|Day's Range||32.48 - 33.76|
Iran's oil minister said on Monday it was difficult to forecast crude prices amid uncertainties over prospects for demand, Iranian state radio reported. "No one can predict crude prices and now the demand is vague," Bijan Zanganeh told state radio. Oil prices rose on Monday, reversing earlier losses, as countries around the world continued to ease lockdown measures imposed to combat the coronavirus pandemic.
(Bloomberg) -- Oil traded near $33 a barrel as an escalating war of words between the U.S. and China added to caution over the prospects for a global recovery in demand.China warned on Sunday that some in the U.S. were pushing the countries toward a new Cold War, stoking concerns that deteriorating relations between Beijing and Washington could complicate the market’s recovery from a historic demand crash. Futures edged higher in New York after falling earlier, with trading volumes thin due to holidays in the U.S., U.K. and Singapore.See also: Oil’s Sudden Rebound Is Exposing the Achilles’ Heel of ShaleCrude has surged more than 75% this month and the boss of the International Energy Agency gave bulls further hope, saying in an interview that demand may well recover from an unprecedented shock caused by Covid-19. Even so, the return of U.S.-China tensions has soured risk sentiment and rekindled more-immediate demand concerns. There’s also concern that some supplies idled during oil’s rout will start to return.“With prices above $30, the recent rally may have pushed too far,” said Hans van Cleef, senior energy economist at ABN Amro. “Inventories remain highly elevated and every disappointment could trigger a fresh wave of profit taking. I will continue to point at downside risks towards my clients.”The U.S. should give up its “wishful thinking” of changing China, Foreign Minister Wang Yi said during his annual news briefing on the sidelines of National People’s Congress meetings in Beijing. He also warned America not to cross China’s “red line” on Taiwan.While fuel consumption climbs in some nations with the easing of lockdown restrictions, the cheapest U.S. gasoline in nearly two decades won’t be enough to entice nervous Americans to hit the road for Memorial Day weekend. The uncertainty around travel is so great due to the virus that American Automobile Association is not releasing a forecast for the first time in 20 years.“In the absence of strong government policies, a sustained economic recovery and low oil prices are likely to take global oil demand back to where it was, and beyond,” Fatih Birol, the head of the IEA, said in an interview, urging governments to focus spending on combating climate change.Big oil annual general meetings in the U.S. and Europe this week should shed light on how heavily producers have been hit by lockdowns, with Total SA, BP Plc, Exxon Mobil Corp. and Chevron Corp. among those fronting shareholders. Meanwhile, Russian President Vladimir Putin has given his government until June 15 to come up with a plan to support the country’s oil industry.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Chinese financial investors betting on a rebound in oil prices are filling commercial storage tanks held by the Shanghai futures exchange just as fast as the exchange can find them. The flood of purchases has come from companies little-known to the oil industry which have been bidding up Shanghai futures, China's only oil futures contract, since early April when global oil prices slumped as COVID-19 hammered demand. "We call them 'hermit' investors," said a state oil official whose firm recently delivered cargoes into the contract.
Oil prices, which have been driven higher for the past four weeks, were steady on Monday, with holidays in Singapore, London and New York dampening trade, as rising concerns over demand recovery offset supply cuts. "Uncertainty around the current travel patterns in the U.S. is so great that the American Automobile Association did not release its Memorial Day travel forecast," Bjornar Tonhaugen, head of oil markets at Rystad Energy, said. Prices are finding support from global supply cuts with the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, now nearly a month into a deal to voluntarily withhold 9.7 million barrel per day of production.
Economic data puts the EUR in focus, while geopolitics and COVID-19 news and numbers will also influence on the day.
Oil prices imploded earlier this year, which has decimated many oil stocks. Things have gotten so bad that several have already declared bankruptcy. Four that seem to be likely bankruptcy candidates this year are Borr Drilling (NYSE: BORR), California Resources (NYSE: CRC), Denbury Resources (NYSE: DNR), and Oasis Petroleum (NYSE: OAS).
U.S. Energy Services firm Baker Hughes reported that the number of active U.S. rigs drilling for oil dropped by 21 to 237 the week-ending May 22.
Long term investing works well, but it doesn't always work for each individual stock. We really hate to see fellow...
The lockdown and travel curbs aimed at stemming spread of COVID-19 since March 25 forced people to stay home, cutting India's fuel demand by 45.8% in April. India has extended its nationwide restrictions to May 31, but relaxed rules in areas with lower numbers of cases leading to some recovery in fuel demand and refiner runs this month. Reliance Industries Ltd, operator of the world's biggest refining complex, operated its export-focussed 700,000 bpd Jamnagar refinery at about 87% capacity.
Five years after first ditching some coal companies, Nordic investors are turning their focus to bigger carbon emitters in a range of industries, paving the way for other funds to follow. Investors in the Nordic region have been among the vanguard of environmental, social and governance (ESG) investing, with Norway's NBIM grabbing most of the attention due to its size. Although some smaller funds have been more ambitious, NBIM was one of a small group of investors to exclude in 2015 all firms that derived more than 30% of revenues from thermal coal.
Oil prices have climbed throughout the month of May, but prices hit the pause button on Friday, losing some ground as markets fear that the global economic recovery might not go as smooth as expected
The enormous amount of monetary stimulus in the system, the need for that to continue for some time and the inflation risk are all bullish for gold.
The oil price collapse is forcing potential buyers of oil and gas fields to try and renegotiate deals or otherwise abandon them entirely
(Bloomberg Opinion) -- The waters off the South African oil storage terminal at Saldanha Bay are getting busy. A small flotilla of tankers full of crude is idling near the busy shipping lanes that link the Atlantic and Pacific Oceans. Their presence, along with similar gatherings of ships all around the world, will be a potential source of oil price volatility for months to come, as global demand begins to recover amid the biggest production shutdown in the oil industry’s 160-year history.Ships full of crude have been forced to anchor off the coasts of the U.S., China, Europe and elsewhere, as refiners have cut back processing and onshore storage tanks have been filled to near capacity. All over the world, tankers are being used to store oil instead.The reasons for most of this expensive excess storage is obvious: the global supply glut. But there’s something else at play here too as some of the world’s smartest oil traders have filled up tankers to take advantage once crude prices start motoring again.The floating supplies of oil are vast. Tankers carrying enough crude to satisfy 20% of the world’s daily consumption gathered off California’s coast in April with nowhere to go. Most are still there. At Durban, 800 miles to the east of Saldanha Bay, six giant Suezmax tankers, each holding about 1 million barrels of crude, have been anchored for up to six weeks. More tankers have amassed off Africa’s northwest corner, around the entrance to the Mediterranean Sea, after processors in Spain, southern France and Italy all cut runs or shuttered refineries.The vessels now off Saldanha Bay began to arrive in early April, carrying crude from Nigeria, Angola and the Republic of Congo. They have been joined over the past two weeks by four more ships, each of which loaded a similar volume of crude in the U.S. Gulf Coast.The area near Africa’s southern tip has always been a favorite place to hold cargoes of West African crude awaiting buyers in far-flung parts of the world. It is safer than locations farther north, where piracy has increased. It also gives owners the choice to send cargoes to either Asia or Europe, depending on where the most profitable opportunities arise.Holding oil in ships is more expensive than storing it in onshore tanks, but owners can respond much more rapidly to selling opportunities.Several of the vessels off South Africa were chartered by leading oil-trading companies, including Vitol Group, the world’s biggest independent oil trader; Glencore Plc, through its ST Shipping subsidiary; and Mecuria Energy Group Ltd., according to fixture data compiled by Bloomberg. The presence of such big-name traders suggests that these aren’t all just cargoes waiting to discharge into congested tanks, but are also the visible parts of trading strategies aimed at making the most of the first signs of a recovery in global oil demand.As I said above, the presence of many of these tankers can be explained by full onshore storage tanks, slower discharging operations and reduced refinery runs. But others will be the result of so-called contango plays, where traders buy cheap crude on the physical market and sell forward contracts to lock in a profit. Some are probably just waiting for prices to rise enough to make the cargo profitable.The eventual unloading of all of these floating supplies will have a significant bearing on the oil price. The gradual drawing down of the huge offshore stockpiles owned by refiners will help keep a lid on prices. But those held by canny traders will be sold whenever and wherever they are most profitable, and that will keep prices volatile.If you were hoping for a smooth recovery in crude prices as the initial disruption of the coronavirus epidemic recedes, think again.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Julian Lee is an oil strategist for Bloomberg. Previously he worked as a senior analyst at the Centre for Global Energy Studies.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
French oil trader Pierre Andurand was catapulted into the spotlight this year after correctly betting that the deadly novel coronavirus would spark a sub-zero oil market collapse. Two months later, in another remarkable call, the hedge-fund trader tweeted on the morning of April 20 that oil could turn negative in a perfect storm of evaporating demand, chronic oversupply and scarce storage.
Geopolitics will be a key driver in the week. Brexit and the Pound and a collapse in the U.S – China relations will be a test riskier assets.
The total value of the global pool of decommissioning projects that will accumulate through 2024 could reach $42 billion as companies shut down producing assets
The main trend is up, but momentum is trending lower with the formation of the closing price reversal top on Thursday and its confirmation on Friday.
(Bloomberg) -- Supertankers laden with Saudi Arabian crude heading to U.S. shores are taking longer than normal to discharge as smaller ships used in the process have become hard to find.Increased crude deliveries from OPEC’s largest producer to the U.S. Gulf Coast and the reliance on a limited number of small ships contracted by buyers to help unload the cargoes are causing lengthier wait times, said market participants. The delays may even worsen before they ease, they said.An armada of Saudi oil is still en route to the U.S., a product of a price war with Russia back in March, where the kingdom flooded the market with oil and offered cargoes to the U.S. at the lowest prices in years. Saudi pumped a record of more than 11 million barrels a day in April.About a month ago, there were 18 supertankers headed for the Gulf of Mexico compared to only seven normally seen, said Peter Sand, chief shipping analyst at industry group BIMCO.It “comes as no surprise to me that it’s taking more time to discharge VLCCs on the U.S. Gulf Coast. I expect the oil to get into the U.S. only with some delay,” Sand said.In a process known as lightering, it usually takes four to six days to fully unload a Very Large Crude Carrier, a 2-million barrel ship that can deliver Saudi oil, said Stephen Wolfe, head of crude oil at consultant Energy Aspects Ltd. Buyers in the U.S. often rent three 600,000-barrel or smaller lightering vessels to complete the process, he said.Since late April, three Saudi oil-carrying ships have had to wait over a week to offload cargoes since arriving, according to ship tracking data compiled by Bloomberg. The VLCC Dalian arrived on the Gulf Coast on May 1 and so far has only unloaded half of its cargo, tracking data show. Prior to this, two other ships, Lulu and Aslaf, completed discharging all their cargo after about two weeks, data show.Inclement weather in the Gulf of Mexico and lower crude demand also contributed to delays. Refiners across the U.S. sharply reduced operating rates since mid-March as measures to slow the coronavirus outbreak slashed fuel consumption nationwide.The incremental demand for lightering ships has now pushed up the cost to rent them. Prices have increased by $50,000 per trip to $350,000 this month, market participants said.There’s still 20 VLCCs laden with Arabian oil set to arrive in the U.S. through the end of June, ship tracking data show. The prospect of more cargoes may push up lightering costs even further.(Corrects to say “lightering” in second deckhead and sixth paragraph of story published May 12)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The main trend is up according to the daily swing chart, however, momentum is trending lower.
(Bloomberg) -- The smallest shale oil drillers have endured their fair share of pain in this spring’s energy collapse and, with ailing stock prices, analysts are finding it even tougher to cover the group.Early Friday, energy researcher Heikkinen Energy Advisors and investment bank Tudor Pickering Holt & Co LLC, both based in Houston, discontinued coverage of Centennial Resource Development Inc., Callon Petroleum Co., and QEP Resources Inc.Heikkinen also suspended ratings on other drillers, including Chesapeake Energy Corp., Goodrich Petroleum Corp., Gulfport Energy Corp., Montage Resources Corp. and Oasis Petroleum Inc.Stocks with market caps below $300 million and share prices under $1 are “generally uninvestable for the majority of our client base due to their small size and low trading liquidity,” Heikkinen told clients in a note. Tudor Pickering cited a “reallocation of resources and an internal refocus of our coverage list.”Oil & gas-focused research firms and investment banks are “pulling in resources,” said Tyler Hardt, a Florida-based portfolio manager at Pelican Bay Capital Management. An easy place to cut is “smaller-cap energy names that a lot of people don’t have hope for.”Bankruptcies could occur before any potential mergers and acquisitions, Hardt added.Centennial was among the exploration and production outfits touted as a potential takeout target in the past by firms including SunTrust and Tudor.‘Non-Consideration’At least one portfolio manager isn’t looking too deeply into the discontinued ratings. “Looking at these cancellations might actually be a non-consideration as an investor,” according to Josh Young at Houston-based Bison Interests LLC. He sees little correlation between stock performance and recommendations, adding that hedge funds still care about potential M&A targets even amid the carnage in the energy industry.At the same time, Heikkinen isn’t completely abandoning ship. The firm intends to follow these companies by “maintaining relationships with management, updating models and providing production and financial estimates.”(Updates with additional suspended ratings at Heikkinen)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
If the concerns over demand continue then look for the selling that began on Friday to drive the market into at least $28.34 over the short-run.
(Bloomberg) -- Oil fell, paring a weekly gain, as investors weighed improving supply fundamentals against doubts surrounding China’s economic growth.Futures in New York slid 2% Friday but notched a 13% increase for the week.Major producers continue to scale back production. U.S. explorers laid down another 21 oil rigs, bringing the total to the lowest since 2009. Beijing abandoned its economic growth target for this year due to “great uncertainty” over the coronavirus, triggering concerns over a demand recovery.“We are starting to see some gradual improvements in the global economy, notwithstanding China, and it’s going to get better from here,” said Bill O’Grady, chief market strategist at Confluence Investment Management LLC. “So, we’ve gone from being undervalued due to fears of the lack of inventory capacity to now being about where we ought to be based on where inventories are.”However, there are still warning signs that any recovery will be long and slow. The research unit of state-owned China National Petroleum Corp. said fuel demand in the country will drop by 5% this year. Plus, U.S. oil production shut-ins have peaked, Mark Rossano, an analyst with consultancy Primary Vision said.Yet, output cuts by major producers have helped shrink inventories globally at the same time that OPEC+ works to implement its pledged reductions. The alliance’s program this month is on the way to trimming 9.7 million barrels of daily crude output -- roughly 10% of global supplies and stockpiles at the storage hub at Cushing, Oklahoma, shrank by the most on record last week.China’s oil demand earlier this month was probably at 92% of levels at the same time last year, IHS Markit said, and full-year consumption is likely to be around 8% lower than in 2019.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.