Oil prices rise as US output drops

[webfact]

Oil prices rise as US output drops

BANGKOK, 2 April 2015 (NNT) - Thai Oil Group reports a rise in crude oil prices after US output drops while Iranian nuclear talks continue.

Thai Oil Group has reported that the West Texas Intermediate crude oil rose $2.49 to $50.09 per barrel while Brent Crude went up $1.99 to $57.10 per barrel on the New York Mercantile Exchange. Prices rose after the US Energy Information Administration disclosed that the country’s crude oil output slipped for the first time since January, 2015, by 0.4 percent to 9.4 million barrels per day.

President of Houston-based Lipow Oil Associates Andrew Lipow foresaw that the three-month drop in output foreshadows an upcoming trend in declining output stemming from the drop in US oil rig counts, despite US crude oil reserves increasing by 4.8 million barrels last week to 471.4 million barrels.

Despite the prolonged nuclear talks between Iran and six major countries in Lausanne, Switzerland, Iran insists on developing clean nuclear power in order to stimulate its economy and calling for the lifting of sanctions.

Since 2011, the country has been able to export only one million barrels of crude oil per day. Iran has approximately 30 million barrels in crude oil reserves stored in its VLCC-class oil tanker operated by National Iranian Tanker Company as well as unknown amounts deposited in china. A rise in oil exports by Iran would help drive down the prices of crude oil prices.

-- NNT 2015-04-02

[Suradit69]

Prices are affecting by news, but they change because of speculators changing their positions from long to short or vice versa.

Despite claims that oil stored is at record highs and domestic production is being curtailed in the US , they are still importing (more expensive) oil at about 7 million barrels a day. Certainly some of this is due to contractual obligations, but pricing is more to do with speculation and manipulation than market realities.

Major oil benchmarks have seen some pretty wild swings so far into the current trading year. Medium term market forecasts remain broadly bearish. That has triggered a markedly evident oil storage rush as traders look to play contango, i.e. an expectation that the oil price would be higher in the future relative to where it is currently trading at.

The game, despite being potentially tricky, is nothing new. In plain vanilla terms, the idea revolves around buying crude oil at current prices, paying for storage for a fixed period of time and selling it at a higher price later thereby recouping costs and making a profit.

http://www.forbes.com/sites/gauravsharma/2015/02/13/oil-storage-rush-takes-two-to-play-contango/

[impulse]

US crude oil reserves increasing by 4.8 million barrels last week to 471.4 million barrels.

Poor choice of words. 471 Million would be crude oil stocks, which is crude oil already in storage.

Crude oil reserves are in the neighborhood of 30 Billion barrels- and that's the amount of oil still in the ground, recoverable under today's price and cost of production (give or take).

http://www.eia.gov/petroleum/

[rotary]

With the regulations on Fracking that Obama put in place expect more dropping of production in the USA

[AlphMichaels]

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With the regulations on Fracking that Obama put in place expect more dropping of production in the USA

The recent regulations are minimal and on federal land ONLY. Long past due and absolutely not enough. Watered down due to GOP efforts to keep lining their pockets with big oil dollars, most revolve only around how waste water is treated. In other words, they can't dig a hole in the ground and put the waste water in it to seep back into the water table. They must store it in tanks.

But at the end of the day, it's not enough as it affects only about 10% of natural gas and less than 5% of petroleum fracking.

But be careful..., Obama is going to take away your guns.

[elgordo38]

Prices are affecting by news, but they change because of speculators changing their positions from long to short or vice versa.

Despite claims that oil stored is at record highs and domestic production is being curtailed in the US , they are still importing (more expensive) oil at about 7 million barrels a day. Certainly some of this is due to contractual obligations, but pricing is more to do with speculation and manipulation than market realities.

Major oil benchmarks have seen some pretty wild swings so far into the current trading year. Medium term market forecasts remain broadly bearish. That has triggered a markedly evident oil storage rush as traders look to play contango, i.e. an expectation that the oil price would be higher in the future relative to where it is currently trading at.

The game, despite being potentially tricky, is nothing new. In plain vanilla terms, the idea revolves around buying crude oil at current prices, paying for storage for a fixed period of time and selling it at a higher price later thereby recouping costs and making a profit.

http://www.forbes.com/sites/gauravsharma/2015/02/13/oil-storage-rush-takes-two-to-play-contango/

The reason they are importing more oil is that it is of the heavy variety that refineries have retooled at great expense to handle. Most of the oil produced in the USA in recent years is of the light sweet variety. They are now in a Catch 22 or is it 44? position. That is why oil companies now want export licenses for the light oil. That also is why Canada who is supposed to be a close friend of the USA (although you would not think so with the way OBama has fiddled with the Keystone pipeline project) wants to send more heavy crude to the southern refineries. Before the shale oil revolution the Americans could not get enough Canadian "dirty" oil and could not kiss their a*s enough. Now with the shale oil revolution the American's are alienating Canada but that will all change again when they come hat in hand looking for fresh water from us. They no doubt already have a plan to drain the Great Lakes (if we are stupid enough to let them) Looking at what is happening in California that day is not far off. If we give them fresh water they will soon be back to their wasteful ways.

[The Deerhunter]

Prices are affecting by news, but they change because of speculators changing their positions from long to short or vice versa.

Despite claims that oil stored is at record highs and domestic production is being curtailed in the US , they are still importing (more expensive) oil at about 7 million barrels a day. Certainly some of this is due to contractual obligations, but pricing is more to do with speculation and manipulation than market realities.

Major oil benchmarks have seen some pretty wild swings so far into the current trading year. Medium term market forecasts remain broadly bearish. That has triggered a markedly evident oil storage rush as traders look to play contango, i.e. an expectation that the oil price would be higher in the future relative to where it is currently trading at.

The game, despite being potentially tricky, is nothing new. In plain vanilla terms, the idea revolves around buying crude oil at current prices, paying for storage for a fixed period of time and selling it at a higher price later thereby recouping costs and making a profit.

http://www.forbes.com/sites/gauravsharma/2015/02/13/oil-storage-rush-takes-two-to-play-contango/

I understand people have tried this with rubber, rice & other cereal crops, silver & wool among other commodities and have had some spectacular losses. Lets hope they lose with oil too.

[blazes]

As early as 1985, still in the Cold War, a colonel in the Canadian armed forces told me that the true enemy of Canada was to the South, not the North.

Why?

Because, he estimated, by roughly 2040, the Americans would be putting pressure on Canada to engineer the turning around of rivers, causing one or more of those draining into the Arctic to be re-directed towards California (to name only one state).

The Canadian army would, in the event that the Canadian government said "eff off" to Washington, only be able to defend one Canadian city from invasion....either Vancouver OR Toronto OR Montreal.

Looks like the future is already upon us...

[Pigdog474]

As early as 1985, still in the Cold War, a colonel in the Canadian armed forces told me that the true enemy of Canada was to the South, not the North.

Why?

Because, he estimated, by roughly 2040, the Americans would be putting pressure on Canada to engineer the turning around of rivers, causing one or more of those draining into the Arctic to be re-directed towards California (to name only one state).

The Canadian army would, in the event that the Canadian government said "eff off" to Washington, only be able to defend one Canadian city from invasion....either Vancouver OR Toronto OR Montreal.

Looks like the future is already upon us...

Not surprised, American policy, OK for 1,000 foreigners (Canadian, British, Mexican's etc.) to die so one American may live.

[Soutpeel]

Tail end of this year into early next year back USD 100 plus a barrel, even read an article by one economist predicting USD 200 barrel in the coming years