AuthorTopic: Oil Price Crash: Who Cooda Node?  (Read 118781 times)

Offline RE

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🛢️ Is The Oil Market Ready For Sanctions On Iran?
« Reply #750 on: April 21, 2018, 09:14:13 PM »
https://oilprice.com/Geopolitics/International/Is-The-Oil-Market-Ready-For-Sanctions-On-Iran.html

Is The Oil Market Ready For Sanctions On Iran?
By Tsvetana Paraskova - Apr 21, 2018, 6:00 PM CDT Iran


Oil market participants and analysts will be intently watching the Trump Administration over the next month. May 12 is the deadline for the U.S. President to decide to waive sanctions on Iran as part of the nuclear deal that global powers reached with Iran in 2015, allowing Tehran to resume oil exports and regain part of its market share.

The re-imposition of sanctions on Iran’s oil is not 100-percent certain, although the probability is high, various analysts say. The potential loss of Iran’s oil exports varies from zero to 1 million bpd, according to investment banks and analysts.

Iranian sanctions could add between $2 and $10 to oil prices this year, analysts polled by Bloomberg say.

The oil market—now at its tightest state in years—would feel an Iranian oil supply disruption much more than it would have felt it just a year or so ago when the global oil glut was more than 340 million barrels.

With the oil overhang in developed economies now virtually eliminated, the possible threat to supply from Iran is one of many geopolitical factors analysts are watching — Venezuela’s oil production and the possible escalation of the situations in Syria and Yemen are other high profile examples.

Without all those geopolitical concerns, market fundamentals alone hardly justify such high oil prices, some analysts say.

But here we are— the geopolitical risk premium is back in the oil market, and fears of supply disruptions, especially in the Middle East, are driving oil prices up.

Analysts have their reasons to believe that President Trump won’t waive Iran sanctions this time around.

President Trump warned in January when he waived the sanctions that it was the last such waiver, “but only in order to secure our European allies’ agreement to fix the terrible flaws of the Iran nuclear deal.”

Related: IMF: Expect Oil To Fall Below $60

Since that waiver, President Trump has appointed a new National Security Advisor, John Bolton, who is extremely hawkish when it comes to Iran.

“The fact that there’s been a change of personnel in both the White House and the State Department pushes the probability up. It would have some impact on price, in the third and fourth quarters, on a couple-of-dollar basis. It’s a good even bet that it will or will not happen in May,” according to Ed Morse, global head of commodities research at Citigroup.

Earlier this week, Citigroup raised its 2018 and 2019 oil price forecasts by $5 to $6 per barrel for Brent, on the back of potential loss of supply from Iran and further Venezuela production losses. Citigroup now expects Brent to average $65 a barrel this year and $55 per barrel next year.

It’s uncertain how much Iranian oil could be removed from the market in case of no-waiver in May. According to Citigroup, it could be anywhere from 200,000 bpd to 1 million bpd if the Iran nuclear deal collapses.

Mike Wittner, head of oil market research at Societe Generale, tells Bloomberg that there is a 70-percent chance of Iran oil sanctions returning, which would have a $10 a barrel impact on oil prices, of which $5 is already priced in. SocGen’s base-case scenario is sanctions implemented in two to three months after May 12, and removing 500,000 bpd of Iranian oil, “much less than in 2012.”

According to Fereidun Fesharaki, chairman of energy consultancy Facts Global Energy (FGE) and a former energy adviser to the prime minister of Iran in the 1970s, there is a 90-percent chance of the Trump Administration walking out of the nuclear deal. This could lead to “sanctions within 180 days, but markets have not priced it in.”

Saxo Bank said in its Q2 quarterly outlook that the appointment of Bolton increases the risk of the U.S. slapping fresh sanctions on Iran, and those restrictions “would likely reduce the country’s ability to produce and export crude oil at the current rate.”

“We expect to see Brent crude remain mostly stuck within the established $10 range with tough U.S.-Russia tensions and U.S. sanctions against Iran potentially giving it a temporary boost towards $75/b. Geopolitical risk spikes can be vicious but tend to lack longevity. Unless supply is threatened, such spikes could add extra non-OPEC barrels while potentially raising growth and demand risk,” Saxo Bank said.

Related: The Bullish And Bearish Case For Oil

Iran is bracing for sanctions, and moved this week to begin using the euro instead of the U.S. dollar for its foreign currency data references. Sara Vakshouri, head of consultancy SVB Energy International, told Platts that this move could be an attempt to curb the impact of fresh sanctions by taking the dollar out of transactions, but it is unlikely to completely protect Iran from sanctions.

“With regard to the oil purchases, as part of its market share policy under sanctions, Iran might agree to receive its oil payments in the local currency of the importers or to received goods and/or services in return for its oil,” Vakshouri told Platts, but noted that Iran’s economy as a whole would be affected even if Tehran is able to continue selling oil internationally.

“Unilateral and multilateral restrictions and sanctions will have their own negative impacts on Iran’s economy, even if it is still able to continue oil exports”, Vakshouri noted.

One thing is certain about possible Iranian sanctions—at present their impact on Iran’s oil exports and the global oil markets is highly uncertain and will keep the market on edge at least until May 12.

By Tsvetana Paraskova for Oilprice.com
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Offline RE

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How high will Oil go bevore the next crash?  ???  :icon_scratch:

RE

http://fortune.com/2018/04/30/gas-prices-summer-2018/

Gas Prices Could Make This the Most Expensive Summer for Driving in 4 Years
By Emily Price April 30, 2018


When you head to the pump this summer you might get hit with a little bit of sticker shock. Rising oil prices are projected to translate into higher gas prices come this summer.

The projections were made by private analysts and the U.S. Energy Information Administration (EIA).

Currently, the average gas price in the United States is $2.81 per gallon, up from $2.39 a gallon last year, according to the Oil Price Information Service. While gas prices last summer averaged $2.41 a gallon, the EIA projects that this summer gas prices will average around $2.74 a gallon, up from $2.41 a gallon earlier this year, the Associated Press reports.

While the numbers are higher, Tom Kloza, global head of energy analysis for Oil Price Information Service told the AP he doesn’t think we’re going to see “apocalyptic numbers” at the pump, but that”this will be the most expensive driving season since 2014.”

Those numbers will likely hold true after the summer as well. The EIA projects that the national retail price for gas in 2018 will average $2.76 a gallon.
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Offline RE

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🛢️ OPEC Sends Oil Prices Crashing
« Reply #752 on: May 26, 2018, 06:45:13 AM »
https://oilprice.com/Energy/Energy-General/OPEC-Sends-Oil-Prices-Crashing.html

OPEC Sends Oil Prices Crashing

Crash

Oil prices fell drastically on Friday on the back of news that Russia and Saudi Arabia are considering an increase in their oil production, bringing an end to the production cut deal in its current form.

Friday, May 25, 2018

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Offline RE

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🛢️ OPEC set for a collision course over production policy
« Reply #753 on: June 21, 2018, 05:33:24 AM »
$100 Oil?  POOF, there goes the economy!  ::)

RE

Oil
OPEC set for a collision course over production policy ahead of landmark meeting

    The gathering of OPEC and other exporters in Vienna, Austria, is already shaping up to be one of the most contentious meetings in years.
    Saudi Arabia and Russia — the largest non-OPEC crude producer — are both pushing for members to loosen supply controls.
    "If OPEC doesn't do something I think we will see $100 oil price," Scott Sheffield, executive chairman at Pioneer Natural Resources Company, said Wednesday.

Sam Meredith   | Patti Domm   
Published 7:59 AM ET Wed, 20 June 2018 CNBC.com
      
      
Iranian oil minister: Trump has created difficulty for the oil market 
4:28 AM ET Wed, 20 June 2018 | 02:35

OPEC kingpin Saudi Arabia is struggling to convince some of the world's largest oil producers over the need to increase oil output ahead of a key meeting on Friday.

The Middle-East-dominated oil cartel is not scheduled to make a decision over production policy until later this week, although the gathering of OPEC and other exporters in Vienna, Austria, is already shaping up to be one of the most contentious meetings in years.

Saudi Arabia and Russia — the largest non-OPEC crude producer — are both pushing for members to loosen supply controls. This comes at time of heightened pressure from President Donald Trump, who has publicly complained the group is to blame for crude prices recently soaring to multi-year highs.

Nonetheless, Iranian Oil Minister Bijan Zanganeh told reporters Tuesday that OPEC members are likely to leave the Austrian capital this week without agreeing on a path forward for their 18-month policy of limiting oil output.

Instead, Zanganeh accused Trump of using oil as a political "weapon" and said the U.S. president had created difficulty for the energy market by imposing sanctions against Iran and Venezuela.
Missing in action

Speaking in Vienna on Wednesday morning, deputy energy ministers from both Saudi Arabia and Russia — who appeared to step in for Khalid Al-Falih and Alexander Novak respectively — called for OPEC and other exporters to continue to work together.

"The opening remarks seem to clearly signal intention of the key sovereign players to respond to concerns of consumers and put some additional barrels on the market. Key question is what the MIA (missing in action) panel ministers are doing today to bridge the gap with the holdouts," Helima Croft, RBC's global head of commodity strategy, said Wednesday.
BP CEO: Lot of uncertainty in the world
BP CEO: Lot of uncertainty in the world 
7:44 AM ET Wed, 20 June 2018 | 01:41

Russia has proposed OPEC and non-OPEC producers increase output by 1.5 million barrels per day (bpd). If implemented, that would effectively eradicate existing supply cuts of 1.8 million bpd that have helped to rebalance the energy market and prop up crude prices.

Meanwhile, Saudi Arabia appears interested in a hike of only 500,000-600,000 bpd. To be sure, it is not unusual for oil producers to stake out maximalist positions ahead of a high-stakes meeting.
'Oil prices will hit $100' without OPEC action

The prospect of an agreement between OPEC and its allied partners this week would seem to rest among those members who are currently firmly opposed to a relaxation of supply cuts.

Alongside Iran — which is seen as the main barrier to any agreement — Iraq, Venezuela and Algeria are all against Saudi Arabia and Russia's calls for rising production levels, fearing a slump in prices.

"If OPEC doesn't do something I think we will see $100 oil price," Scott Sheffield, executive chairman at Pioneer Natural Resources Company, said Wednesday.
Barkindo: Always a challenge to keep OPEC insulated from politics
Barkindo: Always a challenge to keep OPEC insulated from politics 
7:44 AM ET Wed, 20 June 2018 | 01:17

International benchmark Brent crude stood at around $75 a barrel Wednesday, recovering from lows of $27 a barrel in 2016.

"We appreciate our work never stops. It's still a work in progress. We are fully committed to sustaining balance and stability," OPEC Secretary General Mohammed Barkindo said Wednesday.
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Offline RE

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🛢️ OPEC’s Agreement Sends Oil Prices Soaring
« Reply #754 on: June 23, 2018, 08:30:19 AM »
https://oilprice.com/Energy/Energy-General/OPECs-Agreement-Sends-Oil-Prices-Soaring.html

OPEC’s Agreement Sends Oil Prices Soaring

OPEC’s Agreement Sends Oil Prices Soaring

OPEC

OPEC has finally met, and as most expected, the cartel agreed that any country within the group that has space capacity will be able to boost oil production, with Saudi Arabia and Russia arguably standing to gain the most. 

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OPEC issued a communique on Friday that called on a return to 100 percent compliance for the group, down from 152 percent in May. The announcement deferred country-specific allocations, likely because they could not agree on the details. The decision likely means that any country with spare capacity will be able to boost production. In practice, Saudi Arabia and Russia will carry the lion’s share. How individual countries make decisions about how much to produce, while still trying to stay below a collective cap, opens up a lot of uncertainty.

Oil up on vague outcome. Oil prices moved up on Friday morning, on expectations that the result from the OPEC+ meeting won’t lead to a supply glut. In recent days, there seemed to be a bit of convergence on a plan to boost production, perhaps by around 600,000 bpd. That amount would merely offset the declines from Venezuela over the past year, and would not plug the entire supply deficit facing the market. “The market caught up a little in terms of realizing that the rumored increase was less than what is necessary to balance the market,” Emily Ashford, director of energy research at Standard Chartered, told the WSJ. “Any increase in production will come at the expense of spare capacity so that leaves the market much more vulnerable to future supply shocks,” she added.

OPEC eyed 1 mb/d increase, but couldn’t agree. OPEC’s technical committee recommended a supply increase of about 1 million barrels per day, although press reports widely noted that such an increase would likely only be nominal, and actual barrels put onto the market would reach only about 600,000 bpd because several countries have no ability to boost output. The recommendation came even as Iranian oil minister Bijan Zanganeh walked out of a meeting on Thursday night, although he met with his Saudi counterpart Friday morning. The discord likely led to the vague decision on 100 percent compliance, rather than on country-specific increases. Related: OPEC Edges Closer To Production Agreement

Oil and gas methane emissions higher than expected. A new study finds that the oil and gas industry might be leaking more methane from operations than is commonly thought. The study puts the methane leakage rate at about 2.3 percent of total production, or 60 percent higher than the EPA estimates. The difference is the equivalent of heating 10 million homes, and it also cancels out some of the net climate benefit that comes from switching from coal to gas for electricity.

EPA to put biofuels obligations onto large refiners. In a sign of retreat after outrage from the biofuels and corn ethanol industries, the EPA is reportedly set to propose putting biofuels obligations onto large refiners. The agency had issued a series of waivers to smaller refiners, allowing them to get out of buying and blending biofuels, to the anger of the ethanol industry. After the political fallout, the EPA seems to be reversing course, but will shift those requirements onto large refiners. The move is a sign of the political power of the corn lobby, as well as Midwestern Republicans in Congress.

Kimmeridge exits Carrizo, after activist campaign. Activist private equity group Kimmeridge Energy Management sold its position in Carrizo Oil & Gas (NASDAQ: CRZO) this week after a campaign to try to change the company’s strategy. Kimmeridge tried to get Carrizo to sell its oil fields in the Eagle Ford and to shift the company’s focus to the Permian. However, Carrizo resisted and Kimmeridge ultimately decided to sell its 8.1 percent stake. Maintaining Eagle Ford assets turned out to be a winner, now that Permian prices have plunged because of pipeline constraints.

U.S. natural gas output to soar 60 percent. A new report from IHS finds that U.S. natural gas production could jump 60 percent over the next 20 years, a finding that suggests the shale gas revolution has decades of running room. Dry gas production could hit 81 billion cubic feet per day this year, but rise to 118 bcf/d by 2037. Natural gas is expected to capture about 50 percent of the electricity market by 2040, up from about a third today.

Libyan forces retake oil terminal. Libya briefly saw the outage of about 450,000 bpd of supply because of attacks from militants, combined with the destruction of several oil storage tanks. Reuters reports that East Libyan forces have retaken the shuttered oil ports of Es Sider and Ras Lanuf, the two largest in the country. The three storage tanks that were destroyed will take years to repair. “Libyan production is very low but we are going to resume very soon,” Mustafa Sanalla, chairman of Libya’s National Oil Corp., told reporters in Vienna. “After a couple of days we will resume, we start our operations hopefully.”

Related: Permian Bottlenecks Begin To Bite

Permian DUCs to rise. Pipeline bottlenecks are forcing Permian drillers to leave more and more wells uncompleted. The drilled but uncompleted wells (DUCs) has more than doubled from the start of 2017, and should continue to rise as Permian pipelines fill up. “Some companies will have to shut in production, some companies will move rigs away, and some companies will be able to continue growing because they have firm transportation,” Pioneer Natural Resources (NYSE: PXD) CEO Scott Sheffield said.

Corpus Christi port receives funding for upgrade. The Port of Corpus Christi approved $217 million for upgrades to equip the facility to handle large oil tankers. The 1-million-barrel Suezmax and the 2-million-barrel VLCCs can only partially load at the facility right now. The upgrade will expand the port’s – and the country’s – export capacity.

By Tom Kool for Oilprice.com

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Offline Surly1

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Re: 🛢️ OPEC’s Agreement Sends Oil Prices Soaring
« Reply #755 on: June 23, 2018, 10:48:25 AM »
https://oilprice.com/Energy/Energy-General/OPECs-Agreement-Sends-Oil-Prices-Soaring.html

OPEC’s Agreement Sends Oil Prices Soaring

OPEC issued a communique on Friday that called on a return to 100 percent compliance for the group, down from 152 percent in May. The announcement deferred country-specific allocations, likely because they could not agree on the details. The decision likely means that any country with spare capacity will be able to boost production. In practice, Saudi Arabia and Russia will carry the lion’s share. How individual countries make decisions about how much to produce, while still trying to stay below a collective cap, opens up a lot of uncertainty.


Two  questions:

1) What fucking good is a "cartel" if they can't control their prices?
2) If every producer is going to pump their asses off, in creasing supply, why will prices move down?
"It is difficult to write a paradiso when all the superficial indications are that you ought to write an apocalypse." -Ezra Pound

Online K-Dog

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Re: Oil Price Crash: Who Cooda Node?
« Reply #756 on: June 23, 2018, 11:12:16 AM »
Quote
Two  questions:

1) What fucking good is a "cartel" if they can't control their prices?
2) If every producer is going to pump their asses off, increasing supply, why will prices move down?

Number two seems like basic supply and demand.

About number one.  The members of the cartel have different quantities of reserves and some might want to try and stretch profits out instead of selling what remains off quick for a fast buck but less overall money and masses of pitchfork wielding peasants sooner.  These members know their fields are going dry.  The Saudis and the Russians have enough so they are not worried about the end game yet so much.  They still must worry but they can kick-the-can for a while.

Just a guess but we also know the Saudis go through a lot of money and they have been feeling a pinch.  Locking up the princes in the hotel tells us that.
« Last Edit: June 23, 2018, 11:14:38 AM by K-Dog »
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