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  1. #71
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    Saudis gonna raise oil prices next month...

    Saudi Arabia may raise December crude oil prices to Asia to highest in few years
    November 1, 2017 - Top oil exporter Saudi Arabia will hike December crude prices for customers in Asia to levels last seen in 2013 or 2014, a Reuters survey showed, with OPEC-led output cuts and robust demand re-balancing markets for the commodity.
    The producer is expected to raise flagship Arab Light’s December official selling price to at least 90 cents a barrel above Oman/Dubai quotes, the survey of five refiners showed. That would be the highest premium since $1.65 in September 2014, according to Reuters data. Prices for heavier grades may see a bigger boost in December, the survey showed, with Arab Heavy’s OSP set to rise to at least $1.30 below Oman-Dubai quotes. That would be the narrowest discount for Saudi heavy crude since minus $1.05 in December 2013, according to Reuters data.

    The increases would come on the back of stronger Middle East crude benchmark prices and firm refining margins, the respondents said. Dubai’s backwardation widened in October compared with the previous month. In a backwardated market, prompt prices are higher than those in future months signaling strong demand for spot cargoes. Complex refining margins in Singapore, a gauge of refiner profitability in the region, held above $7 a barrel for a fourth month in October, Thomson Reuters Eikon data showed.

    Gains in naphtha margins could prop up Arab Extra Light’s OSP in December by at least 50 cents a barrel, the survey showed.Saudi crude OSPs are usually released around the fifth of each month, and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 12 million barrels per day (bpd) of crude bound for Asia.

    Saudi Aramco sets its crude prices based on recommendations from customers and after calculating the change in the value of its oil over the past month, based on yields and product prices. Saudi Aramco officials as a matter of policy do not comment on the kingdom’s monthly OSPs.

    http://www.reuters.com/article/us-sa...KBN1D13IA?il=0

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    One excuse is as good as another to jack up oil prices...

    Oil hits highest levels since 2015 amid tightening markets, Saudi purge
    November 5, 2017 - Oil prices hit their highest levels since July 2015 early on Monday as markets tightened, while Saudi Arabia’s crown prince cemented his power over the weekend through an anti-corruption crackdown that included high profile arrests.
    Brent futures LCOc1, the international benchmark for oil prices, hit $62.44 per barrel early on Monday, their highest level since July 2015. Brent was at $62.27 per barrel at 0051 GMT, up 20 cents, or 0.3 percent from the last close and 40 percent above June’s 2017 lows. U.S. West Texas Intermediate (WTI) crude CLc1 hit $56.00 per barrel in early trading, also the highest since July 2015, and was at $55.83, up 19 cents, or 0.3 percent from the last settlement. WTI is a third above its 2017 lows.

    Crown Prince Mohammed bin Salman, Saudi Arabia’s designated future king, has tightened his grip on power through an anti-corruption purge by arresting royals, ministers and investors including prominent business billionaire Alwaleed bin Talal and the head of the National Guard, Prince Miteb bin Abdullah. “This consolidates the reforming process underway, part of which is a desire to drive the price of oil higher,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader, said that the purge.

    Bin Salman’s reforms include a plan to list parts of giant state-owned oil company Saudi Aramco next year, and a higher oil prices is seen as beneficial for the market capitalization of the future listed company. In oil fundamentals, traders said that there were ongoing signs of tightening market conditions. U.S. energy companies cut eight oil rigs last week, to 729, in the biggest reduction since May 2016. The decline in U.S. drilling activity comes as the Organization of the Petroleum Exporting Countries (OPEC) and a non-OPEC group lead by Russia have pledged to hold back about 1.8 million barrels per day (bpd) in oil production to tighten markets.

    The pact to withhold supplies runs to March 2018, but there is growing consensus to extend the deal. While supplies are tightening, analysts say demand remains strong. “Synchronous global economic growth and new supply disruptions are creating the most constructive oil price environment since ... 2014,” Barclays bank said. The British bank said it was raising its average Q4 Brent price forecast by $6 per barrel to $60 per barrel. ”The surprisingly strong macro backdrop and the accelerated inventory drawdown mean that these slightly higher price levels are likely to be sustained through Q1 of next year. Barclays said it raised its full-year 2018 forecast by $3 per barrel to $55 per barrel.

    http://www.reuters.com/article/us-gl...KBN1D603A?il=0
    See also:

    Saudi Arabia's crown prince is acting like Putin
    November 5,`17 - Jamal Khashoggi is a Saudi journalist and author.
    Saturday night’s high-profile arrests in Saudi Arabia have sent shock waves through the global political Richter scale. The arrests, including that of such well-known figures as my former boss Prince Alwaleed bin Talal, came within hours of changes in the leadership of a number of important ministries, as well as to the leadership and structure of the much-respected Saudi national guard. Saudi royals view themselves as The Party, sharing power and ruling by consent, in an arrangement that is largely opaque. What is absolutely clear after Saturday’s “Night of the Long Knives” is that Crown Prince Muhammad bin Salman is upending this arrangement and centralizing all power within his position as crown prince.

    This purge comes on the heels of complete intolerance for even mild criticism of Mohammed bin Salman’s reforms, resulting in at least 70 arrests that have, unfortunately, garnered far less attention. Many of us living outside Saudi Arabia will not return home for fear of the same fate. Our families have been targeted instead. All of this leaves me in a difficult quandary. I champion a real campaign to tackle the rampant corruption that is draining Saudi resources, both financial and human. Our unemployment rate would drop rather significantly if the billions we squandered on kickbacks and lavish personal enrichment schemes dressed up as public-works projects were spent instead on the development of small to medium enterprises, vocational training and 21st-century education reforms.


    Corruption in Saudi Arabia is quite different from corruption in most other countries, as it is not limited to a “bribe” in return for a contract, or expensive gift for the family member of a government official or prince, or use of a private jet that is charged to the government so a family can go on vacation. Instead, in Saudi Arabia, senior officials and princes become billionaires as contracts are either enormously inflated or, at worst, a complete mirage. In 2004, Lawrence Wright wrote in the New Yorker about “The Kingdom of Silence” where a massive sewer project in Jeddah was really a series of manhole covers across the city with no actual pipes underneath. I, as the editor of a major paper at the time, can say that we all knew, and we never reported on it.

    Another example is building an airport in the wrong location simply to benefit the princes who own the land. They received the land for free from the government and then got extravagant compensation for the property. Last year, during an interview with Bloomberg, Mohammed bin Salman revealed that “there was roughly between 80 to 100 billion dollars of inefficient spending every year, about a quarter of the entire Saudi budget” during the oil boom from 2010 to 2014. “Inefficient spending” is a far too gentle description for corruption in Saudi Arabia. So yes, I, as a Saudi citizen, am eager to see this scourge end.

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    Granny says, "Dat's right - dey figgerin' on stickin' it to us again...

    OPEC and allies likely to extend production cuts at meeting
    29 Nov.`17 — With bills rising for gasoline or heating oil, consumers around the world are paying the price for a decision by OPEC and Russia last year to cut production. The strategy is working for those oil-producing nations and will likely be extended at a meeting Thursday.
    Benchmark crude prices are now close to $60 a barrel, depending on the grades, up almost 20 percent since a year ago. The bets are that the Organization of the Petroleum Exporting Countries will try to keep supply tight by prolonging output reductions agreed to a year ago. For experts expecting such a scenario, the only question is for how long, with some predicting that production quotas agreed on in November 2016 will be stretched into all of 2018. “The price surge since early October is clearly attributable to the expectation that OPEC will extend its production cuts again at its meeting this Thursday and that the oil market will tighten further as a result,” analysts from Commerzbank Commodity Research wrote in a note to investors. “Anything other than an extension of the agreement would come as a big surprise and would trigger a massive price slide.”


    The ability of the 14-nation cartel to regulate prices and supply made it a sometimes feared factor for consuming nations in past decades. Most extreme was the 1973 OPEC oil embargo on Western consumers that led to widespread economic crises. But its role as a key regulator started fading in recent years, as U.S. shale producers started pumping up their output. That led to oversupply and a steep fall in prices from over $100 to below $40 a barrel by last year. OPEC members in the past have regularly ignored production quotas in their drive for maximum profits. But the cartel’s strategy to flood the market — and drive U.S. shale producers out of business — did not work. So it reversed course last year, joining forces with oil powerhouse Russia and other oil producing allies to crimp supplies. And with member states this time generally keeping to their production limits, OPEC Secretary General Mohammad Sanusi Barkindo says the alliance has attained its goal. “We have accomplished what naysayers thought would be impossible,” he told a 24-nation meeting of OPEC and non-OPEC allies this week. “The decisions we made were historic.”




    Even so, the strategy of continued cuts to drive up prices does not seem sustainable over the longer run. With prices now at two-year highs, U.S. producers who mothballed operations when oil was cheap are coming back into the market in force. U .S. crude oil production already has grown by 15 percent since last year to nearly 10 million barrels per day, just behind Russia and Saudi Arabia. The International Energy Agency expects the U.S. to become the biggest net exporter by the end of the 2020s. The extra crude is welcome for now, with the global economy booming. But at some point the balance could again tip from relatively tight supplies to an oversupply, and a drop in prices. “An extension of the production cut agreement is still needed,” to prevent oversupply, said the JBC Energy Market Report. “However, what the producers should not want is to starve the market too much going forward as U.S. shale in particular has proven again and again that it can surprise.”


    Geopolitics could yet strain OPEC unity on Thursday. Traditional tensions between OPEC kingpin Saudi Arabia and Iran have spiked in recent month as they vie for Middle East dominance, exacerbating potentially different positions on oil. The Saudis favor continued cuts, but Iran is interested in greater market share as it claws back from the effect of more than a decade or sanctions that were lifted as part of its 2015 nuclear deal with six world powers. Now pumping below 4 million barrels a day, Iran has said it wants to add another 1 million barrels within three years.


    https://www.apnews.com/4391cb095a5f4...uts-at-meeting

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    Look for gas prices to go up...

    Oil exporters agree to extend output curbs
    30 November 2017 - The world's leading oil exporting nations have agreed to extend production curbs, aimed at boosting the oil price, by nine months.
    The Organisation of Petroleum Exporting Countries (Opec) and non-members, led by Russia, agreed the output limits would continue until the end of 2018. The limits were first agreed a year ago, and helped to push up the price of crude oil by about 30%. The oil price fell slightly after the latest deal, which had been expected. Brent Crude was down 0.3% at $62.35 a barrel.


    A worker checks the valve of an oil pipe

    The oil exporting countries have suffered in the face of a falling oil price brought about by global oversupply. The new deal means 1.8 million barrels a day will continue to be cut from the market in an effort to reduce the oversupply and push up prices. The 14-member Opec, whose biggest member is Saudi Arabia, has often limited output to boost prices.

    However, last December they were joined by 10 non-members others, including the biggest exporter outside the group, Russia. That agreement had already been extended once until the end of March. A major factor behind global oversupply of oil is growing shale oil production in the US. Russia has previously voiced concerns that continuing the output curbs could lead to more shale oil production.

    http://www.bbc.com/news/business-42187038

  5. #75
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    Granny says, "Dat's right - dey gettin' ready to gouge us again...

    Oil prices should drag companies’ stocks up with them
    In January 2016, oil prices fell to $26 a barrel and dozens of indebted exploration and production companies were forced to file for bankruptcy. The ones that were not overleveraged have survived and learned to cut expenses and their finding costs.
    Since then, the price of oil has risen more than 120 percent, to the upper 50s now, but the oil companies stocks have not doubled and are still at bargain-basement prices. Once upon a time, oil was 25 percent of the S&P, a position now occupied by technology shares. Oil has fallen to about 7 percent of the S&P in recent months. I have long argued that the three top producers, Russia, Saudi Arabia and the United States — each sells about 10 percent of total global production — all needed higher prices in the marketplace. That’s why Russia, the Saudis and other OPEC members have curtailed production. Russia faces the economic sanctions imposed by the West to punish it for its move into Crimea. Despite the attention Putin gets from the U.S. and other global leaders, the Russian economy is barely larger than that of Italy. It desperately needs its petrodollars to support the bellicose efforts it makes around the world in an attempt to appear more powerful than it is.

    The Saudis ran a deficit of about $75 billion in the latest year. It is the fourth time in the last decade that its oil revenues were insufficient to support the vast social programs it needs to buy the silence (loyalty) of its citizens. It is also why the Saudi royal family, led now by Crown Prince Muhammed bin Salman, is so busy trying to float the largest IPO of all time by selling 5 percent of Aramco in 2018. The U.S. cares about the price of oil as it tries to produce at least half of the 21 million barrels the nation uses per day. That would reduce our dependence on the volatile Middle East and on Venezuela, which is now in total disarray. We need oil above $50 for our U.S. producers to turn a profit.

    Somehow, there is an overriding conviction that we will all be driving electric cars in the next two years and that petrol-fueled automobiles will disappear from the planet shortly thereafter. My 24-year-old Cadillac bit the dust in November and I did not choose to buy an electric or even partially electric vehicle to replace it. I don’t plan to give up driving and I plan to keep driving myself, not just sit in the car, for a long time to come. Plus, remember that plastics are made from oil. Global consumption continues to rise. Think about it. Countries where people used to walk or ride bikes are modernizing to the point where more cars are sold in China now than in the U.S. This trend is not abating anytime soon, as nations industrialize and develop a middle class. In a fully priced market fueled (pardon the pun) so far by hopes for a big corporate tax cut, the oil sector is quite undervalued. Chevron seems better positioned now than giant Exxon Mobil.

    Those two huge stocks make up almost half of the XLE ETF. The companies that are more leveraged to higher prices are the exploration and production companies in the United States. While they seem to now trade off of weekly inventory reports, investors cannot ignore forever the rise in prices that has occurred this year. f you prefer more-leveraged, mid-cap stocks, you might like the XOP ETF which, like its benchmark, is off 17 percent this year after perking up 7 percent in the fourth quarter. Rather than an ETF, we have chosen to own a couple of promising individual names which, like the sector overall, have struggled this year but should provide higher returns. Patience is required but eventually should pay off when the momentum crowd decides that value is important again.

    http://www.heraldtribune.com/news/20...s-up-with-them

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    Libyan oil pipeline blast causes spike in oil prices...

    Oil Prices Rise on Libyan Pipeline Blast
    December 26, 2017 — Oil moved higher above $65 a barrel on Tuesday, within sight of its highest since mid-2015, supported by an explosion on a crude pipeline in Libya and voluntary OPEC-led supply cuts.
    The move towards restart of a key North Sea pipeline, Forties, capped the rally. The pipeline is being tested after repairs and full flows should resume in early January, its operator said on Monday. Brent crude, the international benchmark for oil prices, rose 19 cents to $65.44 a barrel at 1447 GMT. Prices hit $65.83 on December 12, the highest since June 2015. U.S. crude added 24 cents to $58.71. "The confirmation that Forties is coming back ... has the potential for capping Brent," said Olivier Jakob, analyst at Petromatrix. Trading activity was thin due to the Christmas holiday in many countries.


    Oil turned positive following the explosion at the Libyan pipeline, which feeds the Es Sider terminal. It was not immediately clear what impact the blast will have on Libyan output, which has been recovering in recent months after being hampered for years by conflict and unrest. Brent has risen 17 percent in 2017. The Organization of the Petroleum Exporting Countries, plus Russia and other non-members, have been withholding output since January 1 to get rid of a glut. The producers have extended the supply cut agreement to cover all of 2018.



    Pipelines are seen at the Zueitina oil terminal in Zueitina, west of Benghazi, Libya.



    Iraq's oil minister said on Monday there would be a balance between supply and demand by the first quarter, leading to a boost in prices. Global oil inventories have decreased to an acceptable level, he added. That is earlier than predicted in OPEC's latest official forecast, which calls for a balanced market by late 2018. While the OPEC action has lent support to prices all year, the unplanned shutdown of the Forties pipeline on December 11 pushed Brent to its mid-2015 high.


    Forties plays an important role in the global market as it is the biggest of the five North Sea crude streams underpinning Brent, the benchmark for oil trading in Europe, the Middle East, Africa and Asia. Rising production in the United States is offsetting some of the OPEC-led cuts. The U.S. rig count, RIG-OL-USA-BHI, an early indicator of future output, held at 747 in the week to December 22, according to the latest weekly report by Baker Hughes.


    https://www.voanews.com/a/oil-rises-...s/4179641.html

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