follow us like us subscribe contact us
Loading, please wait

Energy / Oil Prices

  • Low Oil Prices Hurting U.S. Shale Operations

    Slumping oil prices are putting pressure on U.S. drillers.The number of active rigs drilling for oil and gas fell by their most in two months, according to the latest data from oil services firm Baker Hughes. There were 19 oil rigs that were removed from operation as of Oct. 17, compared to the prior week. There are now 1,590 active oil rigs, the lowest level in six weeks.“Unless there’s a significant reversal in oil prices, we’re going to see continued declines in the rig count, especially those drilling for oil,” James Williams, president of WTRG Economics, told Fuel Fix in…

  • How And When Will Saudi Arabia Respond To Low Oil Prices?

    Oil prices (along with prices of many other commodities) have fallen dramatically since last summer. Some observers are waiting to see if Saudi Arabia responds with significant cutbacks in production. I say, don’t hold your breath. Source: FRED.When oil demand fell in the 1981-82 recession, the Saudis cut production by 6 million barrels a day in an effort to soften the decline in oil prices. They also cut production in response to lower demand in the 2001 recession and the most recent recession. On the other hand, the kingdom boosted production quickly beginning in August 1990 and January 2003 in anticipation…

  • How Oil Prices Affect These Three Major Players

    Russia, Saudi Arabia, and the US will feel the effects of oil prices in radically different ways.It would be logical to think that the emergence of ISIL would have increased oil prices, but Brent crude oil prices have plummeted since July. Having now traded as low as $80 per barrel, oil is at its lowest price since 2012. The steep decline can be attributed to three trends: surging supply led by US fracking production, stagnating European demand, and a strengthening dollar.Declining prices could have a negative impact on oil-producing economies around the world, but some have significantly more risk than…

  • How Cool Heads Can Prevail In This Panic

    The oil market’s in freefall, the stock market is in freefall.  You’re taking losses, big losses, in stocks that you bought – not at the top of the market where valuations were high – but at areas you thought were terrific long-term propositions.  What do you do now?I am precisely where you are right now, because I am an oil trader, first and foremost.  And I can’t tell you what is going to be right for you, I can only tell you what is right for me.  And for right now, I’m standing pat and even committing a little more…

  • Pressure May Remain On Oil Prices

    Weekly Natural Gas OutlookLast week, December Natural Gas futures traded through the July 28 bottom at 3.877, putting the market in an extremely bearish position. Since there is still time before the start of the winter heating season, it looks as if this market still has work to do on the downside before becoming attractive enough for buyers. As long as the product keeps coming into inventory and the cold weather stays away, the charts indicate that the market still has room to the downside. One target is the 2014 low at 3.0990. The next is last year’s fall bottom…

  • Is the Oil Price Slide Nearing an End?

    The rapid decline in oil prices may be almost over.That prediction comes from several big banks that say oil prices are nearing their floor. Bank of America and BNP Paribas see $80 as a floor price and argue there is a high likelihood Brent oil will not crash through that key threshold. Global supplies are strong and demand remains relatively tepid, so why would oil prices suddenly stop dropping when they reach $80 per barrel? There are several built in stabilizers that could act to support prices.First, high cost production could begin to go offline when prices drop to that…

  • Global Oil Surplus To Disappear Gradually Next Year

    The oil markets are concerned that there is too much oil currently available on the market, and that, as a consequence, oil prices may continue to tumble. Saudi Arabia is reportedly telling Reuters that it is happy with prices that may fall as low as $80 a barrel. As I mentioned the other day, some of this has to do with market share, and the KSA increasing production, and thereby seeking to weaken the likelihood of investment in other places, in turn ensuring their share holds up, not just now, but also down the road. The effect on gas prices…

  • Falling Oil Prices Could Push Venezuela Over The Edge

    Oil prices continue to slide, putting enormous pressure on oil producers around the world. Saudi Arabia has insisted it is willing to live with lower prices for quite a while as it seeks to maintain a grip on its market share. Kuwait also indicated its willingness to slash prices in order to keep output level. That sent oil prices lower on Oct. 14, as the markets reacted with a bit of surprise to the unwavering stance by OPEC’s leading members: WTI dropped 4.5 percent.Lower oil prices are putting a strain on all producers, including Saudi Arabia, but Riyadh is hoping…

  • Iran Says Oil’s Price Drop No Threat, Won’t Demand Production Cut

    Iranian officials are taking the current drop in oil prices in stride and don’t plan to demand a cut in production by OPEC.During previous price declines, Tehran has called for deep reductions in output, but on Oct. 14, Shana, the news agency of the Iranian Oil Ministry, quoted Deputy Oil Minister Rokneddin Javadi, as saying, “The drop in oil price is short-lived.”The article said when asked if the global drop in prices would hurt Iran’s budget, Javadi replied, “I don’t think so.”On Oct. 14, the current price of crude was below $90 a barrel – the lowest since 2010. Oil…

  • 5 Reasons Oil Prices Are Dropping

    As oil prices continue to fall, analysts and producers are trying to wrap their heads around the reasons and identify a floor price. Even though crude benchmarks like Brent and WTI keep dropping, the cost of finding oil continues to rise. What are some of the key drivers that have created this paradox? 1. The U.S. Oil BoomAmerica’s oil boom is well documented. Shale oil production has grown by roughly 4 million barrels per day (mbpd) since 2008. Imports from OPEC have been cut in half and for the first time in 30 years, the U.S. has stopped importing crude…