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Oil drops on surging dollar, rising U.S. crude stocks, jump in Iran
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Oil prices fell on Thursday, pulled down by rising U.S. crude inventories, a stronger dollar and surging output from Iran to Europe and Asia. Brent crude futures LCOc1 were down 87 cents, or 1.8 percent from their last settlement, trading at $48.06 per barrel at 0159 GMT. U.S. crude futures CLc1 were down 74 cents, or 1.5 percent, at $47.45 a barrel. Both contracts broke 2016 highs earlier in the week on the back of output cuts across the Americas, in Africa and also in Asia. But the bull-run ended after the U.S. Energy Information Administration (EIA) published data showing an unexpected 1.31 million barrel rise in U.S. crude stocks to 541.29 million barrels C-STK-T-EIA. “We suspect the oil market […]
Oil Slips After EIA Reports 1.3M Barrel Build
After a deluge of economic data overnight, and ahead of the weekly EIA inventory report, crude is edging higher, but traders were slightly disappointed by the EIA reported crude barrel build of 1.3 million barrels. Hark, here are five things to consider in the oil market today. 1) First up, Japan – the world’s third largest economy – saw preliminary economic growth in the first quarter come in much, much better than expected, at +1.7 percent YoY (versus an expected +0.2 percent). This is a big improvement on the prior quarter’s drop of -1.7 percent YoY. Perversely, this has not been accepted too gladly , as it indicates that a tentative economic recovery is underway – blunting the potential of stimulus going forward. 2) Across to […]
Goldman Upgrades Commodity Outlook on Constrained Oil Supplies
Goldman Sachs Group Inc. upgraded its outlook for commodities for the next three months because of disruptions to oil supply, while staying bearish on industrial metals and gold. Supply constraints should support oil prices, but “physical re-balancing” is incomplete and Goldman remains neutral on commodities for the next 12 months, it said in a report e-mailed Wednesday. The bank is recommending investors buy oil and gas assets in equities and credit markets. It’s still bearish on industrial and precious metals. “We continue to expect industrial metals price weakness, owing to a combination of excess supply and weak demand, and have the view that the support from China will be temporary,” said Goldman analysts led by Jeff Currie. “The outlook for metals continues to be bearish as supply curtailments come off in China and elsewhere.” Commodities have rebounded this year led by gains in soy meal and silver amid better […]
Iran’s Government and Revolutionary Guards Battle for Control of Economy
Iran’s South Pars natural-gas field has extensive infrastructure that an Islamic Revolutionary Guard Corps engineering… TEHRAN— Ebadallah Abdollahi, a commander of Iran’s Revolutionary Guards, was surprised last summer to find one of his top projects being second-guessed. A confidential review ordered by the government called for scaling back a multibillion-dollar bullet-train project in which he was deeply involved, cutting some of its costs and allowing Western companies to bid for part of the work, said people who saw the report. Since then, two European companies have negotiated with Iran for a piece of the project, with talks in one case continuing. Iran is riven by a behind-the-scenes skirmish over the economy, one that was sharply accelerated by the country’s 2015 deal with world powers to curb the country’s nuclear program. During years of sanctions that kept away many foreign companies, the Islamic Revolutionary Guard Corps stepped into the void, […]
Are The Saudis Facing A Full-Blown Liquidity Crisis?
Riyadh Saudi Arabia Previously we documented that as a result of the still low oil prices, largely a result of Saudi Arabian strategy to put high cost producers out of business and to remove excess supply, none other than Saudi Arabia has been substantially impacted, with the result being dramatic state budget, a sharp economic slowdown and mass worker layoffs. Just three weeks ago we reported that the biggest construction conglomerate in the middle east, the Saudi Binladin Group had announced it would layoff 50,000 workers, or a quarter of its workforce, slammed by the weak economy. Now, Saudi Arabia has admitted that in addition to acute economic problems, which will manifest themselves most directly in a soaring Saudi debt load… Related: European Natural Gas Prices Collapse … and rising default risk… (Click to enlarge) … Saudi Arabia can also add liquidity worries which just spilled out into the […]
