Crude oil market

[waltky]

Looks like more oil gonna be comin' down the pipeline...

U.S. energy CEOs ready for new drilling as oil prices plot upward path
Wed May 4, 2016 - After cutting spending and staff levels to the bone, U.S. oil executives say they are getting ready for new drilling projects as a 50 percent increase in crude prices since February leads them to believe the worst of the downturn may be over.

Any price rise above $50 per barrel could fuel a resurgence in the U.S. shale industry, which saw drilling and fracking of new wells put on hold over the past year as oil prices plumbed near $25 per barrel. But prices have steadily risen to around $44 per barrel, near levels where money could start flowing again. While myriad factors could push prices lower again and many companies are stuck in bankruptcy, prominent executives say there is a pending upswing in oilfield activity globally and that work will come back fastest in North America. "The outlook for commodity prices is improving," Al Walker, chief executive of oil producer Anadarko Petroleum Corp (APC.N), said on Tuesday after the company posted better-than-expected quarterly results. "It goes without saying that things look better today than they did 90 days ago."

Stacked rigs are seen along with other idled oil drilling equipment at a depot in Dickinson, North Dakota

Dave Lesar, chief executive of oilfield services provider Halliburton Co (HAL.N), said he believes the U.S. drilling rig count has hit a bottom and likely will rise later this year. U.S. oil drillers last week cut rigs for the sixth week in a row to the lowest level since November 2009. The industry has shed more than 250,000 jobs globally, nearly half in the United States. "Certainly with oil prices a little higher, people are more optimistic," Lesar said on Tuesday. "We do think that potentially we'll see an upswing in the rig count in the back half of the year." A rising rig count would translate into more wells being drilled that can be fracked.

On staffing, Halliburton noted it hired 21,000 people globally in 2014 - before laying many of them off in 2015 as oil prices crashed - and could quickly add staff back. Any rise in oil field activity would be a boon for Halliburton, which this week scrapped its planned buyout of rival Baker Hughes Inc (BHI.N). Both companies are now trying to anticipate needs from customers, such as Anadarko, which send ripples across vast supply chains when they lift spending. Last week, Pioneer Natural Resources (PXD.N) CEO Scott Sheffield said he would add rigs if oil stays near or rises from $50 a barrel. And Whiting Petroleum Corp (WLL.N), the largest oil producer in North Dakota, said it would soon frack 44 wells to bring them online - just weeks after saying it would freeze virtually all new work.

Baker Hughes expects oil at $50 or above would fuel the fracking of several hundred wells per month. "This represents a significant near-term opportunity," Martin Craighead, the chief executive of Baker Hughes, said on Tuesday. The services companies are telling analysts they are ready to capture new orders. "When this thing snaps back, it's going to snap back hard," said Lesar, the Halliburton CEO. "We believe that when this market recovers it will be North America that responds the fastest, offering the greatest upside."

http://www.reuters.com/article/us-us...-idUSKCN0XV0A4

[Peter1469]

$43.61

[waltky]

Once again, thank Nigeria for higher oil prices...

Oil prices rise on Nigeria outages, Goldman forecast
May 16, 2016 - Oil prices jumped over 2 percent on Monday to their highest since November 2015 on growing Nigerian oil output disruptions and after long-time bear Goldman Sachs said the market had ended almost two years of oversupply and flipped to a deficit.

Brent crude futures were trading at $48.83 per barrel at 1118 GMT, up $1 or 2.05 percent. U.S. crude futures were up 98 cents, or 2.08 percent, at $47.19 a barrel. Supply disruptions around the world of as much as 3.75 million barrels per day (bpd) have wiped out a glut that pulled down oil prices by as much as 70 percent between 2014 and early 2016. The disruptions triggered a U-turn in the outlook of Goldman Sachs, which had long warned of global storage hitting capacity and of yet another oil price crash to as low as $20 per barrel. "The oil market has gone from nearing storage saturation to being in deficit much earlier than we expected," Goldman said. "The market likely shifted into deficit in May ... driven by both sustained strong demand as well as sharply declining production," it said.

However, Goldman cautioned that the market would flip back into a surplus in the first half of 2017 as it said prices around $50 per barrel in the second half of 2016 would see exploration and production activity picking up. In Nigeria, output has fallen to its lowest in decades following several acts of sabotage. In the Americas, U.S. officials warned they were growing increasingly concerned by the possibility of an economic and political meltdown in Venezuela amid low oil prices. Venezuela's oil production has already fallen by at least 188,000 bpd this year.

In the United States, crude production has fallen to 8.8 million bpd, 8.4 percent below 2015 peaks as the sector suffers a wave of bankruptcies. And in China, output fell 5.6 percent to 4.04 million bpd in April, year-on-year. Countering this, supply rose from the Organization of the Petroleum Exporting Countries (OPEC) as its producers are engaged in a race for market share.

OPEC pumped 32.44 million bpd in April, up 188,000 bpd from March, the highest since at least 2008. Also preventing steeper price jumps was a recovery in output in Canada following closures due to a wildfire, as well as bloated global crude storages. "The inventory buffer may be preventing full price recovery and ... the market is rightly nervous about the sustainability of outages," said Morgan Stanley. Barclays said that "while the supply-side disruptions are supporting oil market balances, refinery margins are starting to weaken, especially in Asia," adding that weaker demand from those refiners could produce "downside risk to prices in Q3 16."

https://www.yahoo.com/news/oil-price...ce.html?ref=gs

[zelmo1234]

All I know is that I invested in Futures the first week in April with a 90day hold.

Looks like my Broker pulled off another good move.

[waltky]

Oklahoma's way of dealing with the oil bust...

Special report: As oil boom goes bust, Oklahoma protects drillers and squeezes schools
May 17 2016 - After intense lobbying, Oklahoma’s oilmen scored a victory two years ago. State lawmakers voted to keep in place some of the lowest taxes on oil and gas production in the United States - a break worth $470 million in fiscal year 2015 alone.

The state’s schools haven’t been so fortunate. In Newcastle, 23 miles from the capital of Oklahoma City, John Cerny recently learned that the school attended by his five-year-old granddaughter, Adelynn, will open just four days a week next year. The Bridge Creek school district will slash spending because of a projected $1.3 billion state budget shortfall next year. Beth Lawton teaches first grade at Broadmoore Elementary in Moore, a city of 59,000 bordering the capital. In April, she and several colleagues were told their contracts won’t be renewed because of funding cuts. Broadmoore’s class sizes are expected to rise next year as a result. “I think our lawmakers have failed us, and I don’t understand how little they value education,” Lawton said.

Oklahoma’s school-funding crisis is part of the pain inflicted by falling oil prices on energy-rich states across America that rely on natural-resources taxes to pay their governments’ bills. But the crisis in Oklahoma is especially dire, exacerbated by a legacy of large tax breaks bestowed upon oil companies. Before the recent 60 percent decline in oil prices, a drilling bonanza minted millionaires and billionaires in Oklahoma. The boom turned sleepy Oklahoma City into a thriving hub for drillers like Devon Energy (DVN.N), Chesapeake Energy (CHK.N) and Continental Resources (CLR.N) - the troika that lobbied hardest for the tax-break extension. The rebuilt downtown hosts top notch dining, hotels, arts venues, and a top NBA basketball team.

But as private oil wealth created these emblems of prosperity, public services have come under severe strain. In contrast to other energy states, Oklahoma didn’t fill state coffers during flush years. Oklahoma taxed new oil and gas production from its prolific horizontal wells - the big money-makers of the fracking industry - at rates as low as 1 percent throughout the shale boom. In North Dakota’s giant Bakken oilfield, the going rate was 11.5 percent.

MISSED OPPORTUNITY?

[waltky]

Looks like we've reached the new normal...

Oil prices top $50, Asian shares struggle on China worries
May 25 2016 - Brent crude oil rose above $50 a barrel for the first time in nearly seven months on Thursday but Asian shares struggled to gain traction, with worries about U.S. interest rates and China's slowing economy keeping many investors on the sidelines.

While energy stocks outperformed, a slump in mainland China stocks to 2-1/2 month lows dampened any broader interest in riskier assets in Asia, offsetting overnight gains on Wall Street. "The market environment is not bad overall. Oil prices are rising, which would benefit oil producing countries. But Asia may be hurt by concerns about the Chinese economy," said Shuji Shirota, associate director at HSBC in Tokyo. "The market's focus is returning to the Fed, given rising expectations that they could hike rates much earlier than expected. That is weighing on many emerging markets as well," he said. Japan's Nikkei rose 0.3 percent but MSCI's broadest index of Asia-Pacific shares outside Japan was almost flat, struggling to extend its rebound from Tuesday's 12-week low. It had gained 1.2 percent on Wednesday. Shanghai shares fell more than 1 percent, with sentiment frail after a series of disappointing economic data earlier this month and fears that policymakers may be taking a more cautious stance on further stimulus as debt levels grow.

Share prices rallied globally overnight, led by European banks, which benefit from a decision by euro zone finance ministers to unlock new funds for Greece and to give it a firm offer of debt relief. On Wall Street, U.S. S&P 500 Index rose around 0.7 percent to 2,091, its highest in almost a month and near its six-month intraday high of 2,111. Energy stocks outperformed on the back of continued recovery in oil prices, which hit seven-month highs after the U.S. government reported a larger-than-expected drop in crude inventories. [O/R] Global benchmark Brent futures rose 34 cents or about 0.6 percent to as high as $50.08 per barrel, the highest level since early November. U.S. West Texas Intermediate (WTI) hit $49.88, a seven-month high. The rally in U.S. and European shares came even as investors readied themselves for monetary tightening by the U.S. Federal Reserve as early as next month.

The yield on two-year U.S. notes rose to a 10-week high of 0.938 percent on Wednesday as investors priced in the likelihood of the Fed raising its federal funds target rate to 0.50-0.75 percent from the current 0.25-0.50 percent in coming months. It last stood at 0.903 percent, almost a quarter percentage point above this month's low of 0.686 percent. Market players are awaiting comments by Fed Chair Janet Yellen at a Harvard University event on Friday, though many also say her speech scheduled for June 6 - after new U.S. payrolls data comes out - would be even more crucial. Recent comments by Fed policymakers have put a possible rate hike this summer firmly on the table for discussion, but U.S. interest rate futures <0#FF:> are still pricing in only about one-third chance of a rate hike in June and about a 60 percent likelihood by July.

The prospects of higher U.S. interest rates undermined the attraction of gold, which fell to a seven-week low of $1,217.90 per ounce though it came back up a tad in Asia to trade at $1,231. In the currencies, sterling rose to $1.4700, near its four-month peak of $1.4770 hit earlier this month, as several bookmakers widened the odds on a British "Brexit" from the European Union after opinion polls showing the "in" camp leading. The dollar was generally supported by U.S. rate hike expectations, while the euro stood at $.1151, having hit a 10-week low of $1.1129 overnight. But it saw a 0.5 percent loss against the yen to 109.64 yen in early Asian trade in an erratic move.

http://www.reuters.com/article/us-gl...-idUSKCN0YG341

[waltky]

The oversupply of oil is easing in the United States...

Lower Supplies Boost Oil Prices, With Demand Expected to Grow
May 26, 2016 | WASHINGTON — Oil prices rose above $50 a barrel Thursday for the first time this year, following a report the oversupply of oil is easing in the United States.

Oil prices have plunged during the past year, hurting oil exporting nations and petroleum companies, which cut jobs and investments in the oil industry. Economists say the damage to demand in the economy was larger than expected, while the boost to consumers from lower gasoline prices had less impact than experts predicted. As a result, investors worried and stock markets had faltered. But Thursday, many global stock markets made gains as oil prices rose to their highest level in seven months.

A attendant fills up a car at a gas station in Jiddah, Saudi Arabia, Sept. 15, 2015. Oil prices rose above $50 a barrel Thursday for the first time this year.

The earlier price plunge grew out of a surge in oil production from advanced technologies, like fracking in the United States, which boosted oil supplies. In the past when supplies were higher than demand, OPEC nations, particularly Saudi Arabia, have cut production to keep prices strong. But the Saudis have changed their strategy, maintaining production, perhaps hoping that falling prices would force competitors, particularly those that have higher production prices, out of business.

Over the long term, experts at the Organization of Petroleum Exporting Countries predict population growth will boost demand for energy by 50 percent, and oil products will fill most of that demand for decades to come. OPEC says the global population will grow by 1.7 billion by 2040, and the number of private cars will double to more than two billion, while electric service will expand to many people who now lack access.

http://www.voanews.com/content/oil-prices/3347264.html

[Truth Detector]

We need to pull out of OPEC and quit pumping billions into the pockets of cavemen who dress in designer jeans.

We have entire communities in the US that are suffering because the price of crude is so low they can't afford to pay the drillers.

Saudi, the big player in all of this, in the meantime, has cranked up its execution of citizens who attempt to criticize the government or speak out against religious law.

They're doing that on OUR dime. We made them the dominating power they are today.

We need to get out of OPEC and let those $#@!s sink.

How is the US a member of OPEC? Good lord.

WE have communities suffering because of SEVEN years of Obama's gross incompetence, inept notions about economics and kowtowing to Communist dictatorships.

http://www.opec.org/opec_web/en/about_us/25.htm

[Truth Detector]

Translation of this thread; seven years of Obamanomics haven't done a damned thing to make life better for minorities and average Americans.

[waltky]

Not much the Saudis can do about it, the market is back in control of prices now...

Saudis pledge not to shock oil market as OPEC debates policy
Thu Jun 2, 2016 - Saudi Arabia promised on Thursday not to flood the oil market with extra barrels as OPEC entered a heated debate about production policy, with Iran insisting on the right to raise output steeply.

Tensions between the Sunni-led kingdom and the Shi'ite Islamic Republic have been the highlights of several previous OPEC meetings, including in December 2015 when the group failed to agree on a formal output target for the first time in years. Several OPEC sources said Saudi Arabia and its Gulf allies would propose to set a new collective ceiling in an attempt to repair OPEC's waning importance and end a market-share battle that has sapped prices and cut investment.

Failure to reach any deal would revive market fears that OPEC's largest producer Saudi Arabia, already pumping near record highs, may raise production further to punish rivals and gain additional market share. "We will be very gentle in our approach and make sure we don't shock the market in any way," new Saudi Energy Minister Khalid al-Falih told reporters ahead of the meeting. "There is no reason to expect that Saudi Arabia is going to go on a flooding campaign," Falih said when asked whether Saudi Arabia could add more barrels to the market. Answering a question on whether Riyadh would propose setting a collective output ceiling, he said: "We will do that when necessary‎." He added that he would listen to anything Iran brings to the table.

Any agreement between Riyadh and Tehran would be seen as a big surprise by the market, which in the past two years has grown increasingly used to clashes between the political foes as they fight proxy wars in Syria and Yemen. Saudi Arabia effectively scuppered plans for a global production freeze - aimed at stabilising oil markets - in April. It said then that it would join the deal, which would also have involved non-OPEC Russia, only if Iran agreed to freeze output. Tehran has been the main stumbling block for the Organization of the Petroleum Exporting Countries to agree on output policy over the past year as the country boosted supplies despite calls from other members for a production freeze.

Tehran argues it should be allowed to raise production to levels seen before the imposition of now-ended Western sanctions over Iran's nuclear program. Iranian Oil Minister Bijan Zanganeh said Tehran would not support any new collective output ceiling and wanted the debate to focus on individual country production quotas. "Without country quotas, OPEC cannot control anything," Zanganeh told reporters. He insisted Tehran deserved a quota - based on historic output levels - of 14.5 percent of OPEC's overall production.

OPEC is pumping 32.5 million barrels per day (bpd), which would give Iran a quota of 4.7 million bpd - well above its current output of 3.8 million, according to Tehran's estimates, and 3.5 million, based on market estimates. Zanganeh said he supported a candidate from Nigeria for the post of OPEC secretary-general, which could emerge as a rare compromise within the organization if Riyadh also backs the appointment.

COUNTRY QUOTAS