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Oil Futures Subdued, Brent-WTI Spread Stays Under $4/bbl

By Eric Yep Crude-oil futures were lower in Asian trading hours Monday with the premium of Brent crude over Nymex WTI still under $4 a barrel after narrowing sharply last week. On the New York Mercantile Exchange, light, sweet crude futures for delivery in November traded at $92.97 a barrel at 0450 GMT, down $0.57 in the Globex electronic session. November Brent crude on London’s ICE Futures exchange fell $0.29 to $96.71 a barrel. Oil prices ended on a mixed note last week resulting in the Brent-WTI spread narrowing to $3.46 a barrel on Friday. Nymex WTI crude gained 2.06% last week and has been up for two consecutive weeks, while Brent crude lost 1.41% last week and has been down five of the past seven weeks. "We expect to see WTI-Brent spreads remain at this level provided PMI remains strong and U.S. stockpile data shows continued drops in […]

Posted On : Published By : Tom Whipple
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WTI Falls as Ample Supply Offsets Disruption Risks; Brent Drops

West Texas Intermediate crude fell from the highest price in seven days as concern eased over the risk of a supply disruption in the Middle East . Brent declined in London . Futures dropped as much as 0.8 percent in New York. Prices capped a second weekly increase on Sept. 26 to trade at the smallest discount to Brent in a year as ample oil supplies shielded the global market from the U.S. military campaign against Islamic State. In the latest strikes conducted over the weekend, aircraft from the U.S., Saudi Arabia and the United Arab Emirates attacked four modular refineries in Syria controlled by the extremist group, U.S. Central Command said. “The gain in front-month WTI was so big that we can now see some profit taking,” Ken Hasegawa , an energy trading manager at Newedge in Tokyo , said by phone today. “A lot of longs were […]

Posted On : Published By : Tom Whipple
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Turkey Wants Secure Syria Zone as Militants Strike Kurds

Turkish President Recep Tayyip Erdogan called for the establishment of a “secure zone” inside Syria to repatriate Kurdish refugees who fled to Turkey to escape an Islamic State onslaught. Erdogan, speaking at the World Economic Forum in Istanbul last night, said Turkey “can’t stay out” of the U.S.-led coalition against the al-Qaeda breakaway. He said any offensive strategy must also strengthen rebels fighting Syrian President Bashar al-Assad, whom Turkey seeks to oust. His remarks capture the clashing interests that have kept Turkey out of the alliance so far and strained relations with Turkish Kurds that he has labored hard to repair. While Erdogan says he wants to see the al-Qaeda breakaway vanquished, that could come at the cost of benefiting Assad and strengthening the hand of Kurdish separatists on both sides of the border. Kurds in Turkey suspect Erdogan wants to create a militarized buffer zone along part of […]

Posted On : Published By : Tom Whipple
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Israel’s Top Oil Supplier Endures Gaza as Azeri Ties Grow

What started as a marriage of convenience has netted Israel its closest Muslim ally. The majority Shiite nation of Azerbaijan is the biggest supplier of oil to Israel, which reciprocates by selling sophisticated arms including missile systems and drones. While the flow of oil in exchange for advanced weapons is the backbone of the alliance, a confluence of interests is propelling the former Soviet republic on the Caspian Sea closer to Israel, often in defiance of discontent at home and dismay among neighbors Iran and Turkey. Tested by Israel’s 50-day military offensive in the Gaza Strip , which sparked protests among Azeris, President Ilham Aliyev is throwing his lot in with Israel to maintain a military edge in a quarter-century-long conflict with Armenia . Azerbaijan, which together with Armenia also buys Russian weapons, benefits from access to advanced technology from Israel as part of $3.7 billion in annual spending […]

Posted On : Published By : Tom Whipple
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Kenya: The Next Big Oil Exporter

Not even the specter of a spillover of Islamic extremism from Somalia can dampen the atmosphere in Kenya, where commercial oil production is expected to begin in 2016 and discovery after discovery has made this the hottest and fastest-paced hydrocarbon scene on the continent. When it comes to new oil and gas frontiers, today it’s all about Africa. And more specifically, it’s all about the eastern coast, with Kenya the clear darling–not just because it’s outpacing neighboring Uganda by leaps and bounds, but also because despite some political instability hiccups and the threat of militant al-Shabaab, it’s still one of the safest venues in the region. Six of the last 10 biggest finds have been in Africa, where—all told–there are some 130 billion barrels of crude oil waiting to be tapped by more than 500 companies, according to a recent report by PriceWaterhouseCoopers. Topping this list are Kenya’s Anza […]

Posted On : Published By : Tom Whipple
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Refinery Failures Spur Bets on Higher U.S. Gasoline

Speculators increased wagers on higher U.S. gasoline prices by the most since February as refinery closures constricted supply. The net-long position jumped 45 percent from a four-year low as hedge funds pared record short bets and added long wagers for the first time in six weeks, weekly U.S. Commodity Futures Trading Commission data through Sept. 23 show. Refineries in eastern Canada and Texas shut gasoline units for unplanned repairs as others began seasonal maintenance. Futures contracts for October traded at the highest premium to November since 2012, reflecting heightened concern about supply. The closures threaten the retreat at the pump that has drivers paying the lowest late-September prices since 2010. “People have covered their positions or moved away from short to long,” Amrita Sen, chief oil analyst at Energy Aspects Ltd. in London, said by phone Sept. 26. “There’s a huge amount of FCC outages in North America at […]

Posted On : Published By : Tom Whipple