Crude oil futures tumbled Friday after a new government report suggested energy company could increase production in 2015 over current levels despite the 40% decline for West Texas Intermediate since its June peak. Crude oil for January delivery settled $2.14 lower at $57.81 per barrel but January natural gas got a boost today following several days of below-average cold in the northeast U.S., rising 16 cents to $3.80 per 1 million BTU.
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LONDON (Reuters) - Brent crude oil hit a fresh five-year low close to $60 a barrel on Monday after producer group OPEC restated its determination not to cut output despite a global fuel glut, but the North Sea benchmark later rallied to around $63.
ReplyDeleteMarket momentum appeared to be downwards, with analysts saying oil could plumb new depths before a sustained recovery.
Oil prices have collapsed over the last six months as high-quality, light crude from North America has overwhelmed demand at a time of lacklustre global economic growth.
The Organization of the Petroleum Exporting Countries has kept production steady, worried that any reduction in its output would have little impact on price and instead mean surrendering market share.
"The decision has been made. Things will be left as is," OPEC Secretary-General Abdullah al-Badri told a conference in Dubai on Sunday. "We agreed that it is important to continue with production (at current levels) for the ... coming period."
Brent for January fell to a low of $60.28 a barrel in Asian trade, down $1.57 and its lowest since July 2009. The futures contract then rallied to trade around $62.85 by 1015 GMT, up $1.00.
U.S. crude for January was trading at $58.50 a barrel, up 69 cents, after hitting a low of $56.25 earlier in the day - its weakest level since May 2009.
Analysts said Monday's bounce was partly speculative buying, and partly a reaction to news that Libya's two biggest oil ports had shut due to fighting between armed factions allied to the country's two rival governments.
"The market may just have moved down too far too quickly today," said Tamas Varga, energy analyst at London brokerage PVM Oil Associates. "It was a bit overdone and people may be 'bottom-picking'."
Analysts have cut oil price forecasts sharply over the last few weeks.
"Oil prices may move below $60 per barrel in the near term," analysts at Barclays Bank said, but added that "this (level) is not sustainable in the long run".
Barclays said it expected Brent to average $67 per barrel in the first half of 2015 and $78 in the second half of next year.
National Australia Bank said on Monday it cut its Brent forecast to $80 in the fourth quarter of 2014, $75 in the first quarter of 2015 and an average of $80 for all of next year.
NORTH DAKOTA OIL PRODUCTION: FIRST DECLINE OF THE YEAR – (Star Tribune) North Dakota state officials said that oil production in October declined by about 4,000 barrels per day to 1.18 million daily barrels compared with September, the first decline in eight months. Drilling for new wells also declined and is expected to decline even more in 2015. The 183 current drilling rigs to be down by 40 to 50 rigs by mid-2015. After drilling wells, operators increasingly are deciding not to immediately complete them. The number of wells in this uncompleted stage rose by 40, to 650 in October. In North Dakota, production from the Bakken and Three Forks shale plays has risen nearly sixfold in the past five years, and the state in October had a record of 11,892 oil wells. (Rig floor life near Williston, North Dakota)
ReplyDeleteNEW YORK: Global oil prices slid to new multi-year lows on Monday (Dec 15) after a top OPEC official suggested that speculation largely was driving the market lower, indicating the cartel would keep output unchanged.
ReplyDeleteUS benchmark West Texas Intermediate for January delivery lost US$1.90, closing on the New York Mercantile Exchange at US$55.91, its lowest level since early May 2009. The European benchmark, Brent North Sea crude for January delivery, settled at US$61.06 a barrel in London, down 79 cents from Friday's closing level.
Oil staged a small rally in early European trading from steep losses last week but that quickly evaporated, roiling European stock markets. Oil prices have plunged roughly 50 per cent since June, weighed down by plentiful supplies, the stronger dollar and weak demand arising from the struggling global economy, according to analysts.
"The move in oil was shown to be a dead-cat bounce and prices rolled over and erased most stock market gains with them," said Jasper Lawler, an analyst at CMC Markets UK.
Lawler said "lower oil prices almost unequivocally boost demand in the longer term but the realization is setting in for markets that part of the reason prices are falling rapidly right now is because global demand is slowing."
U.S. crude futures fell nearly 1 percent on Wednesday to stay below $56 a barrel after industry data showed stockpiles unexpectedly rose last week, and as Russia failed to halt more steep falls in the value of the ruble.
ReplyDeleteNYMEX crude for January delivery was down 49 cents at $55.44 a barrel by 2322 GMT, after settling up 2 cents on Tuesday as trading of expiring options helped defend the price above $55.
On Tuesday, the contract fell by more than $2 to an intraday low of $53.60, the lowest since May 2009.
London Brent crude for January delivery was untraded yet, after settling down $1.20 at $59.86.
(Reuters) - Chevron Corp (CVX.N) is putting a plan to drill for oil in the Beaufort Sea in Canada's Arctic on hold indefinitely because of what it called "economic uncertainty in the industry" as oil prices fall.
ReplyDeleteIn a letter to Canada's National Energy Board on Wednesday, the company withdrew from a hearing on Arctic drilling rules because it has walked away from plans to drill in the EL 481 block, 250 kilometers (155 miles) northwest of Tuktoyaktuk, Northwest Territories.
The drilling project is the largest yet put on hold after oil prices dropped by nearly half over the last six months, even as a long list of oil companies cut their budgets for 2015 because of the price drop.
"Chevron has put its drilling plans for EL 481 on hold indefinitely," the company said in its letter to the regulator, which was confirmed by a spokesman.
The San Ramon, California-based company has been planning the well since 2009 and had planned to drill the prospect in the 2020s, according to filings.
Imperial Oil Ltd (IMO.TO), which leads a joint venture with Exxon Mobil Corp (XOM.N) and BP Plc (BP.L), said on Wednesday that it has not changed early-stage plans to drill in the Beaufort Sea and that a final decision on the project has yet to made.
Chevron has two licenses to explore in the Beaufort, holding EL 481 outright and controlling 60 percent in the other alongside Norway’s Statoil ASA (STL.OL).
The company had previously outlined expectations to have “highly significant” capital outlays in the area. Chevron paid C$103.3 million for the rights to explore in the area of roughly 508,000 acres (206,000 hectares). The region is just east of the Canada-U.S. border.