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Oil prices fall as World Bank cuts economic growth outlook

SINGAPORE Crude oil futures fell on Thursday as the World Bank cut its global economic growth forecast, ending a two-day rally triggered by a sharp U.S. inventory drawdown. In its twice-yearly Global Economic Prospects report, the World Bank predicted the global economy would expand 2.8 percent this year, below its 3 percent outlook in January, with India recording the biggest growth of major economies for the first time, ahead of slowing China. Front-month Brent crude oil prices were down 11 cents at $65.59 a barrel by 0306 ET, while U.S. crude shed 25 cents to trade at $61.18 a barrel. "Considering China’s economic slowdown, we lean towards lower prices today," said Daniel Ang, an analyst at Singapore-based Phillip Futures. In South Korea, the world’s No.5 importer of crude oil, the central bank cut its policy rate by 25 basis points to a record-low 1.50 percent in a bid to […]

Posted On : Published By : Tom Whipple
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Oil futures settle higher on EIA data showing jump in gasoline demand

The oil complex strengthened Wednesday, led by NYMEX July RBOB, after US Energy Information Administration data showed gasoline demand jumping 622,000 b/d and crude stockpiles falling 6.812 million barrels. NYMEX July RBOB settled 6.93 cents higher at $2.1464/gal. On a per barrel basis, that was equivalent to a $2.91 increase. NYMEX July ULSD settled 2.8 cents higher at $1.9459/gal. NYMEX July crude settled up $1.29 at $61.43/b, while ICE July Brent settled 82 cents higher at $65.70/b. With implied demand rising, gasoline stocks fell 2.939 million barrels to 217.354 million barrels last week. Analysts had been looking for a 500,000-barrel draw. "The fact that we’re drawing with production near a record-high suggests strong demand," Jim Ritterbusch, president of Ritterbusch & Associates said. Gasoline production rose 599,000 b/d last week to 10.007 million b/d, just below the all-time high of 10.195 million b/d in December 2014, according to EIA data […]

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Nat-Gas Glut Means Low Prices Here to Stay

The supply glut from the shale drilling bonanza meant that May was another month when U.S. natural gas production from the Lower 48 states stayed strong. As per the latest report from Bentek Energy – the forecasting unit of Platts – May natural gas production edged down less than 1% from the record highs of April to 72.6 billion cubic feet per day (Bcf/d). In fact, the May output was 7.2% higher year-over-year. Thanks to the emergence of major shale plays yielding impressive results, Bentek analysis further suggests that average domestic natural gas supply will climb to 73 Bcf/d in 2015. To put things in perspective, U.S. production was averaging just 55.1 Bcf/d in 2009, only six years back. The Shale Revolution Over the last few years, a quiet revolution has been reshaping the energy business in the U.S. The success of ‘shale gas’ – natural gas trapped within […]

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Global oil demand slowed to a crawl in 2014: Kemp

LONDON World oil demand grew by just 843,000 barrels per day (bpd) last year, the slowest pace for 14 years, outside U.S. recessions. Consumption increased by less than 1 percent to 92.1 million bpd in 2014, according to the BP Statistical Review of World Energy published on Wednesday ( link.reuters.com/hus84w ). Demand in the advanced economies of North America, Europe and Asia has been declining for nine years and is now down by 5 million bpd since 2005. Over the same period, however, consumption in non-OECD economies has risen by almost 12.7 million bpd, according to BP. For the last decade, the non-OECD has absorbed all the growth in supply. In 2013 and 2014 emerging economies consumed more oil than the advanced economies for the first time. But last year the continued slide in OECD consumption (-475,000 bpd) was offset by relatively tepid growth in the non-OECD (+1.3 million […]

Posted On : Published By : Tom Whipple
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Oil rallies in response to OPEC report

OPEC report shows mixed economic growth, though demand should increase globally. Crude oil prices may be reaching their ceiling, however. File photo by Monika Graff/UPI NEW YORK, June 10 (UPI) — Expectations of increased demand for oil from the Organization of Petroleum Exporting Countries sent crude oil prices higher in Wednesday trading. OPEC in its latest monthly market report said global oil demand for 2015 is seen as growing at 1.18 million barrels per day, an increase from last year’s growth of 960,000 bpd, but unchanged from OPEC’s assessment in May. Crude oil prices rallied nonetheless. Brent crude oil rose nearly 2 percent to $66.12 per barrel in early Wednesday trading. West Texas Intermediate, the U.S. standard, rallied 2.2 percent early in the trading day to $61.51 per barrel. Both indices are above where they started June 1. OPEC’s decision to keep production levels static pushed oil prices lower […]

Posted On : Published By : Tom Whipple
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OPEC no place for debate, Iran says

OPEC meetings are no place for negotiations or debate, Iranian oil minister says. File photo by Maryam Rahmanian/UPI TEHRAN, June 10 (UPI) — Meetings between members of the Organization of Petroleum Exporting Countries are no place for debate, Iran’s oil minister said. OPEC last week opted to keep production levels static , taking note of the expected increase in global demand in the second half of the year. OPEC’s November decision to hold output steady in an over-supplied market pushed crude oil prices to historic lows. Iranian Oil Minister Bijan Zangeneh said crude oil prices are largely driven by political factors . "Never can one say that politics has nothing to do with oil," he said. "Oil is an eco-political issue." The minister in April said the Islamic republic could return as a dominant force in OPEC if sanctions are lifted as a result of nuclear negotiations with international […]

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EIA: Continuing but lower global oil inventory builds expected in second half

Global petroleum liquids production continues to exceed consumption, resulting in inventory builds, the US Energy Information Administration said in its most recent Short-Term Energy Outlook , released this month. However, averaged global oil inventory builds are projected to fall from 2.2 million b/d through this year’s first half to 1.6 million b/d during this year’s second half, reflecting rising demand and slowing production growth outside of the Organization of Petroleum Exporting Countries, particularly in the US. EIA expects global consumption to increase 1.3 million b/d in both 2015 and 2016. Forecasted global consumption growth was revised modestly upward from last month’s STEO, as lower oil prices stimulated global demand growth more than previously expected. Projected real gross domestic product weighted for oil consumption, which increased an estimated 2.8% in 2014, is projected to rise 2.4% in 2015 and 3% in 2016. In this month’s outlook, OPEC crude- oil production […]

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OPEC + Different EIA Data

The latest OPEC Monthly Oil Market Report is out. There were no big surprises. OPEC 12 OPEC crude only production was up 23,000 bpd in May but that was after April had been revised upward by 110,000 bpd. Saudi Arabia Almost no change is Saudi production, down 5,000 bpd to 10,107,000 bpd. Iraq had the largest change of all, up 105,000 bpd to 3,800,000 bpd. Kuwait suffered the largest drop in May, down 77,000 bpd to 2,685,000 bpd. Secondary Sources Above are the total changes for all OPEC countries. The top chart, “Secondary Sources” is the one I always use. OPEC is expecting world oil supply to grow by 680,000 bpd in 2015. World Oil Supply Non-OPEC oil supply in 2015 is projected to grow by 0.68 mb/d, in line with the previous forecast and below last year’s strong growth of 2.17 mb/d. OPEC NGLs are forecast to grow […]

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OPEC Decision Doesn’t Intimidate

OPEC to Keep Oil Production High OPEC announced last Friday that it will stick with its policy to produce oil at a high rate, a measure that may signal they are underestimating Bakken producers. If the measure by OPEC was meant to intimidate U.S. energy producers, they may want to try again. Despite this tactic to crush competitors, U.S. oil companies have worked to streamline operations an become more efficient. Many now claim they can remain profitable at the lower crude prices for some time. Lynn Helms, head of North Dakota’s Department of Mineral Resources says that “OPEC is still is our main competition. But what you’re seeing now is the Bakken becoming the swing producer, something that has happened relatively quickly because of efficiencies in drilling and completion technology” In response to OPEC’s announcement, oil prices fell on Monday and analysts project this will prolong the supply glut […]

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OPEC says oil market oversupply to ease, but raises output again

LONDON OPEC voiced confidence that excess supply in the oil market will ease as demand picks up and supply growth slows from producers outside the group, an indication its strategy of letting prices fall, reaffirmed at a meeting last week, is working. In a monthly report on Wednesday, OPEC pointed to its expectations that supply from rival producers would decline in the second half of the year after rising in the first. World oil demand will grow faster than it did in 2014, OPEC said. "The current oversupply in the market is likely to ease over the coming quarters," OPEC’s in-house economists said in the report. But the report also said production by members of the Organization of the Petroleum Exporting Countries in May rose by 24,000 barrels per day (bpd), due to increases in Iraq and Angola and record output in top exporter Saudi Arabia. Last year, OPEC […]

Posted On : Published By : Tom Whipple