Last week started with a flurry of speculator optimism deriving from the World Energy Congress in Istanbul during which the Russians backed Saudi efforts to raise prices using a production freeze, the details of which have yet to be determined. For the rest of the week, oil prices moved little as various reports affecting the oil markets showed that it is unlikely that a significant OPEC/Russian production agreement can be negotiated. The week ended with New York futures settling at $50.35 and London at $51.95. Most analysts do not expect any significant change in prices until the fate of the freeze becomes known around the end of November. In the meantime, technical exchange meetings will take place to see if an agreement can be worked out. Recent and projected increases in OPEC production make it likely that considerably larger production cuts than were agreed to at Algiers will be necessary to move prices higher. Goldman Sachs warned last week that the planned Russian/OPEC production freeze is unlikely to be enough to rebalance the markets in 2017.
Archive for October, 2013
On October 19, 1973, the Organization of Arab Oil Exporting Countries (OAPEC) proclaimed an embargo of oil exports to the United States, in response to U.S. support for Israel in the 1973 Arab-Israeli War. The embargo, which was accompanied by cuts in overall production by OAPEC countries, lasted until March 1974. Oil prices shot up […]
By Tom Whipple 1. Oil and the Global Economy New York oil prices fell last week during volatile trading, closing Friday at $102.02 amidst concerns about the US government shutdown and the possibility of a US debt default later this week. London crude, however, which is more concerned with problems in exports from Libya and […]
By Tom Whipple 1. Oil and the Global Economy The price drop which began in early September continued through last Tuesday, but reversed on Wednesday following the news that the southern leg of the Keystone pipeline would be opening before the end of the year. New York oil traded around $103 on Thursday, then on […]
By Steve Andrews. Early last week, Shell Oil announced it was shutting down its oil shale research project in western Colorado. Combine their departure with Chevron’s exit back in February 2012 and you can count another nail in oil shale’s coffin. Yet since this unconventional resource ranks among the largest in the world, estimated by […]
By Tom Whipple 1. Oil and the Global Economy Oil prices were little changed last week with New York crude trading around $103 a barrel and London around $108. While several of the usual factors moved prices last week – stronger Chinese manufacturing numbers, a falling dollar, and a rebound in Libyan exports – most […]