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Moscow Bourse Outage Interrupts Ruble’s First Gain in Six Days

The ruble strengthened for the first time in six days as crude oil rebounded and investors bet on a pause in the Bank of Russia’s rate-cutting cycle. Equipment failure on the main bourse in Moscow knocked out currency, stocks and bond trading for two hours. The Moscow Exchange switched to backup systems after the shutdown at about 3 p.m. in Moscow, the latest in a string of interruptions this year. When trading resumed, the ruble continued its advance, appreciating 1.6 percent to 68.0490 against the dollar by 7:15 p.m. in Moscow, the biggest rally among emerging markets tracked by Bloomberg. Oil surged 4 percent in London, helping lift the Micex index of stocks to a second day of gains. The ruble is getting some relief as the biggest currency slump in emerging markets this quarter raises the odds that Bank of Russia Governor Elvira Nabiullina will end a string […]

Posted On : Published By : Tom Whipple
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Revenues down for oil-rich Norway

Norwegian government data show revenue losses during depressed oil economy. Photo by tcly/Shutterstock OSLO, Norway, Sept. 8 (UPI) — The Norwegian government said total revenues for the oil-rich economy were down by nearly 5 percent for the second quarter of 2015. Statistics Norway, the government’s data-recording agency, said total revenue for the second quarter of the year was $40.4 billion, down 4.7 percent from the same period last year. "Sales revenue, transfers and the operating surplus from petroleum activities have all been reduced from the second quarter of 2014," the agency said in a statement. The Norwegian government said its oil-driven economy has been pressured by lower crude oil prices, with overall investments expected to decline by 12 percent this year. Slow global growth leaves the government somewhat pessimistic, but an uptick is expected to emerge on the horizon. German energy company Wintershall last week said it aims to […]

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Bourbon to Idle Oil-Service Vessels as Losses Widen With Rout

Bourbon SA, a French supplier of ships and crew to oil and natural gas producers, is pulling as many as 35 vessels from operation in the second half of the year as overcapacity in the deepwater market leads to widening losses. “The drop in the oil price and the uncertainty of the price recovery will continue to affect the development of new deepwater fields and the level of activity in shallow-water fields,” the Paris-based company said in a statement Wednesday. Bourbon is the latest oil-services company to warn that the crash in crude prices will hurt business this year as customers delay or cancel exploration and development projects. Seadrill Ltd., the rig-operator controlled by billionaire John Fredriksen, said last week it expects the rout to force an industry consolidation that will leave only the largest offshore players intact. Bourbon’s first-half net loss widened fourfold to 19.2 million euros ($21.5 […]

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North Sea oil at ‘serious risk’ of shutdown

There is a “serious and urgent risk” that parts of the North Sea oil industry will be abandoned unless energy companies join forces to become more efficient, the man in charge of reviving the sector has warned. Andy Samuel, the head of the new Oil and Gas Authority, told the Financial Times that companies need to fundamentally change some of their working practices if they are to keep parts of the lifeline of the Scottish economy alive. Companies have been struggling for the past 14 months with a low oil price, which has plunged more than 50 per cent since last June and now sits around $50 a barrel. In response, the government has offered companies a range of new tax breaks, but has also urged the industry to work together, appointing Mr Samuel to oversee that process . He warned that there could be a “domino effect”, where […]

Posted On : Published By : Tom Whipple
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How Fracking Changed the Economics of Oil Production Around the World

New technology, high oil prices, and plentiful cheap credit have encouraged the boom. Some $200bn has been borrowed to invest in fracking in the last few years, accounting for 15 percent of the entire $1.3tr US junk bond market . Investors were, in effect, betting on continuing high oil prices making their investments profitable for years to come. Price Slump Last year’s slump in prices trashed that calculation. From a mid-year high of $115 per barrel, by the end of 2014 the price per barrel had fallen by more than 40 percent. More than half of US shale rigs have been laid up since October. The driver, last year, was the behaviour of OPEC – the Organization of Petroleum Exporting Countries. OPEC is a cartel agreement among major oil producers that seeks to manage the international market for oil. With oil prices already plunging over the summer, OPEC could […]

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Oil prices stabilize on strong German data, but slowing Asia still weighs

Oil rig pumpjacks, also known as thirsty birds, extract crude from the Wilmington Field oil deposits area where Tidelands Oil Production Company, which is owned by Occidental Petroleum Corporation (Oxy), operates near Long Beach, California July 30, 2013. Oil prices stabilized at low levels on Tuesday as strong German economic data countered Asia’s darkening outlook that continues to clash with a global supply glut. German exports and imports hit record highs in July despite a slowdown in China. Exports climbed by 2.4 percent on the month to 103.4 billion euros ($115.58 billion) while imports grew 2.2 percent to 80.6 billion euros, the highest values on record. Traders said that the strong German data had helped counter a further darkening of Asia’s economic outlook. U.S. crude CLc1 was at $44.74 per barrel at 0730 GMT, down $1.31 since Friday’s close, weighed down by the closure of the largest crude distillation […]

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Dollar edges higher vs yen, China shares and data in focus

A woman walks past a money exchange shop in Kuala Lumpur, Malaysia, August 25, 2015. The dollar edged up against the yen early on Tuesday, as the prior session’s gains in European and Tokyo equities tempered demand for the safe-haven Japanese currency. Early Asian trading was subdued due to the closure of U.S. markets on Monday for a holiday, with the dollar up 0.1 percent at 119.40 yen JPY= , pulling away from an overnight low of 118.66. The euro was steady at $1.1165 EUR= , having been confined to a narrow $1.1122-1.1177 range over the past two days. The dollar tentative gains against the yen, however, were seen hinging on how risk asset markets react to Chinese trade data and Shanghai shares later in the session. "With the U.S. markets closed on Monday, risks emanating from China will be the main currency driver. Shanghai stocks will be in […]

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U.S. Crude Prices Stay in Negative Territory; Brent Crude Rises 1.8%

LONDON—International oil benchmarks diverged on Tuesday as U.S. prices caught up with the previous day’s drop in Brent crude when U.S. markets were shut for a holiday, but behind the split the market remained focused on a recurring theme, the Chinese slowdown. On Tuesday, worse than expected trade data out of China added to fears of the slowdown in the world’s No. 2 oil consumer. Oil prices dropped to more than six-year lows last month following a slew of weak economic readings, a slide in the Chinese stock market and continued concerns about oversupply . “We experience further sell-off in [U.S.] crude oil as bearish Chinese data verified our recent concerns about how weak the Chinese economy has become,” said Myrto Sokou, analyst at Sucden Financial Research. Meanwhile, robust German exports data provided some support for Brent, the global oil benchmark, Mrs. Sokou added. Exports from Europe’s biggest economy […]

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Oil Extends Drop as Russia Rules Out Production Cuts With OPEC

Oil extended declines as Russia ruled out cooperation with OPEC to cut production, fueling speculation the global glut will persist. Futures slid as much as 4.2 percent in New York from Friday’s close. Russia won’t do a deal with Saudi Arabia, the biggest member of the Organization of Petroleum Exporting Countries, to cut output, OAO Rosneft Chief Executive Officer Igor Sechin said, according to the Financial Times. Sanctions on Iran’s oil exports will probably be lifted within the first three months of 2016, according to four western diplomats familiar with the nuclear monitoring process. Oil has slumped more than 25 percent since this year’s closing peak in June amid signs the global glut that drove prices to a six-year low will be prolonged. Iran has signaled it will boost output once sanctions are removed as the nation seeks to regain market share. U.S. crude stockpiles remain about 100 million […]

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Oil prices fall on global glut fears, slowing U.S. jobs growth

An oil pumpjack operates near Williston, North Dakota January 23, 2015. REUTERS/Andrew Cullen Oil prices fell on Monday as oversupply concerns, a firmer dollar and lackluster U.S. non-farm payrolls data weighed on global markets, but a rebound in Chinese stocks after a two-day holiday helped prop up prices. The long Labor Day holiday in the United States may also lead to thin trading until U.S. markets open in the next session. "I think there is a bit of investor relief China’s stock market opened relatively firm," said Ric Spooner, chief market analyst at Sydney’s CMC Markets. China’s main indexes rose on Monday in the first trading after a two-day holiday during which further restrictions on futures trading were announced. Oil prices have seesawed in recent weeks due to turmoil in global stock markets after a devaluation of its currency and weaker economic data raised concerns about a slowing Chinese […]

Posted On : Published By : Tom Whipple