Category:

Tehran Hard-Liners Undermine Nuclear Talks

An Iranian man joins a gathering in Tehran in support of Iran’s nuclear program on… ENLARGE An Iranian man joins a gathering in Tehran in support of Iran’s nuclear program on Monday. Zuma Press VIENNA—As international talks on Iran were about to resume, the Obama administration early this month secretly presented an eight-page document to Tehran in a bid to demonstrate Washington’s flexibility and offer an opening to end the protracted dispute over Iran’s nuclear program. But a week later, the chairman of the Iranian parliament’s nuclear committee went public with the Nov. 9 proposal, slamming it by saying the U.S. had brought the negotiations “back to zero.” The potentially damaging leak by Ebrahim Karkhaneh, the chairman, marked a low point in what U.S. and European officials see as an ongoing, and possibly intensifying, effort by hard-line factions in Tehran to sabotage more than a year of international negotiations […]

Posted On : Published By : Tom Whipple
Category:

Bottom for oil in 2015 is $35

Oil could plummet to $35 a barrel next year if OPEC doesn’t reach an agreement by the spring, oil price tracker Tom Kloza said Wednesday. The founder of Oil Price Information Services told CNBC’s “Squawk Box” that he expects at least a “lip service agreement” from OPEC members Thursday, when they meet to discuss output, but the members will largely ignore it, creating a bigger crisis in about six months. “When you look at the second half of 2015, that’s when you see oil beginning to dwarf demand by about a million, a million and a half barrels a day,” he said. “Thirty-five dollars is a possibility if they don’t get an agreement next spring because that’s when the oil really starts to build and you can have a billion barrels of oil with really no place to put it.” At that point, U.S. deep-water drilling and mature shale […]

Posted On : Published By : Tom Whipple
Category:

Alberta Producers With World’s Cheapest Oil Face Cascading Woes

Canada ’s biggest energy producers now face the same prospects of shrinking budgets and declining profit as their smaller rivals as prices drop for what’s already the world’s cheapest oil. Producers including Suncor Energy Inc. (SU) and Canadian Natural Resources Ltd. (CNQ) , which each fell the most in at least three years yesterday, operate in one of the most expensive places on earth to produce oil. If crude prices continue sinking following OPEC’s decision not to cut global oil supplies, Canada’s producers big and small will have to tighten their belts to prepare for declining profits. “This is a pretty big shock,” said Justin Bouchard, an analyst at Desjardins Securities Inc. in Calgary. “There’s no question there’s going to be a slowdown. Even the big guys will have to look at their capital spending plans.” Western Canada Select, the Canadian benchmark, has lost more than a third of […]

Posted On : Published By : Tom Whipple
Category:

Russia’s Oil Giant Battles Debt After $55 Billion Deal

Igor Sechin spent $55 billion in 2013 to buy competitor TNK-BP and create a Russian oil colossus, pumping about 5 percent of the world’s crude. Almost two years later and investors have written off the deal. Battered by sanctions and oil’s accelerating price crash, OAO Rosneft (ROSN) has lost 38 percent of its market value this year in dollar terms and today the whole company, TNK-BP and all, is worth $50 billion. And buying TNK-BP has left Sechin, Rosneft’s chief executive officer and a long-time ally of Russian President Vladimir Putin , with a lot of debt to repay . State-controlled Rosneft owes about $60 billion to banks and bondholders, making it more indebted relative to earnings than any large oil producer apart from Brazil ’s Petroleo Brasileiro SA. “Their aggressive expansion and debt accumulation made them more vulnerable to the falling oil price and the effect of sanctions,” […]

Posted On : Published By : Tom Whipple
Category:

Russian Recession Risk Seen at Record as Oil Saps Economy

Russia will sink into recession at a Urals price of $80 a barrel, seven years after its economy grew 8.5 percent when its chief export oil blend averaged near $70, according to a Bloomberg survey of analysts. Urals at $80, or about $3 cheaper than its average in the month through November 15, will tip Russia into a contraction, according to the median estimate of 32 economists. The probability of a recession in the next 12 months rose to 75 percent, the highest since the first such survey more than two years ago, according to another poll. Russia, which receives about half of its budget revenue from oil and gas taxes, is closing in on its first slump since 2009 after dodging recession this year as it lurched from one crisis to another following the takeover of Crimea from Ukraine in March. Consumer spending , which accounts for half […]

Posted On : Published By : Tom Whipple
Category:

Russia’s Economy Minister Says Prepare for Lower Oil Prices –Interfax

By Andrey Ostroukh MOSCOW–Russia, one of the world’s leading oil producers, will have to prepare for a drop in crude oil prices after OPEC’s decision to keep its production ceiling unchanged, Russia’s economy minister said Friday, Interfax news agency reported. The 12-member Organization of Petroleum Exporting Countries decided Thursday to keep its production ceiling unchanged at 30 million barrels a day, sending Brent crude prices below $72 per barrel for the first time since mid-2010. The continued decline in oil prices threatens to weigh further on Russia’s economic growth. The Russian government draws around 50% of its annual revenue from oil and gas exports. "It is likely that it [an oil price] will be close to $80 per barrel. But no one can tell that for sure so we need to prepare for any developments," Alexei Ulyukayev said. Mr. Ulyukayev also said that his ministry will lower its oil […]

Posted On : Published By : Tom Whipple
Category:

Brent sheds close to $1 ahead of OPEC meeting

Traders keep an eye on signs of early movement from members of OPEC considering action amid low oil prices. File Photo by Monika Graff/UPI Iranian Oil Minister Bijan Zanganeh, who arrived early in Vienna, said his country was already producing below its capacity , so further cuts would be unfavorable for a country struggling to cope with sanctions targeting its energy sector. Members of the Organization of Petroleum Exporting Countries are working to shore up a market share in an era when U.S. dependence is plummeting because of the glut of oil from shale. Low prices mean less revenue for countries like Iran that rely heavily on export revenue. "We need to speak to other [member states] and exchange views with them on how to deal with the situation," the Iranian minister said. "The most important thing for all of us is the unity and solidarity of OPEC." The […]

Posted On : Published By : Tom Whipple
Category:

Oil hits four-year low amid fading expectations of OPEC cuts

LONDON (Reuters) – Fading hopes of a meaningful cut in production at Thursday’s OPEC meeting sent oil prices tumbling to a four-year low as Thanksgiving in the United States saw world stocks touch the brakes on their recent rally. Gulf oil producers led by Saudi Arabia are expected to press the case at OPEC’s meeting in Vienna for holding off from output cuts, despite calls from some members for it to prop up prices that have crashed by a over a third since June. OPEC sources have told Reuters action is unlikely and Brent oil dropped by more than $1.75 in Asian and early European trading to $75.95 a barrel, the lowest level since September 2010. "The scene has been set by the Saudi comments going in to this meeting that market forces should be allowed to determine the price here," said National Australia Bank strategist Gavin Friend. "I think […]

Posted On : Published By : Tom Whipple
Category:

Natural Gas Prices Retreat Ahead of Holiday, Warm Weather

By Timothy Puko NEW YORK–Natural gas futures closed lower Wednesday, with traders looking to get out of the market before the holiday and before unseasonably warm weather could damp demand. The front-month January contract settled down 4.8 cents, or 1.1%, at $4.355 a million British thermal units on the New York Mercantile Exchange. Prices have fallen in three of the last four sessions. The U.S. Energy Information Administration said Wednesday that stockpiles had shrunk by a November record of 162 billion cubic feet in the week ended Nov. 21. The draw was 13 bcf more than expected. That outsized drain on stockpiles would often boost prices, but they fell Wednesday afternoon. The holiday weekend likely played a large role, said John Woods, president of JJ Woods Associates and a Nymex floor trader. For as many people who may want to buy on strong demand, there are people who will […]

Posted On : Published By : Tom Whipple
Category:

Oil price fall starts to weigh on banks

©Hulton Archive/Getty Images Banks including Barclays and Wells Fargo are facing potentially heavy losses on an $850m loan made to two oil and gas companies, in a sign of how the dramatic slide in the price of oil is beginning to reverberate through the wider economy . Details of the loan emerged as delegates of Opec, the oil producers’ cartel, gathered in Vienna to address the growing glut in the supply of oil. More On this story On this topic IN Banks Several Opec members have been calling for a production cut to shore up prices, but Saudi Arabia, Opec’s leader and largest producer, signalled that while there was a consensus among the cartel’s Gulf members they would not clarify if that meant a push for a big change in the group’s output targets. Repercussions from the decline in the price of crude, which has dropped 30 per cent […]

Posted On : Published By : Tom Whipple