Rise in Oil Prices Comes to a Halt Oil prices were mainly flat Thursday after weeks of gains, but analysts now question whether crude will continue that positive momentum given a lack of significant change in the supply side of the market. The global benchmark, Brent, is trading down 0.21% at $47.07 a barrel. Its U.S. counterpart, West Texas Intermediate, is trading up 0.18% at $45.41 a barrel. Earlier this month, major oil-producing nations failed to agree on a production freeze at Doha after Saudi Arabia appeared to walk away from any agreement that didn’t include geopolitical rival Iran. That reminded analysts of the inability of producers to coordinate production and that there is more oil that could enter the market from countries like Iran . “There’s been two attempts to freeze oil output which have both driven up the price, but fundamentally non-U.S. […]
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Crude oil prices take a breather after hitting 2016 highs Crude futures pulled back from 2016 highs early on Thursday as traders locked in profits after April’s sharp rally, but analysts said falling U.S. production and strong investor appetite could push prices higher. International Brent crude futures were trading at $47.02 per barrel at 0045 GMT, down 16 cents from their last settlement, and U.S. West Texas Intermediate (WTI) futures were down 12 cents at $45.21 a barrel. The price dip came after both crude benchmarks hit 2016 highs the previous day in what has been one of the steepest price rises in recent years. Both Brent and WTI have rallied more than 70 percent since their respective 2016 lows in January and February. Analysts said falling output in the United States and a weak dollar were pushing prices up and attracting investors. […]
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Oil Prices Fall On Unexpected EIA Barrel Build One hundred and sixteen years after the birth of Woody Woodpecker creator and animator Walter Lantz, and WTI crude oil is knocking on the door of $45 – and knocking on wood that U.S. production is wilting. Here are six things to consider about the oil market on this final Wednesday in April: 1) Today is set to be dominated by a game of two halves; inventories this morning, and Federal Reserve rumblings this afternoon. While the API inventory report points to a draw to crude stocks (h/t lower imports), expectations of dovish rhetoric from the Fed is putting downward pressure on the dollar. Hence, crude is once again pushing on to new highs for the year. The bullish sentiment for oil however did not last long after the DOE surprised by contradicting the API and reporting a significant build in U.S. crude stocks. 2) A piece today talking […]
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Oil Prices Reach High for 2016 LONDON—Oil prices reached a high for the year on Wednesday, with U.S. prices breaking above $45 for the first time since November following data that showed a surprise fall in U.S. oil inventories. Brent crude, the global oil benchmark, rose 2.4% to $46.85 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 2.2% at $45.01 a barrel. Data by the American Petroleum Institute, an industry group, released late on Tuesday showed that U.S. crude inventories decreased by 1.1 million barrels last week. The Energy Information Administration will release its official data later on Wednesday and analysts polled by The Wall Street Journal expect crude stocks to have risen by 1.7 million barrels. Workers walk toward Halliburton Co. “sand castles” at an Anadarko Petroleum Corp. hydraulic fracturing site… “Any news that could suggest a higher price is viewed as […]
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Oil running quickly toward $50 per barrel Oil prices are running toward $50 per barrel, up nearly 60 percent from 2016 lows, as more data surfaces to support a push away from supply side pressures. The price for Brent crude oil was up 2 percent in early Wednesday trading to $46.68 per barrel. West Texas Intermediate, the U.S. benchmark price for crude oil, was up 2.1 percent to start the day in New York at $44.96 per barrel. Oil prices have rallied as a series of reports find balance between supply and demand is starting to return. While reporting its own production was expected to decline moving through the year, BP CEO Bob Dudley said “market fundamentals” are pointing to a market […]
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Oil prices jump on weak dollar, strong investor appetite Crude oil futures rose half a dollar in early Asian trading on Wednesday and remained near 2016 highs on the back of strong investor sentiment and a weak dollar, although analysts warned this month’s bull-run could soon run out of steam. International Brent crude futures were trading at $46.26 per barrel at 0023 GMT, up 52 cents, or 1.1 percent, from their last settlement. U.S. West Texas Intermediate (WTI) crude was also up 52 cents, or 1.2 percent, at $44.56 a barrel. WTI was further lifted after the American Petroleum Institute (API) reported a drawdown of nearly 1.1 million barrels in U.S. crude inventories last week versus a 2.4 million-barrel build expected by analysts in a Reuters poll. Both Brent and WTI were near 2016 highs of $46.49 and $44.83, respectively reached the previous session. Beyond […]
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Analysts Aren’t Buying the Oil Rally Even as oil rallies, analysts have barely nudged up their price forecasts as they worry that crude’s current gains might not be sustainable. The price of oil has jumped by around 70% from the decade-lows it hit earlier this year. That is mainly on hopes that dwindling U.S. oil production will help take crude out of an oversupplied market. But many analysts aren’t buying the rally. They question whether the glut is indeed on the wane given current stockpiles and the potential for increased supply from Iran and elsewhere. They point out that last year, the oil price also rallied in the spring on a belief that supply was falling, only to collapse in the second half of the year. A survey of 13 investment banks by The Wall Street Journal sees Brent crude, the international oil-price benchmark, averaging $41 a barrel this year, up a dollar from the […]
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Something Has To Give – Goldman Sachs Expects More Dividend Cuts It hasn’t been a great week for Big Oil. BP reported an 80 percent decline in earnings, and ExxonMobil lost its coveted AAA credit rating , which it has held uninterrupted for more than eight decades. Low oil prices are still wreaking havoc on the industry, hollowing out profits and forcing companies to cut back on spending and personnel. It is a sign of the times that BP’s $532 million net profit – which excludes nearly $1 billion in fresh charges from the Deepwater Horizon disaster way back in 2010 – beat analysts’ estimates and was considered a very positive result. BP’s share price jumped more than 5 percent on April 26 following the results. But the oil majors are still hurting. And it is unclear whether or not they can maintain their generous dividend policies. BP’s dividend yield now exceeds 7 percent and Royal Dutch Shell has a […]
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Why Saudi Arabia Will Not Win The Oil Price War Crude oil prices continued to surprise on Tuesday, with the U.S. benchmark adding another 4 percent to $44.60 a barrel. West Texas Intermediate is now up 65 percent since hitting 13-year lows below $27 a barrel February 11. It’s a performance only bettered by the globe’s second most traded bulk commodity – iron ore. But like analysts of the steelmaking raw material, many in the industry have been surprised by the extent of the rally, consistently calling the oil price lower. The blame for the cloudy outlook for crude is mostly being laid at the door of Saudi-Arabia. After the collapse of the Doha talks to freeze production and amid a spat with the U.S. over terrorism , the world’s top producer has threatened a scorched earth policy when it comes to maintaining and growing its market share. But there is an alternative view out there that argues that […]
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Long-term oil shortfall predicted by Wood Mackenzie Global supply-side pressures could reverse within 20 years as low crude oil prices crimp spending on exploration and production, Wood Mackenzie finds. For the fifth week in a row, oil services company Baker Hughes reported a decline in rig activity in North America, with a 2 percent drop to 431. Last year’s count for the week ending April 22 was 932. Lower oil prices means less capital is available for energy companies to invest in exploration and production activity. If that situation doesn’t improve, experts with analysis group Wood Mackenzie said in an emailed report the global oil market may face long-term shortages. “Over 7,000 conventional fields have been discovered in the last 15 years and, although […]
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Oil majors’ results surprise, but output fall, volatile trading lurk Major oil companies’ first-quarter results have so far confounded expectations, but volatile trading operations and a likely fall in production mean the good times are unlikely to last. Europe’s big oil producers have been expected to report their worst quarterly earnings yet amid the market downturn but instead BP, Total and Statoil have delivered share-boosting first-quarter results. BP made a first-quarter profit of $532 million, against expectations of a $140 million loss, boosted, the company said, by refining and a strong performance by its trading unit. The same unit had a weak quarter at the end of 2015. The British oil major does not disclose figures for its energy trading divisions, or give details on its performance. “Given the lack of visibility on the repeatability of these profits, we […]
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KRG-Iran pipeline talks gain momentum Iraq’s Kurdistan Regional Government (KRG) is conducting detailed technical planning with Iran that could lead to the construction of the autonomous region’s second oil export pipeline.”It’s serious. Very serious. We’ve had several meetings in the past, and will continue to have meetings,” said Deputy Minister of Natural Resources Taha Zangana, who has led the KRG’s technical delegation. “The technical part of pre-engineering is almost – almost – in place.”If the project moves forwar…
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Oil still at center of Libyan conflict U.N. Support Mission in Libya reminds all parties to respect the sanctity of oil, the country’s main source of revenue. Pictured, Libyan rebels at the western gate of Ajdabiya on April 20, 2011. File photo by Tarek Alhuony/UPI TRIPOLI, Libya, April 27 (UPI) — With oil again acting as kindling for conflict in Libya, the U.N. mission there reminded all parties to respect the sanctity of the nation’s economic lifeline. Martin Kober, the U.N. special envoy for Libya, said Wednesday he was deeply concerned by attacks on oil installations carried out by the Islamic State terrorist group. “It constitutes a grave assault not only on the lifeline of Libya’s national economy, but on the very livelihoods of millions of ordinary Libyans, many of who are already enduring hardship as a consequence of the ongoing political and military conflict in Libya,” he said in a statement. Attacks on Libyan oil […]
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East Libya to Ship More Oil While UN Slams Sales as Illegal Authorities in eastern Libya pledged to export more crude oil soon, two days after shipping their first cargo in defiance of a national unity government based in Tripoli. A representative of the National Oil Corp. based in eastern Libya said he expected payment within a month for the shipment. A separate branch of the company based in Tripoli, in the west of the divided country, said it hoped international forces would seize the “illicit” cargo. A United Nations official condemned the sale, while the buyer of the crude said it was legitimate. Libya, with Africa’s largest proven crude reserves, split into two separately governed regions in late 2014. The western region, centered around Tripoli, is home to the nation’s official oil company, while the internationally recognized government is based in the east. Libyans are currently working with foreign support to set up a Government of National Accord that would […]
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Saudi Aramco sets financing plans for industrial push A surge of volatility in China’s once placid commodities futures markets has rattled industrial players who use them for hedging, with some taking losses or cutting exposure, driven out by a flood of speculative money from hedge funds and retail investors. NEW YORK Expectations for chemical company earnings have been boosted by a combination of lower crude oil costs during the commodity’s slump along with strong demand for plastics that are used to make everything from shampoo bottles to grocery bags. LONDON Major oil companies’ first-quarter results have so far not been as bad as feared but volatile trading operations and a likely fall in production mean any respite could be short lived. NEW YORK Oil prices jumped about 3 percent on Wednesday, hitting new highs for 2016 as the dollar weakened after the Federal Reserve announced it would leave U.S. interest rates unchanged. HOUSTON Exxon Mobil Corp […]
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China’s Biggest Oil Company Posts 52% Decline in 2015 Profit Total oil, gas output rose 1.8% to 259.5 million metric tons China National Petroleum Corp., the country’s biggest oil and gas producer and the parent of PetroChina Co., said profit fell 52 percent as lower oil prices punished global explorers. Profit last year fell to 82.5 billion yuan ($12.7 billion), the Beijing-based company said in a statement on its website Wednesday. The unlisted, state-owned company didn’t specify whether the profit is pretax, gross or net. Revenue fell 26 percent to 2 trillion yuan, while oil and gas output rose 1.8 percent to 259.5 million metric tons, it said. “We properly dealt with all the risks and challenges and steered the company from the model of chasing speedy expansion to a model focusing more on quality growth,” Chairman Wang Yilin said in the statement. CNPC owns oil and gas assets in politically unstable areas, including Sudan, and controls 86 percent […]
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Baker Hughes Gains After Larger-Than-Expected Quarterly Loss Baker Hughes Inc. gained even after reporting a larger-than-expected first-quarter loss as a financial crisis in the oil industry forces explorers to slash spending. The world’s third-biggest oil services provider reported a net loss that widened to $981 million, or $2.22 a share, from a loss of $589 million, or $1.35 a share, a year earlier, Baker Hughes said Wednesday in a statement. Excluding certain items, the loss of $1.58 a share was worse than the 33 cent average loss that 32 analysts surveyed by Bloomberg had predicted ahead of the release. Investors shrugged off the loss, pushing shares up 2.3 percent to $46.86 at 2:33 p.m. in New York. Baker Hughes earlier rose to $47.67. Oil climbed above $45 a barrel for the first time since November. In North America, its largest region, Baker Hughes reported an operating profit margin of negative 21.2 percent, compared to negative 2.5 […]
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Statoil’s Adjusted Profit Declines to Record Low: Chart Statoil ASA reported its worst-ever adjusted earnings as crude prices fell the lowest in almost 12 years. Still, the company beat estimates for a loss as cost savings are having an effect. Norway’s biggest oil company joined BP Plc and Total SA in reporting better-than-expected results as the producer cut operational costs per barrel by a fifth.
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Hess producing more despite taking a loss Even as it reported a loss for the first quarter of the year, U.S. energy company Hess Corp. said it was producing more from its U.S. assets than in late 2015. Crude oil prices are rallying with reckless abandon, though current levels are still about 25 percent lower than they were at this point last year. Oil remains under pressure, albeit weakening, from a market tilted toward the supply side as demand falters in a lackluster global economy. Hess Corp. reported net production from the Bakken shale reserve area in North Dakota in Montana was up 2.7 percent from the fourth quarter to 110,000 barrels of oil equivalent per day. In […]
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New oil discovery in Gulf of Mexico Otto Energy Ltd., a company with headquarters in Australia, said it made an oil discovery in the Gulf of Mexico that was productive enough to keep drilling. The company said it ran through columns of oil at its SM-71 well in the Gulf of Mexico and decided to deepen its drilling activity to ensure the entire targeted region will be evaluated. The cost to drill deeper, the company added, is within the original spending target. Matthew Allen, the company’s managing director, said he was “very encouraged” by the results so far. Otto Energy describes the prospect as part of a regional “low cost, high-chance-of-success” opportunity in […]
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Venezuela Needs Oil’s Rally More Than Anyone as Economy Teeters Few countries need oil’s rally to last more than Venezuela, where the economy’s expected to shrink 8 percent this year and a lack of petrodollars has seen shops run short of consumer goods. The Latin American nation with the world’s largest oil reserves relies on crude shipments for 95 percent of export revenue. It will default this year barring a large jump in the oil price or a financial bailout, said Thomas Olney, a London-based analyst at consultants FGE. Credit-default swap traders have put the chances of non-payment through June next year at 67 percent, according to data compiled by Bloomberg. Following the collapse of oil-freeze talks in Qatar this month, Venezuelan Energy Minister Eulogio del Pino warned crude may revisit the 12-year lows of earlier this year as supply continues to swamp demand. Even with a rebound since February, prices remain 60 percent below their 2014 high. That’s […]
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Putin’s Decade-Old Dream Realized as Russia to Price Its Own Oil Russian President Vladimir Putin is on the verge of realizing a decade-old dream: Russian oil priced in Russia. The nation’s largest commodity exchange , whose chairman is Putin ally Igor Sechin, is courting international oil traders to join its emerging futures market. The goal is to increase revenue from Urals crude by disconnecting the price-setting mechanism from the world’s most-used Brent oil benchmark . Another aim is to move away from quoting petroleum in U.S. dollars. If Russia is going to attract international participation in Russian-based pricing, the Kremlin will need to persuade traders it’s not simply trying to push prices up, some energy analysts said. The government is dependent on oil revenue to fund its budgets. “The goal is to create a system where Russian oil is priced and traded in a fair and straightforward way,” said Alexei Rybnikov, president of the St. Petersburg International Mercantile Exchange, or […]
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