U.S.-Led Wave of Crude price plunge to cripple Russia

[Little_prince]

so what?

 

doesn't affect us.

 

everywhere else in the world oil price drop more than half, only in Singapore petrol price continue to up and up.

 

lol

 

what shale or opec also no problem lah

[yymdz]

HI,

Anyone here trading crude futures? Which futures account do you use?

[Porker]

The debate among the world’s biggest oil nations over whether to freeze production is beginning to be overtaken by a rapid slide in output around the world.

On Tuesday, as traders looked to a weekend meeting on output in Doha, Qatar, the government said U.S. production dropped in March and will likely continue falling.

The combination amounted to a double-shot of adrenaline for an oversupplied market, driving oil prices to their highest point this year. The price of U.S. oil jumped 4.5% to $42.17 a barrel, its highest price since November.

For weeks, oil markets have been preoccupied with the likelihood of an agreement being reached Doha. Helped by speculation of a deal led by Russia and Saudi Arabia, the world’s two biggest producers, oil prices have recovered by almost one-third from the lows earlier this year.

But increasingly, the low price of oil is doing the work for the world’s big producers by knocking down production across the globe, according to traders and industry officials.

Cash-starved smaller producers in Latin America, the North Sea and the shale fields of the U.S. are cutting production sharply. That could reduce or eliminate the glut of oil hanging over the market as early as late this year, some analysts said.

“The impact of this price decline is going to be felt over the next few years,” said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University. “It took longer than expected and the price had to fall farther than expected, but it means there’s not going to be as much supply in a couple of years.”

London-based research consultancy Energy Aspects recently revised its estimates for non-OPEC production declines this year to 700,000 barrels a day from 200,000 to 300,000 in earlier forecasts. It expects demand to begin outstripping supply and drawing on swollen crude stockpiles globally starting in June.Against that backdrop, any agreement to freeze production at the planned Doha meeting could signal that the bottom of the oil-price rout has already passed. Others in the Organization of the Petroleum Exporting Countries—including Venezuela, Iraq, Qatar, Kuwait and the United Arab Emirates—have said they would likely go along with such an agreement, but it remains unclear whether OPEC members would go along with a freeze if Iran, also an OPEC member, doesn’t participate.

For its part, Iran, which only months ago escaped international sanctions that had slashed its oil exports by half, has said it has no intention of restraining output until its production increases to four million barrels a day, the level before sanctions. Iran is currently pumping around 3.1 million barrels a day.

Iran’s oil minister called the freeze plan “a joke” after an earlier Russia-Saudi Arabia summit to discuss it, denting optimism over a potential deal.

Saudi Arabia has sent contradictory messages about whether it would agree to a freeze without Iran. While its oil minister broached the possibility of an agreement without Iran, the kingdom’s powerful deputy crown prince, Mohammed bin Salman, said in a recent interview that Iran would have to participate. The two countries are locked in a larger geopolitical struggle for influence across the Middle East, raising questions about whether the kingdom might prioritize keeping up the political pressure on Iran through lower oil prices.

Saudi Arabia raised its oil output above 10 million barrels a day last year in a bid to gain market share.

Many analysts put low odds on Iran joining in a freeze deal.

“It would be suicide for politicians in Tehran to capitulate to Saudi Arabia and freeze output,” said Saadallah al-Fathi, a United Arab Emirates-based consultant and former OPEC official. “How can Saudi Arabia seriously ramp up to over 10 million barrels a day, say it is going to freeze and then expect Iran to comply with that?”

That still may not stop OPEC members and Russia from freezing production on their own. Even the strongest oil producers are feeling increasing pain from the drop in revenue, and they may see a freeze as the only way to get relief. Most of the Gulf Arab states—including Saudi Arabia, Kuwait, Qatar and the Emirates—have seen their once-unquestioned rock-solid creditworthiness reviewed or downgraded in recent weeks.

The expressed willingness of Qatar, Kuwait and the U.A.E. to support a freeze “indicates that the economic pain of low oil prices is even hitting the flushest of the oil producers,” said Helima Croft, head of commodities strategy at RBC Capital Markets.

Some countries, such as Venezuela, can’t afford to wait for a rebalancing to play out between supply and demand, she said, while some of “the Gulf states could wait and don’t want to wait.”

But even without a freeze, industry officials and traders say the hardships imposed by 18 months of low oil prices are weighing heavily on global production. International oil companies and petrostates alike have minimized exploration and slashed drilling budgets.

After showing surprising resilience for more than a year, U.S. companies operating in the shale basins of Texas, North Dakota and Colorado are seeing accelerating output declines.

The U.S. Energy Information Administration said in its short-term energy outlook Tuesday that U.S. crude production fell by 90,000 barrels a day in March from February. The agency lowered its U.S. output forecast for 2016 to 8.6 million barrels a day and 8 million barrels a day in 2017. That is off from a multidecade peak of 9.4 million barrels a day last year.

It isn’t just U.S. shale fields falling off. In the deep waters of the North Sea, where production is expensive, declining investment has meant the output declines that fields naturally experience over time have overtaken production from new drilling.

Norway’s crude-oil production, for example, grew by 4% to 1.56 million barrels a day in 2015. But output is expected to drop by 2% in 2016 and gradually level off to 1.38 million barrels a day in 2019, according to the Norwegian Petroleum Directorate.

Oil production in Latin America is plummeting, as well, according to Energy Aspects. In Brazil nearly all of the biggest fields could see declines this year. Overall, Latin American production in February and March dropped below 8 million barrels a day for the first time since March 2014. Production in Mexico and Venezuela is also falling.

That is encouraging many industry officials long searching for a bottom of the current price slump.

“We’re going to have a lot of volatility going forward, but from here on, the trend is up,” Torbjorn Tornqvist, chief executive of Swiss trading house Gunvor Group, told the FT Commodities Global Summit in Lausanne, Switzerland, predicting a slow recovery to about $60-$70 a barrel.

Other observers aren’t so sure. Although production is coming down, a significant chunk of it could return from U.S. shale fields if prices rebound sharply. Unlike traditional producers, which need years of lead time to ramp up production, shale producers say they might be able to reverse course in a matter of months. At the least, that could restrain any uptick in prices, and could send them plunging again.

“The key is going to be, once we have a pickup in prices how does shale respond? The jury is out on that.” said Christof Ruhl, global head of research for the Abu Dhabi Investment Authority.

[Zyklon]

In before pump price shoot up citing rising crude price.

 

Crude price is a major component of petrol pricing. Therefore, when crude price goes up, the petrol pump price also must go up. Tell you all peasants, you all also cannot understand one lah.

 

Remember you read it here before our minister said it.

[Goldbug]

Saudi Arabia Dismisses Its Powerful Oil Minister Ali al-Naimi Departure is part of wider government reshuffle, with Saudi Aramco chief Khalid al-Falih succeeding him

 

http://www.wsj.com/articles/saudi-arabias-powerful-oil-minister-ali-al-naimi-is-fired-1462632035

[Kusje]

 

 

Goldman Surprised by Sudden Oil-Market Turn as Glut Vanishes

 

http://www.bloomberg.com/news/articles/2016-05-16/goldman-surprised-by-oil-market-s-flip-to-deficit-on-supply-cuts

 

Looks like Goldman has filled up their nutsacks.

[Lala81]

http://www.bloomberg.com/news/articles/2016-05-16/goldman-surprised-by-oil-market-s-flip-to-deficit-on-supply-cuts

 

Looks like Goldman has filled up their nutsacks.

 

3 months ago, my friend was saying oil likely to meander at around high 20s to low 30s. 

 

Then now, it's can't see the downside for now at 45 usd.

 

haha traders ...  world view changes every minute.

[Kb27]

oil companies happy liao.

get ready for increased pump price.

[Blueray]

3 months ago, my friend was saying oil likely to meander at around high 20s to low 30s. 

 

Then now, it's can't see the downside for now at 45 usd.

 

haha traders ...  world view changes every minute.

 

haha ... ya ... when oil going up they say USD200

 

when oil coming down they say USD20

 

analysts ... 

[Lala81]

haha ... ya ... when oil going up they say USD200

 

when oil coming down they say USD20

 

analysts ...

He is well paid so I'm sure he makes money for the company.

[Goldbug]

 

 

[Goldbug]

with OBOR a petroyuan is a very real possibility. All efforts must be taken to destabilise the Yuan

[Angcheek]

That shld be in their calculation ... else they better step down as leaders.

[Enye]

dunno must wait how many donkey years before Russia is able to develop infrastructure to supply to China