Crude Oil Falls Below $40 as Demand Drops Faster Than Supply
http://www.bloomberg.com/apps/news?pid=20601087&sid=aB8rgLpDzLFI&refer=home
1) Oil consumption will fall by 1 million barrels a day this year while the U.S., Europe and Japan face their first simultaneous recessions since the Second World War, Deutsche Bank AG predicted last week. U.S. stockpiles have climbed in 13 of the past 15 weeks, according to the Energy Department. OPEC members signaled last week that they would be cutting their sales to refiners in February.
âThe health of the global economy is the dominant consideration in the short term, and that is weighing down on prices,â said Harry Tchilinguirian, senior market analyst at BNP Paribas SA in London. âOPEC cuts may prove to be supportive in future but itâll take time for them to take effect.â
2) Saudi Aramco, the worldâs biggest state oil company, sent notices to refiners in Asia on Jan. 9 that it would lower crude supplies to Asia by around 10 percent in February. This was the third month the company had cut sales.
âAlthough OPEC have made substantial production cuts there is an overhang of prompt oil and until that is absorbed the market may not rally substantially,â Christopher Bellew, senior broker at Bache Commodities Ltd. in London.
OPEC may cut its production further should crude prices continue to decline, Iranâs OPEC Governor Mohammad Ali Khatabi said Jan. 11. OPEC is scheduled to meet next in Vienna on March 15. Iran is the groupâs second-largest producer, after Saudi Arabia.
3) Oil for March delivery is at a more than $5 a barrel premium to the front-month contract, while the April future is $9 above February-delivered supplies. The situation where near- term crude is cheaper than later-dated oil is called contango.
âThe curve is very steep, which is consistent with the view that the market tightens up in time and we get higher prices down the track,â said David Moore, a commodity strategist at Commonwealth Bank of Australia. âIt will take a while for those production cuts to eat away at inventories.â
4) Hedge-fund managers and other large speculators increased their net-long position in New York crude-oil futures in the week ended Jan. 6, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 76,658 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 12,110 contracts, or 19 percent, from a week earlier.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aB8rgLpDzLFI&refer=home
1) Oil consumption will fall by 1 million barrels a day this year while the U.S., Europe and Japan face their first simultaneous recessions since the Second World War, Deutsche Bank AG predicted last week. U.S. stockpiles have climbed in 13 of the past 15 weeks, according to the Energy Department. OPEC members signaled last week that they would be cutting their sales to refiners in February.
âThe health of the global economy is the dominant consideration in the short term, and that is weighing down on prices,â said Harry Tchilinguirian, senior market analyst at BNP Paribas SA in London. âOPEC cuts may prove to be supportive in future but itâll take time for them to take effect.â
2) Saudi Aramco, the worldâs biggest state oil company, sent notices to refiners in Asia on Jan. 9 that it would lower crude supplies to Asia by around 10 percent in February. This was the third month the company had cut sales.
âAlthough OPEC have made substantial production cuts there is an overhang of prompt oil and until that is absorbed the market may not rally substantially,â Christopher Bellew, senior broker at Bache Commodities Ltd. in London.
OPEC may cut its production further should crude prices continue to decline, Iranâs OPEC Governor Mohammad Ali Khatabi said Jan. 11. OPEC is scheduled to meet next in Vienna on March 15. Iran is the groupâs second-largest producer, after Saudi Arabia.
3) Oil for March delivery is at a more than $5 a barrel premium to the front-month contract, while the April future is $9 above February-delivered supplies. The situation where near- term crude is cheaper than later-dated oil is called contango.
âThe curve is very steep, which is consistent with the view that the market tightens up in time and we get higher prices down the track,â said David Moore, a commodity strategist at Commonwealth Bank of Australia. âIt will take a while for those production cuts to eat away at inventories.â
4) Hedge-fund managers and other large speculators increased their net-long position in New York crude-oil futures in the week ended Jan. 6, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 76,658 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 12,110 contracts, or 19 percent, from a week earlier.
