Global oil markets are tightening according to fresh analysis from the International Energy Agency (IEA).
OPEC's production output dropped last month from a record high as producers attempt to tackle the global oil glut.
OPEC raised its forecast for global oil demand next year and through the end of the decade, anticipating that cheaper crude will spur consumption even as economic growth slows.
Amid the most enduring global oil glut in decades, two OPEC crude producers whose supplies have been crushed by domestic conflicts are preparing to add hundreds of thousands of barrels to world markets within weeks.
Oil dropped as the International Energy Agency changed its view on global oversupply, seeing a glut persisting into 2017.
Oil trimmed its weekly gain after the biggest U.S. stockpile slump in 17 years was seen as a one-off caused by a tropical storm that disrupted imports and offshore production.
The number of food parcels being handed out in Aberdeen has has gone up almost five-fold in the past two years, according to a charity boss.
The long wait may finally be over.
The International Energy Agency (IEA) said oil markets will begin to tighten in the second half of the year.
Kier Riemersma and his wife sat down a few months ago to make a difficult decision. The American couple, who lived in Dubai for over a decade, would wind down his real estate business and move back home to Denver, Colorado.
Oil traded near the lowest close in two months as U.S. oil producers continued to revive drilling in the shale patch, adding rigs for the fourth consecutive week in the longest streak of increases since August.
Oil is set for a weekly decline as the U.S. heads toward the end of its summer-driving season with ample crude and motor fuel stockpiles.
OPEC forecast higher demand for its crude next year as the global surplus fades, while Saudi Arabia pumped near-record levels amid peak summer consumption.
Oil headed for the first weekly decline since February as OPEC production rose and expanding US stockpiles kept inventories at the highest level in more than eight decades.
The global oil surplus will persist at least until late 2016 as demand growth slows and OPEC shows “renewed determination” to maximize output, according to the International Energy Agency. The Organization of Petroleum Exporting Countries, by effectively dropping production limits at its Dec. 4 meeting, is displaying hardened resolve to maintain sales volumes even as prices fall in an oversupplied market, the agency said Friday in its monthly report. While its policy is hitting rivals, triggering the steepest drop in non-OPEC supply since 1992, world oil inventories will likely swell further once Iran restores exports on the completion of a deal to lift sanctions, it said.
Even with oil prices possibly past the low point, and production falling from outside of OPEC, there aren’t enough signs to say a full recovery is in the works, Kuwait’s oil minister said. Oil ministers from the Organization of Petroleum Exporting Countries need until next month to decide if the rebound is for real, and if it’s not, any production cuts shouldn’t fall only on OPEC’s shoulders, Ali Al-Omair said in an interview in Riyadh on Wednesday. Brent crude rose 2.5 percent in October, after falling 11 percent the month before, amid signs production is falling in the U.S. As the U.S. wilts, demand for OPEC’s crude will grow in 2015, ending two years of retreat, the International Energy Agency estimates. OPEC meets Dec. 4 in Vienna.
Crude dropped from a two-week high as Russian production climbed and new data on Chinese manufacturing signaled a slowdown in demand. Futures fell as much as 2.2 percent in New York. Russian oil output broke a post-Soviet record in October for the fourth time this year, while Iran said it will tell OPEC next month of its plans to raise production by 500,000 barrels a day. China’s purchasing managers index remained at 49.8 in October, the National Bureau of Statistics said Sunday, compared with an estimate of 50, the line between expansion and contraction.
Hedge funds placed the most bets on falling oil prices since July as rising piles of crude dashed hopes of a near-term recovery. Money managers’ short position in West Texas Intermediate crude jumped by 18 percent in the week ended Oct. 20, the largest surge since July 21, according to data from the Commodity Futures Trading Commission. That pulled their net-long position down by more than 16,000 contracts of futures and options. Crude stockpiles in the US rose 22.6 million barrels in the past four weeks to the highest October level since 1930, even as producers have idled more than half their drilling rigs in the past year. A global surplus of crude could last through 2016, according to the International Energy Agency.
Oil climbed from a three-week low as traders snapped up contracts dragged down by expanding U.S. inventories. December futures rose as much as 1.7 percent to $45.95 a barrel in New York. They settled at $45.20 on Wednesday after US government data showed stockpiles expanded by 8.03 million barrels last week, the biggest increase since April and more than twice the gain forecast. “There was a perfect excuse yesterday to send oil through $45 after the bigger-than-expected rise in inventories,” Ole Sloth Hansen, an analyst at Saxo Bank A/S, said by e-mail from Copenhagen. “That did not happen and it could potentially signal that traders are looking to pick up contracts at the bottom of the range that has prevailed since early September.”
When it comes to deciding how much to charge Asian oil buyers, OPEC members are showing little regard for tradition. Suppliers from the Organization of Petroleum Exporting Countries have long moved in lockstep, raising or lowering prices in tandem. Now, Kuwait is undercutting Saudi Arabia by the most on record and Iraq is also selling its oil more cheaply than the group’s biggest member. Qatar is pricing cargoes at the biggest discount in 27 months to competing crude from the U.A.E.’s Abu Dhabi. While the group that accounts for about 40 percent of global oil supplies maintains a collective strategy of flooding the market with crude, the semblance of unity has vanished when setting monthly selling prices. With Asia forecast to account for most of the growth in global oil demand this year, competition for the region’s buyers is trumping historical allegiances.
With WTI on the precipice of breaking below $40/bbl, chatter abounds on just how low oil prices can go from here, with some discussing prices in the low $30s, or potentially lower. While this type of price action is not without possibility, Bentek does not believe this is rooted in fundamentals, but rather, would be a short term phenomenon spurred by speculative trade capitulation and/or a brief storage shock. In terms of the former, should the paper losses from traders holding long positions in oil become too difficult to bear, the market has the potential for a short term rout if/when there is a liquidation of positioning.
Oil headed for the longest run of weekly declines in almost three decades on signs the supply glut that drove prices to a six-year low will be prolonged. Futures fell as much as 1.6 percent in New York, set for an eighth weekly drop. The US pumped crude in July at the fastest pace for the month since at least 1920, the American Petroleum Institute reported Thursday. The nation’s stockpiles are almost 100 million barrels above the five-year seasonal average, weekly government data showed Wednesday.
Saudi Arabia boosted crude output to a record, deepening a global supply glut and sending the country’s stocks down for a seventh day in the longest losing streak this year. The Tadawul All Share Index retreated 2.5 percent to close at 7,991.28 in Riyadh, less than 130 points away from a threshold for entering a bear market. The selloff in oil resumed as the kingdom said crude export in June beat a previous high set in 1980 as OPEC nations seek to maintain market share. Two months after Saudi Arabia opened its equity market to direct foreign investment, stocks have been reeling as crude’s plunge prompted the International Monetary Fund to warn the kingdom’s growth may slow. The Tadawul’s moving averages made a so-called death cross on Tuesday, a sign to some investors more declines lie ahead.
Oil dropped to a three-month low in New York on the prospect that increasing Iranian shipments will extend the global supply glut. West Texas Intermediate crude extended losses in the wake of a third weekly retreat. Iran will focus on regaining oil sales it lost due to sanctions regardless of the impact on prices, Oil Minister Bijan Namdar Zanganeh said in Tehran. The United Nations Security Council unanimously adopted an Iran deal resolution Monday.