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OPEC’s Oil Price Falls Below $90 for First Time Since June 2012

Posted on 09 October 2014 by VRS  |  Email |Print

The average price of benchmark OPEC crudes dropped below $90 a barrel for the first time in more than two years amid muted demand and ample supplies.
The so-called OPEC basket, a weighted average of the main grades produced by the Organization of Petroleum Exporting Countries, slipped to $89.37 a barrel yesterday, the group’s Vienna-based secretariat said by e-mail today. It’s the first time their reference price has dropped below $90 since June 25, 2012………………………………………..Full Article: Source

IMF forecasts weigh on oil

Posted on 09 October 2014 by VRS  |  Email |Print

Oil prices fell further in Asian trade on Wednesday on demand concerns after the International Monetary Fund (IMF) cut its the global economic growth forecasts, analysts said. The US benchmark, West Texas Intermediate for November delivery, was down 35 cents at a 17-month low of $88.50 a barrel in late-morning trade and Brent crude eased 36 cents to $91.75 - lows not seen since mid-2012. Both contracts tumbled on Tuesday.
Singapore’s United Overseas Bank said in a note that prices were being “pressured by reduced economic and demand growth forecasts”. The IMF on Tuesday said the global economy would grow 3.3 percent this year, down 0.1 percentage point from July’s estimate and 0.4 points off its April forecast………………………………………..Full Article: Source

Is OPEC heading for a sinkhole?

Posted on 09 October 2014 by VRS  |  Email |Print

Turmoil is rarely good for the bottom line. Saudi Arabia, Qatar and the United Arab Emirates are joining Washington’s anti-Islamic State air strikes within the borders of neighboring OPEC member Iraq. Fellow OPEC partner Nigeria just barely dodged an Ebola scare, while founding member Iran remains under sanctions aimed to curb its nuclear ambitions.
Meanwhile, Russia, which last year produced an estimated 10.4 million barrels of crude oil a day, doesn’t look set to extricate itself from Ukraine any time soon. Much of the oil-producing world is in turmoil, yet OPEC prices have fallen almost 20 percent since June. The reasons for this are complex, but include significant increases in the U.S. production of shale oil—also known as “tight oil”—over the past few years, which have eroded the American demand for imported oil………………………………………..Full Article: Source

It’s a super market price war! (in oil)

Posted on 09 October 2014 by VRS  |  Email |Print

That Saudi Arabia and the Opec cartel were going to be “disrupted” by North Dakota millionaires was hardly difficult to foresee. What was always harder to figure out, however, was how Saudi would react. Would Opec’s most important swing-producing state cave in and give up on market share for the sake of price control?
Or, conversely, would it be more inclined to follow along the lines of the Great UK Supermarket Price War, and enter a clear-cut race to the bottom? So far, it seems, the strategy is focused on the latter course. Which means people are finally beginning to wonder just how sustainable a path that really is………………………………………..Full Article: Source

Iran denies oil “price wars” as crude continues to slip

Posted on 09 October 2014 by VRS  |  Email |Print

Iran will not be reducing its oil prices in order to match its competitors on the global market, Iran’s oil minister said on Tuesday, amid fears that discounts offered by Saudi Arabia to US and Asian customers in November could trigger a price war among OPEC members.
“There is no oil price war in the [crude] market,” Iranian Minister of Petroleum Bijan Namdar Zanganeh told reporters on Tuesday, in comments carried by state-owned Iranian news channel Press TV. He added that Iran’s state-owned oil company, the National Iranian Oil Company, was currently setting prices in a “professional” manner………………………………………..Full Article: Source

Saudi Arabia absorbs lower oil prices

Posted on 09 October 2014 by VRS  |  Email |Print

As the price of Brent crude continues its seemingly relentless slide – down more than 20 per cent since a mid-June high of $115 a barrel to $90 on Wednesday – a number of conspiracy theories have started to do the rounds.
Most focus on Saudi Arabia – Opec’s largest producer – and its apparent reluctance to cut production in any meaningful way to support the oil price. Before we examine them, some context………………………………………..Full Article: Source

Can Saudis beat North Dakota in an oil price war?

Posted on 09 October 2014 by VRS  |  Email |Print

With oil prices tumbling — and dragging gasoline prices at U.S. pumps further below $4 a gallon — investors wonder if Saudi Arabia will cut production in an effort to stop the slide. Don’t count on it.
In a note, commodity strategists led by Seth Kleinman at Citi argue that the Saudis aren’t likely to throttle back output, in part because they apparently “think that they can win any price war” with U.S. shale producers. In other words, Saudi producers are playing a long game, confident that “full cycle” shale production costs are considerably more than their own………………………………………..Full Article: Source

Commodity themes 2015: Expect metals to be bullish, Oil to fall further

Posted on 08 October 2014 by VRS  |  Email |Print

Amidst a strengthening US dollar, rise in equity markets, commodities are likely to underperform in the coming months. However, metals complex appears bullish,according to a new report titled Commodity Themes 2015 released by Deutsche Bank.
Brent oil physical fundamentals are weak and appearance of contango in Brent oil market will eventually be met with OPEC production cuts to tighten fundamentals and restore backwardation.Falling Brent crude oil prices are already impacting budgetary positions among the major oil producers. History shows that when OPEC takes action and cuts production, their efforts to stabilise and push oil prices are successful. However, this is contingent on world GDP growth in excess of 2.5%………………………………………..Full Article: Source

EIA sees lower OPEC output, weaker demand growth in 2015

Posted on 08 October 2014 by VRS  |  Email |Print

The U.S. Energy Information Administration trimmed its forecast of world oil demand growth next year and made even deeper cuts in its outlook for OPEC production, the latest signs of a shift toward surplus supplies next year. The EIA cut its 2014 global demand forecast to 91.47 million barrels a day, compared with 91.55 million bpd expected last month, according to a monthly report from the agency on Tuesday.
As a result, it now expects consumption to rise by 1.24 million bpd, down 100,000 bpd from the previous month’s report but still higher than the 1 mln bpd increase estimated for 2014. On the backdrop of weakening demand, the agency curbed its forecasts for OPEC oil and other liquid fuels production to 35.51 million barrels a day in 2015, down 350,000 bpd from last month’s forecast………………………………………..Full Article: Source

Oil Prices Drop on Weaker Demand Forecasts

Posted on 08 October 2014 by VRS  |  Email |Print

U.S. oil prices fell to fresh multi-month lows Tuesday as economic data and forecasts suggested slower demand growth next year than previously expected. Weak oil demand, particularly in Europe and Asia, has weighed on oil prices in recent months, as global supplies have remained ample and producers have had to cut prices to lure buyers.
On Tuesday, the International Monetary Fund lowered its global economic growth outlook by 0.2 percentage point to 3.8%. Earlier in the day, German factory data showed a 4% slump in August, well below expectations for a 1.5% decline. Prices fell further midday after the U.S. Energy Information Administration cuts its forecast for global oil-demand growth and oil prices in 2015………………………………………..Full Article: Source

Oil Plunge Magnifies Russia’s Sanctions Pain: Chart of the Day

Posted on 08 October 2014 by VRS  |  Email |Print

Oil prices that have plunged to a 27-month low are inflicting damage on a Russian economy already contending with escalating sanctions from the U.S. and European Union over its role in Ukraine. The CHART OF THE DAY shows how an average oil price of $90 a barrel, close to where prices are now, would give Russia a budget deficit of 1.2 percent of gross domestic product next year, according to Sberbank CIB, the investment bank of Russia’s biggest lender.
The right axis shows the budget balance as a percentage of GDP under different oil-price scenarios. The left axis measures spending and revenues in trillions of rubles………………………………………..Full Article: Source

Iran says no plan for OPEC emergency meeting on price fall

Posted on 08 October 2014 by VRS  |  Email |Print

Iran Oil Minister Bijan Zanganeh said on Tuesday that OPEC has no plans to hold an emergency meeting to discuss the recent slide in oil prices, Iran’s oil ministry news agency Shana reported. Brent crude oil fell towards $92 a barrel on Tuesday, pushing towards 27-month lows as weak demand and ample supply outweighed the price support from a weaker dollar.
Oil ministers from the Organization of the Petroleum Exporting Countries (OPEC) are scheduled to meet in Vienna on Nov. 27 to consider whether to adjust their output target of 30 million barrels per day (bpd) for early 2015. “For the moment, there is no plan for an OPEC emergency meeting,” Shana quoted Zanganeh as saying………………………………………..Full Article: Source

Saudi Arabia initiating a price war among OPEC members?

Posted on 08 October 2014 by VRS  |  Email |Print

Crude oil is poised to extend the biggest slump in more than two years after Saudi Arabia signaled it is ready for a price war with other OPEC members. Saudi Aramco, the state-run oil producer of the world’s biggest exporter, cut prices on October 1 for all its exports, reducing those for Asia to the lowest level since 2008. The move suggests that the biggest member of the Organization of Petroleum Exporting Countries is prepared to let prices fall rather than cede market share by paring output to clear a supply surplus.
Aramco reduced official selling prices, or OSPs, for all grades of crudes to all regions for November. It lowered the OSP for Arab Light to Asia by $1/bbl to a discount of $1.05 to the average of Oman and Dubai crude, the lowest level since December 2008. OSPs are regional adjustments Aramco makes to price formulas to compete against oil from other countries………………………………………..Full Article: Source

As crude oil prices tumble, why isn’t gas cheaper?

Posted on 07 October 2014 by VRS  |  Email |Print

Despite cheap crude oil prices and a seasonal dip in the cost of gas, Canadians are not seeing a big discount at the pumps because of a backlog at the country’s largest refinery. The cost of a barrel of crude oil was US$101.70 on Sunday – more than $5 cheaper than it was on the same day last year. But gas in many Canadian cities is actually more expensive now because of refinery issues, experts say.
“Gasoline is made from crude oil and crude oil needs to be refined,” EnPro chief petroleum analyst Roger McKnight told CTV News. McKnight said that while Canada has a strong supply of cheap crude oil, its largest refinery has been slow to turn that crude into gasoline, meaning the gas supply isn’t as plentiful………………………………………..Full Article: Source

Why the oil price decline is failing to boost Europe

Posted on 07 October 2014 by VRS  |  Email |Print

Forget quantitative easing by the European Central Bank. Surely the precipitous oil price decline in the last couple of weeks will finally be the catalyst to give the down-trodden European economy the big boost it needs. I mean, after three years of prices north of $100 a barrel surely a big cut in the European energy bill will provide the stimulus effect that ECB President Mario Draghi could only dream of?
Well, I’m afraid it appears there will be no energy-induced bonanza as, like many other peculiar aspects of the European economy, consumers will hardly see the benefits of market falls in commodities………………………………………..Full Article: Source

Higher oil prices coming in 2015?

Posted on 07 October 2014 by VRS  |  Email |Print

Let’s kick off this last quarter of 2014 right. See, this is the quarter when we get to see those thousand page reports on the forecasts for 2015. This is when all of those overpaid commodity analysts get to tell the trading community how it’s going to be. They’ll throw out charts and statistics that are going to back each other up. We’ve already heard about declining demand and $80 oil.
How the world is going to grind to a halt, U.S. oil production is going to become unprofitable and we’ll be once again leaning on the great and powerful OPEC to be the best barrel out there. Hold on there Cassandra. First off, we’d raise tariffs on foreign imports before we would let our pride and joy of US crude oil production fall apart………………………………………..Full Article: Source

OPEC Discord Weighs on Oil Prices

Posted on 07 October 2014 by VRS  |  Email |Print

Discord at OPEC is turning into a price war, loosening the cartel’s grip on the oil market and exacerbating a recent steep selloff. Fissures have widened as Mideast turmoil frays political alliances and producers vie for customers amid a flood of oil from the U.S. and slowing growth in Asia. “No one is telling anyone what they are up to,” one Gulf oil official said.
Saudi Arabia last week unilaterally lowered the price it charges for crude scheduled for delivery next month—without the typical consultation with other members of the Organization of the Petroleum Exporting Countries, according to OPEC officials. The decision surprised many market watchers, who were expecting the Saudis to cut output to help boost prices, and sent prices hurtling lower………………………………………..Full Article: Source

Global imbalances succumb to the dwindling price of oil

Posted on 06 October 2014 by VRS  |  Email |Print

The surplus run by the eurozone represents an implicit attempt to Germanise the union. Whatever happened to the global imbalances? Remember them? Not so many years ago, the large current account surpluses run by various countries, led by China, and the large current account deficits run by others, were believed to be at the root of the world’s economic problems.
But now you hardly hear about them. Have they gone away? Or were they never that much of a problem in the first place? The concern about global imbalances arose because surpluses represented extra savings………………………………………..Full Article: Source

World on brink of an oil price war

Posted on 06 October 2014 by VRS  |  Email |Print

Next month’s Opec meeting will take place against a background of dissension between two power blocs in an organisation that controls the lifeblood of the global economy. A secretive group of the world’s most powerful oil ministers will soon gather in Vienna to take arguably one of the most important decisions that could affect the still fragile world economy: whether to cut production of crude to defend prices at US$100 per barrel, or keep open the spigots as winter looms among the biggest energy-consuming nations.
A sudden slump in the price of crude has exposed deep divisions within the Organisation of Petroleum Exporting Countries (Opec) ahead of its final scheduled meeting of the year next month to decide on how much oil to pump………………………………………..Full Article: Source

OPEC rift sets of price war in bid to woo customers

Posted on 06 October 2014 by VRS  |  Email |Print

Discord at OPEC is turning into a price war, loosening the cartel’s grip on the oil market and exacerbating a recent steep sell-off. Fissures have widened as Mideast turmoil frays political alliances and producers vie for customers amid a flood of oil from the US and slowing growth in Asia. “No one is telling anyone what they are up to,” one Gulf oil official said.
Saudi Arabia this week unilaterally lowered the price it charges for crude scheduled for delivery next month – without the typical consultation with other members of the Organisation of the Petroleum Exporting Countries, according to OPEC officials. The decision surprised many market watchers, who were expecting the Saudis to cut output to help boost prices, and sent prices hurtling lower………………………………………..Full Article: Source

Commodity prices: Oil and trouble

Posted on 03 October 2014 by VRS  |  Email |Print

Give commodity markets credit: they are anything but boring. Between 2000 and 2011 broad indices of commodity prices tripled, easily outpacing global growth and stoking Malthusian hysteria. Jeremy Grantham, a wealthy financier, noted at the time that it was not so much “peak oil” that would undo humanity but “peak everything else”.
Yet since then commodity prices have slumped by about a quarter, and roughly 11% since June alone. That is not, however, an unalloyed good. This reversal of fortunes, naturally, is much better news for net importers of resources than for net exporters. For consumers, a drop in the price of natural gas or rice is like a tax cut: it leaves households with more disposable income………………………………………..Full Article: Source

Oil price hits two-year low after Saudi price cut

Posted on 03 October 2014 by VRS  |  Email |Print

Global oil prices have fallen to their lowest level in more than two years after Saudi Arabia cut its official selling price. Concerns of oversupply after higher output in the US, together with forecasts of lower global demand by the International Energy Agency (IEA), are driving prices down.
Brent crude fell by more than 1% to $93 a barrel, its lowest since June 2012. US light crude dipped below $90 for the first time in 17 months. In late London trading it was barely changed on the day at $90.63 a barrel………………………………………..Full Article: Source

Oil Prices Are Falling, Not Oil Regimes

Posted on 03 October 2014 by VRS  |  Email |Print

Oil prices continued falling Thursday, dipping to levels last seen almost two years ago, despite a steady drumbeat of perilous developments from Ukraine to Iraq to Hong Kong. But for all the turmoil in oil markets, not all petrostates are panicking. Although big producers, from Saudi Arabia to Russia, rely on high crude prices to balance their budgets, the price hasn’t dropped low enough, or long enough, to fiscally squeeze them just yet.
Crude oil traded in New York slipped below $90 a barrel in midday trading Thursday before settling slightly higher; Brent crude traded in London fell to about $93 a barrel, continuing a plunge that began in June. Oil prices had reached $115 a barrel over the summer, at the height of the Islamic State’s territorial gains in Iraq………………………………………..Full Article: Source

How the oil and gas boom is changing America

Posted on 03 October 2014 by VRS  |  Email |Print

The US oil and gas boom has been one of the biggest and most consequential energy stories of the last decade. And one of the best books for understanding how that boom is affecting America is Michael Levi’s The Power Surge, published back in 2013.
As Levi explained when I interviewed him last year, his book is actually about two different energy revolutions going on in the United States — each with its own set of supporters. On the one hand, US oil and gas production has been surging since 2005, thanks to hydraulic fracturing and other drilling techniques. But at the same time, alternative energy sources like wind power and electric vehicles had been making surprising advances………………………………………..Full Article: Source

Some in OPEC worried by oil drop, but no plan yet-sources

Posted on 03 October 2014 by VRS  |  Email |Print

Some OPEC countries are calling for supply cuts after a drop in oil prices, but core Gulf members are betting winter demand will revive the market, suggesting the group is no closer to any collective steps.
The differing views within the 12-member Organization of the Petroleum Exporting Countries (OPEC) highlight a split between Saudi Arabia and its Gulf Arab allies and other members, such as Iran, who face greater budget pressures from sub-$100 oil………………………………………..Full Article: Source

OPEC Price War Signaled by Saudi Move Risks Deeper Drop

Posted on 03 October 2014 by VRS  |  Email |Print

Crude oil is poised to extend the biggest slump in more than two years after Saudi Arabia signaled it’s ready for a price war with other OPEC members, according to Commerzbank AG and Citigroup Inc.
Saudi Aramco, the state-run oil producer of the world’s biggest exporter, cut prices on Oct. 1 for all its exports, reducing those for Asia to the lowest level since 2008. The move suggests that the biggest member of the Organization of Petroleum Exporting Countries is prepared to let prices fall rather than cede market share by paring output to clear a supply surplus, according to Commerzbank………………………………………..Full Article: Source

Oil Prices Hit Fresh Lows on Saudi Price Cut

Posted on 02 October 2014 by VRS  |  Email |Print

Oil prices tumbled to more-than-one-year lows Wednesday on news that Saudi Arabia lowered the official selling prices for its crude oil. The price cuts suggest the Kingdom may not reduce output in the coming months to keep prices high.
Ample global oil supplies have weighed on prices in recent months, sending Brent, the global benchmark, to below $100 a barrel for the first time in 16 months Sept. 9. Brent futures haven’t traded above that level since. Some investors have bet that the Organization of the Petroleum Exporting Countries, especially Saudi Arabia, will cut production to keep prices above $100 a barrel………………………………………..Full Article: Source

Oil price forecasts cut, to stay subdued in 2015

Posted on 02 October 2014 by VRS  |  Email |Print

Energy analysts have made the largest downward revision to their oil price forecasts in almost two years, a monthly Reuters poll showed on Wednesday, with the marked weakness in the price of Brent seen persisting into 2015.
The survey results pose a challenge to members of the Organization of the Petroleum Exporting Countries (OPEC), who have largely argued prices will recover from two-year lows hit below $95 a barrel this week on stronger demand in the fourth quarter………………………………………..Full Article: Source

Oil price plunge to $60 per barrel unlikely — Russia’s Finance Ministry

Posted on 02 October 2014 by VRS  |  Email |Print

A world oil price plunge to $60 per barrel is an unlikely scenario, Russian Finance Minister Anton Siluanov said on Wednesday. “We believe this is unlikely,” the finance minister said, adding the budget of Saudi Arabia, a major oil exporter, was balanced at the oil price of $80-85 per barrel.
Russia’s draft budget for 2015, which envisages a deficit of 0.6% of GDP, is based on an oil price of $96 per barrel. The Russian finance minister said the ministry has not examined a stress scenario of an oil plunge to $60 per barrel………………………………………..Full Article: Source

Global Oil market balances to deteriorate in 2015: PIRA Energy

Posted on 02 October 2014 by VRS  |  Email |Print

NYC-based PIRA Energy Group reports that PIRA is cautiously optimistic the global economy will withstand the Fed’s policy shift. In the U.S., stock build slows. In Japan, crude runs perk up, crude stocks draw. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:
World Oil market forecast, September 2014: PIRA is cautiously optimistic the global economy will withstand the Fed’s policy shift and lift into next year with growth above trend. Despite this, and a rebound in oil demand growth, oil market balances are forecast to deteriorate in 2015. Low first half 2014 stocks hid blemishes but now that inventories have rebuilt………………………………………..Full Article: Source

News Of OPEC’s Death Might Not Be An Exaggeration

Posted on 02 October 2014 by VRS  |  Email |Print

Reports about the death of the Organization of Petroleum Exporting Countries (OPEC) have generally proved to be as accurate as reports about the death of Mark Twain – until now. Back in 1897 the great story teller Twain was able to skewer inaccurate accounts of his passing with an immortal comment that “the report of my death was an exaggeration”.
OPEC, an oil marketing cartel comprised mainly of Arab states, plus a few outliers such as Venezuela, has been able to say the same thing for the past 30 years………………………………………..Full Article: Source

OPEC clout on price movement weakens

Posted on 02 October 2014 by VRS  |  Email |Print

The Organization of Petroleum Exporting Countries (OPEC) is steadily losing control of the oil market with the rise of two new industry leaders, Russia and the US. And neither of the member countries has an interest in perpetuating oil-price fixing which is the primary motivation behind OPEC.
Under this scenario, some industry analysts and traders were seeing a bleak future for the organization, anticipating an eventual demise of the 54-year old oil body. Russia needs to produce as much oil and gas as possible to try and balance its budget which is dangerously dependent on petroleum while the broadly diversified US economy is enjoying the benefits of rising domestic production and falling prices………………………………………..Full Article: Source

How the U.S. Can Break OPEC

Posted on 02 October 2014 by VRS  |  Email |Print

The U.S. and global economy has been all but crushed by the cartel pricing power of OPEC (Organization of the Petroleum Exporting Countries) for far too long. Worse than a consumption tax, high oil prices, because of our current dependence on internal combustion and compression engines using oil products, have been a burden for decades.
The perpetrators of the cartel force U.S. and global consumers to pay not only for oil but for the costs of social welfare, such as it is, infrastructure and military capability in their respective countries. With the ability to reduce production and their refusal to increase production, despite their available reserves, OPEC members charge what they think the market will bear against what price might otherwise throw the world into recession………………………………………..Full Article: Source

Fracking Revolution: U.S. Replaces OPEC as World’s “Swing Producer”

Posted on 02 October 2014 by VRS  |  Email |Print

After reviewing the numbers from America’s oil and gas patches, Per Magnus Nysveen of Rystad, an international oil consultancy in Norway, declared that the United States is now taking on the role of “swing producer” that used to be played by Saudi Arabia and other members of OPEC, the oil producers’ cartel.
Those numbers are impressive. Fracking technology has led to a 65-percent increase in U.S. crude oil output in just the last six years and, according to Wood Mackenzie, another highly regarded energy consultancy firm: “The shale industry is just starting out; it is not even a teenager yet…. There is still plenty of room for growth.”……………………………………….Full Article: Source

IEA Sees New ’Zombie’ Oil Refineries as Trading Grows

Posted on 02 October 2014 by VRS  |  Email |Print

Traders are increasingly taking control of failing refineries in Europe, betting they can make profit from plants that lose money for conventional oil companies, the International Energy Agency said.
The refineries, often acquired for almost no fee, will increase output quickly when margins from fuel sales surge and keep run rates down at other times, Antoine Halff, the head of the IEA’s oil industry and markets division, said at a conference in Singapore today. Conventional oil companies maintain higher processing rates during periods of weaker demand, he said………………………………………..Full Article: Source

How prices of crude oil are dragging rates of agricultural commodities

Posted on 01 October 2014 by VRS  |  Email |Print

At $96.98 a barrel currently, Brent crude prices have dropped some 12 per cent over the last 12 months. Prices of US crude, on the other hand, have fallen nearly eight per cent. But falling crude prices seem to have inflicted more severe damage on prices of agricultural commodities, particularly corn, wheat, rice and soyabean. Prices of these commodities, barring rice, have dropped by around 30 per cent in the last one year.
Trade developments: There is a connection between fall in prices of crude oil and agricultural commodities. Let us look into these developments: At over $100 a barrel, crude oil leads to search for alternative energy sources. This is what happened in the last few years. Costlier crude led to people looking for alternatives such as ethanol (mainly produced from corn or sugar) and bio-diesel (from rapeseed oil and palm oil)………………………………………..Full Article: Source

OPEC oil output hits highest since 2012 on Libya, Saudi

Posted on 01 October 2014 by VRS  |  Email |Print

OPEC’s oil supply jumped to its highest in almost two years in September, a Reuters survey found, due to further recovery in Libya and higher output from Saudi Arabia and other Gulf producers in the face of sub-$100 per barrel oil prices.
The lack of any cutbacks underlines the relaxed view of OPEC’s core Gulf members to oil’s slide from $115 in June to $97 on Tuesday - a level they can tolerate, but which puts budgets in producers such as Iran and non-member Russia under pressure………………………………………..Full Article: Source

World economic growth to hit 3.4% in 2015 –OPEC

Posted on 01 October 2014 by VRS  |  Email |Print

The Organisation of Petroleum Exporting Countries, OPEC has put the 2015 world economic growth at 3.4 per cent. The cartel expect the world oil demand to increase by 1.19 million barrels per day, bpd, representing a marginal downward adjustment, as an upward revision in the non-OECD region was offset by slower OECD growth.
The organisation stated in its latest report that non-OPEC oil supply is projected to grow by 1.24 mb/d, representing a downward adjustment of 30 tb/d from the previous forecast during the period………………………………………..Full Article: Source

OPEC Fizzles: Caught Between a Rock and a Shale Boom

Posted on 01 October 2014 by VRS  |  Email |Print

Things just aren’t the way they used to be. Four decades ago, King Faisal of Saudi Arabia snapped his fingers and nearly brought the West to its knees. It happened in 1973, right after he met with Egyptian president Anwar Sadat and they agreed to use their oil as a weapon.
It worked… a little too well. I imagine my veteran readers can recall scenes like the one to the right. The effects were catastrophic as oil prices surged threefold. Faisal became Time’s Man of the Year a year later. Oh, how the times have changed. OPEC’s power has diminished substantially since the 1970s, and the tables are quickly turning………………………………………..Full Article: Source

Oil Prices Fall, and the Global Economy Wins

Posted on 30 September 2014 by VRS  |  Email |Print

Oil is in the midst of one of its steepest selloffs since the financial crisis, with prices falling 16 percent since mid-June. This has the Saudis contemplating even deeper cuts in oil production to keep prices from declining any further. The world’s biggest crude exporter told OPEC recently that in August it reduced output by more than 400,000 barrels a day.
It’s not yet clear how well that’s working. The Saudi cuts were offset in part by more oil from Iran, Iraq, and Nigeria—not to mention the continued record increase in U.S. oil production thanks to the shale boom………………………………………..Full Article: Source

Shale oil eases the economic pain of Middle East military action

Posted on 30 September 2014 by VRS  |  Email |Print

There was a time when headlines about jets bombing Middle Eastern refineries would have sent oil prices soaring. Granted, Islamic State’s facilities aren’t exactly world class. But it is telling that such violence is doing little to lift the price of crude. Brent is down 13 per cent this year and looks set to post its weakest yearly average price since 2010, before the Arab Spring really got going.
The big culprit for this disconnect is shale. US-led growth in oil output from the industrialised world since the start of 2011 has offset supply disruptions in the Organisation of the Petroleum Exporting Countries, according to Citigroup………………………………………..Full Article: Source

Speculators Slash Bets on Rising Crude Oil Price

Posted on 30 September 2014 by VRS  |  Email |Print

Speculators slashed bets on a rising Brent crude oil price by 34% in the week ended Sept. 23, the biggest weekly cut in their net long position in three years, as the oil price continued to slide lower.
In the week to Sept. 23, speculators reduced their net long position—the total number of bets that the price of oil would rise minus the number of bets that it would fall—by 33.7%, according to exchange data released Monday. The last time speculators made a cut this sharp was in October 2011………………………………………..Full Article: Source

Shale, Saudi Arabia and Islamic State Leave Oil Bulls Sweating

Posted on 29 September 2014 by VRS  |  Email |Print

There was a time when headlines about jets bombing Middle Eastern refineries would have sent oil prices soaring. Granted, Islamic State’s facilities aren’t exactly world class. But it is telling that such violence is doing little to lift the price of crude. Brent is down 13% this year and looks set to post its weakest yearly average price since 2010, before the Arab Spring really got going.
The big culprit for this disconnect is shale. U.S.-led growth in oil output from the industrialized world since the start of 2011 offsets supply disruptions in the Organization of the Petroleum Exporting Countries, according to Citigroup………………………………………..Full Article: Source

The worrying slide in oil prices and demand

Posted on 29 September 2014 by VRS  |  Email |Print

While the price slide has slowed and some crude oils witnessed a rise due to a sudden and unexpected stock drawdown in the US, analysts still see the price direction as headed downward. The price of Brent oil rose to $97 (Dh356) a barrel on September 25 while the Opec basket of crude oils declined slightly to $94.25 a barrel. The US Energy Information Administration (EIA) now expects oil prices to stay below $100 a barrel until the end of the decade.
The signals that Opec may reduce its production ceiling by 0.5 million barrels a day (mbd) at the next ministerial meeting in November may not be enough to stabilise the market, especially if further declines are seen from now up to the date of the C meeting. If Opec is serious about price maintenance at some level — and thereby arrest further price erosion — it would be a good idea to start now to seek co-operation from other producers………………………………………..Full Article: Source

Iran Urges OPEC To Stop Oil Slide, Gulf Members Relaxed

Posted on 29 September 2014 by VRS  |  Email |Print

Iran on Friday urged OPEC members to make joint efforts to keep oil prices from falling further, highlighting a split with other members such as Saudi Arabia who face lower budget pressures despite a slide in prices towards $95 a barrel. Oil has fallen from $115 in June, pressured by concern about slowing global demand and higher supplies as Libyan output recovers, raising concern among some oil exporters of lower revenues.
“Considering the downward trend in prices, OPEC members should try to temper production to avoid further price instability”, Iran’s oil minister, Bijan Zanganeh, was quoted by the Iranian oil ministry website Shana as saying………………………………………..Full Article: Source

Why Peak-Oil Predictions Haven’t Come True

Posted on 29 September 2014 by VRS  |  Email |Print

Have we beaten “peak oil”? For decades, it has been a doomsday scenario looming large in the popular imagination: The world’s oil production tops out and then starts an inexorable decline—sending costs soaring and forcing nations to lay down strict rationing programs and battle for shrinking reserves.
U.S. oil production did peak in the 1970s and sank for decades after, exactly as the theory predicted. But then it did something the theory didn’t predict: It started rising again in 2009, and hasn’t stopped, thanks to a leap forward in oil-field technology………………………………………..Full Article: Source

Overheard: Falling Prices Hit OPEC

Posted on 26 September 2014 by VRS  |  Email |Print

Oil cartel struggles to cope with falling prices—the heart bleeds, surely. Sympathizing aside, OPEC’s fiscal health is a big factor in arresting the slide in oil prices, down 15% in three months. In a report published Wednesday, Citigroup estimated oil prices at which various major exporters balance their books. These range from $44 a barrel for Kuwait up to $184 for Libya.
Some big producers are squarely in deficit territory. Iran’s price is $130, for example, while Venezuela’s is $161. Brent’s average so far this year—the key metric rather than the current price—is $107………………………………………..Full Article: Source

Iran: OPEC Should Balance Production to Stabilize Crude Prices

Posted on 26 September 2014 by VRS  |  Email |Print

Iran’s Oil Minister said the Organization of the Petroleum Exporting Countries, OPEC, should balance its crude production to stabilize oil prices in the market. “OPEC should definitely balance its production to avoid crude price volatility in the market,” Bijan Namdar Zanganeh said.
Asked about the possible impact of the results of the nuclear negotiations between Iran and six world powers on crude prices, the Iranian oil minister said the prices are “reasonable enough” not to be affected by such issues. Zanganeh’s comments come against the backdrop of the recent sharp drop in crude prices………………………………………..Full Article: Source

Oil prices plunging despite ISIS

Posted on 26 September 2014 by VRS  |  Email |Print

Oil prices have fallen sharply over the past few months — even though the terrorist organization ISIS has taken control of some refineries in Syria and Iraq. Prices haven’t shot up since the United States and its allies have started to conduct airstrikes against ISIS oil targets in Syria either.
It may seem strange that prices haven’t skyrocketed. Typically, tension in the Middle East has caused serious concerns about oil supply being taken off the market. But experts say there are several reasons why the ISIS situation has not pushed energy prices up … and that the trend should continue………………………………………..Full Article: Source

Geopolitics and the oil price: Why the disconnect?

Posted on 25 September 2014 by VRS  |  Email |Print

Geopolitical tensions between Russia and the West and troubles in Middle East have dominated headlines all summer, but investors so far have managed to shrug off fears, with the market reaction remaining fairly contained.
The Organisation of Petroleum Exporting Countries (OPEC) basket of 12 crude oils slid to $94.31 on Tuesday, the lowest level since July 2012 even as the U.S. confirmed 14 air strikes against ISIS, with large explosions confirmed in eastern Syria………………………………………..Full Article: Source

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