Brent crude fell for a third day amid signs that OPEC members are reluctant to reduce supply even as prices slumped deeper into a bear market. West Texas Intermediate dropped in New York. Futures slid as much as 1% in London. The oversupply in global markets “didn’t come from us,” Energy Minister Suhail Al Mazrouei said yesterday of the United Arab Emirates and the Organization of Petroleum Exporting Countries. Crude stockpiles in the US, the world’s biggest oil consumer, probably increased by 1.1 million barrels through Nov. 7 for a sixth weekly gain, a Bloomberg News survey shows before government data tomorrow.
Oil at $80 a barrel won’t stop BP Plc or Total SA from exploring and developing crude deposits. Oil has dropped into a bear market this year, with prices falling almost 30 percent since June amid a global glut. OPEC won’t cut its collective output when it meets this month and global oil prices will stabilize once the surplus is absorbed, Kuwait Oil Minister Ali Al-Omair said at an oil conference in Abu Dhabi, the capital of United Arab Emirates, yesterday. All projects under way now will go ahead with oil at $80 a barrel, London-based BP Chief Executive Officer Robert Dudley said at the conference. Total, based in Paris, can proceeed with its projects at $80, Arnaud Breuillac, president of exploration and production, also said in Abu Dhabi. Brent crude, benchmark for more than half of the world’s oil, fell 0.5 percent today to $81.97 a barrel on ICE Futures Europe in London, extending this year’s retreat to 26 percent. “We have only sanctioned or approved projects based on an $80 oil price,” Dudley said. “We’ve been doing that three or four years so there isn’t any project that we’re working on today, particularly those big capital projects, that we have any different view of.”
An investment bank has slashed its forecast for the price of Brent crude next year and has warned prices could hit as low as $65 a barrel in January if the Organization of the Petroleum Exporting Countries (OPEC) doesn't scale down production. JPMorgan Chase & Co has become the most bearish bank on Wall Street after it downgraded its 2015 Brent price forecast by $33 to $82 per barrel, citing supply pressures in the Atlantic Basin and an apparent inability of OPEC member states to work cohesively to restrain production and rebalance the market. The investment bank also lowered its 2016 Brent price forecast to $87.80 per barrel from $120, in a research note dated November 7.
Natural gas futures climbed for a 10th day in New York, the longest streak of gains in 14 years, as forecasts showed arctic air sweeping the U.S., boosting demand for heating fuels. Frigid weather will move into the Great Plains and Midwest over the next 10 days as below-normal temperatures blanket states east of the Rocky Mountains, said Commodity Weather Group LLC. The low in Minneapolis on Nov. 14 will be 2 degrees Fahrenheit (minus 17 Celsius), 25 below normal, AccuWeather Inc. said on its website. “This next polar vortex is hitting hard and is expected to persist for several days,” said Scott Hanold, energy analyst at RBC Capital Markets in Minneapolis. “It’s a cold start to winter and people are engaged again.”
Brent crude rose for the third time in four days as Chinese export data signaled foreign demand may help sustain the economy in the world’s second-biggest oil consumer. West Texas Intermediate gained in New York. Futures climbed as much as 0.7 percent in London. Overseas shipments increased 11.6 percent from a year earlier, according to Chinese customs data on Nov. 8, exceeding the 10.6 percent median estimate in a Bloomberg News survey. The number of rigs drilling for oil in the U.S. last week shrank to the lowest since August, Baker Hughes Inc. said last week.
Songa Offshore have announced a loss of $6.4million in its third quarter statement. The company’s profit was $1.1million during the same period which it said had been affected by the lower revenue contribution from the sale of the Songa Venus and Songa Mercur rigs. Last month, the company cut its financial liabilities in relation to its Song Venus bareboat charter agreement.
With less than three weeks to go before OPEC meets in Vienna and the selloff in oil showing few signs of letting up, speculation is mounting the group will take action to try to stem the decline. Here’s how four analysts across Europe and the U.S. see the Nov. 27 meeting playing out. Giovanni Staunovo, an analyst at UBS AG in Zurich, is predicting the Organization of Petroleum Exporting Countries will reduce output 500,000 barrels a day at the meeting. Such a move would help trigger a rebound in crude to a range of $90 to $100 a barrel, the analyst estimated. Crude futures in London dropped again yesterday, bringing the total decline to 28 percent from a June peak, as OPEC acknowledged the world will need less of its oil for most of the next two decades than previously estimated as U.S. shale production grows. Brent crude, the benchmark for more than half of the world’s oil, has slipped to $82.86 a barrel as of the close yesterday, from a high of $115.06 in June on the London-based ICE Futures Europe exchange.
The slump in oil prices is a boon to China as the world’s second-biggest oil consumer. It’s a different story for the country as a major producer. The slide in prices to a four-year low threatens to cut spending, production and profit for the country’s oil companies including PetroChina Co (857) Brent, the global benchmark, has fallen 26% this year to below $83 a barrel. The decline, amid signs that global supply is outpacing demand, is pressuring profits from oil extraction across the globe. After a flurry of acquisitions and spending that’s stretched the balance sheets of Chinese oil companies, the country will also have a diminished appetite for deals, according to Sanford C Bernstein & Co.
Petrol firms and supermarkets will be pressed by the Government to pass on the benefit of falling oil prices to customers filling up at the pumps. Treasury Chief Secretary Danny Alexander will demand an assurance from fuel companies and distributors that they are doing all they can to pass on the price cuts to motorists. Mr Alexander will use a speech in Aberdeen to warn people would "rightly be angry" if they felt prices were not coming down as much as they should.
Interest rates are expected to remain on hold tomorrow as the recent fall in oil prices eases pressure on the Bank of England for an imminent hike. The Bank rate has been left at 0.5% for more than five years but expectations of an upward move have dwindled in recent weeks due to global economic worries and signs that the housing market is cooling. Despite strong UK growth, the majority of members on the Bank’s monetary policy committee (MPC) are worried that a rise will choke off the recovery at a time when the eurozone is in danger of plunging back into recession. Policymakers will have access to the Bank’s latest quarterly projections but these are likely to show inflation is less of a threat due to falling shop prices and oil market weakness.
Russia’s rouble currency is hitting an all-time low as the country’s economy struggles with the combined blows of western sanctions and a worldwide fall in oil prices. In trading on the MICEX exchange, the rouble dropped to 44.9 to the US dollar late today - about a three per cent fall for the day. The rouble has lost more than 25% of its value this year.
Neon Energy is set to merge with MEO Australia after it became involved in a takeover bid. It is hoped the move will reduce overhead costs of the two companies, from $8.5million to $3.5million per year. The company is expected to form with a net cash income of $37million and a board will be formed of the merged groups, comprising two directors from Neon, and two directors from MEO.
SBM Offshore has completed $450million of non-recourse senior debt secured through a US Private Placement (USPP) for the Deep Panuke Production Field Centre (PFC). The company said the 3.5% fixed coupon bond is rated BBB -/ BBB (low) by Fitch and DBRS, and carries a seven year maturity. In a statement the company said offering was oversubscribed, with 14 institutional investors participating.
Oil tumbled as Saudi Arabia cut the cost of its crude to the U.S., deepening a selloff that sent prices to a three-year low. Bonds advanced, while U.S.-equity index futures declined. West Texas Intermediate crude slid 2.6 percent to $76.75 a barrel at 6 a.m. in New York, after reaching $75.84. The yield on 10-year German bunds fell four basis points to 0.81 percent and Italy’s rate dropped four basis points to 2.38 percent. Standard & Poor’s 500 Index futures both slid 0.2 percent and the Stoxx Europe 600 Index lost 0.1 percent. Japan’s Topix index jumped 2.6 percent to a six-year high. Oil prices fell into a bear market last month as global demand growth slowed and supplies swelled from producers outside OPEC, with the U.S. pumping at the fastest pace in more than three decades. Declining commodities prices are contributing to slower inflation around the world, helping preserve the value of fixed payments on bonds. Alibaba Group Holding Ltd. will report earnings before U.S. markets open.
Encana Corp has extended a deadline to buy outstanding shares of common stock of Athlon Energy at $58.50 a share until next week. The deadline, set to US east coast time, will see the chance to purchase shares stop at 12am, Wednesday, November 12. The offer had previously been scheduled to expire at midnight at the end of this week but the company said based on information provided by the depository for the offer 35,302,143 shares of common stock of Athlon had been validly tendered, but not validly withdrawn from the offer.
Talisman Energy has seen its cash flow drop by 11% from the last quarter. The firm dipped oil prices and lower liquid volumes fro the fall. Talisman said its North Sea production averaged at 12,000BOED, which was down 37% from the previous quarter and 43% year-over-year. The dip in production was a result of planned turnarounds at Claymore, Piper, Buchan and the Bleoholm FPSO.
A positive session for corporate earnings ensured the FTSE 100 Index made progress despite a poor performance from heavyweight oil companies. Shares in Imperial Tobacco, Primark owner Associated British Foods and Legal & General were all higher after posting well-received figures. The FTSE 100 Index, which closed sharply lower on Monday due to disappointing manufacturing data in a number of countries, was 16.9 points higher at 6505.2.
Saudi Arabia, the world’s biggest oil exporter, is telling the market it won’t cut output to lift crude back to $100 a barrel and that prices must fall further before it does so, according to consultant FACTS Global Energy. Swelling supplies from non-OPEC producers drove Brent crude into a bear market on Oct. 8 amid waning demand from China, the world’s second-largest importer. The Organization of Petroleum Exporting Countries meets Nov. 27 to consider changing its production target in the face of the highest U.S. crude output in almost 30 years. “Production of shale oil in the U.S. will not be hit as hard as the Saudis think” by the price decline, FGE Chairman Fereidun Fesharaki said at a conference today in Doha, Qatar. Producers in the U.S. “can withstand a lot of pressure” by reining in their operating costs before they curb investment in new wells and production, he said.
Foster Wheeler's profits have slumped with the company’s income down by half in its third quarter results. The company announced its income from operations was $25.4million, compared with $48.9million the same time last year. Shares are currently sitting at an individual price of $0.25, compared to a cost of $0.50 during the third quarter of 2013.
Chevron's profits have risen for the third quarter income for the first time in three years. The oil major credited refining costs as one of the key factors in boosting their revenue. However the company did see a slight drop in its sales and operating revenues for the third quarter, pulling in $52billion, compared with $57billion last year.
West Texas Intermediate crude headed for the biggest monthly decline in more than two years amid signs that OPEC boosted production to a 14-month high. Brent slid in London. Futures fell as much as 0.6 percent in New York, bringing October’s drop to about 11 percent. Output from the 12-member Organization of Petroleum Exporting Countries increased by 53,000 barrels a day to 30.974 million, a third monthly gain, a Bloomberg survey shows. Traders are split on whether Saudi Arabia will deepen the crude price cuts that propelled oil into a bear market this month. WTI and Brent are down more than 20 percent from their June peaks, meeting a common definition of a bear market, as leading OPEC members resisted calls to reduce supply. Global supplies are rising, with the U.S. pumping at the fastest pace in more than three decades while Russia’s output climbed to near a post- Soviet record. “OPEC members are keeping prices low by raising their production as a way to remain competitive against the expanding output in the U.S.,” Will Yun, a commodities analyst at Hyundai Futures Inc. in Seoul, said by phone today. “Positive economic data we saw from the U.S. failed to provide an upward push to oil as supply concerns are too deeply rooted.”
Carbon copy investment companies found by a court to have misled clients have been ordered into liquidation. Both Carbon Green Capital and Agora Capital were found by the High Court in London to have made false claims about investment returns. A petition against the companies was presented to the High Court by the Secretary for Business, Innovation and Skills, Vince Cable. The companies were accused of selling carbon credit investments which were misleading, raking in almost £1million in profit. Chris Mayhew, Company Investigations Supervisor, said: “This formally brings to an end the activities of two heartless companies that claimed to pride themselves on the investment returns for clients but who in truth were peddling near worthless carbon credits, which in some instances they even failed to supply, raising approaching £1million from the public”. “Far from the claimed world class investment services dedicated to helping clients, these companies were dedicated only to helping themselves. “I would once more urge investors not to respond to cold calling investment sharks as you stand to gain nothing and risk losing everything. Simply end the call, not your savings. “The Insolvency Service will not allow rogue companies to rip-off vulnerable and honest people and will investigate abuses and close down companies if they are found to be operating or about to operate, against the public interest."
The reasons oil prices started sliding in June were hiding in plain sight: growth in U.S. production, sputtering demand from Europe and China, Mideast violence that threatened to disrupt supplies and never did. After three-and-a-half months of slow decline, the tipping point for a steeper drop came on Oct. 1, said Ray Carbone, president of broker Paramount Options Inc. That’s when Saudi Arabia cut prices for its biggest customers. The move signaled that the world’s largest exporter would rather defend its market share than prop up prices. “That, for me, was the giveaway,” Carbone said in an Oct. 28 phone interview from his New York office. “Once it started going, it was relentless.”
Shell recorded a third quarter boost thanks to its refining and natural gas assets.
Technip confirmed a 12% profit decline in its third quarter results.