Oil rises 1% on settlement amid fears of supply shortages

[yota691]

Oil at its highest level since October 2014

 

Arab and international Economy News _ Baghdad Oil prices rose in Tuesday trading to their highest level since October 2014, drawing support from OPEC's announcement of a deflation of global crude supply and a drop in global inventories for the second month in a row. The Organization of the Petroleum Exporting Countries (OPEC) said in its monthly report on Monday that it was ready to intervene to ease any potential market shortages with other producers due to recent geopolitical developments regarding the US withdrawal from the Iranian nuclear deal. Brent crude for July delivery rose 0.09 percent, or 7 cents, to $ 78.3 a barrel by 04:48 GMT. US crude futures for June delivery rose 0.06 percent, or 4 cents, to $ 71 a barrel. Markets are looking forward later today, the US Petroleum Institute announced its estimates of US oil inventories last week, while official data will be released Wednesday by the US Energy Information Administration. The US Energy Information Administration (EIA) forecast in its report on Monday that oil production in the United States will rise to 7.18 million bpd in June. Views 19   Date Added 15/05/2018

[yota691]

«International Energy» warns about the demand for oil with the price approaching $ 80

 

Date of publication: Thursday 17 May

LONDON (Reuters)

The International Energy Agency said yesterday that global oil demand is likely to slow this year as the price of crude approaches $ 80 a barrel and many major importing countries have stopped providing generous fuel subsidies to their consumers. The agency cut its forecast for global demand growth to 1.4 million bpd in 2018 from a previous estimate of 1.5 million bpd.

Oil rose 51 percent in the past year, driven by coordinated supply cuts and concerns this month over Iran's supply after the United States said it would "reimpose sanctions on Tehran over its nuclear activities."

 

 

"It would be extraordinary if such a big jump does not affect demand growth, especially as the end-user support has been cut or cut in several emerging economies in recent years," the agency said.

[blueskyline]

Oil Jumps Above $80 For The First Time Since Nov. 2014

by Tyler Durden

Thu, 05/17/2018 - 06:13

39

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Two weeks after Saudi Arabia said it was targeting $80/bbl oil, this morning Riyadh got its wishes early when Brent hit the Saudi target, jumping as much as 1% to $80.18, following the latest drop in U.S. crude inventories and as traders continued to fret about the consequences of renewed sanctions on Iran.

This was the highest price since November 2014.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Today's jump followed a reported from Goldman titled simply "The case for commodities strengthens " according to which America’s surging shale output won’t be able to replace the potential drop in Iranian oil shipments after the U.S. reimposed sanctions on OPEC’s third-largest producer.

US shale cannot solve the current oil supply problems. Even if only 200-300 kb/d of Iran exports are at risk by year-end, OPEC is not likely to preempt this loss, only react to it. Further, any response will reduce spare capacity in an increasingly tighter market. The erosion in Venezuela and Angola oil output is accelerating at the same time ex-US growth is stalling. Only the US has seen supply surprises, but is facing growing pains with filled pipeline capacity, constraining US growth into 2019.

Goldman also noted that physical markets continued to ignore growth concerns - just yesterday the IEA warned that the surge in prices will kill demand - rising rates and USD.

Only financial markets care, which is why only gold has traded substantially lower with the risk-off sentiment. Growth concerns will likely prove temporary, realized demand remains robust and OPEC has never been able to catch late-cycle demand growth to replenish inventories before a recession occurs. And even if growth were to decelerate further, it would take global GDP growth collapsing to 2.5% yoy to simply balance the oil market! We recommend not 'riding this one out.'

 

And confirming that Jeff Gundlach was right in December to go long commodities, Goldman's Jeff Currie said that oil is the "Best performing asset class now posts the best ytd returns in a decade. The rally likely has room to run, particularly from a returns perspective. Oil fundamentals are now more bullish as robust demand faces supply disappointments. We are raising our 12m S&P GSCI returns forecast to 8% from 5% yet markets remain complacent. Specs have declined since $73/bbl under the mantra, 'we will ride this one out' -- dangerous words from a risk management perspective."

The paradox, of course, is that rising oil prices crush the benefit to the middle class of Trump's tax cuts; crude has rallied this month to the highest level in more than three years after U.S. President Donald Trump withdrew from a 2015 pact between Iran and world powers that had eased sanctions on the Islamic Republic in exchange for curbs on its nuclear program. As we noted yesterday, while the International Energy Agency said a global glut’s been eliminated thanks to output curbs by OPEC, it warned high prices may hurt consumption and cut forecasts for demand growth.

So far, however, demand appears to be doing fine.

On Wednesday, the EIA reported that U.S. crude inventories fell 1.4 million barrels last week, while domestic production rose to 10.7 million barrels a day. Despite surging American output, which has topped 10 million barrels a day every week since early February, traders continue to push the price of Brent higher, unconcerned about the torrent of shale production this will unleash.

[pokerplayer]

40 minutes ago, blueskyline said:

Oil Jumps Above $80 For The First Time Since Nov. 2014

by Tyler Durden

Thu, 05/17/2018 - 06:13

39

SHARES

TwitterFacebookRedditEmailPrint

 

Two weeks after Saudi Arabia said it was targeting $80/bbl oil, this morning Riyadh got its wishes early when Brent hit the Saudi target, jumping as much as 1% to $80.18, following the latest drop in U.S. crude inventories and as traders continued to fret about the consequences of renewed sanctions on Iran.

This was the highest price since November 2014.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Today's jump followed a reported from Goldman titled simply "The case for commodities strengthens " according to which America’s surging shale output won’t be able to replace the potential drop in Iranian oil shipments after the U.S. reimposed sanctions on OPEC’s third-largest producer.

US shale cannot solve the current oil supply problems. Even if only 200-300 kb/d of Iran exports are at risk by year-end, OPEC is not likely to preempt this loss, only react to it. Further, any response will reduce spare capacity in an increasingly tighter market. The erosion in Venezuela and Angola oil output is accelerating at the same time ex-US growth is stalling. Only the US has seen supply surprises, but is facing growing pains with filled pipeline capacity, constraining US growth into 2019.

Goldman also noted that physical markets continued to ignore growth concerns - just yesterday the IEA warned that the surge in prices will kill demand - rising rates and USD.

Only financial markets care, which is why only gold has traded substantially lower with the risk-off sentiment. Growth concerns will likely prove temporary, realized demand remains robust and OPEC has never been able to catch late-cycle demand growth to replenish inventories before a recession occurs. And even if growth were to decelerate further, it would take global GDP growth collapsing to 2.5% yoy to simply balance the oil market! We recommend not 'riding this one out.'

 

And confirming that Jeff Gundlach was right in December to go long commodities, Goldman's Jeff Currie said that oil is the "Best performing asset class now posts the best ytd returns in a decade. The rally likely has room to run, particularly from a returns perspective. Oil fundamentals are now more bullish as robust demand faces supply disappointments. We are raising our 12m S&P GSCI returns forecast to 8% from 5% yet markets remain complacent. Specs have declined since $73/bbl under the mantra, 'we will ride this one out' -- dangerous words from a risk management perspective."

The paradox, of course, is that rising oil prices crush the benefit to the middle class of Trump's tax cuts; crude has rallied this month to the highest level in more than three years after U.S. President Donald Trump withdrew from a 2015 pact between Iran and world powers that had eased sanctions on the Islamic Republic in exchange for curbs on its nuclear program. As we noted yesterday, while the International Energy Agency said a global glut’s been eliminated thanks to output curbs by OPEC, it warned high prices may hurt consumption and cut forecasts for demand growth.

So far, however, demand appears to be doing fine.

On Wednesday, the EIA reported that U.S. crude inventories fell 1.4 million barrels last week, while domestic production rose to 10.7 million barrels a day. Despite surging American output, which has topped 10 million barrels a day every week since early February, traders continue to push the price of Brent higher, unconcerned about the torrent of shale production this will unleash.

 

 

   I work in the oil and gas Industry and even though the ROE is high right now most companies, mine Included are cautious about loosening the purse strings to much. They want to see a stable price for around 6 months before commiting to much capital towards long term sustainable projects.

 

    So don't be surprised if nothing earth shattering happens in the Industry for a while yet. I don't believe this has any bearing on an RV for Iraq but it could have in regards to contracts for Investor's.

 

  pp

[nor]

Is really good news . After Rv better i buy  share the company that have in this sector . the good investing for a long term . 

[yota691]

Oil rises due to OPEC cuts and Iran sanctions

 

Arab and international Economy News _ Baghdad Oil prices rose on Friday, driven by strong demand, continued supply cuts led by OPEC and imminent US sanctions on Iran, the main exporter of crude.  But markets remained below several-year highs recorded in the previous session, as the increase in production from the US is expected to offset at least some of the supply shortfall. Brent crude futures at $ 79.50 a barrel rose 20 cents, or 0.25 percent, from the previous close, while Brent broke through $ 80 for the first time since November 2014 on Thursday. In the context of the US crude contracts, West Texas Intermediate $ 71.61 a barrel, up 12 cents, or 0.2 percent of the previous settlement. Crude prices have received support from OPEC-led consensus supply cuts aimed at curbing the supply. In addition to Opec's cuts, strong demand, a decline in Venezuela's output and a US announcement earlier this month of its intention to renew sanctions on OPEC member Iran have helped drive Brent up 20 percent since the start of the year. Views 64   Date Added 18/05/2018

[yota691]

Asia's thirst for oil raises the procurement bill to a trillion dollars a year

 

Excavators of the "Internet"

Arab and international Economy News Baghdad: With oil prices climbing at $ 80 a barrel as Asian demand hits record highs, pushing the region's purchases bill from $ 1 trillion to $ 1 trillion a year, or nearly twice as much as during the recession in 2016/2015 . Oil prices have jumped 20 percent since January and broke $ 80 a barrel on Thursday, their highest level since 2014 . The dollar, the only currency in which the oil is actually traded, is also gaining strength, leading to growing concern that economies, especially in import-dependent Asia, are hit.The sharp rise in crude prices could have an inflationary effect that would hurt both consumers and companies . "Asia is the most affected by rising oil prices," the Canadian investment bank RBC Capital Markets said in a note this month in a warning after oil prices hit their highest level since November 2014 . Data in the oil sector showed that the Asia-Pacific region consumes more than 35 percent of the 100 million barrels per day of oil the world uses daily, with the region's share rising steadily . Asia is also the world's smallest oil producing region, accounting for less than 10 percent of world production . * Inflation and high cost Morgan Stanley said this week that the use of diesel contributes about 10-20 percent to the cash costs of mining companies, while oil contributes between 4 to 50 percent of the cost of generating electricity, depending on the fuel mix of a company or state . "So rising oil prices are turning the entire cost curve upside down ." China is the largest importer of oil in Asia and the world, buying 9.6 million barrels per day in April, equivalent to about 10 percent of global consumption . At current prices, that amount makes the Chinese oil import bill $ 768 million a day, or $ 23 billion a month, which increases the annual bill to $ 280 billion a year . Other Asian countries are more affected by higher oil prices. Most of the damage will be to countries like India and Vietnam, which rely heavily on imports, but their national wealth is not big enough to absorb sudden increases in the cost of fuel . "Poor countries with limited borrowing capacity may face funding difficulties amid an increase in the import bill," RBC said . If there is no massive fuel subsidies, households and businesses in poor countries will also be more affected by higher crude prices than their counterparts in richer countries . Research in Reuters and figures from the Nambio Statistical Database showed that in developing economies such as India, Vietnam and the Philippines, the cost of fuel consumes up to 8-9 percent of the average per capita salary, compared with only 1-2 percent in richer countries such as Japan and Australia . * Diesel and logistics Some companies say they will continue to increase the cost to consumers . Chris Alphonsis Damoy, chief executive of Chelsea Logistics, said his company could be affected by high oil prices, but "we can pass the impact on consumers through price adjustments ." Others said that if they put the burden of rising costs on consumers, they would lose customers . Ashish Salva, who owns 50 trucks in Mumbai, India, said diesel accounted for more than half of his company's expenses, and it was difficult to pass the cost increase to consumers. "Diesel prices have jumped 16 percent this year, but I can not raise shipping charges by 5 percent. If fees are raised, customers will use cheaper railways . " Anil Mittal, who runs a logistics container company, said his company was already operating at low margins even before prices rose . "High diesel prices are hurting our activities." Many small transportation companies such as his company "have difficulties in repaying the bank loans they got to buy trucks ." Given the economic cost and dependence of Asia on imports, economists say it is time for the region to reduce its exposure to oil . "It is very important for Asia to reduce its dependence on oil and increase energy efficiency ... to protect itself against future oil shocks," RBS Capital Markets said. Views 41   Date Added 17/05/2018

[Officiallytook]

OK Iraq now what are you waiting for a seated govt?

[Sage449]

As much as I understand the implication of higher oil, it pains me to shell out over $3.35 per gallon at the pump. 

[Rmc10]

14 minutes ago, Sage449 said:

As much as I understand the implication of higher oil, it pains me to shell out over $3.35 per gallon at the pump. 

 

It's tough on my business when oil prices rise. I just keep hoping that it will help the dinar RV.

[DoD]

3 minutes ago, Rmc10 said:

 

It's tough on my business when oil prices rise. I just keep hoping that it will help the dinar RV.

 

Rmc10, that's exactly what I keep thinking. Paying $3.59 a gallon for gas here in LA about kills my soul. I'm like you, if it helps the RV I'll deal with it better...

[CSM (R) Thack]

Feeling the pain here in E-Town, KY...paid $3.69 per gallon (yesterday)!!!😡

[ChuckFinley]

9 minutes ago, CSM (R) Thackrey said:

Feeling the pain here in E-Town, KY...paid $3.69 per gallon (yesterday)!!!😡

Meet my wife in E-town. 

[CSM (R) Thack]

Hooah...we are just outside the E-town city limits, down the road from the Valley Creek Baptist Church!

[ChuckFinley]

Jenkins was my best man. Family owned the lumber yard. Lived on Hatcher Street. 

[NoviceInvestor]

4 hours ago, CSM (R) Thackrey said:

Feeling the pain here in E-Town, KY...paid $3.69 per gallon (yesterday)!!!😡

In Australia we pay by the Litre and it averages around $1.47 /Litre  where I live ..In the city it may fluctuate in price  at different servos,but in the country its dear ..

[Officiallytook]

6 hours ago, Sage449 said:

As much as I understand the implication of higher oil, it pains me to shell out over $3.35 per gallon at the pump. 

I feel your pain in east LA were sitting at 4.05

[Officiallytook]

5 hours ago, DoD said:

 

Rmc10, that's exactly what I keep thinking. Paying $3.59 a gallon for gas here in LA about kills my soul. I'm like you, if it helps the RV I'll deal with it better...

We are pretty close to each other gonna have to have a biggass party once this thing flips

[pokebu]

Down here in The Villages Fl., we are still  at $2.68.  You guys must have Maliki running your pricing LOL.

[nor]

the things that im shure when oil raises only iran will be see the effect . by the way iraq when rv is completely new gov not about oil . thats all 

[Butifldrm]

 

Saudi Arabia plans to raise the price of a barrel of oil to $ 80

By Rudao 9 hours ago

Archived

Roudao- Erbil , the 

Saudi government has stepped up its efforts to raise oil prices to at least $ 80 a barrel this year, it stands the Saudi crown prince, Mohammed bin Salman, behind these efforts in an attempt to exploit Saudi imports for economic reform and large - scale, represents a departure from the role Which it has long practiced as a supporter of stability in world energy markets. 

Since last year, the Saudis have helped raise oil prices by about 50 percent compared to 2015, by significantly reducing production in coordination with the Organization of the Petroleum Exporting Countries (OPEC), Russia and nine other countries outside the Organization. 1.8 million barrels. But Saudi officials say Bin Salman is no longer satisfied and wants more price rises.

"There is absolutely no intention of Saudi Arabia to do anything to stop the surge in oil prices, that's exactly what the kingdom wants," a Saudi government official told the Wall Street Journal. "The minimum price for a barrel that Saudi Arabia aspires to is $ 80. 

Bin Salman's agenda changed the shape of the kingdom's decades-old foreign relations, which provided for stability in oil prices in return for security assistance from the United States and other major energy consumers.

But the US rock oil industry has lost Middle East oil and security and stability in the Middle East no longer matter to American industry as in the past century. The US appetite for military action in the Middle East has declined, as has the ambitious agenda of the Crown Prince. The Vision 2030 project was launched in the last three years to modernize Saudi Arabia's economy and to generate income from the Kingdom, a project that needs huge resources to achieve. 

For every dollar in which oil prices rise, Saudi Arabia gets about $ 3.1 billion a year in additional revenue, a huge dividend for a country with more than 90 percent of its oil economy.

According to Saudi officials, more oil revenues give the government time and money to continue at a slower pace in other economic reforms. When prices fall, the kingdom imposed austerity plan and stripped ordinary Saudis of government subsidies, reducing consumer spending. The measures have led to internal discontent. "This gives everyone time to breathe," a senior Saudi official said of rising oil prices. 

OPEC members and 10 oil producers will meet next June, and the US withdrawal from the Iranian nuclear deal is expected to lead to a further rise in oil prices by that date.

The Saudis seem ready to raise oil prices in June by pushing for a continuation of the oil production reduction agreement. Saudi officials have individually raised their desire for higher prices in the media, helping to raise prices. 

There have been fears in the past that the rise in oil prices will have negative effects on the level of global economic growth and on demand for oil, but Saudi Energy Minister Khalid Al-Falih pointed to the position of the Kingdom, saying: "I see no impact on demand with current prices , We have seen much higher prices in the past, twice as much as we have today "and demand was continuing.

An increase in the number of people, especially young people, has led to higher government spending. An IMF report notes that Saudi government spending was lower. Saudi Arabia between 2000 and 2014 required an average oil price of about $ 75 a barrel to cover its government expenditure, , That in 2018, Saudi Arabia needs oil prices above $ 87 a barrel to balance its budget. 

Officials in Riyadh told the US newspaper that the kingdom was cautious and did not want oil prices to break the $ 100 barrier because it would provide a good opportunity for the US rocky oil industry and would have a significant impact on global economic growth. 

In addition, Iran and Russia believe that oil prices around $ 60 a barrel are ideal at this stage, which could lead to a difference between OPEC members and others during the June meeting.

According to Bob McNally, president of Rapid Energy, the Saudis want more investments, as well as Aramco's IPO to provide for the Vision 2030 project. 

Saudi Arabia wants high oil prices for short-term goals, but in the long run, after implementing the early stages of Vision 2030, Saudi interests will be aligned with cheaper oil, the Wall Street Journal report says. 

The International Monetary Fund warned this week that high oil prices could cause the Saudi government to slow its economic reforms.

http://www.rudaw.net/arabic/business/20052018

[10 YEARS LATER]

Update as of 16:30 - - - 20 May 2018 - - - $78.95 Brent Crude

 

https://oilprice.com

[ChuckFinley]

18 minutes ago, 10 YEARS LATER said:

Update as of 16:30 - - - 20 May 2018 - - - $78.95 Brent Crude

 

https://oilprice.com

Thanks 10YL, interesting link and it was all green.  

[yota691]

Economic events awaiting the global markets

21/5/2018 12:00 am  During this week Capitals / follow-up morning The world markets are receiving a new week of important political and economic events amid central banks' control of the scene. Several central bankers are also scheduled to speak on different occasions giving their views on monetary policy, as well as a number of central banks  Meetings.  Markets are also awaiting the presidential elections in Venezuela in conjunction with the economic problems experienced by the state. The start of the week Many European markets are trading at the beginning of this week, with trades resuming on Tuesday. Germany, France and Switzerland are among those markets celebrating Monday White Day. Central Bank Presidents The President of the Bank of England and the Chairman of the Federal Reserve are speaking on various occasions this week. On Thursday, Bank of England President Mark Carney is due to speak at the Bank of England's Markets Forum in London. On Friday, Carney and Jerome Powell are scheduled to take part in a panel discussion on the future of central banks at a Stockholm conference. OPEC meeting OPEC holds its monthly meeting on Monday, in the presence of the 13 member states along with 11 other oil-producing countries.  In OPEC's regular meetings, developments in the oil market and levels of production and demand for crude are discussed. While the monthly report of the Organization of the increase in production in April by 12.1 thousand barrels per day to 31.930 million barrels per day. European and the minutes of the Federal European Central Bank and the Federal Reserve announced the minutes of their last meeting over the weekend, which is often released after 3 weeks of the bank meeting. On Wednesday, the Fed will announce its meeting at which it decided to set interest rates at 1.50 to 1.75 percent, a move that has been approved. The European Central Bank is due to release minutes of its meeting on Thursday on interest rate stabilization, with interest rates on major refinancing and interest rates on lending and deposits at 0.00 percent, 0.25 percent and 0.40 percent respectively. VENEZUELA, Venezuela - Venezuela held its presidential election on Sunday at a time of huge economic problems ranging from currency collapse to rising inflation, along with a lack of oil production.

[jmartin1145]

19 hours ago, pokebu said:

Down here in The Villages Fl., we are still  at $2.68.  You guys must have Maliki running your pricing LOL.

I was going to say the same thing. Im still paying 2.65.