Category:

Oil Prices Pare Losses on Report of Possible OPEC Supply Cut

By Christian Berthelsen and Nicole Friedman Oil prices pared earlier losses in midday trading Tuesday after The Wall Street Journal reported OPEC members, including Saudi Arabia, are moving toward a compromise that would effectively result in reduced output from the cartel. The report, citing a Gulf official familiar with Saudi Arabia’s position, said support is building among members of the Organization of the Petroleum Exporting Countries to more closely adhere to its production quota of 30 million barrels a day, which the group regularly exceeds. Such an agreement could remove about 300,000 barrels a day from global physical supplies compared with October’s levels, the report said. Still, such a move would fall short of an outright production cut, which analysts say is required in the amount of one million barrels a day for the supply-and-demand balances to stabilize. The agreement would also leave unclear how closer adherence to the […]

Posted On : Published By : Tom Whipple
Category:

U.S. Crude Tumbles to Four-Year Low Before OPEC Meeting

West Texas Intermediate fell to the lowest level in more than four years after nations supplying a third of the world’s oil failed to pledge output cuts before this week’s OPEC meeting. Venezuela , Saudi Arabia , Mexico and Russia said they plan to start quarterly monitoring of oil prices . Today’s talks in Vienna didn’t result in any joint commitment to reduce supplies, said Igor Sechin , who runs Russian state oil producer OAO Rosneft. “Even those four countries are not agreeing to any kind of cut, and the last thing the Saudis want is to be the ones doing all the cutting,” said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors. “You have to get an above 2-million-barrel cut from OPEC to stabilize the market.” WTI for January delivery fell $1.69, or 2.2 percent, to $74.09 a barrel on the New York Mercantile […]

Posted On : Published By : Tom Whipple
Category:

Natural Gas Rebounds on Cool Forecast, Expiring Contract

By Timothy Puko Natural gas closed higher as a cooler afternoon weather update pushed the December contract on one last rally before it expired. The front-month contract settled up 13.1 cents, or 3.2%, at $4.282 a million British thermal units on the New York Mercantile Exchange. December futures ended a volatile month on a volatile note. The contract moved by more than 2%, up or down, in all but three of its last 21 sessions. Most trading volume has moved to the January contract. It also settled higher, up 9.9 cents, or 2.3%, at $4.403/mmBtu. The rally picked up in the afternoon as weather updates showed cooler temperatures than previous forecasts. Half of U.S. homes use natural gas for heating, and the market had spent the morning in retreat as traders expected demand to start falling from unseasonably warm weather. "The model message is while it’s warmer (outside of […]

Posted On : Published By : Tom Whipple
Category:

Pre-OPEC Producer Meeting Fails to Deliver Oil Output Cut

Nations supplying a third of the world’s oil failed to pledge output cuts after meeting in Vienna today. Russia can withstand prices even lower than they are now, the country’s biggest producer said. Officials from Venezuela, Saudi Arabia, Mexico and Russia said only that they would monitor prices. Crude futures sank to a four-year low in New York. OPEC meets in two days, with analysts split evenly over whether the group will lower output in response to the crash in prices. Crude fell into a bear market this year amid the highest U.S. production in 31 years and speculation that Saudi Arabia and other members of the Organization of Petroleum Exporting Countries won’t do enough to curb a surplus. Prices are below what nine of group’s 12 members need to balance their national budgets, data compiled by Bloomberg show. “All these countries are significantly affected by lower prices and […]

Posted On : Published By : Tom Whipple
Category:

OPEC Members Nearing Compromise on Supply Cuts

A general view of a meeting of oil ministers of the Organization of the Petroleum… ENLARGE A general view of a meeting of oil ministers of the Organization of the Petroleum Exporting countries, OPEC, at their headquarters in Vienna, Austria in June. The ministers meet again on Thursday in one of the most closely watched sessions in years. Associated Press VIENNA—OPEC members are inching toward a compromise that could lead them to cut oil supply, as the producer group prepares for one of its most closely watched meetings in years this week. Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, is likely to side with calls for the group to adhere more closely to its self-imposed production ceiling at Thursday’s meeting of OPEC oil ministers, according to a Gulf official familiar with the Saudi position. Support for such a move, which would be […]

Posted On : Published By : Tom Whipple
Category:

Saudis signal no push for oil cut as market to ‘stabilize itself’

VIENNA (Reuters) – OPEC leader Saudi Arabia signaled on Wednesday it was unlikely to push for a major change in oil output at the producer group’s meeting this week, a day after Russia refused to cooperate in any production cut. Saudi Oil Minister Ali al-Naimi said he expected the oil market "to stabilize itself eventually" but did not comment on talks with Russia held on Tuesday, which produced no firm pledge from Moscow to help support flagging oil prices. Iranian Oil Minister Bijan Zangeneh said some OPEC members, although not Iran itself, were gearing up for a battle over market share and insisted that non-OPEC producers needed to participate in any OPEC-led output cut. "The most important thing for all of us is the unity and solidarity of OPEC, and in this situation I believe we need to have the contribution of non-OPEC producers for managing the market," Zangeneh […]

Posted On : Published By : Tom Whipple
Category:

Pipeline to Pakistan still viable, Iran says

Pipeline to Pakistan still in the cards for an Iranian government coping with sanctions targeting its energy sector. UPI/Shutterstock/Kodda "Pakistan has signed a deal to import 760 million cubic meters of natural gas per day from Iran and by the beginning of 2015, it should start receiving this amount of gas according to agreement," Oil Minister Bijan Zanganeh said. Once dubbed the Peace Pipeline, and including India as the terminal country, Iran has long held out its gas reserves as an opportunity for Eastern trading partners. Washington and its Western allies, however, have backed a rival project that would stretch from one of the world’s largest natural gas fields in Turkmenistan through Afghanistan, Pakistan and India. For Pakistan, sanctions targeting Iran’s energy sector meant it was time to reconsider the pipeline project. Government officials told Pakistani media outlets they were declaring force majeure on the pipeline , meaning it […]

Posted On : Published By : Tom Whipple
Category:

Domestic pressures in U.S., Iran threaten slow-moving nuclear talks

VIENNA/WASHINGTON (Reuters) – A seven-month extension in talks between world powers and Iran on a deal to curb its nuclear program emboldened critics in Washington and Tehran, threatening to undermine further talks. After failing to clinch an agreement that would limit Iran’s nuclear program in return for lifting stifling U.S.-led economic sanctions, the sides agreed on Monday to push back, yet again, a deadline for reaching a deal, until next July. Iran is negotiating with so-called P5+1 group of the United Nations Security Council permanent members, plus Germany, but that could be called the P5+1+2, given the role played by hard-liners in Congress and in Iran’s ruling establishment. Even before the ink dried on the extension agreement in Vienna, skeptics in Washington were demanding new sanctions to pressure Iran’s rulers. The American Israel Public Affairs Committee, long regarded as one of the most effective lobbying groups in Washington, called […]

Posted On : Published By : Tom Whipple
Category:

A Nuclear Deal for U.S. and Iran Slips Away Again

VIENNA — By the time Secretary of State John Kerry and his Iranian counterpart checked into a luxury hotel near the famous beaches of Oman earlier this month, a long-sought deal that has eluded the last two American presidents to roll back Tehran’s nuclear program seemed to be slipping out of reach. With a deadline approaching, Mr. Kerry thought the opportunity could be lost unless the Iranians finally offered a breakthrough compromise. But Mohammad Javad Zarif, the Iranian foreign minister, came with little new. Frustrated, Mr. Kerry said there was no way the United States would accept a deal that did not curb Iran ’s ability to produce enough fuel for a bomb within a year. The conversation grew heated. The two men, patricians in their own cultures and unaccustomed to shouting, found themselves in the kind of confrontation they had avoided during multiple negotiating sessions over the past […]

Posted On : Published By : Tom Whipple
Category:

Iran’s Supreme Leader Dismisses Western Pressure on Nuclear Issue

TEHRAN — The day after a deadline for concluding a nuclear agreement was extended for seven months, Iran ’s supreme leader, Ayatollah Ali Khamenei , delivered his first remarks on the negotiations, saying that the West had failed to bring Iran “to its knees.” Meeting Tuesday with Muslim clerics in Tehran, the Iranian capital, Mr. Khamenei dismissed the diplomatic and economic pressure that world powers have brought to bear on his country over its nuclear ambitions. “In the nuclear issue, America and colonial European countries got together and did their best to bring the Islamic Republic to its knees, but they could not do so — and they will not be able to do so,” Mr. Khamenei’s personal website quoted him as saying. Mr. Khamenei has the final say on all important policy matters in Iran, including its nuclear program . His remarks suggested that he would continue to […]

Posted On : Published By : Tom Whipple