Oil extended declines for a third day amid speculation that a predicted gain in U.S. output will offset OPEC-led efforts to trim a global glut.
Oil declined following a failed coup in Turkey as shipments continued through the vital conduit from Russia and Iraq to the Mediterranean Sea.
The London market opened on the back foot as crude prices fell after a key meeting of oil producers broke up without agreement.
Brentdropped for a second day as Russia signaled Iran won’t join major producers in freezing output to manage a global glut.
China Petroleum & Chemical Corp.’s third-quarter profit plummeted 92 percent as lower oil prices and production dwarfed an increase in refining revenue. Net income at Asia’s biggest refiner, known as Sinopec, was 1.64 billion yuan ($258 million), or 0.013 yuan a share, compared with 19.3 billion yuan, or 0.165 yuan, a year earlier, the Beijing-based company said in a statement to the Shanghai Stock Exchange on Thursday. That compares with the 4.27 billion yuan average of three analyst estimates compiled by Bloomberg. Higher refining revenue was swamped by a drop in oil prices. Brent, the benchmark for more than half of the world’s crude, averaged about $51 a barrel in the third quarter, compared with more than $103 a year ago.
Hunting has seen a drop in revenue from $664.1million to $463.6million in the first half of the year. The international energy services group said its operations had been impacted by the downturn in the oil and gas market. The decline has seen a reduction in headcount of 900 employees which has resulted in savings of $41million.
Baker Hughes has posted a quarterly loss compared with its profit one year ago. A decline in oil prices has kept a lid on drilling activity for the company, which was bought over by Halliburton last year. Baker Hughes said net loss attributable was $188million - or 43 cents a share - in the second quarter of 2015.
The oil guru who predicted last year’s rout said $100-a-barrel crude is likely to return within five years as faltering supply fails to meet demand. Gary Ross, the founder of consultants PIRA Energy Group, said oil markets aren’t nearly as oversupplied as many believe and spare capacity is tight since Saudi Arabia is pumping all the crude it can without new drilling. “Current prices are unsustainable,” he said Monday in an interview in London. “It’s hard not to see oil hitting $100 a barrel at some point in the next five years.”
Halliburton has signed a joint venture with BlackRock for $500million to help fund drilling of existing shale wells in the US. The decision is the first such move by a major oilfield services provider at a time when oil producers have been shying away from drilling new wells. Halliburton has said it expects to see an “uptick” in activity – including refracking – later this year and a meaningful recovery in 2016.
Halliburton has seen a 93% drop in its quarterly profits following the decline in oil prices since last year. The oilfield services provider said it had incurred about $400million in charges as companies have reduced drilling activity. The company’s net profit fell to $53million – six cents a share – in the second quarter of 2015.
As we ring in the New Year, let's take stock of where we are at with the oil markets. 2014 proved to be a momentous one for the oil markets, having seen prices cut in half in just six months. The big question is what oil prices will do in 2015. Oil prices are unsustainably low right now – many high-cost oil producers and oil-producing regions are currently operating in the red.
US oil drillers laid down the most rigs in the fourth quarter since 2009. And things are about to get much worse. The rig count fell by 93 in the three months through December 26, and lost another 17 last week, Baker Hughes Inc. (BHI) data show. About 200 more will be idled over the next quarter as US oil explorers make good on their promises to curb spending, according to Moody’s Corp.
Armada Oil has terminated the terms of its existing credit facility amid the recent decline in oil price. The firm said it was working with its current lender to secure an extension of the terms of its existing credit facility and expects a resolution before the ed of the year. The loss of its financial facility has also halted work on the Bear Creek #1 project.