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Crude oil falls after U.S. growth figures disappoint

A gas station worker fuels a vehicle in Tokyo August 26, 2015. Crude futures dropped in Asian trading on Friday after the release of a report showing that U.S. economic growth had slowed sharply, reinforcing concerns about sluggish demand in a world awash with oil. U.S. economic growth braked sharply in the third quarter as businesses cut back on restocking warehouses to work off an inventory glut, data showed. Both of the main crude benchmarks are on track to post their first weekly gains in three weeks, but with oil still being added to inventories, prices are likely to be rangebound in the coming weeks, traders and analysts said. U.S. crude was down 17 cents at $45.89 a barrel at 0407 GMT, after rising 12 cents in the previous session. The benchmark is on track to post a gain of 2.9 percent this week. Brent crude fell 9 cents […]

Posted On : Published By : Tom Whipple
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Oil Snags Small Rally After Rig Numbers Drop Again

Oil prices had a small rally in the afternoon after data showed further cuts to the number of rigs working U.S. oil fields. The U.S. oil-rig count dropped by 16 to 578 in the latest week , the ninth consecutive week of declines, according to Baker Hughes Inc. BHI 0.17 % There are now 64% fewer rigs from a peak of 1,609 in October 2014, which some expect to lead to lower production, though it has yet to make a major impact. December crude oil settled up 53 cents, or 1.2%, to $46.59 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, gained 76 cents, or 1.6%, to $49.56 a barrel on ICE Futures Europe. “I don’t think these prices on oil or natural-gas are sufficient to meet long-term demand,” said Kyle Cooper, managing director of research at IAF Advisors, a Houston consulting firm. Oil has […]

Posted On : Published By : Tom Whipple
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Natural Gas Revived by Sign of Cold

Natural gas rallied Friday, ending a lengthy selloff as the first sign of a winter chill led to the largest one-day gains in nearly two months. Prices for the front-month December contract settled up 6.4 cents, or 2.8%, at $2.321 a million British thermal units on the New York Mercantile Exchange. The gains blunted steep losses from earlier in the week, but gas still fell 6.9% over the last five sessions. Gas has fallen in six of the past seven weeks. It lost 8% for the month, its largest monthly fall since December. It has lost ground in fourth-straight months, the longest losing streak since September 2011. Natural-gas prices had slumped to three-year lows on worries that moderate weather will limit indoor-heating demand and keep the market oversupplied. Near-record production may put stockpiles at record highs heading into the winter, and an unprecedented glut could develop without cold weather […]

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Oil Companies Curtail Spending on Everything–Except Dividends

A year after the bear market in crude began, oil companies have cut workers, are using fewer rigs and have less money to spend. But they’re still pumping more oil. BP Plc, Royal Dutch Shell Corp. and Hess Corp. are among the companies producing more crude than a year ago. In the U.S., shale explorers have focused on the most productive parts of their land, drilled faster and better wells there and negotiated lower prices from oilfield service companies. It’s helped keep total U.S. output about 1.6 percent higher than at this time last year, even as drilling rigs have fallen by 63 percent. “A well that broke even at $60 18 months ago is now at $40,” said Harold York, a senior analyst for Wood Mackenzie Ltd. in Houston. “If drilling a well generates a return greater than the cost of capital, companies are going to do it. […]

Posted On : Published By : Tom Whipple
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U.S. Oil Rig Count Declines by 16

The number of U.S. oil-drilling rigs, which is viewed as a proxy for activity in the oil industry, has fallen sharply since oil prices started falling last year. After a streak of modest growth, the rig count has now declined for nine consecutive weeks. There are now 64% fewer rigs from a peak of 1,609 in October 2014. According to Baker Hughes, the number of gas rigs rose by four to 197. The U.S. offshore rig count was 33 in the latest week, down two from last week and down 20 from a year ago. For all rigs, including natural gas, the week’s total fell by 12 to 775. Earlier in the week, oil prices had their highest gains in two months. But that rally soon fell away, like many recent price spikes, as robust supply and expectations of weaker demand from China reminded investors of the market’s poor […]

Posted On : Published By : Tom Whipple
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Chevron, Exxon Cut Spending on Oil Price Slide

Oil storage tanks sit at the Esso oil refinery, operated by Exxon Mobil Corp. Both companies managed to make a profit during the third quarter, bolstered by refining operations and chemical divisions that are helped by low oil prices. But the two biggest U.S. energy companies were forced to slash costs to stay ahead of plunging revenues from their oil-and-gas production businesses. Chevron, the second-largest energy company in the U.S. by revenue, said it would lay off between 6,000 and 7,000 employees. The San Ramon, Calif., company is trying to dial back its capital spending by 25% next year to between $25 billion and $28 billion. John Watson , Chevron’s chief executive, told analysts that job reductions would be concentrated in Australia as the company completes construction of two giant, liquefied natural-gas projects. Some cuts also will come from West Africa as Chevron reorganizes operations in Angola. Chevron also […]

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Bad timing: Big Oil ramps up output just as prices sink

Lights from the French oil giant Total refinery of Donges are reflected in the water at night, western France, October 23, 2015. After years of declining output, major oil companies have ramped up crude production this year, just as they are being battered by a plunge in prices due to already excessive supplies. Executives have taken pride in seeing billions worth of investments in new technologies and new fields in places such as Brazil, the North Sea and West Africa kick in and boost output. But most of the investment was made three to five years ago when oil was about $100 a barrel, around double current levels. Now, the new production is contributing to a glut in supply due mostly to the North American shale boom, a faltering global economy and OPEC’s decision not to cut output. Recent third-quarter results show the scale of the problem. According to […]

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Volatility and flash events in the oil market: Kemp

Offshore oil platforms are seen at the Bouri Oil Field off the coast of Libya August 3, 2015. Crude oil prices have been more volatile this year than at any time since the financial crisis of 2008/09 and before that 1991, according to standard measures of price variability. Some of the increase in volatility is more apparent than real, however, as every $1 per barrel move translates into a larger shift in percentage terms now that prices have halved from $100 per barrel to less than $50. The chief of the U.S. Commodity Futures Trading Commission (CFTC) warned a conference last week the oil market had already experienced 35 "flash events" since the start of the year. CFTC Chairman Timothy Massad defined flash events as occasions on which prices moved by at least 200 basis points within an hour but returned to within 75 basis points of the starting […]

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Businesses hit hard due to fuel crisis, shortages

UN climate chief: global emissions pledges not enough yet Governments’ emissions-cutting pledges ahead of a … NOC tankers reach Rasuwa, receive warm welcome from locals The 12 tankers sent by Nepal Oil Corporation to br… Traffic police intensify cross checking in Tanahaun Kathmandu, October 28 The ‘unofficial’ border blockade by India has hit the business sector hard. Many industries across the county are on the verge of closure while there is an acute shortage of essentials and petroleum products in the market. “Vehicles carrying essentials and clothes that have been stuck at the Nepal-India border are yet to make it into the country. Unlike in the past, my business was down during this Dashain ,” said Dipak Subedi, who runs a cloth store in the Capital. Likewise, Shanta Lama of Dolakha, who runs a footpath stall selling grocery items, said that her business is facing a hard time as […]

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S&P Downgrades Saudi Arabia on Oil Worries

Standard & Poor’s Ratings Services on Friday cut its credit rating on Saudi Arabia, saying the tumble in oil prices is driving a wider government deficit. S&P lowered its rating by one notch to A-plus from double-A-minus. The rating is now four notches below the premier triple-A rating. S&P maintained its negative outlook on the kingdom, saying it could lower its rating in the next two years if the government doesn’t reduce the deficit. The ratings firm said it expects Saudi Arabia’s deficit to increase to 16% of gross domestic product this year from 1.5% in 2014, largely due to the sharp decline in oil prices. Saudi Arabia is one of the world’s top crude oil-exporters, leaving it heavily exposed to the swings in oil prices.

Posted On : Published By : Tom Whipple