Oil Prices Tumble to Five-Year Lows
Oil prices tumbled Friday, plumbing five-year lows, following an OPEC decision that will likely translate into a lingering glut of crude. Brent crude, the global benchmark, fell $2.43, or 3.4%, Continue Reading
U.S. crude down 10 percent post-OPEC, Brent breaks below $70
NEW YORK (Reuters) – U.S. crude tumbled 10 percent in its biggest one-day drop in more than five years on Friday, and benchmark Brent broke below $70 a barrel, as OPEC’s decision not to cut output sent oil traders and analysts scurrying to find a new trading floor. "I see little reason to buy oil now. I think people are either going to drive it down further or just let the market collapse," said Tariq Zahir, managing member at Tyche Capital Advisors in Hollow Way, New York. U.S. West Texas Intermediate (WTI) light crude ( WTI ) settled down $7.54 at $66.15 a barrel, and fell further post-settlement, reaching a four-year low of $65.69. The last time the market lost 10 percent in a day was in March 2009. North Sea Brent LCOc1 finished down $2.43, or 3.3 percent, at $70.15. It fell to as low as $69.78 on […]
Market rout as oil slide rocks energy groups
Shares in the world’s biggest energy groups have tumbled in a market rout as plunging oil prices put at risk billions of dollars of investment and jeopardised future supplies of crude. The sharp slide in the price of Brent oil after Opec’s decision not to cut output triggered warnings that oil companies would cut as much as $100bn of capital spending in response, imperilling the US shale bonanza and threatening much Arctic oil exploration. Meanwhile oil’s fall continued to play havoc with the currencies of oil exporting countries, especially Russia. At one point on Friday, the rouble slid to a record low. More On this story On this topic IN UK Equities Leonid Fedun, vice-president of Lukoil, Russia’s second largest crude producer, told the Financial Times that Opec was trying to turn the US shale oil “boom” into a “bust” for smaller producers. He compared the surge in North […]
Natural Gas Futures Retreat on Warmer Forecasts
By Timothy Puko NEW YORK–Natural gas prices have given back gains from early this week in a strong response to warmer weather forecasts. Natural gas for January delivery fell 17.7 cents, or 4.1%, to $4.178 a million British thermal units on the New York Mercantile Exchange. The losses reflect nearly two days of trading as Nymex prices didn’t have a settlement over the Thanksgiving holiday on Thursday. They also settle an hour early Friday, at 1:30 p.m. Globex online trading will also close early at 1:45 p.m. Weather forecasts have pulled back from predictions for a fiercely cold start to December. Temperatures aren’t severely warmer than normal, but enough to get traders refocused on the record supply coming from the U.S. drilling boom, said Tim Evans, analyst at Citi Futures Perspective in New York. Traders had bid prices above $4.50/mmBtu earlier this month when an early burst of Arctic […]
IEA Chief Economist Urges Oil Producers to Invest in New Projects
Petroleum storage tanks at the Suncor tar sands operations near Fort McMurray, Alberta, Canada. IEA… ENLARGE Petroleum storage tanks at the Suncor tar sands operations near Fort McMurray, Alberta, Canada. IEA has singled out Canada as a key focus area for future oil production. Reuters MADRID—The International Energy Agency’s chief economist on Friday urged oil producers to boost investment in new projects to meet an anticipated rise in demand, a move that he said may avoid oil price spikes in coming years. Speaking in Madrid during the presentation of the IEA’s annual report, Fatih Birol said that a tumble in oil prices makes it hard to believe a supply crunch may happen any time soon, but the slow pace of development of new projects makes it imperative to act. “We shouldn’t just ignore tomorrow’s challenges,” Mr. Birol said. “This is hard point to make in this context of lower […]
OPEC Gusher to Hit Weakest Players, From Wildcatters to Iran
The refusal of Saudi Arabia and its OPEC allies to curb crude oil output in the face of plummeting prices has set the energy world on a painful course that will leave the weakest behind, from governments to U.S. wildcatters. A grand experiment has begun, one in which the cartel of producing nations — sometimes called the central bank of oil — is leaving the market to decide who is strongest and how to cut as much as 2 million barrels a day of surplus supply. Oil patch executives including billionaire Harold Hamm have vowed to drill on, asserting they can profit well below $70 a barrel, with output unlikely to fall for at least a year. Marginal producers in less profitable U.S. shale areas, as well as countries from Iran to Russia and operations from Canada to Norway will see the knife sooner, according to analyses by Wells […]
WTI moves near price where it could hurt
West Texas Intermediate crude, the U.S. benchmark, falls below level some see as profitable one day after OPEC Secretary-General Abdalla Salem El-Badri, pictured, leads ministers in the decision to keep output steady. File Photo by Maryam Rahmanian/UPI West Texas Intermediate shed more than $4 per barrel for the January contract in early Friday trading, adding to dramatic losses for the U.S. benchmark that greeted a Thursday decision from members of the Organization of Petroleum Exporting Countries to keep production levels static . Oil prices are at a four-year low and down more than 25 percent from their mid-summer levels. The decline in price is in part related to slow economic recovery and an increase in oil production from U.S. shale. "It is important to recognize that if the recent price trend continues, the long-term sustainability of capacity expansion plans and investment projects may be put at risk," Libyan Deputy […]
Market rout as oil slide rocks energy groups
Shares in the world’s biggest energy groups have tumbled in a market rout as plunging oil prices put at risk billions of dollars of investment and jeopardised future supplies of crude. The sharp slide in the price of Brent oil after Opec’s decision not to cut output triggered warnings that oil companies would cut as much as $100bn of capital spending in response, imperilling the US shale bonanza and threatening much Arctic oil exploration. Meanwhile oil’s fall continued to play havoc with the currencies of oil exporting countries, especially Russia. At one point on Friday, the rouble slid to a record low. More On this story On this topic IN UK Equities Leonid Fedun, vice-president of Lukoil, Russia’s second largest crude producer, told the Financial Times that Opec was trying to turn the US shale oil “boom” into a “bust” for smaller producers. He compared the surge in North […]
OPEC is playing a dangerous game with oil markets
(The Platts’ OPEC team in Vienna was headed by Margaret McQuaile, and also included Stuart Elliott, Adal Mirza, Jacinta Moran and Herman Wang.) Saudi Arabian oil minister Ali Naimi left OPEC’s Vienna meeting on Thursday saying the group had made “a great decision.” Oil markets didn’t agree. In the weeks leading up to the decision, expectations had built for a cut in output, not least because of the sharp fall in demand for OPEC oil that forecasting organizations–including OPEC itself–were projecting for the first half of next year. But when Naimi signaled early Wednesday that the oil market would eventually stabilize itself, it became clear that the Saudis were not interested in cutting output. The confirmation on Thursday that OPEC would simply roll over its 30 million b/d ceiling and arrange to meet again in June next year sent prices into freefall. Brent, having closed the previous day at $77.75/barrel, […]
Oil Seen in New Era as OPEC Won’t Yield to U.S. Shale
OPEC’s decision to cede no ground to rival producers underscored the price war in the crude market and the challenge to U.S. shale drillers. The 12-nation Organization of Petroleum Exporting Countries kept its output target unchanged even after the steepest slump in oil prices since the global recession, prompting speculation it has abandoned its role as a swing producer. Yesterday’s decision in Vienna propelled futures to the lowest since 2010, a level that means some shale projects may lose money. “We are entering a new era for oil prices, where the market itself will manage supply, no longer Saudi Arabia and OPEC,” said Mike Wittner , the head of oil research at Societe Generale SA in New York. “It’s huge. This is a signal that they’re throwing in the towel. The markets have changed for many years to come.” The fracking boom has driven U.S. output to the highest […]