The Economist (December 10)
“For the first time since oil prices plunged in 2014, Big Oil is putting its head above the parapet to seek substantial new sources of crude that will tide it through the 2020s.” While this signals renewed confidence, the players remain extremely cost conscious, with the aim of staying lean to maintain profitability even if oil stays stuck around $50 per barrel.
Tags: Big oil, Confidence, Cost conscious, Crude, Lean, Oil, Plunge, Prices, Profitability
Wall Street Journal (September 26)
“As the oil bust shows little sign of reversing, independent refiners in China have emerged as perhaps the most important, and little-known, force in oil markets today.” Known as “teapots,” these refiners accounted for the vast majority of the 13.5% surge in imports this year by China, which now rivals the U.S. as world’s largest crude importer.”
Institutional Investor (April 23)
“Rate announcements by the Federal Reserve and the Bank of Japan will loom large this coming week as investors consider the alternate reality of negative interest rates. Meanwhile, key economic indicators for onetime BRIC stars Russia and Brazil will arrive as each suffers from the weight of low oil prices and Brazil deals with domestic political intrigue surrounding the impeachment of President Dilma Rousseff.”
Tags: Announcements, BOJ, Brazil, BRICS, Economic indicators, Fed, Impeachment, Negative interest, Oil, Rates, Rousseff, Russia
Financial Times (February 18)
The conditional deal between Saudi Arabia and Russia delivered “maximum rhetorical impact for the minimum genuine commitment.” Ultimately, it “will not take a single barrel of oil off the market to ease the glut that has driven crude prices down about 70 per cent since the summer of 2014.” The deal reveals “nervousness among the world’s two largest oil producers. But the fact that Saudi Arabia is not already cutting its output, in spite of mounting signs of financial strain, shows that while its strategy might be painful, it is still rational.”
Tags: Deal, Financial strain, Glut, Market, Oil, Output, Producers, Rational, Russia, Saudi Arabia, Strategy
The Economist (January 23)
Oil price slumps usually do “the world a power of good. The rule of thumb is that a 10% fall in oil prices boosts growth by 0.1-0.5 percentage points.” This time, however, the abrupt 75% drop in the price of oil is testing the old paradigm. “Producers are suffering grievously. The effects are spilling into financial markets, and could yet depress consumer confidence. Perhaps the benefits of such ultra-cheap oil still outweigh the costs, but markets have fallen so far so fast that even this is no longer clear.”
Tags: Benefits, Consumer confidence, Costs, Growth, Markets, Oil, Price slumps, Producers, Suffering, Ultra cheap
The Economist (January 16)
“Since the new year, the price of oil has surprised even the most bearish punters, plunging by 18%.” With prices already dipping below $30 a barrel, few know how low oil will go or when prices will begin to recover. Analysts have placed the bottom as low as $10, with April deliveries calculated at “anything from $25 to $56 a barrel.” The only thing everyone agrees on is that current supply vastly outstrips demand.
Wall Street Journal (November 25)
In the U.S., “the pressure on corporate profits may last longer than expected.” Many have attributed the contraction in corporate profits to temporary trends, namely “the weakness in the commodities sector, which is ravaging profits at energy companies, and the strong dollar, which is putting pressure on multinationals.” Though reassuring, “the problem with those dismissals is that oil may not be done going down, and the dollar may not be done going up.”
Tags: Commodities, Contraction, Corporate profits, Dollar, Energy, Multinationals, Oil, Pressure, Trends, U.S.
Bloomberg (November 25)
“Surging U.S. crude stockpiles that have filled storage tanks near capacity are widening the discount on immediate oil deliveries.” Known as contango, this discount may reach the stage of “supercontango” and is unlikely to go away soon.
Tags: Contango, Crude, Discount, Immediate deliveries, Oil, Stockpiles, Storage, U.S.
USA Today (November 9)
“Innovation is the key to moving from dirtier fuels to cleaner ones.” To the joy of environmentalists, President Obama rejected the proposed Keystone pipeline to carry oil from Canadian tar sands to the U.S. “The main factor behind Obama’s decision is something environmentalists hate even more than Keystone: hydraulic fracturing, or fracking,” which has added over 3.5 million barrels per day to U.S. domestic production. “The lesson for climate change is obvious… If we want to keep oil (and coal) in the ground, we need to make other forms of energy cheaper. That means nurturing technologies such as natural gas extraction. It also means promoting another technology that environmentalists love to hate: nuclear energy.”
Tags: Canada, Climate change, Coal, Environmentalists, Fracking, Fuel, Innovation, Key, Keystone, Nuclear energy, Obama, Oil, Pipeline, Tar sands, Technologies
Financial Times (September 27)
“It is disappointing that Mr Abe chose last week not to redouble his efforts,” especially on the third arrow of structural reform, “but instead promulgate three newer arrows: ‘strong economy’, ‘support for families’ and ‘social security’. Anything that confuses his original, and clearer message risks undermining its goals.” Moreover, his original program has been working. “Japan is no longer the deflationary outlier — virtually every developed country has seen negative inflation following the recent oil price falls. When this effect is stripped out, Japan’s CPI has been growing at between 0.5 and 1 per cent, well above its previous rate.”
Tags: Abe, CPI, Deflationary, Economy, Families, Japan, Negative inflation, New arrows, Oil, Social security, Structural reform, Undermine
