Saudi Arabia, the world’s largest oil producer, now seems to be moving to Phase 2 of its efforts to achieve a $75 – $100bbl price range. As the blog noted in early December, the Saudis’ initial tactic was to play ‘hardball’ within OPEC. The aim was to ensure that other countries did not try to […]
Chemicals and the Economy
IEA revises down oil demand
The International Energy Agency (IEA) has cut its estimate of expected global GDP growth in 2009 to just 1.2%. It therefore expects the world to record its first back-to-back annual decline in oil demand since 1982/3. It says oil production last month was unchanged at 86.2mbd, despite OPEC cutbacks and the first fall in Russian […]
Oil hits $34/bbl
The blog’s oil price forecasts have had a stellar record this year. Last month, with its $70/bbl forecast having been realised, the blog continued to worry about downside risk: “If refiners are forced to cut runs for December, then it would be hard for OPEC to cut its own production quickly enough to compensate. In […]
Saudi plays hard-ball on oil prices
A month ago, with WTI at $70/bbl, the blog suggested that: “If refiners are forced to cut runs for December, then it would be hard for OPEC to cut its own production quickly enough to compensate. In that case, a $20 – $30/bbl range for crude, albeit temporarily, would not be impossible.” During November, prices […]
IEA says “world’s energy system at crossroads”
The International Energy Agency (IEA) is the global energy watchdog. Its new annual report, just published, says “the world’s energy system is at a crossroads”, and adds that “current global trends in energy supply and consumption are patently unsustainable”. As examples, it highlights: • The world will need 45 mb/d of new capacity (4 times […]
Oil producers at a crossroads
The blog has been thinking about last week’s leaked report from the International Energy Agency (IEA). This said that the world needs “to invest $360bn each year until 2030 to replace falling oil production and increase supply”. The IEA based this sum on a new analysis of 500 oilfields, which showed the current depletion rate […]
OPEC cuts production, worries about demand
Two main factors weigh on oil markets. The first, as PetroMatrix note in their latest weekly report, is that speculative players in virtually all commodity markets are being forced to deleverage their positions, and so “the bottom will be dependent on the end of the firesale”. The other factor is the continuing fall in demand. […]
Oil futures focus on $50/bbl for December
Futures markets are taking an increasingly gloomy view of oil demand. And over the past 2 weeks, the volume of NYMEX contracts to sell crude at $50/bbl has soared 50-fold. But so far, as the blog expected, physical prices have stabilised at the $70/bbl level in advance of OPEC’s emergency meeting on Friday. Current OPEC […]
OPEC bites the bullet
Events have moved quickly in oil markets in recent days. Last week, when oil was at $80/bbl, the blog argued that OPEC risked having to defend a $50/bbl price, by delaying production cuts until its 18 November meeting. Last night, OPEC signalled it agreed with this analysis, announcing that the meeting would now take place […]
OPEC tries to hold $70/bbl oil
OPEC has called an emergency meeting for 18 November to discuss measures to combat collapsing oil prices. But as the blog noted last week, by then they could be looking to defend $50/bbl. And it seems Saudi Arabia agrees. Market reports suggest ‘the world’s top oil exporter has already started cutting oil supplies to European […]
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