Crude oil market

[waltky]

Oil prices fall on expected oversupply...

Oil prices fall on dimming prospect of output restraint
Mon Apr 4, 2016 - Oil prices fell on Monday as the chances of Middle East producers agreeing to curb overproduction appeared to fade, while stubbornly high U.S. output and worries about Asia's economic outlook also dragged on prices.

Iran, returning to global oil markets after sanctions against it were lifted in January, said it would continue increasing its oil production and exports until it reaches the market position it enjoyed before the imposition of sanctions, according to a media report. This makes a proposed deal by major producers to restrict ballooning output unlikely as top exporter Saudi Arabia said last week it would only participate if its rival Iran also took part.

U.S. crude futures CLc1 were at $36.39 per barrel at 0554 GMT, down 1.06 percent or 40 cents from their last settlement, while Brent crude LCOc1 was down 0.9 percent or 34 cents at $38.33. A global glut has pulled down oil prices by as much as 70 percent since 2014. "Macroeconomic concerns and high petroleum inventories are the oil market's ball and chain and are likely to keep the oil price between the mid-$30s and low $40s in Q2," Barclays said. While some analysts expect a recent weakening of the U.S. dollar .DXY to spur demand for oil from importers holding other currencies, Morgan Stanley said "negative oil headlines, producer hedging at higher prices and bloated inventories" indicate any upside in prices will be limited.

Adding to concerns of a global glut is U.S. production remains high despite steep cuts in drilling for new reserves as well as a jump in bankruptcies. "The U.S. oil rig count dropped further this week, with a total 10 rigs idled," Goldman Sachs said. "The current rig count implies U.S. production ... would decrease by 705,000 barrels per day yoy (year-on-year) on average in 2016, and by 375,000 barrels per day yoy in 2017," it added. So far, U.S. production remains stubbornly high, at over 9 million barrels per day.

Despite a pick-up in recent economic data, including from India and China, analysts also poured cold water on hopes that Asia's economic prospects were improving. "Asia continues to face a structural growth problem – one that will not be cured in the space of a few, short months," said HSBC's Frederic Neumann. Given a growing belief that prices might not recover by much any time soon, hedge funds have cut their net long positions in U.S. crude for the first time in six weeks. The chief executive of the Abu Dhabi National Oil Company said oil markets would only start to rebalance in 2016 and 2017.

http://www.reuters.com/article/us-gl...-idUSKCN0X100H

[FindersKeepers]

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.

[hanger4]

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.

I don't understand "get out of OPEC". The US isn't a member.

[FindersKeepers]

I don't understand "get out of OPEC". The US isn't a member.

Purchasing from OPEC.

[hanger4]

Purchasing from OPEC.

Oooooooooh.

[waltky]

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

[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

[Crepitus]

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.

You do realize that the nation as a whole is benefiting from those low oil prices right? Yea, a few oilfield workers are getting laid off but that is minuscule in comparison.

Also, do really truly care what the Saudis are doing to their citizens? Is it really our business? Is it our job to fix?

[FindersKeepers]

You do realize that the nation as a whole is benefiting from those low oil prices right? Yea, a few oilfield workers are getting laid off but that is minuscule in comparison.

You're not even close to being right.
Yes, some areas have seen boosts in business and consumerism due to lower gas-at-the-pump costs. Many states, however, are suffering. It's not even close to being "minuscule."

Problem is -- short-sighted individuals relish in the thought of cheap gas, and it does help put a bit of money back in their pockets, but rarely do they see the damage on a large scale.

http://www.slate.com/blogs/moneybox/...e_economy.html
http://www.bloomberg.com/news/articl...global-economy
http://www.washingtonexaminer.com/im...rticle/2586786
http://www.energyfuse.org/low-oil-an...economic-woes/

Also, do really truly care what the Saudis are doing to their citizens? Is it really our business? Is it our job to fix?

You obviously don't care -- as I sort of expected, but that's the point. Should the US have any qualms about pumping billions into foreign economies when those nations do not adhere to basic human rights? No one said we should "fix it" (except you), but should are you comfortable in being held hostage to nations that regularly execute gays and those who do not agree with the status quo? Because, if you do -- you're just another enabler.

[waltky]

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