Crude oil market

[waltky]

Crude oil price losses give back gains...

Crude oil prices drop more than 1 percent as weak outlook prevails
Tue Dec 29, 2015 - Crude oil futures fell around half a dollar early on Wednesday as the market remained under pressure from slowing demand and high supplies, while forecasts that a cold snap in Europe and the United States would be short-lived also hurt prices.

Crude prices have plunged by two-thirds since mid-2014 as soaring output from the Organization of the Petroleum Exporting Countries, Russia and the United States led to a global surplus of between half a million and 2 million barrels per day. More recently, a slowing demand outlook, especially in Asia but also Europe, has started dragging on prices. Front-month U.S. West Texas Intermediate crude futures CLc1 were trading at $37.18 per barrel at 0140 GMT, down 69 cents or 1.82 percent from their last settlement. Brent futures LCOc1 were down 47 cents, or 1.24 percent, to $37.32 a barrel.

Traders said the price falls were largely a result of a weak outlook for next year and the closing of 2015 trade books. "The 2016 outlook is for lower prices, especially early next year. Many are closing their last long positions for the year today as nobody wants to come back in January and be surprised badly. Better start with a clean sheet," a trader said. Forecasts that an upcoming cold weather in Europe will only be short-lived could also hurt crude prices.

U.S. crude and Brent had both rallied about 3 percent in the previous session on hopes that a drop in temperatures would buoy demand for oil for heating purposes. But weather data in Thomson Reuters Eikon shows that average continental European temperatures are expected to drop from around 5 degrees Celsius currently toward and slightly below the seasonal norm of 2.4 degrees by Jan. 3 before rising to as high as 6-8 degrees by Jan. 7. For most of the United States, a brief cold period is also not expected to last for much more than a week.

Crude oil prices drop more than 1 percent as weak outlook prevails

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Asian stock erase gains as crude oil rebound fizzles
Tue Dec 29, 2015 - Asian shares unwound early gains on Wednesday, as investors turned cautious following renewed selling in recently battered crude oil futures.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS erased a positive start to edge down 0.1 percent, on track for a flat monthly performance and down 12 percent for the year. U.S. crude futures CLc1 skidded 1.8 percent to $37.19 a barrel, while Brent LCOc1 shed 1.2 percent to $37.32. Both had jumped 3 percent overnight, taking back ground lost in the previous session as colder weather forecasts raised expectations of more demand. But weekly data from industry group the American Petroleum Institute (API) showed a rise of almost 3 million barrels in U.S. crude inventories, defying expectations of no change and rekindling fears of a supply glut.

On Wall Street, major U.S. indexes each gained more than 1 percent. All 10 major S&P sectors ended with gains, led by a 1.34 percent rise in the technology sector .SPLRCT, which lifted the S&P 500 .SPX to a modest increase for the year. Japan's Nikkei .N225 was up 0.3 percent, off session highs but still poised to gain over 9 percent for the year, though down more than 3 percent for December. "We're seeing thin volumes at year-end as the number of active participants has decreased due to the holidays," said Martin King, co-managing director at Tyton Capital Advisors. Australian shares outperformed, up 0.9 percent and on track for their ninth consecutive day of gains.

A man, holding a mobile phone, walks past an electronic stock quotation board outside a brokerage in Tokyo, Japan​

Higher U.S. Treasury yields underpinned the dollar overnight, although yields were off highs in Asia. The yield on benchmark 10-year U.S. Treasury notes US10YT=RR stood at 2.292 percent, compared with its U.S. close of 2.307 percent on Tuesday. The yield on the U.S. two-year note US2YT=RR closed at 1.095 percent on Tuesday after earlier touching its highest level since April 2010. The dollar index .DXY, which tracks the greenback against a basket of six rival currencies, was up 0.1 percent at 98.207.

The index rose to nearly a one-week high of 98.413 on Tuesday, from a nearly two-week low earlier in the session. It is up 8.8 percent for the year, though down nearly 2 percent for the month as investors pare their dollar-long positions after the U.S. Federal Reserve's widely anticipated interest rate increase earlier in December.

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[waltky]

Let's hope it stays down...

Oil ends 2015 down 35 percent; long, painful hangover seen
Thu Dec 31, 2015 - Oil prices rose on Thursday but fell as much as 35 percent for the year after a race to pump by Middle East crude producers and U.S. shale oil drillers created an unprecedented global glut that may take through 2016 to clear.

Global oil benchmark Brent and U.S. crude's West Texas Intermediate (WTI) futures rose between 1 and 2 percent on the day on short-covering and buying support in a thinly traded market ahead of the New Year holiday. But for 2015, both benchmarks fell double-digits for a second straight year as Saudi Arabia and other members of the once-powerful Organization of the Petroleum Exporting Countries (OPEC) again failed to boost oil prices. The U.S. shale industry, meanwhile, surprised the world again with its ability to survive rock-bottom crude prices, churning out more supply than expected, even as the sell-off in oil slashed by two-thirds the number of drilling rigs in the country from a year ago.

The United States also took a historic move in repealing a 40-year ban on U.S. crude exports to countries outside Canada, acknowledging the industry's growth. "You do have to tip your hat to the U.S. shale industry and their ongoing ability to drive down costs and hang in there, albeit by their fingernails," said John Kilduff, a partner at Again Capital, an energy hedge fund in New York. Brent crude settled up 82 cents at $37.28 a barrel, rebounding from a near 11-year low of $36.10 hit earlier in the session. For the month, it was down 16 percent and for the year, it fell 35 percent. In 2014, Brent lost 48 percent.

An oil pump is seen in Varadero, Matanzas province, Cuba, during an organized tour by the state-run Cuba-Petroleo (CUPET)​

WTI rose 44 cents to $37.04 a barrel. It slid 11 percent in December and 30 percent for the year, after a 46 percent loss in 2014. The immediate outlook for oil prices remains bleak. Goldman Sachs has said prices as low as $20 per barrel might be necessary to push enough production out of business and allow a rebalancing of the market. Adding to oil's woes, floods across the Midwestern United States were threatening refineries and pipelines from Illinois to Louisiana, potentially swelling the glut of domestic crude at a time when stockpiles were already at record highs.

A mild winter so far in the Northern Hemisphere due to the El Niño weather phenomenon has also slashed demand for heating oil. U.S. heating oil prices fell 40 percent for a second year in a row. "We have brimming oil inventories in Europe," Bjarne Schieldrop, chief commodity analyst at SEB in Oslo, said. "And our predictions are that oil inventories in Asia are going to get closer to saturation in the first quarter." Morgan Stanley said in its outlook for next year that "headwinds (are) growing for 2016 oil." The bank cited ongoing increases in available global supplies, despite some cuts by U.S. shale drillers. "The hope for a rebalancing in 2016 continues to suffer serious setbacks," it said.

INDUSTRY PAIN

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Wall Street suffers feeble end to turbulent 2015
31 Dec.`15 - - Wall Street dropped on Thursday, leaving the S&P 500 marginally lower for a year marked by record highs as well as a major selloff.

In a reversal of one of 2015's major trends, oil shares moved higher, with the S&P energy sector up 0.34 percent and alone among gainers. Much of the blame for this year's underwhelming stock market performance can be laid at the feet of crude oil prices, which lost a third of their value during an unprecedented global glut. The energy sector fell 24 percent, its worst annual performance since the global recession. The S&P 500 hit a record high in May only to slump 11 percent over eight days in August over fears of a China-led global economic slowdown. The CBOE Volatility index spiked to a seven-year high before the market recovered.

Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York​

On the last trading day of 2015, the S&P 500 fell 0.94 percent to 2,043.94 points, leaving it with a total loss of 0.71 percent for the year. The S&P's total return, including dividends, was about 1.40 percent, according to preliminary data. "If you went to sleep on Dec. 31, 2014, and woke up today, you'd say what a dull year it's been, and yet in between we've had these wild swings," said Donald Selkin, chief market strategist at National Securities in New York. "The lesson is that people should watch the extremes. On those big down days, hold your nose and buy - and don't be afraid."

The Dow Jones industrial average lost 2.23 percent for the year, its first annual decline since 2008. The Nasdaq Composite gained 5.73 percent after surpassing levels not seen since the dot-com bubble in 2000. Eight of the 10 worst performers on the S&P this year were energy companies, led by Chesapeake Energy's 77-percent slump. The consumer discretionary sector, on the other hand, was the S&P's best performer, rising 8.43 percent thanks to Netflix's 134-percent increase and Amazon's 118-percent surge. Consumer stocks also took the top three spots on the Dow, led by Nike's 30-percent increase in 2015.

GOOD RIDDANCE!

 

[william the wie]

A few questions:

How long is the usual lag time for pipeline construction?

How much does the use of pipelines reduce delivery costs? For NG? For Crude?

 

[Billyjack]

The CME trades around 750,000,000 paper barrels per day versus around 95,000,000 liquid barrels. If you want to know what oil prices are going to do, check with Goldman Sachs, not OPEC in an over supply environment.

 

[waltky]

Iran's oil can come back on the market adding to oil glut...

Oil slides to lowest since 2003 as Iran sanctions are lifted
Sun Jan 17, 2016 - Oil prices hit their lowest since 2003 in early trading on Monday, as the market braced for a jump in Iranian exports after the lifting of sanctions against the country at the weekend.

On Saturday, the U.N. nuclear watchdog said Tehran had met its commitments to curtail its nuclear program, and the United States immediately revoked sanctions that had slashed the OPEC member's oil exports by around 2 million barrels per day (bpd) since their pre-sanctions 2011 peak to little more than 1 million bpd. "Iran is now free to sell as much oil as it wants to whomever it likes at whatever price it can get," said Richard Nephew, program director for Economic Statecraft, Sanctions and Energy Markets at Columbia University's Center on Global Energy Policy. Iran is ready to increase its crude exports by 500,000 bpd, its deputy oil minister said on Sunday. International Brent crude LCOc1 fell to $27.67 a barrel early on Monday, its lowest since 2003, before recovering to $28.25 by 0103 GMT, still down more than 2 percent from their settlement on Friday.

A flame shoots out of a chimney at a petro-industrial factory in Kawasaki near Tokyo​

U.S. crude CLc1 was down 58 cents at $28.84 a barrel after hitting a 2003 low of $28.36 earlier in the session. "The lifting of sanctions on Iran should see further downward pressure on oil and commodities more broadly in the short term," ANZ said on Monday. "Iran's likely strategy in offering discounts to entice customers could see further downward pressure on prices in the near term," it added. Iran's potential new exports come at a time when global markets are already reeling from a chronic oversupply as producers pump a million barrels or more of crude every day in excess of demand, pulling down crude prices by over 75 percent since mid-2014 and by over a quarter since the start of 2016.

And although analysts expect Iran to take some time before being able to fully revive its export infrastructure, suffering from years of underinvestment during the sanctions, it does have at least a dozen Very Large Crude Carrier super-tankers filled and in place to sell into the market. The oil price rout is also hurting stock markets, with Asian shares set to slide to near their 2011 troughs on Monday, stoking further worries about a global economic downturn. "Growth keeps slowing ... Lower commodity prices, including oil, partly reflect weakening demand itself. In addition, the downturn in mining capex and the declining income of commodity producers is weighing on exports from Asia," said Frederic Neumann, co-head of Asian Economics Research at HSBC, Hong Kong.

Oil slides to lowest since 2003 as Iran sanctions are lifted

See also:

Asian shares skid to 2011 levels as oil slump intensifies
Sun Jan 17, 2016 - Asian shares slid to their lowest levels since late 2011 on Monday after weak U.S. economic data and massive falls in oil prices stoked further worries about a global economic downturn.

Oil prices fell as much as 4 percent on Monday, with international benchmark Brent futures LCOc1 falling below $28 per barrel LCOc1, touching their lowest level since 2003. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 1.0 percent in early trade, extending its fall so far this month to over 11 percent. Japan's Nikkei .N225 tumbled as much as 2.8 percent to a one-year low. It has lost 20 percent from its peak hit in June, meeting a common definition of a bear market. In China, the Shanghai Composite index .SSEC fell nearly 2 percent, piercing through intraday lows last seen in August when China's markets nosedived.

People are reflected in a stock quotation board outside a brokerage in Tokyo, Japan​

On Wall Street, S&P 500 .SPX hit a 15-month low on Friday, ahead of a market holiday on Monday for Martin Luther King Jr. Day. "The fact that U.S. and European shares fell below their August lows, failing to sustain their rebound, is significant," said Chotaro Morita, chief fixed income strategist at SMBC Nikko Securities. "We are coming to a stage where we need to consider the risk of recession in the global economy," he said. An unexpected drop in retail sales and the third consecutive monthly fall in industrial output in December added to the latest indication that U.S. economic growth braked sharply in the fourth quarter. Following those data, the Atlanta Federal Reserve's closely-watched GDPNow forecast model showed the U.S. economy is on track to grow 0.6 percent in the fourth quarter, slowing sharply from 2.0 percent growth in the third quarter.

U.S. companies' fourth-quarter profits are expected to decline more than 4 percent, which would be the second straight quarterly decline. Federal Reserve officials have been stuck to a well-worn script: day-to-day financial market swings do not drive monetary policy. But investors also further cut back their expectations on the U.S. Federal Reserve's rate hikes, with short-term interest rate futures pricing in only one rate hike by the end of year, compared to two hikes priced in at the start of year. Outside the United States, the economic outlook appeared even bleaker, with the energy and raw material sector hit the hardest as China's massive investment-led economy slows down.

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[waltky]

Another half million barrels a day coming on the market...

Oil price steadies after falling below $28 a barrel
18 Jan.`16 - The oil price has recovered slightly after earlier falling below $28 a barrel, as Opec predicts crude will mount a recovery this year.

Brent crude, used as an international benchmark, fell as low as $27.67 a barrel, its lowest since 2003, before recovering to trade at $28.86. The price of US crude was $29.65 a barrel after hitting $28.36. Investors fear the lifting of Western sanctions on Iran could worsen the existing oversupply problem. Iran's deputy oil minister Roknoddin Javadi has expressed confidence the country can produce an extra 500,000 barrels per day.

Phillip Futures analyst Daniel Ang said the earlier price drop was due to concerns about Iran. "This means we will be seeing a bigger oil glut with Iranian crude exports coming back to the market," he said. However, oil producers' group Opec said in its January market report that it expected to see the price of crude begin a rebalancing process in 2016. The group forecast that in the next six months non-Opec members would be unable to sustain production because of the continuing low oil price.

Excess supply

The decision to lift the sanctions against Iran came on Sunday after the international nuclear watchdog, the IAEA, said Iran had complied with a deal designed to prevent it developing nuclear weapons. Iran has the fourth largest proven oil reserves in the world, according to the US Energy Information Agency and any additional oil would add to the one million barrels a day of over-supply that has led to a more than 70% collapse in oil prices since the middle of 2014.

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[waltky]

Granny says ain't no unseasonably warm weather here - is colder'n a well digger's butt...

Oil market may ‘drown in oversupply’ in 2016: IEA
Tuesday, Jan. 19, 2016 - Unseasonably warm weather and rising supply will keep the crude oil market oversupplied until at least late 2016 and could push the price below its current 12-year lows, the International Energy Agency said on Tuesday.

The addition of Iranian supply to a market where production looks set to outpace consumption for a third year in a row could not come at a worse time for crude oil exporters, who are grappling with prices at their lowest in more than a decade. Brent crude futures have fallen to their lowest level since late 2003, tumbling below $30 a barrel, after OPEC said in December it would not cut output to halt the price slide despite global oversupply.

The IEA, which issues regular reviews of the health of the energy market, said more price weakness could lie ahead as a result. “Although we do not formally forecast OPEC oil production, in a scenario whereby Iran adds 600,000 bpd to the market by mid-year and other members maintain current output, global oil supply could exceed demand by 1.5 million bpd in the first half of 2016,” the agency said in a monthly report. “While the pace of stock-building eases in the second half of the year as supply from non-OPEC producers falls, unless something changes, the oil market could drown in over-supply. So the answer to our question is an emphatic yes. It could go lower.”

Responding to Tehran’s compliance with a nuclear deal, the United States and other major powers have revoked international sanctions that sharply cut Iran’s oil exports. Warm winter weather around the world cut global oil demand growth to a one-year low of 1 million barrels per day in the fourth quarter of 2015, down from a near five-year high of 2.1 million bpd in the third quarter. The IEA left its estimate of growth in global demand for 2016 unchanged from its previous monthly report at around 1.2 million bpd. “We conclude that the oil market faces the prospect of a third successive year when supply will exceed demand by 1 million bpd and there will be enormous strain on the ability of the oil system to absorb it efficiently,” the IEA said.

With the world economy slowing, the IEA said it had cut its forecast for 2016 OPEC crude oil demand by 300,000 bpd to 31.7 million bpd. Iran has said it will raise output by an initial 500,000 bpd now that international sanctions have been lifted, but the IEA said it believes the increase will be of a more modest 300,000 bpd by the end of the first quarter of 2016. The IEA is sticking with its forecast for a decline of around 600,000 bpd in non-OPEC output, which it said had been surprisingly resilient in the face of tumbling crude oil prices.

Oil market may ‘drown in oversupply’ in 2016: IEA

 

[waltky]

Ruble hits all time low...

Oil Slump Sends Russian Ruble to All-time Low
January 20, 2016 — The Russian ruble struck a new record low on Wednesday as fresh falls in world oil prices deepened investor worries about Russia's contracting, commodity-dependent economy.

The ruble was trading down 4.6 percent at 82.16 to the dollar at 1715 GMT after earlier reaching a historic low of 82.29 earlier in the session. It was 4.6 percent lower versus the euro at 89.66. The previous all-time low was 80.10 rubles per dollar, reached in December 2014 when Russia was in the grips of a financial crisis exacerbated by Western sanctions over the Ukraine crisis.

People walk past a currency exchange display board showing the value of the Russian ruble against the U.S. dollar and the euro, in Moscow, Russia​

Analysts said the ruble was likely to remain on the ropes as long as oil prices continue their decline but that the central bank was unlikely to intervene to defend the currency unless financial stability was threatened. "The ruble is trading on oil and risk sentiment," said Tom Levinson, chief forex strategist at Sberbank CIB, the investment-banking arm of Russia's largest lender Sberbank. "Despite arguably offering good value at this level, no one is going to become neutral or positive on the ruble without signs of a recovery in oil prices."

No signs of panic

In contrast to the situation 13 months ago, there was no sign of panic buying of dollars on Moscow streets on Wednesday - a factor likely to prevent the central bank taking active steps to defend the currency. Many Russian consumers, having spent months already watching the value of the rubles in their pockets fall, have adopted a fatalistic approach to the currency's decline. But the ruble's slide makes it more likely the central bank will have to postpone interest rate cuts badly needed to breathe new life into the economy. In a country where many consumer goods are imported, the ruble's drop will also push up inflation, testing so-far robust public support for President Vladimir Putin in a year when Russia holds a parliamentary election.

The central bank cut rates aggressively in early 2015 to ease the impact of an economic recession but has been forced to leave them on hold since July, despite prospects for the economy remaining grim. Russia's economy shrank an estimated 3.9 percent last year and the International Monetary Fund forecast on Tuesday another 1 percent contraction in 2016. The bank next meets on monetary policy on January 29, and market expectations have recently shifted towards a "hold" decision.

Global gloom

See also:

Oil prices fall near 2003 lows on oversupply, demand worries
Thu Jan 21, 2016 - Oil fell on Thursday, dipping back towards 12-year lows on persistent concerns about a supply overhang and the outlook for demand.

Oil futures dropped to their lowest levels since 2003 this week as investors worry that a glut of crude is combining with slowing demand due to economic weakness, especially in China. International benchmark Brent LCOc1 was down 43 cents at $27.45 a barrel by 0913 GMT. Brent has lost 26 percent so far in January, on track for its biggest monthly fall since 2008. Front-month West Texas Intermediate (WTI) crude futures CLc1 traded at $28.09 per barrel, down 26 cents from their previous close.

A worker checks the valve of an oil pipe at Nahr Bin Umar oil field, north of Basra, Iraq​

Broad market sentiment remained bearish as producers around the world pump 1 million to 2 million barrels of crude every day in excess of demand, creating a huge overhang of stored oil. Iran's return to the oil market this month added to the glut, after the lifting of international sanctions to discourage the country from obtaining nuclear weapons. "There are worries surrounding demand and oversupply," said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam. He said weaker demand in the Middle East, which has been hit by lower oil prices, could add fuel to the sell-off and there was little to stop crude falling to $20 per barrel.

Concerns are also growing that China's economy could slow further and cut demand in the world's second-largest oil consumer. "Lower commodity and oil prices reflect weakening demand," HSBC said on Thursday. Meanwhile, Venezuela has requested that OPEC hold an emergency meeting to discuss steps to prop up oil prices, although delegates from other members of the producer group said such a meeting was unlikely.

Oil prices fall near 2003 lows on oversupply, demand worries

 

[waltky]

Oil market takes advantage of cold snap...

Oil gains 8% as cold snap forces bears to back off
Friday, Jan. 22, 2016 - Oil extended its gains and soared about 8 per cent on Friday, as a cold snap boosted demand for heating oil and investors took advantage of the lowest prices since 2003 to close out some of their more profitable bets on price declines.

Short covering, the practice of buying back an asset sold previously at a higher price, and hopes for easier monetary policy from Europe have been catalysts to lift oil prices by 12 per cent in just two days. The rebound has stopped the oil price heading towards a near-17 per cent drop in January, the largest slide in the first month of the year in at least a quarter of a century. Money managers have racked up record-breaking bets against oil over the past few months. The price slide to its lowest since late 2003 this week provided a chance for them to book a profit on some of those positions, analysts said. “Given the volatility we’ve seen in the oil price, even intraday, swings of 3 to 4 per cent, if you are going to see a rebound, this is the kind of rebound you’d expect,” CMC Markets analyst Jasper Lawler said.

Brent rose $2.25, or 7.7 per cent, to $31.50 (U.S.) a barrel by 11:47 a.m. EST (16:47 GMT), set for its biggest one-day rise since August. U.S. crude rose $2.04 to $31.57 per barrel. Heating oil futures led the markets higher, with ICE gas oil futures soaring more than 10 per cent, their biggest percentage gain since January 2009. U.S heating oil was up more than 8 per cent, its biggest one-day gain since August. Freezing conditions and snowstorms have gripped parts of Europe and the United States, threatening to cripple a broad swath of the Northeast, the world’s largest heat oil market, with about 2 feet (61 cm) of snow. In the longer run, however, the cold snap may not be quite the boon oil bulls were hoping for.

Still, some analysts were optimistic and believe oil prices may have finally hit a bottom, but maintained that the overwhelming bearishness of investors and oversupply woes persist. “I think panic took over common sense and now we’re starting to get a grip on reality,” said Phil Flynn, analyst at Price Futures Group in Chicago. “There’s no doubt, there are fundamentals out there that mean weaker energy prices, but a price of $26 a barrel is pricing in a global recession and we’re not in one”

Oil gains 8% as cold snap forces bears to back off

 

[waltky]

OPEC cryin' uncle...

Oil prices in reverse amid Opec call
25 Jan.`16 - Oil prices tumbled again on Monday, eroding last week's gains, as Opec called for co-operation from oil-producing nations outside the cartel. Brent crude fell 6.3% to $30.15 a barrel following a 10% rise on Friday, while US oil shed 7.1% to $29.90.

The slide came as the head of Opec called for all oil-producing nations to work together. Abdullah al-Badri said both Opec and non-Opec oil producers needed to tackle oversupply to help prices rise. "It is vital the market addresses the issue of the stock overhang. As you can see from previous cycles, once this overhang starts falling then prices start to rise," he told a conference in London. Despite the ongoing refusal of Saudi Arabia, the dominant Opec member, to cut production, Mr al-Badri nevertheless blamed countries outside the cartel for the huge global oil glut. "Yes, Opec provided some of the additional supply last year, but the majority of this has come from non-Opec countries," he said. Opec accounts for almost 42% of the world's oil production.

Analysis: Andrew Walker, BBC Economics Correspondent

What's an oil producer to do amid tumbling prices? Ask everybody in the business to cooperate, it seems. If you're Opec, that means asking non-members, such as Russia to join in with curbing production. It must be said that the prospects of any co-operation from outside Opec are weak at the best of times. But it has got harder in the last decade. The surge in US shale oil means it is much more difficult to manage the market without American co-operation, which would never be forthcoming. The US government wouldn't want to work with Opec, and in any case private companies are the ones taking the decisions. They will cut if makes commercial sense to them and their shareholders.

'Future at risk'

The Opec secretary-general said all major producers should agree on methods to reduce stockpiles and thus help prices recover. "The current environment is putting this future at risk. At current price levels, it is clear that not all of the necessary future investment is viable," Mr al-Badri said. Prices briefly fell to less than $28 a barrel earlier this month. HSBC has lowered its forecast for the average price of Brent crude in 2016 from $60 to $45 a barrel, while UniCredit lowered it from $52.50 to $37 a barrel. The prospect of Opec members cutting production remains unlikely. Indonesia's Opec representative said that only one member of the cartel supported calling an emergency meeting to discuss ways of boosting oil prices. The chairman of Saudi Aramco, the state-owned oil giant, said on Monday that prices would ultimately rise to a moderate level as global demand increased.

The Iraqi government said on Monday that oil output reached a record high in December, producing as much as 4.13m barrels a day. Hans van Cleef, senior energy economist at ABN Amro in Amsterdam, said: "The news that Iraq has probably hit another record builds on the oversupply sentiment. The oversupply will keep markets depressed and prices low." Iran, which has the world's fourth-biggest oil reserves, is also preparing to resume exports now that sanctions have been lifted. A fall in the number of oil rigs in the United States, one of Opec's biggest production rivals, could reduce output, with Goldman Sachs predicting a decline of 95,000 barrels per day this year. Analysts at Energy Aspects said global oil inventories would continue to rise in the next few months, but should start to decline by the summer.

Oil prices in reverse amid Opec call - BBC News

 

[waltky]

Russia in cahoots with the Saudis...

Moscow says ready to discuss global oil cut
Friday 29th January, 2016 - Russia has said that OPEC leader Saudi Arabia had proposed global oil production cuts of up to 5 percent in what could likely be the first major move to help clear a glut of crude and push up sinking oil prices.

Benchmark Brent futures on Thursday jumped as much as 8 percent to nearly $US36 a barrel on news of the potential deal, which if implemented would immediately reduce surplus global output exceeding demand by I million barrels per day. Oil prices jumped 5 percent to near $35 a barrel on Thursday after reports said Russia's Energy Minister Alexander Novak said the Saudis had proposed that oil producing countries cut production by up to 5 percent, which for non-OPEC member Russia - the world's top producer - would represent around 500,000 bpd. "Indeed, these parameters were proposed, to cut production by each country by up to 5 percent," Novak said. "This is a subject for discussions, it's too early to talk about." "We think it's reasonable to discuss the situation," he added.

The two countries have been holding discussions for almost 18 months about the oil collapse, but have never come close to an agreement. Saudi Arabia has said it can cut oil production to shore up prices only if the largest non-OPEC members mainly Russia join the cuts. There has been no comment from Saudi Arabia's top oil officials so far on Thursday. According to Bloomberg, OPEC delegates said they have no meeting planned with Russia following Novak's statement. Russia has previously said it is unable to cut production due to the harsh winter climate and the many private companies operating in the sector. But of late there have been several signs of softening of that position.

Andrey Polischuk, oil and gas analyst at Raiffeisen Bank, said that key is US shale oil production which is expensive to drill. "The most important trigger for this year is a possible drop in non-OPEC production, such producers have very high costs and currently [prices] are too low for maintaining the current level of production," according to euronews. Saudi Arabia has been trying to make it uneconomic for the shale producers by flooding the market resulting in the glut and massive price slump, but now no one can afford to pump less knowing others would step in to fill the gap and there is the risk of losing market share to competitors.

That applies particularly to Russia, which is very dependent on oil revenues and also facing technical difficulties in reducing production in winter. "It's possible that Russia could be testing the waters to gauge how OPEC members would respond to the idea of cuts," said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University and a former senior oil official at the White House, according to bloomberg. Oil rose as much 7.8 percent to $34.82 a barrel in New York trading, the highest since Jan. 6, after Novak's comments were reported. It traded at $33.48 as of 11:18 a.m. local time, paring its decline this year to 9.8 percent.

Moscow says ready to discuss global oil cut

 

[william the wie]

Russia in cahoots with the Saudis...

Moscow says ready to discuss global oil cut
Friday 29th January, 2016 - Russia has said that OPEC leader Saudi Arabia had proposed global oil production cuts of up to 5 percent in what could likely be the first major move to help clear a glut of crude and push up sinking oil prices.

Benchmark Brent futures on Thursday jumped as much as 8 percent to nearly $US36 a barrel on news of the potential deal, which if implemented would immediately reduce surplus global output exceeding demand by I million barrels per day. Oil prices jumped 5 percent to near $35 a barrel on Thursday after reports said Russia's Energy Minister Alexander Novak said the Saudis had proposed that oil producing countries cut production by up to 5 percent, which for non-OPEC member Russia - the world's top producer - would represent around 500,000 bpd. "Indeed, these parameters were proposed, to cut production by each country by up to 5 percent," Novak said. "This is a subject for discussions, it's too early to talk about." "We think it's reasonable to discuss the situation," he added.

The two countries have been holding discussions for almost 18 months about the oil collapse, but have never come close to an agreement. Saudi Arabia has said it can cut oil production to shore up prices only if the largest non-OPEC members mainly Russia join the cuts. There has been no comment from Saudi Arabia's top oil officials so far on Thursday. According to Bloomberg, OPEC delegates said they have no meeting planned with Russia following Novak's statement. Russia has previously said it is unable to cut production due to the harsh winter climate and the many private companies operating in the sector. But of late there have been several signs of softening of that position.

Andrey Polischuk, oil and gas analyst at Raiffeisen Bank, said that key is US shale oil production which is expensive to drill. "The most important trigger for this year is a possible drop in non-OPEC production, such producers have very high costs and currently [prices] are too low for maintaining the current level of production," according to euronews. Saudi Arabia has been trying to make it uneconomic for the shale producers by flooding the market resulting in the glut and massive price slump, but now no one can afford to pump less knowing others would step in to fill the gap and there is the risk of losing market share to competitors.

That applies particularly to Russia, which is very dependent on oil revenues and also facing technical difficulties in reducing production in winter. "It's possible that Russia could be testing the waters to gauge how OPEC members would respond to the idea of cuts," said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University and a former senior oil official at the White House, according to bloomberg. Oil rose as much 7.8 percent to $34.82 a barrel in New York trading, the highest since Jan. 6, after Novak's comments were reported. It traded at $33.48 as of 11:18 a.m. local time, paring its decline this year to 9.8 percent.

Moscow says ready to discuss global oil cut

Russia in cahoots with the Saudis...

Moscow says ready to discuss global oil cut
Friday 29th January, 2016 - Russia has said that OPEC leader Saudi Arabia had proposed global oil production cuts of up to 5 percent in what could likely be the first major move to help clear a glut of crude and push up sinking oil prices.

Benchmark Brent futures on Thursday jumped as much as 8 percent to nearly $US36 a barrel on news of the potential deal, which if implemented would immediately reduce surplus global output exceeding demand by I million barrels per day. Oil prices jumped 5 percent to near $35 a barrel on Thursday after reports said Russia's Energy Minister Alexander Novak said the Saudis had proposed that oil producing countries cut production by up to 5 percent, which for non-OPEC member Russia - the world's top producer - would represent around 500,000 bpd. "Indeed, these parameters were proposed, to cut production by each country by up to 5 percent," Novak said. "This is a subject for discussions, it's too early to talk about." "We think it's reasonable to discuss the situation," he added.

The two countries have been holding discussions for almost 18 months about the oil collapse, but have never come close to an agreement. Saudi Arabia has said it can cut oil production to shore up prices only if the largest non-OPEC members mainly Russia join the cuts. There has been no comment from Saudi Arabia's top oil officials so far on Thursday. According to Bloomberg, OPEC delegates said they have no meeting planned with Russia following Novak's statement. Russia has previously said it is unable to cut production due to the harsh winter climate and the many private companies operating in the sector. But of late there have been several signs of softening of that position.

Andrey Polischuk, oil and gas analyst at Raiffeisen Bank, said that key is US shale oil production which is expensive to drill. "The most important trigger for this year is a possible drop in non-OPEC production, such producers have very high costs and currently [prices] are too low for maintaining the current level of production," according to euronews. Saudi Arabia has been trying to make it uneconomic for the shale producers by flooding the market resulting in the glut and massive price slump, but now no one can afford to pump less knowing others would step in to fill the gap and there is the risk of losing market share to competitors.

That applies particularly to Russia, which is very dependent on oil revenues and also facing technical difficulties in reducing production in winter. "It's possible that Russia could be testing the waters to gauge how OPEC members would respond to the idea of cuts," said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University and a former senior oil official at the White House, according to bloomberg. Oil rose as much 7.8 percent to $34.82 a barrel in New York trading, the highest since Jan. 6, after Novak's comments were reported. It traded at $33.48 as of 11:18 a.m. local time, paring its decline this year to 9.8 percent.

Moscow says ready to discuss global oil cut

 

[william the wie]

As soon as there as a definite price pipelines to the oil patch to drop marginal shipping cost to market by at least half will upset that applecart.

 

[waltky]

China continues to slide as oil continues it's price decline...

Oil falls on China economic woes, rising OPEC supply
Tue Feb 2, 2016 - Oil prices fell for a second session in Asian trade on Tuesday as worries about top energy consumer China and rising oil supply weighed on markets, although possible talks between OPEC and Russia on output cuts offered some support. Brent for April delivery LCOc1 had dropped 66 cents to $33.58 a barrel as of 0502 GMT, after settling down $1.75, or 4.9 percent, in the previous session.

The front month contract for West Texas Intermediate (WTI) CLc1 was down 71 cents at $30.91 after falling $2.00, or 5.9 percent, the session before. Despite the declines, U.S. crude is still nearly 19 percent above the more than 12-year low of $26.19 hit in mid-January. The fall in oil prices reflected the general negative sentiment in the Asia time zone, said Ric Spooner, chief market analyst at Sydney's CMC Markets. "Stocks markets are down; oil is weakening. It all points towards negative risk sentiment across the board," he said. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down almost 0.9 percent, while Japan's Nikkei .N225 slipped 0.6 percent.

The dollar index .DXY also slipped. "(Prices) have just come back to reality a bit, although they are holding water above $30 a barrel," said Ben Le Brun, market analyst at Sydney's OptionsXpress, pointing to concern over rising oil supplies and weaker economic data. Oil prices could nudge below $30 a barrel again if investors saw hopes fading of a deal between members of oil producers cartel OPEC and Russia on production cuts, he said. Russia's energy minister and Venezuela's oil minister discussed the possibility of holding joint consultations between OPEC and non-OPEC countries in the near future, the Russian Energy Ministry said on Monday.

Pump jacks are seen at the Lukoil company owned Imilorskoye oil field outside the West Siberian city of Kogalym, Russia​

But Goldman Sachs said it was "highly unlikely" OPEC producers would co-operate with Russia to cut output, while also being self-defeating as stronger prices would bring previously shelved production back to the market. Crude prices fell after China's purchasing managers index dropped to a three-year low in January, coupled with climbing oil supplies, ANZ said in a note on Tuesday. "Rising supply also suggests further downside risk to short-term prices. Output from OPEC rose to 33.1 million barrels per day last month as Indonesia's membership to the group was reactivated," the note added.

Investors are waiting on a slew of economic data, including U.S. non-farm payroll and unemployment figures and producer prices from the euro zone, to give oil markets further direction, Le Brun added. That came as U.S. commercial crude oil inventories likely rose by 4.7 million barrels last week to a new record high of 499.6 million barrels, a preliminary Reuters survey taken ahead of industry and official data showed on Monday. The Reuters poll was taken ahead of weekly inventory reports from industry group the American Petroleum Institute (API), due out later on Tuesday, and the U.S. Department of Energy's Energy Information Administration (EIA), due for release on Wednesday.

Oil falls on China economic woes, rising OPEC supply

See also:

Asian shares slip as crude resumes drop
Tue Feb 2, 2016 - Asian shares fell on Tuesday as crude oil prices slid on oversupply fears and after downbeat manufacturing data raised concerns about sluggish global economic growth. Spreadbetters predicted European bourses would follow Asia lower, with IG predicting Britain's FTSE 100 .FTSE would start trading down 0.6 percent. Germany's DAX .GDAXI was seen falling 0.7 percent, and France's CAC 40 .FCHI was expected to open down 0.6 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down about 1 percent. Japan's Nikkei .N225 ended down 0.6 percent as investors locked in profits after two straight days of big gains following the Bank of Japan's decision to introduce negative interest rates late last week. [.T] U.S. crude oil CLc1 fell 1.8 percent to $31.05 a barrel after skidding as much as 7 percent overnight, pressured by weak economic data from China, a U.S. forecast for mild weather and doubts that suppliers would be able to agree on steps to address the global supply glut. [O/R] Despite the declines, U.S. crude is still nearly 19 percent above the more than 12-year low of $26.19 hit in mid-January. "(Prices) have just come back to reality a bit, although they are holding water above $30 a barrel," said Ben Le Brun, market analyst at Sydney's OptionsXpress, pointing to concern over rising oil supplies and weaker economic data.

Brent April crude futures LCOc1 slipped 1.6 percent to $33.69. Oil faced fresh pressure after Chinese January manufacturing data on Monday showed activity contracted at the fastest pace since 2012. Despite the weak factory reading, Chinese shares bucked regional softness and rebounded on Tuesday, led by small-cap shares. The Shanghai Composite Index .SSEC was up 1.8 percent, while the bluechip CSI300 index .CSI300 added 1.8 percent. "In a bear market, investors would use any rebound to cut equity holdings, and that has been the trading pattern recently," said Zeng Yan, an analyst at Zhongtai Securities. "There are no changes in fundamentals: yuan depreciation concerns are still there, the economy remains in bad shape, and market liquidity tends to be tight." The Australian dollar was down about 0.5 percent at $0.7075 AUD=D4, though it held above its recent seven-year trough of $0.6827.

People are reflected in a stock quotation board outside a brokerage in Tokyo, Japan​

As expected, the Reserve Bank of Australia held interest rates steady at a record low of 2.0 percent. Although the bank was hopeful on growth prospects, it reiterated that there was scope for a further cut if needed to support the economy. The greenback slipped about 0.3 percent against its Japanese counterpart to 120.65 yen JPY=, but remained underpinned by the BOJ's surprise rate move on Friday. Markets were little fazed by results of Iowa's Republican presidential nominating primary election, in which U.S. Senator Ted Cruz beat billionaire Donald Trump. On the Democratic side, former Secretary of State Hillary Clinton was in a virtual tie with rival Bernie Sanders. S&P 500 e-mini futures ESc1 were down 0.4 percent, mostly tracking oil prices. Wall Street marked modest losses on Monday, after January surveys of global factory activity on Monday showed the new year began much as the old one ended, with too much capacity chasing too little demand.

Global manufacturing expansion accelerated slightly but remained weak at the start of 2016 as faster growth in developed markets failed to offset a contraction in emerging economies. U.S. economic data showed manufacturing activity contracted in January for a fourth straight month as factories grappled with a strong dollar and lower oil prices forced energy firms to further cut spending, but the pace of the decline appeared to be slowing. The euro was up about 0.1 percent at $1.0899 EUR=, mired in recent ranges, its gains limited by the disappointing euro zone manufacturing data as well as comments from European Central Bank President Mario Draghi. The central bank head stressed the risks facing the euro zone and reiterated the ECB was ready to review its monetary policy stance in early March.

Asian shares slip as crude resumes drop

 

[william the wie]

Thanks for the update. The next huge step down will be when pipelines start reaching the oil fields.

 

[waltky]

Not much sympathy after gougin' ever'body at the pumps...

BP posts biggest annual loss in decades
Wednesday 3rd February, 2016 - British energy major BP Tuesday posted its biggest annual loss in decades of $6.48 billion, compared with a profit of $3.78 billion in 2014, while the fourth quarter replacement cost profit was $196 million as against $2.2 billion in the same quarter a year earlier, with the slump in oil prices eating into its revenues.

The energy giant, which reported its worst annual loss in two decades, announced further job cuts totaling 7,000 by the end of 2017, with 4,000 jobs upstream to be cut during 2016 and the remaining 3,000 from the downstream by the end of 2017. Despite strong operational performance and growing cost reductions, the lower underlying result was predominantly driven by the impact of steeply lower oil and gas prices on BP's Upstream segment, which reported a pre-tax loss for the quarter. This was partially offset by a strong set of counter-cyclical results from the Downstream segment, the company stated.

The Brent crude oil marker price averaged $44 a barrel in 4Q 2015 compared with $77 a year earlier, and the average Henry Hub US gas marker price was $2.27 per million British thermal units compared with $4.04 in 4Q 2014. BP took a bigger-than-expected hit at its upstream oil and gas production business and booked charges of $2.6 billion in the fourth quarter because of low oil prices, including on fields in the Gulf of Mexico, the US Utica shale acreage in Ohio and Libya. Despite lower revenue, BP's production rose 5.4 percent to 2.26 million barrels of oil equivalent per day.

Its refining and trading operations, benefiting from cheap fuel prices, once again offset losses in oil and gas production, although BP indicated that supply and trading weakened over the fourth quarter compared to a year earlier. Still grappling with about $55 billion of costs from the oil spill in the Gulf of Mexico in 2010, the energy major said the focus on cost discipline and increasing efficiency would continue. The annual controllable cash costs in 2015 were $3.4 billion lower than in 2014 and are on track to be close to $7 billion lower in 2017.

Having completed the $10 billion divestment programme announced in October 2013, BP now plans a further $3-5 billion disinvestment during 2016. "We are continuing to move rapidly to adapt and rebalance BP for the changing environment. We're making good progress in managing and lowering our costs and capital spending, while maintaining safe and reliable operations and continuing disciplined investment into the future of our portfolio," said Bob Dudley, BP group chief executive, in a statement. "Our plans set out a clear course for BP for the medium term and will allow us to deliver growth in the longer term. All of this underpins our commitment to sustaining our dividend and then growing free cash flow and shareholder distributions over the long term."

MORE

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Oil futures drop for 3rd session on rising crude stocks, oversupply
Wed Feb 3, 2016 - Oil futures extended losses into a third session in Asian trade on Wednesday, as U.S. crude stocks last week surged to more than half a billion barrels and as Iran plans to boost exports from March.

Brent for April delivery LCOc1 had dropped 24 cents to $32.48 a barrel as of 0524 GMT, after settling down $1.52, or 4.4 percent. U.S. crude, also known as West Texas Intermediate (WTI) CLc1, fell 22 cents to $29.66, having ended the previous session down $1.74, or 5.5 percent. "Oil prices are coming off again. Prices are going to zig-zag for a while," said Tony Nunan, oil risk manager at Mitsubishi Corp in Tokyo. U.S. crude stocks rose by 3.8 million barrels to 500.4 million in the week to Jan. 29, data from industry group, the American Petroleum Institute, showed on Tuesday.

Weekly inventory data from the U.S. government's Energy Information Agency is due on Wednesday. "The (global) inventory situation is going to get worse in the second quarter as we hit the peak refining rate at the end of this quarter," Nunan said. "(But) this has been so well documented that it's been built into prices. I do think we're close to the bottom and the bottom in prices will be this quarter." Nunan forecast Brent would trade in a $25-$35 a barrel range in the first quarter, before slowly recovering over the rest of the year.

A worker grabs a nozzle at a petrol station in Tehran, Iran​

A rebalancing between oil demand and supply will not come until mid-2017, Morgan Stanley said in a note on Wednesday. Implied crude stocks are set to climb by 1.1 million barrels per day this year, compared with an implied stock build of 1.3 million bpd last year, the note said. "Despite the myriad announcements of capex cuts, production has yet to respond enough to rebalance the market," Morgan Stanley said. Production numbers from Canada, Brazil and Russia all grew last year, with Russian output in December hitting the highest level since the 1980s, the note said.

The increase in stocks at Cushing has led to renewed fears of overflowing oil tanks at the key U.S. storage hub, causing the spread between prompt and forward U.S. crude oil futures to slump to an 11-month low, stoking fears of a further price rout. Meanwhile, Iran is aiming for crude exports of 2.3 million barrels per day in the fiscal year beginning March 21, the managing director of the National Iranian Oil Company was quoted as saying on Tuesday. That is higher than the 1.44 million bpd Iran is expected to export in February and 1.5 million bpd in January, according to data on Iran's preliminary tanker loading schedules. South Korea, which imported 5.7 million tonnes of crude from Iran last year, unveiled a set of stimulus measures on Wednesday.

Oil futures drop for 3rd session on rising crude stocks, oversupply

 

[william the wie]

Interesting throwaway line on Bloomberg last night..
60-180 days investment to production cycle in fracking.
the same cycle for big oil/gas 5 years.

If pipeline innovations start accumulating for the relatively small fields of fracking then that cycle will shorten considerably. Due to the much lower transport costs of pipelines any advances could reduce this cycle even further.

 

[waltky]

Dollar down, oil up...

Oil prices extend gains on dollar-slide, talk of oil producer meeting
Wed Feb 3, 2016 - Crude oil futures extended gains from the previous session on Thursday, as a weaker dollar and unconfirmed talk of producers potentially meeting to discuss output cuts lifted the market despite record U.S. stocks.

Despite this, analysts said prices would remain low in 2016 and 2017 as production stays high, global demand slows, and inventories swell. U.S. crude futures were trading at $32.68 per barrel at 0119 GMT on Thursday, up 40 cents from the previous session's close when they rallied 8 percent from below $30 per barrel. Brent crude was up 43 cents at $35.47 per barrel. Analysts said prices had recovered on a sliding dollar and from ongoing, yet unconfirmed, talk of a potential meeting of oil producers to cut output in support of prices, which have fallen around 70 percent since mid-2014.

But the main feature of recent oil trading has been volatility, with price swings of more than 10 percent within two trading sessions frequently occurring since mid-January. "The weaker U.S. dollar provided some interim support to the commodity complex, but volatility in crude oil remains extreme. Climbing U.S. crude stocks remain an ongoing threat to further price weakness," ANZ bank said. U.S. crude inventories climbed 7.8 million barrels in the week to Jan. 29 to 502.7 million barrels, compared with analyst expectations for an increase of 4.8 million barrels. U.S. gasoline inventories rose to a record high, soaring 5.9 million barrels to 254.4 million barrels. Analysts had forecast a 1.7 million-barrel gain in gasoline inventories.

Despite the latest gains, analysts remain largely bearish in their oil market outlook, pointing towards persistent oversupply and swelling inventories as the main factors that are keeping prices low. Morgan Stanley on Thursday lowered its average 2016 Brent price forecast to $30 per barrel, down from $49 previously. The bank only expects an average price of $40 per barrel in 2017 as oversupply persists. "Until the market rebalances, prices will drift at low levels. With demand slowing, rebalancing may not occur until mid-2017 or later," it said, adding that "global supply should grow in 2016 despite low prices."

Morgan Stanley also said that an emerging willingness of producers to forward hedge at prices not much above $40 per barrel was also capping prices. "We now see risk that producers will begin to hedge if the 12-24 month WTI strip moves into the mid-40s, which should cap prices in the front as well.

Oil prices extend gains on dollar-slide, talk of oil producer meeting

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Asia stocks jump as dollar slide boosts oil
Wed Feb 3, 2016 - Asian shares rallied on Thursday as speculation the U.S. Federal Reserve might opt to not raise interest rates at all this year hammered the dollar and sparked a huge rally in oil prices.

By some measures the U.S. currency suffered its largest one-day percentage drop outside of the crises of 1998 and 2008, symptomatic of just how crowded bullish positions had been. The sudden reversal provided a much-needed boost to beleaguered commodities, sending oil up no less than 8 percent, and easing pressure on energy shares and risk appetite. That relief showed in equity markets where MSCI's broadest index of Asia-Pacific shares outside Japan jumped 1.9 percent. Australia's resource-heavy index rose 1.7 percent and South Korea 1 percent.

In China, the Shanghai Composite Index gained 1.8 percent as trade wound down ahead of the Lunar holidays. Hong Kong stocks leaped 1.7 percent, in part because the U.S. dollar's fall lessened strains on the HK dollar's peg. Japanese investors, however, seemed less happy with the yen's newfound strength against the dollar and nudged the Nikkei down 0.7 percent. Wall Street had taken its cue from oil and recouped early losses on Wednesday, in a wild session that saw the Dow swing in a 420-point range.

The Dow ended Wednesday up 1.13 percent, while the S&P 500 added 0.5 percent and the Nasdaq Composite eased 0.28 percent. Traders were unsure what triggered the dollar rout though many pointed to comments from Federal Reserve Bank of New York President William Dudley that tighter financial conditions would be taken into account at the next policy meeting in March. In an interview with Market News International, Dudley also warned that a sharp rise in the dollar could have "significant consequences" for the U.S. economy.

MORE

 

[waltky]

Oil still down...

Oil falls in volatile trade ahead of key oil producer meeting
Fri Feb 5, 2016 - Oil prices ended the week lower in choppy trading on Friday, snapping two weeks of gains, as a frenzy of speculation about a possible deal between top oil producers clashed with concerns about a growing supply glut.

After a volatile week's trading, much is riding on Sunday's meeting between Venezuelan Oil Minister Eulogio Del Pino and his Saudi counterpart Ali al-Naimi in Riyadh, after Del Pino's discussions with the Qatari and Omani ministers this week. As cash-strapped Venezuela tries to rally support for concerted action between members of the Organization of the Petroleum Exporting Countries to boost prices, Sunday's meeting is seen "make or break" for a possible deal, said Tim Evans, energy futures specialist at Citi Futures. Adding to this week's rollercoaster ride in prices was the sudden liquidation of a $600 million leveraged fund bet on falling prices.

Investors were also weighing a string of conflicting indicators on Friday as the dollar .DXY recovered some of the ground lost over the past two days while investors continued to fret about growing oversupply, with U.S. inventories hitting record highs last week amid concerns about a slowing global economy. The pickup in the market earlier this week was not really warranted, Gene McGillian, senior analyst at Tradition Energy said, referring to the market seemingly brushing aside extremely bearish inventory data earlier this week. [EIA/S] "Today when the dollar tried to push up, which I attribute mostly to a little weekend covering, you started to see some sellers come back in the oil markets," he said.

A gasoline pump is seen hanging at a petrol station in central Seoul​

Global benchmark Brent crude futures LCOc1 settled down 40 cents, or 1.2 percent at $34.06 a barrel, after trading between $35.14 and $33.81. U.S. crude futures CLc1 closed 83 cents, or 2.6 percent lower, at $30.89 a barrel, after touching a high of $32.45. The contract fell slightly lower to $30.63 in post-settlement trading. Prices briefly turned positive after data showed U.S. energy firms this week deepened their oil rig cuts in the seventh week of declines, to the lowest levels in nearly six years. Both contracts were stuck in a narrow $1.50 range through the session but ended lower as hopes of an OPEC-led production cut that boosted prices in January have faded and concerns about a global supply glut have returned.

In a sign that low prices are having a limited impact on production, only around 100,000 barrels per day of oil production has been shut in globally to date - about 0.1 percent of global output, industry research group Wood Mackenzie said on Friday. Morgan Stanley warned on Friday that a rebalancing in the oil market may not occur until mid-2017. As markets try to balance themselves, it will likely lead to further volatility as investors close excessive positions, ABN Amro said in a note. In a sign that optimism had not fully returned to the market, money managers cut their bullish wagers on U.S. crude oil in the week to Feb. 2, data from the U.S. Commodity Futures Trading Commission (CFTC) showed on Friday.

Oil falls in volatile trade ahead of key oil producer meeting

 

[waltky]

Few signs there would be steps taken to boost prices...

Crude oil slips after Saudi, Venezuela meeting on prices yields little
Sun Feb 7, 2016 - Crude oil futures were mixed in early Asian trade on Monday after a meeting between OPEC producers Saudi Arabia and Venezuela to discuss coordination on prices ended with few signs there would be steps taken to boost prices.

Brent crude futures, LCOc1 the global benchmark was down 9 cents at $33.97 at 0039 GMT. They fell 40 cents to $34.06 a barrel on Friday. U.S. crude futures CLc1 were down 2 cents at $30.87. On Friday, the contract fell 83 cents to $30.89 a barrel. Both contracts were up slightly earlier on Monday in see-saw trade on low volumes.

Saudi Arabia's oil minister Ali al-Naimi talked about cooperation between Organization of Petroleum Exporting Countries members and other oil producers to stabilize the global oil market with his Venezuelan counterpart on Sunday, but there was no agreement to hold an early meeting of suppliers.

Venezuela's Oil Minister Eulogio Del Pino, who is on a tour of oil producers to lobby for action to prop up prices, said his meeting with Naimi was "productive." The prospect of a supply restraint helped oil prices rise from 12-year lows last month, even though there was widespread scepticism that a deal will happen.

Crude oil slips after Saudi, Venezuela meeting on prices yields little