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Oil Heads for Biggest Monthly Drop This Year Amid Global Glut

Oil headed for its biggest monthly drop this year on speculation that increased OPEC supplies and threats to demand in China will prolong a global glut. Futures slid as much as 1.5 percent in New York and are down 19 percent in July. U.S. crude stockpiles are almost 100 million barrels above the five-year seasonal average, while exports from southern Iraq rose to a record this month. Producers from BP Plc to Royal Dutch Shell Plc have started a new round of cost cutting as prices decline. Oil’s worst month since December paces a slump across raw materials amid expanding surpluses and concern slower economic growth in China will crimp demand. Commodities also dropped as the dollar gained on signs that the Federal Reserve may increase rates. Sanctions on oil exports from Iran, holder of the world’s fourth-biggest crude reserves, may be lifted following a nuclear accord on July […]

Posted On : Published By : Tom Whipple
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Commodities Drop as Dollar’s Best Month Since January Hits Ruble

Friday’s markets told July’s story in a microcosm: Commodities extended their worst monthly slump since 2011, Chinese shares dropped and the dollar advanced against emerging-market peers as the Federal Reserve moved closer to raising interest rates. Crude oil led the Bloomberg Commodity Index down 0.4 percent by 10:25 a.m. in London, extending the gauge’s decline in July to 10 percent. The dollar headed for the biggest monthly gain since January while a gauge of emerging-market currencies dropped to a record low. Italian bonds headed for their best month since 2013 and Russia’s ruble weakened before a monetary policy decision. The dollar’s ascendance amid rising bets on a U.S. rate increase in September has spread across financial markets, hurting commodities already in retreat on supply gluts and slowing growth in China. Emerging markets have been a chief casualty, while stocks in the U.S. and Europe are poised for their biggest […]

Posted On : Published By : Tom Whipple
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Oil falls after OPEC comments imply no supply cut

A customer holds a nozzle to fill up his tank in a gasoline station in Nice December 5, 2014. Oil prices fell on Friday as concern over global oversupply intensified after the head of oil producers’ cartel OPEC indicated there would be no cuts in production despite a huge global oversupply. Benchmark North Sea Brent crude LCOc1 headed for its fifth consecutive weekly fall after comments on Thursday in Moscow by Abdullah al-Badri, secretary-general of the Organization of the Petroleum Exporting Countries. Badri said rising demand would prevent a further fall in oil prices and suggested cuts in OPEC output would not have much impact on the market. Brent LCOc1 was down 50 cents at $52.81 a barrel by 0825 GMT after settling 7 cents lower in the previous session. U.S. light crude CLc1 was 60 cents lower at $47.92 a barrel. OPEC members produced around 31.25 million barrels […]

Posted On : Published By : Tom Whipple
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Oil climbs on big U.S. stock draw; strong dollar caps gains

A customer prepares to fill up his tank in a gasoline station in Nice December 5, 2014. Oil prices extended gains in Asian trade on Thursday, after a larger than expected draw in U.S. crude and gasoline stocks strengthened the outlook for oil demand. But gains were capped by a stronger dollar and despite the drop in oil stocks some commentators warn of a global supply glut, with OPEC members producing 3 million barrels per day more than demand in the second quarter. U.S. crude stockpiles fell by 4.2 million barrels in the week to July 24, more than twenty times analysts’ expectations of a decrease of 184,000 barrels, Energy Information Administration (EIA) data showed. Gasoline stocks dropped by 363,000 barrels against analysts’ forecasts of a 512,000-barrel gain with U.S. gasoline demand up 6.2 percent from a year ago. The large draw down in stocks could be short-lived, said […]

Posted On : Published By : Tom Whipple
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OPEC says oil should not fall further, sees stability in 2016

The OPEC logo is seen at OPEC’s headquarters during a meeting of OPEC oil ministers in Vienna, Austria, June 5, 2015. OPEC expects increasing oil demand to prevent a further fall in prices and sees a more balanced market in 2016, its secretary-general said on Thursday, the latest sign the group is sticking to its policy of defending market share. Oil LCOc1 has dropped about 15 percent this month and halved in value in the past year but neither OPEC nor Russia, the world’s top producer, have cut output to support prices, hoping cheaper oil will hit U.S. shale and other rival sources. "I would not expect they (prices) are going to fall because demand is growing," OPEC Secretary-General Abdullah al-Badri told reporters in Moscow. OPEC pumps around 40 percent of global oil production. "The current situation is a test for all producers and investors. While the prices … […]

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Saudi Arabia to Cut Oil Production After Summer

The world’s top crude-oil exporter, Saudi Arabia, is planning to pull back from record-high levels of production at the end of the summer when domestic energy demand subsides, according to people with knowledge of the matter. The reduction could begin as soon as September and would amount to about 200,000 to 300,000 barrels a day, bringing production to about 10.3 million barrels a day, the people said. Saudi Arabia told the Organization of the Petroleum Exporting Countries that it produced 10.56 million barrels a day in June, a record high. “It is purely based on the [domestic] demand situation,” one of the people said, adding that “production is likely to hover around” 10 million barrels until the end of the year. Saudi Arabia—one of a handful of countries that generates electricity by burning crude oil—generally reduces production in the fall, when demand for the heavily subsidized energy to power […]

Posted On : Published By : Tom Whipple
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Kurdish oil secured, Norwegian company says

Norwegian energy company DNO says it’s still working as normal in northern Iraq despite the bombing of a pipeline running north to a Turkish port. File Photo by UPI/Mohammed al Jumaily OSLO, Norway, July 30 (UPI) — Norwegian energy company DNO International said Thursday its oil operations in the north of Iraq were isolated from violence raging across the border in Turkey. The company said operations at its Tawke oil field in the Kurdish north of Iraq "continued uninterrupted during this week’s shut down of the Kirkuk-Ceyhan pipeline in Turkey, given the flexibility to redirect volumes from exports to local sales." Ankara confirmed Wednesday that a section of the Kirkuk-Ceyhan oil pipeline, running from northern Iraq to Turkish ports, was bombed in southern Sirnak province. The pipeline has a maximum capacity of around 400,000 barrels of oil per day and the bombing comes one day after an attack on […]

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Analyst: Iranian gas no panacea for Pakistan

Building a pipeline from Iran may help Pakistani energy issues, but it won’t be a cure-all for chronic woes, analyst says. UPI/Hamid Forotan/ISNA BATH, England, July 30 (UPI) — Completing a natural gas pipeline from Iran won’t be the "silver bullet" expected by the government in Islamabad, analysis finds. Iran, the five permanent members of the U.N. Security Council, plus Germany, finalized a deal July 14 that restricts Tehran’s nuclear ambitions in exchange for relief from sanctions targeting its energy sector. For Iran, it may open the spigot on natural gas reserves , which could help address chronic energy shortages in neighboring Pakistan. Oliver Coleman, deputy head of Asia programs at analytical firm Verisk Maplecroft, said in a briefing that while both sides of the pipeline have lauded its benefits , it won’t address the long-term issue completely. "A steady supply of gas from Iran would not be a […]

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Rosneft, Exxon Combine in Africa Even Amid Russia Sanctions

OAO Rosneft and Exxon Mobil Corp. bid for licenses in Mozambique, forging ahead with a partnership strategy even as U.S.-Russia relations remain tense. Russia’s largest oil producer and Exxon submitted joint bids in Mozambique’s fifth licensing round to explore the Angoche Basin and Zambezi Delta, according to a statement on Rosneft’s website confirmed by Exxon. “Partnerships with global industry leaders, such as Exxon Mobil, allow the company to minimize the risks in the implementation of frontier exploration projects,” Rosneft said. If the bids succeed, Exxon would operate the project, according to Rosneft. The Russian company and Irving, Texas-based Exxon Mobil already produce oil together off the coast of Russia’s Sakhalin Island. They also have explored Russia’s arctic seas, an area now subject to U.S. and European Union sanctions on offshore technologies prompted by Russia’s role in Ukraine. Working together elsewhere in the world may be a way for the […]

Posted On : Published By : Tom Whipple