Oil tumbles towards crisis-era lows

[gearhead204]

yes it still baffles me as how cherry prices on my end can swing by as much as 60+ cents a pound, but the store price is several dollars a lb. and stays about the same every year..........hummmmmm. Some middle man is making a whole lot of money!!!!!

I need to find a 5000 gal fuel tank so I can take advantage of the whole fuel deal!

[kscarbel2]

Brent Crude Oil Dips Below $30 a Barrel for First Time Since 2004

Transport Topics / January 13. 2016

Brent oil dropped below $30 a barrel for the first time since April 2004 on speculation Iranian shipments will soon climb.

Crude fell 1.8% in London, and West Texas Intermediate oil was little changed in New York. A nuclear deal between Iran and world powers may be implemented by the time markets open Jan. 18, triggering sanctions relief for the Islamic Republic that paves the way for a surge in oil exports. Fuel prices tumbled after Energy Information Administration data showed U.S. gasoline supplies capped the biggest two-week gain on record.

"The spread between Brent and WTI is coming in because Iranian sanctions could be lifted as early as [Jan. 18]," said Bob Yawger, director of the futures division at Mizuho Securities USA in New York. "Additional Iranian barrels will have a much bigger impact on seaborne Brent than on WTI."

Futures in London have lost 19% this year as volatility in Chinese markets fueled a rout in global equities and on speculation that growing Iranian shipments will add to the global glut.

Brent oil slipped 55 cents, or 1.8%, to $30.31 a barrel on the London-based ICE Futures Europe exchange Jan. 12. It was the lowest close since April 2004. The contract touched $29.96. Total volume traded was 89% above the 100-day average at 3:18 p.m.

West Texas Intermediate crude for February delivery rose 4 cents to settle at $30.48 a barrel on the New York Mercantile Exchange. The contract sank to $29.93 on Jan. 12, the lowest since 2003. The U.S. benchmark crude closed at a 17-cent premium to Brent, up from a 42-cent discount at Jan. 12's close.

[Maddog13407]

so what?? god forbid it actually go down and we can actually survive and drive a 1/2 ton truck around or have a hot rod or an old Mack to enjoy rather than worrying about how much it will cost to fill the tank for worrying if we cant drive it much because its too bad on gas???

[gearhead204]

dang, I wonder what the price of fertilizer will drop to affordable levels?

[kscarbel2]

so what?? god forbid it actually go down and we can actually survive and drive a 1/2 ton truck around or have a hot rod or an old Mack to enjoy rather than worrying about how much it will cost to fill the tank for worrying if we cant drive it much because its too bad on gas???

Nikkei Asian Review / January 14, 2016

While the lowest crude oil prices in more than a decade should be a good thing for the U.S. and other energy-hungry nations, fears are growing that the global economy will be left worse off.

West Texas Intermediate was trading back above $30 a barrel Wednesday morning after slipping under that level for the first time in 12 years the day before. Even so, the U.S. benchmark remains well below the mid-$50 range that many companies and economists had been predicting.

This bear market could hurt the global economy in three ways.

First, the pain that oil-producing nations now feel could spread to advanced economies. Steelmakers are voicing anxiety over the prospect of oil field project delays or suspensions. Demand for the steel pipe used in well drilling is already down, and executives fear that it may worsen.

We can't simply rejoice over lower energy costs. There will be a negative impact on business in resource-producing nations.

The second way oil could slow global growth is through the financial markets. Falling share prices, rising developed-nation currencies and increased risk avoidance pose risks to real economic activity. So far, the disquiet in the markets has not spread. But it may yet depress consumer sentiment or make banks less eager to lend.

The third vector runs through the Middle East, where plunging oil revenues threaten to deepen the region's turmoil.

In oil-consuming nations, corporate earnings may get a boost, but amid slowing economic growth, the bulk of the savings will be banked rather than channeled into capital or consumer spending. A 10% fall in the price of crude translates to a 0.76% drop in global industrial output six months later.

Cheap crude looks to be here to stay for a while. The U.S. Energy Information Administration on Tuesday lowered its forecast for the average WTI price this year to $38.54 from $50.89. It sees the average price rebounding to only $47 next year.

Chinese demand for crude may have further to fall. American inventories of petroleum products are on the rise. On the supply side, some fiscally hard-pressed oil-producing nations have been forced to devalue their currencies as the dollar gains strength. This could end up discouraging production cutbacks by improving the profitability of their oil exports, analysts say.

Companies involved in the oil business naturally have greater reason to worry than others. Japanese trading house Mitsui & Co.'s fiscal 2015 forecasts assume an oil price of $56 a barrel in the October-March half. Every $1 shortfall cuts $22.7 million a year off its profit.

[GreenGiant2]

On my end in the earth work I have a costumer who has a large scrap yard. The price for scrap has fallen drastically and in turn I have lost revenue from them cause they are not doing improvements in the yard and I am not running my screen to retrieve the lost iron in the ground. The price of scrap follows the price of oil. I have not seen a increase in work from others since the drop in oil.

[thomastractorsvc]

because all of the commodity traders(speculators) are not making money hand over fist off the fears of global unrest any more does not mean that economy is going to collapse the way chicken little said the sky is falling. The oil market was over inflated bubble and the bubble burst. Give it a few little bit and the oil company's that holding there breath for a rebound in oil prices will start going back to work and instead of ExxonMobil and other oil company's making huge off the chart profits raping the consumer, things will get back to normal and the producers will start manipulating the supply and demand to drive the prices back up some.

The consumers will also start spending money that they now have from the lower gas prices and that should spur the manufacturing sector because Chinas economy is down because the Chinese labor costs have finally started hitting the manufacturing sector and US company's are now bringing jobs back due to the higher labor costs and transportation margins are getting close.

The thing that I am concerned about is the mega company's are starting to buy up competitors and forming monopolies, than there comes a point of to big to fail that will devastate the economy. Beer to oil to insurance to medicine

http://www.thefiscaltimes.com/Columns/2015/11/13/Mega-Danger-Mega-Deals-Monopolies-Are-Crushing-US-Workers-and-Consumers

[ranchhopper]

You can bet they are sitting around board room tables figuring out what crisis they can use to bump the prices back up or the good old standby were taking a refinery or two off line for maintenance that's what they used around here last year to generate a large price spike.

[kscarbel2]

Oil price wallows below $29

The Financial Times / January 18, 2016

Resumption of crude slide follows lifting of sanctions on Iran

Oil prices sank further below $28 early on Monday on fears the lifting of sanctions against Iran will push more supply on to a global market already grappling with overcapacity.

The renewed fall in prices, which sank below $30 a barrel on Friday and hit US stocks, dovetails with Implementation Day when the economic benefits of life unyoked by many international sanctions start to flow to Iran. Those include the ending of embargoes by western powers on oil imports.

The slide in oil prices pulled Asian equities lower, sending the Japanese stock market briefly into bear territory.

Brent crude, the international oil benchmark, shed as much as 4.3 per cent in Asian trading to $27.70 a barrel, the lowest since November 2003. That followed a 6.7% slump on Friday in New York and a decline of 13.7% for the whole of last week.

In the run-up to the start of European equities trading, Brent crude had recovered slightly but was still down 2% at $28.36, with Nymex WTI 1.9% softer at $28.86. It had fallen to $28.36, the lowest level since October 30, 2003.

Concern about additional Iranian barrels come as prices are already depressed by a supply glut due to the development of shale oil in the US and Opec’s refusal to curtail production.

Brent crude has now fallen 77.4% since closing at a record high $126.65 a barrel in April 2011. The drop was most precipitous in the second half of 2014 when prices went from above $100 to below $50 by January last year.

On Monday, Barclays made what it called a “significant” reduction to its price forecasts the year. The bank now expects Brent and WTI to average $37 in 2016, down from $60 and $56 respectively.

Kevin Norrish, an analyst, said: “The miserable start to the year for commodities markets has been exacerbated by heavy speculative selling on the basis of too much supply.”

“New year woes are now being compounded by preliminary data suggesting demand is weakening sharply as well.”

Barclays went on to warn that the “deflationary pressure” sparked by weakening oil prices could mean that the European Central Bank would take “further action” to loosen monetary policy, while a Bank of England move to tighten interest rates could be delayed into the fourth quarter of the year.

Analysts at HSBC expressed scepticism that benefits typically associated with lower oil prices, particularly for oil-importing nations around Asia, will flow through this time.

“Lower commodity prices, including oil, partly reflect weakening demand itself. In addition, the downturn in mining capex and the declining income of commodity producers is weighing on exports from Asia. So don’t expect the plunge in crude to lead to a swift bounce in Asian demand,” they said.

[thomastractorsvc]

Gas prices have fallen but nothing else has
According to these statistics
http://data.bls.gov/pdq/SurveyOutputServlet]http://data.bls.gov/pdq/SurveyOutputServlet
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=EMD_EPD2D_PTE_NUS_DPG&f=W

Everybody raises prices to cover the cost of transport and energy but never lower it also why is a motor oil not gone down???

Jan 2003
Diesel 1.50 gal
Gas 1.47 unleaded
Bread 1.04
Chicken 1.00 per pound
Milk 2.68 gal

[HeavyGunner]

Can someone please explain why low oil prices is a bad thing? Please explain it in layman's terms to someone who never had a day of Kollege in his life......All I know is that right now it's costing me less and less to feed my pickup and the wife's van, which is good because we both drive a lot for our jobs....So I don't unnerstan why all this so bad.....???

I've wondered the same thing. To me as an uneducated truck driver it would seem that fuel costing less SHOULD give trucking out fits a bigger margin and lower freight prices some which SHOULD mean lower retail prices for us the consumer who I turn has more of a disposable income because $4 gas isn't eating all the extra money up. So instead of the entire $4 going straight to fuel it can be divvied up among things like restaurants, movies, hobbies/toys or more fuel to go visit somewhere which boosts tourism. I just don't seem where affordable fuel hurts us other than the rich aren't getting richer as fast.

[blackdog2]

#1 .03 cent light iron .025 brought 7000 lbs cried the whole time while there complaining that it would bring in 70.00$ to bring it to the ship yard but has a new Volvo 10 wheeler sitting there .

[RedBullDog]

Diesel is down to $1.60 where I fill up. It's as low as $1.56 at other places. It would be nice if there was more to do while prices are lower, but a percentage of my better paying work is down for precisely this reason.

The rates on stuff I haul where I don't set my own rate are getting close to unprofitable, due to people thinking the rates should go down precipitously based on fuel alone. My other overheads haven't changed, except for insurance, that went up.

On a side note, last week Sandridge went in at Cherokee, a small town west of here a ways, and fired almost everyone at Lariat, an oilfield services branch of Sandridge. Two hundred and some more small town jobs gone.

[kscarbel2]

US crude drops below $40 a barrel

The Financial Times  /  August 2, 2016

Previously bullish hedge funds turn more negative as inventory of refined products swells

US crude hovered near the $40 a barrel mark early on Tuesday, while the global benchmark Brent was at three-month lows as higher output and exports from big producer countries weighed on market sentiment.

West Texas Intermediate, the US marker, dropped to as low as $39.82 late on Monday and was just above the $40 level in London on Tuesday.

The world’s leading energy bodies have said a rebalancing of supply and demand is well under way, but oil prices remain under pressure while previously bullish hedge funds are turning more negative.

Market participants also point to increasing production and exports from Opec countries, just as concerns rise about falling crude demand from refineries as refined products inventories swell.

“There was a temporary balance in the oil market. Now supplies that were disrupted have started to resume and the sharp downturn in US supply that was expected to balance the oil market looks shallower,” said Harry Tchilinguirian, global head of commodity markets strategy at BNP Paribas.

“There are doubts in the minds of even the most fervent bulls as to when the market fully comes into balance,” he added.

Brent reversed all the hefty gains it had early on Monday to finish 0.8 per cent lower at $42.14 - a level it was near early on Tuesday.

The price of Brent crude for delivery in October rose to $43.85 a barrel in morning trading, following the expiry of the September contract.

Both benchmarks were trading at levels last seen in mid-April and have dropped a fifth from their peak of $51 a barrel in June. A fall of more than 20 per cent is considered to be a bear market.

Hedge funds and other money managers added the equivalent of 56m barrels of extra short positions in Brent and WTI futures and options contracts in the week ending July 26. Bullish bets on crude are at their smallest in five months.

Bijan Zanganeh, Iran’s oil minister, on Monday said that although he expected supply and demand to even out, the oil market was still “oversupplied,” according to state television.

Of all Opec nations, Iran has provided the biggest rise in output as it pumps more oil and seeks a greater export market share after the lifting of western sanctions against its energy sector.

Mr Zanganeh said the Iranian government will ratify a new oil contract model this week to make way for international investment into the country’s energy sector.

Meanwhile, the head of Libya’s national oil company said on Sunday he welcomed the reopening of ports following a deal between the UN-backed government and a rebel force, saying it would prepare the way for a resumption of its disrupted exports.

Mustafa Sanalla said big military, political and legal obstacles remained in Libya, but the national oil company sought to “immediately start technical works, and we will mobilise workers as quickly as possible”.

Libya aims to boost exports to 900,000 barrels a day by the end of the year, Mr Sanalla said.

Separately, the state oil company for Saudi Arabia — Opec’s largest producer and the world’s top exporter — on Sunday reduced its export prices for Asian customers.

It cut the official selling price for the benchmark Arab Light grade for September-loading cargos by $1.30 a barrel to a discount of $1.10 compared with the Oman/Dubai benchmark.

That’s the sharpest cut in almost a year, which industry participants took to mean a more aggressive push for market share as it competed with other big producers, from Russia to Iraq and Iran.

The price reduction came ahead of an expected pullback in demand in October when Asian refinery maintenance season got under way.

In the US, oil companies added drilling rigs for a fifth consecutive week, according to services company Baker Hughes. The data published on Friday showed an increase of three rigs to 374 and made up the biggest monthly jump in more than two years.

[kscarbel2]

Diesel and gasoline prices keep declining

Fleet Owner  /  August 2, 2016

EIA also expects gasoline prices to keep falling due to rising production and inventories.

National average retail pump prices for both diesel and gasoline continued falling this week, according to data tracked by the Energy Information Administration (EIA), mirroring price declines for both fuels on a regional basis across the U.S.

Diesel dropped 3.1 cents to a national average of $2.348 per gallon, the agency said, which is 32 cents per gallon cheaper compared to the same week in 2015.

Prices for diesel declined in every region of the country as well, EIA pointed out, with the biggest declines occurring in:

• The West Coast (when not including California): down 4.4 cents to $2.492 per gallon. With California’s prices included, that changes to a 3.3 cent decline to $2.63.
• The Central Atlantic: down 4 cents to $2.441.
• New England: down 3.8 cents to $2.396.
• The Midwest: down 3.7 cents to $2.304.

Gasoline fell as well this week, dipping 2.3 cents to a national average of $2.159 per gallon, which is 53 cents per gallon cheaper compared to the same week last year.

Prices for gasoline declined across the board on a regional basis in the U.S. as well this week, EIA said, with the biggest declines occurring in:

• The West Coast (when including California’s prices): down 5.6 cents to $2.614 per gallon. When not including California, prices on the West Coast dropped 3.8 cents to $2.421 this week.
• New England: down 4.1 cents to $2.168.
• The Gulf Coast: down 3.6 cents to $1.944 per gallon.

EIA also emphasized that gasoline prices may enjoy further declines in the near future.

The agency said the U.S. gasoline front-month futures crack spread has declined in recent months due to increased U.S. gasoline production and inventories. In June, the reformulated “blend stock” for oxygenate blending (RBOB)-Brent crack spread hit 37 cents per gallon, which is 18 cents per gallon below the June 2015 level and slightly lower than the five-year average.

The recent trend of declining gasoline crack spreads extends beyond the U.S., as unlike in 2015 when gasoline crack spreads in some regions worldwide rose to match or set new recent record highs, spreads in 2016 are now significantly below last year’s levels and are generally closer to their respective five-year averages.

For although gasoline consumption is “robust” in countries such as the U.S., China, and India, EIA stressed that gasoline crack spreads reflect supply conditions – and growth in gasoline supply has exceeded the increase in gasoline consumption since last summer.

Refineries in the U.S., Europe, and Asia all increased production of gasoline compared with distillate to take advantage of the high gasoline crack spreads that occurred back in 2015 and in early 2016.

That means this shift toward increased gasoline production is resulting in high gasoline inventory levels globally, according to the agency; levels that remain consistently above the five-year average, it said.

In the U.S., for example, gasoline inventories in Petroleum Administration for Defense District (PADD) 1 – the location of the New York Harbor trading hub – were 14.3 million barrels higher than the five-year average level as of July 22.

Thus based on projections for U.S. gasoline and distillate production in the EIA’s Short-Term Energy Outlook, the U.S. gasoline-to-distillate production ratio is expected to remain elevated through the summer, the agency emphasized – which could keep inventory levels high and put further downward pressure on domestic gasoline crack spreads for next few months.

[grayhair]

And yet we still subsidize ethanol...

[HeavyGunner]

10 hours ago, grayhair said:

And yet we still subsidize ethanol...

And the Middle East, and on top of that let them control the oil market here.