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Sunday, 28 July 2019
" oil prices in the wake of the attacks highlights the importance of Strait of Hormuz as a global oil artery"
Insurance rates for tankers going through the Strait of Hormuz have skyrocketed tenfold in the two months since the first attacks on tankers off the coast of the UAE, CNBC reports, quoting the chief executive of a shipping company. The news could reinforce anticipation of higher oil prices, not because of fundamental factors but because of insurance rates.
The first link in a chain of events that may send prices higher took place in late May, when Middle Eastern media reported attacks on four tankers off the coast of the port of Fujairah, in the Persian Gulf and close to the Strait of Hormuz. Then, about two weeks later, another attack was reported, this time in the Gulf of Oman, right out of the Strait of Hormuz. Finally, Iran shot down a U.S. drone claiming it was flying over its territory.
After the U.S. blamed both tanker attacks on Iran, the drone incident was seen by many as the last straw before open military confrontation. This has not yet materialized, but oil prices spiked after both attacks and the drone shoot-down and reports about insurers hiking their tanker premiums for Strait of Hormuz-passing vessels multiplied.
CAN DIPLOMACY WORK?
Sunday, 21 July 2019
"The frack market “is a mess,” Brad Handler, an analyst at Jefferies LLC, wrote in a note to clients. “With every passing datapoint/call, there is little to suggest this market gets any better, and so we hack away at numbers again.”
Shale Drilling's Worst Yet to Come
(Bloomberg) -- America’s biggest owner of drilling rigs fell the most in seven months after the chief of Helmerich & Payne Inc. said he called the bottom too soon.
Three months ago, when Helmerich had 220 of its rigs hired out, Chief Executive Officer John Lindsay told investors the second quarter would be the nadir for his fleet. But after the number of Helmerich rigs at work shrank to 214 a few weeks ago, Lindsay says his earlier projection was “premature.”
“The full effect of the industry’s emphasis on disciplined capital spending continues to reverberate through the oil field services sector,” he said in a Wednesday statement. “We are reluctant to predict another bottom and see further softening during our fourth fiscal quarter as our guidance would indicate.”
The hired hands of the shale patch who drill and frack wells are suffering from a slowdown in North American spending brought on by investor demands for higher returns. The U.S. oil rig count has fallen 11% this year, according to Baker Hughes.
Fracking giant Halliburton Co. is eliminating jobs and warehousing equipment no one wants to rent. Superior Energy Services Inc. said earlier this week that it’s looking for ways to cut costs and may sell assets to raise cash. On Thursday, 28 of the 29 oil and gas industry stocks in the S&P 500 Index were falling.
OIL PRICES SIGNAL RECESSION?
Sunday, 14 July 2019
"History shows that the collapse of economies is very common. Collectively, we have closed our eyes to this possibility ever happening to the world economy in the modern era. If the issue with collapsing demand causing ever-lower energy prices is as severe as my analysis indicates, perhaps we should be examining this scenario more closely."
EXPONENTIALS TELL THE FUTURE
EXPONENTIALS TELL THE FUTURE
Sunday, 7 July 2019
"In May, OPEC’s oil production had dropped to a 2015 low of 30.17 million bpd, as a major 200,000-bpd increase in Saudi Arabia’s production was unable to offset an even larger production decline in Iran"
OPEC Oil Production Dips To 2014 Low
Despite the increase, Saudi Arabia was comfortably below its 10.311-million-bpd cap under the OPEC+ deal as it had been overachieving in its share of the cuts by 500,000 bpd in the previous months.
ARE CUTS NEEDED FOR HIGHER PRICES?
Monday, 1 July 2019
"The energy sector has made up almost a quarter of all U.S. bankruptcies in the past year"
Shale Patch Struggles 5 Years After Crude Collapse
Bloomberg) -- It’s been five years since crude started a precipitous drop that eventually saw it hit a low of $26 a barrel. While prices have recovered some of the lost ground, shale producers are still feeling the pain.
Oil’s 76% collapse from almost $108 a barrel in June 2014 was the worst plunge since the financial crisis of 2008. Below are some data points on how the industry has fared since.
In 2014, oil and gas companies made up almost 11% of the S&P 500 Index. Now, that’s just over 5% as some investors appear to have given up on the sector.
Shareholder antipathy stems at least in part from questions over the profitability of shale drilling. While the five big, publicly traded integrated major producers -- BP Plc, Chevron Corp., Exxon Mobil Corp., Royal Dutch Shell Plc and Total SA -- resumed generating free cash flow as a group in 2017, independent U.S. drillers only became cash-flow-positive (based on an average of 12 such companies compiled by Bloomberg) in 2018 -- and they were back in the red in the first quarter of 2019.
OIL: BOOM OR BUST
Monday, 24 June 2019
There is no doubt that a severe disruption to the transit of oil through this vulnerable route would be extremely serious,” said consultancy FGE Energy in a note.
U.S. oil soars 10% in week on fears of U.S.-Iran conflict
NEW YORK (Reuters) - Oil futures rose 1% on Friday, with U.S. crude up 10% in the week and global benchmark Brent gaining 5%, on fears the United States could attack Iran and disrupt flows from the Middle East, which provides more than a fifth of the world’s oil output.
Monday, 17 June 2019
"Surging U.S. supply as well as gains from Brazil, Canada and Norway would contribute to an increase in non-OPEC supply of 1.9 million bpd this year and 2.3 million bpd in 2020"
IEA cuts 2019 estimate for oil demand growth on global trade worries
LONDON (Reuters) - The outlook for oil demand growth in 2019 has dimmed due to worsening prospects for world trade, the International Energy Agency (IEA) said on Friday, although stimulus packages and developing countries should boost growth going into 2020.
The Paris-based IEA, which coordinates the energy policies of industrial nations, revised down its 2019 demand growth estimate by 100,000 barrels to 1.2 million barrels per day (bpd), but said it would climb to 1.4 million bpd for 2020.
“The main focus is on oil demand as economic sentiment weakens ... The consequences for oil demand are becoming apparent,” the IEA said in its monthly oil report.
“The worsening trade outlook (is) a common theme across all regions”, it added.
The oil demand growth forecast assumes the maintenance of U.S. and Chinese tariffs imposed on goods in 2018, but the IEA said it had not factored in further U.S. tariffs announced in May.
TRADE WAR ESCALATES!
Monday, 10 June 2019
Monday, 27 May 2019
"the nation is experiencing hyperinflation projected to reach a mind-boggling 10 million percent this year, is grappling with food and medical shortages and has lost about 10 percent of its population to migration in the past few years.'
Venezuela plunges into darkness amid widespread outage
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