• 16 hours Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 17 hours Oil Gains Spur Growth In Canada’s Oil Cities
  • 18 hours China To Take 5% Of Rosneft’s Output In New Deal
  • 18 hours UAE Oil Giant Seeks Partnership For Possible IPO
  • 19 hours Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 20 hours VW Fails To Secure Critical Commodity For EVs
  • 21 hours Enbridge Pipeline Expansion Finally Approved
  • 22 hours Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 23 hours OPEC Oil Deal Compliance Falls To 86%
  • 2 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 2 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 2 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 2 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 2 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 2 days Aramco Says No Plans To Shelve IPO
  • 4 days Trump Passes Iran Nuclear Deal Back to Congress
  • 5 days Texas Shutters More Coal-Fired Plants
  • 5 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 5 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 5 days Chevron Quits Australian Deepwater Oil Exploration
  • 5 days Europe Braces For End Of Iran Nuclear Deal
  • 5 days Renewable Energy Startup Powering Native American Protest Camp
  • 6 days Husky Energy Set To Restart Pipeline
  • 6 days Russia, Morocco Sign String Of Energy And Military Deals
  • 6 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 6 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 6 days India Needs Help To Boost Oil Production
  • 6 days Shell Buys One Of Europe’s Largest EV Charging Networks
  • 6 days Oil Throwback: BP Is Bringing Back The Amoco Brand
  • 6 days Libyan Oil Output Covers 25% Of 2017 Budget Needs
  • 6 days District Judge Rules Dakota Access Can Continue Operating
  • 7 days Surprise Oil Inventory Build Shocks Markets
  • 7 days France’s Biggest Listed Bank To Stop Funding Shale, Oil Sands Projects
  • 7 days Syria’s Kurds Aim To Control Oil-Rich Areas
  • 7 days Chinese Teapots Create $5B JV To Compete With State Firms
  • 7 days Oil M&A Deals Set To Rise
  • 7 days South Sudan Tightens Oil Industry Security
  • 8 days Over 1 Million Bpd Remain Offline In Gulf Of Mexico
  • 8 days Turkmenistan To Spend $93-Billion On Oil And Gas Sector
  • 8 days Indian Hydrocarbon Projects Get $300 Billion Boost Over 10 Years
Alt Text

Oil Prices Spike On Middle East Tensions

Oil prices jumped upwards on…

Alt Text

The Trillion Dollar Market That Stopped Chasing Profits

The revolution in the automobile…

Alt Text

Oil Fundamentals Overturn Geopolitical Risk

Geopolitical risk from Iraq and…

Oil Enters Bull Market Amid Output Freeze Talk

Oil Tanker

Another day, another dollar (rally in oil prices). The tag-team of dollar weakness and production freeze hopes combine again to rally crude prices higher for yet another day. Hark, here are five things to consider in oil markets today:

1) Qatar's economy is looking none too shabby, despite the oil price drop of the last two years. It is doing better than the rest of the GCC (Gulf Cooperation Council), and this is being reflected through in its demand for products, which has doubled since 2011 - according to JODI.

(Click to enlarge)

Qatar is already preparing for the 2020 World Cup, and is into its second year of a $200 billion project to improve its infrastructure. This is boosting economic activity, while a new airport with a growing fleet of planes is boosting jet fuel demand. Qatar's population is 2.5 million people, and its economy is set to grow by 3.4 percent this year, according to the IMF.

2) Domestic crude production in Qatar has risen in the last decade, up from around 1.5 million barrels per day in 2010 to over 2 million bpd currently, driven by rising condensate production. This rise in production has helped to offset the rise in demand, with imports edging lower of late.

After weak January, Qatar crude oil loadings this year have averaged just over 1 million bpd through the first seven months of this year, down 12 percent from year ago levels.

In terms of the destination of Qatar's oil, our ClipperData show that Japan has jumped ahead of South Korea this year as the leading recipient, accounting for ~35 percent of total oil and condensate exports, with South Korea accounting for ~30 percent. India is in third place, but gaining ground:

(Click to enlarge)

3) Here is another chart to highlight how all paths lead back to energy. As the Eurozone continues to flirt with deflation, as it has done since late 2014, it could clamber back to 2 percent (YoY) should Brent crude prices stay at current pricing through the end of the year. (h/t @jsblokland).

(Click to enlarge)

4) A schizophrenic market summed up by two Bloomberg headlines and a chart:

(Click to enlarge)

Headline 8/7/16: Oil bear market attracts record bets on future price slide.

Headline 8/18/16: Oil on brink of bull market amid Saudi stabilization talk.

5) As the IHS index shows below, companies have slashed capital costs by 26 percent since prices started dropping in mid-2014. An increased focus on efficiency gains amid large discounts from service companies means the likes of BP have been able to dramatically lower the costs of some of its projects. BP's Mad Dog project in the Gulf of Mexico was priced at $20 billion back in 2011; now costs are expected to be half that at $9 billion.

But while discounts from oil services companies appear unsustainable - with Schlumberger, Halliburton and Baker Hughes all reporting losses for Q1 - an emphasis by oil companies on frugality in their operations mean a certain amount of cost-cutting should be sustained in the coming years. Slashed expenditures in the oil industry are expected to add up to $1 trillion dollars over the 2015 - 2020 period.

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