Category

Oil

Oil Prices Look to Top $150 by Midsummer On Resilient Demand and MENA Turmoil

Money Morning predicted in its 2011 Outlook series that oil prices would see $100 a barrel by summer. And that's proven to be true – but not entirely for the reasons we discussed.

In addition to the increased demand we talked about in January, violence in the Middle East and North Africa (MENA) has driven oil prices into the stratosphere. The price of light, sweet crude climbed above $112 a barrel last week, up more than 22% from where it started the year.

A recent pullback has driven prices back down to about $107 a barrel, but don't be fooled. Strong demand in emerging markets, a weak dollar, political turmoil in the MENA region, and a strong speculative sentiment will continue to push oil prices higher.

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How to Profit if the Nigeria Elections Drive Up Oil Prices

Oil prices are on the rise for a bevy of reasons – soaring demand in emerging markets, the weak dollar, and a strengthening U.S. recovery, to name a few.

However, supply disruptions and civil unrest in the Middle East-North Africa (MENA) region in recent months have had the biggest impact on oil prices. Egypt, Libya and Yemen have all played a part in driving up oil prices, and now they're about to be joined by another volatile oil producer.

I'm talking about Nigeria.

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Libyan Rebels May Oust Gadhafi, but the Fight Against Higher Oil Prices is Lost

Information has surfaced that forces opposing Libyan leader Moammar Gadhafi secured the major oil towns of Brega and Ras Lanuf (both port cities on the Mediterranean).

The Libyan rebels now control oil fields producing between 100,000 and 130,000 barrels a day, and they say that will quickly increase to 300,000, with exports renewing in a week. That higher figure would account for about 19% of daily exports from Libya before the unrest started.

To the extent that anti-Gadhafi forces can secure the oil fields presently under their control, at least some of those exports should begin to flow again.

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Libya Civil War: Saudi Oil Surplus Won't Stop $300 Oil Prices

As the autocratic rule that has dominated the Middle East for decades continues to unravel, volatility in the global oil markets points toward one overriding concern: How can we maintain an oil-flow balance in the face of this escalating uncertainty? Global oil prices are posting their highest levels since the speculative frenzy of 2008 drove […]

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Mideast Crisis and Higher Oil Prices Could Pour Profit into Venezuela's Economy

Libya turmoil continued this week as Col. Moammar Gadhafi's troops tried to chase rebel forces out of cities housing key oil facilities. The pro-government regime wants to regain cities with oil operations, many of which rebels took over in the first days of fighting.

Attacks Wednesday also destroyed one oil facility's diesel oil storage tank and pipeline. Shukri Ghanem, Libya's de facto oil minister and the chairman of Libya's National Oil Corp., said no major oil installations were damaged in the explosion, but the fighting has disrupted a number of oil and natural gas facilities around the country.

Libya's oil exports have fallen to 500 million barrels a day from 1.6 billion since the country's conflict erupted, according to Ghanem. Libya hopes to resume fulfilling its oil contracts as soon as the political crisis subsides.

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Oil Patch Outlook: Oil's March Madness a Boost for Refiners

March Madness is still a few weeks away for college basketball fans, but the madness of March is in full swing for the oil sector. Turmoil in the Middle East sent oil prices up more than 6% last week – following a 5.2% gain in February. We also happen to be entering a time of year that has historically been good for energy prices and energy equities in recent decades.

Going back nearly 30 years – as the preceding graphic illustrates – March has been the best month for crude oil. By the end of the month, the price of oil is nearly 4% higher on average than the closing price on the last trading day of February.

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Oil and Gold Prices Surge as Speculators Bet Billions Shorting the Dollar

Oil reached a 29-month high (yesterday) Monday morning in London and gold hit an intraday record as investors sought to hedge against inflation and traders bet billions shorting the dollar.

Brent crude futures contracts in London gained 0.1% yesterday to close at $116.11 a barrel, pushed higher by the Middle East crisis disrupting the oil supply. Crude for April delivery was up 0.9% to $105.36 in Monday afternoon trading on the New York Mercantile Exchange (NYMEX).

Fighting in Libya so far has reduced the country's oil output by 1 million barrels per day.

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Mideast Crisis Turns Attention to Saudi Arabia Oil Supply

Libya's political turmoil yesterday (Thursday) continued to rage near the country's important oil patch cities, as Col. Moammar Gadhafi's military fought to secure ports and refineries.

Libya's government tried to portray a sense of security to foreign reporters who toured the Zawiya Oil Refinery Co. yesterday, even as rebel forces remained in place throughout the surrounding city.

Rebels also infiltrated Brega, an oil port in eastern Libya, as government warplanes struck the site, according to the Associated Press.

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$130 Oil Could Be Just the Beginning as Libya Crisis Intensifies

With rising violence in Libya looking increasingly like a war, the head of Libya's national oil company said yesterday (Wednesday) that crude prices could reach $130 a barrel within a month.

But that may be just the beginning, as other analysts have raised fears of oil prices topping $200 and even $300 a barrel.

"The oil market is very sensitive," Shokri Ghanem, chairman of Libya's National Oil Corporation, told Reuters. "Speculation is very important for the market. When you see that production in an important country went down you are afraid it will go down even more."

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Mideast Crisis Update: Don't Count on the Saudi Oil Supply

As the autocratic rule that has dominated the Middle East for decades continues to unravel, volatility in the global oil markets continues to point toward one overriding concern: How can we maintain an oil-flow balance in the face of this escalating uncertainty?
Global oil prices spiked to their highest levels in more than two years on Friday because of worries that the unrest and resulting production curbs in Libya would spread to other oil-exporting countries.
Oil prices retreated a bit yesterday (Monday) in the aftermath of several developments that investors perceived as positive. In the first, reports said that Libyan protesters were allowing oil shipments to resume from certain parts of the country. And in the second, Khalid Al-Falih, the head of state-owned Saudi Aramco, said that that "all incremental needs" for extra oil have been met.
Of course, even with the Saudi oil supply pledge, these developments offer only a momentary respite in the Mideast crisis. Almost two-thirds of the world's known conventional oil supplies are located in the Middle East region. And the question that isn't being answered – or even asked – right now is this: Are oil supplies sustainable in the face of a longer-term crisis?
The answer to that question will leave you feeling less than sanguine.
<<BREAK HERE>>To understand why this crisis is worse than most believe, please read on…

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