries at a particularly challenging time for the oil-producing cartel.
The 13-nation group that controls more than a third of the world’s oil supplies has been able to function in the past even when its members were at war. Iraq and Iran sent representatives to OPEC meetings during their war in the 1980s, and Saddam Hussein’s oil officials sat at the table with representatives of Kuwait’s exiled government after Iraq invaded in 1990………………………………………..Full Article: Source

Big oil to cut investment again in 2016

Posted on 04 January 2016 by VRS  |  Email |Print

With crude prices at 11-year lows, the world’s biggest oil and gas producers are facing their longest period of investment cuts in decades, but are expected to borrow more to preserve the dividends demanded by investors.
At around $37 a barrel, crude prices are well below the $60 firms such as Total, Statoil and BP need to balance their books, a level that has already been sharply reduced over the past 18 months. International oil companies are once again being forced to cut spending, sell assets, shed jobs and delay projects as the oil slump shows no sign of recovery………………………………………..Full Article: Source

Look for oil prices to spike if hostility between Iran and Saudi Arabia gets worse

Posted on 04 January 2016 by VRS  |  Email |Print

If friction between Saudi Arabia and Iran persists, in addition to attacks on targets such as embassies, look for oil’s first move of the new year to be a spike. A furor has erupted in both countries, and across the region, in the aftermath of Saudi Arabia’s execution Jan. 2 of Nimr al-Nimr, an influential Shia cleric who had denounced discrimination against Saudi’s Shia minority.
An Iranian mob ransacked the Saudi Embassy in Tehran, and Ayatollah Ali Khamenei forecast that God would smite Saudi Arabia. Angry rhetoric and demonstrations across the region probably won’t move oil prices: oil traders would likely take these, more or less, in their stride………………………………………..Full Article: Source

Oil prices to stay low for two years: BP Chief

Posted on 04 January 2016 by VRS  |  Email |Print

Struggling oil producers could suffer even more pain in 2016 with further plunges in already record-low prices, BP Chief Executive Bob Dudley warned Saturday. “A low point could be in the first quarter,” Dudley told BBC radio. Oil prices fell by 34 percent in 2015, battered by prolonged global oversupply and a slowdown in energy-hungry China’s economy.
Dudley predicted that prices could stabilize towards the end of the year, but would remain low for the foreseeable future. “Prices are going to stay lower for longer, we have said it and I think we are in this for a couple of years. For sure, there is a boom-and-bust cycle here,” Dudley said………………………………………..Full Article: Source

Analysts see 2016 oil price increase, while traders bet on fall

Posted on 04 January 2016 by VRS  |  Email |Print

A year ago, after oil prices had halved in six months, analysts were forecasting a price recovery in 2015 while many traders were busy shorting the market. As it turned out, the traders were correct and oil prices fell by another third this year. Analysts have now forecast a pick-up in prices over 2016, while traders built short positions on US oil futures to a record in early December.
The difference in the two views is on what happens in response to an oil output surplus that has been estimated as high as 2 million barrels per day (bpd) by some analysts. Many analysts expect a price recovery toward the end of 2016 to pull up the average for the full year, with production — especially in the US — falling as drillers succumb to debt and low revenues………………………………………..Full Article: Source

2016 to see global oil and gas investments at lowest level in six years

Posted on 04 January 2016 by VRS  |  Email |Print

News agency Reuters is reporting that the oil price slump witnessed in 2015 will loom large over 2016 as: “Global oil and gas investments are expected to fall to their lowest in six years in 2016 to $522 billion, following a 22 percent fall to $595 billion in 2015, according to the Oslo-based consultancy Rystad Energy.”
This news comes as little surprise as the appetite for expensive investment projects is likely to be low amongst management teams looking to batten down the hatches to ride out a crude oil price slump largely attributed to an oversupplied market………………………………………..Full Article: Source

Not Even OPEC Can Fix Oil Glut

Posted on 30 December 2015 by VRS  |  Email |Print

Surprisingly strong crude output in the U.S. and Mideast over the past year pushed oil prices to their lowest levels in more than a decade. But for investors trying to determine whether the oil market is close to a bottom, the pace of production elsewhere in the world is a key source of uncertainty.
Producers in Russia, Brazil and Norway pumped more oil in 2015 than the closely watched forecasters International Energy Agency and Energy Information Administration had projected. Meanwhile, oil-field investments made years ago when prices were higher are set to begin producing, even as exploration-and-drilling projects scheduled to bear fruit in the coming decades are being delayed or canceled outright………………………………………..Full Article: Source

In global oil price war, Saudis blink first

Posted on 30 December 2015 by VRS  |  Email |Print

Long accustomed to cheap utilities and some of the lowest petrol prices in the world, Saudis woke to a shock Tuesday as authorities made massive subsidy cuts after falling oil prices caused a record deficit. In a clear departure from its decades-old generous welfare system, Riyadh announced prices would rise on fuel, electricity, water and even plane tickets and cigarettes.
Residents of the oil-rich Gulf kingdom have long enjoyed cheap prices on basic goods and services, but officials made clear that was no longer sustainable after the stunning drop in crude prices over the last 18 months………………………………………..Full Article: Source

Iranian re-entry into global oil market dims hope for price recovery

Posted on 30 December 2015 by VRS  |  Email |Print

Investors are losing faith in an oil-price recovery next year as Iran prepares to add more crude to a global glut. Hedge funds reduced bets on rising prices to a three-month low and kept bearish wagers near a record high in the week ended Dec. 22, data from the U.S. Commodity Futures Trading Commission show.
Oil fell to the lowest level in more than six years on Dec. 21 amid speculation suppliers from the Middle East to the U.S. will exacerbate a glut as they fight for market share. Iran, which expects sanctions over its nuclear program to be lifted by the first week of January, has secured customers for its planned supply expansion, an Iranian oil official said this month………………………………………..Full Article: Source

Russia’s stricken currency drops to 2015 low amid oil price slump

Posted on 30 December 2015 by VRS  |  Email |Print

Russia’s battered ruble on Tuesday continued its slide on the back of low oil prices, reaching a new 2015 low against the dollar and dropping to below 80 against the euro. The Russian currency stood on Tuesday at 72.85 against the dollar, down from 72.46 on Monday.
The ruble meanwhile stood at 80.02 against the euro, dropping below 80 for the first time since late August. The slide in oil prices and Western sanctions over Moscow’s role in the Ukraine crisis have pummeled the oil-dependent Russian economy in recent months. At his annual press conference earlier this month President Vladimir Putin assured the country could weather the headwinds, despite volatility in oil prices………………………………………..Full Article: Source

Oil companies brace for a grim 2016 amid sustained price crash

Posted on 29 December 2015 by VRS  |  Email |Print

As a miserable year for the oil industry draws to a close, any relief executives might feel will be tempered by the knowledge that 2016 is shaping up to be even worse.The collapse in oil and gas prices that began in the summer of last year has already cost hundreds of thousands of jobs, and caused projects worth hundreds of billions of dollars to be cancelled or delayed.
Today, the external environment is more challenging than it was a year ago, and the energy companies’ ability to cope with tough conditions is diminished. For oil and gas producers, 2016 will be a year of cost-cutting, restructuring, refinancing when it is possible, and in some cases bankruptcy when it is not. ……………………………………….Full Article: Source

Crude Oil Market to Balance Some Time in 2016, Says Saudi Aramco Chairman

Posted on 29 December 2015 by VRS  |  Email |Print

Crude oil markets are likely to balance some time next year as supplies from North America, including U.S. shale, continue to decline significantly, the chairman of Saudi Arabia’s giant oil company said Monday.
“Supply has plateaued in North America and [is] declining by significant amounts. We expect that to continue and perhaps accelerate in 2016,” Khalid al-Falih, chairman of Saudi Arabian Oil Co., known as Saudi Aramco, said in a news conference in Riyadh. “We see the market balancing some time in 2016. We see demand ultimately exceeding supply…Prices in due course will respond,” he said………………………………………..Full Article: Source

Will oil continue to drive volatility in 2016?

Posted on 29 December 2015 by VRS  |  Email |Print

Perhaps the biggest financial story of 2015 has been the continued collapse of oil prices, which has been a noticeable drag on the stock market. And some argue that the oil market will continue to drive stock movements in the year ahead. “Oil is the meat of the volatility sandwich here, and I don’t think that changes,” Max Wolff of Manhattan Venture Partners said Wednesday on CNBC’s “Trading Nation.”
“I think the first half of 2016 is sort of a heavy-duty repeat of the second half of 2015 on the vol side,” Wolff continued, “although I do think you start to see a bottom in and a rebuild going into the second half of 2016.”……………………………………….Full Article: Source

3 Scenarios For Oil in 2016: RBC commodity chief

Posted on 28 December 2015 by VRS  |  Email |Print

Crude oil may have rallied more than eight percent this week and is trading near 2004 lows, but it doesn’t mean we’ve seen the bottom in the market. In fact, the recent bullish trend could be short-lived in 2016.
RBC Capital Markets’ Global Head of Commodity Strategy Helima Croft outlined three potential scenarios for WTI crude on CNBC’s “Fast Money” for the new year. The most bullish situation would be seeing more than a million barrels of oil pulled off the market and prices averaging in the $60 dollar range………………………………………..Full Article: Source

Oil Price Could Fall To $20 In 2016 – IMF

Posted on 28 December 2015 by VRS  |  Email |Print

Nigeria may be in for harder times than previously envisaged as the International Monetary Fund has predicted that crude oil prices may slump to as low as $20 per barrel in 2016.In the ‘IMF Executive Board Concludes 2015 Article IV Consultation with Iran’ report, the body highlighted that the price of crude oil could drop by between $5 and $15 in 2016, cableng.com reports.
As of Thursday, the price of crude oil in the international market averaged $37. On December 17, the price fell to $36 per barrel. The Federal Government 2016 budget had based the 2016 budget on a benchmark oil price of $38 per barrel. If the IMF prediction comes true, the country will be in serious trouble as there won’t be any buffer for the budget……………………………………….Full Article: Source

Oil back at $95 — but only in 24 years’ time: OPEC

Posted on 28 December 2015 by VRS  |  Email |Print

Oil prices will take decades to recover and will still not reach the peak seen in recent years, according to the latest World Oil Outlook (WOO) from OPEC. In the group’s latest outlook on supply, demand and prices to 2020 and 2040, OPEC predicted that a barrel of oil would cost (in real terms) around $70 by 2020 and $95 by 2040, a far cry from a high point of $114 a barrel last seen in June 2014 before prices began to plunge on oversupply.
Price declines were exacerbated by the decision last year by OPEC, the 12-member producer group led by Saudi Arabia, not to cut production. Still, OPEC’s Secretary General Abdalla Salem El-Badri said OPEC had been a bastion of stability amid volatile times for the oil industry………………………………………..Full Article: Source

Oil prices will reach $70 a barrel by 2020, says Opec

Posted on 28 December 2015 by VRS  |  Email |Print

Oil producers’ group Opec has said it expects oil prices to recover to $70 a barrel by 2020. Prices have fallen from more than $110 a barrel in the summer of 2014 to less than $37 a barrel now due to oversupply and slowing demand.
But Opec said oil prices would begin to rise next year and, longer term, would rise due to higher exploration costs. It expects the market share of Opec producers to shrink by 2020 as rivals prove more resilient than expected. The group currently accounts for about 30% of the world’s oil production, down from 50% in the 1970s………………………………………..Full Article: Source

Iran will sell oil at plausible prices

Posted on 28 December 2015 by VRS  |  Email |Print

Oil minister has refuted the claims that Iran will offer massive discounts to regain the market in post-sanction era. Bijan Zanganeh deemed increased oil exports as Iran’s first priority after the lifting of sanctions; “the exports volume needs to reach a greater amount than before the time of international sanctions,” he asserted.
Certain news resources had recently announced that Iran plans to offer large discounts on its crude. “A total of 500 thousand barrels will be added to the volume of oil production in the first few days after the removal of sanctions while a similar amount will be added by the end of the current Iranian calendar year (March 19, 2016),” Zanganeh added………………………………………..Full Article: Source

Oil Prices: Is OPEC the Real Enemy of U.S. Oil?

Posted on 21 December 2015 by VRS  |  Email |Print

OPEC is still getting a lot of blame for low oil prices, which have led to losses of around $700 billion for energy investors. While it’s true that OPEC’s decision not to cut its own production has led to low prices, it’s also true that the cartel’s production hasn’t wavered much at all in the past decade, while U.S. production has nearly doubled.
Was the oil glut that led to low oil prices really OPEC’s fault? And if OPEC’s desire now is to squeeze U.S. shale, Russia, and others long-term, do you really think they’ll give up on that strategy after a few months?……………………………………….Full Article: Source

Oil price crash could get even worse in 2016

Posted on 21 December 2015 by VRS  |  Email |Print

The epic oil crash could end next year. But before prices start climbing higher, they could go even lower. It’s been a catastrophic 18 months for crude oil, which has suffered a dramatic 68% plunge due to a massive supply glut. Oil fell to a fresh seven-year low below $34.50 a barrel on Friday.
The collapse in prices has wreaked havoc on the industry, causing tens of thousands of job losses, a surge in corporate defaults and plunging stock prices. Many Wall Street oil experts believe that prices will rebound in late 2016. Yet more pain may be inflicted — some say it’s actually needed — before prices bounce higher………………………………………..Full Article: Source

Iraq Sees Crude Oil Prices Rising on Strong Market Fundamentals

Posted on 21 December 2015 by VRS  |  Email |Print

Crude prices are set to rise from current “very low” levels that are hurting producers, Iraq’s Oil Minister Adel Abdul Mahdi said after a meeting of Arab petroleum-exporting nations. Abdul Mahdi, whose country is the second-biggest producer in OPEC, didn’t forecast when prices would rebound from an almost seven-year low for Brent, the benchmark for more than half of the world’s oil.
Qatar’s Energy Minister Mohammed Al Sada told reporters before the meeting in Cairo there was no need to be pessimistic about prices. “There is no doubt that oil prices will rebound,” Abdul Mahdi told reporters Sunday after the meeting of the Organization of Arab Petroleum Exporting Countries………………………………………..Full Article: Source

Gulf markets spooked with oil price at seven-year low

Posted on 21 December 2015 by VRS  |  Email |Print

Arabian Gulf stock markets slid on Sunday amid fears about the economic effect of the falling price of oil, which closed on Friday at a seven-year low. The global crude benchmark Brent ended Friday down 0.5 per cent to US$36.88 a barrel, and West Texas Intermediate finished 0.6 per cent lower at $34.73 a barrel. Oil declined after a report from the oil services firm Baker Hughes showed an increase in rig counts in the United States, a factor that would exacerbate the current oil glut.
The oil price decline contributed to the slide in US equities on Friday, with the S&P 500 and Dow Jones Industrial Average indexes ending the session lower. Oil, which has shed more than half its value since last year’s prices of more than $100 a barrel, took a beating this month when Opec, the organisation pumping 40 per cent of the world’s oil, could not reach a decision on its output ceiling, leaving members to produce at will………………………………………..Full Article: Source

Goldman sees high risk of oil prices dipping further; likely to hit $20/barrel

Posted on 18 December 2015 by VRS  |  Email |Print

Goldman Sachs said on Thursday it sees a high risk of oil prices declining further on the back of OPEC’s decision to maintain high output and a continued build in European refined products stocks. The high financial stress being faced by oil producers due to the low oil price environment can halt oil surplus by the fourth quarter of 2016, mainly through declining U.S. oil production.
However, Goldman said the required rebalancing of the oil market is still far from achieved partly as the U.S. rig count and production guidance remain too high for the required supply decline. “Financial stress may prove too little too late to prevent the market from having to clear through operational stress with prices near cash costs to force production cuts, likely around $20 per barrel.”……………………………………….Full Article: Source

As Oil Sinks, Fed Hike Hurts Saudis

Posted on 18 December 2015 by VRS  |  Email |Print

For Saudi Arabia and oil-producing countries in the Gulf of Arabia, having a dollar-pegged economy is a struggle as crude prices tumble and domestic deficits build. As the U.S. Federal Reserve raised its benchmark interest rate Wednesday, the official daily oil price benchmark for the Organization of the Petroleum Exporting Countries (OPEC) fell to a new 11 year low of $32.33 per barrel.
Low oil prices are hurting the Saudi Arabian economy. “This is the highest this key funding rate has been since January 2009 and 60 bp above the level in place in mid July when the OPEC oil benchmark was still above $40. The Saudi Arabian benchmark is now 83.9 basis points above the US equivalent, an unusual state of affairs for a pegged currency……………………………………….Full Article: Source

OPEC producers bearish on oil in 2016 as oversupply persists

Posted on 18 December 2015 by VRS  |  Email |Print

OPEC producers see little chance of significantly higher oil prices in 2016 as extra Iranian production could add to surplus supplies and the prospect of voluntary output restraint remains remote.
OPEC delegates, including those from Gulf OPEC members, say higher oil prices are not around the corner yet, despite further growth in global demand and as a rise in non-OPEC supply is tempered by prices that have more than halved in 18 months………………………………………..Full Article: Source

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