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Russia Will Join Oil Freeze Talks After OPEC Members Agree In Algiers
By Zainab Calcuttawala - Sep 23, 2016, 4:40 PM CDT
Sechin Putin
Russia will join output freeze discussions with the Organization of Petroleum Exporting Countries only afterits members agree on the terms of the deal amongst themselves first, according to three anonymous industry sources cited by Bloomberg.
The 14 members of OPEC will meet on 28 September on the sidelines of the International Energy Forum in Algiers next week.
The Russian Delegation, led by Energy Minister Alexander Novak, will attend the forum and hold meetings with foreign officials, but the group may leave before the OPEC meeting occurs on Wednesday.
Moscow would enter output freeze negotiations after receiving a formal invitation form OPEC to do so, the sources said, though the Russian Energy Ministry declined to comment.
Oil prices have been volatile leading up to the unofficial meeting in the Algerian capital. Crude prices dropped on Friday after sources close to Saudi Arabian and Iranian officials commented that the two rival regional powers may not come to an agreement during the meeting due to political and technical differences.
In April, Saudi Arabia walked away from a negotiated freeze deal at the last moment, after Iran refused to lower outputs as it rebuilt production capacity to pre-sanctions levels.
Russia agrees that Iran should be offered an exception to the deal as it restores the strength of its oil industry
“Iran is starting from a very low position, connected with the well-known sanctions in relation to this country,”Russian President Vladimir Putin told Bloomberg earlier this month. “It would be unfair to leave it on this sanctioned level.”
Russian oil production reached a record high of 11.75 million barrels per day (bpd) last Tuesday, and averaged around 10.71 million bpd in the month of August.
The rise in Russian oil production has helped global supplies grow and, in turn, been influential in keeping prices low. Should this oil glut continue, OPEC could hold discussions immediately following the Algeria conference.
http://oilprice.com/Latest-Energy-News/World-News/Russia-Will-Join-Oil-Freeze-Talks-After-OPEC-Members-Agree-In-Algiers.html
Fact
Dragonflies have six legs just like any other insect…but they can't walk.
WTI 44.44 -1.88 -4.06%
Texans use a lot of gas because it it such a huge state.
Example: El Paso, TX to South Padre, TX is a fifteen hour drive!
uwti is at 20.09 right now.
WTI 45.36 -0.96 -2.07%
Gas is $1.89 today in Belton, Texas.
WTI 45.81 -0.51 -1.10%
It was at 22.03 in pre-market a little while ago.
Live blog: Fed, voting 7-3, takes pass on interest-rate hike
Fed holds rates in close decision — live blog and video of Yellen press conference
September 21, 2016, 1:08 PM ET
http://blogs.marketwatch.com/capitolreport/2016/09/21/live-blog-and-video-of-the-fed-decision-and-janet-yellen-press-conference-2/
Oil extends gains after EIA data show U.S. crude supplies down 6.2 million barrels
By Myra P. Saefong
Published: Sept 21, 2016 10:35 a.m. ET
Oil futures extended their earlier gains Wednesday after the U.S. Energy Information Administration reported that domestic crude supplies fell by 6.2 million barrels in the week ended Sept. 16. A 2.8 million-barrel climb was expected by analysts polled by S&P Global Platts, while the American Petroleum Institute late Tuesday reported a larger drop of 7.5 million barrels, according to sources. The EIA has now reported unexpected supply declines for three weeks in a row. Gasoline supplies also fell by 3.2 million barrels, while distillate stockpiles rose by 2.2 million barrels, according to the EIA. November crude CLX6, +1.95% climbed $1.01, or 2.3%, from Tuesday's settlement to $45.06 a barrel on the New York Mercantile Exchange. Prices traded at $44.90 before the data.
http://www.marketwatch.com/story/oil-extends-gains-after-eia-data-show-us-crude-supplies-down-62-million-barrels-2016-09-21
Is This The Biggest Wildcard For Oil Prices This Month?
By Dave Forest - Sep 19, 2016, 9:27 AM CDT
It’s been a tough couple of weeks for oil investors. With crude prices having descended back to near $40 per barrel, after making a run close to $50 in mid-August.
And news over the weekend suggests things could get worse before they get better.
That’s because of developments in one oil-exporting nation that’s been almost wiped from the market recently: Libya. A place that has seen its crude exports drop to almost nothing since the deposition of dictator Muammar Gaddafi in 2011.
But Libya’s central government is intent on regaining its share of the global oil market. With officials here saying Saturday that they will refuse to freeze output until national production rises back to pre-Gaddafi levels.
That word came from Libya’s official envoy to OPEC, Mohamed Oun. Who told the press that Libya will oppose a production freeze being discussed by OPEC and Russia on September 26.
Mr. Oun said that Libya will not rein in production until it restores output of 1.6 million barrels per day — the level it enjoyed during Gaddafi’s time.
That leaves a lot of new oil to come to market, given that Libya is currently producing just 300,000 barrels per day. Meaning that officials want to dump another 1.3 million daily barrels on the market before they’ll even consider slowing things down.
Related: What Hubbert Got Wrong About Peak Oil
That said, there is doubt as to whether Libya can move this crude out of country. With press reports over the weekend suggesting that the key oil ports of Sidra and Ras Lanuf were once again taken by rebel forces — delaying planned shipments of crude here.
Those ports have been the subject of intense fighting between Libya’s central government and forces loyal to eastern commanders splintered from the national army. With control going back and forth since Gaddafi was ousted in 2011.
News last week suggested that the national government had retaken the ports — with crude shipments now being readied. But the weekend’s news shows this may have been premature, and we’ll now have to wait and see if shipments can really be moved.
Watch for more news on who has the upper hand at these key facilities. If the central government does gain control and can resume exports, it could be a significant drag on international prices.
Here’s to a wild card.
By Dave Forest
http://oilprice.com/Energy/Oil-Prices/Is-This-The-Biggest-Wildcard-For-Oil-Prices-This-Month.html
What is your reasoning behind your opinion to sell D?
A Return to $40 Oil? Rally Runs Out of Steam
By Evan Kelly - Aug 30, 2016, 2:18 PM CDT
When taking a quick look at some of the critical figures and data in the energy markets this week, we see that the U.S. oil rig count remains unchanged, while oil prices are falling as a result of a stronger U.S. dollar.
Chart of the Week
• OPEC members earned $404 billion in oil export revenues last year, a decline by roughly half from the $753 billion they earned in 2014, according to the EIA.
• The 2015 total was the worst performance since 2004. The EIA says that OPEC members earned about $606 per capita for its population from oil export revenue, down from about $3,500 per person in 1980.
• This year will likely be worse. The EIA projects OPEC oil revenue to fall to $341 billion this year but could rebound to $427 billion next year. However, those are just rough estimates, using assumption for oil prices for the next 18 months.
Market Movers
• Royal Dutch Shell (NYSE: RDS.A) said that it would sell some of its Gulf of Mexico assets for $425 million to Houston-based EnVen Energy. The sale includes the Brutus/Gilder assets, which include four blocks plus a subsea pipeline and platform.
• Oil production at Eni’s (NYSE: E) Goliat oil platform in the Barents Sea was shut down last week because of a power failure, requiring a partial evacuation. The Norwegian government is requesting that Eni come up with a plan to prevent future interruptions.
• An anti-fracking vote failed to qualify for the November ballot in Colorado, falling short of the signatures needed to make the cut. The measures could have been severely restrictive to oil and gas drilling in the state.
Tuesday August 30, 2016
Oil prices dipped on Monday as oil traders took a more pessimistic view of the forthcoming OPEC meeting in Algeria. A stronger dollar and an improved security outlook in Nigeria also weighed on prices. Last week, a surprise build in crude oil inventories dashed hopes that the bull market would continue. On top of these fundamentals, the U.S. dollar also gained strength as the Fed appeared to put a near-term rate hike back on the table last week. Taken together the glut has kept oil prices from rising back to $50 per barrel.
The bearish news was offset on Tuesday by a temporary shutdown in recent days of about 170,000 barrels per day in the Gulf of Mexico because of tropical storm concerns. Oil traded up slightly on Tuesday – WTI moved above $47 per barrel during midday trading and Brent was just shy of $50.
Oil price volatility “here to stay.” Top oil executives do not see an end to the volatility in the oil markets for the foreseeable future. “The volatility is here to stay,” ConocoPhillips (NYSE: COP) CEO Ryan Lance said at a Conference in Norway on Monday, according to Bloomberg. The ongoing process of adjustment to oil supply and demand “will extend into 2017. The inventory levels are still quite high." Other oil executives agree. Martin Bachmann, the top official from Wintershall AG’s exploration and production unit for Europe and the Middle East, said that “[t]here will be a rebalancing. Over what timeframe is the big question.” He went on to add, “asically, volatility is the word.”
A return to sub-$40 oil? "While we see high probability of some 80 to 90 percent of a return to $39 WTI, we also feel that achievement of this objective could still be some four to five weeks away," said Jim Ritterbusch of the oil consultancy Ritterbusch & Associates, according to Reuters.
Strong rebound next year. While some analysts are concerned that oil could dip again in the short run, Bank of America Merrill Lynch says that oil is set for strong gains in 2017, expecting WTI and Brent to rise to $70 per barrel. BofA Merrill Lynch says that the oil market will flip from glut to deficit next year, with demand outstripping supply by as much as 800,000 barrels per day. Francisco Blanch, head of global commodities research at BofA Merrill Lynch drew a parallel with the 2010 rally, which saw strong price gains amid a supply deficit. In 2010 oil surged to the mid-$90s per barrel because of the supply shortfall, but Blanch says that the potential for tighter monetary policy could keep oil prices from reaching that level this time around.
Oil majors pull out of Alaska LNG. A massive project to build a long-distance natural gas pipeline and LNG export terminal in Alaska just took a hit, as one of the main private sector sponsors pulled out amid high costs. ExxonMobil (NYSE: XOM) said that despite the 20 percent reduction in the expected cost for the project, it is still not economically viable. Exxon is a joint owner of the project, along with BP (NYSE: BP), ConocoPhillips (NYSE: COP), and the state of Alaska. The companies say they believe the project will cost $45 billion, at the lower end of a previous estimated range of $45 to $65 billion. Instead, they support a state-led ownership model for the project, but exactly how that would work has yet to be determined. The 800-mile pipeline and LNG export terminal is among one of the world’s costliest on the drawing board. LNG prices have crashed in recent years, throwing the project’s economic case into doubt.
Mexico hedges $9.5 billion worth of oil. Mexico once again hedged a large volume of its oil sales for the year ahead, locking in the equivalent of $9.5 billion of oil sales to ensure predictable prices. Mexico does not like to play with chance – it is the largest sovereign oil hedger in the world, according to Bloomberg. Mexico locked in 250 million barrels of oil at $38 per barrel, a few dollars below last week’s close of $41 per barrel (Mexico’s crude stream trades at a discount to the more widely traded international benchmarks). That is the lowest price it has hedged at since 2008. But while last year’s hedging looked too cautious at the time, it ended up yielding $6.4 billion in savings, and Mexico’s hedging could save $3 billion this year. Still, the willingness to hedge at $38 per barrel says a lot about where Mexico believes the oil price is heading over the next 12 months.
Oil discoveries continue to plummet. In 2015 the oil industry logged new discoveries that represented just one tenth of the annual average dating back to 1960, Bloomberg reports. This year could be even worse as the industry slashes spending on exploration. The figures come from a new Wood Mackenzie report, which found that only 2.7 billion barrels of new oil was discovered in 2015, and only 736 million barrels have been discovered so far this year. The poor results raise questions about the industry’s ability to bring enough supply online to meet future demand.
U.S. regulators says fix to faulty offshore drilling bolts needed. The U.S. Bureau of Safety and Environmental Enforcement (BSEE) warned offshore oil drillers and equipment suppliers that faulty bolts used in the drilling process could lead to a catastrophic oil spill. “Fortunately, as of today we’ve had no major catastrophes from bolt failures,” Brian Salerno, Director of BSEE, said at a forum on Monday hosted by the agency. “We believe it may only be a matter of time before our luck runs out.” A pattern of bolt failures used in key equipment such as blowout preventers have been reported in recent years, parts manufactured by General Electric (NYSE: GE), Schlumberger (NYSE: SLB) and National Oilwell Varco (NYSE: NOV), according to The Wall Street Journal. “We could have another Macondo or something similar from this piece of equipment,” said Joe Levine, a BSEE official. BSEE is working with industry trade groups to figure out the problem.
By Evan Kelly of Oilprice.com
http://oilprice.com/Energy/Energy-General/A-Return-to-40-Oil-Rally-Runs-Out-of-Steam.html
44.89 -1.46 -3.15%
Sounds good.
WTI 46.13 -0.15 -0.32%
WTI 46.56 -0.42 -0.89%
WTI 47.39 +0.41 +0.87%
WTI 47.18 +0.20 +0.43%
WTI 46.76 -0.88 -1.85%
WTI 46.99 -0.65 -1.36%
WTI 47.10 -0.54 -1.13%
Big Oil Companies Binge on Debt
Exxon, Shell, BP and Chevron have combined debt of $184 billion amid two-year slump
By SELINA WILLIAMS and BRADLEY OLSON
Updated Aug. 24, 2016 6:13 p.m. ET
Some of the world’s largest energy companies are saddled with their highest debt levels ever as they struggle with low crude prices, raising worries about their ability to pay dividends and find new barrels.
Exxon Mobil Corp., Royal Dutch Shell PLC, BP PLC and ChevronCorp. hold a combined net debt of $184 billion—more than double their debt levels in 2014, when oil prices began a steep descent that eventually bottomed out at $27 a barrel earlier this year. Crude prices have rebounded since, but still hover near $50 a barrel.
The soaring debt levels are a fresh reminder of the toll the two-year price slump has taken on the oil industry. Just a decade ago, these four companies were hauled before Congress to explain “windfall profits” but now can’t cover expenses with normal cash flow.
Executives at BP, Shell, Exxon and Chevron have assured investors that they will generate enough cash in 2017 to pay for new investments and dividends, but some shareholders are skeptical. In the first half of 2016, the companies fell short of that goal by $40 billion, according to a Wall Street Journal analysis of their numbers.
“Eventually something will give,” said Michael Hulme, manager of the $550 million Carmignac Commodities Fund, which holds stakes in Shell and Exxon. “These companies won’t be able to maintain the current dividends at $50 to $60 oil—it’s unsustainable.”
The debt is piling up despite cuts of billions of dollars on new projects and current operations. Repaying the loans could weigh the companies down for years, crimping their ability to make investments elsewhere and keep pumping ever more oil and gas.
The companies spent more than 100% of their profits on dividends last year. This year, the problem got worse. In the April-to-June period, Exxon paid $3.1 billion in dividends and had just $1.7 billion in net income, according to S&P Global Market Intelligence. Shell paid $1.26 billion in interest in the first half of 2016, compared with $726 million in the same period a year earlier.
“They are just not spending enough to boost production,” said Jonathan Waghorn, co-portfolio manager in London at Guinness Atkinson Asset Management Inc. who helps oversee more than $400 million across a range of energy funds, including shares in Exxon, BP, Chevron and Shell.
The oil companies say they have many tools to deploy to help defray debt, including selling assets and offering shareholders more shares instead of a cash dividend, as well as continuing to cut costs. Record-low interest rates are helping ease some of the pain.
They also say the steep levels of debt are temporary as the companies restructure, and the debt will fall when oil prices rise.
‘These companies won’t be able to maintain the current dividends at $50 to $60 oil—it’s unsustainable.’
—Michael Hulme, manager of the Carmignac Commodities Fund
“We are in a transitional stage in 2016,” said Shell Chief Executive Ben van Beurden during last month’s earnings disclosures. The company reported a rise in net debt to over $75 billion at the end of the second quarter, in large part because of its acquisition of BG Group PLC.
BP has said it expects to be able to pay for its operations, make new investments and meet its dividend at an oil price of between $50 and $55 a barrel next year.
But analysts and investors say the oil slump is making it harder than ever for companies to raise money with asset sales to pay off debt. Handing out more shares to shareholders is only storing up the dividend problem for the future when the companies will need to pay up. Even the boost many companies got from bumper profits from their refining divisions—which tend to do well when prices are low—looks to be coming to an end as a glut of gasoline erodes fuel prices, say investors and analysts.
Still, some funds see BP, Shell, Exxon and Chevron as big enough to weather problems for the next year and a half. Wilmington Trust has reduced its exposure to energy companies it deems more risky in favor of other corporate debt. But the firm remains invested in debt issued by BP, Chevron and Shell
“They’re so big, they can diversify, they have more levers to push and pull in terms of shoring up their creditworthiness,” said Wilmer Stith, senior fixed-income portfolio manager at Wilmington Trust, which has $73 billion in assets under management.
Only another long period of oil below $40 a barrel would pose a challenge that could prompt dividend cuts, said Iain Reid, senior oil analyst at Macquarie Capital. A Goldman Sachs report this week projected oil prices remaining between $45 and $50 a barrel for much of the next year.
“The question is, can they get through this year and next without doing something radical like cutting dividends?” said Iain Reid, senior oil analyst at Macquarie Capital.
The rise in net debt has helped push these companies’ ratio of net debt to equity to the highest level in years, which influences the ratings given by credit agencies. S&P has already downgraded Shell, Chevron, Exxon and BP, though they all remain highly rated.
Shell’s debt-to-equity ratio is at 28% and Chief Financial Officer Simon Henry said last month it could even reach its targeted maximum of 30%. BP’s gearing is over 25%, while Chevron’s is 20% and Exxon’s is around 18%.
By comparison, in 2012, Shell’s gearing was around 10%, and Exxon’s was 1.2%. Back in 2005, when oil prices were climbing steadily, Exxon had no debt, and its profits were so high that its executives and those from other big oil companies were called to testify in front of the U.S. Senate about their so-called windfall profits.
Chevron’s Chief Financial Officer Patricia Yarrington said in April that the company’s higher levels of debt were expected. “We could handle that if it’s temporary,” she said.
Much of the new debt has been in corporate bonds. Exxon, for instance, issued $12 billion in debt in February. Two months later, the company was downgraded by S&P Global Ratings, losing the triple-A credit rating that it had held since 1930.
Exxon Chief Executive Rex Tillerson has assured investors that Exxon remains committed to paying its dividend.
The company has increased shareholder payments for 34 straight years, although those increases have been modest in the past two years. Mr. Tillerson and others have noted that Exxon has the ability to borrow further. If anything, the company has signaled a willingness to go further into debt for strategic opportunities, such as buying assets, including InterOil Corp., a small company focused on gas exports in Papua New Guinea that Exxon agreed to acquire for an estimated $2.5 billion in July
“We’re not going to forgo attractive opportunities,” said Jeff Woodbury, Exxon’s vice president of investor relations, on an investor call last month.
—Heather Gillers in New York contributed to this article.
Write to Selina Williams at selina.williams@wsj.com and Bradley Olson at Bradley.Olson@wsj.com
Corrections & Amplifications:
In the first half of 2016, the companies fell short of that goal by $40 billion, according to a Wall Street Journal analysis of their numbers. An earlier version of this article incorrectly stated that it was the first half of 2015. Aug. 24, 2016
http://www.wsj.com/articles/largest-oil-companies-debts-hit-record-high-1472031002
WTI 47.06 -0.27 -0.57%
Stocks slide as Fed’s George says it’s ‘time to move’ on interest rates
By Mark DeCambre and Sara Sjolin
Published: Aug 25, 2016 9:49 a.m. ET
Workday rallies after earnings; Jackson Hole retreat in focus on Friday
Investors are waiting for just one thing: Fed chief Janet Yellen
U.S. stocks dropped Thursday as investors remained skittish ahead of a key economic symposium in the Rocky Mountains and as a member of the Federal Reserve indicated that a rate-hike is merited sooner than later.
“When I look at where we are with the job market, when I look at inflation and our forecast for that, I think it is time to move,” Kansas City Fed President Ester George said in an interview on Bloomberg Radio. In a separate interview on CNBC, she said hikes should be made gradually.
George is a voting member of the policy-setting Federal Open Market Committee, which is set to meet Sept. 20-21.
The Kansas City Fed president’s remarks come ahead of the highly anticipated retreat of economists and Fed members in Jackson Hole, Wyo., which will be headlined by Fed Chairwoman Janet Yellen.
The Dow Jones Industrial Average DJIA, -0.12% slips 28 points, or 0.2%, to 18,456, the S&P 500 index SPX, -0.15% declined about 3 points, or 0.2%, at 2,172. The Nasdaq Composite COMP, -0.16% gave up 10 points, or 0.2%, to 5, 207.
Ultraloose monetary policy has been supportive of stocks multiyear rise and investors have been worried that rate tightening might result in a stock-market drop.
Meanwhile, weekly jobless benefits claims fell to 261,000, showing that fewer Americans are losing their jobs as summer nears an end. Plus, U.S. durable-goods orders jumped 4.4% in July.
Both economic reports may be read as providing fodder for a resumption of interest rate increases by the Fed, which has been stalled since its last hike in December.
Thursday’s moves come after a downbeat trading day on Wednesday, when the S&P 500 and the Dow industrials finished at their lowest levels since early August. The selloff came as health-care shares tumbled following outrage over a price hike for Mylan Inc.’s MYL, +3.64% EpiPens, which are widely used to treat anaphylactic shock.
Shares of Mylan were up 4.2% on Thursday as the company said that it would immediately aim to cut costs of its lifesaving medication.
Read: How Hillary Clinton crushed another rally in biotech
All eyes on Jackson Hole: Wall Street will look to Jackson Hole and Yellen’s comments to provide clarity on the path for rates. Yellen is set to speak at 10 a.m. Eastern Time, and markets are likely to remain becalmed until then, analysts said.
“Markets are incredibly quiet this August (in sharp contrast to last year), so investors are latching on to anything they can, which gives this meeting a lot more attention than it probably deserves,” said Neil Wilson, markets analyst at ETX Capital in a note.
Read: Existential threat looms over central bankers as they gather at Jackson Hole
“The big question on the table is whether the Fed is ready to raise rates in September. We can probably expect Yellen to signal the Fed’s confidence about the U.S. economy and this could drive up expectations it will pull the trigger in September, potentially pushing up [the dollar] and hitting gold in the short-term,” he added.
Read: Fed might raise interest rates despite market objections
The ICE Dollar Index DXY, -0.13% was down 0.1% on Thursday at 94.695, while gold GCZ6, -0.40% traded down 0.5% at $1,323.60.
According to the CME FedWatch tool, markets are currently pricing in a 1-in-5 probability of a September rate increase.
Eight central bankers, including Fed governor Lael Brainard and New York Fed President William Dudley, are expected to meet activist group Campaign for Popular Democracy’s Fed Up Campaign to answer questions about monetary policy on Thursday.
Economic news: At 9:45 a.m. Eastern, a preliminary reading on the services purchasing managers index for August is due from Markit.
http://www.marketwatch.com/story/wall-street-set-for-losses-as-yellen-speech-draws-closer-2016-08-25
DWTI was at 79.22 early premarket this morning.
Here's How OPEC Manipulates The Oil Market
By Ellen WaldCommodities
Aug 24, 2016 05:53
Tuesday’s oil market has proven, once again, that OPEC can play the speculation game too.
Last week, the price of oil was slowly climbing back up to $50 a barrel, apparently based on reports that OPEC leaders were planning to meet to discuss a production freeze at the end of September. At the start of this week, however, the media reported that most analysts do not believe that OPEC will agree to a production freeze (an obvious conclusion), that the number of new oil rigs in the U.S. is increasing, and that Iraq is planning to increase oil exports. The price of oil began to decline.
Then, suddenly, around midday on Tuesday, the price of oil shot up by almost $1.50. The culprit? A Reuter’s report based on an unnamed OPEC source, that Iran might be interested in “joint action,” to support oil prices. Despite the fact that the Iranian Oil Ministry has not even confirmed that Iran will attend the September meeting in Algeria, speculators saw the headline and ran with it.
Iran has no incentive to curtail its oil production. The country needs money desperately and has just overcome a major political hurdle on the way to offering new types of petroleum development contracts (called Iran Petroleum Contracts or IPCs) to investors. Agreeing to freeze its oil production at current levels would send a message to investors that Iran is not open for petroleum development and would severely limit the country’s ability to increase its revenue in the future. Iran cannot do that.
What Iran and other OPEC countries can do, however, is play the speculation game. Given that all oil producing countries and companies (with exceptions for destitute countries like Venezuela) are producing at high rates, and given that global demand is not increasing at the same rates, the price of oil is stuck below a certain threshold and above another.
Within this price range, however, certain producing countries (such as Iran, Saudi Arabia, Iraq, Russia) have found that they can easily manipulate oil traders with words. While past oil ministers, such as the recently retired Ali al-Naimi from Saudi Arabia, often chastised speculators for their finicky reactions to his every word, the current generation is taking advantage. It seems that OPEC ministers are now manipulating the manipulators. They issue cryptic statements that are not lies but are not substantive either. These statements serve to raise prices while the countries continue overproducing. All they have to do to raise the price by a couple of percentage points is issue a statement or two about a possible meeting or a hope to “stabilize the market.” They wait a day, or an hour, and speculators take the bait, pushing up the price of oil.
This week has shown that the speculators have taken the bait yet again.
http://ca.investing.com/analysis/here's-how-opec-manipulates-the-oil-market-200149551
WTI 46.50 -0.27 -0.58%
WTI 46.57 -0.20 -0.43%
WTI 46.66 -0.11 -0.24%
WTI 46.77 -1.33 -2.77%
WTI 47.10 -1.00 -2.08%
WTI 47.62 -0.48 -1.00%
Everything is out of whack and nothing is making sense right now.
Oil Tanks After API Reports Massive Build In U.S. Crude Stocks
By Zainab Calcuttawala - Aug 23, 2016, 4:43 PM CDT
The American Petroleum Institute reported a 4.464 million barrel increase in U.S. crude oil inventories in the biggest build in crude supplies in four months.
These figures are in stark contrast to a survey by Reuters earlier today, which showed an expert consensus for a 0.5 million-barrel draw in crude oil inventories. Similarly, Zero Hedge’s sources expected an 850,000 barrel draw this week, while analysts polled by S&P Global Platts expected a 200,000-barrel rise in U.S. crude inventories. No estimates expected the massive increase in inventory.
Gasoline inventories decreased by 2.2 million barrels – and if confirmed by tomorrow’s EIA figures, this would be the fourth weekly draw for the energy source in a row. Distillates also experienced an 834,000 barrel draw.
West Texas Intermediate prices fell lower after the release of the new data, in light of the high inventory build-ups. However, the actual supply numbers will be released tomorrow in a report by the federal Energy Information Administration.
In light of the new energy supply configuration, analysts at Goldman Sachs predict that even if the Organization of Petroleum Exporting Countries (OPEC) agree on a production freeze next month, the move will be self-defeating as net energy importer nations begin buying energy supplies en masse to hedge against higher prices.
This week, supplies at the storage facilities at Cushing increased by 417,000 barrels according to the API figures, against a more conservative expected 200,000-barrel build. In the week prior, crude inventories at the site were down by 680,000 barrels according to actual EIA data.
By Zainab Calcuttawala for Oilprice.com
http://oilprice.com/Latest-Energy-News/World-News/Oil-Tanks-After-API-Reports-Massive-Build-In-US-Crude-Stocks.html
WTI 47.34 -0.76 -1.58%
WTI 47.65 -0.45 -0.94%
Here is another one of the charts I use:
http://www.stock-trkr.co.uk/live-charts/commodities/light_crude_oil_live_chart