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Commodities Briefing - Category | Oil more

Where From Here For The Oil Price?

Posted on 30 April 2015 by VRS  |  Email |Print

The first topsy-turvy quarter of the current oil trading year is behind us, with both benchmarks – Brent and WTI – currently trading above the stated period’s average price well in to the second quarter. In fact, some commentators are quite keen to flag-up the fact that both benchmarks are hovering around price levels not seen since mid-December.
Using Brent, the global proxy benchmark, as a measuring rod – it is also worth remembering that mid-December’s mid-$60 per barrel price level was a decline from a higher mark, that continued into the next month with bearishness entrenched all around. April’s return to the stated level achieved recently is part of a price uptick, if not some sort of an overblown bullish rally………………………………………..Full Article: Source

How Low Can Oil Prices Go?

Posted on 30 April 2015 by VRS  |  Email |Print

In recent months, Americans have been greeted with relatively cheap gas upon filling up at the pump. Oil prices are experiencing record lows and gasoline prices are at the lowest levels the market has seen since 2010, with some areas of the country enjoying prices of less than $2 a gallon. While this comes as a welcome development for consumers, oil companies are struggling with choosing market share over profitability.
As prices fall, what are the short- and long-term implications for the oil industry? Will consumers continue to line their pockets as domestic and global oil prices plummet? This article will break down the causes for the current price drop in the oil market and the outlook on oil prices………………………………………..Full Article: Source

Why investors shouldn’t count on oil price stability

Posted on 30 April 2015 by VRS  |  Email |Print

If you’ve been following the Bank of Canada’s utterances lately, you know that a consistent and pretty optimistic story is emerging about how the economy is going to unfold this year.
Governor Stephen Poloz’s view is that Canada’s growth will start to rebound this quarter, then really take off in the second half, thanks to a burgeoning U.S. economy, stronger manufacturing and export sector, and, oh yes, stable oil prices. No doubt, a lot could go wrong and may already have………………………………………..Full Article: Source

Saudi Arabia elevates Aramco chief as it braces for more market uncertainty

Posted on 30 April 2015 by VRS  |  Email |Print

Saudi Arabia is likely grooming Khalid Al-Falih to replace Ali Al Naimi’s oil minister, as the kingdom prepares for more uncertainty in oil markets. On Wednesday, Saudi King Salman initiated a number of significant changes, including the promotion of Al-Falih as chairman of state-owned Saudi Aramco, a position previously held by Ali Al-Naimi, the 80-year-old oil minister.
Al-Falih, 55, who joined Aramco in 1979, and became its president and chief executive in 2009, now appears most likely to succeed Al-Naimi, given the kingdom’s long-standing tradition of promoting non-royals to the all-important position………………………………………..Full Article: Source

Meet the man who could be the next ruler of oil market

Posted on 30 April 2015 by VRS  |  Email |Print

There’s no one individual who has the power to shake the world oil markets quite like Ali al-Naimi, Saudi Arabia’s octogenarian oil minister. So the replacement of al-Naimi as chairman of state-owned Aramco with its former CEO Khalid al-Falih is being read as a signal by oil traders that he could now be the front runner for oil minister when al-Naimi retires.
He was also named to the post of health minister in a series of key appointments by King Salman bin Abdulaziz al-Saud, which included a sweeping succession plan with a new generation in line………………………………………..Full Article: Source

OPEC, Russia becoming unlikely allies

Posted on 30 April 2015 by VRS  |  Email |Print

The slump in oil prices is leading to an unlikely convergence of interests between Russia and OPEC which have traditionally seen each other as rivals. Russia will meet with OPEC on June 2-3 to discuss production adjustments in order to arrest falling oil prices, Energy Minister Alexander Novak said in Moscow.
The meeting will be held before the Organization of the Petroleum Exporting Countries gathers in Vienna on June 5 to discuss the global market. According to Russian officials, the country is on course to lose $180 billion this year from slump in oil prices………………………………………..Full Article: Source

Russia Plans to Meet With OPEC Before Group Next Gathers in June

Posted on 29 April 2015 by VRS  |  Email |Print

Russia, the world’s biggest energy exporter, will meet with OPEC before the group next gathers in June to discuss whether to adjust production limits, amid prices that are almost half their level of 10 months ago.
Talks with the 12-nation group will take place on June 2-3, Energy Minister Alexander Novak said Tuesday in Moscow. The Organization of Petroleum Exporting Countries gathers in Vienna on June 5 with no signs so far that it will alter plans to maintain output amid a surplus. Novak said April 15 that a meeting with OPEC would happen in June, without giving a date………………………………………..Full Article: Source

Opec officials said to plan technical talks with non-Opec in May

Posted on 29 April 2015 by VRS  |  Email |Print

Opec officials will meet with representatives from oil producers outside the group to discuss the global market in May, a few weeks before the organization’s ministerial meeting, according to two people with direct knowledge of the matter.
Technical experts from Russia, Mexico and Oman will confer with counterparts from the OrganiSation of Petroleum Exporting Countries’ 12 members at the group’s secretariat in Vienna on May 12 to 13, said the people, who asked not to be identified because the talks are private. The conference was suggested by member nation Venezuela, they said, which has urged OPEC to revive prices by cutting output………………………………………..Full Article: Source

Oil market climbs on Iran reports

Posted on 29 April 2015 by VRS  |  Email |Print

Oil prices have risen, reversing earlier losses on confusion surrounding reports that Iran had taken control of a container ship in the strategic Strait of Hormuz, dealers say. New York’s benchmark West Texas Intermediate for June delivery added US2c to $US57.02 a barrel.
London’s Brent North Sea crude for June gained US16c to $US64.99 a barrel in late afternoon deals. “During the afternoon … reports hit, and were later denied, of Iranian forces taking control of a US vessel,” IG analyst Chris Beauchamp said………………………………………..Full Article: Source

Oil see-saws on report of Iranian ship seizure

Posted on 29 April 2015 by VRS  |  Email |Print

A reminder that politics can move an oil market that’s been paying more attention of late to rigs counts and inventories. Crude prices were in a state of flux on Tuesday amid reports that Iranian forces had seized a cargo ship in the Persian Gulf.
Brent spiked by nearly a dollar to $65.46 a barrel following initial reports from Saudi Arabia’s Al Arabiya News that the vessel in question was a US ship. The report - later denied by the Pentagon - also pushed prices for West Texas Intermediate, the US oil benchmark, a dollar higher to $57.82 a barrel………………………………………..Full Article: Source

Do Oil Price Trends Have a Clear Direction?

Posted on 29 April 2015 by VRS  |  Email |Print

First, the price of oil surged this morning as reports came in on social media of an incident in Iran. Then, it dropped rapidly as the details showed the incident as a confrontation between Iranian warships and a Marshall Islands-flagged cargo ship. Such is the oil market these days.
Months after plummeting and holding all markets hostage during a sell-off few had expected– but weeks after a bounce-back rally–oil traders now have very itchy trigger fingers. In the very near term, traders and strategists are looking at the fundamentals and saying oil simply can’t jump too high. The facts are: stockpiles are at an 80-year high and there remains a massive global glut of crude. With the market still vastly oversupplied, prices should be lower………………………………………..Full Article: Source

Saudi keen to maintain oil market share

Posted on 29 April 2015 by VRS  |  Email |Print

Saudi Arabia’s high crude oil production policy is based on the status of global demand and the top oil exporter is keen to maintain its market share, the kingdom’s deputy oil minister said. Speaking to reporters in Saudi Arabia, Prince Abdulaziz bin Salman bin Abdulaziz described the oil market as “excellent”, suggesting the Opec heavyweight was comfortable with current global conditions.
“As the minister mentioned, the kingdom responds to demand and supplies oil to wherever the demand is and whoever asks for it,” he said. “We care about our market share, we care about maintaining our customers and we care about the stability of the market.”……………………………………….Full Article: Source

BofA raises oil price forecasts for 2016

Posted on 28 April 2015 by VRS  |  Email |Print

Bank of America Merrill Lynch has revised upward its oil price forecasts for 2016, but said it remained bearish amid oversupply, weak demand from emerging markets, a return of U.S. shale production and expectations of a deal on Iran.
The bank raised its outlook for Brent next year to $62 per barrel from $58, but kept its WTI outlook unchanged at $57, as it expects only a moderate draw in global inventories. For 2015, BofA saw Brent averaging $58 per barrel and WTI at $53. The bank had previously forecast Brent at an average of $52 this year, and WTI at $50………………………………………..Full Article: Source

Investors Step Up Bets on Oil Price Recovery

Posted on 28 April 2015 by VRS  |  Email |Print

Investors last week pushed the number of bets that oil prices would rise to a record high, even as some market observers worry prices could slip in the short-term. Net long positions taken by large investors in futures and options contracts that the price of Brent crude oil would increase rose 3.2% during the past week, according to the Commitment of Traders report from Intercontinental Exchange Inc.
That pushed the total number of bets that oil prices will rise to a net 271,929 contracts, the highest level since the report was first prepared in 2011. With a contract equivalent to 1,000 barrels of oil, that represents the equivalent of nearly 272 million barrels of crude oil at stake………………………………………..Full Article: Source

Why this oil price collapse could be different

Posted on 28 April 2015 by VRS  |  Email |Print

Unlike the 1980s, electricity prices should hold firm, but we should not be complacent about fixing our energy policy. The recent oil price collapse seems like a replay of a bad 1980s movie that we’ve seen before. If we are not careful, we’ll be doomed to make the same mistakes we made last time, allowing our domestic oil and gas producers to wither, watching energy imports soar, prematurely stunting the growth of alternative fuel sources, and tossing conservation and efficiency by the wayside.
If we are smart we’ll seize this opportunity to double-down on good energy policies and support all of our domestic energy producers so that we’re prepared for the next time oil prices spike………………………………………..Full Article: Source

Saudi Prince Sees ‘Excellent’ Oil Market as Kingdom Pumps On

Posted on 28 April 2015 by VRS  |  Email |Print

Saudi Arabia, the world’s biggest oil exporter, will meet any demand for its crude as the kingdom seeks to keep customers happy and maintain a balanced market, Prince Abdulaziz bin Salman, the deputy oil minister, said.
The oil market is in “excellent” condition, he told reporters on Monday in the eastern city of Khobar, without elaborating. Benchmark Brent crude has gained 13 percent this year and was trading 9 cents lower at $65.19 a barrel at 4:39 p.m. in London………………………………………..Full Article: Source

Oil’s 45 percent rebound could be markets’ next headache

Posted on 28 April 2015 by VRS  |  Email |Print

Whisper it, but the next challenge for financial markets and policymakers may not be deflation, but the remarkable surge in oil prices from the six-year low touched in January. Since then, Brent crude futures have risen 45 percent. If that is sustained or even increased throughout this year, inflation next year could rise significantly, posing questions for policymakers largely committed to ultra-loose policy.
No fewer than 27 central banks around the world have eased monetary policy to some extent this year in a battle against deflation, slowing growth or both. These measures have ranged from interest rate cuts to bond-buying “quantitative easing” programs. All have been in response to the fall in inflation rates and inflation expectations driven by the 60 percent collapse in oil prices over the latter part of last year………………………………………..Full Article: Source

This Is How Much OPEC Really Earns

Posted on 28 April 2015 by VRS  |  Email |Print

The world already knows that the Organization of Petroleum Exporting Countries, or OPEC, can change the fate of the international oil price. By producing close to 40 % of the world’s combined crude oil, OPEC’s oil exports represents about 60% of the total petroleum traded internationally.
In spite of having such clout, 2014 has been kind of odd for the cartel as there was a considerable drop in OPEC’s revenues. As per Energy Information Administration, OPEC earned close to $730 billion in net oil export revenues in 2014, which was a decline of 11% from 2013. Low oil prices and reduction in the net oil exports were the major factors behind this decline. This was the cartel’s lowest revenue earning since 2010………………………………………..Full Article: Source

Why the US won’t have OPEC to kick around in 2016

Posted on 28 April 2015 by VRS  |  Email |Print

As candidates for the 2016 U.S. general election gear up for a White House run, one villain of recent campaign cycles will be conspicuously absent: the cartel known as OPEC. With the U.S. oil boom helping the world’s largest economy churn out more than 9 million barrels per day (bpd), its highest in about three decades and up 80 percent since 2008, energy prices appear to be sidelined as political theater.
Should current trends continue-prices of Brent crude and West Texas Intermediate are trading near their lowest levels in nearly 10 years-energy prices are unlikely to figure prominently in the coming presidential election………………………………………..Full Article: Source

Hedge funds bet big on oil price rally

Posted on 24 April 2015 by VRS  |  Email |Print

Hedge funds have placed one of their largest ever bets on a rally in oil prices, just as evidence mounts that energy companies are hunkering down for a delayed recovery.
Exchange data show hedge funds and other large speculators have accumulated a record-breaking number of North Sea Brent futures and options contracts equal to almost 265m barrels of oil — the equivalent of almost three days of global oil demand…………………………………..Full Article: Source

Strong demand to rebalance oil market by early 2016: Kemp

Posted on 24 April 2015 by VRS  |  Email |Print

Global oil demand is set to rise by 1 million or even 1.5 million barrels per day (bpd) in 2015, according to a range of forecasters. Coupled with a fall in shale output in the second half of the year, as the decline in the U.S. rig count takes effect, that should be enough to bring the oil market near to balance by early 2016.
Worldwide consumption will increase by a little over 1 million bpd in 2015, according to forecasts published this month by both the International Energy Agency and the U.S. Energy Information Administration (EIA). Ian Taylor, chief executive of Vitol, the world’s largest oil trader, has also predicted demand will grow by around 1 million bpd, at a conference hosted by the Financial Times…………………………………..Full Article: Source

U.S. Shale Fracklog Triples as Drillers Keep Oil From Market

Posted on 24 April 2015 by VRS  |  Email |Print

Think the U.S. is awash in crude now? Thank the fracklog that it’s not worse. Drillers in oil and gas fields from Texas to Pennsylvania have yet to turn on the spigots at 4,731 wells they’ve drilled, keeping 322,000 barrels a day underground, a Bloomberg Intelligence analysis shows. That’s almost as much as OPEC member Libya has been pumping this year.
The number of wells waiting to be hydraulically fractured, known as the fracklog, has tripled in the past year as companies delay work in order to avoid pumping more oil while prices are low. It’s kept crude off the market with storage tanks the fullest since 1930. The fracklog may slow a recovery as firms quickly finish wells at the first sign of higher prices…………………………………..Full Article: Source

Where should investors look when Oil recovers?

Posted on 24 April 2015 by VRS  |  Email |Print

When oil prices recover-and plenty of analysts think the climb back up will start soon-Canada’s western frontier of Saskatchewan and neighboring Alberta will ’still have the edge’, according to a report from TD Economics. Depressed oil prices may have skewed the view from Canada’s oil-producing west, but this will be one of the better places to bet on the oil rebound.
Saskatchewan remains the last highly accessible onshore North American oil frontier and it is home to part of the prolific Williston Basin. And as the industry gears up for the Williston Basin Petroleum Conference(WBPC) on 28 April, the message is clear: Saskatchewan is still alive and kicking…………………………………..Full Article: Source

Oil vs. Gas ETFs: Which One Should I Choose?

Posted on 24 April 2015 by VRS  |  Email |Print

Energy is one of the last places an investor wanted to be over the past year. Many analysts are calling a bottom. This is often based on nothing more than oil and natural gas prices being low combined with an improving U.S. economy. As far as the latter is concerned, this trend is debatable. Though unemployment has improved, there is minimal wage growth.
Without wage growth, consumers save more and spend less. Additionally, the Baby Boomer generation is retiring in droves, and retirees tend to save more and spend less. Furthermore, China is consistently slowing and the Eurozone and Japan are fighting deflation…………………………………..Full Article: Source

The fossil fuelled economy

Posted on 23 April 2015 by VRS  |  Email |Print

The price of oil has historically had a huge affect on the global economy but how does it impact on our lives in general? Our research has unearthed some fascinating facts in the event of oil price fluctuations. The impact of oil price changes meant average car insurance premiums increased by 2% (a whopping £12m) in the final quarter of 2014, which was the first quarterly increase since 2011.
We also found some more unusual truths, such as reductions in crude oil prices could drop the price of synthetic condoms, therefore increasing the potential of safe sex. Read on for more intriguing factors that are affected by price movements of oil……………………………………Full Article: Source

Could The Oil Market Be In For A Quick Rebound?

Posted on 23 April 2015 by VRS  |  Email |Print

A global oil glut led to the slump in oil prices over the last year. Yet some in the industry believe the turnaround could come much quicker than markets expect. Glencore chairman and Genel CEO Tony Hayward is particularly bullish. Though he thinks the oversupply in the market would likely take a year or two to work off, he predicts that cuts to oil companies’ capital spending are laying the seeds for the next oil price bull market.
“The supply chain in the U.S. is being decimated,” Mr. Hayward said. U.S. shale oil production, the source of the current battle among producers for market share, is expected to be flat this month and will decline next month for the first time in 4.5 years, he told the FT Commodities summit in Lausanne. The decline will be faster than people are anticipating due to a significant fall in activity, he said……………………………………Full Article: Source

Strong demand to rebalance oil market by early 2016

Posted on 23 April 2015 by VRS  |  Email |Print

Global oil demand is set to rise by 1 million or even 1.5 million barrels per day (bpd) in 2015, according to a range of forecasters. Coupled with a fall in shale output in the second half of the year, as the decline in the US rig count takes effect, that should be enough to bring the oil market near to balance by early 2016.
Worldwide consumption will increase by a little over 1 million bpd in 2015, according to forecasts published this month by both the International Energy Agency and the US Energy Information Administration (EIA). Ian Taylor,CEO of Vitol, the world’s largest oil trader, has also predicted demand will grow by around 1 million bpd, at a conference hosted by the Financial Times……………………………………Full Article: Source

Pricing Up Oil Worry on Shell’s BG Deal

Posted on 23 April 2015 by VRS  |  Email |Print

What is a merger without a bit of arbitrage? Ask Royal Dutch Shell and BG Group. Pentwater Capital Management this week became the first big merger arbitrage fund to disclose a position in BG, after Shell’s $70 billion cash-and-stock deal to buy the U.K. oil and gas company.
But with the deal not slated to close until early next year, and requiring approval from several regulators, other arbitrage funds will likely move slowly in putting on trades, especially with few obvious counter-bidders……………………………………Full Article: Source

Wall Street Bets on Oil Price Rally

Posted on 23 April 2015 by VRS  |  Email |Print

If the whims of speculators are anything to go by, then oil markets are poised for a rebound. Data from the Commodity Futures Trading Commission show that bullish positions on WTI have reached their highest levels in eight months. Speculators make bets on the price of crude — long or short — depending on where they think prices are heading. Not since the end of the summer in 2014 have so many investors put money on the line, betting on a price rise.
Obviously, elite investors are not always right. Few saw the bust coming. But the mounting belief that the worst is over for oil provides a bit of evidence that prices could be on the mend……………………………………Full Article: Source

Is The Oil Price Now In A Big Gap For Investors?

Posted on 23 April 2015 by VRS  |  Email |Print

Leading oil stocks have already run hard - over 100% off the bottom and some are even up Year-Over-Year. Tier 2 oil stocks started to move in last week’s rally - should they be bought? Euphoria may move the group, but quarterly financials could be a regular rude awakening.
I think investors are in the middle of a Big Gap in oil stocks. The Leaders have already run so hard they’re pricing in $75-$80 oil - so there’s not much value or leverage there. But the Laggards need even higher oil prices than that to really work: $90-$100……………………………………Full Article: Source

Expert: No conditions for oil price bouncing back to $100/barrel

Posted on 22 April 2015 by VRS  |  Email |Print

There are no conditions to restore oil prices at their previous level of $ 100 per barrel or more in the short and medium term, Anton Soroko, analyst of Russia’s Finam Investment Holding told Trend April 21. “A qualitative breakthrough in the global GDP growth rates and the expansion of oil consumption are required to increase the oil prices up to $100-120 per barrel.
“We have not seen such preconditions yet,” he said. “At the same time, oil prices will continue restoring slowly. They will reach $70-80 per barrel by late 2015 and early 2016.” Soroko said that the oil prices approximately $50-60 per barrel are not very interesting for manufacturers of highly viscous and hard-to-reach oil, shale oil…………………………………..Full Article: Source

World Oil Price Reaches Minimum - Lukoil President

Posted on 22 April 2015 by VRS  |  Email |Print

The world price of oil has hit a low end, Lukoil President Vagit Alekperov said. Global oil prices have dropped by some 50 percent since summer 2014, damaging economies heavily reliant on energy exports, including Russia. “I personally believe that the price has reached its minimum,” Alekperov said.
Alekperov pointed out to the great reduction in drilling in the United States as proof. “That shows clearly that there is a certain stress on services and companies,” he added. In November 2014, the Organization of Petroleum Exporting Countries (OPEC) decided not to reduce oil output levels, which prompted an even greater slump in prices…………………………………..Full Article: Source

World’s Biggest Oil Trader Sees $50 Floor for Crude Prices

Posted on 22 April 2015 by VRS  |  Email |Print

Vitol Group, the world’s biggest independent oil trader, said crude prices won’t drop below $50 a barrel for sustained periods because that’s a level some producers need in order to invest in new supply. Gunvor Group said a rout is over.
“We still subscribe to the likelihood that over time prices still have to go back up again because you still need to invest,” Vitol’s Chief Executive Officer Ian Taylor said in an interview at the FT Commodities Global Summit in Lausanne, Switzerland on Tuesday. “People won’t invest unless they can make the upstream business work and it’s not just U.S. shale, at $50 a barrel it doesn’t work.”………………………………….Full Article: Source

Oil unlikely to hit new 2015 lows, say traders

Posted on 22 April 2015 by VRS  |  Email |Print

Oil prices could weaken again but they are unlikely to plumb new depths this year, leading commodities traders said on Tuesday, citing strengthening demand. Ian Taylor, head of the world’s largest oil trader, Vitol, told Reuters he thought global benchmark Brent crude oil, which tumbled 60% to just above US$45 (RM163) a barrel in January, could dip again briefly.
But the oil market had likely already seen its 2015 lows. “We will probably see one more dip in the second quarter but prices probably won’t go below this year’s lows,” Taylor told Reuters on the sidelines of the FT Commodities Summit in Lausanne…………………………………..Full Article: Source

Oil Market Uncertain As US Shale Boom “Goes Bust”

Posted on 22 April 2015 by VRS  |  Email |Print

Oil market is uncertain as the US shale oil output is expected to fall for the first time in four years, and the coming months are likely to see a continuing price war between OPEC producers. Deutsche Bank, Goldman Sachs and HIS are now projecting that US oil production growth will now end. The global oil price rose slightly in the morning of April 14.
Citing the April 13, 2015 US Energy Information Administration prediction on the US shale production Andy Rowell writes in Oil Change International: The production would fall by 57,000 barrels per day in May this year. The report says: “The EIA forecasted that the seven major shale formations in the US: Bakken, Eagle Ford, Haynesville, Marcellus, Niobrara, Permian and Utica will produce a total of 5.56 million barrels of crude oil daily next month, down from 5.62 million barrels per day in April…………………………………..Full Article: Source

Fed could be to blame for oil’s decline: Analyst

Posted on 21 April 2015 by VRS  |  Email |Print

The dramatic 10-month drop in the price of oil could be due to ultra-loose monetary policy by the U.S. Federal Reserve, according to a senior analyst at a major financial services company. Mark Lewis from Kepler Cheuvreux said on Monday that the boom in U.S. shale gas production over the last few years that had helped push down oil prices was partly driven by the Fed’s “very, very low interest rates.”
“The financial dimension to the shale story is hugely important,” he told CNBC. “I think it’s questionable whether we would ever have had the increase in oil production we’ve had out of the shale plays over the last three or four years if we hadn’t been in this environment.”………………………………….Full Article: Source

Sluggish Oil Demand Emerges As A Potent Factor In The Peak Oil Debate

Posted on 21 April 2015 by VRS  |  Email |Print

Peak oil isn’t what it used to be. That’s not simply because the theory of global oil supply peaking has been postponed courtesy of the U.S. production rebound, it is also because a second meaning to the expression is making a return, and that’s peak demand. A fresh glimpse of demand for oil peaking came last week in the release of the April edition of Oil Market Report by the International Energy Agency.
While most interest was in oil supply, a natural focus given the glut which has depressed the price of oil, there was a more important factor in the report and that was the modest demand growth forecast from the agency…………………………………..Full Article: Source

Researchers Warn of Global Oil Price Crisis as Investors Shy Away

Posted on 20 April 2015 by VRS  |  Email |Print

The drop oil prices has changed the longstanding laws of the energy market and made investors deeply insecure about financing expensive projects in the future. The risk of a global oil crisis has increased and investors are becoming more and more cautious about financing expensive projects, according to a study by the Hamburg Research Office Energycomment, presented by the German magazine “Der Spiegel”.
The researchers stated that low oil prices resulted in a drastic cut of investments in long-term energy projects, including the development of the Arctic and production of synthetic and biological fuels. Oil prices have almost halved since the summer of 2014, and currently lie below the level of 60 dollars per barrel. For the first time, the drop was caused not by an economic crisis, but tough competition in the global oil market, experts claim……………………………………Full Article: Source

OPEC Should Consider Return To Oil Quotas-Delegate

Posted on 20 April 2015 by VRS  |  Email |Print

A proposal to reintroduce quotas would spark a fierce debate in OPEC as national prestige and market share are at stake. OPEC should consider re-introducing individual output quotas, shuffled quietly to one side in 2008, to prevent oversupply hitting prices should Iran increase its oil exports following a deal over its nuclear work, an OPEC delegate said.
A proposal to reintroduce quotas would spark a fierce debate in the Organization of the Petroleum Exporting Countries as national prestige and market share are at stake. After refusing to cut output last year, OPEC is pumping much more than its overall output target of 30 million barrels per day (bpd) because of record Saudi Arabian output, higher Iraqi exports and a partial return of Libyan crude……………………………………Full Article: Source

Nigeria, Algeria See Oil Prices Staying Low for a Long Time

Posted on 20 April 2015 by VRS  |  Email |Print

Oil prices are likely to stay low for a long time after falling more than 40 percent in the past year, said officials from two OPEC nations. Nigeria and Algeria both warned that oil prices, currently at around $60 a barrel, probably won’t recover to the 2011-2013 level of more than $100 a barrel.
“You forecast at your own risk, but it seems to me that we should be regarding this as a permanent shock,” Ngozi Okonjo-Iweala, the Nigerian finance minister, said on a panel discussion Sunday in Washington near the end of the International Monetary Fund’s spring meetings. “We should prepare our economies for that eventuality.”…………………………………..Full Article: Source

Three Reasons Oil Will Continue to Run the World

Posted on 20 April 2015 by VRS  |  Email |Print

While all the buzz surrounds oil prices, the global demand side remains on solid footing: up. Supplying 33% of all energy, oil is the world’s primary fuel. Oil is so important that global demand is ever-growing: 67 million b/d in 1990, 77 million b/d in 2000, and 91 million b/d in 2014.
I’ll never understand the animosity of some Westerners toward critical fuels that they depend on everyday, making their lives easier in ways their great grandparents only dreamed of. Oil, after all, is the reason the world is truly globalized. And it’s oil that takes a grandson living in Atlanta back home to Seattle for his grandmother’s funeral…the very same day he learned she passed……………………………………Full Article: Source

Citi: Q2 Commodities Outlook Hinges On Oil

Posted on 16 April 2015 by VRS  |  Email |Print

In a new report, analysts at Citi Research looked at the slumping commodity market and updated their forecast for 2Q15 and beyond. One of the topics that analysts addressed is whether or not the worst of the slump is over or if there is downside remaining in oil and other commodities.
Analysts believe that many commodities have found near-term support at current levels, but that this support could be short-lived. The center of the collapse in commodity prices is crude oil, and Citi analysts to not feel that crude oil has bottomed just yet. According to the report, demand for crude oil will be seasonably low in Q2 due to refinery turnarounds. In addition, investment outflows from physically-backed crude oil ETFs will likely push crude prices lower………………………………………..Full Article: Source

Price controls on oil to halve global growth boost: IMF

Posted on 16 April 2015 by VRS  |  Email |Print

Countries that fail to pass on steep declines in global oil prices to consumers could cost the world half a per cent in economic growth next year, according to the International Monetary Fund. Modelling by the IMF in its April World Economic Outlook report predicts GDP growth of 3.5 per cent this year and 3.8 per cent next year.
The report shows the oil slump could boost GDP in 2016 by 1 per cent, excluding nations that are increasing their oil supply. But that assumes a complete “pass-through” of the low prices. Countries such as Russia, India, China and Brazil, which manage their oil prices, would halve the 1 per cent gain by using the oil windfall to prop up their nations’ finances instead………………………………………..Full Article: Source

Oil just hit $56 — its highest price in 2015

Posted on 16 April 2015 by VRS  |  Email |Print

Oil peaked above $56 for the first time in 2015 on Wednesday. It’s the fifth straight day the price for a barrel of oil has nudged up. Investors are cheering and buying energy stocks while American drivers are cringing at the prospect of higher costs at the pump.
Consumers have loved low gas prices this year. The average gallon of gas costs a mere $2.39. That’s way below the average a year ago, $3.63, according to AAA, although it’s off the rock bottom levels of $2 a gallon that many Americans saw around the New Year………………………………………..Full Article: Source

IEA Says Oil Market Recovery Could Be Delayed

Posted on 16 April 2015 by VRS  |  Email |Print

The prospect of Iranian crude oil flooding the market and Saudi Arabia pumping at near-record levels could delay a recovery in an oil market slammed by a historic price collapse, the International Energy Agency said.
The IEA, which tracks oil data for Western countries, and others have predicted that the world’s supply of oil would fall back in line with demand starting from the second half of this year, when U.S. producers are expected to begin cutting back production because of low prices………………………………………..Full Article: Source

Saudi Arabia Leads OPEC Oil Boom as U.S. Shale Growth Slows

Posted on 16 April 2015 by VRS  |  Email |Print

Saudi Arabia pumped close to a record amount of crude oil last month, leading the biggest surge in OPEC output in almost four years just as the U.S. shale boom shows signs of slowing, the International Energy Agency said.
The Organization of Petroleum Exporting Countries may extend its biggest output gain since June 2011 into next month as recovery in Libya and Iraq adds to the Saudi increase, the IEA said. Average U.S. oil production of 12.6 million barrels a day in the first six months of 2015 will slide to 12.5 million by the fourth quarter as companies curb drilling, the agency said………………………………………..Full Article: Source

Russia in Active Consultations with OPEC

Posted on 16 April 2015 by VRS  |  Email |Print

Russia is conducting “unprecedentedly active” consultations with the Organization of the Petroleum Exporting Countries but isn’t discussing oil production cuts to support prices, Russian officials said on Wednesday.
The consultations come after several months of low oil prices that are putting pressure on Russia’s budget and currency, but Russian officials poured cold water on any suggestion of coordinated production cuts………………………………………..Full Article: Source

IMF: oil price collapse will cripple North Sea producers

Posted on 15 April 2015 by VRS  |  Email |Print

Fund’s analysis suggests industry’s crisis is worse than feared, as IMF claims oil price slump has hit UK “earlier and more intensely” than in other countries. Britain’s oil industry faces a deep and long-lasting crisis, according to the International Monetary Fund, which said the collapse in oil prices would stifle investment and hit production at a much faster pace than other countries.
Analysis by the IMF and Rystad Energy showed North Sea oil producers would be among the hardest hit by the slump in prices because huge operating costs meant they could not absorb the decline as easily as countries such as Kuwait, Iraq and Saudi Arabia………………………………………..Full Article: Source

Oil price could recover to $70 per barrel by year end: Fitch

Posted on 15 April 2015 by VRS  |  Email |Print

Crude oil prices could rise quickly in the second half of the year and may reach $70 per barrel by the end of 2015 as US shale production tapers and seasonal variations increase demand, a top analyst at ratings agency Fitch said on Tuesday.
However, Alex Griffiths, the head of oil and gas research at Fitch, said it might take several years for oil to reach $80 — the price level where supply and demand is seen as balanced based on current production costs. “We see US shale oil as reacting most quickly to balancing the supply with demand,” Griffiths told Reuters on the sidelines of a conference in Oslo………………………………………..Full Article: Source

US Shale oil production may have maxed out - EIA

Posted on 15 April 2015 by VRS  |  Email |Print

The shale oil boom may be over, judging from the latest report from the US Energy Information Administration, which said oil output from America’s seven most productive shale formations will decrease for the first time in four years.
The report has had an effect on the oil market with Brent, the benchmark for more than half of the world’s oil, trading above $58.25 per barrel, a 0.55 percent increase, and WTI, the North American blend, advancing one percent to $52.44 at the time of publication………………………………………..Full Article: Source

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