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Russia is now China’s biggest oil partner — and it’s a huge problem for Saudi Arabia

Posted on 03 February 2016 by VRS  |  Email |Print

Saudi Arabia has long trumped Russia in the Chinese oil market. The Saudi share of Chinese crude imports at the beginning of the decade was about 20%, while Russia’s was below 7%, according to data cited by RBC Capital Markets.
But now the Russians are creeping in — and the Saudis are getting nervous. “Russia is the biggest rival to the Saudis in the single-largest oil demand growth country in the world,” RBC Capital Markets’ commodity strategist Michael Tran wrote………………………………………..Full Article: Source

Commodity producers face tough times on bearish market

Posted on 27 January 2016 by VRS  |  Email |Print

Commodity bears are testing nerves of producers. Several commodity producers, especially those related to metals and US shale, have blinked and cut production. However, there is always a limit to the extent they can cut production. Prices are at multi-year lows — metals around 7-8 year lows, oil at 12-year lows. Gold and silver are no exceptions and so are other commodities like iron ore, steel and coal.
Most resource commodities are in a bear market, down significantly from their peaks, largely due to lower demand. The criteria to indicate whether commodities are in a bear market is when a commodity is down 50% or more from its peak or is around its long term low levels………………………………………..Full Article: Source

Citigroup Cuts Commodity Forecasts as Resources Rout Resumes

Posted on 21 January 2016 by VRS  |  Email |Print

Citigroup Inc. cut its commodities forecasts on concern slowing global growth will prolong the time it takes for markets to swing back into balance. Shares of resources companies resumed their drop as raw material prices slid.
Brent crude may average $40 a barrel this year, compared with an estimate of $51 in a November report, while the outlook for nickel was cut 22 percent to $8,450 a metric ton, analysts including Ed Morse wrote in a report received on Wednesday. Gold was a rare bright spot, with Citigroup raising its forecast 7.5 percent to $1,070 an ounce………………………………………..Full Article: Source

Non-OPEC crude production projected to drop in 2016

Posted on 20 January 2016 by VRS  |  Email |Print

Crude oil production in 2016 outside the Organization of Petroleum Exporting Countries (OPEC) will plunge by 660,000 barrels a day (BPD), the group said Monday in its monthly market report, a 270,000 BPD drop from its December estimate. The bulk of the production drop outside OPEC this year will come from the U.S., 380,000 BPD, OPEC projected in its January report, averaging 13.5 million barrels per day (MMBPD), Kallanish Energy finds.
The drop was revised down by 210,000 BPD compared to December’s projection due to the steep drop in global oil prices which could endanger output of marginal barrels from unconventional sources (tight crude and unconventional natural gas liquids)………………………………………..Full Article: Source

The Case for Raw Commodity Sector Bottoming in 2016

Posted on 19 January 2016 by VRS  |  Email |Print

Let’s take a look at a few longer-term charts of key markets and indexes, which are presently providing some technical clues the major “bust” cycle in the raw commodity sector will likely run its course in 2016.
Goldman Sachs Commodity Index: The GSCI monthly chart shows the index price this month dropped below the 2009 low and hit a 12-year low. The raw commodity sector is presently experiencing its second-largest bust cycle dating back at least 40 years—second only to the big downdraft seen in 2008 and 2009………………………………………..Full Article: Source

Iran to boost oil exports by 500,000 bpd after sanctions

Posted on 18 January 2016 by VRS  |  Email |Print

Iran is ready to increase its crude oil exports by 500,000 barrels a day, the deputy oil minister said on Sunday, hours after international sanctions on Tehran were lifted, removing an obstacle to exports.
The Islamic Republic emerged from years of economic isolation on Saturday when world powers lifted sanctions after confirming that Tehran had curbed its nuclear programme. “With consideration to global market conditions and the surplus that exists, Iran is ready to raise its crude oil exports by 500,000 barrels a day,” Deputy Oil Minister Amir Hossein Zamaninia was quoted as saying by the Shana news agency………………………………………..Full Article: Source

The Commodities Crash: A Supply-Side Perspective

Posted on 14 January 2016 by VRS  |  Email |Print

2015 was brutal for commodities. Even worse, they took another plunge at the start of 2016. The Bloomberg Commodity Index, which covers a wide range of natural resources, dropped to its lowest level since June 1999. The collapse in commodity prices happened across the board, from crude oil to iron ore, coal, and industrial metals.
Unfortunately, there is little sign of stability or recovery: Oil and iron ore prices dipped even further in December. As a result, mining stocks took a beating, and ratings on mining bonds were downgraded. Weakening demand from China receives most of the blame for the tumbling prices. China was the main driving force behind the rising commodity prices, its fixed-asset investment growing at an average of 25% from 2003 to 2011………………………………………..Full Article: Source

Russia plans for seven more years of $40 oil in message to Opec

Posted on 14 December 2015 by VRS  |  Email |Print

Russia is battening down the hatches for a Biblical collapse in oil revenues, warning that crude prices could stay as low as $40 (Dh147) a barrel for another seven years. Maxim Oreshkin, the deputy finance minister, said the country is drawing up plans based on a price band fluctuating between $40 and $60 a barrel as far out as 2022, a scenario that would have devastating implications for Opec, the Organisation of Petroleum Exporting Countries.
It would also spell disaster for North Sea producers, Brazil’s offshore projects and heavily indebted Western producers. “We will live in a different reality,” Oreshkin told a forum in Moscow. The cold blast from Russia came as US crude slipped to $36.14, pummelled by the continuing fallout from the acrimonious Opec meeting last week. Record short positions by hedge funds have amplified the effect………………………………………..Full Article: Source

OPEC Says Crude Production Rose to 3-Year High in November

Posted on 11 December 2015 by VRS  |  Email |Print

OPEC raised crude output to the highest in more than three years as it pressed on with a strategy to protect market share and pressure competing producers.Output from the Organization of Petroleum Exporting Countries rose by 230,100 barrels a day in November to 31.695 million a day, the highest since April 2012, as surging Iraqi volumes more than offset a slight pullback in Saudi Arabia.
The organization is pumping about 900,000 barrels a day more than it anticipates will be needed next year. Benchmark Brent crude dropped to a six-year low in London this week after OPEC effectively scrapped its output ceiling at a Dec. 4 meeting as de facto leader Saudi Arabia stuck to a policy of squeezing out rival producers………………………………………..Full Article: Source

OPEC predicts rivals’ supply to contract in 2016

Posted on 11 December 2015 by VRS  |  Email |Print

The supply of oil from countries outside of the OPEC will contract next year as world oil demand rises, the production cartel said in its latest monthly report. Indicating that the 12-country oil producing group led by Saudi Arabia could be winning the fight to retain market share in the face of its rivals outside the organization, the group said that non-OPEC oil supply growth was expected to be “much lower” in 2015 and 2016 after “the tremendous growth of 2.23 million barrels a day achieved in 2014.”
While non-OPEC oil supply was estimated to grow by 1.00 mb/d in 2015 to average 57.51 mb/d, it forecast a contraction in non-OPEC oil supply in 2016………………………………………..Full Article: Source

2016 spells more gloom for oil producers

Posted on 10 December 2015 by VRS  |  Email |Print

A year after OPEC sent oil markets spiraling out of control, the group may have sparked another round of bearishness for crude. OPEC failed to agree to a production target on December 4 in Vienna, removing the stated target of 30 million barrels per day (mb/d). It was no secret that member nations collectively produced in excess of 30 mb/d for quite a while, but by removing the target altogether, OPEC sent a signal to oil markets.
The decision, or non-decision as the case may be, kills the notion that OPEC will act decisively to boost oil prices. In response, just as in November 2014, oil prices crashed. On Dec. 7, both WTI and Brent traded down by more than 5%. The markets had been holding out a sliver of hope that OPEC would take action in Vienna, but it wasn’t to be………………………………………..Full Article: Source

Oil producers prepare for prices to halve to $20 a barrel

Posted on 09 December 2015 by VRS  |  Email |Print

The world’s leading oil producers are preparing for the possibility of oil prices halving to $20 a barrel after a second day of financial market turmoil saw a fresh slide in crude, the lowest iron ore prices in a decade, and losses on global stock markets.
Benchmark Brent crude briefly dipped below $40 a barrel for the first time since February 2009 before speculators took profits on the 8% drop in the cost of crude since last week’s abortive attempt by the oil cartel Opec to steady the market. But warnings by commodity analysts that the respite could be shortlived were underlined when Russia said it would need to make additional budget cuts if the oil price halved over the coming months………………………………………..Full Article: Source

Why the Chinese metal production cuts won’t work: Andy Home

Posted on 04 December 2015 by VRS  |  Email |Print

The last few days have brought a string of cutback announcements by Chinese metals producers. A grouping of 10 of the country’s top copper smelters have pledged to reduce output by 350,000 tonnes next year. Not to be outdone, 10 major zinc producers are going to cut their output by 500,000 tonnes next year, while eight of the country’s biggest nickel producers are going to cut by around 20 percent, equivalent to around 80,000 tonnes, of collective capacity.
The statements, coordinated by the China Nonferrous Metals Industry Association and Antaike, both metallic arms of the government, are proof that Chinese metals producers are feeling the same pain as their Western peers after this year’s implosion in metal prices………………………………………..Full Article: Source

Is the market really flooded with surplus oil?

Posted on 24 November 2015 by VRS  |  Email |Print

Nearly three billion barrels of crude petroleum and refined products are being stored by oil firms in the advanced economies according to the International Energy Agency (IEA). Commentators have seized on the three billion figure as a shorthand way to convey how oversupplied the oil market has become.
Large round numbers exert a powerful pull on the imagination but shorn of context they are meaningless and apt to confuse rather than illuminate. The statistic is technically accurate but the way in which it is being employed by analysts and journalists is hugely misleading. It would be more helpful to report the change, which is 240 million barrels, or nine per cent, over the last year………………………………………..Full Article: Source

Commodity producers may be better bet in any demand recovery: Russell

Posted on 19 November 2015 by VRS  |  Email |Print

Let’s assume that you are a somewhat contrarian investor and take the view that the recent slump to fresh lows in commodity prices, and the share prices of producers, is a sign that a turnaround is coming in 2016. If you do take this view, is it better to buy the actual commodities or the shares of the companies that extract them?
Unfortunately there is no clear precedent from recent history to suggest that one will significantly outpace the other, but that doesn’t mean there’s no value in looking in what has happened in prior commodity routs. BHP Billiton, the world’s largest diversified miner, reached its lowest since the 2008 financial crisis in Sydney trading on Nov. 11, hitting an intraday low of A$19.81 ($14.06) a share, before closing at A$20.23. ……………………………………..Full Article: Source

Commodity producers may be better bet in any demand recovery: Russell

Posted on 17 November 2015 by VRS  |  Email |Print

Let’s assume that you are a somewhat contrarian investor and take the view that the recent slump to fresh lows in commodity prices, and the share prices of producers, is a sign that a turnaround is coming in 2016. If you do take this view, is it better to buy the actual commodities or the shares of the companies that extract them?
Unfortunately there is no clear precedent from recent history to suggest that one will significantly outpace the other, but that doesn’t mean there’s no value in looking in what has happened in prior commodity routs. BHP Billiton, the world’s largest diversified miner, reached its lowest since the 2008 financial crisis in Sydney trading on Nov. 11, hitting an intraday low of A$19.81 ($14.06) a share, before closing at A$20.23………………………………………..Full Article: Source

China’s gold reserves likely to rise by 14 tonnes in October

Posted on 10 November 2015 by VRS  |  Email |Print

China likely added about 14 tonnes of gold to its reserves in October, according to Reuters calculations from central bank data on Saturday. The value of China’s gold reserves stood at $63.261 billion at the end of October, compared with $61.189 billion at the end of September, the People’s Bank of China (PBOC) said on its website.
Based on the London Bullion Market Association afternoon gold price on the last trading session of October, China’s reserves likely totalled 55.378 million troy ounces or 1,722.5 tonnes at the end of last month, Reuters calculations show. That would be an increase of about 14 tonnes from September. The PBOC reveals the dollar value of its gold reserves early in the month, before revealing the volume numbers later on……………………………………….Full Article: Source

Arab oil producers watching Iranian re-entry into oil market closely

Posted on 05 November 2015 by VRS  |  Email |Print

The re-entry of Iranian crude oil exports into an already well supplied market is being watched closely by Middle East oil producers, but their full re-entry is likely to take “years rather than months,” the Arab Petroleum Investment Corp. or Apicorp said Wednesday.
The introduction of significant Iranian barrels could force OPEC to consider re-introducing supply management measures, but this will not be straightforward, the Al Khobar-based investment company said in a research note, “as Iran has repeatedly signaled its desire to re-capture market share and that other OPEC players should create the necessary space.”……………………………………….Full Article: Source

The Earth is not running out of oil and gas, BP says

Posted on 03 November 2015 by VRS  |  Email |Print

Global reserves could almost double by 2050 despite booming consumption, oil major says. The world is no longer at risk of running out of oil or gas, with existing technology capable of unlocking so much that global reserves would almost double by 2050 despite booming consumption, BP has said.
When taking into account all accessible forms of energy, including nuclear, wind and solar, there are enough resources to meet 20 times what the world will need over that period, David Eyton, BP Group head of technology said. “Energy resources are plentiful. Concerns over running out of oil and gas have disappeared,” Mr Eyton said at the launch of BP’s inaugural Technology Outlook………………………………………..Full Article: Source

Oil exports: KSA holds around 8.1% of global market share

Posted on 23 October 2015 by VRS  |  Email |Print

Saudi Arabia will not change course on its strategy of retaining market share and exports are expected to remain at around current levels for the remainder of this year and next year, according to a report released by Jadwa Investment.
Latest data available shows that year-to-August exports in the Kingdom were up 3 percent year-on-year, at 7.38 million barrels per day, below 10-year highs of 7.54 million bpd, recorded in 2012, Jadwa researchers say in their Quarterly Oil Market Update issued recently. Both Saudi Arabia and Iraq saw the largest year-on-year increases in OPEC supply in Q3 2015 pushing the organization’s output to a two-year high of 32 million bpd………………………………………..Full Article: Source

Opec crude output falls in September led by Gulf producers

Posted on 02 October 2015 by VRS  |  Email |Print

Opec crude output fell this month, led by declines in the group’s three-biggest producers. Output from the Organisation of Petroleum Exporting Countries fell by 233,000 barrels to 32.048 million a day this month, according to a Bloomberg survey of oil companies, producers and analysts. Last month’s total was revised 35,000 barrels lower to 32.281 million a day because of changes to the Iraqi, Nigerian and Ecuadorean estimates.
Crude futures in London and New York market are down 24 per cent this quarter amid speculation that the global supply glut will grow as Chinese economic growth slows. Opec agreed on June 5 to retain its collective output target of 30 million barrels a day, a level that it’s exceeded for 16 months, according to data compiled by Bloomberg………………………………………..Full Article: Source

OPEC crude output falls in September, led by Gulf producers’ decline

Posted on 01 October 2015 by VRS  |  Email |Print

OPEC crude output fell this month, led by declines in the group’s three-biggest producers. Output from the Organization of Petroleum Exporting Countries fell by 233,000 barrels to 32.048 million a day this month, according to a Bloomberg survey of oil companies, producers and analysts. Last month’s total was revised 35,000 barrels lower to 32.281 million a day because of changes to the Iraqi, Nigerian and Ecuadorean estimates.
Crude futures in London and New York market are down 24 per cent this quarter amid speculation that the global supply glut will grow as Chinese economic growth slows. OPEC agreed on June 5 to retain its collective output target of 30 million barrels a day, a level that it’s exceeded for 16 months, according to data compiled by Bloomberg………………………………………..Full Article: Source

What it means: Shell abandons Arctic oil drilling

Posted on 29 September 2015 by VRS  |  Email |Print

Royal Dutch Shell is giving up on its expensive and controversial push to produce oil in Alaska’s Arctic waters, a decision that darkens the long-term oil prospects of the U.S. and brings relief to environmental groups that had tried desperately to block the project. Shell is abandoning the region “for the foreseeable future” because it failed to find enough oil to make further drilling worthwhile.
The company has spent more than $7 billion to explore for oil in Alaska’s Arctic, slogging through a years-long regulatory gauntlet and attracting spite from environmental groups who feared a spill in the Arctic’s harsh climate would be extremely difficult to clean up and devastating to polar bears, walruses, seals and other wildlife………………………………………..Full Article: Source

Investors Are Mining for Water, the Next Hot Commodity

Posted on 25 September 2015 by VRS  |  Email |Print

Gazing out of a turboprop high above his company’s main asset — 34,000 acres in the Mojave Desert with billions of gallons of fresh water locked deep below the sagebrush-dotted land — Scott Slater paints a lush picture that has enticed a hardy band of investors for a quarter-century.
Yes, Mr. Slater admits, his company, Cadiz, has never earned a dime from water. And he freely concedes it will take at least another $200 million to dig dozens of wells, filter the water and then move it 43 miles across the desert through a new pipeline before thirsty Southern Californians can drink a drop………………………………………..Full Article: Source

China is hoarding the world’s oil

Posted on 21 September 2015 by VRS  |  Email |Print

Even after China’s slowing economy dragged crude to a six-year low, oil’s second-biggest consumer remains the main safeguard against a further price meltdown. While China’s surprise currency devaluation helped trigger Brent crude’s slump to about $42 a barrel last month, the nation’s stockpiling of oil can staunch further losses.
In the first seven months of the year, China purchased about half a million barrels of crude in excess of its daily needs, the most for the period since 2012, according to data compiled by Bloomberg……………………………………….Full Article: Source

OPEC cuts oil production forecast for US

Posted on 15 September 2015 by VRS  |  Email |Print

OPEC has cut its oil production forecasts for states like the US that are not members of the cartel. The group said Monday it had lowered its forecast for daily oil supply growth this year from non-member states by 72,000 barrels a day to 880,000 due to lower than expected output in the US For next year, it trimmed its forecast by 110,000 barrels to 160,000.
The cartel also increased its forecast for global demand growth this year by around 84,000 barrels a day to 1.46 million, and by 50,000 barrels to 1.29 million for next year. The price of oil has fallen this year amid strong supply and weaker demand from energy-hungry economies like China………………………………………..Full Article: Source

Commodities Producers’ Currency Prop

Posted on 14 September 2015 by VRS  |  Email |Print

Some emerging-markets exposure can be a valuable currency – for commodities producers. Currencies of commodity-producing countries have mostly fallen against the U.S. dollar this year, helping cushion earnings of miners who dig there. Platinum has fallen 20% this year in dollar terms, but only about 6% in South African rand. Copper is down 15% in dollars, just 4% in Chilean peso.
This can keep beleaguered producers in business. It also means big falls in investment spending don’t necessarily mean equally large cuts in activity. Tudor Pickering Holt notes emerging-market oil producers like Lukoil, Rosneft, CNOOC and Petrobras all expect capital spending to be down 30% this year, helped by currency moves, versus 15% for U.S. and European companies………………………………………..Full Article: Source

OPEC pumps 31.26 million bpd in August

Posted on 10 September 2015 by VRS  |  Email |Print

Oil production from the Organisation of the Petroleum Exporting Countries (OPEC) totaled 31.26 million bpd in August, down 140 000 bpd from the July level of 31.4 million bpd as several member countries, including Saudi Arabia, trimmed output, according to a just-released Platts survey of OPEC and oil industry officials and analysts.
“This is the first time OPEC output has fallen since February, but it shouldn’t be over-interpreted,” Margaret McQuaile, senior correspondent for Platts, a leading global provider of energy and commodities information. “The August total still puts OPEC exceeding its official ceiling by 1.26 million bpd and Saudi oil is still flowing at record levels.”……………………………………….Full Article: Source

OPEC oil output in Aug falls from record on Iraq disruption - survey

Posted on 03 September 2015 by VRS  |  Email |Print

OPEC oil output fell in August from the highest monthly level in recent history, a Reuters survey found on Wednesday, as disruptions to flows on Iraq’s northern pipeline halted supply growth from the group’s second-largest producer.
Largely stable output from Saudi Arabia and other Gulf members of the Organization of the Petroleum Exporting Countries indicated they are not wavering in their focus on defending market share instead of prices. OPEC supply fell in August to 31.71 million barrels per day (bpd) from a revised 31.88 million bpd in July, according to the survey, based on shipping data and information from sources at oil companies, OPEC and consultants………………………………………..Full Article: Source

Commodities in Africa: How natural resources breed violence

Posted on 28 August 2015 by VRS  |  Email |Print

Africa is home to a tenth of the planet’s oil, a third of its mineral reserves and produces two-thirds of its diamonds. High prices may pep up the continent’s short-term economic growth, but scholars have long suspected that its plentiful natural resources also breed instability and violence. Politicians and their cronies cannot resist skimming off some of the huge profits, the theory goes, which enrages those who are left out.
Struggles over these wealths have played a part in many African troubles, from militias in the Democratic Republic of Congo to Sudanese civil wars. However, identifying a systematic link between natural resources and violence in Africa has proven tricky for economists, who must usually work with small or insufficiently detailed datasets………………………………………..Full Article: Source

OPEC Unable to Control Oil Production in Member States

Posted on 27 August 2015 by VRS  |  Email |Print

The Organization of the Petroleum Exporting Countries (OPEC) is irrelevant because it can’t control oil production volumes within it’s own member-countries, the president of PKVerleger LLC, an US energy consulting firm, told Sputnik. “OPEC is irrelevant today. Producing countries set their levels of production… Prices will probably fluctuate between 30 and 50 [dollars per barrel]. OPEC <…> has no power,” Dr. Philip K. Verleger said.
Global oil prices have significantly dropped compared to summer 2014, falling from $100 to $43 per barrel for Brent crude, primarily a result of worldwide oversupply. According to the International Energy Agency (IEA), global oil prices will fall further in 2016 in response to decreased demand. ……………………………………….Full Article: Source

Ecuador Reveals Pain Inside OPEC: It’s Pumping Oil at a Loss

Posted on 27 August 2015 by VRS  |  Email |Print

Ecuador has revealed the financial stress inside OPEC created by low oil prices, becoming the first member of the group to say it’s pumping at a loss. President Rafael Correa said on Tuesday that the South American nation is receiving as little as $30 a barrel for its crude, while production costs average about $39.
The warning comes after several other members of the Organization of Petroleum Exporting Countries, including Algeria and Libya, said the group should consider holding an emergency meeting to respond to the drop in oil prices. “We are going through a very difficult year economically because the price of oil collapsed,” Correa said in a speech in the central highland province of Cotopaxi………………………………………..Full Article: Source

Iran to Raise Oil Output ‘at Any Cost’ to Defend Market Share

Posted on 24 August 2015 by VRS  |  Email |Print

Iran plans to raise oil production “at any cost” to defend the country’s market share and joins calls for an emergency OPEC meeting to help shore up crude prices. “We will be raising our oil production at any cost and we have no other alternative,” said Oil Minister Bijan Namdar Zanganeh, according to his ministry’s news website Shana. “If Iran’s oil production hike is not done promptly, we will be losing our market share permanently.”
Iran had the second-biggest output in the Organization of Petroleum Exporting Countries before U.S.-led sanctions banning the purchase, transport, finance and insuring of its crude began July 2012. Oil producers such as BP Plc and Royal Dutch Shell Plc have expressed interest in developing its reserves, the world’s fourth-biggest, once sanctions are removed………………………………………..Full Article: Source

OPEC May Boost Oil Output to Record With Iran Back Amid Glut

Posted on 17 August 2015 by VRS  |  Email |Print

OPEC could potentially boost crude oil production to 33 million barrels a day, the most ever, after international sanctions are removed against Iran amid a global supply glut, according to the country’s OPEC representative.
The global oil market is already in surplus by about 3 million barrels a day, with Saudi Arabia and Iraq responsible for OPEC’s oversupply in the past six months, Iran’s state-run Islamic Republic News Agency reported Sunday, citing Mehdi Asali. Iran can boost output by 500,000 barrels a day within one week after sanctions are lifted, Oil Minister Bijan Namdar Zanganeh said earlier this month………………………………………..Full Article: Source

Iran Targets 45 Oil and Gas Projects in Plan to Boost Output

Posted on 14 August 2015 by VRS  |  Email |Print

Iran has selected 45 oil and gas projects to show international companies at a conference in London in December when new oil contract models will be discussed ahead of exploration auctions to double the country’s crude output.
The projects, including oil and gas exploration, will be discussed along with details of a new oil contract model at the Dec. 14-16 conference, Mehdi Hosseini, chairman of Iran’s oil contracts restructuring committee, said in an interview in Tehran. Iran hopes to boost crude production to 5.7 million barrels a day, he said………………………………………..Full Article: Source

Iran is hiding more oil at sea than we realized

Posted on 14 August 2015 by VRS  |  Email |Print

One of the biggest mysteries in the oil market surrounds just how much oil Iran is hoarding at sea. That’s a key question because Iran’s nuclear deal with the West could lift crippling sanctions, and pave the way for tons of Iranian oil to hit the market. A surge in Iranian exports would only deepen the oil supply glut that has sent prices to fresh six-year lows this week to below $43.
Iran claims it’s not stockpiling oil in tankers in the Persian Gulf, but no one believes it. Up until recently, energy experts thought Iran’s vessels held 30 million to 40 million barrels of oil. But maritime surveillance firm Windward has harnessed sophisticated technology to determine Iran is actually hoarding 50 million barrels of oil………………………………………..Full Article: Source

Are oil production hikes the sole defense against crude’s lows?

Posted on 11 August 2015 by VRS  |  Email |Print

The only way for oil producers to cope with the low price of crude is to hike rather than cut production, an industry analyst told CNBC. Natixis Lead Oil Market Analyst Abhishek Deshpande said that both the Organization of Petroleum Exporting Countries (OPEC) and Western producers were working hard to maintain oil levels—simply as a matter of self-preservation.
“They’re left with no choice,” Deshpande told CNBC on Monday. Both OPEC and Western producers want to keep production high, but their motivations are different, said Deshpande………………………………………..Full Article: Source

OPEC leader Saudi Arabia is having to borrow money

Posted on 07 August 2015 by VRS  |  Email |Print

The oil kingdom is facing a big hole in its budget, caused by the slump in oil prices and a sharp rise in military spending. That’s forcing the government to raid its reserves, and it may even borrow from foreign investors, analysts say.
Saudi Arabia has already burned through almost $62 billion of its foreign currency reserves this year, and borrowed $4 billion from local banks in July — its first bond issue since 2007. Its budget deficit is expected to reach 20% of GDP in 2015. That’s extraordinarily high for a country used to running surpluses. Capital Economics estimates that government revenues will fall by $82 billion in 2015, equivalent to 8% of GDP. The IMF is forecasting budget……………………………………….Full Article: Source

Asteroid passing by Earth may hold $5 trillion in precious metals

Posted on 21 July 2015 by VRS  |  Email |Print

Forget the Pluto flyby. Metals bugs were buzzing Monday after a metallurgically rich asteroid rocketed past Earth on Sunday evening, boasting an out-of-this-world cache of precious metals. Astronomers speculated that the asteroid, known as 2011 UW-158, which passed about 1.5 million miles from Earth, might have carried as much as $5.4 trillion worth of precious metals and minerals, according to Slooh, which connects telescopes to the Internet.
Slooh quoted Astronomer Bob Berman as saying this in a news release: “Can it be mined someday, perhaps not too far in the future?” Mining.com reported that scientists believe the half-kilometer-wide asteroid contains up to 90 million metric tons of platinum and other precious metals………………………………………..Full Article: Source

China’s Been Hoarding Gold And It Isn’t Likely to Stop

Posted on 20 July 2015 by VRS  |  Email |Print

With China finally coming clean that it’s been the second-biggest buyer of gold over the past six years, analysts and traders say the purchases will continue. In the first update since 2009, the People’s Bank of China said on Friday that it owns about 1,658 metric tons, implying purchases of 100 tons a year. The stockpile may eventually reach more than 5,000 tons, according to Robin Bhar, an analyst at Societe Generale SA in London.
“China hasn’t been very open about its strategy, so what matters now is whether the market believes they intend to continue buying,” said Joni Teves, an analyst at UBS Group AG in London. “They do appear to leave the door open to further purchases, which should limit the downside for gold.”……………………………………….Full Article: Source

China’s gold reserves underestimated

Posted on 20 July 2015 by VRS  |  Email |Print

Pull the other one, Beijing. Various analysts put it more politely, but there was a wave of scepticism washing over Friday’s announcement that the people’s Bank of China had increased its official gold holdings, adding 604 tonnes since 2009, making the present total 1658 tonnes.
Being more measured than Pure Speculation, Bernard Dahdah, precious metals analyst at French bank Natixis put this view thus: “It begs the question of what’s been happening to the gold produced that hasn’t been taken by the central bank”. One London broker said he did not believe the Chinese announcement, and wondered why Beijing was playing down its gold purchases. Another said: “The timing (of the announcement) is as expected; it’s just the amount that makes no sense”……………………………………….Full Article: Source

Iran: The oil and gas multibillion-dollar ‘candy store’

Posted on 17 July 2015 by VRS  |  Email |Print

They did not advertise their presence. But in the days and weeks before Tuesday’s nuclear deal between the west and Iran, a steady trickle of visitors from some of the world’s largest energy groups have flown into Tehran. By some accounts, they have done more than exchange business cards.
As one senior western executive puts it, few of the industry’s big players can ignore the “candy store” that is Iran — now preparing to throw open a multibillion-dollar shop window of oil and gas projects. An array of US and EU oil-related sanctions, in place since 2012, has prevented detailed negotiations. But once these are lifted, serious talks about a return to the country will get under way, with the European majors first………………………………………..Full Article: Source

Iran 5th gas exporter in 2014: OPEC

Posted on 14 July 2015 by VRS  |  Email |Print

According to the latest OPEC’s statistical report on 2014 market, Iran placed the 5th top exporter of natural gas and 7th oil seller in OPEC. Despite sanctions in 2014, Iran stood at the 5th place among the top natural gas exporters and the seventh oil seller in the world, according to OPEC’s Annual Statistical Bulletin 2015.
According to the bulletin the largest gas reserves in the OPEC belongs to Iran with 34.20 trillion cubic meters of natural gas ahead of Qatar with 24.531 trillion cubic meters. However the bulletin holds that sanctions imposed on Iran hindered infrastructural developments and led to an export of 8.360 billion cubic meters of natural gas putting Iran behind Qatar, Algeria, Nigeria, and the UAE in 2014………………………………………..Full Article: Source

The Story Behind Inflated World Oil Reserves

Posted on 09 July 2015 by VRS  |  Email |Print

There’s an old joke about lab rats in which the teller says he or she secretly suspects that all lab rats are prone to cancer and so all research about the risk of cancer in humans based on tests in rats is likely useless. The Committee for Independent Research and Information on Genetic Engineering, a European-based research group, thought it would look into such a possibility.
Last week the group released its findings and that joke became a reality. The diet fed to most lab rats is so laced with pesticides, heavy metals, genetically engineered feed and other man-made contaminants that lab rats worldwide are indeed at much higher risk of developing cancer and other diseases and disabilities just from the food they are reared on………………………………………..Full Article: Source

OPEC keeps plugging away

Posted on 08 July 2015 by VRS  |  Email |Print

Output from Saudi Arabia and Iraq helped lead to the fourth straight monthly increase from the Organization of Petroleum Exporting Countries, a survey found. A survey by energy reporting service Platts finds OPEC production in June reached 31.3 million barrels per day, a 5.5 percent increase from May and the fourth straight month of gains from the 12-member group.
Saudi Arabia, the de facto leader of OPEC, produced an average 10.3 million bpd in June, about 1 million barrels more than the United States. The increase in production from U.S. shale basins is keeping markets weighted on the supply side. Saudi Arabia has said it would keep its output higher despite the glut in an effort to stay competitive and keep its Asian consumers satiated………………………………………..Full Article: Source

OPEC Pumps 31.28 Million Barrels of Crude Oil Per Day in June

Posted on 07 July 2015 by VRS  |  Email |Print

Oil production from the Organization of the Petroleum Exporting Countries (OPEC) totaled 31.28 million barrels per day (b/d) in June, up 170,000 b/d from May and the fourth consecutive monthly increase since February, as Saudi Arabia and Iraq pushed out more oil, a Platts survey of OPEC and oil industry officials and analysts showed Monday.
“This is the highest monthly level since August 2012, when the survey estimated output at 31.54 million b/d,” said Margaret McQuaile, senior correspondent for Platts, a leading global provider of energy and commodities information. “At that point, output was on the way down. Now, output seems to be on the way up, and at a time when the market could be looking at a lot more oil from Iran.” The June total leaves OPEC pumping nearly 1.3 million b/d in excess of its official 30 million b/d ceiling. (Press Release)

International companies ’seek’ Iranian oil fields

Posted on 06 July 2015 by VRS  |  Email |Print

Some European countries have already started direct talks with Iran’s oil officials regarding future relations after the embargo on Iran is lifted. Shell, Eni and Russian Luke Oil companies have launched discussions both in Vienna and Tehran. American companies have not yet taken a step in this regard but they are on alert waiting by the second for the official announcement of lifting of the embargo on Iran.
The investments of international oil companies in this country dates back to many years. They always had their ups and downs throughout their longstanding history since year 1901 starting with the first concession; then the rest of the major American oil companies poured in followed by Royal Dutch Shell and Total of France………………………………………..Full Article: Source

Oil Falters After Rig Count Grows

Posted on 03 July 2015 by VRS  |  Email |Print

The amount of rigs drilling for oil in the U.S. rose for the first time in seven months, triggering a slump in crude oil prices to their lowest settlement in two months. U.S. oil producers added 12 rigs last week, breaking 29 straight weeks of cuts, in response to prices that have rebound to- and stayed at $60 a barrel since late April.
That convinced producers to end months of massive cutbacks that started after the U.S. shale drilling boom flooded the market and sent prices crashing. But the increase in rigs is scaring investors and analysts who have warned that oil could be on the verge of another sharp fall. Production has kept making small gains even as drilling has declined and stockpiles have hit historic levels around the world………………………………………..Full Article: Source

OPEC oil output hits three-year high in June on Iraq: Reuters survey

Posted on 02 July 2015 by VRS  |  Email |Print

OPEC oil supply in June has climbed to a three-year high due to record or near-record output from Iraq and Saudi Arabia, a Reuters survey found, underlining the focus of the group’s top exporters on market share.
The boost from the Organization of the Petroleum Exporting Countries puts output further above its target of 30 million barrels per day (bpd) and comes despite outages in Libya and Nigeria that curbed supplies. OPEC supply has risen in June to 31.60 million bpd from a revised 31.30 million bpd in May, according to the survey, based on shipping data and information from sources at oil companies, OPEC and consultants………………………………………..Full Article: Source

OPEC output surges as Iraq accelerates production

Posted on 01 July 2015 by VRS  |  Email |Print

Iraqi crude production climbed to a record this month, helping send OPEC output to the highest level since August 2012. Output by the Organisation of Petroleum Exporting Countries climbed 744,000 barrels to 32.134 million a day this month, according to a Bloomberg survey of oil companies, producers and analysts. Last month’s total was revised 189,000 barrels lower to 31.39 million a day, because of changes to the Saudi, Iraqi, Algerian and Nigerian estimates.
OPEC has been boosting supply as it seeks to force higher-cost producers to cut output. The 12-member group agreed on June 5 to retain its collective output target of 30 million barrels a day, a level that it’s exceeded for 13 months, according to data compiled by Bloomberg………………………………………..Full Article: Source

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