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Energy & Commodities

Why Are The Oil Markets Crashing?

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Posted by OIlPrice.com

on Friday, 05 May 2017 07:46

8a5e77ab513ab1bc6af6080efc57d3faWTI and Brent continued to tumble on Thursday, dropping to their lowest levels since the announcement of the OPEC deal back in November. Brent actually dipped below $49 per barrel, raising fears of another downturn. Both WTI and Brent were off by nearly 4 percent during midday trading on Thursday.

Oil traders have been patient, hoping that despite the rapid rebound in U.S. shale production, the OPEC cuts would take a substantial volume of oil off the market and correct the supply/demand imbalance. But it has been a painful and protracted process.

U.S. crude oil inventories hit a record high of 535 million barrels as recently as the end of March. Several consecutive weeks of drawdowns in April again raised hopes that the market is heading towards balance, but the most recent data release from the EIA on May 3 disappointed yet again, and it was apparently the last straw for some. Market analysts predicted a drop in oil inventories by about 2.3 million barrels, but the EIA said stocks only fell by 930,000 barrels. WTI sank to $46 per barrel and Brent fell into the $40s for the first time in 2017.

....read more HERE

...related:

Oil Prices Crash To Pre-OPEC Deal Levels



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Energy & Commodities

Big Oil Betting On Electric Vehicles

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Posted by OilPrice.com

on Tuesday, 02 May 2017 07:05

a0dc7f3a8d9ba42905761e72cc2492c0Total SA's chief energy economist, Joel Couse, forecasted that EVs will make up 15 to 30 percent of global new vehicle sales by 2030.

Oil demand for transportation fuel see its "demand will flatten out," after 2030, "Maybe even decline." Couse said speaking this week at the Bloomberg New Energy Finance conference in New York.

Colin McKerracher, head of advanced transport analysis at Bloomberg New Energy Finance, sees Couse's forecast as the highest EV sales margin yet to be forecasted by a major company in the oil sector.

"That's big," McKerracher said. "That's by far the most aggressive we've seen by any of the majors."



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Energy & Commodities

Greyerz – This Will Come As A Massive Shock To People

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Posted by Egon von Greyerz via King World News

on Monday, 01 May 2017 07:43

KWN-Greyerz-I-4302017-1024x664

As we get ready to kickoff what promises to be a wild week of trading, today the man who has become legendary for his predictions on QE, historic moves in currencies, spoke with King World News about what is going to come as a massive shock to people.

“This Is The New Normal!”

Egon von Greyerz:  “This is the new normal”! That is what a professional advisor stated at a recent family office in London after I had outlined the risks due to the credit and asset bubbles. This is what is so frightening about any top in such an extreme economic cycle. Peak optimism and peak asset prices go hand in hand. I did not experience the 1929 crash or the depression, but a few quotes from that remarkable period of time expresses the typical euphoria at a market peak

...continue reading HERE



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Energy & Commodities

Future World Economic Growth In Big Trouble As Oil Discoveries Fall To Historic Lows

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Posted by Steve St. Angelo - SRSrocco Report

on Monday, 01 May 2017 07:28

Future global economic growth is in serious trouble as oil discoveries fell to historic lows last year.  The International Energy Agency (IEA) reported that the sharp downturn in capital spending by the conventional oil sector was due to extremely low oil prices.

As the oil price fell to $30 in 2016, oil companies cut their exploration and capital expenditures by 25-40%.  For example, ExxonMobil, the largest oil company in the United States, cut their capital expenditures by 26% in 2016, from $26 billion in 2015 to $16 billion last year.  This had a profound impact on new oil discoveries.

According to the IEA report:

Oil discoveries declined to 2.4 billion barrels in 2016, compared with an average of 9 billion barrels per year over the past 15 years. Meanwhile, the volume of conventional resources sanctioned for development last year fell to 4.7 billion barrels, 30% lower than the previous year as the number of projects that received a final investment decision dropped to the lowest level since the 1940s.

By taking the IEA’s oil discovery data and comparing it to the total amount of conventional oil consumed by the world in 2016, here is the following chart:

Global-Oil-Consumption-2016-vs-Discoveries-768x550

The world consumed 69 million barrels per day of conventional oil last year, which equaled a total of 25 billion barrels (source: IEA report above).  Which means, conventional global oil discoveries of 2.4 billion barrels were less than 10% of total world conventional oil consumption.  This is extremely bad news.

To understand the breakdown in the different oil types, the IEA provided the following data:



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Energy & Commodities

Trump Considers Executive Order Withdrawing From NAFTA: Majorly Stupid

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Posted by Mike "Mish" Shedlock - Global Economic Trend Analysisomic Trend Analysis

on Thursday, 27 April 2017 05:07

"It's been very, very bad for our companies and for our workers, and we're going to make some very big changes or we are going to get rid of NAFTA once and for all," President Donald Trump said in a speech last week.

Today, White House readies order on withdrawing from NAFTA.

The Trump administration is considering an executive order on withdrawing the U.S. from NAFTA, according to two White House officials.

A draft order has been submitted for the final stages of review and could be unveiled late this week or early next week, the officials said. The effort, which still could change in the coming days as more officials weigh in, would indicate the administration's intent to withdraw from the sweeping pact by triggering the timeline set forth in the deal.

Peter Navarro, the head of Trump's National Trade Council, drafted the executive order in close cooperation with White House chief strategist Steve Bannon. The executive order was submitted this week to the staff secretary for the final stages of review, according to one of the White House officials.

The draft executive order could be a hardball negotiating tactic designed to bring Mexico and Canada to the table to renegotiate NAFTA. But once Trump sets the withdrawal process in motion, the prospects for the U.S. pulling out of one of the largest trade deals on the globe become very real.

Some internally see the drafting of the executive order as a win for the "nationalist" faction within the White House led by Bannon, who has been sidelined in recent weeks since he was removed from the National Security Council.

NAFTA Running Out of Time

CNNMoney reports Trump's NAFTA is Already Running Out of Time

President Trump wants a new trade deal with Mexico and Canada soon. But he's running out of time.

Trump has said he wants a deal that benefits US workers, but hasn't said exactly what he wants in a new deal.

If Trump decides to stay in and renegotiate, time isn't on his side.

His trade team, led by Commerce Secretary Wilbur Ross, must trigger a 90-day consultation period before trade talks can begin. At the earliest, talks could start in August.

Edward Alden, a senior fellow at the Council on Foreign Relations, said "it's completely unrealistic" to get a deal done this year.

"The notion that you're going to have a negotiation that's both fast and productive is just an illusion," Alden added.

It's also worth noting that the original NAFTA agreement, which became law in 1994, took years to put together.

Mexican leaders want negotiations done by early 2018 because Mexico has presidential elections in July of next year. There's no telling whether the next Mexican president will cooperate with Trump on NAFTA.

Very Bad Idea

Killing NAFTA is a terrible idea. I have talked about this before buts here are some pictures of the allegedly "terrible trade deal"

Manufacturing Employment

44253 a



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