Commodity Trade Mantra

Posts Tagged ‘Oil Industry’

Crude Oil Enters Bull Market Amid Output Freeze Talk

An emphasis by oil companies on frugality in operations mean a certain amount of cost-cutting should be sustained in the coming years. Slashed expenditures in the oil industry are expected to add up to $1 trillion dollars over the 2015 – 2020 period. Dollar weakness & production freeze hopes combine again to rally crude oil prices higher. Here are 5 things to consider in crude oil markets today.

With A Rebound In Oil Prices, Will Drilling Activity Return?

On June 6, Morgan Stanley released a report saying that “all eyes” are on the U.S. to see if drilling will return now that oil prices are back above $50, after having rallied roughly 85% since February. There are a few early signs that drilling is starting to begin again. The oil rig count jumped by nine last week to 325 active oil rigs, the sharpest increase since December 2015.

Why We Could See An Oil Price Shock In 2016

Crude oil storage levels have once again increased. The Rystad Energy figures show that the supply-demand balance could quickly swing back in the other direction as upstream investment has screeched to a halt. The oil markets have always suffered from booms and busts, and this is just more of the same. The current bust is sowing the seeds of the next boom.

Oil Prices Drop After IEA Warns Production Freeze Is "Meaningless"

A deal among some OPEC producers and Russia to freeze production is perhaps “meaningless” as Saudi Arabia is the only country with the ability to increase output, a senior executive from the International Energy Agency (IEA) said. It’s more some kind of gesture which perhaps is aimed … to build confidence that there will be stability in oil prices.

7 Reasons Why Oil Could Fall Even Lower Before Christmas

While OPEC has been reticent and reluctant to defend its oil production levels this year, Russia has been unabashedly boosting exports after six years of declines. As refinery improvements have caused less domestic crude oil demand, this has opened up a window of opportunity for the country to export more.

This Is Why $20 Oil Price Is A Possibility

I believe that another plunge in the oil price is required to thrust a dagger through the heart of US shale drillers and the banks that have supported them. Low oil price will at some point result in the situation reversing & prices will turn very quickly. But before that can happen, production momentum needs to be switched off & I dare say that requires a sharply lower oil price.

Time to Play the Rebound In Oil Prices

The oil industry is permeated in gloom right now because of oversupply & weak demand. Small producers are going out of business & a wave of energy-related bond defaults is about to wash over the fixed-income markets. But the oil majors are positioning themselves to benefit from the rebound of prices in late 2016 and early 2017. The time to play this rebound is now.

Will Less Supply in the Very Near Future Mean Higher Oil Prices?

The strategy, promoted by Saudi Oil Minister was meant to keep oil prices low temporarily & starve many non-OPEC oil producers of profits & restore the cartel’s global market share. The primary target of the OPEC plan was oil production from shale in the United States, which relies on hydraulic fracturing that can’t make money unless oil sells for at least $60 per barrel.

OPEC Divorce And Self-Destruction Thanks To Saudi Oil Strategy?

Despite low oil prices, Saudi Arabia is maintaining its investment in its oil industry. The Saudi government revenue and expenditure data suggest that the Saudis must do far more than “reduce investment” in 2016: the precipitous drop in oil prices—a consequence of their new policy—has put Saudi Arabia on an unsustainable financial path.

Why it Feels Like Something Isn’t Quite Right with the Stock Market

US stocks are still in a bull market. Large parts of the stock market are down significantly since June. Last Friday, Bloomberg reported that “roughly half the biggest stocks are mired in corrections, down 10 percent or more from their one-year high.” The S&P 500 is now up 210% from its 2009 low, and is up 2.1% this year. How can the stock market be up when so many stocks are down?

Despite Oversupply, Oil Rallies on Currency Moves

Domestic oil inventories still stand at near-record levels for this time of year in at least 80 years. Because oil remains in oversupply, the recent rally owes a lot to currency moves. We might be seeing a dollar reset, which should finally give oil, gold, copper & other important commodities – the much-needed breathing room.

A Necessary Correction in the Oil Industry

The short-term pain the oil industry is currently facing is necessary & none must not stop this natural process through misguided stimulus in an effort to prevent oil company layoffs. Such efforts are likely to only benefit giant oil companies, as seen in the wake of the 2008 crisis where the biggest banks were the biggest winners.

North American Crude Oil Production Remains Strong

A massive build-up of crude oil inventories is seen in the US, to levels never seen in recent history. The International Energy Agency has even warned that the US will run out of storage soon. Why do producers continue to pump at low prices? It seems that at that point someone will have to finally stop pumping crude oil out of the ground.

Why Price Of Oil Is More Inclined Towards $20 Than $80

If the price of oil stays at this level for the rest of the year, we are going to see a whole bunch of energy companies fail, billions of dollars of debt issued by energy companies could go bad, and trillions of dollars of derivatives related to the energy industry could implode. This is just the beginning of the oil crisis.

Why Oil Can’t Stay Cheap

Oil market gyrations touch everything. So you have to either figure out how to ride the train… or get crushed beneath the wheels. How long can you expect low oil prices to last? Over the long haul, it is simply too valuable a commodity to stay “cheap.” Any number of events could trigger prices to rebound. Anything could happen.

Could an Energy Bust Trigger QE4?

The bright spot for US over past few years has been the surge in energy production, called the “American Energy Revolution”. I believe oil headed higher because the Fed was printing money. Why is it that oil started falling when the mass of analysts came to believe the Fed would finally tighten? So oil now needs QE4 for higher prices again.

Cheap Oil A Boon For The Economy? Think Again

Tumbling oil prices are a bonanza for global stock markets, provided the chief cause is a surge in crude supply rather than a collapse in economic demand. Roughly one third of the current oil slump is a shortfall in expected demand, caused by China’s industrial slowdown and Europe’s austerity trap.

Will Shale Oil Fuel Manufacturing Boom in the US?

Chris Guith the senior Vice President of Policy for the Institute for 21st Century Energy pointed out how large a benefit the shale revolution is for the U.S. economy. Since 2007, all non-farm jobs fell 2.6%. Oil industry jobs rose 38.6%. In 2012, there were 2.1 million jobs in the sector. By 2025, there will be over 4 million jobs.

Oil Prices Will Rise Regardless Of Middle East Unrest

Oil Prices will remain high, because the price is driven by long-term supply issues, not short-term disruptions in the Middle East – Oil production in South American countries is in decline as a consequences of governments’ interference in the oil industry.

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