• 5 hours Permian Still Holds 60-70 Billion Barrels Of Recoverable Oil
  • 10 hours Petrobras Creditors Agree To $6.22 Billion Debt Swap
  • 14 hours Cracks Emerge In OPEC-Russia Oil Output Cut Pact
  • 18 hours Iran Calls On OPEC To Sway Libya, Nigeria To Join Cut
  • 19 hours Chevron To Invest $4B In Permian Production
  • 21 hours U.S.-Backed Forces Retake Syrian Conoco Gas Plant From ISIS
  • 23 hours Iraq Says Shell May Not Quit Majnoon Oilfield
  • 3 days Nigerian Oil Output Below 1.8 Million BPD Quota
  • 4 days Colorado Landfills Contain Radioactive Substances From Oil Sector
  • 4 days Phillips 66 Partners To Buy Phillips 66 Assets In $2.4B Deal
  • 4 days Japan Court Slams Tepco With Fukushima Damages Bill
  • 4 days Oil Spills From Pipeline After Syria Army Retakes Oil Field From ISIS
  • 4 days Total Joins Chevron In Gulf Of Mexico Development
  • 4 days Goldman Chief Urges Riyadh To Get Vision 2030 Going
  • 4 days OPEC Talks End Without Recommendation On Output Cut Extension
  • 4 days Jamaican Refinery Expansion Stalls Due To Venezuela’s Financial Woes
  • 4 days India In Talks to Acquire 20 Percent Of UAE Oilfield
  • 5 days The Real Cause Of Peak Gasoline Demand
  • 5 days Hundreds Of Vertical Oil Wells Damaged By Horizontal Fracking
  • 5 days Oil Exempt In Fresh Sanctions On North Korea
  • 5 days Sudan, South Sudan Sign Deal To Boost Oil Output
  • 5 days Peruvian Villagers Shut Down 50 Oil Wells In Protest
  • 5 days Bay Area Sues Big Oil For Billions
  • 5 days Lukoil Looks To Sell Italian Refinery As Crimea Sanctions Intensify
  • 5 days Kurdistan’s Biggest Source Of Oil Funds
  • 6 days Oil Prices On Track For Largest Q3 Gain Since 2004
  • 6 days Reliance Plans To Boost Capacity Of World’s Biggest Oil Refinery
  • 6 days Saudi Aramco May Unveil Financials In Early 2018
  • 6 days Has The EIA Been Overestimating Oil Production?
  • 6 days Taiwan Cuts Off Fossil Fuels To North Korea
  • 6 days Clash In Oil-Rich South Sudan Region Kills At Least 25
  • 6 days Lebanon Passes Oil Taxation Law Ahead Of First Licensing Auction
  • 7 days India’s Oil Majors To Lift Borrowing To Cover Dividends, Capex
  • 7 days Gulf Keystone Plans Further Oil Output Increase In Kurdistan
  • 7 days Venezuela’s Crisis Deepens As Hurricane Approaches
  • 7 days Tension Rises In Oil-Rich Kurdistan
  • 7 days Petrobras To Issue $2B New Bonds, Exchange Shorter-Term Debt
  • 7 days Kuwait Faces New Oil Leak Near Ras al-Zour
  • 8 days Sonatrach Aims To Reform Algiers Energy Laws
  • 8 days Vitol Ups Cash-for-Oil Deals With Kazakhstan To $5B
Alt Text

5 Top Marijuana Stocks For 2017

The marijuana market is growing…

Matt Smith

Matt Smith

Taking a voyage across the world of energy with ClipperData’s Director of Commodity Research. Follow on Twitter @ClipperData, @mattvsmith01

More Info

Crude Sinks As Jobs Report Propels Dollar Even Higher

Crude Sinks As Jobs Report Propels Dollar Even Higher

We reach the penultimate unemployment release of the year, with a lot hinging upon this report. The headline numbers – ironically 154 years after the birth of basketball inventor James Naismith – mean an interest rate hike in December is increasingly becoming a slam dunk.

271,000 jobs were apparently created last month, a country mile away from the expectation of 180,000 (and not even hinted at by Wednesday’s ADP report). The unemployment rate has ticked lower to 5.0 percent, a level not seen since May 2008 (hark, below). Even average hourly earnings ticked up by 0.4 percent in October, indicating the presence of the panacea for disinflation. In summary, the Fed couldn’t have wished for a better report if they were looking for encouragement to raise rates next month.

As we discussed yesterday, the prospect of higher interest rates will propel the U.S. dollar higher, providing headwinds for a crude rally. Hence, as the U.S. dollar rips higher after the surprisingly strong unemployment report…crude is sinking once more. Related: Oil Markets Shrug Off Supply Disruptions In Libya And Brazil

(Click to enlarge)

Unemployment rate, percent (source: investing.com)

Flipping to overnight action, and fun and games were kicked off by Bank of Japan’s Governor Haruhiko Kuroda, who said further potential stimulus measures could be forthcoming should China’s slowdown spur on deflationary pressure.

Across to Europe, and German industrial production in September contracted for a second consecutive month, dropping -1.1 percent versus the expectation of a rebound of 0.5 percent. The UK also saw a worse-than-expected print at -0.2 percent (MoM), while Spain bucked the trend, coming in better than consensus. Brazilian woes continue, with inflation ticking up to 9.93 percent (YoY), a new 15-year high. Related: Is Iran Opening A “Secret Passage” To Asia For Russian Crude?

The below graphic illustrates how low oil prices are weighing heavy on the number of new oil projects being launched (NB, excluding unconventional oil and gas drilling in the U.S.). This huge drop in new projects is causing oil services companies to slash costs and get increasingly more competitive for a lesser number of projects. This is no better exemplified than by Schlumberger, who has seen profits halved in Q3 as revenues were slashed by a third (versus the prior year).

Finally, despite weaker trade between Russia and Japan, Russian crude exports to Japan have rebounded in recent months. Nonetheless, they are still below last year’s pace, dropping to average 242,000 barrels per day so far this year through October. Related: Oil Sands Still Face Pipeline Problems

Our #ClipperData show that Saudi Arabia is seeing its share of the Chinese market drop, as countries such as Russia increasingly compete for market share. Saudi Arabia is, however, seeing its exports to Japan increasing this year, while total Japanese oil imports edge lower. This underscores how the competitive landscape for producers – just as mentioned above for oil services companies – continues to intensify.

By Matt Smith

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News