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Oil Prices Slump as Inventories Rise Near 80-Year Highs

Oil prices tumbled 8.7% on Wednesday, the largest one-day drop in two months, after data showed that U.S. crude supplies had climbed to their highest level in about 80 years. U.S. crude oil for March delivery sank $4.60, or 8.7%, to $48.45 a barrel on the New York Mercantile Exchange, the largest one-day decline since Nov. 28, 2014. Brent, the global benchmark, declined $3.75, or 6.5%, to $54.16 a barrel on ICE Futures Europe. U.S. crude-oil supplies rose by 6.3 million barrels in the week ended Jan. 30 to 413.1 million barrels , the U.S. Energy Information Administration said Wednesday. Analysts surveyed by The Wall Street Journal had expected a gain of 3.7 million barrels. Stockpiles are at the highest level ever in EIA weekly data going back to August 1982. In monthly data, which don’t line up exactly with the weekly data, inventories haven’t been this high since […]

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Natural Gas Hits Multi-Year Low Ahead of Inventory Data

By Timothy Puko and Nicole Friedman Natural-gas prices slid to a more-than-two-year low Wednesday ahead of weekly inventory data, which is expected to show that inventories shrank last week by a smaller amount than is typical for this time of year. Natural gas for March delivery settled down 9.2 cents, or 3.3%, at $2.662 a million British thermal units on the New York Mercantile Exchange, the lowest settlement price since Aug. 29, 2012. The market has tumbled in five of the past six sessions, bringing a quick end to a rally that took off after weather updates at noon on Tuesday. Half of U.S. homes use natural gas for heat, and severe winter cold can push demand for gas to record levels. But production has been so strong in the past year that consumption has failed to prop up prices. Analysts and traders expect the U.S. Energy Information Administration […]

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DNO Says Loss Widens on Price Impairment as Kurdish Output Jumps

(Bloomberg) — DNO ASA, a Norwegian oil producer focused on northern Iraq, said its fourth-quarter loss more than doubled after higher output from the autonomous Kurdistan region failed to counter impairments due to lower crude prices. A net loss of $252.5 million came after an impairment of the same amount on oil and gas assets, the Oslo-based company said in a statement on Thursday. That compared with a $98.1 million loss a year earlier, and missed the average estimate for a $4.8 million loss of nine analysts surveyed by Bloomberg. “Our focus in 2015 is to align our spending with our earning,” Executive Chairman Bijan Mossavar-Rahmani said in the statement. “We are targeting operating efficiencies, cutting back on discretionary expenditures and high-grading our portfolio.” The loss comes as DNO continues to build up production, especially from its flagship Tawke field, after the semi-autonomous Kurdish and central Iraqi governments reached […]

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Most Volatile Oil Market Since ’09 Seen Persisting on Oversupply

(Bloomberg) — The most volatile oil market in almost six years is forecast to continue seesawing as a global glut that drove prices lower last year persists for at least the first half of 2015. The CBOE Crude Oil Volatility Index, which measures price fluctuations using options of the U.S. Oil Fund, ended at 62.73 on Wednesday, the highest level since April 2009. Another measure shows West Texas Intermediate, the benchmark U.S. crude contract, is fluctuating the most in almost 3 1/2 years. “There is a clash between future expectations of where oil may end up in terms of fundamentals and what we’re seeing on the ground right now,” Daniel Hynes, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Sydney, said by phone. “That’s why you’re getting that whipsaw affect in prices at the moment. This is something that we’re going to have to […]

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Deloitte studies oil supply growth for 2015-16

HOUSTON, Feb. 4 02/04/2015 A Deloitte MarketPoint analysis suggested large-field projects, each producing more than 25,000 b/d, could bring on 1.835 million b/d in oil supply this year of which 635,000 b/d would be from members of the Organization of Petroleum Exporting Countries and the rest from non-OPEC productions. In 2014, new non-OPEC large-field projects collectively brought on 2.3 million b/d in new supply. These efforts spanned diverse geographies and production methods, ranging from Brazil’s offshore projects in the Roncador, Parque, Iracema, and Sapinhoa fields to Mars B in the Gulf of Mexico, and to Russian and Canadian oil sands projects. Notably, these 2014 supply additions excluded the numerous US shale oil fields being developed. OPEC also contributed to the expanding large-field supply picture, adding another 1.4 million b/d of new oil production capacity in 2014, Deloitte said. Researchers forecast that large-field projects to bring on a total 1.835 […]

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Kemp: Does Oil’s Rally Put Rebalancing At Risk?

The decline, although larger than anticipated, was not really news. The number of active rigs had been falling steadily for the previous seven weeks, so the trend was well understood. The size of the move was wholly unrelated to the significance of the information that triggered it. Instead, the rig news sparked a classic short-covering rally, as hedge funds with significant positions betting on a further price fall found themselves losing money as oil rose, and rushed to reduce their exposure, pushing prices up even more. "Is the falling U.S. oil rig count really driving an oil price turnaround?" analysts at Citigroup wondered in a research note of the same title published on Wednesday. Productivity gains and more careful selection of drilling targets will reduce the impact of rig cuts, they predicted. But markets are not precision weighing machines. They are voting machines – subject to whims, crazes and […]

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Citi: The oil (and gas) plunge isn’t over yet

The oil crash — and cheap gas bonanza — probably isn’t over yet. For a few days, oil was showing real signs of life following last year’s meltdown. Prices spiked above $54 a barrel on Tuesday after oil’s best three-day performance in six years. Drivers may have even noticed a little pop in gas prices. The national average price of gasoline jumped nearly five cents a gallon on Wednesday, according to AAA. The oil bounce also caused stock prices to surge on Tuesday. But the rebound is already looking like it may be short lived. Oil plummeted nearly 9% on Wednesday to settle at $48.45 a barrel. That’s the commodity’s worst day since November 28 when OPEC rattled the market by deciding to keep production steady. What’s going on? It all goes back to simple supply and demand. The world is awash in oil — more than it needs, […]

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Iraq financial crisis prompts emergency action

Iraqi Prime Minister Haider al-Abadi addresses the session ‘A Vision for Iraq’ at the World Economic Forum in Davos, Switzerland, on Jan. 23, 2015. (RUBEN SPRICH/Reuters) Recommend 4 people recommend this. Sign Up to see what your friends recommend. Iraq is pursuing a series of emergency measures to finance its 2015 budget, following years of poor governance and unchecked spending that led to a financial crisis now made worse by low oil prices and high military spending demands.The government is planning to indirectly borrow from the country’s foreign currency reserves, in a plan described Wednesday in Baghdad by Central Bank Governor Ali al-Alaq. The move could create a risk to the credibility of the Central Bank of Iraq (CBI) and the …

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12 Are Killed in Attack on Libyan Oil Field

TRIPOLI, Libya — Attackers killed 12 people, among them two Filipinos and two Ghanaians, after storming a remote Libyan oil field, a Libyan official said Wednesday. “Most were beheaded or killed by gunfire,” said Abdelhakim Maazab, commander of a security force in charge of protecting the Mabruk oil field, about 100 miles south of the Mediterranean city of Surt. Mr. Maazab added that his men had regained control of the field, which used to pump 40,000 barrels a day but is not operating now. The French energy company Total has a stake in the site, but it is contracted to a Libyan company. The Filipinos worked for an Italian company, Sogepi S.r.l., according to a statement earlier Wednesday by the Philippines Department of Foreign Affairs. It reported three of its citizens as among seven foreigners who had been “abducted by unidentified armed men.” With Libya in turmoil, details of […]

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Iran’s President Accuses West of Distorting Atomic Plans

Portraying himself to be as tough as his domestic critics, President Hassan Rouhani of Iran criticized nuclear-armed powers on Wednesday, singling out the United States and Israel for what he described as false and hypocritical warnings about Iranian atomic ambitions. In a speech, Mr. Rouhani repeated his government’s claim that it neither covets nuclear weapons nor aspires to have them. That is a central issue in the prolonged international negotiations over Iranian nuclear activities, which Iran asserts are for purely peaceful purposes. “They tell us, ‘We don’t want Iran to make atomic bombs’ — you who have made atomic bombs,” Mr. Rouhani said sarcastically. He also asserted that the nuclear weapons amassed by the United States and, he said, possessed by Israel, have done little to ease their worries about vulnerability to attack. “Have you managed to bring about security for yourselves with atomic bombs?,” Mr. Rouhani asked rhetorically […]

Posted On : Published By : Tom Whipple