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Russian ruble tumbles after violent weekend in east Ukraine

MOSCOW (AP) — The Russian currency fell by more than 3 percent early Monday, after Western leaders threatened to punish Russia for escalated fighting in eastern Ukraine over the weekend. The ruble tumbled to 65.8 to the dollar from 63.7, one day after rocket fire left at least 30 civilians dead in the city of Mariupol. Western leaders announced that they would consider further punitive measures against Russia for what they say is its role in supporting the separatists, while Russian officials blamed Ukrainian forces for the attack. The Russian currency, buffeted by Western sanctions and plummeting oil prices, has already lost about half its value in the past year. While sanctions are set to expire this summer, U.S. President Barack Obama said Sunday that his country would work with its European partners to "ratchet up the pressure on Russia" after the latest violence. EU officials said they would […]

Posted On : Published By : Tom Whipple
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Oil Falls as New Saudi King Says Policies Won’t Change

Oil fell in New York on speculation the death of King Abdullah of Saudi Arabia won’t signal any change in strategy for the world’s largest crude exporter. Salman Bin Abdulaziz Al Saud, who succeeds Abdullah on the throne, said he would maintain his predecessor’s policies. The kingdom will not cut production to boost prices because other producers will fill the gap, Saudi Prince Alwaleed Bin Talal Al Saud said. U.S. crude inventories rose the most since 2001 last week, according to a government report. “There already has been a pretty well established succession plan so it’s not a big deal,” said Kyle Cooper, director of commodities research at IAF Advisors in Houston. “Supply has been very stout and demand’s not been what people had expected. It highlights the bearish sentiment in the market.” Oil has slumped about 36 percent since the Organization of Petroleum Exporting Countries’ Nov. 27 accord […]

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Oil Rebounds on Saudi King’s Death, China PMI Data

The death of Saudi King Abdullah bin Abdulaziz al Saud comes at a critical point for the kingdom’s oil policy. The WSJ’s Andrew Peaple examines what oil watchers are looking for. Crude-oil futures rebounded in Asian trade Friday after news of the death of Saudi Arabia’s King Abdullah and marginal improvement in China’s manufacturing data. On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at $47.10 a barrel, up $0.79 in midmorning trade on the Globex electronic session. Brent crude for March delivery on London’s ICE Futures exchange rose $0.84 to $49.36 a barrel. Saudi Arabia’s King Abdullah bin Abdulaziz al Saud died at the age of around 90, according to a royal court statement early Friday morning. The statement also said that Abdullah’s half-brother, Crown Prince Salman, who is 79 years old, was declared king and Prince Muqrin, 69, became crown prince. […]

Posted On : Published By : Tom Whipple
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Oil Falls as New Saudi King Says Policies Won’t Change

Oil fell in New York on speculation the death of King Abdullah of Saudi Arabia won’t signal any change in strategy for the world’s largest crude exporter. Salman Bin Abdulaziz Al Saud, who succeeds Abdullah on the throne, said he would maintain his predecessor’s policies. The kingdom will not cut production to boost prices because other producers will fill the gap, Saudi Prince Alwaleed Bin Talal Al Saud said. U.S. crude inventories rose the most since 2001 last week, according to a government report. “There already has been a pretty well established succession plan so it’s not a big deal,” said Kyle Cooper, director of commodities research at IAF Advisors in Houston. “Supply has been very stout and demand’s not been what people had expected. It highlights the bearish sentiment in the market.” Oil has slumped about 36 percent since the Organization of Petroleum Exporting Countries’ Nov. 27 accord […]

Posted On : Published By : Tom Whipple
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Oil Prices Won’t Return to $100: Saudi Prince Alwaleed

Oil won’t return to $100 a barrel and global oil supply will be affected by the price slump, billionaire Saudi Prince Alwaleed Bin Talal Al Saud said. Crude at $100 was an “aberration,” Alwaleed said in an interview with Bloomberg TV Friday. Saudi Arabia, the biggest OPEC producer, won’t reduce production to boost prices because other countries will “fill that gap,” he said. Oil has slumped about 36 percent since the Organization of Petroleum Exporting Countries’ Nov. 27 accord to maintain production at 30 million barrels a day amid a glut caused in part by the fastest U.S. output in three decades. King Salman, who became the ruler after the death of King Abdullah early on Friday, will continue with his predecessor’s policy, Alwaleed said. “If we reduce our production some other countries will fill that gap,” he said. Saudi Arabia isn’t happy with low prices, “but it’s something […]

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Plunging Oil Prices Both Underpin and Threaten U.S. Policy Objectives

Dow Jones Newswires By Jay Solomon DAVOS, Switzerland–Plunging global oil prices are both underpinning and threatening the foreign policy objectives of the Obama administration and its allies, who face what leaders assembled here described as a dangerous convergence of international crises. Fueling the uncertainty, said U.S., Arab and European officials meeting at the annual World Economic Forum, was the death Thursday of Saudi Arabia’s monarch, King Abdullah–a central player in global energy policy and the fight against international terrorism. "King Abdullah had a long history of being a brave partner with us and with the world not just in counterterrorism, but in his work on interfaith understanding," U.S. Secretary of State John Kerry told the conference. "We will miss his wisdom." Mr. Kerry rallied the world’s business and political elite in Davos to marshal their resources to fight Islamic State and other terrorist organizations that he said posed the […]

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IMF: Most oil exporters facing deficits

Most oil exporting countries will run fiscal deficits this year if the crude price averages $57/bbl as currently indicated by markets, according to the International Monetary Fund . The main exception is Kuwait, IMF said in an update to its Regional Economic Outlook, which projects fiscal balances as percentages of each country’s gross domestic product. Kuwait’s fiscal surplus this year will fall to 11.1% of GDP from 21.9% last year, according to IMF. The only other oil exporters not expected to show deficits this year in IMF’s analysis are Turkmenistan and Uzbekistan. Among major oil exporters, Saudi Arabia faces a deficit of 10.1% of GDP in 2015 after a surplus of 1.1% in 2014. For other major exporters, IMF projects deficits this year relative to GDP of 3.7% for the United Arab Emirates, 3.4% for Iran, 6.1% for Iraq, 37.1% for Libya, 1.5% for Qatar, 15.1% for Algeria, 14.5% […]

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Low oil prices bruising MENA, IMF says

IMF finds oil producers in the Middle East and North Africa feeling economic pain from weak crude oil market. Photo by Christopher Halloran/Shutterstock Revenue losses for oil producers in the Middle East and North Africa could reach $300 billion because of price declines, the International Monetary Fund said. Oil prices are down around 50 percent from the June 2014 highs. The decline means a source of de facto stimulus for countries that rely in oil imports, but is problematic for those that rely on oil exports for most of their government revenues . Masood Ahmed, director of Middle East programs at the IMF, said Middle East and North African oil producers are expected to be out about $300 billion, or 21 percent of their collective gross domestic product, because of the steep decline in oil prices. In the short term, most oil producers will draw on financial reserves to […]

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Dueling Oil Benchmarks Converge in Their Price, but Diverge in Their Stories

ENLARGE The economic ripples caused by the free-falling price of oil in recent months have drawn wider public attention to the daily cost of a barrel of crude. But the figures traditionally used to convey global oil prices—the West Texas Intermediate and Brent crude benchmarks—measure different things and don’t always line up. Today, for example, a barrel of oil costs $45 and change by WTI and a few dollars more by Brent . At times, the difference between the two has topped $20. Traders and economists are familiar with the reasons why WTI and Brent differ. For those newly curious about what falling oil prices mean, it’s worth learning what the benchmarks reveal, and how they’ve changed over time. The basic reason why the numbers diverge is because they are snapshots of oil prices in different places: WTI reflects the U.S. and Brent the North Sea in Europe. At […]

Posted On : Published By : Tom Whipple
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OPEC Crude Oil Production, What’s Next?

The latest  OPEC Monthly Oil Market Report  is out with OPEC production data for. The data is  “Crude Only”  and does not reflect condensate production. Also the charts, except for Libya, are not zero based. I chose to amplify the change rather than the total. All Data is in thousand barrels per day with the last data point December 2014. OPEC 12 production has averaged slightly above or below 30 million barrels per day for about two years now and there is little chance it will go anywhere very fast. But what is obvious from the above chart is there has been no surge in OPEC oil production. OPEC’s December production f 30,204,000 barrels per day is still more than 1.4 million barrels per day below the peaks of 2008 and 2012.  Algeria is struggling to keep production relatively flat.  Angola is holding its own… so far. Ecuador increased […]

Posted On : Published By : Tom Whipple