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Volatile Oil Market May Hurt Global Economy

ENLARGE Wind turbine blades are assembled on the ground before being placed on top of a tower at a wind farm in Uruguay. A new report Tuesday warns oil price volatility threatens the global economy and urges policy makers to support renewable energy. Photo: Bloomberg News LONDON—The dramatic fall in oil prices since last summer has been a boon for global consumers taking advantage of cheaper fuel and lower utility bills. But the price rout has increased the volatility of the crude market, which could end up hurting the global economy, a new report warns. Volatile energy prices can lead to delays in business investment and slower job growth, according to the report co-authored by Nicholas Stern, former U.K. Treasury official and a prominent climate economist. The “Oil Prices and the New Climate Economy” report will be published later Tuesday by the Global Commission on the Economy and Climate, […]

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U.S. set to get more accurate oil production data: Kemp

LONDON "The data must be wrong," according to veteran oil analyst Phil Verleger, who wrote in a blistering note that the Energy Information Administration is probably overestimating U.S. oil production by 1.6 million barrels per day. Verleger argues substantially lower U.S. production is the most likely explanation for why global stocks are not rising as fast as predicted and discounts for storing barrels are narrowing ("Notes at the margin" May 11). Other reasons why the stock build is smaller and the forward price structure is firmer could be stronger demand and/or more oil stockpiling in developing countries. But if Verleger is correct, U.S. production would be only 7.7 million barrels per day (bpd) compared with the 9.3 million bpd reported in the agency’s most recent weekly and monthly statistics. The global oil market would be nearly balanced, since most estimates put the global supply surplus at between 1.5 and […]

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EIA forecasts higher global oil consumption growth

HOUSTON, May 12 In its most recent Short-Term Energy Outlook (STEO), the US Energy Information Administration expects global oil consumption to rise by 1.2 million b/d in 2015 and by 1.3 million b/d in 2016, upward from last month’s STEO by an average of 200,000 b/d in both 2015 and 2016, as lower oil prices stimulate demand growth more than previously expected. EIA estimates production outside the Organization of Petroleum Exporting Countries to rise by 800,000 b/d in 2015 and by 400,000 b/d in 2016, reflecting slower production growth in the US and Canada, as well as declining production in Europe and Eurasia. is expected to rise by 400,000 b/d in 2015 and fall by 200,000 b/d in 2016. Forecast OPEC crude oil production was revised upward from last month’s STEO by 300,000 b/d in 2015 and by 200,000 b/d in 2016, with Iraq being the largest contributor to […]

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Oil Prices Gain on OPEC Report

Updated May 12, 2015 1:08 p.m. ET By Nicole Friedman and Georgi Kantchev Oil prices extended their gains Tuesday after the Organization of the Petroleum Exporting Countries raised its forecast for oil-demand growth this year. Light, sweet crude for June delivery recently rose $1.74, or 2.9%, to $60.99 a barrel on the New York Mercantile Exchange. Brent crude, the global benchmark, gained $2.07, or 3.2%, to $66.98 a barrel on the ICE Futures Europe exchange. The cartel of oil producers said in a monthly report released Tuesday that it expects oil demand to increase by 1.18 million barrels a day, an increase of 50,000 barrels a day from its forecast last month. OPEC also raised its expectations for demand for its own oil this year. However, the group still expects its production to exceed demand for its oil next year. Write to Nicole Friedman at [email protected] By Nicole Friedman […]

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Inspectors in Syria Find Traces of Banned Military Chemicals

Photo Villagers in Syria headed away from what activists said was a chlorine gas attack this month in insurgent-held areas. Credit Abed Kontar/Reuters International inspectors have found traces of banned toxic chemicals in at least three military locations in Syria , four diplomats and officials said, less than two years after President Bashar al-Assad agreed to dismantle the country’s chemical arsenal. Traces of sarin, a nerve agent, were found in drainage pipes and in artillery shells in two places, and traces of another banned toxin, ricin , were found in a third location, a scientific research center, according to a United Nations diplomat, who spoke on the condition of anonymity to discuss confidential reports from the inspectors. The discovery of the small amounts of banned materials, first reported by Reuters, comes as Syrian government forces are being accused of continuing to bombard insurgent-held areas with chlorine bombs. Taken together, […]

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Iraq oil production rising, but not as high as hoped

A worker climbs a drilling rig at the Rumaila oil field. (BEN VAN HEUVELEN/Iraq Oil Report) Recommend 7 people recommend this. Sign Up to see what your friends recommend. At Rumaila, Iraq’s most prolific oil field, the development budget has been slashed this year by $1 billion – the latest sign that Iraq is tempering its long-term oil production ambitions.Even as the country works to raise production and export capacity – Iraq sold record amounts of oil in March and April – the increases are smaller than many anticipated, including Iraqi policymakers. Their ambitions have been chastened by reduced oil prices, a financial crisis, infrastructure delays a…

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OPEC denies WSJ article on oil price outlook, quotas

LONDON The Organization of the Petroleum Exporting Countries denied a Wall Street Journal story which said the producer group saw oil prices below $100 a barrel in the next decade. "The article refers to a number of scenarios, including crude oil price assumptions out to 2025, and also claims the report recommends a return to a production quota system," OPEC’s headquarters said in the statement. "The OPEC Secretariat would like to stress that these and other statements made in the WSJ article have no basis whatsoever." It is rare for OPEC to publicly deny press articles about the organization. (Reporting by Alex Lawler , editing by William Hardy)

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Saudi Arabia’s April crude output hits record high

DUBAI Top global oil exporter Saudi Arabia raised its crude production in April to a record high, feeding its flourishing Asian market share and its own power plants and refineries. The world’s top oil exporter pumped 10.308 million barrels of oil per day in April, a Gulf industry source told Reuters on Tuesday, compared to 10.29 million bpd in March. "This is an indication of strong demand, especially from Asia, as well as increasing domestic consumption during summer," the source said. The increase underlined Saudi Arabia’s determination not to cede market share to higher-cost producers, such as U.S. shale drillers. The kingdom and others in the Organization of Petroleum Exporting Countries (OPEC) had resisted cutting production to shore up oil prices. It also highlights the strength of global demand, which has helped lift refinery profit margins to their highest in years. Oil Minister Ali al-Naimi has said the kingdom’s […]

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Saudis Boosted Oil Output in April as U.S. Idled Rigs

Here’s Why the Oil Rally Might Not Last Saudi Arabia boosted crude oil production for a second month to the highest level in at least three decades, helping to raise OPEC output as U.S. supply growth showed signs of slowing. The Middle Eastern country increased crude output by 13,700 barrels a day in April to 10.308 million, according to data the country communicated to the Organization of Petroleum Exporting Countries’ secretariat in Vienna. Prices collapsed by almost half last year as Saudi Arabia led OPEC in maintaining production rather than cede market share to booming U.S. supply. The group has become more unified about keeping its output target because prices are now rising, according to Kuwait’s oil minister. Crude in New York has surged more than 40 percent from its March low as U.S. drillers pulled a record number of rigs from fields. “The Saudis must be content that […]

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Colombian oil exploration activity in Q1 sinks 83% from prior year: trade group

Exploration drilling in Colombia’s oil patch in the first quarter fell 82.5% compared with the year-ago period, while seismic exploration sank by an even steeper 92%, the Colombian Petroleum Association (ACP) said Tuesday. Speaking at a press conference in Bogota, ACP president Francisco Jose Lloreda issued another in a series of recent appeals to the government to enhance the royalty and tax incentives available to wildcatters or face the possibility of declining production and reserves in coming years. "Without tax incentives, it will not be feasible to reactivate exploration and current production levels of 1 million b/d, which would impact state revenue even more," Lloreda told reporters. He said only nine exploratory wells were drilled in Q1, down from 52 drilled in the year-ago period. Seismic exploration totaled 800 square kilometers, down from 10,000 sq km. Lloreda acknowledged that the Colombian government had made some moves in recent months […]

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