Wells Fargo Calls $100 Oil a 'Pipe Dream'
USD 100 per barrel oil is but a “pipe dream,” Wells Fargo said in a new investor note, reports MarketWatch. The report quoted Wells Fargo’s John LaForge saying that he’s doesn’t expect oil prices to climb anywhere near $100 a barrel over the next few years. Barrels price will bounce between $30 and $60 in the coming years, according to top bank’s diagnosis. “We continue to hear that big cutbacks are on the cusp of happening,” he said. “The evidence, however, implies otherwise. Shale production has caused American output to stand higher than it did in 2014, before the oil price crisis began.
Projections center on When, not If
The cyclical nature of the offshore exploration and production beast is legendary in financial circles, riding boom and bust waves for years at a time. While industry analysts and insiders alike had forecast a pick-up in activity no sooner than mid-year 2000, the collective industry is “itching” to get back to the business of building, repairing and supplying the myriad of rigs, boats and other business opportunities that abound in a full-blown boom oil market. Patience, it seems, is wearing thin, particularly in the face of dwindling business prospects and the lingering of the $30+ barrel of oil. While it seems all too natural that sustained high prices would sooner than later drive a resurgence of the moribund offshore business…
Offshore Recovery Stalled For Now
As crude oil prices reach Gulf War highs and recent memories of historic low crude prices fade, capital spending on finding and developing new oil reserves continue to play catch up. "The recent oil-price crisis set back non-OPEC output growth for at least a year," a recent report released by Deutsche Banc Alex. Analysts say there is a lag time for exploration spending to play catch up with oil prices - for every one month when crude prices are below the cost of production, it takes three months of high prices to regain the volume of production lost during the low cost period. Crude prices began to rebound from lows near $10 a barrel when OPEC and other major producers cut crude production to raise prices in March 1999.
Jacques de Chateauvieux, CEO, Bourbon
The plan, on its face, was simple. At the turn of the century Bourbon embarked on the path to become a dominate player in the global offshore supply vessel sector, building technologically sophisticated vessels for a good price in emerging Chinese shipyards, among others globally. Dubbed Horizon 2012, the plan was backed with a multi-billion dollar investment, a world economy that was firing on all cylinders and an offshore oil and gas market that was steamrolling ahead, powered by oil prices in the region of $150. That was yesterday.
Hedging Energy Bets: The Case for a 2018 Oil Bull Run
Hedge funds gamble OPEC will tighten oil market too much. Hedge funds are the most bullish about oil prices in years, expecting further gains even as prices touch multi-year highs and ignoring the risk linked to such a large concentration of positions. A record net long position has been accumulated by hedge funds and other money managers, amounting to 1,183 million barrels in the five biggest futures and options contracts covering crude, gasoline and heating oil. Portfolio managers held a record 1,328 million barrels of long positions in Brent, WTI, U.S. gasoline and U.S. heating oil on Dec.
Oil Prices May Fall in Q3 Say Citigroup
Weakening economies in Europe, Asia, cause Saudi to produce surplus crude Citigroup Inc. has said oil prices may fall in the third quarter, as economies weaken in Europe and Asia and Saudi Arabia produces surplus crude, Bloomberg reports. Increased crude production from Saudi Arabia and Iraq may be a "major downside risk to prices" if the economic crisis worsens, said Citigroup analyst in New York, Edward Morse. "Saudi Arabia continues to push prices lower" by cutting June official selling price differentials to Asia and increasing output to about 10 million barrels a day, Morse said. "What's most dangerous to prices would be a repeat of conditions in 1997-1998, when Saudi overproduction coincided with an unexpected Asian financial crisis that hit hard at demand."
Winter Storm Threatens U.S. East Coast Energy Industry
The U.S. energy industry braced for a major test to refineries and power plants as an intense winter storm roared up the Atlantic Coast, bringing heavy snowfall and high winds to a region already beset with several days of extreme cold. The storm is the product of a rapid and rare sharp drop in barometric pressure known as bombogenesis, or bomb cyclone. Heavy snow pounded the East Coast along a front stretching from Maine as far south as North Carolina early on Thursday, knocking out power, icing over roadways and closing hundreds of schools.
India's Oil Imports Surged in 2017
India's oil imports rose by about 1.8 percent in 2017 to a record 4.37 million barrels per day (bpd) as the country boosted purchases to feed its expanded refining capacity, ship-tracking data obtained from sources and data compiled by Thomson Reuters Oil Research & Forecasts showed. To meet its growing fuel demand India, the world's third-biggest oil consumer, raised its refining capacity in the second half of 2017. India's capacity expansion to about 5 million bpd was aided by Reliance Industries…
Oil Prices At Nine-Year High As Iraq Suspends Exports
Oil prices rocketed to a new nine-year high Nov. 22 after Iraq suspended oil exports under its humanitarian exchange program with the United Nations. London January Brent futures opened at $25.90, the highest oil price since January 1991 when allied forces were preparing to eject Iraqi troops from Kuwait. Prices leapt as Iraq's Oil Minister Amir Mohammed Rasheed confirmed that Iraq had stopped oil deliveries under the latest six-month phase of its oil-for-food exchange with the UN. Baghdad protested the UN's proposal to extend by two weeks the sixth phase of the program and accused the United States of trying to push other Security Council members into accepting a draft resolution on weapons inspections.
Rig Rates Down 10 Percent
According to a Nov. 25 report from Business Standard, the current global credit crisis and an over 63 percent fall in crude oil prices in the last four months have resulted in oil companies drilling fewer wells in offshore areas. This has increased the availability of rigs across the world and helped bring down rig rentals by up to 10 percent in the recent past. The rig rates have corrected primarily in the shallow water fields where there have been traditionally more rigs available. (Source: Business Standard)
Hapag-Lloyd: Shipping Demand Up, More Mergers in 2018
German shipping group Hapag-Lloyd sees demand for transport growing 4 percent in 2018 and expects more shipping firms to merge in the year, the chief executive said. CEO Chief Executive Rolf Habben Jansen also said Hapag-Lloyd, which merged with its Arab peer UASC, could achieve 85 to 90 percent of targeted annual savings from the deal of $435 million this year and 100 percent from 2019. More savings could be made in future, he told reporters in Hamburg, where he reiterated guidance for rising full-year 2017 earnings before interest, tax, depreciation and amortisation (EBITDA) and for EBIT.
Ship Recycling Prices Plunge 25%
Demolition Prices for elderly ships have fallen by a quarter in 2012 to date, and owners are encouraged to dispose of recycling candidates sooner rather than later, says Mark Williams of Braemar Seascope. Addressing the 7th Annual Ship Recycling Conference in London on 19th June, the Braemar Seascope Research Director told delegates that deflating international steel prices were likely to translate into lower offers for recycling tonnage in the coming quarters. Meanwhile, rapid reductions in the value of the Indian…
Oil Instability, Consolidation Muddy Offshore E&P Picture
The cyclical nature of the oil business has blossomed into full bloom during the latter part of 2000, as a host of political power plays have sent oil prices on a virtual rollercoaster, albeit mostly up, helping to send it soaring as high as $37/barrel at the time of this writing. The business of accurately predicting the direction in which oil pricing will go has seemingly become less of a science and more of a speculative game. While it was the Asian financial crisis which led prices to the cellar in 1997, it is another crisis — the potential advancement of hostilities in the Middle East — which have helped to send the price back up to near decade (read: Gulf War) heights.
The U.S. Gulf Market: When Will It Turn Around?
Discussions around our office and with various clients usually entail an exchange of anecdotal information believed to explain the current situation with the quest to predict when things will turn around. There are a host of different viewpoints, most seemingly relevant, but no one satisfactory answer. In previous downturns in the offshore service sector, there was usually a fairly clear understanding embraced by most of why things were slow. This downturn is more difficult to understand. Back in 1998 when the Asian financial crisis impacted oil prices, it was easy to see why E&P fell. This downturn also affected most oil fields around the world about the same. The price of oil was too low to drill new wells and upgrade production at a profit.
Jotun Coatings Announces Price Increase
Jotun has acknowledged the steep rise in the cost of raw materials through 2010 used in some of their coatings. This rise in costs has significantly affected all paints and coatings manufacturers worldwide. Consequently, Jotun has been forced to increase prices on some of its products, but emphasises that it has not affected its entire range. Throughout 2010 the market price of major raw materials used in coatings, such as epoxies, titanium dioxide, acrylics and metal-based materials has increased by up to as much as 50 per cent. The surprisingly high global demand coupled with the downscaling of capacity following the 2007 financial crisis has caused an imbalance in the raw materials market for coatings…
As US Opens Up Offshore Waters, Eastern GoM Beckons
President Donald Trump's administration has proposed opening up nearly all of America's offshore waters to oil and gas drilling, but the industry says it is mainly interested in one part of it, now cordoned off by the Pentagon: the eastern Gulf of Mexico. The industry's focus on an area located near a sprawling network of existing platforms, pipes and ports could ease the path to new reserves, and assuage the drilling opponents near other places offered under the Interior Department's proposed drilling plan issued last week, like California's Pacific, the Atlantic and Arctic.
House GOP Spearheads Bill to Expand Domestic Drilling
Today, the House passed H.R. 4899, The Lowering Gasoline Prices to Fuel an America that Works Act by a vote of 229-185. If enacted the bill would expedite oil and gas leasing on federal lands, open new offshore drilling areas and expand drilling in Alaska’s National Petroleum Reserve. This bill is everything Big Oil wants for Christmas. Reviving “Drill Baby Drill” can’t magically lower prices of a global commodity, and any economic gains pale in comparison to the long-term damage climate change threatens to inflict on our economy. Bringing about additional droughts, wildfires and other extreme weather events is no way to save money. Leaving fossil fuels in the ground is the only course of action that respects the seriousness of the climate crisis.
Hyundai Heavy $600M Order for LNG Carriers
Hyundai Heavy Industries, the world’s largest shipbuilder, won a $600 million order to build two 155,000 m3 LNG carriers, including an option for another same class vessel, from Greece-based Dynagas Ltd. These membrane-type LNG carriers are due for delivery in the second half of 2013. They will feature the Dual Fuel Diesel Engine System which allows the ship to run on oil fuel or natural gas. Due to tightening global regulations on carbon emissions, increasing demand for LNG as an alternative energy source after Japanese nuclear crisis…
Oil Skidding Toward 11-year Low
Oil prices extended their freefall on Friday, flirting with 11-year lows, after the International Energy Agency (IEA) warned that global oversupply of crude could worsen next year. Brent and U.S. crude's West Texas Intermediate (WTI) futures fell as much as 5 percent on the day and 12 percent on the week as mild pre-winter weather and a plummeting U.S. stock market added to the toll on oil prices. Oil traders and analysts alike have been perplexed by oil's decline since the Dec. 4 meeting of the Organization of the Petroleum Exporting Countries which all but abandoned price support for crude by removing OPEC's production ceiling in an oversupplied market. "It's very tough to find a cause to get bullish here," said Peter Donovan, broker at Liquidity Energy in New York.
Lubmarine Outlines Position in Supply Crisis
Marine lubricants supplier TOTAL Lubmarine has outlined its position concerning increasing raw material costs and growing shortages of marine lubricants. Andrew Knox, Head of Marketing at TOTAL Lubmarine, says, "Recent events have shown how tight the worldwide situation is. This is due to a long historical period of low and decreasing margins which have discouraged the industry from investing. "With the 2004 and 2005 increases in crude oil and lubricant raw material market prices, industry profitability has worsened, and the incredible acceleration in cost increases in recent months puts the industry in an unprecedented position of vulnerability. Since July, base oil price costs have increased by between 24 and 35 percent.
Oil Finishes Strong in 2017
U.S. oil prices rose above $60 a barrel on the final trading day of the year and hit their highest since mid-2015, as an unexpected fall in American output and a decline in commercial crude inventories stoked buying in generally thin trading. International benchmark Brent crude futures also rose, supported by ongoing supply cuts by top producers OPEC and Russia as well as strong demand from China. Oil prices are set to close out the year with strong gains. Brent is up 17 percent since the beginning of the year and U.S. West Texas Intermediate is up 12 percent.
Improving Freight Rates May Help Shippers Cope With Fuel Costs
The shipping industry is in a better position to cope with soaring fuel prices because of growth in trade as Asia recovers economic crisis, analysts said. The price of bunker fuel, which typically makes up about five percent of a shippers' total operating costs, has over the past six months doubled to $140 per ton. The spoils from improved conditions have not been evenly shared within the industry, with tanker owners the worst hit. Three global-pacts among oil producers to cut output and shore up prices have had a negative effect on tanker owners who now face higher bunker costs and lower shipping volumes. However, experts said, fuel cost is only a major issue if freight rates are on a decreasing trend, but with rates on a recovery, the impact on shippers will be lessened.
Watching Ukraine for Economic, Commodity Fallout
Reuters - A top Federal Reserve official said on Tuesday he is closely watching the unfolding crisis in Ukraine for potential effects on U.S. economic growth and volatility in commodity prices. "It's something I'm watching really carefully for potential implications for growth," Richmond Fed President Jeffrey Lacker told the Council of Economic Education. "We obviously worry first about the disruptions of the commodity markets ... and volatile commodity prices." Russia's military intervention in Ukraine's Crimea peninsula has driven up oil markets. But prices eased on Tuesday after President Vladimir Putin told reporters Russia would only use force as a "last resort."