01-16-2016, 11:54 PM
China won’t let fuel prices fall in line with crude below $40/bbl as the world’s second-biggest oil consumer seeks to curb pollution and shield domestic producers from oil’s collapse.
China sets oil price floor at $40 to protect domestic supply
Wood Mackenzie's latest review of the global LNG industry concludes that the market was characterized by weak Asian demand in 2015, with a year-on-year decline of 2%. As a result, many LNG players shifted their focus to developing markets and employing new regasification capacity. Despite weakened demand and the impact of the oil price crash, LNG production remained high throughout the year reaching 250 million tonnes in 2015—up 4 million tonnes on 2014—primarily due to a number of key project start-ups. In 2016, the initial focus will be on the U.S., with the start of exports from Sabine Pass, signifying a key milestone; however, Wood Mackenzie cautions that with a further 125 million tonnes of LNG under development, real LNG growth is post 2016. Key findings from Wood Mackenzie’s 2015 LNG review include:
U.S., Australian LNG start-ups in 2016, but real LNG growth yet to come
The world mostly ignored Ed Morse 11 months ago when the head of commodities research at Citigroup said oil could drop as low as $20. It’s paying attention now that crude has tipped below $30. Crude futures in the U.S. sank into the $20s for the first time in more than 12 years on Tuesday, hours after BP Plc said it would slash an additional 4,000 jobs, Petroleo Brasileiro SA cut its spending plan and Petroliam Nasional Bhd. warned that it faces several tough years. Morse, who wrote in a Feb. 9 research note that oil could fall "perhaps as low as the $20 range for a while," said in Calgary Tuesday that the world is now confronting $20 oil. “The $20 number is something you have to talk about,” Morse said. “When you’ve seen a $10 price slide and WTI is trading just slightly above $30, the likelihood is fairly great. Clearly oil markets cannot maintain a price at below the $30 level for very long. The question is how much longer.”
$20 oil no longer mirage as world confronts 12-year low
Iran may only be able to deliver about half of the promised surge in crude output after sanctions are lifted as it struggles to revive idled fields, according to banks including UBS Group AG and Saxo Bank A/S. Abouzar production platform. The Persian Gulf nation will increase crude oil production by 100,000 bpd, or 3.7%, a month after sanctions are lifted and by 400,000 bpd in six months, according to the median estimate of 12 analysts and economists surveyed by Bloomberg. Oil Minister Bijan Namdar Zanganeh has pledged to boost output by half a million barrels a day within weeks of the end of sanctions and by the same amount again in six months. The strictures may be removed as soon as Jan. 18.
Iran’s post-sanctions oil surge likely to come in a half measure