PIRA Expects $50-60/barrel Oil from OPEC Deal
The Organization of Oil Exporting Countries' decision to embrace production cuts will help move crude prices toward a target of $50 to $60 per barrel, Gary Ross, chairman of consultancy PIRA Energy Group, told reporters on Wednesday. OPEC's policy has shifted as Saudi Arabia is targeting that price range and Iran has become more willing to accept an agreement. Ross said at a news conference that U.S. shale producers were likely to hedge future output more selectively after OPEC decided to limit output.
Oil Prices Slip as Short-Covering Rally Fizzles
Crude, refined product glut still weighs on market. Short-covering rally pushed up prices midweek. Oil prices dipped on Friday, ending a two-day rally, as a glut of crude and refined products weighed on markets and investors eyed a possible stutter in China's imports. U.S. West Texas Intermediate (WTI) crude futures fetched $41.74 per barrel at 0930 GMT, down 19 cents from their last close, after trading as low as $41.44 earlier in the day. They were on track roughly to break even on the week.
Canada's Liard Basin Among World's Biggest Shale Gas Plays
Northwest Canada's remote Liard Basin is the world's ninth largest shale gas resource, according to a new assessment released by Canadian regulators on Wednesday, although it may take years to develop given depressed global energy prices. The basin, mostly situated in British Columbia but also straddling the Yukon and Northwest Territories borders, is estimated to contain 219 trillion cubic feet of marketable, unconventional natural gas. That makes it the second largest gas resource in Canada behind the Montney formation in British Columbia and Alberta…
U.S. Shale Snaps up $50 Oil Hedges
Welcome to the oil market's new vicious cycle. This past week, as oil prices barreled over 9 percent higher to break out of a weeks-long trading range, U.S. shale producers jumped at the chance to lock in $50-plus crude for the first time in months, making up for lost time after holding off hedging during the market's late-summer slump. U.S. crude oil futures for December 2016 delivery, a favored contract for hedgers, saw trading volume spike to a weekly record high of nearly 190 million barrels…
Commodity Surge Boosts World Equities; Dollar Falls
Major world stock markets were poised for their biggest weekly advance since 2011 on Friday, as greater investor appetite for riskier assets propelled gains in equities and a surge in commodities and crude oil prices. Declines in the dollar, a bullish oil forecast and giant miner Glencore's pledge Friday to slash world zinc output by 4 percent have lifted beaten-down commodities, with Brent crude oil headed for its biggest weekly rise since March 2009. The U.S.
Oil Set for Best Week Since 2009
Brent set to rise 12 pct this week; PIRA forecasts oil at $70 at end-2016. Oil extended gains on Friday and was set for its biggest weekly rise in over six years after U.S. Federal Reserve minutes suggested it was in no hurry to raise interest rates and an influential forecaster predicted a price rally. Brent crude, the global benchmark, was up 90 cents at $53.95 a barrel at 1045 GMT, 1.7 percent above the previous close and on track to rise 12 percent this week alone. U.S.
Weak Economic Outlook Propels Energy Losses
Brent, U.S. crude prices fell 8 pct on Tuesday; fundamentals remain bearish, analysts say. Oil prices fell on Wednesday as concerns about the global economy exacerbated worries that an oversupply of crude could last longer than expected. Weak manufacturing reports from China, the United States and Europe undermined global equities, while a stronger-than-expected build in U.S. crude stocks drove oil market sentiment down, analysts said. Wednesday's fall compounded an 8 percent drop in Brent and U.S.
US Industrial Natural Gas Usage Falls Unexpectedly
U.S. manufacturers have not soaked up as much excess shale gas in the first half of 2015 as expected, but the shortfall may be an anomaly as a Gulf Coast manufacturing boom is poised to insulate the sector from seasonal demand fluctuations. Average industrial demand for gas in 2015 was expected to increase nearly 4 percent over 2014, according to federal energy forecasts. But almost halfway through the year, it has eased about 1 percent to 21.7 billion cubic feet per day from 22 bcfd a year earlier, according to Thomson Reuters Analytics.
OPEC to Keep Pumping, Global Glut Fears Persist
Oil group OPEC agreed to stick by its policy of unconstrained output for another six months on Friday, setting aside warnings of a second lurch lower in prices as some members such as Iran look to ramp up exports. Concluding a meeting with no apparent dissent, Saudi Arabian Oil Minister Ali al-Naimi said the Organization of the Petroleum Exporting Countries had rolled over its current output ceiling, renewing support for the shock market treatment it doled out late last year when Saudi Arabia…
Oil Dips Below $62 on U.S. Inventory
U.S. crude stocks rose 5.5 million barrels last week. Industry leaders say demand will push prices higher. Oil prices dipped under $62 a barrel on Wednesday after industry data showed a build in U.S. crude inventories for the 15th straight week, adding to concerns of a global supply glut. The American Petroleum Institute (API) said on Tuesday that U.S. crude stocks rose by 5.5 million barrels last week, higher than the 2.9-million-barrel build expected by analysts in a Reuters survey, to 480.2 million barrels.
Easing U.S. Crude Export Ban Pressures Asian Producers
Most U.S. light crude expected to go to Europe, not Asia, but ripple effect to create pressure for Asian discounts. Formal U.S. government approval to ease a 40-year-old ban on exports of crude oil will squeeze Asian producers already scrambling to cut costs amid diminished revenues due to a crash in energy prices and weaker currencies. The Obama administration on Tuesday bowed to months of pressure over the ban on exports of most domestic crude, taking steps expected to unleash a wave of ultra-light shale oil known as condensate onto global markets.
Oil Dips Below $79 as Market Doubts OPEC
Oil market "will stabilize itself" - Saudi oil minister. Brent crude oil steadied below $79 a barrel on Wednesday after Saudi Arabia signalled it was unlikely to push for a major change in OPEC oil output despite a collapse in prices. Saudi Arabian Oil Minister Ali al-Naimi said he expected oil "to stabilise itself eventually", a comment traders understood to mean that the cartel would not cut output when oil ministers from the Organization of the Petroleum Exporting Countries (OPEC) meet on Thursday in Vienna.
S. Arabia Raised Output in Sept
Top oil exporter Saudi Arabia told OPEC it raised its oil production in September by 100,000 barrels per day, adding to signs it has yet to respond to a drop in prices well below $100 a barrel by trimming output. In a monthly report issued on Friday, the Organization of the Petroleum Exporting Countries (OPEC) said Saudi Arabia reported September production of 9.704 million barrels per day (bpd), up from 9.597 million in August. The lack of a Saudi cut could add to perceptions of traders and analysts that the kingdom is looking to defend market share…
PIRA's Latest Weekly Oil Market Recap
NYC-based PIRA Energy Group reports that accounting for the strength of U.S. jet fuel demand this summer. In the U.S., stock excess accelerates. In Japan, stocks draw, but finished product stocks continue to rise. Accounting for the Strength of U.S. Jet fuel demand spiked in June, July and early August. Because the economy's fundamentals do not support such a high level of domestic demand, we suspect that higher than currently assumed exports will result in a revision downward of the final demand numbers.
Natural Gas, Power & Coal Market: PIRA's Weekly Recap
NYC-based PIRA Energy Group believes that drought-stricken Brazil will continue high LNG imports. In the U.S., there was another above-expectations build, with larger injections to come. In Europe, Ukraine data implies another storage boost in 3Q. As it heads into its traditionally weaker season for gas demand, Brazil will nevertheless be testing the limits of how much LNG it can import. Hydro storage levels in Brazil are well below the 10-year range and more gas is going to be needed in order to keep the lights on…
PIRA Energy Group's Latest Weekly Oil Recap
Asian oil balances remain long, for now. In the U.S., product stock build outpaces crude draw, widening commercial stock excess. In Japan, both crude and finished product stocks rise. Oil prices are likely to remain soft. Asian oil demand will pick up in 4Q and support a rising run profile post-turnaround. The continued glut of Atlantic Basin crude will need to be moved to Asia which will keep Brent-Dubai narrow. Eventually, Asian crude demand will rise and some of the surplus should be drawn, thus presenting a floor to prices.
PIRA Energy Group's Weekly Oil Recap
NYC-based PIRA Energy Group reports that Cushing stocks to rise in 4Q, while pipeline projects relieve congestion in other midcontinent markets. In the U.S., slight stock build matches last year’s. In Japan, crude stocks draw and finished product stocks continue rising. Fourth quarter crude stock increases, both in Cushing and on the Gulf Coast, will very likely lead to contango for LLS and Mars and quite possibly for WTI as well. However, stronger fundamentals in other regions should lead to improved differentials for Canadian…
Brent Crude Slips Towards US$102 After Overnight Jump
Brent crude slipped towards $102 a barrel on Thursday, reversing some of the sharp overnight gains, as U.S. industry data showed fuel stocks rose last week and raised fresh doubts about the strength of demand in the world's biggest oil consumer. * U.S. * Oil prices spiked Wednesday on upbeat U.S. * Coming up: U.S. Oil futures on both sides of the Atlantic have seen wide swings this week, as the U.S. dollar has gyrated. Brent hit a 16-month low on Tuesday, before bouncing back $2.43 yesterday as the prospect of peace talks over Ukraine and strong U.S.
PIRA Energy Group's Weekly Oil Recap
NYC-based PIRA Energy Group reports that there is potential for Iceland volcano eruption to disrupt North Atlantic air traffic and jet fuel demand. In the U.S., crude stocks draw larger than the product stock build. In Japan, low demand builds product stocks. Iceland’s Met Office warned that the country’s largest volcano might erupt, potentially posing a threat to air traffic in the North Atlantic. This is reminiscent of 2010’s eruption of Iceland’s Eyjafjallajökull volcano…
Oil Inventories Higher, Crude Demand Lower: PIRA
NYC-based PIRA Energy Group reports that oil inventories are higher and crude demand is lower. In the U.S., stock surplus to last year is roughly flat. In Japan, crude stocks draw amid peak run rates. Oil inventories are higher, crude demand is lower and PIRA is beginning to question the expected 2H 2014 and 2015 lift off in economic activity. Also, add in unrelenting upward revisions to U.S. oil supply growth with non-OPEC supply additions continuing to substantially outpace demand growth and you have a combination of factors pointing to lower prices.
