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Gold races to 28-month high, oil slides on renewed Brexit fears
Gold rallied to a more than two-year high and oil extended its losses on Wednesday, as renewed fears over the impact of Britain’s exit from the European Union prompted investors to dump riskier assets in favor of the safer bullion. Financial markets were weak across the board, with Asian stocks tumbling and sterling plumbing a 31-year low, on worries that global efforts to boost liquidity may not be enough to cushion the impact of Brexit. Concerns that financial and political instability in Italy could lead to even more chaos in Europe spooked investors further. “The market is beginning to focus on the wider euro zone risk,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. Underlining strong appetite for gold, seen as a safe-haven during economic uncertainties, […]
Saudi Arabia’s oil reserves: how big are they really? – Kemp
“How much oil lies beneath the desert sands of Saudi Arabia and how long will it last before running out?” is a question that has intrigued and confounded oil experts for five decades. The kingdom has proven reserves of 266 billion barrels according to government estimates submitted to the Organization of the Petroleum Exporting Countries (“Annual Statistical Bulletin”, OPEC, 2015). If these numbers are correct, Saudi Arabia’s reserves will last for another 70 years at the average production rate of 10.2 million barrels per day reported for 2015. But there is widespread scepticism about the official estimates, which were abruptly raised without explanation from 170 billion barrels in 1987 to 260 billion in 1989 ( tmsnrt.rs/29fzTm3 ). Official reserves have remained constant every year since then at 260-265 billion barrels, even […]
Will Iran Scare Away Big Oil Once Again?
Just when big oil was preparing to sign the new Iranian Petroleum Contracts and start working the country’s vast fields, hardliners once again took the upper hand. On Monday, the new head of the National Iranian Oil Company announced that the old buyback contracts that the country used before the sanction era will stage a comeback as an alternative to the new IPC. The announcement signals that political hardliners, who objected to the introduction of the new IPC as a more attractive alternative to the buyback contracts are increasing the pressure on the reformist camp. Thanks to precisely this pressure, the official presentation of the IPC was delayed several times, butOil Minister Bijan Zanganeh managed to push forward with it. Most recently, Zanganeh said the first tenders for the development of some 15 fields could be launched as early as this month. The old buyback contracts pushed away […]
Record Heat Wiping Out U.S. Gas Glut Fuels Best Rally Since ’08
Hot weather will lead to boost in demand from power plants Drillers are refilling storage at half the 2015 pace A blistering start to summer is helping put U.S. natural gas futures on course for the biggest gain in eight years. Gas has surged 18 percent this year, rebounding from a 17-year low. Drillers, burned by earlier declines, are refilling storage at half last year’s pace as extreme heat boosts the use of air conditioners, increasing gas demand from power plants. By November, supplies will probably drop below the five-year average, the benchmark for normal levels, for the first time in 13 months, based on storage rates. Just four months ago, gas plunged after the warmest winter on record left the market with a glut large enough to last through the year. Instead, hot weather and a slowdown in shale production are eating into the surplus, signaling an era […]
Oil Bust Continues To Take Its Toll On Canadian Economy
The fallout from the commodities price rout may prove to be more lasting than that of the 2008 global financial crisis. Economies dependent on oil and minerals have borne the full brunt of the price drop, but even mature, diversified economies such as Canada’s have trouble dealing with the consequences of an 80 percent slide in the price of crude over 16 months and similarly major declines in other key commodities. A business sentiment survey conducted by the Bank of Canada among 100 companies between May and June has revealed that local businesses are wary of new investments, with the majority of respondents not planning any over the next 12 months. The situation is understandably the worst in energy and related industries, where many businesses are preparing a new round of cost cuts, while service providers are guardedly optimistic, planning to add new jobs. The goods […]
