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Oil Bulls Face Specter of Market Turmoil on Brexit Aftershocks

Posted on 27 June 2016 by VRS  |  Email |Print

Oil bulls could end up road kill following the Brexit ballot. Crude tumbled as much as 6.8 percent June 24 after U.K. voters decided to leave the European Union. While some analysts said supply and demand still favor rising prices, Britain’s exit means there’ll be a period of uncertainty over Europe’s future, casting a shadow over the market.
“A vote for Brexit is a vote against globalization, against the free mobility of people and goods,” said Francisco Blanch, head of commodities research at Bank of America Merrill Lynch in New York. “Any reversal in the growth of trade and mobility is bad for the commodities, except gold.”……………………………………….Full Article: Source

‘Brexit’ Unlikely to Have Big Impact on U.K. Oil and Gas Market, Consultant Says

Posted on 27 June 2016 by VRS  |  Email |Print

The U.K. is too large a market for European oil and gas sellers to be marginalized too much by its exit from the European Union, said Simon Flowers, chairman and energy chief analyst at global oil consultancy Wood Mackenzie.
In an interview with The Wall Street Journal, Mr. Flowers said the U.K. could be subject to some tariffs on oil and gas from the EU as part of any new trade deal. However, global markets for both resources are oversupplied and there is enough competition for the U.K. to ensure it still gets a good deal, he added………………………………………..Full Article: Source

Has the Oil Market Finally Bottomed?

Posted on 27 June 2016 by VRS  |  Email |Print

Ever since oil prices started tumbling in late 2014, oil executives, analysts, and investors have been wondering when the market will finally hit rock bottom. While there have been many guesses over the past two years, the data is starting to suggest that the market could have bottomed out during the second quarter. At least that is the view of oil-field services giant Schlumberger.
At a recent industry conference, Patrick Schorn, Schlumberger’s president of 0perations, detailed what the company is seeing in the oil market. He started off by noting that market conditions during the second quarter were as bad as it expected………………………………………..Full Article: Source

Saudi Arabia Declares Cease-Fire in Oil War

Posted on 24 June 2016 by VRS  |  Email |Print

The new Saudi oil minister, Khalid Al-Falih, says the oil glut is over. That means the kingdom’s war against U.S. shale producers is coming to an end, too. Who won it is a tough question to answer; on balance, it’s probably the Saudis, but they have paid a huge price, and the surviving U.S. frackers have also benefited.
In September 2014, Saudi Aramco, the kingdom’s state oil company, simultaneously increased output and discounts to Asian customers, making it difficult for producers with higher costs to compete. The U.S. shale industry responded with desperate bravado, cutting costs, perfecting technologies and pumping like crazy to avoid defaulting on its debts………………………………………..Full Article: Source

Will oil price surge if Remain wins the EU referendum?

Posted on 24 June 2016 by VRS  |  Email |Print

Oil futures, like most risk assets, has been doing better in recent days as traders take heart from a late polls shift to Remain ahead of the EU referendum. Having fallen for six consecutive sessions from a 2016 high of $53 two weeks ago, international benchmark Brent crude returned to $50 earlier this week. It has been held back from further gains by supply concerns – so would a Remain victory send it soaring?
No, says investment bank BNP Paribas. It outlines a lose-lose scenario for oil: either a Leave vote sends the price spiralling lower in response to a demand-dampening surge for the dollar against the pound, or a Remain victory focuses attention back on supply and demand fundamentals that do not support higher prices………………………………………..Full Article: Source

OPEC oil revenues slump to 10-year low

Posted on 24 June 2016 by VRS  |  Email |Print

OPEC’s 13 member countries saw oil export revenues slump to their lowest level in a decade last year. Crude revenues fell nearly 46% to $518 billion in 2015, according to OPEC’s annual bulletin published Wednesday.
Collapsing world oil prices also meant that OPEC countries spent more importing goods than they raised from exports for the first time in 17 years. The cartel posted a combined current account deficit of just under $100 billion in 2015, compared with a surplus of $238 billion in 2014………………………………………..Full Article: Source

OPEC Registers First Collective Deficit Since 1998

Posted on 23 June 2016 by VRS  |  Email |Print

OPEC member countries last year registered their first collective budget deficit since 1998, the group said Wednesday, the result of an oil-price slump that dropped government petroleum-export revenue to a 10-year low.
In its annual statistical report, the Organization of the Petroleum Exporting Countries illustrated how an oil rout that has cut prices in half since 2014 has weighed on the economies of crude-dependent states. OPEC members ran a combined deficit of $99.6 billion in 2015, compared with a surplus of $238.1 billion in 2014………………………………………..Full Article: Source

Oil price fall tips OPEC current account into deficit in 2015, first since 1998

Posted on 23 June 2016 by VRS  |  Email |Print

OPEC’s 2015 oil export revenues slumped 46 percent to a 10-year low, the group said in a report published on Wednesday, underlining the impact on producers’ income from a collapse in prices.
Oil prices at about $50 a barrel are half their level in mid-2014, pressured by oversupply. OPEC’s decision in November 2014 to not cut supply, hoping a drop in prices would curb supply from competitors, deepened the decline. With income falling, the 13 members of the Organization of the Petroleum Exporting Countries (OPEC) posted a combined current account deficit of $99.60 billion in 2015, compared with a surplus of $238.10 billion in 2014………………………………………..Full Article: Source

OPEC Says Its Oil Revenue Plunges $438 Billion to 10-Year Low

Posted on 23 June 2016 by VRS  |  Email |Print

OPEC said its oil revenue plunged by $438 billion to a 10-year low last year, as an increase in export volumes failed to compensate for the collapse in prices. The Organization of Petroleum Exporting Countries earned $518.2 billion in 2015 from the sale of crude and refined fuels, the lowest figure since 2005, the group’s Vienna-based secretariat said in its Annual Statistical Bulletin.
It boosted exports by 1.7 percent to 23.6 million barrels a day, maintaining its share of global markets, as Iraq increased output and Saudi Arabia pressed on with a policy to squeeze rivals………………………………………..Full Article: Source

Iran names new OPEC envoy - oil ministry

Posted on 23 June 2016 by VRS  |  Email |Print

Iran named oil ministry senior analyst Behrouz Beik Alizadeh as its new representative at the Organization of the Petroleum Exporting Countries (OPEC), the ministry’s news agency SHANA reported on Wednesday.
Oil Minister Bijan Zanganeh said in an official statement that Beik Alizadeh would replace Mehdi Asali, who is retiring………………………………………..Full Article: Source

Oil analysts agree price will rise, but disagree on magic number

Posted on 23 June 2016 by VRS  |  Email |Print

Just months after asking, “How low can it go?” oil analysts are raising price forecasts for 2017 and beyond. But they differ on how high it will go, and when. Many firms see a gradual increase toward $80 a barrel in the coming years, but one believes the oil cycle will peak next year.
On Monday, Raymond James increased its already bullish forecast, calling for U.S. crude at $80 a barrel in 2017, up $5 from its previous forecast. Thereafter, it believes oil will fall to $75 in 2018 and $70 in 2019………………………………………..Full Article: Source

Saudi energy minister says oil glut has vanished

Posted on 23 June 2016 by VRS  |  Email |Print

Saudi Arabia’s new energy minister said the supply glut that kindled a crippling oil rout around the world and thrashed Houston’s biggest business for two years has finally vanished.
“We are out of it,” Khalid Al-Falih said in his first newspaper interview since his rise to the most powerful job in the global energy industry last month. “The oversupply has disappeared. We just have to carry the overhang of inventory for a while until the system works it out.”……………………………………….Full Article: Source

Oil Prices Fall on Supply Overhang, ‘Brexit’ Uncertainty

Posted on 22 June 2016 by VRS  |  Email |Print

Oil prices fell Tuesday but pared a lot of their losses late in the day as investors try to navigate an array of volatile influences on the market. Many expect supply outages to end in Nigeria and Canada, but others claim it will have little influence. New polls have caused quick-changing expectations on the U.K.’s referendum on European Union membership.
Analysts are predicting a drain from U.S. crude stockpiles, but they are still near record highs. And U.S. crude’s front-month contract expired with much bigger losses than later-month contracts………………………………………..Full Article: Source

Rosneft’s Sechin says Saudi Arabia, U.S. and Russia call shots on oil markets

Posted on 22 June 2016 by VRS  |  Email |Print

Igor Sechin, the head of Russia’s top oil producer Rosneft, said on Tuesday that Saudi Arabia, the United States and Russia were the three main players on global oil markets, dismissing again OPEC’s role as a regulator. He told Rossiya-24 TV that Russia’s role in hydrocarbon markets will strengthen.
Russia is the world’s top oil and natural gas producer, pumping oil at around 10.8 million barrels per day. It plans to at least keep production of crude oil, its chief export commodity, at the current level………………………………………..Full Article: Source

Era of Cheap Oil Coming to an End - IEA

Posted on 22 June 2016 by VRS  |  Email |Print

The era of cheap oil may soon come to an end, if the prediction of the International Energy Agency, IEA, is anything to go by. The IEA said that there will be rise in oil price due mainly to unplanned outages and disruptions in places like Canada, Nigeria, and Libya.
According to the Agency, it is expected that the oil market will be balanced for the rest of the year, meaning the world will pump roughly as much oil as it consumes. That should nudge prices higher. Oil is currently trading around $50 a barrel, double the nadir reached earlier this year………………………………………..Full Article: Source

Is $50 the new $100 for crude oil?

Posted on 21 June 2016 by VRS  |  Email |Print

The near 80 per cent rebound in oil prices from their February lows has finally started to fizzle and we believe more corrections are on the cards in the near-term as some of the pillars of the price rally start to give away.
Investors were reluctant to buy at higher levels and prices could not sustain above $50 for much longer. One of the biggest factors driving the recent rally was unexpected supply outages, which pushed around 2.5-3 million barrels per day (bpd) of crude oil out of the global market. Adding to that, the slowdown in US oil output and a weaker dollar exacerbated the price strength………………………………………..Full Article: Source

Oil price could hit $80 in 2017

Posted on 21 June 2016 by VRS  |  Email |Print

Rebounding after a two-year collapse, it’s only this month that oil prices have pushed up past US$50 a barrel, but Raymond James & Associates says this is just the beginning for higher prices.
In a note to clients, analysts led by J. Marshall Adkins say West Texas Intermediate will average $80 per barrel by the end of next year — that’s higher than all but one of the 31 analysts surveyed by Bloomberg. “Over the past few months, we’ve gained even more confidence that tightening global oil supply/demand dynamics will support a much higher level of oil prices in 2017,” the team says………………………………………..Full Article: Source

Oil Price: Next Stop $20? Or $70?

Posted on 21 June 2016 by VRS  |  Email |Print

Since the beginning of 2016, the oil price has been on a tear and is up by around 100% from the lows of $26 a barrel printed just a few months ago, and all the “expert” pundits seemed really bearish right as Oil hit its low.
Indeed, at time of writing both Brent and WTI are trading around the key $50 a barrel level and some analysts are now projecting that the price of black gold could head back to $70 a barrel by the end of the year. In a research report sent to clients on Monday, analysts at Raymond James laid out their case for oil to hit $70 a barrel by the end of 2016, and $80 a barrel by 2017………………………………………..Full Article: Source

With oil price near $50, resilient U.S. shale producers eye new chapter

Posted on 21 June 2016 by VRS  |  Email |Print

Two years into the worst oil price rout in a generation, large and mid-sized U.S. independent producers are surviving and eyeing growth again as oil nears $50 a barrel, confounding OPEC and Saudi Arabia with their resiliency.
That shale giants Hess Corp, Apache Corp and more than 25 other companies have beaten back OPEC’s attempt to sideline them would have been unthinkable just months ago, when oil plumbed $26 a barrel and collapses were feared. To regain market share, the Organization of the Petroleum Exporting Countries in late 2014 pumped more oil despite growing global oversupply………………………………………..Full Article: Source

Oil prices under pressure as hedge funds adjust positions: Kemp

Posted on 21 June 2016 by VRS  |  Email |Print

Hedge funds cut their net long position in the main crude futures and options contracts by 63 million barrels, 10 percent, in the week to June 14, as the rally in oil prices showed signs of running out of steam.
The one-week reduction in the net long position was the largest since July 2014, according to an analysis of data published by the U.S. Commodity Futures Trading Commission and the Intercontinental Exchange. Hedge funds and other money managers cut their combined net long position in the three main Brent and WTI futures and options contracts from a near-record 633 million barrels to 570 million………………………………………..Full Article: Source

Oil prices push back above $50 a barrel as traders bet on Remain

Posted on 21 June 2016 by VRS  |  Email |Print

Oil prices pushed back above the $50 a barrel mark this morning after the US dollar fell against the pound in line with speculation that Britain will remain a member of the European Union when it votes later this week. The market price for Brent crude on Friday was slightly above $49 a barrel but on Monday the market opened at $49.50 and quickly climbed to above $50 by mid morning.
The price of crude oil broke through the $50 mark for the first time this year a month ago, but fell back last week as market confidence slumped amid growing uncertainty over Brexit………………………………………..Full Article: Source

Moody’s ups oil price forecast to $40 for 2016

Posted on 20 June 2016 by VRS  |  Email |Print

Moody’s Investors Service today revised upwards its price forecast for oil this year on the back of recent uptick in rates. “Moody’s assumes a medium-term oil price band of $40 to $60 per barrel for both WTI and Brent crude and upwardly revised its shorter-term oil price estimates for these crudes to $40 in 2016, $45 in 2017 and $50 per barrel in 2018,” the rating agency said today.
In March, Moody’s estimated oil prices to be around $33 per barrel in 2016, which will rise to $38 next year and to $43 in 2018. In a release titled ‘Moody’s: Challenging conditions for oil-related entities remain unchanged despite near-term price rebound’, the rating agency said its medium-term outlook for the sector remains unchanged………………………………………..Full Article: Source

Beware Goldman Sachs Oil Price Prophecy

Posted on 20 June 2016 by VRS  |  Email |Print

Oil prices have recovered somewhat from the lows we saw in 2015 and early 2016. Still, the price is down by more than half as compared to its high of a couple of years ago. The price of crude oil currently sits just below $50 per barrel as of this writing.
The oil bubble, and its subsequent bust, is one of the few examples we have seen of a bubble/ bust scenario since 2008/ 2009. The Fed has pumped in a lot of money since 2008, and interest rates have remained near historic lows………………………………………..Full Article: Source

In the Saudi-Iran Oil Clash, Riyadh Gains an Edge

Posted on 20 June 2016 by VRS  |  Email |Print

Saudi Arabia is poised to boost its share of OPEC oil production in the coming months, as Iran’s rapid recovery runs out of steam and the kingdom raises output as summer temperatures soar.OPEC’s biggest exporter has seen its share of the group’s production chipped away despite its landmark decision in November 2014 to no longer support crude prices by holding back supply.
The strategic shift was driven by a desire to protect its own market share, but that’s been restrained by rising production from Iraq, Indonesia’s return to OPEC and the easing of sanctions on Iran………………………………………..Full Article: Source

Following Saudi Arabia, Iran Hikes Crude Oil Prices For Now

Posted on 20 June 2016 by VRS  |  Email |Print

Iran has been selling more oil at higher prices in recent weeks. The country sold light crude oil at $47.58 per barrel in the week ended on June 10, a $1.93 higher from the previous week, according to the Teheran Times.
Iran’s price hike comes as the country expands output to reach its pre-sanction market share; and as Saudi Arabia has been raising its own crude oil prices. It was only a few months ago that Saudi Arabia and Iran were rushing to sign contracts with Asian customers, undercutting each other, pushing prices lower, towards the $20s………………………………………..Full Article: Source

Nobody wants to wear the oil crown that makes OPEC richer

Posted on 20 June 2016 by VRS  |  Email |Print

The world’s biggest oil importer. The title nobody wants. For decades the U.S. held undisputed rights to the crown. Last year, China squeaked ahead for the first time amid growing demand and as rising U.S. shale production displaced overseas deliveries. The Middle Kingdom looked poised to become the center of the crude importing world.
Then $30 oil happened. U.S. drillers shut the most rigs in modern history, production began to fall and imports have rebounded. Chinese oil firms also shuttered output and kept demand growing. Now the two are neck and neck………………………………………..Full Article: Source

Global Oil Market to Reach Supply-Demand Balance by End of 2016

Posted on 17 June 2016 by VRS  |  Email |Print

The global oil market will reach the balance of supply and demand by the end of the year, BP Head Bob Dudley said. “We continue to think that before the end of 2016 on a daily basis supply and demand we think will balance. There is still a lot in storage around the world. But we do think that the fundamental point will likely happen before the end of the year,” Dudley said.
“I think we drifted down a little bit in the last month, and there is also the uncertainty of geopolitical issues. But i think we can see prices above $50 a barrel by the end of the year. We are working really hard to readjust our cost structures to be able to operate and balance our sources of funds at $50 dollars per barrel. I think by next year we will get there,” he added………………………………………..Full Article: Source

Global Oil Market to Reach Equilibrium By Mid-2017

Posted on 17 June 2016 by VRS  |  Email |Print

Oil prices are likely to reach $65 per barrel within three or four years, before the next cycle of high oil prices possibly taking prices to $150 per barrel within 10-15 years, he said. “Keeping production and supply at the given level, the imbalance can be reduced by rising consumption, and it will fall by the start of 2017…Supply and demand will be in equilibrium in the middle of next year,” Novak said.
“There is a certain consensus that but the end of the year, the price will be at the level of $50-60 per barrel this year, with the average yearly price just below $50 per barrel given that prices were low at the start of the year,” the minister added………………………………………..Full Article: Source

Oil Prices Fall to One-Month Low

Posted on 17 June 2016 by VRS  |  Email |Print

Concerns about the U.K. referendum and possible rise in U.S. oil production trigger largest one-day price loss since April. U.S. oil prices on Thursday posted their largest one-day loss since April, dragged down by market jitters over the looming U.K referendum.
Crude prices have fallen for six straight days, as traders assessed global economic uncertainty and the prospect that U.S. oil production could start rising again. Oil has fallen alongside global stocks, which have sold off in recent days amid fears that a British vote to exit the European Union will disrupt financial markets and the economy………………………………………..Full Article: Source

Opec revenue seen down for 3rd straight year

Posted on 17 June 2016 by VRS  |  Email |Print

The Organization of the Petroleum Exporting Countries (Opec’s) full-year 2016 oil export revenues will probably fall 15 per cent, down for the third straight year and possibly the lowest in more than a decade before rising in 2017, the US Energy Information Administration (EIA) said.
Members of Opec, including Iran, will likely earn about $341 billion in 2016, about 15 per cent below 2015 levels, based on projections of global oil prices and the group’s production levels, the US government’s EIA said in a report. The last time Opec’s export revenues fell for three years straight was 1983-86………………………………………..Full Article: Source

OPEC’s Chasm of Doom

Posted on 17 June 2016 by VRS  |  Email |Print

OPEC’s members are divided by many things: language; size; politics; sometimes outright war.And money. Don’t forget money.If you want to understand why OPEC has responded to its current crisis with all the cohesion of cat herding, some numbers in the Energy Information Administration’s “OPEC Revenue Fact Sheet,” published on Tuesday, provide some important clues.
First up, estimated revenue, adjusted for inflation: OPEC’s real net oil export revenue is expected to be the lowest since 2003. The estimate for this year, $337 billion in real terms, is barely a third of 2012’s peak — and, uncannily, exactly the same as the consensus forecast for the combined revenue of Exxon Mobil and Chevron in 2016………………………………………..Full Article: Source

Oil could shed more than half its value to $20, analyst says

Posted on 16 June 2016 by VRS  |  Email |Print

Oil futures have staged a magnificent comeback in recent months. However, if history is any guide, the struggling market isn’t out of the woods. Looking at the performance of West Texas Intermediate crude oil since 1870, Paul Jackson, head of research at exchange-traded-fund provider Source, predicted that prices will tank to $20 a barrel, or about 60% from its current levels, and languish for a while, before recovering.
“What you find is that in four out of every five months since 1870 the price has been between $20 and $60, when you measure in today’s prices,” he said……………………………………….Full Article: Source

Oil price retreats from $50 - and will stay lower ‘for months’

Posted on 16 June 2016 by VRS  |  Email |Print

The oil market has reversed its fragile gains over the past two weeks to fall back below the $50 a barrel mark, as Goldman Sachs warned that the price is unlikely to return to its 2016 highs “for months”.
The oil price reached $52.60 a barrel last week, its highest point since October, before market confidence plummeted ahead of the UK’s EU referendum vote and rising US oil stocks forced a 7pc retreat to below $49 a barrel on Wednesday………………………………………..Full Article: Source

Goldman Sachs says oil price gains set to stall

Posted on 16 June 2016 by VRS  |  Email |Print

Oil production disruptions may be hitting multi-year highs, but Goldman Sachs predicts the resulting price recovery is likely to stall. “On aggregate, we view the price recovery as fragile,” Goldman Sachs said in a commodities research note published Wednesday.
The bank explained that the restart of Canadian production, prospects of a solution to Nigerian outages, larger-than-expected output from OPEC members, and the risk of smaller-than-expected production declines as result of higher crude prices are likely to temper price gains going forward………………………………………..Full Article: Source

Oil and gas industry to cut $1 trillion in spending after price slump

Posted on 16 June 2016 by VRS  |  Email |Print

The oil and gas industry will cut US$1 trillion from planned spending on exploration and development because of the slump in prices, leading to slower growth in production, according to consultant Wood Mackenzie.
Worldwide investment in the development of oil and gas resources from 2015 to 2020 will be 22 per cent, or $740 billion, lower than anticipated before prices plunged in 2014, with the deepest cuts in the US, Wood Mackenzie said in a report Wednesday. A further $300bn will be eliminated from exploration spending. Global production this year will be 3 per cent lower than previously forecast, the consultant said………………………………………..Full Article: Source

OPEC Turmoil Could Turn IEA’s Balanced Market Into Shortfall

Posted on 16 June 2016 by VRS  |  Email |Print

The world’s most prominent oil forecaster, the International Energy Agency, anticipates near-equilibrium between supply and demand in global crude markets next year. If OPEC members can’t resolve some massive output disruptions, that will turn into a significant shortfall.
World oil production in 2017 will very nearly match consumption, ending several years of oversupply, the Paris-based IEA forecast on June 14. For that to happen, the Organization of Petroleum Exporting Countries would have to pump an extra 650,000 barrels a day over the year, according to Bloomberg calculations based on IEA data………………………………………..Full Article: Source

Opec Oil Revenues Fell By $350bn Last Year, Says EIA

Posted on 16 June 2016 by VRS  |  Email |Print

Members of the Organization of the Petroleum Exporting Countries (Opec) saw their revenues from oil sales fall by $349bn last year, according to new analysis by the US Energy Information Administration (EIA).
The EIA estimates that the 13 countries of the oil cartel earned $404bn last year from oil exports, 46% less than the $753bn they earned the year before. It was the bloc’s lowest earnings since 2004. Lower export volumes played a role in the decline, but it was mainly due to the sharp fall in the price of oil which began in late 2014………………………………………..Full Article: Source

Global Oil Markets Approach Balance, IEA Says

Posted on 15 June 2016 by VRS  |  Email |Print

Global oil markets are moving close to balance in the second half of this year on stronger-than-expected demand and on supply disruptions, the International Energy Agency said. Summer Said reports the oversupply in the first half of this year is likely to stand around 800,000 barrels a day, down from the 1.5 million barrels initially anticipated.
Global oil demand in the first quarter of this year was revised up to 1.6 million barrels a day. Unplanned shut-ins in Canada and Nigeria as well as the expected drop of 900,000 barrels a day in production from producers outside the Organization of the Petroleum Exporting Countries, or OPEC, will help the markets to rebalance, the oil watchdog said………………………………………..Full Article: Source

Oil price rally will stall at $50, IEA says

Posted on 15 June 2016 by VRS  |  Email |Print

The price of oil is unlikely to rise much further after rallying almost 90 per cent since January, as the global market shows signs of stabilizing, the International Energy Agency said Tuesday.
The Paris-based agency, which advises the world’s top oil consuming nations, nudged up its estimate for global oil demand this year in its monthly report. It noted, however, that supply and past inventories remain high. “At halfway in 2016 the oil market looks to be balancing,” said the IEA in its monthly market report………………………………………..Full Article: Source

Non-Opec oil supply to grow again next year – IEA

Posted on 15 June 2016 by VRS  |  Email |Print

Strong demand growth and production disruptions are easing the oil glut quicker than anticipated, but supply rises outside of the Opec group will return next year, according to the world’s leading energy body.
“Less oil has been stock-piled than we originally expected,” said the International Energy Agency in its closely watched monthly oil market report. The agency initially estimated the surplus of supply over demand in the first half of 2016 would be 1.5m barrels a day, but this has fallen to 800,000 b/d. It expects the oil market to reach a balance by the end of the year………………………………………..Full Article: Source

Opec: Oil market to reach balance by end of year

Posted on 14 June 2016 by VRS  |  Email |Print

The oversupplied oil market is on track to rebalance later this year as economic growth spurs demand against a backdrop of falling US production and a string of supply outages. The Organization of Petroleum Exporting Countries (Opec) said in its latest monthly report that commercial crude stocks declined by eight million barrels in May.
By contrast, global stocks increased by 12 million barrels in March and April, and by 19 million barrels in February. The chronic glut of oil forced market prices to their lowest point in 12 years in January, but as the excess supply dwindles, prices have rallied higher. Opec’s reference price for May averaged $43.21 a barrel, a gain of $5.35 compared to the previous month………………………………………..Full Article: Source

ECB Says Oil-Price Slump Not the Global Boon It Might Have Been

Posted on 14 June 2016 by VRS  |  Email |Print

Cheaper oil prices since 2014 have probably been of little net benefit to the global economy and may even have been a drag on growth, according to the European Central Bank. “While most of the oil-price decline in 2014 could be explained by the significant increase in the supply of oil, more recently the lower price has reflected weaker global demand,” the ECB said.
“Although the low oil price may still support domestic demand through rising real incomes in net oil-importing countries, it would not necessarily offset the broader effects of weaker global demand.”……………………………………….Full Article: Source

Rothman: Oil Prices to Surge To Over $85 By End of 2016

Posted on 14 June 2016 by VRS  |  Email |Print

Oil prices could surge above $85 a barrel by the end of this year, according to analysis by Michael Rothman, considered to be one of the most astute oil experts on Wall Street, CNBC reports.
Rothman heads the research firm Cornerstone Analytics, through which he advises governments from all over the world, the oil-rich Saudi royal family and its affiliates, and energy firms. Barrel prices hit a 13-year low on the 11th February this year. Last week, they surged to above $50—the first time they have done so since July last year………………………………………..Full Article: Source

OPEC Has Its Way as China Oil Output Cut by Most in 15 Years

Posted on 14 June 2016 by VRS  |  Email |Print

China’s crude production dropped by the most in 15 years in another sign that OPEC’s strategy of flooding markets to drive out higher-cost suppliers is working in the world’s biggest energy consumer.
The Asian nation reduced oil output in May by 7.3 percent from a year ago to 16.87 million metric tons, according to data from National Bureau of Statistics released on Monday. That’s the biggest decline since Feb. 2001………………………………………..Full Article: Source

Why Oil ETFs Can’t Catch a Break

Posted on 14 June 2016 by VRS  |  Email |Print

Suppose that when West Texas Intermediate crude fell to $26 a barrel on Feb. 11 you had a stroke of genius and figured it couldn’t get much lower. Since you don’t have the billion-dollar backing of a commodities-trading house, you acted in the only way you could and bought into an oil exchange-traded fund.Nice work, you’d think.
Crude is up almost 90 percent since then. Not quite so good for you, though — ETF returns are about half that. Traders generally find life easier when futures curves are in backwardation — with longer-dated contracts cheaper than shorter-term ones — than the reverse situation, known as contango………………………………………..Full Article: Source

Why the Oil Price Rally Might Falter

Posted on 13 June 2016 by VRS  |  Email |Print

Last year’s oil price rally ran out of steam in early May after 112 days. This year’s has already lasted longer (140 days so far) and prices have risen further, but there are worries that, it, too, may be running ahead of market fundamentals. While prices seem unlikely to collapse again, there are good reasons to expect a pause in their upward march.
Crude prices have nearly doubled from the lows reached in mid-January. Brent rose above $50 a barrel last Monday and stayed there all week. West Texas Intermediate crude narrowly failed to do the same after breaking through the psychological barrier on Tuesday………………………………………..Full Article: Source

How OPEC lost its iron grip on oil prices

Posted on 13 June 2016 by VRS  |  Email |Print

When his final press conference as secretary-general of the Organization of the Petroleum Exporting Countries came to an end last week, Abdallah Salem el-Badri finally addressed the whispers that have been circulating throughout the oil markets.
Energy industry observers are howling that “OPEC is dead,” El-Badri acknowledged, after the group again failed to reach an agreement to cap oil production that would bolster sagging prices. His frustration was evident. “I have heard this comment maybe five, six times in my career,” he told reporters in Vienna. “Don’t take that notion that OPEC is dead. OPEC is alive. OPEC will be a very important segment of the economy, of the world.”……………………………………….Full Article: Source

Oil market will find balance amid the turmoil

Posted on 13 June 2016 by VRS  |  Email |Print

There is a lot of disruption going on in oil. We’re talking wildfires and war. The US Energy Information Administration (EIA) calculates that unplanned supply outages, such as those in Canada and Nigeria, reached just over 3.6 million barrels a day last month, the highest since the EIA started tracking them in 2011.
No wonder oil is back above US$50 a barrel. Or, from another perspective, how the hell is oil only at US$50? Oil looks pretty subdued relative to earlier periods of strife, a recent report said. But then, you’d probably be a bit subdued too if you had a few hundred million barrels of oil dumped on top of you………………………………………..Full Article: Source

Will crude oil price ‘reach’ $60/barrel before year-end?

Posted on 13 June 2016 by VRS  |  Email |Print

The surprising news is that oil prices have doubled since the start of this year. It is currently hovering around $55 level and is anticipated to hit the $60 level prior to the end of this year. This news came as a surprise for everyone particularly the oil-producing countries. They did not expect to witness such high increase in oil prices within a short period — from $27 per barrel to $52 in less than six months.
The oil producing nations can soon witness the doubling of their income and can look forward to some positive news. Now that the oil fundamentals are back at work suddenly, crude oil inventories are on the decline as the USA has lost more than 3 million barrels………………………………………..Full Article: Source

Investors Betting on Oil Prices to Hit $100 a Barrel

Posted on 13 June 2016 by VRS  |  Email |Print

The massive plunge in the price of global oil prices has without doubt been one of the biggest triggers for the rising uncertainties in markets worldwide but over the past few months the prices have rallied and some traders and investors believe that the price would rise further in the days to come.
Plenty of traders have taken out contracts that would be triggered only when the price of oil touches $100 or more a barrel and that is without doubt a clear indication that they feel that the pries would continue to rise in the near term………………………………………..Full Article: Source

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