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Oil Trades Sideways; U.S. Dollar, Oversupply Cap Gains

By Eric Yep Crude-oil futures traded sideways in Asia Friday as oil markets struggled to recover from this week’s losses on the back of a strong U.S. dollar and persistent oversupply concerns. On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $47.14 a barrel at 0340 GMT, up $0.09 in the Globex electronic session. April Brent crude on London’s ICE Futures exchange rose $0.17 to $57.25 a barrel. U.S. oil prices fell to a six-week low in the last session, and Brent crude is also hovering at the lower end of its trading range. The U.S. dollar had posted strong gains this week, with the euro falling to a nearly 12-year low versus the greenback helped by the European Central Bank’s bond purchases. The dollar softened a bit yesterday after weaker economic data from the U.S. but remains strong, putting pressure on […]

Posted On : Published By : Tom Whipple
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U.S. Oil Prices Fall to Six-Week Low

U.S. oil prices fell to a six-week low Thursday as swelling crude inventories weighed on the market. Light, sweet oil for April delivery slid $1.12, or 2.3%, to $47.05 a barrel on the New York Mercantile Exchange, the lowest settlement since Jan. 29. The U.S. oil benchmark is down 56% from its mid-June high. Growing global oil output and lackluster demand sent prices plunging in late 2014. U.S. crude stockpiles are at their highest in about 80 years, and production continues to grow, according to the U.S. Energy Information Administration. Data service Genscape Inc., which tracks storage levels in Cushing, Okla., reported to its clients Thursday that inventories in Cushing rose by 2.2 million barrels between March 6 and March 10, according to two market participants. Prices turned lower on the news. Cushing is the delivery point for the benchmark U.S. oil-futures contract, so prices are sensitive to supply […]

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Brent extends rally as EU industrial production falters

European industrial activity on life support, suggesting a lack of a demand economy persisting in the low oil price era. UPI/Debbie Hill Brent prices increased for the second straight day Thursday, gaining 1.3 percent from the previous close to sell at $58.32 per barrel for the April contract. Brent in mid-January sold for less than $45 per barrel, but has been unable to hold above the $60 mark for any extended period so far this year. Oil prices are trading at a discount from their June 2014 high above $100 per barrel as markets shift away from the demand side on continued concerns about the health of the global economy. Eurostat, the statistics office for the European Union, said Thursday there were still lingering problems for the regional economy. Industrial production in December grew by just under one-half percent but dropped 0.1 percent in January. Year-on-year, industrial production grew […]

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Natural Gas Prices Lower After Larger-than-Expected Stockpile Drain

By Timothy Puko Natural gas futures fell Thursday after data showing a larger-than-expected draw from stockpiles that set a new record for any week in March. The U.S. Energy Information Administration said storage levels fell by 198 billion cubic feet in the week ended March 6. That is seven bcf more than the 191-bcf consensus average of 22 forecasters surveyed by The Wall Street Journal. The severe cold covering most of the country last week led to enough heating demand to cause the largest drain on record in EIA statistics dating through 1994. The previous record came last year, when 195 bcf were drained from stockpiles in the week ended March 7. Half of U.S. homes use natural gas for heating fuel, so single-digit temperatures like those that hit major markets across the country last week are big drivers for demand. The EIA update is widely considered one of […]

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Oil price decline leads to lower tax revenues in top oil-producing states

The decline in spot oil prices in the last half of 2014 and first month of 2015 has reduced oil and natural gas production tax revenues in some of the largest oil- and natural gas-producing states. Texas, North Dakota, Alaska, and Oklahoma are four of the five top oil- and natural gas-producing states, and they derive a significant share of their unrestricted operating revenues from taxes on oil and natural gas production. Although California produces more oil than both Alaska and Oklahoma, its economy is much larger, making it relatively less affected by changes in oil and natural gas prices and production. Texas collected $583 million in tax receipts from oil and natural gas production in August 2014, but tax revenue declined by 40% to $352 million in January 2015, based on data from the state’s comptroller . EIA estimates crude oil and lease condensate production in Texas also […]

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Germany Warns GOP Letter Affects Iran Talks

ENLARGE German Foreign Minister Frank-Walter Steinmeier said during a visit to Washington that the letter sent by 47 Republican senators to Iran’s leaders is affecting talks over the country’s nuclear program. Photo: Reuters BERLIN—German Foreign Minister Frank-Walter Steinmeier said Thursday a letter sent by 47 Republican senators to Iran’s leaders has complicated talks over Iran’s nuclear program by allowing Tehran to claim the West is not negotiating in good faith. Mr. Steinmeier, whose country is among the group of six nations negotiating with Iran, said the March 9 letter warning that a nuclear deal may not last beyond the Obama Administration injected a new element of distrust into the already difficult talks. “It would have been difficult enough without the letter of the 47,” Mr. Steinmeier said in an appearance at the Center for Strategic and International Studies think tank in Washington. “Now it has become somewhat more difficult.” […]

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Ayatollah Khamenei Derides Republicans’ Letter on Iran Nuclear Talks

TEHRAN — Iran ’s highest leader issued a sharp response Thursday to a letter to the country’s leadership by Republican lawmakers, deriding it as an indication that Washington is “disintegrating” from within. Ayatollah Ali Khamenei , Iran’s supreme leader, said the letter warning that any nuclear deal could be scrapped by a new president was “a sign of a decline in political ethics and the destruction of the American establishment from within.” The statement was posted on his website. Mr. Khamenei, who will have the final say in Iran over a nuclear deal, characterized the open letter written by 47 Republican senators on Monday as a reflection of Washington’s decadence. “All countries, according to the international norms, remain faithful to their commitments even after their governments change, but the American senators are officially announcing that at the end of the term of their current government, their commitments will be […]

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Oil deal imperiled by political discord

KRG Minister of Natural Resources Ashti Hawrami during a speech at the 2015 Sulaimani Forum on March 11, 2015, as Iraqi Oil Minister Adil Abd al-Mahdi looks on. (Source: American University of Iraq – Sulaimani) The fragile oil export and revenue sharing deal between Baghdad and Erbil appears to be in renewed danger of collapsing after KRG Minister of Natural Resources Ashti Hawrami publicly accused his federal counterpart of reneging on their agreement.“Why should we only have received $208 million when we are owed $3.6 billion?” Hawrami said.Hawrami aired his grievances Wednesday during a panel discussion at a conference in Sulaimaniya, sitting next to federal Oil Minister Adil Abd al-Mah…

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Spending cut planned for Kurdish oil operations

Oryx Petroleum cuts spending for Kurdish oil operations, but expects production to hold steady. UPI/Ayad Rasheed The bulk of spending for 2015 will target oil operations in northern Iraq and, while spending is reduced, output should be static, Oryx Petroleum announced. Oryx, a Canadian company focused on operations in the Kurdish north of Iraq, said it was planning 2015 capital spending of $140 million, a 60 percent reduction from the budget set in November. Oryx Chief Executive Officer Michael Ebsary said low oil prices and "disruptions to market access" in the semiautonomous region led in part to the spending revision . "Accordingly, we have moderated our capital expenditure plans to focus on our core development assets to enable us to achieve our targeted near term production growth," he said in a statement. "We are also reducing costs throughout the organization in order to increase our overall efficiency." The company […]

Posted On : Published By : Tom Whipple