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Tag Archives: oil price
Let’s cut to the quick. My forecast for Brent at around this time next year in my BAU scenario is $37. This is grim reading for all those involved in and around the oil industry. Worse still, I think there is high probability that we see sub-$20 oil before the first quarter is out. Continue reading
The day of reckoning has arrived for the oil price with the head and shoulders pattern I have been tracking for two months finally completing in recent weeks. It became a rather drawn out affair with markets awaiting the outcome of the OPEC meeting of 4 December. In the event, OPEC elected to stay the course and did nothing. With WTI closing at $40 and Brent on $43 on Friday both are testing support levels. Continue reading
The “big news” this month is that the banks granted over leveraged, loss making shale oil drillers a stay of execution by continuing to provide credit lines. Consequently, there was no major move in US oil drilling or production though both are trending down. Continue reading
The spotlight in this week’s Bumper Blowout falls on coal. Vattenfall wants to sell its German lignite plants and lignite mines and Greenpeace wants to buy them – no prizes for guessing why. Continue reading
With momentous events unfolding on the World stage, the oil market continues to evolve at a glacial pace. Global total liquids production was 96.29 Mbpd in August, down 630,000 bpd from the June peak. But with over-supply running at over 3 Mbpd during the second quarter, there is still a long way to go to rebalance the system. Continue reading
The main action this month has been on the oil price that continued to slide. Both WTI and Brent set new post-crisis lows but saw sharp reversals on 27th and 28th August last week. Global oil production data remains in its up trend although there are signs from the regions that this may be slowing and reversing. Monthly data revisions continue to obscure the real picture. Continue reading
With West Texas Intermediate (WTI) and Brent close to their January 2015 lows some readers are wondering how these lows compare with historic lows when the oil price is adjusted for inflation (deflated).
To get straight to the point. Brent will need to fall below $30 to match the lows seen in 1986 and to below $20 to match the lows seen in 1998.
The US oil directed rig count was up 31 for the month of July and WTI is down about $11 for the month at time of writing. Global total liquids production was up 540,000 bpd in June. The production momentum built in recent years is proving very difficult to switch off. Continue reading
Recent history has not repeated and that makes it nigh impossible to predict the future with so many unconstrained variables. Continue reading
During May and June the oil price has stabilised and both WTI and Brent spot prices have converged on $60 / bbl; the US oil rig count is still falling, but slowly; oil production from all regions is stable hence global total liquids production is trending sideways on the back recent sharp rises. It appears that oil market equilibrium has been reached. Past experience tells us that this is unlikely to last long. Continue reading
Global oil production rose sharply in March by 1 Mbpd and we have a new peak in global total liquids production of 95.24Mbpd. But with the oil price currently resilient, it seems likely that surge in production may have reversed.
The plunge in US oil rig count has resumed. Oil plus gas rig count stood at 905 on May 1, just above the low point reached in the post financial crash period.
I anticipate that the price bottom may be in but that price will bounce sideways along bottom for several months until we see significant falls in OECD production. There is as yet little sign of a significant drop in US production.
The current action appears to be demand driven, the low price raising demand more than it is suppressing supplies. Continue reading
Global oil production is declining slowly but remains just above its long-term trend. Just over 94.04 Mbpd was produced in February.
The recovery in the oil price in February reversed in March and WTI has tested its January lows. Spreading conflict in the Middle East adds further complexity to the price dynamic.
The plunge in US oil rig count has slowed significantly although still falling slowly. This may signal a new phase of the oil price war that is discussed at the end of this post. Continue reading
World total liquids down 40,000 bpd
OPEC down 240,000 bpd
N America down 10,000 bpd
Russia and FSU down 70,000 bpd
UK and Norway down 40,000 bpd (compared with January 2014)
Asia up 60,000 bpd Continue reading
The main oil production changes from November to December are:
World total liquids up 150,000 bpd
OPEC up 80,000 bpd
N America up 80,000 bpd
Russia and FSU up 180,000 bpd
Europe down 70,000 bpd (compared with December 2013)
Asia down 60,000 bpd Continue reading
Most readers of this blog should be aware that the price of oil has more than halved in the last 6 months rendering much of the global oil industry unprofitable which is an unprecedented disaster for all of those dependent upon oil in their daily lives. But what is the underlying cause of all this market mayhem and does it really matter? The S&P 500 is after all riding high and the US$ keeps marching towards new highs against the € and other currencies. This post takes a look at a number of indicators searching for answers which are elusive. Continue reading
This is the first in a monthly series of posts chronicling the action in the global oil market in 11 key charts.
The oil price crash of 2014 / 15 is following the same pace of the 2008 crash. The 2008 crash was demand driven and began 2 months ahead of the broader market crash.
The US oil rig count peaked in October 2014, is down 127 rigs from peak and is falling fast.
Production in OPEC, Russia and FSU, China and SE Asia and in the North Sea are all stable to falling slowly. The bogey in the pack is the USA where a production rise of 4 Mbpd in 4 years has upset the global supply dynamic.
It is unreasonable for the OECD IEA to expect Saudi Arabia to cut production of cheap oil in order to create market capacity for expensive US oil.
There are likely both over supply and weak demand factors at play, weighted towards the latter. Continue reading
We complete our first Blowout Year with attention refocused on the harsh realities of the marketplace.
More related stories below the fold, plus the NATO threat to Russia, growth in coal, NIMBY in Germany, the UK capacity auction, increased public support for nuclear, how global warming caused by squirrels may turn Siberia into a time bomb and US indifference to farting cows. Continue reading
The current “low oil price crisis” is providing a clear and new perspective on the nature of the peak oil problem. If low price does indeed destroy high cost production capacity then this will raise the question if the high cost sources can ever be brought back? IF low price kills the shale industry can it come back from the dead? Continue reading
We lead off this Blowout week with the ongoing oil price collapse (graph credit NASDAQ).
More related stories below the fold, plus the UK “capacity auction”, US tariffs on Chinese PV panels, India’s advanced heavy water reactor, New York bans fracking, the world’s largest ship, CO2 emissions from the Southern Hemisphere, the Lima climate talks and how hot weekdays are going to cost Americans $20 each.