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Oil Set for Biggest Slump Since 2008 as OPEC Battles U.S. Shale

Oil headed for the biggest annual decline since the 2008 global financial crisis as U.S. producers and the Organization of Petroleum Exporting Countries ceded no ground in their battle for market share amid a supply glut. Futures slid as much as 1.8 percent in New York , bringing losses for 2014 to 46 percent. U.S. guidelines allowing overseas sales of ultralight oil without government approval may boost the country’s export capacity and “throw a monkey wrench” into Saudi Arabia ’s plan to curb American output, according to Citigroup Inc. U.S. crude inventories are forecast to rise to the highest level for this time of the year in three decades. Oil’s slump has roiled markets from the Russian ruble to the Nigerian naira and squeezed government budgets in producing nations including Venezuela and Ecuador . It’s also boosted China ’s emergency crude reserves and helped shrink fuel subsidies in India […]

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Hedge Funds Surrender to Oil Rout as Bullish Bets Drop

Hedge funds finally pulled back from bets on higher oil prices as the market faces its worst year since 2008. Speculators reduced their net-long position in West Texas Intermediate crude for the first time in four weeks, cutting their holdings by 5 percent in the week ended Dec. 23, Commodity Futures Trading Commission data showed yesterday. Long wagers dropped the most since August. Prices have tumbled to the lowest level in more than five years as U.S. output climbed and the Organization of Petroleum Exporting Countries refused to make production cuts. The International Energy Agency and U.S. Energy Information Administration cut their estimates of 2015 global fuel consumption this month amid expectations for slower economic growth outside the U.S. “The weak physical fundamentals have weighed on the market,” Tim Evans , an energy analyst at Citi Futures Perspective in New York , said by phone. “OPEC’s shift from a […]

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Oil falls below $57, heads for biggest annual drop since 2008

LONDON (Reuters) – Oil dropped below $57 a barrel on Wednesday and was heading for its biggest annual decline since 2008, pressured by weakening demand and a supply glut prompted by the U.S. shale boom and OPEC’s refusal to cut output. Global benchmark Brent crude has fallen 49 percent in 2014 as demand growth slowed, the United States expanded output and OPEC, dropping its strategy of trimming supply to keep oil around $100 a barrel, chose instead to defend market share. On Wednesday, prices came under pressure from a survey showing China’s factory sector shrank for the first time in seven months in December – a bearish indication on the strength of oil demand in the world’s second-largest consumer. "Clearly, demand concerns are one of the issues for the oil market," said Michael McCarthy, chief market strategist at CMC Markets. Brent was down $1.00 at $56.90 by 0917 GMT, […]

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Oil Drops to Lowest Since ’09 With Stockpiles at Year-End Record

Oil fell to the lowest since 2009 in New York and London amid speculation that U.S. crude inventories will stay at the highest for the time of year in at least three decades. Futures dropped as much as 1.7 percent in New York. U.S. stockpiles are projected to remain at 387.2 million barrels last week, the highest for the period in data going back to 1982, a Bloomberg News survey shows before government statistics tomorrow. U.S. oil drillers idled the most rigs since 2012, Baker Hughes Inc. said on its website yesterday. Oil has slumped 46 percent this year, set for the biggest annual decline since 2008, as the highest U.S. production in more than three decades contributed to a global surplus estimated by Qatar at 2 million barrels a day. Saudi Arabia , which is steering the Organization of Petroleum Exporting Countries to resist cutting output, has said […]

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Natural Gas Falls Ahead of Inventory Report

By Nicole Friedman NEW YORK–Natural gas prices skidded Tuesday on expectations of continuing moderate demand for the heating fuel. Natural gas for February delivery fell 10.5 cents, or 3.3%, to $3.094 a million British thermal units on the New York Mercantile Exchange. Prices had surged 6% on Monday on expectations that frigid weather would boost demand for natural gas to heat homes and offices. But updated forecasts released Tuesday pointed to slightly warmer weather in the South, West and Pacific Northwest, according to private forecaster Commodity Weather Group LLC. Traders are also looking ahead to weekly inventory data on Wednesday, which is expected to show that natural gas inventories fell by less than typical levels for this time of year. Natural gas supplies fell to 11-year lows at the end of last winter as frigid weather fueled record-high demand. However, production exceeded expectations this summer, allowing producers to refill […]

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A Binding Global Agreement on Climate Change Will Remain Elusive

Heavy smog darkens the skies over Beijing in November 2014. (Kevin Frayer/Getty Images) Summary Organizing a significant, global legal agreement at the U.N. Climate Summit in Paris in late 2015 will not be easy. Every country has its own priorities; for some, imposing constraints on economic growth by limiting greenhouse gas emissions is a political nonstarter. For others, moving toward renewable energy sources and limiting certain environmental risks — such as smog or rising sea levels  — are top priorities. The 2014 U.N. Climate Summit in Lima, Peru, has helped to maintain some momentum for a climate agreement ahead of the Paris meeting, but if any deal is reached, it will be watered down and will lack concrete enforcement measures. Analysis The countries that participated in the 2011 U.N. Climate Summit in Durban, South Africa, signed a pact to work toward a legal agreement that would be signed at […]

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OPEC Resolve on Supply Promises No Calm for Oil Markets: Energy

Oil’s biggest price swings in three years are poised to continue as OPEC cedes no ground to competing suppliers. Oil traders’ expectations for future swings, known as implied volatility, surged since Saudi Arabia and fellow members of the Organization of Petroleum Exporting Countries decided on Nov. 27 to keep pumping crude despite a supply glut. That will mean prices fluctuating in the next several years by even more than the $58-a-barrel move in 2014, Bank of America Corp. says. “OPEC has always been there to lower volatility both on the upside and downside, but now they have less and less weight,” said Pierre Andurand , the London-based founder of Andurand Capital Management LLP, whose $350 million fund earned 18 percent in November from betting on lower Brent crude prices. “It means more volatility.” OPEC’s policy of testing rival producers’ tolerance for lower prices has sparked the search for a […]

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Basra leaders pushing for regional autonomy

Iraqi Prime Minister Haider al-Abadi (left) with Basra Gov. Majid al-Nasrawi (center) having tea on the street in Basra city on Dec. 29, 2014. Abadi is attempting to slow down the Basra campaign to create an autonomous region. (Source: Iraqi Prime Minister’s Media Office) Leaders in Basra are making a renewed push to form a region akin to the autonomous Kurdistan Regional Government (KRG) – a move that would reduce the central government’s power over the engine of Iraq’s economy.The campaign comes as Basrawis grow increasingly impatient with Baghdad, which has delayed implementing revenue sharing provisions for Basra while simultaneously making budget concessions to the KRG. Prime Minister Haider al-Abadi is taking the threat seriously enough that he met wi…

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Guard of Libyan Oil Ports Calls In Strikes on Islamist Militias

Libyan oil production has fallen below 300,000 barrels a day after Islamist militants shifted attacks to energy facilities including the country’s largest oil export terminal, said Energy Aspects Ltd. Output is the lowest since May and down at least 65 percent from a recent high of 850,000 barrels a day in October following the assault on the Es Sider terminal, according to the Energy Aspects estimate. Libya holds Africa ’s largest oil reserves. The fighting last week marked a turning point in the unrest that followed Muammar Qaddafi’s 42-year rule, according to Energy Aspects and Eurasia Group consultants. All the factions, including the Islamist militia coalition known as Libya Dawn, had committed to spare the energy industry that provides 80 percent of public spending. “The latest phase in fighting is a serious development as Libya Dawn is now trying to gain control of oil facilities, which up to now […]

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Wintershall shuts oil operations in Libya

German energy company Wintershall suspends operations in Libya amid escalation of fighting near oil export terminals. UPI/Mohamaad Hosam TRIPOLI, Libya, Dec. 30 (UPI) — With fighting ongoing in and around Libya oil export facilities, German energy company Wintershall said it had to suspend operations until further notice. "Wintershall traditionally transports oil produced in the Libyan desert to the export facilities in the coastal towns of Ras-Lanuf and Zuetina," the German company said in a Monday statement. "Wintershall does not deliver oil to Es Sider, where export facilities are on fire at this time after intense fighting." The U.N. Support Mission in Libya during the weekend called on all parties involved in the fighting to work together to end what it said was a cycle of violence spiraling quickly toward war. Oil storage depots at the Es Sider port caught fire during weekend fighting. Ahmed al-Mismari, a spokesman for the […]

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