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    Oil falls ahead of producer meeting...

    Oil falls as dark clouds appear ahead of producer meeting
    Wed Apr 13, 2016 - Oil prices fell on Thursday as OPEC warned of slowing demand and Russia hinted that there would only be a loose agreement with little commitments at the upcoming exporter meeting to rein in ballooning oversupply.
    Meanwhile, Goldman Sachs said that productivity gains by U.S. shale producers were keeping alive its "deflationary outlook" for oil prices as drillers manage to adjust to lower prices instead of going out of business. Brent crude futures LCOc1 were at $43.66 a barrel at 0123 GMT, half a dollar, or 1 percent, below their last close. U.S. West Texas Intermediate (WTI) futures CLc1 were also down 1 percent at $41.60.

    Russian oil minister Alexander Novak told a briefing that a deal on an output freeze scheduled this weekend will be loosely-framed with few detailed commitments. "The agreement will not be very rigidly formulated, it is more of a gentlemen's agreement," one of those present said, paraphrasing Novak's words at the gathering. A second person present said: "there is no plan to sign binding documents." This would make it unlikely that the meeting by top exporters in Qatar on Sunday will successfully rein in production of around 2 million barrels per day (bpd) of crude in excess of demand.

    Morgan Stanley said in a note that "we think any agreement actually sets up bearish catalysts for the months ahead." With the likelihood of a binding freeze by the Organization of the Petroleum Exporting Countries (OPEC) and Russia fading, analysts will look to the U.S. oil industry to see if lower drilling will result in falling production. Here too, the outlook is for production to remain higher than many expected. "Shale productivity gains remain a key driver of our long-term deflationary outlook for oil prices," said Goldman Sachs.[ "Our analysis of shale productivity... (is) broadly in line with our expectations for 3 percent to 10 percent yoy (year-on-year) increases," it added. With no end in sight to the supply glut, much will depend on demand to determine the size of the market's oversupply.

    While demand has been strong, supported largely from Asia, OPEC on Wednesday cut its 2016 forecast for global demand growth and warned of further reductions. World demand will grow by 1.20 million bpd in 2016, OPEC said in its monthly report, 50,000 bpd less than expected previously. "Economic developments in Latin America and China are of concern... Current negative factors seem to outweigh positive ones and possibly imply downward revisions in oil demand growth." Morgan Stanley pointed to several bearish risks for oil, including "significant selling pressure from producer hedging if prices rise... (and) reemerging macro headwinds." The bank said it was "bearish oil prices into 2H16" and that "sustaining a price above $45 WTI in the front will be difficult... into 2017."

    http://www.reuters.com/article/us-gl...-idUSKCN0XB027

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    Question

    Oil futures up ahead of OPEC meeting...

    Crude prices edge up in thin trading ahead of producer meeting
    Thu Apr 14, 2016 - Crude futures edged up on Friday in thin business as traders were reluctant to take on new positions ahead of a planned meeting at the weekend of major oil exporters who want to rein in ballooning global over-production.
    A group of oil producers, lead by top exporters Saudi Arabia and Russia, plan to meet in Qatar's capital Doha on Sunday to discuss measures to freeze output around current levels in an effort to contain a global supply glut that is seeing some 2 million barrels of crude produced every day in excess of demand. Traders said they were reluctant to take on new positions ahead of the meeting, which takes place outside of market hours, and that as a result of low volumes, prices were little moved. "The crude oil market is awaiting the outcome from a key meeting of oil producers in the coming days," ANZ bank said.

    Brent crude futures LCOc1 were at $44 a barrel at 0154 GMT, 16 cents, or 0.4 percent above their last close. U.S. West Texas Intermediate (WTI) futures CLc1 were up 17 cents at $41.67. With discussions focussing around freezing output at or near current record levels, most analysts said they have little hope that a potential Doha deal will reduce the glut that has pulled down crude prices by as much as 70 percent since 2014. "The Doha meeting does not materially change the oil market balances," Barclays bank said.

    Instead of pushing prices up by much, Barclays said an agreement could prevent prices from otherwise falling further. "If recent supply-side fundamental support holds and the market's expectations for a credible statement and commitment are met, the meeting could help prevent prices from falling back to the low $30 range." Energy consultancy Wood Mackenzie said that "even if an output freeze is announced, we do not expect a genuine one to occur during the remainder of 2016." Instead, Wood Mackenzie said it expected "OPEC output to rise 0.5 million barrels per day year-on-year in 2016, with most of that growth coming from Iran and Iraq, both of whom have indicated plans to grow output in 2016."

    http://www.reuters.com/article/us-gl...-idUSKCN0XB027

  3. #13
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    Angry

    Output freeze to push up oil prices...

    Oil exporters to discuss output freeze
    Fri, 15 Apr 2016 - Opec members, together with a few other oil producers, are meeting in Qatar on Sunday to discuss freezing output in an attempt to push up oil prices.
    The world's leading oil exporters could be finally about to take action following the fall in prices. Members of the exporters' group Opec, together with some other oil producers, are meeting in Qatar on Sunday to discuss freezing output. They want to push up the price of crude oil, which is less than half what it was in June 2014. In previous episodes of falling prices, Opec has been much quicker to respond, often cutting output. The agenda for the meeting in Doha, the capital of Qatar, is a freeze in production. No cuts in other words, just a commitment to no more increases. But even that possibility has given some support in recent weeks to the price of oil. The low it reached earlier this year was about $27 a barrel for Brent crude oil, one of the leading international market prices. This week it has been very close to $45. That is to a large extent due to traders considering the possibility that some oil producers are close to taking some sort of action to push prices higher.

    It's worth emphasising that even at current levels the price of oil is far below where it was as recently as June 2014 - when it reached $115. The fall has hurt many oil producing countries. Earlier this week, the International Monetary Fund said it had damaged financial stability and the government finances in many of them. The meeting is not formally an Opec event, though all or very nearly all the group's members will be represented. There will also be some non-members, notably Russia. The decision to hold this meeting, with a rather unusual group of attendees, reflects the oil exporters' persistent concerns about the level of prices and a feeling that any action needs to involve more than just the members of Opec.

    Two of the world's leading producers are not going to be there: the US and China. Both countries have large oil production industries, but they use nearly all of it themselves, and have to import extra to meet their own needs. Their economies overall tend to benefit from cheaper oil so they don't have a shared interest with those who will be turning up in Doha. Still, there is more than enough oil production that will be represented there to make a substantial difference to the global market if the participants chose to take strong action. What many oil analysts say, however, is that they aren't talking about action that is going to achieve much. In the past, Opec has often managed to agree and deliver cuts in production. This time all that's on the table is a potential agreement to refrain from further increases.

    Among the countries attending there is certainly a good deal of support for the idea. But one important player, an Opec member, is determined to increase its production: Iran. As the country emerges from western sanctions, the Iranian government wants to regain the share of the market that it lost as a result of those restrictions on its international sales. Iran is not even sending its oil minister Bijan Zanganeh to the meeting, although another senior official is expected to attend. Saudi Arabia's Deputy Crown Prince has said that a freeze could only happen if Iran takes part. But there are doubts about whether this really is the Kingdom's last word.

    No 'game changer'
    See also:

    Oil down ahead of producer meeting; dollar slips
    April 15, 2016 - Crude oil prices fell on Friday ahead of a weekend meeting that could yield an output freeze by major producers, while the U.S. dollar and stocks across the globe edged lower but posted weekly gains.
    On Wall Street, energy stocks led the market slightly lower as oil fell, and Apple <AAPL.O> shares also weighed after Nikkei business daily reported Apple will continue its reduced production of iPhones in light of sluggish sales. The S&P 500, however, posted its seventh positive week in the last nine. The MSCI index of stocks across the globe <.MIWD00000PUS> hit its highest point of the year on Thursday and emerging market stocks <.MSCIEF> racked up their best weekly gain in six. European shares <.FTEU3> fell 0.3 percent but posted their largest weekly gain in two months.

    On Friday, the Dow Jones industrial average <.DJI> fell 28.97 points, or 0.16 percent, to 17,897.46, the S&P 500 <.SPX> lost 2.05 points, or 0.1 percent, to 2,080.73 and the Nasdaq Composite <.IXIC> dropped 7.67 points, or 0.16 percent, to 4,938.22. Japan's Nikkei <.N225> closed 6.5 percent higher for the week. China's economy grew 6.7 percent in the first quarter from a year earlier, meeting expectations and providing additional evidence that a slowdown in the world's second largest economy may be bottoming out.

    The dollar index <.DXY> slipped 0.2 percent after the U.S. currency had gained more than 1 percent against both the yen <JPY=> and the euro <EUR=> earlier this week. Speculation was still rife about whether top oil producers led by Saudi Arabia and Russia will be able to reach a deal in Qatar on Sunday to curb output. "I think the fact that oil producers are talking suggests that the psychology of the market has changed a little bit and probably the worst of the oil price declines is behind us. This would be good for risk sentiment going forward," said Shaun Osborne, chief currency strategist at Scotiabank in Toronto.

    MORE

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    Output freeze = increase in oil prices = American fracking firing it up!
    Alea iacta est

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    Angry

    Granny says, "Dat's right - purt soon we all gonna be standin' in line buyin' $3/gal. gas again...

    Doha oil producers close to agreeing output freeze: sources
    Sun Apr 17, 2016 - Oil producing countries meeting in Doha on Sunday appeared close to agreeing on an output freeze to prop up crude prices, the first such deal in 15 years, official sources told Reuters. A draft agreement circulating in Doha and seen by Reuters says countries' average daily crude oil production in each month would not exceed the level recorded in January this year.
    The freeze would last until Oct. 1 this year, and producers would meet again in October in Russia to review their progress in engineering "a progressive recovery of the oil market", the draft reads. Final agreement has not been reached on the draft, but several senior sources in national oil ministries said they believed a deal could be achieved. "I am optimistic," acting Kuwaiti oil minister Anas Khalid al-Saleh said on Saturday of prospects for a deal. "‎There is only one proposal. Freeze at the January level till October," another delegate said, declining to be named because of political sensitivities. "There is a proposal to meet in October and to look forward." "We have a deal," a third senior oil source told Reuters.

    Over a dozen oil-producing countries inside and outside OPEC have officially confirmed they would attend the meeting in Doha - although major producer Iran has said it would not participate as it could not accept proposals to freeze its production. During the freeze, producers would continue to consult on the best ways to bolster the oil market, and the deal would be open for other states to join, the draft agreement says. The draft provides for the creation of a "high level monitoring committee" of two oil ministers from OPEC countries and two from non-OPEC countries; they would be assisted by a working group of experts.


    Although a freeze would be a significant step for oil producers, it would have only a limited impact on global supply and the market is unlikely to rebalance before 2017, the International Energy Agency said on Thursday. The role of Iran, which wants to ramp up production after the lifting of economic sanctions on it in January this year, is a key issue overhanging the Doha talks. "We have told some OPEC and non-OPEC members like Russia that they should accept the reality of Iran's return to the oil market," Tehran's oil minister Bijan Namdar Zanganeh was quoted as saying by his ministry's news agency SHANA on Saturday. "If Iran freezes its oil production at the February level, it means it cannot benefit from the lifting of sanctions."

    Publicly, Saudi Arabia has taken a tough stance on Iran. Deputy Crown Prince Mohammed bin Salman told Bloomberg in recent days that the kingdom would only restrain its output if all other major producers, including Iran, agreed to freeze their production. It was not clear if Saudi Arabia would stick to this position at the talks.

    http://www.reuters.com/article/us-oi...-idUSKCN0XE02Y

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    It won't create lines in the US. If it did, the price would be much higher than $3/gallon.

    Anyway, fire up the fracking wells at that price.
    Alea iacta est

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  8. #17
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    Oil meeting breaks up without agreement...

    Oil meeting aiming to cap output ends without agreement
    Mon, 18 Apr 2016 - A meeting of the world's leading oil producers to discuss capping output and reverse tumbling prices ends without agreement.
    A meeting of the world's leading oil exporters to discuss capping production has ended without agreement. After hours of talks in Qatar, the country's energy minister Mohammed bin Saleh al-Sada said that the oil producers needed "more time". Most members of the Opec producers' group, plus other oil exporters including Russia, attended the talks. They wanted a deal that would freeze output and help stem the plunge in crude prices over the past 18 months. "The general conclusion was that we need more time to consult among ourselves in Opec and non-Opec producers," Mr Sada said.

    Talks hit difficulties earlier on Sunday as reports emerged of tensions between Iran and Saudi Arabia. Iran did not attend the meeting. Saudi Arabia, the world's largest oil exporter, appeared willing to only freeze output if all Opec members agreed, including Iran. But Iran maintained it would continue the increase in oil production it has followed since economic sanctions were lifted earlier this year. "As we're not going to sign anything, and as we're not part of the decision to freeze output, we ultimately decided it was not necessary to send a representative," the Iranian government said.

    Analysis: Andrew Walker, BBC World Service economics correspondent

    The failure to agree a freeze is not going to help oil exporters desperate to see the price of crude oil rise. They are hurting. Even Saudi Arabia - despite having significant financial buffers - is overhauling its public finances and trying to diversify its economy away from oil. Other major oil producers are finding life even harder. One OPEC member, Angola, has even gone to the International Monetary Fund seeking to negotiate financial assistance. There is, perhaps, some compensation for the countries at the Doha meeting in that their failure to agree to curtail supply increases is likely to renew the pressure on shale oil producers in the US, who were not and never would be represented at a gathering such as this.

    The rise of the American shale industry in the last decade or so is one of the main reasons why global supplies are so plentiful and why prices are now less than half what they were in mid-2014. Mr Sada told reporters after the meeting: "We of course respect [Iran's] position... The freeze could be more effective definitely if major producers, be it from Opec members like Iran and others, as well as non-Opec members, are included in the freeze." Russia's oil minister Alexander Novak said Moscow had not closed the door on a global deal to freeze output. However, the Reuters news agency reported, Mr Novak said he was disappointed at the failure to reach a decision as he had travelled to Qatar expecting to sign a deal, not debate one.

    'Mother of all meetings'
    See also:

    Saudi-Iran tensions scupper deal to freeze oil output
    April 17, 2016 - A deal to freeze oil output by OPEC and non-OPEC producers fell apart on Sunday after Saudi Arabia demanded that Iran join in despite calls on Riyadh to save the agreement and help prop up crude prices.
    The development will revive oil industry fears that major producers are embarking again on a battle for market share, especially after Riyadh threatened to raise output steeply if no freeze deal were reached. Iran is also pledging to ramp up production following the lifting of Western sanctions in January, making a compromise with Riyadh almost impossible as the two fight proxy wars in Yemen and Syria. Some 18 oil nations, including non-OPEC Russia, gathered in the Qatari capital of Doha for what was expected to be the rubber-stamping of a deal - in the making since February - to stabilize output at January levels until October 2016.

    But OPEC's de facto leader Saudi Arabia told participants it wanted all members of the Organization of the Petroleum Exporting Countries to take part in the freeze, including Iran, which was absent from the talks. Tehran had refused to stabilize production, seeking to regain market share post-sanctions. After five hours of fierce debate about the wording of a communique - including between Saudi Arabia and Russia - delegates and ministers announced no deal had been reached. "We concluded we all need time to consult further," Qatar's energy minister Mohammed al-Sada told reporters. Several OPEC sources said if Iran agreed to join the freeze at the next OPEC meeting on June 2, talks with non-OPEC producers could resume.

    Russian oil minister Alexander Novak called the Saudi demand "unreasonable" and said he was disappointed as he had come to Doha under the impression that all sides would sign the deal instead of debating it. Novak said Russia was not shutting the door on a deal but the government would not restrain output for now. Russia is a key ally of Iran and has been defending Tehran's right to raise output post-sanctions while also supporting the Islamic Republic in many of its conflicts with Riyadh.

    TOUGH SAUDI STANCE

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    Oil prices dive after output talks fail...

    Oil prices dive after producers fail to agree output cap
    Mon, 18 Apr 2016 - Oil prices are down sharply after a meeting of oil producers fails to agree an output freeze.
    Brent crude fell 7% at one point before recovering some ground. In afternoon trade it fell 3.4% to $41.70 a barrel. The meeting in Qatar was attended by most members of oil producers' group Opec, including Saudi Arabia, but not Iran. Saudi Arabia, the world's biggest exporter, had been prepared to freeze output if all Opec members had agreed. But Iran is continuing to increase output following the lifting of sanctions against it. "As we're not going to sign anything, and as we're not part of the decision to freeze output, we ultimately decided it was not necessary to send a representative," the Iranian government said.


    After hours of talks in Qatar, the country's energy minister Mohammed bin Saleh al-Sada said that the oil producers needed "more time". He said after the meeting: "We of course respect [Iran's] position... The freeze could be more effective definitely if major producers, be it from Opec members like Iran and others, as well as non-Opec members, are included in the freeze."

    The price of US crude oil initially fell 6.8%, or $2.82, to $38.68 a barrel. It too clawed back some of those losses and in was trading down 3.6% in the afternoon at $38.90. The Russian rouble also fell sharply, dropping 2% against the US dollar to 67.79. In mid-afternoon trading it was up 0.57% at 66.65.

    Analysis: Andrew Walker, BBC World Service economics correspondent

  11. #19
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    Iran and Saudi Arabia is not playing well together within the OPEC framework.
    Alea iacta est

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    Angry

    Sounds like the demand side is back...

    As oil plows through $45 a barrel, U.S. producers rush to lock in prices
    Mon May 2, 2016 - U.S. oil producers pounced on this month's 20 percent rally in crude futures to the highest level since November, locking in better prices for their oil by selling future output and securing an additional lifeline for the years-long downturn.
    The flurry of dealing kicked off when prices pierced $45 per barrel earlier in April. It picked up in recent weeks, allowing producers to continue to pump crude even if prices crash anew. While it was not clear if oil prices will remain at current levels, it may also be a sign producers are preparing to add rigs and ramp up output. This week, Pioneer Natural Resources Co (PXD.N), a major producer in the Permian shale basin of West Texas, said it would add rigs with oil prices above $50 per barrel. Selling into 2017 tightened the structure of the forward curve, with December 2017's premium to December 2016 CLZ6, known as a contango, narrowing to $1.30, its tightest since June 2015. That spread had been as wide as $2.15 a barrel just four days earlier.

    Open interest in the December 2017 CLZ7 WTI contract was at a record high of 122,533 lots on Friday, up about 20,000 lots from the start of April. "U.S. producers have been quick to lock in price protection as the market rallies given that the vast number of companies remain significantly under hedged relative to historically normal levels," said Michael Tran, director of energy strategy at RBC Capital Markets in New York. It was not clear which companies embarked on the forward selling. In the past a handful of producers such as Anadarko Petroleum (APC.N) have sporadically hedged in large chunks. But trade sources pointed to increased activity among financial instruments for the balance of 2016, calendar year 2017 and even 2018.


    Oil pump jacks are seen next to a strawberry field in Oxnard, California

    The uptick in producer hedging activity came as benchmark West Texas Intermediate (WTI) futures finished April up 20 percent for the biggest monthly increase in a year. Prices have rebounded by as much as 80 percent on expectations of falling U.S. production after touching a 12-year low in February. On Friday, Baker Hughes reported oil drillers removed another 11 from operation the week to April 29, bringing the total oil rig count to 332, its lowest since November 2009. The calendar 2017 strip CLCALYZ7 week climbed to $49.44 on Thursday, its strongest since early December. In January, it had traded as low as $37.38 a barrel.

    To outlast the downturn, many producers like Continental Resources (CLR.N), are deferring completions on already drilled wells, known as DUCs. "There are some companies that will hedge at $45 and $50, giving them more incentive to bring those DUCs on line," said Hakan Carapcioglu, an energy market analyst with Ponderosa Advisors, a Denver-based consultancy. To be sure, many have questioned the fundamentals backing the recent oil rally, particularly as U.S. crude inventories currently stand at a record 540.6 million barrels, according to the latest data from the Energy Information Administration.

    http://www.reuters.com/article/us-us...-idUSKCN0XT07T

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