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RE: OPEC, for some quiet moments.. - admin - 03-31-2015

Speculators were the least bullish on crude in two years before prices surged as Saudi Arabia and its allies bombed rebels in Yemen, threatening supply disruptions in the largest oil-producing region. Hedge funds and other money managers cut their net-long position in West Texas Intermediate crude by 3.8% in the seven days ended March 24, U.S. Commodity Futures Trading Commission data show. Futures jumped more than 8% in the next two days before dropping 5% on Friday as shipping groups said there were no disruptions for now.

Oil speculators focused on glut miss surge as bombs hit Yemen

Outside the boardroom of BP Plc’s headquarters on London’s swanky St. James’s Square, a display case houses the geological data from Masjid-i-Solaiman, Iran’s first oil well. The discovery of crude in 1908 laid the foundations for the company that would become British Petroleum and opened one of the richest opportunities that Western oil companies have ever enjoyed in the turbulent Middle East. Since then, the industry’s history in Iran is intertwined with CIA-backed coups, colonial exploitation and the anti-Western resentment surrounding the 1979 Islamic Revolution.

Iran’s riches coveted by oil majors after decades of conflict

Saudi Arabia is seeking to protect its share of Asia’s oil market by keeping crude prices competitive with those of other suppliers, according to energy consultants Wood Mackenzie Ltd. “Asia now has more options to source crude oil supply,” Sushant Gupta, Wood Mackenzie’s head of Asia downstream research, said in an emailed statement Monday. “Saudi Arabia had to cut its price in Asia to ensure its crude oil remained attractive to the region’s refiners.”

Saudis seen by Woodmac pricing oil to protect Asia market share

The fate of global oil prices will be determined in Lausanne, Switzerland this week. An unlikely location for oil markets, to be sure, but that is where U.S. Secretary of State John Kerry is meeting with Iran’s Mohammad Javad Zarif for intense negotiations over Iran’s nuclear program. The P5+1 countries and Iran hope to come to an 11th hour agreement that could pave the way for a historic thaw in relations. The deadline for a deal is the end of the month, or Tuesday night. Although nuclear weapons proliferation is the headline item, one of the most significant side effects of the negotiations will be their effect on the price of oil. Iran, as a member of OPEC and a major oil producer on the world stage, still has substantial influence on oil markets.

Oil Prices To Fall Or Fly Depending On Iranian Nuclear Talks

If you ever need to be reminded just how influential Saudi Arabia is in the global oil industry, just look back to last week. On March 22, Saudi Oil Minister Ali al-Naimi said his country was at that point producing about 10 million barrels of crude per day, the most since July, the onset of the glut responsible for the current drop in prices. That news sent down oil prices even further in trading the next day.

Saudi Influence On Oil Markets Slipping




RE: OPEC, for some quiet moments.. - admin - 04-01-2015

Total has completed the divestment of its stake in onshore Oil Mining Lease (OML) 29 to Aiteo Eastern E&P, a Nigerian company, for $569 million. Together with the recently completed divestments of OML 24 and OML 18, Total’s share of sale proceeds from these three onshore Nigerian blocks amounts to over $1 billion. “The sale of these non-operated onshore blocks in Nigeria is yet another example of our strategy of dynamic portfolio management, achieved at attractive valuations,” said Patrick de La Chevardiere, CFO at Total. “These transactions also reduce our exposure to non-operated blocks onshore Nigeria, and allow us to focus on our core, operated developments, such as the Egina project.”

Total completes $1 billion of onshore divestments in Nigerian blocks

PetroChina (NYSETongueTR), the Asian country’s largest oil major by market value, no longer wants a stake in Canada’s oil sands as the ongoing collapse in crude prices has made the sector less attractive and more costly.

Another Major Getting Out Of The Oil Sands Business

The Russian government is requesting that its state-owned gas giant Gazprom provide discounted gas to the struggling government in Ukraine. The deal seems weird because Russia is also supporting an armed insurgency inside Ukraine, made up of pro-Moscow rebels. The conflict has decimated the Ukrainian economy. So why is Russia suddenly offering to help the country it has spent the past few months undermining?

Russia pushing Gazprom to provide discount gas to Ukraine - Business Insider

A couple of factors have cushioned Canadian oil producers slightly from the collapse in oil prices in the U.S. First, while the dollar price of West Texas Intermediate has fallen 45% since June, the Canadian dollar depreciated against the U.S. dollar by 18% over the same period, and now stands at CAD $1.26 per U.S. dollar. Since the costs of the oil sands producers are denominated in Canadian dollars, the currency depreciation is an important offset. There has also been some narrowing of the spread between synthetic and other crudes. As a result of these factors, the University of Alberta’s Andrew Leach calculated that when WTI was selling for US $50 a barrel, Canadian producers were receiving CAD $60 per barrel of synthetic crude.

Low Oil Prices Not Enough To Kill Off Oil Sands, Yet




RE: OPEC, for some quiet moments.. - admin - 04-02-2015

Ships carrying oil from Mexico docked in South Korea this year for the first time in more than two decades as the global fight for market share intensifies. Latin American producers are providing increasing amounts of heavy crude to bargain-hungry Asian refiners in a challenge to Saudi Arabia, the world’s largest exporter and the region’s dominant supplier.

The Saudis Are Losing Their Lock on Asian Oil Sales - Bloomberg Business

U.S. drillers targeting oil idled rigs for the 16th straight week, extending an unprecedented cutback in drilling, and dragging the total rig count down to the lowest level in more than five years. Rigs targeting oil in the U.S. fell by 12 to 813, Baker Hughes Inc. said on its website Friday. Those seeking gas declined by nine to 233, the Houston-based field services company said. The total U.S. count, including two miscellaneous rigs, slipped by 21 to 1,048.

U.S. oil rigs drop for 16th straight week, Baker Hughes says

Chevron Corp. withdrew from a natural gas exploration venture in central Australia, as the second-biggest U.S. energy producer curtails spending. Chevron decided that “the opportunity does not align strategically” with its global exploration and development portfolio, its partner Adelaide-based Beach Energy Ltd. said Friday in a statement.

Chevron pulls out of Australian gas project with Beach Energy

Petroleo Brasileiro SA, the state-controlled company at the center of Brazil’s biggest corruption scandal, agreed to sell oil and natural gas fields in southern Argentina to billionaire Eduardo Eurnekian’s Corporacion America, two people with knowledge of the deal said.

Petrobras said to start asset sale with fields in Argentina

Lenders are preparing to cut the credit lines to a group of junk-rated shale oil companies by as much as 30% in the coming days, dealing another blow as they struggle with a slump in crude prices, according to people familiar with the matter.

Reckoning arrives for cash-strapped oil firms amid bank squeeze




RE: OPEC, for some quiet moments.. - admin - 04-04-2015

For exploration and production companies, the recent plunge in oil prices poses a sizable challenge. But it is far from the only challenge these companies face. Exploration and production players have been buffeted in recent years by a host of forces, including rising costs and project risk, ongoing depletion of easy-to-exploit resources, a shrinking talent pool, and more onerous government regulations and fiscal demands. These challenges show few signs of abating. To weather this environment, such companies have to make bold changes to their businesses, with heavy emphasis on cost reduction. We believe that the following measures are among the most critical:

Seven Steps Oil Companies Should Take Amid Falling Prices - The Experts - WSJ

Surprisingly, the flow of crude oil is still accelerating, much like the money going into crude oil funds. Three of the largest crude oil funds include USO, OIL, and UCO. UCO is unique due to the fact that it’s an exchange-traded fund that uses leverage, mostly in the form of derivatives, to correspond to twice (200%) the daily performance of its underlying benchmark, the Bloomberg WTI Crude Oil Sub-index.

Many Big Guns Still Betting On Oil Comeback In 2015

It appears as if oil prices could be on the verge of a rebound, with new data showing that the U.S. oil patch is hitting an inflection point. While specific shale regions – such as North Dakota’s Bakken and Texas’ Eagle Ford – have posted production declines, overall U.S. oil output managed to edge up in recent months.

This Is What Will Determine If Oil Prices Go Up Or Down

Switching to excess in the world of black gold, Texas tea, according to the EIA’s drilling productivity report new well oil production for the Permian region is set to increase by a whopping 20% month-on-month in April, as a precipitous drop in oil prices spurs producers to be much more nimble in achieving greater efficiencies.

Fuel Fix » Commentary: Excess across the Energy Complex




RE: OPEC, for some quiet moments.. - admin - 04-04-2015

Ships carrying oil from Mexico docked in South Korea this year for the first time in more than two decades as the global fight for market share intensifies. Latin American producers are providing increasing amounts of heavy crude to bargain-hungry Asian refiners in a challenge to Saudi Arabia, the world’s largest exporter and the region’s dominant supplier.

The Saudis Are Losing Their Lock on Asian Oil Sales - Bloomberg Business

Because contrary to popular belief there is ”plenty of storage, but fear and misperception will likely prevail near term,” wrote Morgan Stanley MS +0.25% refining analyst Evan Calio in an in-depth report last week. Calio and his colleagues figure that tank farm utilization will top out near 72% in May at more than 500 million barrels in storage — high enough to continue supporting bearish sentiment, but not enough to bring about a complete collapse in U.S. crude oil benchmarks.

Busting The Myth Of Oil Storage Hitting 'Tank Tops' - Forbes

Iran’s oil current production of 2.8 million bpd is down by about 1.1 million bpd from the pre-sanction average of 3.9 million bpd. Meanwhile, Iran’s net crude oil exports are currently near 1.2 million bpd, down by about 1.2 million bpd from the average of 2.4 million bpd seen from 1995-2006. If a final agreement is reached by end-June, then sanctions would be lifted “when Iran complies with the terms of the agreement,” which Secretary of State Kerry said could take 6-12 months. Iran’s oil sanctions could therefore be at least partially lifted by the end of this year. But even worse, the market already knows that Iran has anywhere from 7-35 million barrels of oil in storage, which means that a flood of oil could be quickly released when sanctions are lifted, followed by a steady ramp-up in production and exports. World oil prices are likely in for another big leg down if the Iran agreement remains on track.

Will an Iranian Nuclear Deal Sink the Oil Market? - Focus on Funds - Barrons.com

But there remains ways to go in this little drama. It remains unclear whether Israeli Prime Minister Netanyahu will be successful in his mission to scuttle the deal or if the U.S. Congress will put up successful barriers to an accord. If a final agreement is reached in June, there needs to be a subsequent lifting of sanctions, which could take six to 12 months. Then, there needs to be a recovery in Iran’s investment-starved oil industry. In short, it could be 2016 or later before Iranian crude becomes a major issue for the oil markets.

Will an Iranian Nuclear Deal Sink the Oil Market? - Focus on Funds - Barrons.com




RE: OPEC, for some quiet moments.. - admin - 04-05-2015

Weekly Supply Estimates (Stocks in Thousand Barrels, All Other Volumes in Thousand Barrels per Day) show first production cut in the US

U.S. Weekly Supply Estimates




RE: OPEC, for some quiet moments.. - admin - 04-05-2015

It is not that I think that oil is going to again breach the low $40s in price.  There is a market theory of a crude 'clearing price', where oil finds buyers and less traditional routes to move out of glutted areas no matter what the fundamentals of supply and storage might say.  I think that is right and the idea of low $30s targets on oil, or low $20s as Citibank has called for to be downright ridiculous.  But it is the thought that oil can again rally into the profit zone above $60 that I find equally ridiculous now.   Production does matter, and we are at the limits of traditional storage. Further, if the E+Ps haven't collectively lied in their recently quarterly presentations, production is definitely going up this year. Finally, there are literally dozens of oil companies who could buy themselves another year or two of life should they be able to sell financial futures anywhere near $65 a barrel. That means a wall of real commercial selling should oil rally.  I don't think it will.

Oilprice.com

Lenders are preparing to cut the credit lines to a group of junk-rated shale oil companies by as much as 30 percent in the coming days, dealing another blow as they struggle with a slump in crude prices, according to people familiar with the matter.

Reckoning Arrives for Cash-Strapped Oil Firms Amid Bank Squeeze - Bloomberg Business

The breakthrough in nuclear talks with Iran on Thursday has the potential to cause a seismic shift in global energy markets over the long term, but energy experts said any appreciable impact on an already glutted global oil market was highly doubtful for at least six months and probably more than a year.

Iran deal may be slow to affect oil sector

The onus for restoring the oil price back to an equilibrium lies squarely on the shoulders of countries like the U.S. and not on the Organization of the Petroleum Exporting Countries (OPEC), a top Goldman Sachs analyst told CNBC.

Goldman Sachs on oil: US needs to cut, not OPEC

As concerns about the glut of oil in the world continues to weigh, questions have been raised over why the price of the crucial commodity hasn't fallen even further. For one analyst, the answer comes down to "phenomenal" demand.

Why oil’s not hitting lows? ‘Phenomenal’ demand




RE: OPEC, for some quiet moments.. - admin - 04-06-2015

Saudi Arabia, the world’s largest crude exporter, raised pricing for all May sales to Asia, after the country’s oil minister said global demand was improving. State-owned Saudi Arabian Oil Co. narrowed the discount for its Arab Light grade to Asia to the least since December, setting the crude at a discount of 60 cents a barrel to the regional benchmark, the company said in an e-mailed statement. The May pricing is 30 cents higher than in April. The company known as Saudi Aramco also increased the pricing of the other four grades it ships to Asia.

Saudis Raise Crude Oil Pricing to Asia on Signs of Demand Growth - Bloomberg Business

The African Petroleum Producers Association, which represents oil and gas producers from Algeria to South Africa, called for a cut in oil output globally. The group also includes the continent’s biggest producers, Nigeria and Angola. It’s starting an initiative, led by Angola and Algeria, to seek collaboration between members of OPEC and other oil producers to reduce output and stabilize oil prices, which have halved since the end of June.

African oil producers seek production cut, start initiative

Refiners are poised to make gasoline at a record pace this year, keeping the biggest U.S. crude glut in more than 80 years from overflowing storage.

Record Gasoline Output to Curb Biggest U.S. Oil Glut in 85 Years - Bloomberg Business

Iran’s accord with world powers brings the OPEC member a step closer to restoring oil production that was cut by sanctions while leaving unresolved when it will happen. The preliminary agreement outlined Thursday signals the Persian Gulf nation may be able to resume exports within months of a final deal, which negotiators aim to conclude by Jun. 30, according to UBS AG and Commerzbank AG. Iran’s shipments abroad have been curbed 50% by measures imposed in mid-2012.

Iran moves closer to restoring oil exports after nuclear accord




RE: OPEC, for some quiet moments.. - admin - 04-07-2015

U.S. oil rigs fell by the smallest number in 16 weeks, a sign that America's oil-drilling crash may be nearing its end. Drillers idled 11 oil-directed rigs, dropping the number to 802, Baker Hughes reported on Thursday.  The rig count has dropped 50% since October, an unprecedented retreat, as the drop in oil prices has made production less profitable.

Oil rigs decline by smallest number in almost four months

U.S. oil production is on track to reach an annual all-time high by September of this year, according to Rystad Energy. If production does indeed top out, then supply levels may soon hit a peak as well. That, in turn, could lead to shrinking supplies.

The U.S. oil boom is moving to a level not seen in 45 years - MarketWatch

Astenbeck Capital Management chief executive Andy Hall said that while bulking up on bullish trades a month ago may have been premature, he's still confident that the market will see stronger prices relatively soon.

Trader Andy Hall says oil prices still are on the way higher

The growth of US natural gas output in recent years has been sustained partly by gas produced in conjunction with shale or "tight" oil. The slowdown in oil drilling in response to lower oil prices could also affect future natural gas production, and thus prices, especially in the US.

Energy Outlook: How Will Low Oil Prices Affect Natural Gas?




RE: OPEC, for some quiet moments.. - admin - 04-08-2015

When we think of the recent drop in oil prices, the question is not only who started it, but who’s responsible for keeping the prices falling. Probably no one would dispute that the price plunge began with the eager and copious production of oil from shale formations in the United States. From the American perspective, that was beneficial because it was bringing energy self-sufficiency to a country with the reputation as the world’s largest importer of oil.

Who’s To Blame For The Oil Price Crash?

In the last few years, there have been some remarkable technological innovations that have the capability of changing the global oil and gas scenario. Some of these innovations, if implemented successfully, even have the capability of altering the current global geopolitical landscape.

Top 4 Energy Innovations On The Horizon

Declines in U.S. oil inventories and capex may boost prices modestly in the near term, but production growth will remain too strong for substantial gains, Goldman Sachs said. "While the decline in the U.S. rig count has been faster than we expected, it remains insufficient in our view to balance the U.S. market in 2016,"

Why oil inventory fall won't boost prices much: Goldman - Yahoo Finance

Brent crude oil fell below $58 a barrel on Tuesday on signs of growing oversupply as Iranian officials visited Beijing to seek more oil sales after a framework nuclear deal that could lead to the lifting of sanctions. China is Iran's largest trade partner and has bought roughly half of its crude exports since 2012, when sanctions against the Islamic Republic were tightened.

Oil falls as Iran, China discuss more supply - Yahoo Finance