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Commodities Briefing - Category | Oil more

Hedge Funds Most Bearish on Crude in 4 Years After Rally: Energy

Posted on 09 February 2015 by VRS  |  Email |Print

Hedge funds raised bearish bets on oil to the highest in more than four years, a sign they’re skeptical that a two-week 14 percent rally will last. Short bets on West Texas Intermediate climbed 1.2 percent in the week ended Feb. 3 to the most since August 2010, U.S. Commodity Futures Trading Commission data show.
Net-long positions slipped for a third week, the longest stretch of declines since August. Prices jumped during the report week as a shrinking number of U.S. rigs drilling for crude raised speculation that output would soon retreat from a three-decade high………………………………………..Full Article: Source

Oil heading for $30, currency war coming: Analysts

Posted on 06 February 2015 by VRS  |  Email |Print

So much for the rally. Oil will likely still head as low as $30, analyst John Kilduff told CNBC on Thursday. “I still believe we’re going to go to that $30 to $33 area, which is the low point from the financial crisis in 2008, 2009. What you saw over the past several days was technical in nature, a short squeeze. This volatility is a little crazy and I think that $30 target is a downside target is for technicians that are in this market,” the founding partner of Again Capital said.
U.S. crude tumbled 9 percent on Wednesday to settle at $48.45, erasing nearly all of its gains in the previous two sessions. The benchmark commodity—West Texas Intermediate—had soared 22 percent from a nearly six-year low of $43.58 last Thursday, ending the day at $53.05 on Tuesday………………………………………..Full Article: Source

OPEC delegates see scant hope of rapid oil price recovery

Posted on 06 February 2015 by VRS  |  Email |Print

Growing numbers of OPEC delegates say they expect no rapid recovery in oil prices, even as the market shows signs of a tentative rally from near six-year lows. One delegate from a country outside the Gulf and a relative price hawk in OPEC said he doubted oil would revisit $100 a barrel this year or next, and that this should encourage less dependence on oil revenue in national budgets.
“Based on supply and demand, the price for this year and next will probably not go beyond $100,” the delegate told Reuters on condition of anonymity. “We have to get a lesson from this. The budgets should not depend on a high oil price.”……………………………………….Full Article: Source

Saudis Increase Oil Price in U.S., Cut It for Asia

Posted on 06 February 2015 by VRS  |  Email |Print

Saudi Arabia on Thursday increased the oil prices it charges U.S. buyers, reversing months of cuts. But the world’s largest oil exporter has reduced its prices in Asia as it shifts a battle over market share from America to the Far East.
In an email to clients, Saudi Aramco said it was increasing its U.S. prices for light oil delivery in March by 15 cents a barrel, reversing at least three months of price cuts in the American market. But the state oil company reduced its prices for Asia by 90 cents a barrel………………………………………..Full Article: Source

OPEC Says Oil Could Reach $200 Per Barrel: Here’s Why Investors Shouldn’t Bet on It

Posted on 06 February 2015 by VRS  |  Email |Print

The most severe oil collapse since the credit crisis has caused many energy stocks to crash to six-year lows and spurred countless “experts” to predict when the oil markets will bottom and where they might head next. In reality, no one can accurately predict the short- to medium-term price of oil — nor should most investors try — but that hasn’t stopped legendary oil tycoon T. Boone Pickens from boldly predicting that oil will return to $100 per barrel within 12-18 months.
On the other side of the argument, Saudi Prince Alwaleed bin Talal is even more confident in his counter claim “I’m sure we’re never going to see $100 anymore.” However, now, OPEC’s Secretary General Abdulla al-Badri has upped the speculative prediction stakes with the boldest prediction of all — that oil prices have not only bottomed but may soon soar past $200 per barrel………………………………………..Full Article: Source

Oil spikes in ‘super volatile’ market amid supply gain

Posted on 06 February 2015 by VRS  |  Email |Print

Oil traded at the greatest volatility since April 2009 after U.S. crude supplies rose from the highest level in more than three decades. West Texas Intermediate gained as much as 7.5%, erasing an earlier 2.3% decline. Prices have moved an average of US$1.74 a day this year, up from 92 cents during the first 24 days of 2014.
Crude inventories expanded by 6.33 million barrels to 413.1 million last week, the highest level in weekly records compiled since August 1982, the Energy Information Administration reported Wednesday. Oil’s swings have intensified since the Organization of Petroleum Exporting Countries decided in November to let rival producers deal with a global surplus that Iran’s oil minister pegged at 2 million barrels a day in an interview with state television………………………………………..Full Article: Source

Why Cheaper Oil Doesn’t Always Lead to Economic Growth

Posted on 05 February 2015 by VRS  |  Email |Print

Tumbling oil prices were supposed to boost growth in a host of major oil-importing economies. It isn’t necessarily working out that way. Some governments have moved already to shore up their revenues by raising gasoline taxes or cutting fuel subsidies. At the same time, falling oil costs have pumped up deflation fears across Europe and Japan, adding to the risk that consumers and businesses will hold back on spending and investment, dragging on growth.
China has raised fuel-consumption taxes by 50% since November. Gasoline prices have soared in Indonesia as the authorities eliminated subsidies altogether………………………………………..Full Article: Source

Citi: The oil (and gas) plunge isn’t over yet

Posted on 05 February 2015 by VRS  |  Email |Print

The oil crash — and cheap gas bonanza — probably isn’t over yet. For a few days, oil was showing real signs of life following last year’s meltdown. Prices spiked above $54 a barrel on Tuesday after oil’s best three-day performance in six years. Drivers may have even noticed a little pop in gas prices. The national average price of gasoline jumped nearly five cents a gallon on Wednesday, according to AAA. The oil bounce also caused stock prices to surge on Tuesday.
But the rebound is already looking like it may be short lived. Oil plummeted nearly 9% on Wednesday to settle at $48.45 a barrel. That’s the commodity’s worst day since November 28 when OPEC rattled the market by deciding to keep production steady………………………………………..Full Article: Source

Oil’s Surge to Bull Market Viewed as Temporary Bounce

Posted on 05 February 2015 by VRS  |  Email |Print

Oil is back! Or maybe not. After suffering its longest rout in history, crude rebounded Tuesday, entering a bull market after soaring 24 percent from a six-year low reached in January. Behind the gain was speculation that curbs in investment will cut production.
For all the optimism among traders, firms from Barclays Plc to Societe Generale SA and UBS Group AG say the rally is just temporary because less spending won’t eliminate a glut overnight. Instead of heading back to $100 a barrel, oil could fall as low as $30 because supply surpluses won’t disappear overnight, said Miswin Mahesh, a commodities analyst at Barclays………………………………………..Full Article: Source

Total CEO Expects Oil Price Of $60/Barrel This Year

Posted on 05 February 2015 by VRS  |  Email |Print

Oil prices are likely to remain relatively low until the summer, the chief executive of Total was quoted as saying on Wednesday, leading the French oil major to assume an average price of $60 a barrel this year.
Talking to the privately Saudi-owned al-Hayat newspaper on the crude oil price outlook, Patrick Pouyanne said: “I see it as relatively low until summer, but it is hard to predict after that. When we see the history of the crude cycles, we notice that prices fall hard and quick then rise back usually within 18 months. “Because we are cautious we have adopted a price of $60 a barrel for this year and this is more of a prediction,” he was quoted saying………………………………………..Full Article: Source

Big oil is not the biggest victim of cheap crude

Posted on 05 February 2015 by VRS  |  Email |Print

If only oil-producing countries that got into trouble could merge, bring in fresh management, lay off citizens, cut costs and restructure their operations. At this point in the energy cycle, betting on a national merger wave similar to the corporate one that created supermajors such as ExxonMobil and BP in the late 1990s would be a good investment.
Brazil could merge with Venezuela, helping to solve both the Petrobras scandal and the latter’s lurch toward default. The United Arab Emirates or Saudi Arabia could roll up Nigeria and Russia. Norway could acquire Scotland from the UK………………………………………..Full Article: Source

Commodities Head for Biggest 3-Day Rally Since 2012 as Oil Gains

Posted on 04 February 2015 by VRS  |  Email |Print

Commodities are showing signs of life after prices fell to a 12-year low. Brent crude is poised for a bull market, climbing 2.6 percent as of 11:42 a.m. in New York on speculation that production will be curbed. The Bloomberg Commodity Index of 22 raw materials advanced 1.3 percent to 102.68, set for the best performance over three days since 2012. Sugar, copper and wheat advanced more than 2 percent.
Greece retreated from its call for a debt writedown and the Reserve Bank of Australia unexpectedly cut interest rates to a new record low, joining central banks from Canada to India that have reduced borrowing costs this year to support their economies………………………………………..Full Article: Source

OPEC sees oil prices exploding to $200 a barrel

Posted on 04 February 2015 by VRS  |  Email |Print

Right now the oil market is totally focused on finding a bottom for oil prices. However, according to OPEC’s Secretary-General Abdulla al-Badri we’ve already hit bottom. Not only that, but he sees a real possibility that oil prices could explode higher to upwards of $200 per barrel in the future. He’s far from the only one that sees a return of triple-digit oil prices.
According to the Secretary-General, the oil market doesn’t need to look for oil prices to bottom as the market has already bottomed. Instead, he offered quite bullish comments by saying, “Now the prices are around $45-$55, and I think maybe they [have] reached the bottom and we [will] see some rebound very soon.” Now, normally that type of remark would be just another layer of noise, but this is coming from OPEC’s Secretary-General so it comes with a lot of weight behind it………………………………………..Full Article: Source

Oil’s price plunge could raise Keystone carbon footprint -EPA

Posted on 04 February 2015 by VRS  |  Email |Print

Oil prices have dropped so low that the Keystone XL pipeline could play a bigger role in the development of Canada’s oil sands and raise greenhouse gas emissions, Obama administration environmental regulators said.
The U.S. Environmental Protection Agency’s comments in a letter to the State Department give weight to President Barack Obama’s view that the controversial pipeline should not be approved if it significantly increases carbon pollution. The letter, sent on Monday, was released on Tuesday………………………………………..Full Article: Source

Believe it or not, oil is in a bull market

Posted on 04 February 2015 by VRS  |  Email |Print

It doesn’t feel like a bull market. But by the accepted rule of thumb, the recent rise in the price of a barrel of Brent crude oil is just that. Moves of at least 20% in either direction commonly define things as being in bull- or bear-market territory.
At the time of writing, the price of Brent, the international oil benchmark, is up 25% from its low point last year, thanks to a 7% jump today. But if you’re breaking out the champagne, drink responsibly. From its 2014 high, the price of the international oil benchmark is still down by some 50%………………………………………..Full Article: Source

Gold’s relationship with oil ‘decoupled’, interest rates key: BoA/Merrill

Posted on 04 February 2015 by VRS  |  Email |Print

Gold has “decoupled” its century-old relationship with oil and is now being driven by interest rates and currencies, according to Bank of America/Merrill Lynch Tuesday. “Moreover, we think that a unique combination of factors is again making gold attractive in investor portfolios: negative nominal interest rates, a closing volatility gap to other asset classes, and improving weekly returns. After all, unlike government bonds or fiat currency, gold is no one’s liability,” said BoA/ML analyst Michael Widmer.
Gold has been performing well so far in 2015. The price surged by more than 10% in January alone, breaking through $1,300/oz as investors sought a safe haven………………………………………..Full Article: Source

Oil could fall to $30-$35: Opec delegates

Posted on 03 February 2015 by VRS  |  Email |Print

Oil prices may stay depressed until summer due to weak seasonal demand even as Saudi Arabia’s strategy of curbing the output growth of rival producers might have started achieving tangible results, Opec delegates told Reuters. Delegates from the Organization of the Petroleum Exporting Countries and external experts are meeting at Opec’s Vienna headquarters this week to discuss the producer group’s long-term strategy. Such meetings do not set output policy.
The talks arise as data from the United States showed a record drop in drilling rigs, prompting oil prices to jump above $50 a barrel on Friday as traders said they saw it as a sign that Opec’s strategy was taking a toll on the US shale boom………………………………………..Full Article: Source

Has oil bottomed? Markets are starting to bet that it has

Posted on 03 February 2015 by VRS  |  Email |Print

Is the bear market in oil over? It’s starting to look that way, after another big move up in crude prices overnight, adding to the 7% gain it posted on Friday. Prices have swung sharply within a $3/barrel range so far Monday, as short-term trading instincts clash with long-term fundamentals.
Over the last month, traders who started the year by ‘shorting’ oil had made a tidy profit, as the price had fallen from $53.27 a barrel to as low as $44 by Friday………………………………………..Full Article: Source

Oil prices jolted as falling rigs wrong-foot bears: Kemp

Posted on 03 February 2015 by VRS  |  Email |Print

Oil prices surged 8 percent on Friday as the market digested news another 94 rigs previously drilling for oil in the United States had been idled over the previous week. It was the largest number of rigs de-activated in a single week since at least 1987 and triggered the biggest one-day percentage increase in Brent prices since 2009.
Yet there was nothing remotely surprising about either the continued fall in the rig count - or the volatile market reaction………………………………………..Full Article: Source

Oil prices rebound on signs of output cuts

Posted on 03 February 2015 by VRS  |  Email |Print

The price of oil rallied on Monday as investors speculated that the falling cost of crude may have ended. Brent crude was up 1.3% at $53.65 a barrel, having reached $55, while US oil rose 1.7% to $48.52.
It followed the release of data showing that US demand for leasing oil rigs was slowing, suggesting that producers might be preparing to cut output. Meanwhile, US giant ExxonMobil reported a 21% fall in quarterly earnings on lower oil and gas production………………………………………..Full Article: Source

U.S. refinery strike rattles global oil market

Posted on 03 February 2015 by VRS  |  Email |Print

A strike at nine refineries and chemical plants across the U.S., the first of its kind in 35 years, is having an impact on global crude oil prices. Over the weekend, the United Steelworkers Union (USW) announced a work stoppage at facilities in Texas, Kentucky, Washington State and California. At issue was what the labor group described as excessive overtime demands, unsafe staffing levels and dangerous working conditions.
A USW official also criticized “the industry’s refusal to make opportunities for workers in the trade crafts; the flagrant contracting out that impacts health and safety on the job; and the erosion of our workplace, where qualified and experienced union workers are replaced by contractors when they leave or retire.”……………………………………….Full Article: Source

Oil rebound lifts commodity currencies, Aussie awaits rate test

Posted on 03 February 2015 by VRS  |  Email |Print

The Canadian dollar and Norwegian crown held onto solid gains early on Tuesday, having rallied on a further rebound in oil prices which also led other commodity currencies higher as well. With the U.S. dollar sidelined for the moment against the yen and euro, it was time for beaten-down currencies to regain some ground. The Canadian dollar rallied to C$1.2557 per USD , well off a near six-year low of C$1.2800.
The Norwegian crown climbed to 7.6142 per USD, up 2.3 percent in the past two sessions. It also rose against the euro, which plumbed a two-month low of 8.6292 crowns at one stage………………………………………..Full Article: Source

Oil price will average less in 2015 than during financial crisis - Reuters Poll

Posted on 02 February 2015 by VRS  |  Email |Print

Crude oil will likely continue falling before posting only a mild recovery in the second half of this year, a Reuters survey of analysts showed on Friday, with prices set to average even less in 2015 than during the global financial crisis. The survey of 33 economists and analysts forecast North Sea Brent crude would average $58.30 a barrel in 2015, down $15.70 from last month’s poll, in the biggest month-on-month forecast revision since prices last collapsed in 2008-2009.
If the forecasts for 2015 prove correct prices will average the lowest since 2005, even if they recover after June, illustrating the impact of OPEC’s decision to maintain output in the face of fast-growing U.S. shale output………………………………………..Full Article: Source

Chevron chief says oil price to rebound after investment cuts

Posted on 02 February 2015 by VRS  |  Email |Print

Very few large oil projects will go ahead if crude stays below $50 per barrel, setting the scene for a rebound in prices, the chief executive of Chevron of the US has said. Speaking as Chevron became the latest oil company to announce a cut in capital spending in response to the plunge in crude, John Watson said that given fiscal terms and production costs around the world, “I don’t see many investments that are going to go [ahead]” at current prices.
He added that in spite of the excitement over booming US shale oil production, “you’re going to see reduction in that rate of growth in response to current prices”………………………………………..Full Article: Source

OPEC oil output up in January

Posted on 02 February 2015 by VRS  |  Email |Print

Total oil production by OPEC members rose by a substantial 483,000 bpd in January, the biggest monthly rise in output since February 2014, according to Bloomberg estimates. OPEC produced 30.9mn bpd last month, well above the 30mn bpd ceiling, despite a sharp -26 per cent m/m decline in OPEC’s reference oil price. The OPEC reference price averaged just $44 in January, down from $66 in December and $105 in January 2014.
Emirates NBD reports that the main contributors to the surge in OPEC output last month were Saudi Arabia (+220,000 bpd to 9.7mn), Iraq (+200,000 bpd to 3.9mn) and Angola (+190,000 bpd to 1.8mn). Some of this was offset by lower output from Libya (-150,000 bpd to 0.3mn) and Nigeria (-40,000 bpd to 2.0mn). Among the other GCC oil producers, Kuwait increased production by 60,000 bpd while the UAE and Qatar kept output unchanged m/m………………………………………..Full Article: Source

GCC growth ‘to remain unaffected by oil price fall’

Posted on 02 February 2015 by VRS  |  Email |Print

Economic growth in the six-nation Gulf Cooperation Council (GCC) will not be affected by the falling oil prices as these countries have abundance of financial reserves, which will allow them to keep on moving with the level of spending, said an expert from International Monetary Fund (IMF) here at a workshop.
The Riyadh Chamber of Commerce and Industry (RCCI) organized the workshop in cooperation with the IMF. Speaking on the Middle East economy in light of the global changes and the role of the private sector, Raja Al-Marzouqi, IMF adviser for the Middle East and Central Asia Department, said: “Losses of the GCC countries are estimated at $300 billion in the wake of the oil price drop, however, economic growth in the GCC countries will not be affected by the price fall due to the abundance of financial reserves, which will make the GCC countries keep the level of spending.”……………………………………….Full Article: Source

Goldman Sachs, Barclays predict oil’s recovery to be a way off

Posted on 30 January 2015 by VRS  |  Email |Print

Those hoping for a quick recovery in the price of oil might end up being disappointed, with Goldman Sachs and Barclays forecasting the slump to continue for much of 2015. Barclays has slashed its forecast average price of Brent crude for this year to $US44 a barrel, down nearly $US30 from its early-December forecast of $US72 a barrel, before recovering to $US60 in 2016.
Goldman Sachs is forecasting WTI oil to trade about $US44 a barrel for the first three-quarters of this year, lifting to $US65 a barrel by the end of the year as sharp cuts in capital spending and rising demand weigh on supply………………………………………..Full Article: Source

Energy Economist: Shale oil’s response to prices may call for industry re-evaluation

Posted on 30 January 2015 by VRS  |  Email |Print

Shale oil’s investment cycle is shorter and its decline profile sharper than conventional oil production. Current indicators suggest legacy declines from shale will catch up fast with the industry. This points to a sharp deceleration in US shale oil output. But, while conventional oil takes time to slow down, it also takes time to speed up.
It will be shale that is best placed to benefit from any oil price recovery, as Ross McCracken, managing editor of Platts Energy Economist, explains in this month’s selection from the publication. The full analysis can be found in the February 2015 issue, which is also issue 400 of Energy Economist. Global crude oil production has only fallen in six years since 1984 and then generally as a result of geopolitical disruptions to supply or restraint by OPEC, rather than as a reaction to price………………………………………..Full Article: Source

Why the OPEC Secretary General Believes Oil Prices Have Bottomed

Posted on 30 January 2015 by VRS  |  Email |Print

Nowadays, you’ll find plenty of predictions about the future direction of oil prices. But some are worth paying particular attention to. On Monday, Abdullah al-Badri, the Secretary-General of OPEC, said that he expects oil prices to bottom out around current levels. He would know as well as anyone. That said, what makes US$45 per barrel such a logical bottom for oil prices? Is there a risk that prices could fall lower? And how should you react as an investor?
There are reasons to believe the Secretary-General. With such low prices, producers have already been cutting back. According to oil services giant Baker Hughes, the number of oil rigs fell for the seventh straight week, and is now at its lowest level since January 2013………………………………………..Full Article: Source

How far will OPEC go?

Posted on 30 January 2015 by VRS  |  Email |Print

If you are a business-news junkie like me, you could hardly miss the trends of the past two months that presumably predict the 2015 economy. Before the holiday season and on into January, retailing was a priority fiscal indicator. Now we have oil production as a runner-up for the most crucial headline of the day.
I already vented my dismay over the emphasis of shopping for deals on Thanksgiving Day and the public’s apparent monthlong need to storm the stores and crowd the Internet right up to Christmas Day in my Jan. 1 column (“Spirit of Christmas centers on malls”). Despite my reaction to commercial exploitation of family traditions, the retailers loved it………………………………………..Full Article: Source

Barclays, Goldman forecast bearish first half for oil prices

Posted on 29 January 2015 by VRS  |  Email |Print

Barclays Plc and Goldman Sachs Group Inc issued even more bearish forecasts for oil prices on Wednesday, predicting no significant recovery in the first half of 2015.
Barclays slashed its 2015 Brent crude oil price forecast to $44 a barrel from $72, while Goldman said it expected prices for West Texas Intermediate crude to trade close to $40 per barrel for most of the first half of 2015………………………………………..Full Article: Source

Crude oil bottom seen at $40: CNBC Fed survey

Posted on 29 January 2015 by VRS  |  Email |Print

Crude oil’s free fall may be close to bottoming, according to CNBC’s January Fed Survey. Wall Streeters in the survey forecast that the lowest price for WTI crude in the current downturn will be $40 on average per barrel, about $6 below its current price.
Among the 33 economists, money managers and investment strategists surveyed, the range of bottom estimates was $25 to $48. Crude oil futures have tumbled nearly 60 percent from the recent peak of $107 in June………………………………………..Full Article: Source

Former US Official Says OPEC Can No Longer Control Oil Price

Posted on 29 January 2015 by VRS  |  Email |Print

The Organization of the Petroleum Exporting Countries (OPEC) can no longer control the oil price, as there are new independent markets, such as those in Russia and the United States, Charles McConnell, a former Obama administration energy official told RIA Novosti.
“Forty years ago they [Middle Eastern oil producers] formed a cartel. And they controlled the price, and the entire world was dependent. And control from the Middle East is no longer true. The world has changed — Russia has and produces significant volumes of oil, as does the US and Canada,” he stated………………………………………..Full Article: Source

Iraq oil surge to fan OPEC rivalry that triggered slump

Posted on 29 January 2015 by VRS  |  Email |Print

The battle for customers among OPEC members that helped trigger oil’s collapse is about to escalate. Iraqi crude production is climbing from a 35-year high as it adds growing Kurdish supplies to its exports, while southern oilfields remain unscathed by Islamic State militants. Finding buyers for the new output means offering more attractive terms than rivals in the Organization of Petroleum Exporting Countries, say Citigroup, DNB and Barclays.
Oil’s biggest slump in six years gained momentum in October as a wave of discounts by Middle Eastern producers signaled OPEC members were intent on defending market share against booming shale output from the U.S. The price of Saudi crude for Asian buyers was cut to the lowest in at least 14 years last month, a move followed by Iraq, Kuwait and Iran………………………………………..Full Article: Source

Where Is All That Excess Oil Going?

Posted on 29 January 2015 by VRS  |  Email |Print

There’s a term traders use when the price of a commodity like oil has fallen because of oversupply but seems guaranteed to rise again. It’s a market that’s “in contango,” says Brenda Shaffer, an energy specialist at Georgetown University. “It almost sounds like a sort of great oil dance or something.”
And Shaffer says that some oil speculators see an oil market that is in contango in a major way. “Some people out there think that oil is going to get more expensive so it’s worthwhile now to buy oil, lock it in, and have those supplies, have them stored and have them available to sell a few months down the line, if you actually believe it’s going to go up,” she says………………………………………..Full Article: Source

Oil’s price slump may have lasting impact on non-OPEC countries

Posted on 29 January 2015 by VRS  |  Email |Print

Crude prices dropped sharply Wednesday as global producers pump surplus supply into the world’s bulging storage tanks, resulting in record-high inventories in the United States. As the market focuses on the booming U.S. industry for signs of slowdown, analysts say the price slump may have a more pronounced and longer-lasting impact outside of North America, particularly in non-OPEC countries such as Russia, Mexico and Brazil.
Fuelled by $100 (U.S.)-a-barrel prices, crude production has grown sharply in the past two years among countries outside the Organization of the Petroleum Exporting Countries, after being in the doldrums – other than in Canada and the United States – following the price collapse of 2008-09………………………………………..Full Article: Source

Commodities collapse could wipe out entire year’s profits at Standard Chartered

Posted on 29 January 2015 by VRS  |  Email |Print

Macquarie analysis predicts that 1980s-style oil price slump and default spike will mean huge losses at under-pressure bank. Standard Chartered faces losing a year’s profits from the recent collapse in commodity prices as loan defaults spike in a repeat of the 1980s crisis, according to the Australian bank Macquarie.
The Asia-focused British bank is believed to be one of the biggest losers from the slump in oil, iron ore and copper prices, with $61bn (£40.2bn) of exposures to producers and traders………………………………………..Full Article: Source

Oil price ‘too low’: Saudi Aramco chief

Posted on 28 January 2015 by VRS  |  Email |Print

World oil prices have fallen too far, the president of state-owned energy giant Saudi Aramco said, insisting that market forces, not deliberate production cuts, must take their course. “It’s too low for everybody,” Khalid al-Falih told a conference. “I think even consumers start to suffer in the long term.”
Falih also said American shale oil production is important for the world’s long-term energy future and Saudi Aramco has marked an additional US$7 billion for its own shale projects. Saudi Aramco is the world’s largest oil company in terms of crude production and exports………………………………………..Full Article: Source

Budget: Iraq lowers oil price forecast to $55

Posted on 28 January 2015 by VRS  |  Email |Print

Falling oil prices forced Iraq’s cabinet to revise its draft 2105 budget, trimming its forecast for oil to $55 a barrel from $60. It trimmed spending to 119 trillion Iraqi dinars ($105 billion) for 2015. Even so, the budget deficit will rise to 25 trillion dinars.
The decision to lower the forecast oil price may satisfy some MPs who saw the previous estimate as unrealistic, but Brent crude is trading still lower at under $50, down from $115 in June. Prime Minister Haider Al-Abadi said last week he feared lower revenues from falling global oil prices could hurt Iraq’s military campaign against Islamic State………………………………………..Full Article: Source

World price of oil - where is OPEC now?

Posted on 28 January 2015 by VRS  |  Email |Print

The world price of crude oil, which has been around 100 dollars a barrel for the past 6 years, has suddenly collapsed and is now tending below 50 dollars. Many are trying to understand this rapid decrease and have proposed various explanations.
Of course, the ready explanation is simply in terms of supply and demand; but this just begs the question. The supply of oil has increased sharply in recent months – mainly because of the prolific production of shale oil in the United States, thanks to the technologies of fracking and horizontal drilling. In fact, the US is now the world’s largest producer of crude oil and US imports of oil have dropped to the lowest level in 10 years………………………………………..Full Article: Source

Why $50 Oil Won’t Last

Posted on 28 January 2015 by VRS  |  Email |Print

In the past few weeks I have received numerous questions about the role of a “drop in demand” in the oil price decline. These questions are driven by many stories in the media that have referenced a drop in demand. There are two primary reasons given for this so-called demand drop. One is that years of high oil prices have resulted in reductions in consumption through conservation and improvements in vehicle fleet efficiency.
The second reason is due to the strengthening dollar, oil has become more expensive for many countries since oil is generally traded in dollars. There are elements of truth behind both reasons. There has indeed been reduced oil consumption in recent years in most developed regions of the world. It is also true that the dollar has strengthened against many currencies………………………………………..Full Article: Source

Prices of Russia’s Top Export Commodities Fall Amid Oil Price Drop

Posted on 27 January 2015 by VRS  |  Email |Print

While the plummeting price of oil has occupied headlines in recent months, it’s not the only commodity of key importance to the Russian economy whose price is dropping. In fact, all nine of the World Bank’s key commodity price indices are currently in decline, pulled down by abundant supplies, disheartening global growth forecasts and the appreciation of the U.S. dollar, the World Bank said in a report.
At the present time, the World Bank sees little hope for a rebound. “[This year] is a rare case in which all nine key commodity price indices are expected (as of January) to decline for the year,” the report said………………………………………..Full Article: Source

U.S. regulators should study oil slump -CFTC official

Posted on 27 January 2015 by VRS  |  Email |Print

U.S. futures market regulators should review the sharp drop in crude oil prices to gain a better understanding of the slide as they pursue rules to crack down on speculation in commodities, a top official said on Monday.
The Commodity Futures Trading Commission is considering regulations to rein in speculation in energy, grain and metals markets with new rules on position limits. However, the agency needs more data to justify sweeping changes, Commissioner Christopher Giancarlo told a commodities conference in Miami………………………………………..Full Article: Source

Opec’s Badri expects some oil price rebound soon

Posted on 27 January 2015 by VRS  |  Email |Print

Oil prices at current levels may have reached a floor and could move higher very soon, Opec Secretary-General Abdullah al-Badri said on Monday. “Now the prices are around US$45-US$55 and I think maybe they reached the bottom and will see some rebound very soon,” Mr Badri said in an interview.
Asked about the prospects for Saudi Arabian oil policy under a new king, Mr Badri said: “Saudi Arabia is a stable country, is a stable government, and I think things will be normal.”……………………………………….Full Article: Source

Where’s the oil price outrage?

Posted on 27 January 2015 by VRS  |  Email |Print

When gasoline prices spiked in 2005 after Hurricane Katrina, Congress and the public demanded a federal probe of price manipulation. The same thing happened three years later, when oil prices shot to $145 a barrel and gas prices topped $4 a gallon.
But now that prices are moving in the other direction — down more than 50% per barrel in about six months — virtually no one is clamoring for an investigation. As Bob Dole memorably put it in his presidential campaign, where’s the outrage?……………………………………….Full Article: Source

OPEC minister sees oil price floor at $45

Posted on 27 January 2015 by VRS  |  Email |Print

An OPEC official predicted that oil prices had bottomed out on Monday, briefly raising hopes that the steep slide might be easing. West Texas Intermediate crude, the benchmark contract in the U.S., moved up early in the morning, but ended the day down 45 cents at $45.16 US a barrel at mid-afternoon on Monday, while Brent crude was down 67 cents at $48.12. Western Canada Select oil is now at $31.81.
“Now the prices are around $45-$55 and I think maybe they reached the bottom and will see some rebound very soon,” Abdullah al-Badri, Secretary-General of OPEC, said in an interview on Monday………………………………………..Full Article: Source

OPEC’s El-Badri: $200 Oil Possible If There’s Lack of Investment

Posted on 27 January 2015 by VRS  |  Email |Print

OPEC’s secretary-general said oil prices as high as $200 a barrel are possible if producers fail to invest in new supply. “If you don’t invest in oil and gas, you will see more than $200,” Abdalla El-Badri said in an interview in London on Monday, without giving a timeframe. West Texas Intermediate, the U.S. crude benchmark, erased a decline of as much as 2.7 percent following his comments.
Crude prices tumbled 46 percent last year as Saudi Arabia and other members of the Organization of Petroleum Exporting Countries said they wouldn’t curb output in response to a supply glut caused in part by surging U.S. shale oil production………………………………………..Full Article: Source

Oil Is Never Going To Reach $200, Not For Any Length Of Time At Least

Posted on 27 January 2015 by VRS  |  Email |Print

We’ve two interesting announcements from various players in Opec today, one that the oil price might have hit bottom just at the moment and the second that oil might reach $200 at some point in the future. It’s possible that oil might have reached bottom: but the idea that oil will ever reach $200 a barrel in real terms for any significant length of time is extraordinarily unlikely.
It’s as if people really still don’t get the deep economic change that has happened in the oil market as a result of the fracking revolution. We are simply no longer in a world where the development of an oil field is a tens of billions of dollars problem taking a couple of decades to bring to fruition. Because we’re no longer in that world we’re simply not going to end up with the sort of supply and demand mismatches that could lead to a $200 oil price………………………………………..Full Article: Source

Hedge Funds Bet Oil Has Further to Fall as Glut Grows: Energy

Posted on 26 January 2015 by VRS  |  Email |Print

Hedge funds boosted bearish wagers on oil to a four-year high as U.S. supplies grew the most since 2001. Money managers increased short positions in West Texas Intermediate crude to the highest level since September 2010 in the week ended Jan. 20, U.S. Commodity Futures Trading Commission data show. Net-long positions slipped for the first time in three weeks.
U.S. crude supplies rose by 10.1 million barrels to 397.9 million in the week ended Jan. 16 and the country will pump the most oil since 1972 this year, the Energy Information Administration says………………………………………..Full Article: Source

Who needs a ‘long-term economic plan’ when the oil price is falling like this?

Posted on 26 January 2015 by VRS  |  Email |Print

The Tories must know their strategy has failed. But, unlike the governments of the 1970s, the energy market has saved them. I have taken part in many a pub discussion about the perennial question of whether governments lose elections or oppositions win them, or a mixture of both. If ever a postwar British government deserved to lose an election it is this one. That is why the Labour party has got to get its act together, and soon.
The gravamen of the charge against this government is that, for all the triumphalism about a long-delayed period of economic growth, it woefully mishandled the economy when it came in – and plans an assault on our already deteriorating public services, if it is re-elected, that would quite seriously threaten the social fabric of the nation………………………………………..Full Article: Source

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