Posts Tagged ‘prices’

Oil demand, prices and decelerating US supply

Global oil supply and demand forecasts for 2015 have changed significantly recently, but these changes have largely cancelled each other out: the outlook is still one of a market roughly in balance. However, this ignores the tectonic shifts taking place under the surface. US output growth is decelerating. If futures markets pre-empt this, as they did in February, they risk reversing it, which could produce another drop in prices, as Ross McCracken, managing editor of Platts Energy Economist, explains.

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If breaking up is hard to do, try not growing oil

Someone had to do it, and it might as well have been one of the biggest names in US shale.

Having whittled its 2015 capital budget down to $5 billion, 40% lower than last year, US producer EOG Resources last week made the tough call of forfeiting production growth this year, saying it would drill but not complete wells in a low oil price environment.

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New Frontiers: Price drops could reset African crude production expectations

With spending cutbacks already taking their toll on global upstream activity, oil companies are being forced to rethink their approach to Africa’s vulnerable high-risk, high-reward exploration frontiers.

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Will crude prices weigh on the US export debate?

There’s relatively widespread consensus among analysts and academics that the White House is unlikely to do anything on crude exports in the near term, and many believe President Obama may not touch the issue before he leaves office in January 2017.

What’s less clear is how the newly-Republican controlled Congress will deal with the issue and how crude prices will influence the possible debate.

Will the recent plunge in crude oil prices bolster the case for an end to restrictions on US exports or could relatively low prices deflate the argument for loosening the long-standing US crude export regime?

On the other hand, will crude prices have little to no impact on domestic export policy?

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As oil prices push towards $60/b, are we witnessing a “dead cat bounce”, or is the market finding some equilibrium?

On February 9 over 500 delegates crammed into London’s Mayfair Hotel for the Platts London Oil Forum 2015. I’ve lost count of how many times I’ve attended this annual event, which traditionally kicks off IP Week – it’s a fantastic opportunity for the industry to come together, and invariably features stimulating debate.

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Steel sheet blues: US steelmakers find prices unseasonably out of tune

US steelmakers have been singing the blues so far in 2015 as prices for sheet steel, which represents half of all American steel sales, have collapsed with no turnaround in sight.

Factors that are usually in their favor at this time of year are absent. Freezing temperatures normally boost prices for scrap – a major steelmaking input – thereby supporting either mill price hikes or the maintenance of the pricing status quo.

It has been cold – with temperatures in the teens – and infamously snowy in the major scrap-producing regions of the US, the Midwest and Northeast, but scrap prices are down $80-100 a long ton from a month ago. That’s a 25% reduction in just a (cold) month’s time for shredded scrap, a key grade.

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Guest post: A lesson from the history of oil

Steven Kopits is the president of Princeton Energy Advisors, and contributes guest posts to The Barrel. 

In an interview with Bloomberg TV, BP CEO Bob Dudley took a bearish view on the price of oil, noting that the present feels like 1986, when oil slumped from $30 a barrel to $10 and did not recover until in 1990. “The fundamental supply and demand does remind me of 1986 a bit, where we could go into a period in this decade of lower oil prices,” Dudley noted, adding that prices may stay in a range below $60 for as long as three years. “It will be a long time before we see $100 again.”

I agree with Dudley: 1986 is the appropriate template for today’s oil market dynamics. However, the understanding of the precedent is incomplete, and the analogy, imperfect. The differences matter.

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CEOs wrestle with a gloomy 2015 in the oil patch

After emerging loudly from under the cloak of the holidays a month ago, the 2015 downturn is now in full swing as rig counts drop by the dozens each week and oil companies grimly whack away at their capital budgets.

But a week of E&P quarterly conference calls appears to have calmed investor pulses a bit by revealing the extent of activity cutbacks industry is prepared to make this year – particularly for Big Oil’s biggest players. And CEOs appeared quite willing to “go to the mattresses” to survive stubbornly low oil prices which have dropped by half since mid-2014 and stayed there for the past month.

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Petrodollars: Changing regulations, falling prices move Asian oil markets

In this week’s Oilgram News column, Petrodollars, Song Yen Ling examines the effects of low oil prices on various markets in Asia, ranging from the massive consumption center of China to the rapidly increasing appetite of Indonesia.

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Energy Economist: Shale oil’s response to prices may call for industry re-evaluation

Shale oil’s investment cycle is shorter and its decline profile sharper than conventional oil production. Current indicators suggest legacy declines from shale will catch up fast with the industry. This points to a sharp deceleration in US shale oil output. But, while conventional oil takes time to slow down, it also takes time to speed up. It will be shale that is best placed to benefit from any oil price recovery, as Ross McCracken, managing editor of Platts Energy Economist, explains in this month’s selection from the publication. The full analysis can be found in the February 2015 issue, which is also issue 400 of Energy Economist.

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