Oil prices are down again, and have dropped for five of the past six sessions. The proximate cause for yesterday’s drop was news that OPEC had cut its demand forecasts through 2035, except for next year. In addition, Libya indicated that it would soon resume operations of its largest oil field.
Slumping oil prices are putting pressure on U.S. drillers.
The US dollar’s upside momentum has faded, but oil prices remain depressed. Many observers try, too hard perhaps, to link the decline in commodity prices in general, and oil in particular, to the appreciation of the dollar. Yet the situation is considerably more complicated.
Norwegian energy company Statoil has become the latest oil giant to turn to private security firms to handle its operations in North Africa, amid rising violence and organised attacks on its energy assets.
Norwegian energy company Statoil said in June it was forming a special operations division to handle emergency operations in response to a terrorist attack on a natural gas facility in Algeria.
The European Commission’s probe of alleged manipulation of crude oil benchmark prices has now gone beyond just the major oil companies to include even energy trading firms and price-reporting agencies. Following the Libor scandal last year, the markets really did not need yet another trillion-dollar scandal.
The downturn beginning in 2008 triggered a macroeconomic meltdown that would disrupt all markets, domestic and global. Demand for petroleum diminished just as new technologies were beginning to gush out oil and gas in never-before-seen volumes, creating a perfect storm that would depress prices. Now that oil prices have rebounded, is the worst behind us?
Sixteen Chinese firms that won a second round of auction for exploration rights for shale gas have pledged to invest a total of 12.8 billion yuan ($2.06 billion) over the next three years, according to a report by Xinhua.
The 16 Chinese companies, which include 14 state-owned firms, are part of a larger group of 57 companies that were awarded in October rights to explore 19 shale gas blocks, the Ministry of Land and Resources said on Monday.
The United States is on track to overtake oil-rich Saudi Arabia and Russia as the world’s top oil producing nation by 2017, according to the latest report by the International Energy Agency.
In a report released todat, the International Energy Agency (IEA) said it saw a continued fall in US oil imports and predicted that Washington could be self-sufficient in energy by 2035.
It wrote:
Iran has said it would consider taking its oil off the market if international sanctions, aimed at forcing Tehran to abandon its nuclear enrichment programme, intensify. According to the nation’s oil minister, Iran has plans to survive without oil revenues.
The comments by Iran’s Oil Minister Rostam Qasemi were the latest in a series of threats of retaliation by Tehran in response to the sanctions, which have heightened political tensions across the Middle East.
The Japanese parliament has passed a bill that would allow government guarantees on Iranian oil imports, effectively bypassing EU-led sanctions aimed at forcing Tehran to abandon its nuclear enrichment programme.
According to a source who spoke to Reuters on the condition of anonymity, the new law will take effect in seven days and will allow Japan to provide insurance coverage of up to $7.6 billion for Iranian oil exports bound for Japan.
