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U.S. Oil Prices Drop After Inventory Data

Used oil barrels are stacked at a storage facility in Seattle. ENLARGE Photo: Reuters U.S. oil prices fell Wednesday as domestic crude stockpiles grew to a record, while lower-than-expected refinery activity boosted gasoline prices. Light, sweet crude for June delivery settled down 45 cents, or 0.8%, at $56.16 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 65 cents, or 1%, to $62.73 a barrel on ICE Futures Europe. U.S. crude-oil stockpiles last week rose by 5.3 million barrels to 489 million barrels, the highest in weekly data going back to 1982, the U.S. Energy Information Administration said Wednesday. In monthly data, which don’t exactly correspond with weekly data, inventories haven’t been this high since 1930. The amount of domestic crude oil in storage has increased for 15 straight weeks. “Everyone knows there’s a lot of crude around,” said Elaine Levin, president of energy brokerage […]

Posted On : Published By : Tom Whipple
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Oil Trims Gains After China’s Manufacturing Activity Slows

By Eric Yep Crude-oil futures trimmed early gains in Asian trade Thursday after data showed slower manufacturing activity in China and another weekly uptick in U.S. oil stockpiles. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $56.25 a barrel at 0322 GMT, up $0.09 in the Globex electronic session. June Brent crude on London’s ICE Futures exchange fell $0.01 to $62.72 a barrel. The preliminary HSBC China Manufacturing Purchasing Managers Index, a gauge of nationwide manufacturing activity, fell to a one-year low of 49.2 in April, compared with a final reading of 49.6 in March, HSBC said. "China’s flash PMI remains subdued, but not substantially weaker than over the past six months," Julian Evans-Pritchard, China Economist at Capital Economics said. But Mr. Evans-Pritchard also said underlying momentum has softened slightly going into the second quarter, and measures by China’s central bank […]

Posted On : Published By : Tom Whipple
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Oil prices edge lower on rising U.S. inventories

SINGAPORE (Reuters) – Oil prices fell slightly on Thursday as rising U.S. crude inventories due to robust shale production outweighed concerns over renewed air strikes in Yemen. Saudi-led coalition warplanes continued bombing Yemen on Wednesday despite an announcement by Riyadh a day earlier that it was ending its campaign of air strikes. While Yemen is not among the biggest producers in the Middle East, others in the region ship crude bound for Europe along the Gulf of Aden on Yemen’s southern coast and through the narrow straits of Bab el-Mandeb, between Yemen and Djibouti. Oil prices have risen as much as $10 this month due to concerns over potential supply disruption as well as signs of stronger global demand. Brent crude for June delivery was down 40 cents at $62.33 a barrel by 0724 GMT, after settling 65 cents higher. U.S. crude for June delivery was trading 30 cents […]

Posted On : Published By : Tom Whipple
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Yergin: Why the oil-price collapse changes everything

General Ideas It was not long ago that $100 per barrel oil was accepted as the new normal. China’s strong economic growth (and energy demand) would continue apace, and OPEC and Saudi Arabia would continue to play the traditional role as swing producer in support of oil prices. Events have proved otherwise. Oil markets have entered a new period. Now it is supply, not demand, which is the key the factor, making not-so-distant discussions of “peak oil” seem very far gone. China’s economy, while still growing, has slowed. And by leaving oil prices to the market, OPEC has effectively ceded the role of de facto swing producer to a country that hardly expected it—the United States. Markets never cease in their ability to upend current expectations and confound established thinking. That is certainly the case for the world of energy in a year that has seen the rapid creation […]

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Crude oil markets in limbo

Supply and demand dynamics may be shifting, leaving crude oil markets hanging in limbo for much of the trading week. File photo by Gary C. Caskey/UPI NEW YORK, April 22 (UPI) — Crude oil prices held their ground in the early stages of Wednesday’s trading session as markets tried to make sense of fluctuating supply and demand dynamics. Brent crude oil for May delivery gained a fraction of a percent from the previous close to trade at $62.61 per barrel. Brent for the week is relatively unchanged, but up more than 10 percent since the start of April. Recent market reports from the Organization of Petroleum Exporting Countries and the International Energy Agency said global demand for oil may be on the rise. Oil markets in late 2014 faltered as supply far outweighed demand as U.S. crude oil production soared. The weak market for crude oil, however, has forced […]

Posted On : Published By : Tom Whipple
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Could The Oil Market Be In For A Quick Rebound?

An RV park in Texas sits empty due to the downturn in oil jobs in the Eagle Ford shale area Associated Press A global oil glut led to the slump in oil prices over the last year. Yet some in the industry believe the turnaround could come much quicker than markets expect. Glencore chairman and Genel CEO Tony Hayward is particularly bullish. Though he thinks the oversupply in the market would likely take a year or two to work off, he predicts  that cuts to oil companies’ capital spending are laying the seeds for the next oil price bull market. “The supply chain in the U.S. is being decimated,” Mr. Hayward said. U.S. shale oil production, the source of the current battle among producers for market share, is expected to be flat this month and will decline next month for the first time in 4.5 years, he told the […]

Posted On : Published By : Tom Whipple
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Big Oil’s Latest Fear: A Price Shock After $114 Billion of Cuts

(Bloomberg) — As the oil patch grows accustomed to a new world of $50 to $60 crude, it’s now looking ahead to a different but equally daunting sort of cliff. Oil companies are warning there will be a price to pay — a much higher price — for all the cost cutting being done today to cope with the collapse in the crude market. Big projects intended to start pumping oil and natural gas 5 to 10 years from now are being canceled or put on hold as the price crash forced $114 billion in spending cuts on the industry. Energy giants from Exxon Mobil Corp. to Royal Dutch Shell say they’re taking a much more cautious approach to approving projects that cost billions and take years to complete. That’s setting the table for a future oil-price shock when a growing world population drives higher demand, said oil executives […]

Posted On : Published By : Tom Whipple
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OPEC, Tight Oil and Russia

The OPEC Monthly Oil Market Report  is out with OPEC crude only production numbers for March 2015. OPEC production was up 812,000 barrels per day. The increase came primarily from three countries: Saudi Arabia Saudi Arabia was up 347,000 barrels per day to 10,010,000 bpd. Iraq was up 319,000 bpd to 3,625,000 barrels per day. And Libya was up 165,000 bpd to 473,000 bpd. Iran Zero This is Iran zero based in order to show exactly how much sanctions have affected them. Iran was producing about 3.75 million bpd before sanctions. Then when sanctions the UN resolution for sanctions was passed in 2010, but before they were enforced, production began to drop, but very slightly. It was not until late 2011 and early 2012 before production began to fall rather steeply. Iranian crude only production is now around 2.75 million bpd, down about 1 million bpd, or 27 percent […]

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Baiji refinery still threatened

Iraqi pro-government forces fire a rocket during an operation to retake the Baiji oil refinery from Islamic State (IS) group on April 16, 2015. (MOHAMMED SAWAF/AFP/Getty Images) Recommend 7 people recommend this. Sign Up to see what your friends recommend. The Islamic State (IS) militant group still poses an immediate threat to the Baiji oil refinery, three days after Iraqi military leaders declared the facility had been secured.Several security officials in Baghdad and northern Iraq have given conflicting accounts of the extent to which the 36-square-kilometer refinery compound is under government control: some say it is secure; some say IS fighters are still inside; and others say there was another attack Wednesday.Even the most optimist…

Posted On : Published By : Tom Whipple
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Iraq Oil Output Growth Seen Slow by BP, Lukoil on Low Prices

Growth in Iraq’s oil production capacity may slow as lower crude prices hurt the ability of OPEC’s number two producer to pay international oil companies for work there, officials from BP Plc and OAO Lukoil said. Lukoil sees a “significant reduction” in the growth rate of Iraqi output capacity in 2016 and 2017 due to the decline in crude price, Gati Al-Jebouri, senior vice president at Lukoil Overseas, said in Abu Dhabi on Tuesday. BP’s ability to meet its production targets depends on the government approving the company’s proposed investment plans, said Michael Townshend, the company’s regional president for the Middle East. The slump in global crude prices over the past year has cut the Iraqi government’s income even as it battles Islamic extremists that have seized parts of the country. That risks sidetracking Iraq’s efforts, after decades of conflict and sanctions that choked investment, to boost crude production […]

Posted On : Published By : Tom Whipple