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Oil Falls on Investor Caution Over Recent Rally

Crude-oil futures fell in Asian trade Tuesday, reversing gains made in the previous trading session, on uncertainty about the rebound in prices and weak Chinese inflation data. On the New York Mercantile Exchange, light, sweet crude futures for delivery in March recently traded at $52.16 a barrel, down $0.70 in the Globex electronic session. Brent crude for March delivery on London’s ICE futures exchange fell $0.71 to $57.63 a barrel. Oil-market participants were assessing a range of mixed indicators about global oil-supply levels. On Monday, monthly reports from both the Organization of the Petroleum Exporting Countries and the International Energy Agency were bullish. OPEC reduced its non-OPEC supply growth estimates, while the IEA said that a price recovery seemed “inevitable” with the oil glut starting to ease as soon as the second half of the year. Oil prices have fallen more than 50% since June on surging output. Both […]

Posted On : Published By : Tom Whipple
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Forecasts Of Oil Price Bottom And Recovery

For oil price forecasters, it is all but mandatory to start with self-deprecating humor, because the track record is so bad. Late 2013, surveys showed predictions for 2014 of $104 per barrel for Brent. Citi’s forecast of a significant drop raised eyebrows, in fact. Now, one reporter noted that expert forecasts range from $30-200, which is both true and funny, but doesn’t capture the actual expectations, primarily because of the time differential. But once prices were clearly falling, there was a rush to be the most bearish. (I suggested back in December that a floor seemed to have been reached at about $50, although at other points on the way down I believed OPEC would manage to stabilize prices at those levels.) A few have suggested that a price of $20 per barrel might be reached, albeit only briefly, while others have picked a range of $40-50, although mostly […]

Posted On : Published By : ASPO-USA
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Oil-Price Rebound Predicted

ENLARGE OPEC says demand for its crude oil will rise this year. Early last month, men worked in oil fields in Bahrain. Photo: Associated Press In the latest sign that the seven-month selloff in crude-oil prices may be nearing a bottom, an energy watchdog said that a recovery seems “inevitable” and the glut that has driven down prices by more than 50% since June could start to ease as soon as the second half. A wave of spending cuts by oil producers and a sharp decline in the number of rigs drilling for crude in the U.S. likely will slow the nation’s oil-output growth, spurring a rebound in prices, the International Energy Agency said in a report released Tuesday U.K. time. The benchmark U.S. oil price rose 2.3% to $52.86 a barrel on Monday and is up 19% from a nearly six-year low hit last month. The IEA, which […]

Posted On : Published By : Tom Whipple
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OPEC, IEA Reports Hint at a Win for Cartel — 2nd Update

By Sarah Kent And Benoît Faucon In the latest sign that the seven-month selloff in crude-oil prices may be nearing a bottom, an energy watchdog said that a recovery seems "inevitable" and the glut that has driven down prices by more than 50% since June could start to ease as soon as the second half. A wave of spending cuts by oil producers and a sharp decline in the number of rigs drilling for crude in the U.S. likely will slow the nation’s oil-output growth, spurring a rebound in prices, the International Energy Agency said in a report released Tuesday U.K. time. The benchmark U.S. oil price rose 2.3% to $52.86 a barrel on Monday and is up 19% from a nearly six-year low hit last month. The IEA, which coordinates energy policy among industrialized countries, is adding its voice to the chorus of experts who say that the […]

Posted On : Published By : Tom Whipple
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IEA says scope of US shale oil output fall will be limited

Pump jacks are seen in the Midway Sunset oilfield, California, April 29, 2013. The nearby vast Monterey shale formation is estimated by the U.S. Energy Information Administration to hold 15 billion barrels of technically recoverable oil, or four times that of the Bakken formation centered on North Dakota. Most of that oil is not economically retrievable except by hydraulic fracturing, or fracking, a production-boosting technique in which large amounts of water, sand and chemicals are injected into shale formations to force hydrocarbon fuels to the surface. Picture taken April 29, 2013. REUTERS/Lucy Nicholson (UNITED STATES – Tags: ENERGY BUSINESS) – RTXZ5IM The dramatic fall in the oil price will lead to a swift pullback in US shale oil production, although the scale of the output decline will be “limited in scope”, the world’s leading energy forecaster said on Tuesday. The supply build-up hanging over the oil market will grind […]

Posted On : Published By : Tom Whipple