as dealers fretted again over swelling US crude inventories adding to the global supply glut.
World oil prices fall after solid gains the previous day, as dealers fretted again over swelling US crude inventories adding to the global supply glut (AFP Photo/Philippe Huguen)
London (AFP) - World oil prices fell Thursday, after solid gains the previous day, as dealers fretted again over swelling US crude inventories adding to the global supply glut.
U.S. Oil’s Discount to Global Benchmark Widens to 13-Month High Bloomberg
Oil prices fall after another rise US inventories AFP
Oil falls sharply after U.S. crude inventories rise Reuters
Oil ends mixed after mild rig count drop, heating oil spikes Reuters
European benchmark Brent North Sea crude for April delivery dipped 63 cents to $61.00 per barrel in London late afternoon deals.
New York's West Texas Intermediate (WTI) for April dived $1.72 to $49.27 a barrel.
The US government's Department of Energy (DoE) said Wednesday that crude inventories rose 8.4 million barrels in the week ending February 20 to a record 434.1 million barrels, more than double the increase expected.
"There are modest signs of a recovery in global demand from the likes of Europe and China -- but in the United States, stockpiles are increasingly rapidly as supply still outstrips demand,"
The reason for the big spread WTI Vs Brent is, most of the surplus oil is light sweet from shale, because only half of US refineries are geared for it they have to store much of it, crunch time is getting closer not enough storage too much oil.
Don't forget that even though drilling is slowing down, the Saudis are increasing their drilling, then you have Iraq and the other countries I've mentioned before that can add a lot of cheap oil going forward also.
"Ten million barrels a day is not VERY little oil."
That is half of what the US uses and 1/9th of what the world uses per day. Hardly very little when one considers there is an estimated one million barrels a day of surplus oil now. And that is what I'm trying to get a handle on. With an anemic world economy and that much cheaper oil in reserve what price can we expect? I'm expecting oil prices new high in about a year will be eighty bucks, and that is what I'm basing my stock purchasing on. Of course barring a black swan event.
That is the old worn out R. fix all snake oil BS, easy to say and difficult to explain away.
Simply put facts support the R. ideas of trickle down economics, cut taxes, make war, break unions and deregulate hasn't worked.
In fact it has lead to exactly where we are today, high labor participation and low wages, wages that can't support an economy that is over seventy percent dependent on the consumer.
And to add to this problem computer programs and robots taking more and more of the better paying jobs. There is no shortage of goods and services which testifies that the R. claims are not true, the shortage is on the consumption side, and the reason for that is the consumer is tapped out.
They are rigging the market the question is if what they are doing is illegal, and are they keeping the prices high or suppressing them?
No doubt depletion is happening, but according to articles I have read there is about 10 million barrels of cheap oil Vs. shale, deep sea and oil sands in the Mid East alone that can come to market in the next 5 years. Most storage is capped out and new storage is being built. Our SOR is at about 95% China's at about 99%. Tankers are full and anchored as storage vessels.
The bottom line for me is new oil is out pacing depletion, and the reason for that is the world's economy remains weak. When austerity is abandoned that will be the time to jump on oil stocks.
February 23, 2015 by William James
“Oil prices are the canary in the coal mine,” said one expert. “I don’t think the global economy, especially in the United States, is all rainbows and unicorns right now.”
The current, robust pace of oil production has been going on for two years now, he said. What has changed over the summer? “The supply picture has not changed. So the drop in price, to me, is an indication, I think, of worrying global demand,” he said.
Scared OPEC members want meeting, but Saudis call the shots
The problem oils and other natural resource companies is having is the collapse in price of commodities, and that is directly relative to the US and world economy, in other words their prices show it sucks. Throw in the stock market is way over bought, austerity, a deeply indebted consumer and the likelihood of a economical recovery is slim.
Iraq, Saudi Arabia, Russia, Venezuela and others can easily add 10 million barrels a day of cheaper oil than shale, deep sea and oil sands. And due to the horrible shape the No1 consumer country consumer is in, the US is using 1.5 million barrels a day less than its high. Take Europe and China's slowing economy. I'm still till on the sidelines.
If your a bull buy the shares back, more than likely you will have plenty of opps to buy lower than you sold. My self I'm on the side lines for now.
But US Rig count Falls To 4-Year Low
Iran OK With $25 Oil As Iraq Pumps Crude At Record Pace
Submitted by Tyler Durden on 01/19/2015 09:56 -0400
Why I'm not a buyer, Saudi Arabia drilling at record pace, other countries that depend on oil for their economy such as Venezuela, Russia and Iraq, all selling as much oil as they can, plus if Iran sanctions are lifted, they have millions of oil stored and can add another 1.5 million a day, and the world's may be slipping back into recession.
Thinking about the R. six years and and gw BuSh eight years controlling our government debacle. How is it possible the fool gave us two wars and a recession, never happened before, wars usually cause economic activity which translates into a better than normal economy. I remember when the fool was running the R. were clamoring that the US would have a great economy because he was the first president with an MBA, what we got was a great recesion which we are not out of yet. Wall Street got richer and average American got poorer, and we are dangerously close to slipping back into another recession. Goes to show that money may get you an MBA but it can't buy intelligence.
You'd think after the ever increasing evidence of the expanding poor, and the shrinking middle class that reagonmics deregulate, cut taxes, privatize, bust unions, cut pay, renege on retirement promises, export good paying jobs and US advanced tech, to low paying countries would wake some R. up. But instead we get more commitments to do more of the same from them.. I suspect that since 30 years has passed many never knew how good this country was when the middle class was dominate, so they buy into the R. same old BS. I suppose you can't miss what you don't know you had.
I'm not complaining since I benefited greatly post FDR New Deal, and the environmental movement, I'm just confused and in wonderment of how easily it was all taken away.
The world's economy is anemic, the Saudis are drilling more wells than ever. The only good thing is low oil prices will put more money in the pockets of the consumer. However, the jobs that have been created since the gw BuSh greater recession don't pay well. A recipe for another world wide recession in the not to distant future.
"U.S. crude stocks rose by 14.3 million barrels last week, data by industry group the American Petroleum Institute showed after Wednesday's settlement, compared with analyst expectations of an increase of 3.2 million barrels. [API/S]
If the build is confirmed by U.S. Energy Information Administration data due at 1600 GMT, it will be the largest weekly growth since EIA data became available in 1982.
Oversupply could still worsen before a more balanced market is established, as the U.S. rig cut will only translate into actual lower American output later this year.
Meanwhile, production from the world's biggest exporter - Saudi Arabia - may be increasing further.
"In discussions with Saudi customers and after reviewing recent U.S. refiner earnings calls, it is becoming clear that production from Saudi Arabia is rising," PIRA Energy said in a note.
"Saudi production had been averaging around 9.7 million barrels per day since last June but ... demand has pushed output to just under, if not above, 10 (million)," it added."
Even though the US uses about one and a half million barrels less of crude per day, off of the highs we are still the number one user. The USD has strengthened and that makes our good and services more expensive Europe our number one trading partner, non of this is good for our economy our oil prices.
The only way it will hit ten bucks is a world wide depression. And that isn't good for anyone except the 1% who will add to their assets on the cheap. But, I doubt the European Union or the US would continue austerity in the face of that, but one never knows they messed up big time in the last one, so the financial powers that are could do it again. Personally I give that scenario a 5% chance. So no oil will not go that low, we will know how low it will go when all of the storage is filled.