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Oil prices drop as oversupply weighs on markets

SINGAPORE Crude oil prices fell on Wednesday as oversupply weighed on markets, with OPEC not expected to announce a production cut at its meeting on Friday. Core Gulf members of the Organization of the Petroleum Exporting Countries (OPEC), which controls over 40 percent of the world’s crude production, have a consensus to maintain the group’s oil output at its meeting this week, a senior Gulf OPEC delegate told Reuters in Vienna on Tuesday. "There is consensus among Gulf OPEC countries, and others, to keep the (production) ceiling unchanged," the source said. "Nobody wants to rock the boat. The meeting is expected to be smooth sailing." High production by OPEC, but also from other regions like U.S. shale producers and Russia, has contributed to oversupply and left tankers filled with millions of barrels of oil without buyers. Some analysts said there was a chance OPEC could increase its production target. […]

Posted On : Published By : Tom Whipple
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Oil Prices Slide as High Supplies Persist

NEW YORK—Oil prices slumped Wednesday on concerns that the global crude market continues to be oversupplied. Robust production from the U.S. and member nations of the Organization of the Petroleum Exporting Countries sent oil prices plunging last year, and prices remain more than 40% below their June highs. The market rallied earlier this year on expectations that spending cuts would help shrink the global glut of crude, but large supply cuts haven’t materialized so far. U.S. data released Wednesday showed domestic oil production at a new weekly high, and OPEC is widely expected to keep its production target unchanged at its June 5 meeting. Light, sweet crude for July delivery settled down $1.62, or 2.6%, at $59.64 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell $1.69, or 2.6%, to $63.80 a barrel on ICE Futures Europe. Traders have closely scrutinized weekly U.S. inventory data […]

Posted On : Published By : Tom Whipple
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Natural Gas Falls to One-Month Low on Growing Production and Surpluses

Natural gas prices fell to a one-month low Wednesday as traders responded to increasing production and the expectation for growing weekly surpluses. Prices for the front-month July contract lost 6.4 cents, or 2.4%, to $2.634 a million British thermal units on the New York Mercantile Exchange. The move erased all of a small two-day rally and sent gas to its lowest settlement since April 29. The market’s default position is to sell because of chronic oversupply, said Michael Doyle, a broker at Eclipse International Inc. in New York. Production is still at a near-record pace and hot weather isn’t coming to ramp up demand for gas-fired power to run air conditioners, said Jim Ritterbusch, president of energy-advisory firm Ritterbusch & Associates, said in a note. Gains "were just overcooked yesterday," he added. "We didn’t see enough shift in the temperature views to justify" prices near $2.70/mmBtu. The U.S. Energy […]

Posted On : Published By : Tom Whipple
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World Oil Output Last 3 Years

The EIA publishes every possible energy stat for the USA and hardly anything for the rest of the world. Well, anything current for the rest of the world anyway. Their International Energy Statistics is already five full months behind and working on six. December 2014 is the last international oil production data we have. Anyway during this lull in other data I decided to look at the last three years of international data, from December 2011 to December 2014. All data is in thousand barrels per day. World C+C production was flat for most of 2012 and 2013 but in late 2013 production took off and has increased by about 3 million barrels per day above the average for 2012 and 2013. December C+C production was 79,300,000 BPD. While total C+C production has increased by 3,000,000 BPD over the last three years the top ten gainers have increased just […]

Posted On : Published By : Tom Whipple
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OPEC finds oil output consensus: ‘Don’t rock the boat’

VIENNA OPEC is set to carry on pumping oil nearly flat-out for months more, content that last year’s shock market therapy has revived moribund demand and knocked back growing competition. With oil prices having stabilized, for now, at around $65 a barrel, some $20 off their January lows, there’s little appetite within the Organization of the Petroleum Exporting Countries to modify production limits, as some analysts have suggested is an outside possibility. "There is consensus among Gulf OPEC countries, and others, to keep the ceiling unchanged," a senior Gulf OPEC delegate told Reuters late on Tuesday after an informal meeting of the four core Gulf Arab OPEC members earlier in the day. The group meets on Friday following a two-day seminar featuring the chief executives of the world’s biggest energy groups, including BP ( BP.L ) and Exxon ( XOM.N ), companies whose fortunes have been abruptly altered by […]

Posted On : Published By : Tom Whipple
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What not to expect from OPEC at its Friday meeting

Myra Members of the Organization of the Exporting Countries are expected to leave their oil-production ceiling unchanged at their semiannual meeting on Friday, but what they decide not to do is equally important. Analysts widely expect the oil-producing cartel to stand pat on the 30 million barrels-per-day output ceiling it is had in place since 2012, even though various market estimates show that its members have been producing about one million barrels a day above that level. Talk ahead of the summit has been centered on OPEC’s desire to defend its valuable market share. The cartel left its production target unchanged at its last meeting in November, despite a plunge in global oil prices LCON5, -2.70% CLN5, -2.66% and some analysts fear that if OPEC stands pat again, that’ll condemn the market to an oil-supply glut for years . Retaining market share is obviously a key objective for OPEC […]

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How OPEC Hurt Big Oil

VIENNA—The world’s biggest oil companies have taken a beating since the Organization of the Petroleum Exporting Countries let prices fall last year in favor of pumping more crude, injecting a note of tension into a long-standing marriage of convenience. Oil company earnings plunged 50% in the first quarter from a year earlier. Some of the industry’s biggest projects are on ice, and a new mood of uncertainty hangs over the sector as it goes through a rough patch after years of stability. The meeting of the cartel this week amounts to a counseling session of sorts for global integrated oil companies and OPEC, as they all converge on Vienna. But no one expects the good times to return soon. OPEC, at its meeting here on Friday, appears likely to stay the course it set last November, keeping production levels the same . Some oil company executives see a rocky […]

Posted On : Published By : Tom Whipple
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OPEC Optimistic on Energy Outlook

VIENNA—OPEC oil ministers expressed optimism about their strategy of pumping more crude oil and fighting for market share, amid expectations they will stick to their production target when they meet at the end of the week. “In terms of the global trends of energy outlook, the future looks very positive. The global economy is growing,” Saudi Oil Minister Ali al-Naimi told an oil-and-gas seminar hosted by the Organization of the Petroleum Exporting Countries in the Austrian capital. In a sign of how much things have changed for OPEC, oil ministers from some its most vulnerable nations appeared to come to terms with prices below $100 a barrel, signaling that the group may have put some of its rancor behind it. OPEC ministers from Saudi Arabia, Qatar, and the United Arab Emirates spoke Wednesday morning at the seminar, along with representatives of industry watchdogs and chief executive officers from energy […]

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OPEC’s Problem: There Is No Minister of Shale

When Saudi Arabia launched a global oil-price war last year, most market players assumed America’s high-cost, financially fragile shale producers would be first to retreat. Some retreat. American companies have been quick to idle rigs and lay off workers, but U.S. onshore oil production has gone up since last fall, not down. As oil ministers from member countries of the Organization of Petroleum Exporting Countries meet this week, they are grappling with the fact that the world’s new swing producer is a very different animal from their traditional competitors. Shale-oil companies have more in common with the technology startups of Silicon Valley than the big, often state-controlled, integrated oil companies that dominate global oil markets. They are smaller, more nimble, take more risks and are more tied to the ebb and flow of the capital markets. This agility has enabled them to boost productivity, raise cash, and so far […]

Posted On : Published By : Tom Whipple
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Using Violence and Persuasion, ISIS Makes Political Gains

Photo The Tadmur prison in Syria after it was blown up by ISIS. Credit via Associated Press BEIRUT, Lebanon — Days after seizing the Syrian desert city of Palmyra, Islamic State militants blew up the notorious Tadmur Prison there, long used by the Syrian government to detain and torture political prisoners. The demolition was part of the extremist group’s strategy to position itself as the champion of Sunni Muslims who feel besieged by the Shiite-backed governments in Syria and Iraq . The Islamic State, also known as ISIS or ISIL, has managed to advance in the face of American-led airstrikes by employing a mix of persuasion and violence. That has allowed it to present itself as the sole guardian of Sunni interests in a vast territory cutting across Iraq and Syria. Ideologically unified, the Islamic State is emerging as a social and political movement in many Sunni areas, filling […]

Posted On : Published By : Tom Whipple