Month: September 2015

Pump jacks and pipes are seen on an oil field near Bakersfield on a foggy day, California January 17, 2015. Oil prices fell 2 percent in Asian trade on Wednesday, as a stronger-than-expected build in U.S. crude oil stocks and weaker U.S. manufacturing data fueled a rout in prices that started in the previous session. Brent and U.S. crude finished around 8 percent lower on Tuesday to end a 25 percent three-session surge, the largest three-day gain since 1990. That came after oil prices dropped to their lowest in six-and-a-half years last week. This roller-coaster volatility could continue especially if there are similar wild swings in the equity markets, said Ric Spooner, chief market analyst at Sydney’s CMC Markets. "Any change in sentiment tends to be amplified. Any change in direction in the oil markets has the potential to be risk driven by what’s going on in the equity […]

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Oil prices dropped Tuesday, giving up most of Monday’s strong gains, as worries resurfaced about China’s economy and a seasonal decline in U.S. demand. The current oil market is the most volatile in years. The U.S. benchmark posted a move of more than 6% for the fourth straight trading day on Tuesday, the longest such streak since January 1991. Light, sweet crude for October delivery settled down $3.79, or 7.7%, to $45.41 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, slumped $4.59, or 8.5%, to $49.56 a barrel on ICE Futures Europe, notching the largest one-day percentage decline since May 2011. Both oil benchmarks rose more than 25% in the three days ended Monday, posting their largest three-day gains on a percentage basis since Iraq invaded Kuwait in 1990. Both contracts are still up more than 14% from Wednesday’s settlement. On Tuesday, official and private […]

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A customer prepares to fill the tank of her car at a fuel station in Sint Pieters Leeuw December 5, 2014. Oil prices fell more than 3 percent on Tuesday after official data showed China’s giant manufacturing sector, the engine powering the world’s biggest energy consumer, contracted at the fastest pace in three years. China’s official Purchasing Managers’ Index (PMI) fell to 49.7 in August from 50.0 in July, reinforcing concerns over the world’s second-largest economy. The figures helped spur a retreat in oil prices after three days of hefty gains. Investors took profits after Brent and U.S. crude both soared more than 8 percent on Monday, traders said. "It was primarily the China fear factor," Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt, told Reuters Global Oil Forum. Benchmark Brent crude dropped $2.13 to a low of $52.02 a barrel, and was trading around $52.15 by 0815 […]

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NEW YORK–Natural gas prices rose Tuesday on expectations that a heat wave would increase demand for natural gas as a power-generation fuel. Summer heat increases demand for air conditioning, leading to higher consumption of gas-powered electricity. Prices have declined in recent weeks as traders looked past summer to fall, when demand typically eases as the weather moderates. But a bout of “highly anomalous late summer heat” is forecast to spread across the eastern and southern U.S. in the next six to 10 days, said forecaster WSI Corp. on Tuesday. Futures for October delivery settled up 1.3 cents, or 0.5%, at $2.702 a million British thermal units on the New York Mercantile Exchange. “Prices are slightly higher as the heat wave engulfs major parts of the country,” Dominick Chirichella, analyst at the Energy Management Institute, said in a note. However, he added, “the market is not overly excited as the […]

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Sign up for quick access to a wealth of global business news, including: Oil bear bets on return to $25 a barrel Newspaper + Premium online Newspaper + Premium online Premium Full FT.com subscription Premium Full FT.com subscription Standard Full news & archive Standard Full news & archive Trial Try Premium online Trial Try Premium online Price Monthly Annual $66.30 $11.77 per week $53.00 $9.25 per week $36.00 $6.45 per week $1.00 for 4 weeks $1.00 for 4 weeks FT Alphaville plus selected FT blogs yes yes yes yes Unlimited FT.com article access yes yes yes yes Unlimited mobile and tablet access yes yes yes yes Unlimited fast FT yes yes yes yes 5 year company financials archive yes yes yes yes The LEX column yes yes no yes ePaper access yes yes no yes Three exclusive weekly emails yes yes no yes Daily newspaper delivery yes no no […]

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An oil pump is seen near Bakersfield, California October 14, 2014. U.S. crude prices jumped more than 27 percent in three trading days between Thursday and Monday, which should convince even the most die-hard believers the oil futures market is neither efficient nor rational. The rally has left traders, analysts and journalists struggling to make sense of the sudden change in direction after prices had fallen steadily for two months, hitting their lowest level since 2009. Possible explanations range from a bounce in global stock markets, pipeline problems in Nigeria, new data showing U.S. oil production falling, and an editorial published in OPEC’s monthly bulletin interpreted by some analysts as a call for a coordinated approach to cutting output (“Cooperation holds the key to oil’s future”, August 2015). But it should be obvious none of these factors, singly or in combination, is sufficient to explain an increase in the […]

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Whither oil prices. After West Texas Intermediate posted its best three-day gain in a quarter-century, analysts are divided over the durability of the rally in the commodity price and related equities. Goldman Sachs and Citigroup agree that the near-parabolic trajectory of crude prices has been driven by a shift in sentiment, rather than a significant change in the fundamentals of the oversupplied global oil market. But while the former believes that energy stocks have more room to run, the latter says the shaky foundation of the rally should prompt investors to head to the sidelines. The notable increase in energy options prices amid the severe equity selloff last week "demonstrates a capitulation in sentiment and positioning that we have been waiting for for the past two months," according to Goldman Sachs. Spikes in implied volatility, which can be derived from options prices and the put-call skew—or the extent to […]

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Oil prices are still massively higher than they were a week ago but Citi believes that the surge is pretty much devoid from reality. Crude oil rocketed nearly 30% in just three days, its biggest three-day rally in 25 years . Since Friday August 28, oil over 20% higher. Today, crude oil prices are initially ebbing off ever-so slightly. But while crude oil is hovering around $47.86, the chart shows the undeniable explosion in prices over the last few days. NYMEX crude oil price over the last five days. Marketwatch.com However, the spike isn’t good news, considering oil prices are still around 50% lower than they were at their peak in the summer of 2014. Edward L Morse and his team at Citi, in a note entitled "The Oil Price Surge" sent to investors this morning, say that the markets may be in for a nasty shock as people […]

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Slumping oil prices are spurring 4,000-mile (6,400-kilometer) diversions of tankers filled with diesel and jet fuel as the price of ship fuel plunges, opening up trading opportunities. At least five tankers Continue Reading