Forget OPEC, China Controls Oil Prices
Written by Tony Barnes on 2017-08-23
U.S. shale has taken a lot of headline space recently as the biggest headwind for oil prices and the highest stumbling block for OPEC’s efforts to prop them up by cutting production. Yet, there may be another factor that could bring down oil prices as soon as next year…China.China has been building a strategic crude oil reserve for the last decade, but the size of that reserve remains...(Read More)
The Next Oil Price Spike May Cripple The Industry
Written by Tony Barnes on 2017-08-21
Two diametrically opposed views dominate the current debate about where the oil price is heading. On the one hand, there is the view that the price of oil will be “lower for longer”, or even “lower forever”, as the electrification of transport will eat away at oil demand more and more while, at the same time, technological innovation (shale in particular) will greatly increase...(Read More)
Is Boone Pickens Is Wrong On Natural Gas?
Written by Tony Barnes on 2017-08-19
Bloomberg is attempting to make the case that Tesla’s CEO Elon Musk and cheap gasoline prices have driven natural gas away as an economically viable vehicle fuel. But that does not seem to be the case if you look at the role compressed natural gas (CNG) and liquefied natural gas (LNG) has been playing on a global level.Pickens is cited in the article for making the business case for natural...(Read More)
Are Investors Bailing On U.S. Shale?
Written by Tony Barnes on 2017-08-17
U.S. oil production continues to grow, with the EIA reporting a shocking jump in output last week.Total U.S. production rose to 9.5 million barrels per day (mb/d) for the week ending on August 11, up 79,000 bpd from a week earlier. That puts U.S. output at the highest level in nearly two and a half years. The U.S. shale industry has been adding new supply pretty much uninterrupted since late last...(Read More)
IEA: OPEC Must Extend Cuts To Balance Oil Markets
Written by Tony Barnes on 2017-08-15
U.S. shale is poised to outlast OPEC.It has long been the suspicion of many oil market analysts that the U.S. shale industry was likely too nimble for OPEC to really hammer it into oblivion. That proved to be the case after two years of low prices – shale production came off from peak levels, but held up through 2016.That was long enough to force OPEC’s hand. The deal that OPEC put in...(Read More)
Will Oil Markets Rebalance Before The OPEC Deal Expires?
Written by Tony Barnes on 2017-08-13
The oil market is still on track to rebalance, although the pace is “stubborn” and will still take some time, the IEA said in a new report.Market sentiment has been fickle throughout summer, and despite the recent plateauing of oil prices, the IEA reassured everyone in its new monthly report that things are still proceeding apace. For example, in the second quarter, global inventories...(Read More)
Have Oil Markets Reached A Tipping Point?
Written by Tony Barnes on 2017-08-11
Despite bullish conditions led by a huge drawdown in U.S. crude, oil prices were down at the end of the week following less than positive OPEC reports. (Click to enlarge)(Click to enlarge)(Click to enlarge)(Click to enlarge)(Click to enlarge)(Click to enlarge)(Click to enlarge)Oil prices were down at the end of the week on fears of lingering oversupply. The U.S. reported a strong drawdown in...(Read More)
Big Oil Might Be In Better Shape Than U.S. Shale
Written by Tony Barnes on 2017-08-09
For much of the past three years, the oil majors have struggled to adapt to the new reality of low oil prices, while at the same time, their smaller and nimbler rivals deftly pivoted to the ebbs and flows of oil price movements. Big Oil, it has been said, was ill-equipped to deal with $50 oil, dragged down by the enormous expenses on their billion-dollar megaprojects. Shale, on the other hand, was...(Read More)
Why Trump Won’t Tear Apart The Iran Nuclear Deal
Written by Tony Barnes on 2017-08-07
Last month, the U.S. government certified Iran’s compliance to the terms of the 2015 nuclear deal – a required approval mechanism that dictates the life or death of the deal, reviled by the White House’s new resident.“The Secretary of State is in the process as we speak of certifying to the Congress that the conditions that are laid out in the [Iran Nuclear Agreement Review...(Read More)