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Ukraine gas supplies in doubt as Russia seeks EU payment deal

BRUSSELS (Reuters) – Ukraine’s efforts to unblock deliveries of Russian gas as winter sets in were deadlocked on Thursday as Moscow’s negotiators were quoted demanding firmer commitments from the European Union to cover Kiev’s pre-payments for energy. EU-hosted talks were adjourned after running late into the night, Energy Minister Alexander Novak and the head of Russian gas firm Gazprom ( GAZP.MM ) told Russian news agencies. They would resume later in the day if Ukraine and the EU had a firm financing deal in place, Gazprom head Alexei Miller said. Ukrainian and EU officials were not available. A spokeswoman for Energy Commissioner Guenther Oettinger issued a statement cancelling a news briefing that had been tentatively set for 8:30 a.m. (0730 GMT) in the event of an agreement. There has already been agreement on the price Kiev will pay for gas over the winter, the amount to be supplied and […]

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Why Oil Prices Went Down So Far So Fast

Print Back to story The reasons oil prices started sliding in June were hiding in plain sight: growth in U.S. production, sputtering demand from Europe and China , Mideast violence that threatened to disrupt supplies and never did. After three-and-a-half months of slow decline, the tipping point for a steeper drop came on Oct. 1, said Ray Carbone, president of broker Paramount Options Inc. That’s when Saudi Arabia cut prices for its biggest customers. The move signaled that the world’s largest exporter would rather defend its market share than prop up prices. “That, for me, was the giveaway,” Carbone said in an Oct. 28 phone interview from his New York office. “Once it started going, it was relentless.” The 29 percent drop since June of the international price caught traders and forecasters by surprise. After a steady buildup of supply and weakening demand, the outbreak of an OPEC price […]

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Oil Futures Stable Ahead FOMC Meeting, Stockpile Data

By Eric Yep Crude-oil futures were stable in Asian trading hours Wednesday ahead of the U.S. Federal Reserve meeting and a final reading on U.S. oil inventories due later in the day. On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at $81.71 a barrel at 0504 GMT, up $0.29 in the Globex electronic session. December Brent crude on London’s ICE Futures exchange rose $0.39 to $86.42 a barrel. Most investors were on the sidelines as the Federal Open Market Committee’s statement is expected to set the tone in wider financial and commodity markets. The vast majority of analysts expects the Fed to finish its tapering program and should help anchor sentiment for Asian markets today, Singapore’s OCBC Bank said. Late Tuesday, the American Petroleum Institute, a trade group, said U.S. crude stockpiles rose 3.2 million barrels last week. The more closely-watched inventory […]

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WTI Rises Second Day as Fuel Demand Seen Expanding; Brent Climbs

West Texas Intermediate crude rose for a second day on speculation that fuel demand is increasing amid signs of an improving economy in the U.S., the world’s biggest oil consumer. Brent gained in London. Futures climbed as much as 0.7 percent in New York. U.S. gasoline inventories probably fell by 900,000 barrels to 203.5 million last week, according to a Bloomberg News survey before Energy Information Administration figures today. Stockpiles dropped by 3.7 million, the American Petroleum Institute was said to have reported yesterday. Consumer confidence in the country advanced to a seven-year high in October, data from the Conference Board showed. “Oil prices have been supported by better-than-expected economic indicators we’ve been getting from countries including the U.S. and Japan ,” Hong Sung Ki, a senior commodities analyst at Samsung Futures Inc. in Seoul, said by phone today. “We can’t expect a strong rebound in oil but I’d […]

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Crude Rises First Time in Three Days on Consumer Optimism

West Texas Intermediate and Brent crudes advanced for the first time in three days after a report showed that confidence among U.S. consumers rose in October to a seven-year high as gasoline prices dropped. The Conference Board’s index climbed to 94.5 this month, the highest since October 2007, from a September reading of 89 that was stronger than initially estimated, the New York-based private research group said today. WTI prices have slipped 11 percent this month on signs that global oil production is growing faster than demand for fuel. “The consumer confidence numbers were very encouraging,” Michael Lynch , president of Strategic Energy & Economic Research in Winchester, Massachusetts , said by phone. “It’s another sign that the U.S. economy is looking strong. A major reason for the rise in confidence was probably the drop in gasoline prices.” WTI for December delivery rose 42 cents, or 0.5 percent, to […]

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Natural Gas Rallies as Bears Collect Profits

By Christian Berthelsen Natural gas futures gained Tuesday despite revised forecasts for warm weather to last into mid-November, as traders squared their books ahead of the November-delivery contract’s expiration. The contract rose 8.8 cents, or 2.5%, to end at $3.649 a million British thermal units on the New York Mercantile Exchange. Options on the November contract expired with the close of trading Tuesday and the contract itself expires Wednesday. Most of the volume in the market has moved forward into the December contract, which settled up 2.6% at $3.731/mmBtu. Analysts and brokers said the pending expirations drove trading, particularly investors closing out bearish trades against the market by buying futures to cover their positions. "The market sold down hard over the last two weeks," said Tom Saal, a broker with INTL FCStone. "There’s short-covering, and we’re rolling into a new front-month." Short-covering comes when a trader cashes out of […]

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Barclays Cuts Oil-Price Forecasts on World Supply Surplus

Barclays Plc cut its oil-price forecasts for the second time this month, citing expectations that OPEC won’t cut supplies sufficiently to remove a global surplus. The bank reduced its 2015 estimate for the average Brent price to $93 a barrel from $96, and for West Texas Intermediate to $85 from $89. Still, oil has probably reached its lowest point for this year as the oversupply temporarily diminishes and “should recover modestly” during the rest of the quarter, the bank said. “OPEC supply-side adjustments are expected, but these are unlikely to be sufficient to overcome a lackluster demand picture in the first half of the year,” analysts Miswin Mahesh and Michael Cohen wrote in a report today. Oil has collapsed into a bear market amid rising global supplies as leading members of the Organization of Petroleum Exporting Countries resisted calls to cut production. The supply glut, which dwindled in the […]

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Energy groups left bruised as falling oil prices bite into profits

©Getty Tumbling oil prices have hit the earnings of two big London-listed energy companies, in one of the first tangible signs of how the oil supply glut is reverberating across the global economy. FTSE 100 oil and gas producers BP and BG Group both reported a fall in third-quarter profits on Tuesday, in part due to the drop in the oil price over the period. More On this story Oil price fall dents Mexican budget BP stands by cash target as profit falls BG reports 29 per cent profits fall Oil rallies sharply after near 4-year low On this topic IMF urges Gulf states to restrain spending Comment Commodities as a pump primer Oil rises on claims of Saudi supply cut Trading Post Deflation fear underpins oil-equity link IN Commodities Fall in copper stocks points to rally Cofco unveils plans for joint venture IPO Chinese coffee attracts Swiss traders […]

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Benchmarks play an important role in pricing crude oil

Source: U.S. Energy Information Administration, from Bloomberg Note: Dubai/Oman price calculated by taking the average of Dubai and Oman spot prices. When energy analysts and the media discuss the price of crude oil, they are typically referring to one of a small group of specific types of crude oil that are widely and actively bought and sold. The use of such benchmark crudes makes it easier for buyers and sellers to price the variety of crudes that are produced around the world. The most widely used benchmarks are associated with crude oil that has four common qualities: stable and ample production; a transparent, free-flowing market located in a geopolitically and financially stable region to encourage market interactions; adequate storage to encourage market development; and/or delivery points at locations suitable for trade with other market hubs, enabling arbitrage (profit opportunities) so that prices reflect global supply and demand. Other types […]

Posted On : Published By : Tom Whipple