Brent Crude Archives - SolarBuzz Jamaica

Oil Back Above US$50 Per Barrel

June 14, 2016 Webmaster

The price of oil closed above US$50 a barrel for the first time in almost a year, pushing oil stocks higher.

The Dow Jones industrial average briefly flirted with the 18,000-point mark but eventually retreated.

Benchmark US crude oil added 67 cents, or 1.3 per cent, to close at US$50.36 a barrel in New York. Oil has not closed at US$50 a barrel or higher since July 21. Brent crude, which is used to price international oils, added 89 cents, or 1.8 per cent, to US$51.44 a barrel in London.

In other energy trading, heating oil added four cents to US$1.54 a gallon and natural gas gained one cent to US$2.47 per 1,000 cubic feet.

The Dow held on to a gain of 18 points to 17,938.28. Earlier, the Dow was up as much as 82 points and appeared to be on track for its highest close since last July.

The Gleaner

Crude Oil Electricity News Oil

Has oil bottomed out?

March 29, 2016 Webmaster

ANGRA DOS REIS, Brazil —Â In this September 22, 2010 file photo, workers stand by the construction of Petrobras oil platforms in the BrasFels shipyard in Angra dos Reis, Brazil. Brazil’s State-run oil company reported on Monday a record quarterly loss due to a large reduction in some of its assets amid lower oil prices.

Energy stocks and energy-related bonds have had a rough ride over the past year and a half after outperforming considerably over the last decade.

The reason for the decline was simple: the sharp decline in oil prices from over US$100 a barrel to just above US$40 currently.

WTI crude, which was at a high of US$96 in June 2014, is currently trading at US$40 a barrel for a 58 per cent drop, while Brent crude which traded as high as US$107.75 in June 2014 fell 62 per cent to be trading around the US$41 level.

The slide began due to significantly increased supply of US oil production, as hydraulic fracturing was able to retrieve oil from previously difficult to get at locations, as a result of improved drilling technologies. The combination of high oil prices and low interest rates, emanating from Central Banks’ accommodative monetary policies, made such projects economically viable. Consequently, US oil production increased 80 per cent from 2008 through 2014, according to one estimate.

Crude oil inventories in storage at Cushing, Oklahoma, the largest storage hub in the US, increased from 20 million barrels in the middle of 2014 to just below 70 million presently. In addition, on the demand side, slower growth in demand from China seemingly played a significant role in prices declining.

Finally, there was quite a bit of feeling that the high price of oil merely reflected trading and speculation, and that the whole situation would unravel at some point as fundamentals declined. In this case, the catalyst was OPEC’s strategy to increase production in an already oversupplied market to protect market share and ultimately force production cuts from non-OPEC sources as the price plunge continued.

Oil prices fell in excess of 30 per cent in 2014, 40 per cent in 2015, and by mid-February 2016 had plunged by a further 30 per cent, trading in the mid-20s, but have since rallied some 50 per cent to around US$40 a barrel currently. So what’s next for oil? While it’s difficult to predict the future, a continued recovery or at least stability in oil prices, should persist as supply and demand dynamics come back into balance.

Oil slumped to a 12-year low this year on protracted excess supply concerns before rising on speculation that stronger demand and falling US output, coupled with talks of a production freeze between OPEC and Russia, would ease the global surplus. Additionally, there’s the potential for supply shocks in the future after energy companies from Chevron Corp to BP Plc cut billions of US dollars in spending amid the price crash, according to the International Energy Agency (IEA).

Support for oil on the demand side should come from the observation that oil demand tends to go up over time. Global demand for oil, according to an economic estimate, increased from 75.9 million barrels per day in 2000 to 94.2 million barrels per day in 2015 and is expected to rise to 95.6 million in 2016.

The IEA recently expressed the view that oil prices had reached their bottom, given recent developments on the supply side of the equation in particular and improving outlook on the demand side.

OPEC also is apparently anticipating average oil prices of US$50.00 for 2016. It has become increasingly apparent that given the difference fracking has made in increasing available supply to the United States, we will not see US$100 a barrel for a long time — perhaps never again as we begin a slow but likely definite transition to cleaner fuels.

As oil prices continue to rise, look out for more lucrative buying opportunities in some still beaten-down energy assets — but as usual be sure to consult with your investment advisor to ensure that your selections are right for you.

Jamaica Observer

Biodiesel Crude Oil Electricity News Oil

Oil Price Appears To Have ‘Bottomed Out’, Says Energy Agency

March 15, 2016 Webmaster

The organisation that represents major oil-consuming nations said Friday that signs of a market that has “bottomed out” are emerging.

US crude prices jumped to a high for the year. Brent crude, used as a global benchmark, hit a high for the year Tuesday and rose one per cent Friday.

Energy companies have been shutting down rigs and laying off thousands of workers as oil prices plunged to around US$30 per barrel, from well over US$100 per barrel just two years ago.

A broad retreat by the energy sector played out again last Friday on both fronts.

The number of oil and natural gas rigs active in the US fell for the 12th consecutive week, according to Baker Hughes on Friday, to 480. That’s the lowest level in decades, and perhaps the fewest since the earliest days of the oil drilling industry.

And Texas driller Anadarko Petroleum Corp. said that it would cut 1,000 workers, 17 per cent of its work force.

The pain at Anadarko and other energy companies may finally be translating into a reduction of a massive and global oversupply of oil, the International Energy Agency said Friday.

OPEC production tumbled by 90,000 barrels a day last month, the IEA said. US production that had surged due to new drilling technology, is expected to fall by almost 530,000 barrels a day this year, according to the IEA.

The Paris organisation, however, said that the recovery in crude prices in recent days from multiyear lows does not mean that there will be a significant and sustained rebound in the short-term. There have been sharp declines in demand, particularly in the United States and China, it said.

China, the world’s second-largest oil consumer, is attempting to quell anxiety over a slowing economy and labour unrest. Earlier this month, it cut its growth expectations for the year.

Goldman Sachs said last Friday that production is unlikely to increase in the US until 2017, and that prices could volatile in the next few months.

Analysts with Goldman said that if US drillers ramp up production with any rise in oil prices, “we believe a self-defeating rally in oil prices/equities could result.”

The report buoyed stocks of energy companies last Friday, making the sector the second-best performer on the Standard & Poor’s 500 index.

In the energy markets on Friday, US crude added 66 cents, or 1.7 per cent, to US$38.50 per barrel on the New York Mercantile Exchange. Brent crude, which is used to price international oils, gained 34 cents, or 0.8 per cent, to US$40.39 a barrel and natural gas gained 3.4 cents to US$1.822 per 1,000 cubic feet.

Gleaner

News Oil

Why gas prices may be on the rise

February 6, 2015 Webmaster

Enjoying those prices at the pump? You might not want to get used to them. A former top oil executive says the price of gas at the pump could double by the end of the year.

In an interview with CNBC, former Shell Oil President John Hofmeister predicts that U.S. oil could skyrocket from the current levels under $48 a barrel to $80 by this fall, just as consumers are getting used to the windfall from lower gas prices. That would force gas prices to double, from the current $2 to a whopping $4 by next winter.

The reason, he says, is the oil companies are masters of the simple economics of supply and demand.

“The industry is the best in the world at cutting costs when they have to reduce spending. What’s happening is we’re shutting down drilling rigs,” Hofmeister said. “Not completing the wells that have just been drilled. And we’re going to eat off the surplus oil out there probably by mid-year.”

Hofmeister, who ran Shell Oil USA from 2005-08, retired and foundedCitizens for Affordable Energy. The non-profit organization seeks the growth of natural gas as a transportation fuel alternative to oil.

He says U.S. producers have idled 500 rigs over the past four months as oil prices plunged. He says the result of that production slowdown eventually will be felt at the pump. This month, Baker Hughes reported that U.S. drillers had taken a record number of oil rigs out of serviceamid the price slump. Last week alone, oil rig counts tumbled by 55 to 1,366.

Five dollar a gallon gas?

A gas station advertises gasoline for $1.68 a gallon in Dellwood, Mo., Jan. 20, 2015.

Hofmeister predicts gas prices could pass the $3-a-gallon range in September and October. By December and next January, he says, gas prices will be nearing $4 a gallon.

Looking further into the future, the former oil exec sees prices rising to “$5 gasoline in the U.S. as we approach the end of the decade.”

Although the Republican-controlled Senate passed the Keystone XL pipeline this week, Washington observers say President Barack Obama is certain to veto it.

Hofmeister says the Keystone XL pipeline will have no impact on fuel prices in the near term. And he tells CNBC he doesn’t expect it to pass during Obama’s tenure.

“Whoever is the next president, Democratic or Republican, must look at the needs of the nation 20 to 30 years down the road,” he added.

While still a fossil fuel, natural gas has half of the carbon in the molecule that an oil molecule has, Hofmeister explained. “It’s a reduction in fossil fuel emissions, or carbon emissions, by switching to natural gas.”

Hofmeister sees natural gas being turned into four types of alternative fuels. “You can have ethanol and methanol for passenger cars,” he said. “CNG (compressed natural gas) and LNG (liquefied natural gas) for trucks and trains. Natgas “takes the pressure off oil. And it also ends the need for the U.S. to import oil.”

Hofmeister says that unless the U.S. reduces oil consumption, “we will face inevitable and perpetual volatility in oil, especially as we approach the end of the decade.”

CNBC
On the Money airs on CNBC Sundays at 7:30 pm, or check listings for air times in local markets.

News Oil

Oil Falls To Near US$95 As Dollar Strengthens

May 14, 2013 Webmaster

The price of oil fell to near US$95 a barrel on Monday, as the dollar continued to strengthen against the yen and other major currencies.

Benchmark oil for June delivery fell 87 cents to finish at US$95.17 a barrel on the New York Mercantile Exchange.

The stronger dollar is pushing down oil prices, analysts said. The dollar has risen in recent days against the euro and last week passed the 100-yen mark for the first time in four years.

Since oil is traded in dollars, a stronger dollar makes crude and other commodities less appealing to investors with other currencies.

“This, like the stock market, ends up pulling a lot of money out of commodities and into more reliable risk,” said Carl Larry, president of Oil Outlooks and Opinions, a research analysis firm.

An increase in OPEC’s output, which grew by 280,000 barrels to 30.46 million barrels a day in April compared with March, also helped drag down prices by boosting concerns about excess supply.

And weak refining data from China further undercut crude. Government statistics showed China’s refining output in April was the lowest since last August.

drift higher

Brent crude, which is a benchmark for many international oil varieties, was down US$1.09 to end at US$102.82 a barrel on the ICE Futures exchange in London.

United States drivers saw gasolene prices drift higher over the weekend, up two cents since Friday to a national average of US$3.58 a gallon.

In other energy futures trading on Nymex, wholesale gasolene fell four cents to finish at US$2.82 a gallon, heating oil lost two cents to end at US$2.89 a gallon and natural gas rose two cents to finish at US$3.93 per 1,000 cubic feet.

– AP

News Oil

Oil Falls To Near US$95 As Dollar Strengthens

May 14, 2013 jrobinson

The price of oil fell to near US$95 a barrel on Monday, as the dollar continued to strengthen against the yen and other major currencies.

Benchmark oil for June delivery fell 87 cents to finish at US$95.17 a barrel on the New York Mercantile Exchange.

The stronger dollar is pushing down oil prices, analysts said. The dollar has risen in recent days against the euro and last week passed the 100-yen mark for the first time in four years.

Since oil is traded in dollars, a stronger dollar makes crude and other commodities less appealing to investors with other currencies.

“This, like the stock market, ends up pulling a lot of money out of commodities and into more reliable risk,” said Carl Larry, president of Oil Outlooks and Opinions, a research analysis firm.

An increase in OPEC’s output, which grew by 280,000 barrels to 30.46 million barrels a day in April compared with March, also helped drag down prices by boosting concerns about excess supply.

And weak refining data from China further undercut crude. Government statistics showed China’s refining output in April was the lowest since last August.

drift higher

Brent crude, which is a benchmark for many international oil varieties, was down US$1.09 to end at US$102.82 a barrel on the ICE Futures exchange in London.

United States drivers saw gasolene prices drift higher over the weekend, up two cents since Friday to a national average of US$3.58 a gallon.

– AP

News

Oil Posts Gain As Market Eyes Syria And Israel

May 7, 2013 Webmaster

The price of oil edged higher Monday as tension increased between Syria and Israel.

The benchmark oil contract for June delivery rose 55 cents to close at $96.16 per barrel on the New York Mercantile Exchange. It was the third straight day of gains for oil, and the first close above $96 since April 2.

Prices rose early Monday on news of an Israeli military strike in Syria, raising concern of an expansion in conflict in the oil-rich Middle East. The price fell back below $95 before rising again late in the day.

Brent crude, which is the benchmark for international oil varieties and more susceptible to news from the Middle East, gained $1.27 to $105.46 per barrel on the ICE Futures exchange in London.

In other energy futures trading on the Nymex, wholesale gasolene rose 4 cents to $2.87 a gallon, heating oil rose 4 cents to $2.92 a gallon and natural gas fell 3 cents to $4.01 per 1,000 cubic feet.

– AP

News

Oil prices inch up, Jamaicans to pay more at the pumps

January 3, 2013 Webmaster

Oil prices continue to inch up following the last-minute deal on the US fiscal cliff.

Brent crude rose to almost US$113 a barrel Wednesday, the highest since October 19, before easing to settle up US$1.36 at US$112.47.

Oil moved in tandem with other risky markets after the US Congress approved a deal to avoid automatic tax rises and spending cuts that were forecast to bring on a recession.

US fuel consumption, wavering since the financial crisis, would weaken further if economic growth spluttered.

Here in Jamaica, consumers are to see higher prices at the pumps this week.

Petrojam on Wednesday announced it will hike the price of E10-87 and E10-90 gasoline by J$1.33.

The increase is the third week in a row and takes the price of gasoline to a 10-week high.

Diesel price will rise by J$0.72 while the price of kerosene will fall by J$0.05 cents.

Propane cooking gas goes up by J$1.50 while butane rises by J$0.36 cents.

News

Oil Climbs The Cliff, Ends Year At US$91.82

January 2, 2013 jrobinson

Oil prices rose Monday as political leaders were trying to finalise a deal to avert the ‘fiscal cliff’ hours before the deadline.

The US had until midnight New Year’s Eve to avert a tax increase for everyone and spending cuts that would have hit defence spending.

Benchmark US crude rose US$1.02 to finish at US$91.82 per barrel in New York. Oil has wavered in recent weeks along with the ups and downs of the budget negotiations.

The price of oil finished December up about three per cent from the start of the month. It ranged from a low near US$77 a barrel to high around US$110 a barrel during the year.

Brent crude, used to price international varieties of oil, rose 49 cents to end at US$111.11 a barrel in London.

In other energy futures trading on the New York Mercantile Exchange: natural gas fell 12 cents, or 3.4 percent, to finish at US$3.35 per 1,000 cubic feet; wholesale gasolene rose one cent to US$2.81 a gallon; heating oil was flat at US$3.05 a gallon.

News Oil

Oil Rises Slightly On Unrest In The Middle East

October 16, 2012 Webmaster

The price of oil fell Friday on concerns that growth in global crude demand will slow even as more petroleum becomes available.

Benchmark oil fell 21 cents Friday to $91.86 per barrel in New York.

On Friday, the International Energy Agency issued a new report predicting slower growth in demand for oil over the next five years.

It cited the sluggish global economy and growing energy efficiency. The agency also forecast that supplies will increase, in part because U.S. production from shale formations is exceeding expectations.

The IEA is an organization of 28 oil-importing countries that collects and analyzes data about global petroleum supply and demand.

Friday’s decline in the price of oil eroded some of the gains from earlier this week, when tensions between Syria and Turkey raised worries about supplies. Still, the price of U.S. benchmark crude climbed 2.2 per cent over the past week.

AAA said gasoline prices at the pump fell less than a penny from Thursday to $3.81 for a gallon of regular. That’s about 41 cents higher than a year ago but down 5 cents from a month ago.

Brent crude, which is used to price international varieties of oil, dropped $1.07 to $113.61 per barrel in London.

In other energy trading on the New York Mercantile Exchange, heating oil fell 3.32 cents to end at $3.2239 per gallon.

Wholesale gasoline dropped 6.28 cents to end at $2.8928 per gallon and natural gas rose less than a penny to end at $3.611 per 1,000 cubic feet.

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