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Oil ETF investors, not just OPEC, hold sway over crude market

NEW YORK (Reuters) – Tumult in Libya, U.S. rig counts, production plans of the oil exporting cartel and a pact on nuclear relations with Iran can all affect crude supply and demand, but oil traders have kept an equally close watch on retail investors in recent weeks. Those investors and hedge funds, betting on a reversal of oil’s long rout, poured billions of dollars into exchange traded products at the tail end of the slide last year, providing unexpected support that helped prices stabilize. Even as concerns about U.S. storage capacity triggered renewed slide over the past week investors have stuck with the view that a bottom might be in sight, pouring more money into financial products backed by oil futures. There is a risk, however, that their bets could unravel and send oil prices tumbling again because of a market constellation where spot prices may head lower, but […]

Posted On : Published By : Tom Whipple
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Natural Gas Futures Sell Off as Spring Appears on Horizon

Dow Jones Newswires By Christian Berthelsen and Tim Puko Natural gas futures slipped Monday as forecasts for warmer temperatures were expected to arrive over most of the U.S. in the coming weeks, dimming expectations for late-season heating demand as winter fades. The front-month April natural gas contract lost 5.3 cents, or 1.9%, to settle at $2.733 a million British thermal units, its third straight losing session. Though the market has recovered off recent lows set last month, analysts and traders say it remains mired in booming supply growth and sluggish demand with the approach of warm weather months and will likely be stuck in low gear for months to come. "Natural gas prices will likely remain discounted for much of the year," BNP Paribas said in a note. Though robust production from domestic shale formations has led to rising supplies, seasonally warmer weather over much of the U.S. has […]

Posted On : Published By : Tom Whipple
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Oil prices falter as OPEC stands firm

U.S. crude oil prices still near 2015 floor as markets continue to favor the supply side. Photo by John Angelillo/UPI The price for Brent crude oil, the global benchmark, was volatile early in the Monday trading day, dropping off about a half a percent before the opening bell on Wall Street, but posting small gains at the start of the trading day in the United States. Brent was trading at about $55 per barrel for the May contract. Prices recovered from near the $45 per barrel mark mid-January to above $60 per barrel, but have since pulled back to the mid-$50s for much of the month. Mohammend al-Madi, the OPEC governor for Saudi Arabia, said during an energy conference in Riyadh it would be "difficult" for current markets to return to a scenario where oil priced about $100 per barrel was normal. Prices were hammered last week after the […]

Posted On : Published By : Tom Whipple
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Eight killed in air strike as Libya government aims to recapture capital

TRIPOLI/BENGHAZI (Reuters) – Eight civilians were killed in an air strike near Tripoli on Monday, the U.S. ambassador said, as Libya’s internationally recognized government pressed on with an assault to recapture the capital it abandoned to a rival faction last year. Four years after NATO warplanes helped dislodge dictator Muammar Gaddafi, Libya has descended into chaos, with two rival governments fighting for control, both fielding armies of former rebel fighters and air forces that bomb rival territory. The internationally recognized government has been based in the country’s east since being driven out of the capital last August by an alliance of armed groups called Libya’s Dawn, which has set up its own rival government and parliament. On Friday, the eastern-based government announced an assault to recapture Tripoli, even as the sides are both attending U.N.-hosted peace talks in Morocco. Western countries fear a total collapse of central authority in […]

Posted On : Published By : Tom Whipple
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Israeli Officials Talk With French to Try to Influence Iran Nuclear Deal

PARIS — Fearing that the Obama administration may not take what they consider to be a tough enough stand in the next round of negotiations on a nuclear deal with Iran , senior Israeli officials held talks in Paris on Monday with senior members of the French government and will go to London on Tuesday in an attempt to influence the final terms of any agreement. France and Britain are among the six world powers — along with the United States, Russia, China and Germany — that are negotiating with Iran on an accord that would require Tehran to submit to verifiable limitations on its nuclear program in exchange for the lifting of United Nations sanctions, as well as separate sets of sanctions imposed by the United States and the European Union. Negotiations are scheduled to resume later this week in Lausanne, Switzerland, with negotiators working against a self-imposed […]

Posted On : Published By : Tom Whipple
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JODI, Iraqi Reserves and Ghawar

The JODI  data just came in with production numbers for January 2015. I really don’t like JODI all that much but they are about two and one half months ahead of the EIA with their world data. And their data is incomplete so I have to substitute the EIA data for the countries that do not report to JODI. So the data I use is about 95% JODI and about 5% EIA. The last data point is January 2015 and is in thousand barrels per day. JODI World We peaked in December at 75,342,000 bpd but dropped 356,000 bpd in January to 74,986 bpd. JODI has the US at 9,226,000 in December but dropping 34,000 bpd in January to 9,192,000 bpd. The US did not start its grand ascent until the summer of  2011 when the shale oil boom exploded. JODI Less USA Without that shale surge in the […]

Posted On : Published By : Tom Whipple
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Saudis claw back global market share with oil output push

LONDON (Reuters) – When Saudi Arabia’s oil minister Ali al-Naimi says he does not want the kingdom to lose market share anymore, he really means it. Iraq, Venezuela, Russia and Kazakhstan all saw their oil partially replaced by Saudi crude in Asia, the United States and even Europe, with its lackluster demand, as traders said the kingdom offered customers more oil, and more cheaply. Supplies from OPEC’s leading producer are notoriously difficult to track as they reach customers under confidential direct deals rather than via the spot market. But an indirect confirmation of rising deliveries came on Sunday from Naimi himself. The veteran minister, who carefully chooses his words and figures in his speeches, said the kingdom was now pumping around 10 million barrels per day – near an all-time high and some 350,000 bpd above the figure Saudi Arabia gave to OPEC for its February output. And to […]

Posted On : Published By : Tom Whipple
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East’s bid to control Libya oil wealth likely to fail

CAIRO (Reuters) – Libya’s official government, operating out of hotels in the east after being driven from the capital, is unlikely to succeed in plans announced last week to divert the country’s oil export income away from Tripoli. Control over oil is at the heart of a struggle between two rival governments who are fighting for territory in the North African OPEC state four years after the ousting of Muammar Gaddafi. Both sides field armies of fighters whose salaries are paid with export revenues collected by the National Oil Company (NOC), which continues to operate out of Tripoli and sell oil abroad even though the capital is in the hands of a faction whose legitimacy is not recognized by the international buyers. Last week, the internationally recognized government, which runs an eastern rump state since fleeing the capital last year, said it wanted all oil exports to be paid […]

Posted On : Published By : Tom Whipple
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Iran’s Hard-Liners Show Restraint on Nuclear Talks With U.S.

Photo Ayatollah Ali Khamenei, in a speech Saturday, said Iran’s establishment favored negotiations over the country’s nuclear program. Credit Office of the Supreme Leader, via European Pressphoto Agency TEHRAN — A coterie of Iran ’s hard-line Shiite Muslim clerics and Revolutionary Guards commanders is usually vocal on the subject of the Iranian nuclear program , loudly proclaiming the country’s right to pursue its interests and angrily denouncing the United States. But as the United States and Iran prepare to restart nuclear talks this week, the hard-liners have been keeping a low profile. “They have been remarkably quiet,” said Nader Karimi Joni, a former member of the Revolutionary Guards and the Basij, a volunteer paramilitary group. Their silence is a result of state policies intended by Iran’s supreme leader, Ayatollah Ali Khamenei , to seriously try to find a solution through negotiations. Ayatollah Khamenei has largely supported the nuclear talks […]

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Iran expecting economic growth

Iranian budget planners place less emphasis on oil for new year that began March 21. File Photo by Maryam Rahmanian/UPI Iran’s economy emerged from recession in December, and Finance Minister Ali Tayebnia said the momentum should continue into the new year, which for Iran began Saturday. "We predict a better situation in economy for the upcoming year," he said. Sanctions imposed on Iran’s energy sector curb the country’s ability to generate revenue from oil and gas sales. The Central Bank of Iran, however, said a nine-month growth rate of 3.6 percent represents an increase of $54 billion for the nation’s economy. When he wrapped up his mission to Iran last month, Martin Cerisola, assistant regional director for the International Monetary Fund, warned "the sharp drop in global oil prices and an uncertain external environment" presents significant challenges to Iran’s economic future. Iranian President Hassan Rouhani said during weekend celebrations […]

Posted On : Published By : Tom Whipple