Oil Prices Are Falling

STEFANO POZZEBON

 NOV. 11, 2014

Brent oil hit a 4-year low Tuesday, slumping to $81.86 a barrel. This breaks last week’s low of $81.92. Brent crude is now trading at $82.61.

Investing.com

Crude oil hit a day low of $76.50, before jumping back and is now trading at almost $77. Last week, it hit a two-year low of $76.42.

Investing.com

Last week, Saudi Arabia, the leading country of the OPEC cartel, made clear that it was ready to let the crude price slip to this levels in order to defend its share in the US energy market. Offshore producers, like the OPEC countries, see their exports damaged by the boom of shale oil in the continental US, which is putting the States on the path of energy independence. 

SCHORK: Oil Prices Will Be Dictated By The New Middle East 'Powder Keg'

AP

 Sep. 13, 2012

AP

Oil traded above $97 a barrel Thursday after attacks on U.S. diplomatic missions and the killing of the U.S. ambassador to Libya sparked new worries about unrest in the Middle East.

By early afternoon in Europe, benchmark crude was up 25 cents at $97.26 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 16 cents Wednesday to end at $97.01 per barrel in New York.

In London, Brent crude was down 8 cents at $115.25 a barrel on the ICE Futures exchange.

Ambassador Chris Stevens and three other Americans died after an attack on the U.S. diplomatic facility in Benghazi on Tuesday. The attack in Libya came hours after a mob stormed the U.S. Embassy in Cairo and tore down the U.S. flag. On Thursday, protesters stormed the American embassy in Yemen.

Analysts said the while impact of the attacks on oil prices had been subdued thus far, risks were on the rise.

"The fact that all of this is occurring without a price impact on oil shows that a geopolitical premium is already priced in," said Olivier Jakob of Petromatrix in Switzerland. "We need however to keep in mind that due to the sanctions on Iran there is absolutely no room for another disruption in any oil producing country."

Oil analyst Stephen Schork said in an email commentary that he expects "the fundamental picture to be overtaken by the powder keg that was ignited yesterday in Libya ... we will be keeping a close eye on tension in the region."

Traders were also awaiting the end of a two-day Federal Reserve policy meeting at which central bankers were widely expected to announce new steps to help the flagging U.S. economy.

Should the Fed fail to announce the awaited measures, "we may see crude prices unwind some of their recent gains as the dollar corrects higher," said a report from Sucden Financial Research in London. A stronger dollar makes crude more expensive and a less attractive investment for traders using other currencies. Early Thursday, the euro was up to $1.2911 from $1.2900 late Wednesday in New York.

In other trading on the Nymex, heating oil fell 0.65 cents to $3.2217 per gallon. Wholesale gasoline dropped 0.76 cent to $2.994 per gallon. Natural gas lost 2 cents to $3.043 per 1,000 cubic feet.

BofA: Here Are 4 Ways A Greek Exit From The Euro Could Shock Oil Prices

Rob Wile

 May 24, 2012

hooktothejaw via flickr

We recently covered GasBuddy.com's Patrick DeHaan's take on what effect a Greece exit from the Eurozone would have on oil prices.

Last week, Bank of America Merrill Lynch's Francisco Blanch went one step further, laying out the effect of four Euro-crisis resolution scenarios, ranging from mild to burn-your-mouth, on oil prices:

• Scenario 1 Greek package renegotiation: "Greece accepts modest revisions to the austerity programme (including relaxation of debt/GDP targets) and stays in EUR in return for more proactive growth stimulus from the Eurozone."

Impact: $120/bbl Brent & $110/bbl WTI

• Scenario 2 Face-off with Greece where exit is explored but does not materialize: "Non-pro European government will materialize after elections which will drive Greece to the brink of disorderly bankruptcy as the government attempts to broker a new funding deal which is better for Greece but untenable  for the IMF/EU/ECB."

Impact: $100/bbl Brent & $80/bbl WTI.

• Scenario 3 Disorderly Greek Euro exit, but other members remain in Euro: "Disorderly Greek default and exit of Eurozone as current funding run out between June and July (on our economists' estimate). Some contagion to the Eurozone through the European banking sector, however, other Eurozone members remain in the Euro."

Impact: $80/bbl Brent & $65/bbl WTI.

• Scenario 4 Disorderly broad Eurozone break-up: "Greek exit leads to vast contagion and bank funding freezes in the Eurozone and results in other countries leaving and the eventual break-up of the Eurozone into a number of new domestic currencies."

Impact: $60/bbl Brent and $50/bbl WTI for two years.

Oil Prices Dip Below $100, Hitting Three-Month Low

Rob Wile

 May 4, 2012

Wikimedia Commons

Oil prices fell below $100 barrel for the first time in three months.

This is coming on the tail of a week of excructiatingly mixed job reports.

As we reported this morning, the BLS says just 115,000 jobs were created in April — well below analyst consensus estimates of 160K.  

And earlier this week, ADP reported a similar figure of 119K jobs added. 

Plus, the labor force is now at its lowest level since 1981.

But with the EIA reporting this week that crude inventories were in line with expectations, don't expect this to last too long — producers will now almost certainly scale back supplies.