Who benefits from the price drop?


Any motorist can tell you that gasoline prices have dropped. Diesel, heating oil and natural gas prices have also fallen sharply.

The latest drop in energy prices — regular gas nationally now averages $2.22 a gallon, roughly down about 50 cents from the same time a year ago — is also disproportionately helping lower-income groups, because fuel costs eat up a larger share of their more limited earnings.

Households that use heating oil to warm their homes are also seeing savings.

Why did the price of oil drop in the first place?

This a complicated question, but it boils down to the simple economics of supply and demand.

United States domestic production has nearly doubled over the last several years, pushing out oil imports that need to find another home. Saudi, Nigerian and Algerian oil that once was sold in the United States is suddenly competing for Asian markets, and the producers are forced to drop prices. Canadian and Iraqi oil production and exports are rising year after year. Even the Russians, with all their economic problems, manage to keep pumping at record levels.

There are signs, however, that production is falling because of the drop in exploration investments. RBC Capital Markets has calculated that projects capable of producing more than a half-million barrels a day of oil were canceled, delayed or shelved by OPEC countries alone last year, and this year promises more of the same.

Recently, oil companies in Canada severely pulled back or stopped pumping altogether after a forest fire devastated the oil sands region. Production there dropped by a million barrels a day, roughly 40 percent of the area’s output.

Rebel attacks in Nigeria have also curtailed supplies in that region.

These fluctuations, however, may be short-lived.

On the demand side, the economies of Europe and developing countries are weak and vehicles are becoming more energy-efficient. So demand for fuel is lagging a bit, although there are signs that demand is growing in the United States.

The oil industry, with its history of booms and busts, has been in its deepest downturn since the 1990s, if not earlier.

Earnings are down for companies that made record profits in recent years, leading them to decommission more than two-thirds of their rigs and sharply cut investment in exploration and production. Scores of companies have gone bankrupt and an estimated 250,000 oil workers — roughly half in the United States — have lost their jobs.

The cause is the plunging price of a barrel of oil, which at one point fell more than 70 percent compared with June 2014 levels.

Prices have recovered a few times over the last year, and lately Brent crude crossed the $50-a-barrel threshold for the first time in nearly seven months. But prices are still below what producers need to drill profitable wells.

Executives think it will be years before oil returns to $90 or $100 a barrel, a price that was pretty much the norm over the last decade.

Signs of revival in OnG...

http://www.nytimes.com/interactive/2016/business/energy-environment/oil-prices.html?_r=0

Moving up!

Anasuria is a producing field la... this is for real.

Come on Armada, the only way is up from now...

Ki Ki Ki how many months you say 1 month liow... Ki Ki Ki... up up OnG counters!

http://www.offshoreenergytoday.com/hibiscus-returns-to-profit-thanks-to-anasuria-buy-from-shell/


Hibiscus returns to profit thanks to Anasuria buy from Shell


FPSO Anasuria

Malaysia’s independent exploration and production company Hibiscus Petroleum returned to profit for the financial period ended March 31, 2016 due to completion of acquisition of Shell’s Anasuria cluster in the UK North Sea.

To remind, in August 2015, Shell reached an agreement to sell a batch of its North Sea oil fields to Ping Petroleum Limited and Hibiscus Petroleum whereby each of the two companies acquired 50% of the entire interests of Shell UK Ltd, Shell EP Offshore Ventures Limited and Esso Exploration and Production UK Limited in the Anasuria Cluster of oil and gas fields.

For this period, the group recorded a profit after taxation of RM80.5 million ($19.5M), an increase of RM 91.5 million ($22.2M) versus a loss after taxation of RM11 million ($2.7M) in the corresponding three-month period ended March 31, 2015.

Hibiscus explained that the turnaround achieved in the third quarter was attributable to the completion of the acquisition of the Anasuria Cluster on March 10, 2016. Following the completion in March, Petrofac was appointed as duty holder to support Anasuria Operating Company (AOC), a UK joint venture formed between Hibiscus Petroleum and Ping Petroleum.

Further, upon completion of the acquisition, the group recognised a fair value gain of RM135.3 million. The gain was generated as a result of the difference between the net assets of Anasuria Cluster at fair value versus the purchase consideration for the acquisition.

Hibiscus noted that the ownership of the Anasuria Cluster, with oil priced at a premium to Brent, provides the platform for Hibiscus Petroleum to generate a stable and long-term revenue stream. This is now also positively set against a backdrop of rising oil prices as the oil marketplace appears to have turned the corner with December 2017 Brent futures trading at $53/barrel as at the date of the quarterly report for the third quarter, the company added.

With respect to its future plans for this asset, Hibiscus said that its key objective is to boost the production rate of the Anasuria Cluster. Since taking over operatorship of the asset, the planning process has started for the development work to be undertaken to transform the productive capacity of the Anasuria assets. This would enhance oil and gas production rates which are expected to last well over the remaining useful economic life of the asset.

Hibiscus Petroleum Managing Director, Dr Kenneth Pereira commented, “With the completion of the acquisition of the Anasuria Cluster, Hibiscus Petroleum now has a profitable, cash generating asset within its portfolio with an estimated remaining economic life of twenty years. The focus is now on operations and proving our capability as a responsible operator in UK North Sea.”

Go go OnG counters...

Oil Heading for $60

http://oilprice.com/Energy/Oil-Prices/Oil-Heading-for-60.html


NYMEX

The UAE’s economy minister sees oil jumping to $60 per barrel in the next few months.

"It’s possible for oil prices to reach $60 or more during this summer,” UAE economy minister Sultan Bin Saeed Al Mansoori said at a conference in Abu Dhabi on May 30.

There is a growing chorus of oil market watchers that see the oil price rally continuing, after rallying more than 80 percent over the past several months. According to Bloomberg, the global chief economist at Standard Chartered Plc says WTI and Brent will rise above $60 before the end of the year, and SEB Bank agreed that the markets would see oil prices above $60 in 2016.


Those voices come two weeks after investment bank Goldman Sachs, a notorious bear when it comes to oil prices, suddenly become a lot more bullish on crude. "The oil market has gone from nearing storage saturation to being in deficit much earlier than we expected," Goldman concluded earlier this month. That statement came not too long after Goldman had warned that record high oil storage levels around the world threatened to push crude prices down into the $20s again.

Now, sentiment is trending up along with prices. Global demand continues to rise, and summer driving season in the U.S. could add a bit more strength on the demand side. The IEA has already predicted that the global surplus shrinks to just 0.2 million barrels per day in the second half of the year, but as the surprise outages in Canada and Nigeria make clear, unexpected events could tighten markets further.


Still, the markets are not without headwinds. Suncor Energy is bringing some oil production back online in Alberta this week as the threat of wildfires recedes. Also, Iraq raised its export quota ahead of the OPEC meeting, signaling its intent to step up exports.

Related: 3 Years Of Painful Cuts Sets Markets Up For Serious Supply Crunch

Nevertheless, global demand continues to rise while producers face disruptions and natural depletion. That points to higher oil prices.

"I think the secular trend is higher. We have been saying this for a few months. The damage we are doing to the non-OPEC supplies is just tremendous at this point in time. Non-OPEC supplies are down about 1 million barrels per day…So yes, we can get a bit of a correction in the near-term. Net-length is very high in the market. But the secular trend is definitely up," Amrita Sen, cofounder and chief oil analyst at Energy Aspects, told CNBC in a May 27 interview.

By Charles Kennedy of Oilprice.com

Go go OnG counters...

Oil Heading for $60

http://oilprice.com/Energy/Oil-Prices/Oil-Heading-for-60.html



NYMEX

The UAE’s economy minister sees oil jumping to $60 per barrel in the next few months.

"It’s possible for oil prices to reach $60 or more during this summer,” UAE economy minister Sultan Bin Saeed Al Mansoori said at a conference in Abu Dhabi on May 30.

There is a growing chorus of oil market watchers that see the oil price rally continuing, after rallying more than 80 percent over the past several months. According to Bloomberg, the global chief economist at Standard Chartered Plc says WTI and Brent will rise above $60 before the end of the year, and SEB Bank agreed that the markets would see oil prices above $60 in 2016.



Those voices come two weeks after investment bank Goldman Sachs, a notorious bear when it comes to oil prices, suddenly become a lot more bullish on crude. "The oil market has gone from nearing storage saturation to being in deficit much earlier than we expected," Goldman concluded earlier this month. That statement came not too long after Goldman had warned that record high oil storage levels around the world threatened to push crude prices down into the $20s again.

Now, sentiment is trending up along with prices. Global demand continues to rise, and summer driving season in the U.S. could add a bit more strength on the demand side. The IEA has already predicted that the global surplus shrinks to just 0.2 million barrels per day in the second half of the year, but as the surprise outages in Canada and Nigeria make clear, unexpected events could tighten markets further.


Still, the markets are not without headwinds. Suncor Energy is bringing some oil production back online in Alberta this week as the threat of wildfires recedes. Also, Iraq raised its export quota ahead of the OPEC meeting, signaling its intent to step up exports.

Related: 3 Years Of Painful Cuts Sets Markets Up For Serious Supply Crunch

Nevertheless, global demand continues to rise while producers face disruptions and natural depletion. That points to higher oil prices.

"I think the secular trend is higher. We have been saying this for a few months. The damage we are doing to the non-OPEC supplies is just tremendous at this point in time. Non-OPEC supplies are down about 1 million barrels per day…So yes, we can get a bit of a correction in the near-term. Net-length is very high in the market. But the secular trend is definitely up," Amrita Sen, cofounder and chief oil analyst at Energy Aspects, told CNBC in a May 27 interview.

By Charles Kennedy of Oilprice.com

Oil Heading for $60

NYMEX

The UAE’s economy minister sees oil jumping to $60 per barrel in the next few months.

"It’s possible for oil prices to reach $60 or more during this summer,” UAE economy minister Sultan Bin Saeed Al Mansoori said at a conference in Abu Dhabi on May 30.

There is a growing chorus of oil market watchers that see the oil price rally continuing, after rallying more than 80 percent over the past several months. According to Bloomberg, the global chief economist at Standard Chartered Plc says WTI and Brent will rise above $60 before the end of the year, and SEB Bank agreed that the markets would see oil prices above $60 in 2016.


Those voices come two weeks after investment bank Goldman Sachs, a notorious bear when it comes to oil prices, suddenly become a lot more bullish on crude. "The oil market has gone from nearing storage saturation to being in deficit much earlier than we expected," Goldman concluded earlier this month. That statement came not too long after Goldman had warned that record high oil storage levels around the world threatened to push crude prices down into the $20s again.

Now, sentiment is trending up along with prices. Global demand continues to rise, and summer driving season in the U.S. could add a bit more strength on the demand side. The IEA has already predicted that the global surplus shrinks to just 0.2 million barrels per day in the second half of the year, but as the surprise outages in Canada and Nigeria make clear, unexpected events could tighten markets further.



Still, the markets are not without headwinds. Suncor Energy is bringing some oil production back online in Alberta this week as the threat of wildfires recedes. Also, Iraq raised its export quota ahead of the OPEC meeting, signaling its intent to step up exports.

Related: 3 Years Of Painful Cuts Sets Markets Up For Serious Supply Crunch

Nevertheless, global demand continues to rise while producers face disruptions and natural depletion. That points to higher oil prices.

"I think the secular trend is higher. We have been saying this for a few months. The damage we are doing to the non-OPEC supplies is just tremendous at this point in time. Non-OPEC supplies are down about 1 million barrels per day…So yes, we can get a bit of a correction in the near-term. Net-length is very high in the market. But the secular trend is definitely up," Amrita Sen, cofounder and chief oil analyst at Energy Aspects, told CNBC in a May 27 interview.

By Charles Kennedy of Oilprice.com

Up, up and away....

http://www.wsj.com/articles/oil-price-forecasts-rise-as-oversupply-concerns-ease-1464674434

Oil Price Forecasts Get More Bullish as Oversupply Concerns Ease

Price rise takes pressure off OPEC over production cuts

By
Georgi Kantchev

Updated May 31, 2016 9:13 a.m. ET

9 COMMENTS

Analysts are once again raising their oil price forecasts, in a reflection of falling concerns over the glut in crude supply.

That takes pressure off members of the Organization of the Petroleum Exporting Countries as they meet on Thursday, following months of fervent debate over production levels within the cartel.

Investment banks surveyed by The Wall Street Journal hiked their price forecast for the third consecutive month this May, predicting that Brent crude, the international benchmark, will average $43 a barrel in 2016. That’s up $2 from April’s survey. The survey of 13 investment banks foresees the price of West Texas Intermediate, the U.S. oil gauge, averaging at $41 a barrel this year and $55 a barrel in 2017.

“The market is conspiring to help OPEC,” said Doug King, chief investment officer at RCMA Asset Management and manager of that firm’s $240 million Merchant Commodity hedge fund. “If I was in the Saudis’ shoes right now, I’d be pretty happy right now.”

Oil prices rose above the key $50 a barrel mark last Thursday for the first time since November.





On Tuesday, Brent crude, the global benchmark, was trading down 0.1% at $49.70 a barrel. West Texas Intermediate, the U.S. crude benchmark, rose 0.6% to $49.60. Brent is up close to 80% from its lows earlier this year.

Almost half a year of lower prices has dragged the year’s average down. But analysts see a more positive trajectory for the second half of the year. By the fourth quarter of 2016, analysts expect oil to be trading at $48 a barrel, that’s up from a prediction of $47 in April’s survey.

Analysts cut their forecasts throughout the start of this year amid a glut of oil and concern over the Chinese economy, the world’s second biggest consumer of oil. But crude has rallied since it hit a decade low of below $30 early this year as U.S. output continued to decline and a series of production outages from Canada to Nigeria took barrels off the market. U.S. output has fallen from a peak of 9.7 million barrels a day in April 2015 to below 9 million barrels in recent weeks, according to government data.

.
The rally is welcome news for OPEC, many of whose members have struggled to shore up their resource-dependent budgets during the nearly two-year old price rout.

Few analysts expect OPEC to change its policy at this week’s meeting in Vienna.

"The urgency to do something is gone as prices have rallied,” said Michael Wittner, chief oil analyst at Société Générale SA

In late 2014, the group established a policy of pumping flat out in a bid to defend its market share against increased competition from the U.S. and others.

The path to consistent prices gains is expected to be volatile. The banks in the survey see Brent averaging $43 a barrel in the third quarter of this year, below where it is trading now.

Analysts say that supply disruptions, such as through civil unrest in Nigeria, will ease, sending more crude washing back into markets. Production from some OPEC members is also on the rise, including from Iran, which is ramping up its output after international sanctions were lifted in January.

OPEC could face another familiar challenge: U.S. shale drillers. U.S. oil fields are peppered with drilled wells that haven’t been activated and a $50 barrel is enough to now make them profitable, according to Citigroup. The recent price rally could release 400,000 barrels a day or more of new U.S. output, the bank said.

“If oil stays above $50 a barrel, U.S. producers waiting on the sidelines could increase their output,” said Mark Watkins, regional investment manager at the U.S. Bank Wealth Management, which oversees $128 billion in assets. “That’s why rising prices are a mixed bag for OPEC.”


Corrections & Amplifications:
By the fourth quarter of 2016, analysts expect oil to be trading at $48 a barrel. An earlier version of this article incorrectly said the time period was the fourth quarter of 2015. (May 31, 2016)

Something big coming?

Going to bounce back very soon guys...

Slowly but surely...

http://www.bbc.co.uk/news/business-36303577

Oil hits $50 a barrel for first time this year

Benchmark Brent crude hit $50.22 per barrel at one stage on Thursday, its highest level since early November.

The rise followed US data showing that oil inventories had fallen after supply disruptions due to fires in Canada.

Brent crude has now risen 80% since it hit 13-year lows of below $28 a barrel at the start of the year.

US crude oil inventories fell by 4.2 million barrels to 537.1 million barrels in the week to May 20, according to US Department of Energy data.

Canada is the biggest supplier to the US and wildfires in the western provinces have reduced supplies by about a million barrels per day.

Talks in recent months between Opec and Russia about freezing oil production had already encouraged a price rise.

Short-term disruptions to oil supplies have also lifted the price, offsetting higher production from Iran and Saudi Arabia.

As well as the disruption to key oil production facilities in Canada, attacks by militant groups continue to restrict oil pipelines in Nigeria.

Demand has also been better than expected from major economies such as China, India and Russia.

Michael Hewson, chief market analyst at CMC Markets, said: "We do now appear to be seeing the effects that the decline in US output is having, and while supplies remain elevated, the glut does now appear to be diminishing."



'Surprises'

Against this backdrop, analysts are starting to raise their forecasts.

Goldman Sachs said earlier this month that it now expected oil prices to consistently hit $50 a barrel in the second half of 2016 and $60 by the end of 2017.

The US bank said: "The oil market continues to deliver its share of surprises, with low prices driving disruptions in Nigeria, higher output in Iran and better demand.

"With each of these shifts significant in magnitude, the oil market has gone from nearing storage saturation to being in deficit much earlier than we expected."



Oiling the gears

In a sign of growing confidence, oil companies have started preparing for higher prices.

BP said last month it had budgeted for prices of at least between $50 and $55 a barrel in 2017.

And last month US oil producer Pioneer Natural Resources announced plans to add up to 10 new rigs when the oil price gets back up to $50.

Adam Laird, an investment manager at Hargreaves Lansdown, told the BBC: "This is an area that's been starved of resources and investment and that psychological barrier [of $50] could be enough to make some executives reassess."

However, Mr Laird cautioned that price volatility was likely to continue. "It's too early to say this is the beginning of the big rebound," he said.

Abhishek Deshpande, an oil markets analyst at Natixis, agreed and said: "We believe that the market is going up, but if it goes too quickly there will be auto-corrections."

Woohoo... slowly but surely...

http://www.bbc.co.uk/news/business-36303577

Oil hits $50 a barrel for first time this year

Benchmark Brent crude hit $50.22 per barrel at one stage on Thursday, its highest level since early November.

The rise followed US data showing that oil inventories had fallen after supply disruptions due to fires in Canada.

Brent crude has now risen 80% since it hit 13-year lows of below $28 a barrel at the start of the year.

US crude oil inventories fell by 4.2 million barrels to 537.1 million barrels in the week to May 20, according to US Department of Energy data.

Canada is the biggest supplier to the US and wildfires in the western provinces have reduced supplies by about a million barrels per day.

Talks in recent months between Opec and Russia about freezing oil production had already encouraged a price rise.

Short-term disruptions to oil supplies have also lifted the price, offsetting higher production from Iran and Saudi Arabia.

As well as the disruption to key oil production facilities in Canada, attacks by militant groups continue to restrict oil pipelines in Nigeria.

Demand has also been better than expected from major economies such as China, India and Russia.

Michael Hewson, chief market analyst at CMC Markets, said: "We do now appear to be seeing the effects that the decline in US output is having, and while supplies remain elevated, the glut does now appear to be diminishing."



'Surprises'

Against this backdrop, analysts are starting to raise their forecasts.

Goldman Sachs said earlier this month that it now expected oil prices to consistently hit $50 a barrel in the second half of 2016 and $60 by the end of 2017.

The US bank said: "The oil market continues to deliver its share of surprises, with low prices driving disruptions in Nigeria, higher output in Iran and better demand.

"With each of these shifts significant in magnitude, the oil market has gone from nearing storage saturation to being in deficit much earlier than we expected."



Oiling the gears

In a sign of growing confidence, oil companies have started preparing for higher prices.

BP said last month it had budgeted for prices of at least between $50 and $55 a barrel in 2017.

And last month US oil producer Pioneer Natural Resources announced plans to add up to 10 new rigs when the oil price gets back up to $50.

Adam Laird, an investment manager at Hargreaves Lansdown, told the BBC: "This is an area that's been starved of resources and investment and that psychological barrier [of $50] could be enough to make some executives reassess."

However, Mr Laird cautioned that price volatility was likely to continue. "It's too early to say this is the beginning of the big rebound," he said.

Abhishek Deshpande, an oil markets analyst at Natixis, agreed and said: "We believe that the market is going up, but if it goes too quickly there will be auto-corrections."

Woohoo... slowly but surely...


Oil hits $50 a barrel for first time this year

Benchmark Brent crude hit $50.22 per barrel at one stage on Thursday, its highest level since early November.

The rise followed US data showing that oil inventories had fallen after supply disruptions due to fires in Canada.

Brent crude has now risen 80% since it hit 13-year lows of below $28 a barrel at the start of the year.

US crude oil inventories fell by 4.2 million barrels to 537.1 million barrels in the week to May 20, according to US Department of Energy data.

Canada is the biggest supplier to the US and wildfires in the western provinces have reduced supplies by about a million barrels per day.

Talks in recent months between Opec and Russia about freezing oil production had already encouraged a price rise.

Short-term disruptions to oil supplies have also lifted the price, offsetting higher production from Iran and Saudi Arabia.

As well as the disruption to key oil production facilities in Canada, attacks by militant groups continue to restrict oil pipelines in Nigeria.

Demand has also been better than expected from major economies such as China, India and Russia.

Michael Hewson, chief market analyst at CMC Markets, said: "We do now appear to be seeing the effects that the decline in US output is having, and while supplies remain elevated, the glut does now appear to be diminishing."



'Surprises'

Against this backdrop, analysts are starting to raise their forecasts.

Goldman Sachs said earlier this month that it now expected oil prices to consistently hit $50 a barrel in the second half of 2016 and $60 by the end of 2017.

The US bank said: "The oil market continues to deliver its share of surprises, with low prices driving disruptions in Nigeria, higher output in Iran and better demand.

"With each of these shifts significant in magnitude, the oil market has gone from nearing storage saturation to being in deficit much earlier than we expected."



Oiling the gears

In a sign of growing confidence, oil companies have started preparing for higher prices.

BP said last month it had budgeted for prices of at least between $50 and $55 a barrel in 2017.

And last month US oil producer Pioneer Natural Resources announced plans to add up to 10 new rigs when the oil price gets back up to $50.

Adam Laird, an investment manager at Hargreaves Lansdown, told the BBC: "This is an area that's been starved of resources and investment and that psychological barrier [of $50] could be enough to make some executives reassess."

However, Mr Laird cautioned that price volatility was likely to continue. "It's too early to say this is the beginning of the big rebound," he said.

Abhishek Deshpande, an oil markets analyst at Natixis, agreed and said: "We believe that the market is going up, but if it goes too quickly there will be auto-corrections."

http://www.reuters.com/article/us-global-oil-idUSKCN0YG01R

Oil nudges $50 a barrel as investors bet on shrinking overhang

LONDON | By Amanda Cooper

Oil rose towards $50 a barrel on Wednesday for the first time in seven months, driven by expectations that shrinking supply will help erode any overhang of unwanted crude, particularly after industry data showed a sharp fall in U.S. inventories.

A series of outages around the world, such as wildfires in Canada and a spate of violence in Nigeria's oil-producing region, has helped cut global oil supply by nearly 4 million barrels per day this month.

Although these hitches are temporary, they have contributed to a drop in the supply glut that has plagued the market for nearly two years.

Brent crude futures LCOc1 were up 58 cents at $49.19 a barrel by 0849 GMT, while U.S. crude futures CLc1 rose 56 cents to $49.18 a barrel.

"We are definitely moving out of this surplus situation that we've been living in since mid-2014. There will still be some time, maybe six months of surplus, but then we're basically into rebalancing," SEB head commodities strategist Bjarne Schieldrop said.

"There have been losses in equities and especially emerging markets (this month) and still oil is up, so it's definitely about oil fundamentals, rather than tailwinds from equities and currencies," he said.

Strikes across France that crippled output from most of the country's eight refineries have had little impact so far on crude oil prices, but rather helped lift refining margins for diesel and gasoline.

Data on Tuesday showed U.S. crude inventories fell by 5.1 million barrels to 536.8 million last week, double the expectations of analysts polled by Reuters.

Some of the drawdown was caused by falling imports due to the fires in Canada, which cut production by about 1.5 million barrels per day, said Ben Le Brun, market analyst at Sydney online brokerage OptionsXpress. Some crude producers restarted operations on Tuesday in Canada's energy heartland.

"A strong U.S. economy is (also) good for oil consumption and demand," Le Brun said.

Investors are awaiting confirmation of the big draw when the U.S. Energy Information Administration (EIA) issues official inventory figures on Wednesday.

Masanobu Hamada, general manager of the crude oil trading department at JX Nippon Oil & Energy Corp, said the current price rise was due to supply disruptions.

"Unless there is a halt in supply, the market lacks material (strength) to go higher because the inventory levels are high," Hamada said.

(Additional reporting by Osamu Tsukimori in TOKYO and Keith Wallis in SINGAPORE; Editing by Dale Hudson)

http://money.cnn.com/2016/05/17/investing/oil-crude-prices-rally/


In case you haven't noticed, oil prices are staging a strong recovery and inching towards $50 per barrel.

Unexpected supply disruptions in places like Canada, Nigeria and Venezuela have caused oil prices to hit their highest level in seven months last night, at $48.41 per barrel.

Prices have since retreated a tad in early morning trading. But this current price around $48 marks a major rebound from mid-February when crude was trading just above $26 a barrel, the lowest level seen since 2003.


Canada


Raging wildfires in oil-rich parts of the Canadian province of Alberta have forced major oil companies to shut down some operations and cut production by about 1.2 million barrels of oil per day, according to Manouchehr Takin, an independent oil and energy consultant.

That's a massive production cut when you consider that Canada produces, on average, about 4.4 million barrels of oil per day, making it the fifth largest oil producer in the world.


Nigeria


Nigeria too has reduced production as militants in the oil-rich Niger Delta region of Africa have launched attacks to cut off oil flows.

"Nigeria's oil output has fallen to a 20-year low of 1.4 million barrels per day after militants disabled several oil facilities in the Niger Delta," wrote John Ashbourne, an Africa economist at Capital Economics.

Ashbourne says attacks on the facilities have been picking up since February.

Oil analysts at Barclays (BCS) warn that the Nigerian situation is a bit of a wild card.

"In contrast to the outages in Canada, the issues in Nigeria may well prove longer lasting," they said in a research note.


Venezuela


Traders are also concerned about supply disruptions in Venezuela, which is in the midst of a severe economic crisis and is suffering from political infighting, electricity shortages, food shortages, medical supply shortages and the Zika virus.

Venezuela's economy has been hit hard since oil prices have plummeted over the past year and a half. It's low-quality oil output means the country gets less than market rates for its barrels, according to Eric Smith, a professor and associate director at the Tulane Energy Institute.

Independent analyst Takin said the drop in production from a range of countries has led traders to bid prices much higher over the past few weeks.

"They didn't expect these things and now they see these supply disruptions.... Up until a month ago, the perception was there was too much supply," he said.

A new report from Goldman Sachs (GS) also notes that stronger demand from India, China and Russia has helped support prices.

Goldman said oversupply in the market has now come to an end due to "sustained strong demand as well as sharply declining production."



CNNMoney (London)
First published May 17, 2016: 9:13 AM ET

http://money.cnn.com/2016/05/17/investing/oil-crude-prices-rally/


In case you haven't noticed, oil prices are staging a strong recovery and inching towards $50 per barrel.

Unexpected supply disruptions in places like Canada, Nigeria and Venezuela have caused oil prices to hit their highest level in seven months last night, at $48.41 per barrel.

Prices have since retreated a tad in early morning trading. But this current price around $48 marks a major rebound from mid-February when crude was trading just above $26 a barrel, the lowest level seen since 2003.


Canada


Raging wildfires in oil-rich parts of the Canadian province of Alberta have forced major oil companies to shut down some operations and cut production by about 1.2 million barrels of oil per day, according to Manouchehr Takin, an independent oil and energy consultant.

That's a massive production cut when you consider that Canada produces, on average, about 4.4 million barrels of oil per day, making it the fifth largest oil producer in the world.


Nigeria


Nigeria too has reduced production as militants in the oil-rich Niger Delta region of Africa have launched attacks to cut off oil flows.

"Nigeria's oil output has fallen to a 20-year low of 1.4 million barrels per day after militants disabled several oil facilities in the Niger Delta," wrote John Ashbourne, an Africa economist at Capital Economics.

Ashbourne says attacks on the facilities have been picking up since February.

Oil analysts at Barclays (BCS) warn that the Nigerian situation is a bit of a wild card.

"In contrast to the outages in Canada, the issues in Nigeria may well prove longer lasting," they said in a research note.


Venezuela


Traders are also concerned about supply disruptions in Venezuela, which is in the midst of a severe economic crisis and is suffering from political infighting, electricity shortages, food shortages, medical supply shortages and the Zika virus.

Venezuela's economy has been hit hard since oil prices have plummeted over the past year and a half. It's low-quality oil output means the country gets less than market rates for its barrels, according to Eric Smith, a professor and associate director at the Tulane Energy Institute.

Independent analyst Takin said the drop in production from a range of countries has led traders to bid prices much higher over the past few weeks.

"They didn't expect these things and now they see these supply disruptions.... Up until a month ago, the perception was there was too much supply," he said.

A new report from Goldman Sachs (GS) also notes that stronger demand from India, China and Russia has helped support prices.

Goldman said oversupply in the market has now come to an end due to "sustained strong demand as well as sharply declining production."



CNNMoney (London)
First published May 17, 2016: 9:13 AM ET

http://money.cnn.com/2016/05/17/investing/oil-crude-prices-rally/


In case you haven't noticed, oil prices are staging a strong recovery and inching towards $50 per barrel.

Unexpected supply disruptions in places like Canada, Nigeria and Venezuela have caused oil prices to hit their highest level in seven months last night, at $48.41 per barrel.

Prices have since retreated a tad in early morning trading. But this current price around $48 marks a major rebound from mid-February when crude was trading just above $26 a barrel, the lowest level seen since 2003.


Canada


Raging wildfires in oil-rich parts of the Canadian province of Alberta have forced major oil companies to shut down some operations and cut production by about 1.2 million barrels of oil per day, according to Manouchehr Takin, an independent oil and energy consultant.

That's a massive production cut when you consider that Canada produces, on average, about 4.4 million barrels of oil per day, making it the fifth largest oil producer in the world.


Nigeria


Nigeria too has reduced production as militants in the oil-rich Niger Delta region of Africa have launched attacks to cut off oil flows.

"Nigeria's oil output has fallen to a 20-year low of 1.4 million barrels per day after militants disabled several oil facilities in the Niger Delta," wrote John Ashbourne, an Africa economist at Capital Economics.

Ashbourne says attacks on the facilities have been picking up since February.

Oil analysts at Barclays (BCS) warn that the Nigerian situation is a bit of a wild card.

"In contrast to the outages in Canada, the issues in Nigeria may well prove longer lasting," they said in a research note.


Venezuela


Traders are also concerned about supply disruptions in Venezuela, which is in the midst of a severe economic crisis and is suffering from political infighting, electricity shortages, food shortages, medical supply shortages and the Zika virus.

Venezuela's economy has been hit hard since oil prices have plummeted over the past year and a half. It's low-quality oil output means the country gets less than market rates for its barrels, according to Eric Smith, a professor and associate director at the Tulane Energy Institute.

Independent analyst Takin said the drop in production from a range of countries has led traders to bid prices much higher over the past few weeks.

"They didn't expect these things and now they see these supply disruptions.... Up until a month ago, the perception was there was too much supply," he said.

A new report from Goldman Sachs (GS) also notes that stronger demand from India, China and Russia has helped support prices.

Goldman said oversupply in the market has now come to an end due to "sustained strong demand as well as sharply declining production."



CNNMoney (London)
First published May 17, 2016: 9:13 AM ET

ALL oil and gas counters are at a discount now, hibiscus is the only one that is purely into oil&gas production and exploration (except for the other 2 SPACs which has failed/yet to qualify) the rest are all service providers i.e. bumi / perisai / knm / alam...

Oil spike coming...

http://oilprice.com/Energy/Oil-Prices/Oil-Price-Spike-Is-Not-As-Far-Away-As-Many-Think.html

So many projects stalled or stopped, in a short time everyone will realize that we don't have enough supply to cover the demand.


By Dan Steffens for Oilprice.com:

Conclusion: History Repeats Itself

I have worked in the upstream energy sector for 38 years. During my career the industry has survived six major and a few minor oil price cycles. It will survive this one because the products made from crude oil, natural gas and natural gas liquids (NGLs) are critical to the world economy. Our high standard of living depends on a steady supply of oil.

Oil price cycles do not end well. The big ones, and this is one of the biggest ever, overshoot the mark and result in a supply shortage. With OPEC now producing flat out, there is very little excess production capacity in the world. After the end of 2016, when oil supply and demand are back in balance, all significant supply outages (i.e. Canadian fire, Nigerian militants, ISIS attacks in the Middle East, etc.) will send crude oil prices skyrocketing. The Wall Street analysts that are saying we will never see oil over $100/bbl again will be eating those words.

Oil prices do not go up or down in a smooth line, as you can see in the chart above. Investors that can look past the short-term noise and invest in the best companies will harvest market beating gains as this cycle moves back to the long-term trend.

Oceanstory, Hibiscus is indeed an oil producer now after they acquired 50% of the Anasuria Cluster field in the UK.... read this...

http://www.theborneopost.com/2016/03/12/hibiscus-petroleum-becomes-licensed-operator-of-anasuria-cluster/

4,000 barrels a day, you do the maths.

This is not a SPAC counter anymore la...

Oil prices jump as Goldman Sachs says market flips into deficit

http://www.reuters.com/article/us-global-oil-idUSKCN0Y703M

Best time to buy is now!

Hibiscus OWNS 50% of the Anasuria cluster PRODUCING field in UK, of course all these are positive news!

http://www.rigzone.com/news/oil_gas/a/144443/EIA_Sees_Brent_Oil_Prices_Rebounding_to_76_Per_Barrel_in_2017

EIA Sees Brent Oil Prices Rebounding to $76 Per Barrel in 2017



by Reuters

|
Wednesday, May 11, 2016

May 11 (Reuters) - The price of Brent crude oil should rebound in the next year to about $76 a barrel as consumption continues to increase in coming years, a key U.S. energy agency said on Wednesday.

The U.S. Energy Information Administration anticipates increased growth in fuel consumption, largely through growth in emerging economies in Asia, the Middle East and Africa, it said in an international outlook for the energy market. This is the first EIA International Energy Outlook report since September 2014.

The EIA said that due to the glut of supply, it expects the spread between U.S. crude and Brent to remain between $0 and $10 a barrel. The EIA said it expects liquids production to grow by 30.5 million barrels/day by 2040.

It said world GDP growth should average 3.3 percent in the next 25 years, largely due to stronger economic growth in emerging nations.

(Reporting By David Gaffen; Editing by Chizu Nomiyama) -

http://www.rigzone.com/news/oil_gas/a/144443/EIA_Sees_Brent_Oil_Prices_Rebounding_to_76_Per_Barrel_in_2017

EIA Sees Brent Oil Prices Rebounding to $76 Per Barrel in 2017



by Reuters

|
Wednesday, May 11, 2016

May 11 (Reuters) - The price of Brent crude oil should rebound in the next year to about $76 a barrel as consumption continues to increase in coming years, a key U.S. energy agency said on Wednesday.

The U.S. Energy Information Administration anticipates increased growth in fuel consumption, largely through growth in emerging economies in Asia, the Middle East and Africa, it said in an international outlook for the energy market. This is the first EIA International Energy Outlook report since September 2014.

The EIA said that due to the glut of supply, it expects the spread between U.S. crude and Brent to remain between $0 and $10 a barrel. The EIA said it expects liquids production to grow by 30.5 million barrels/day by 2040.

It said world GDP growth should average 3.3 percent in the next 25 years, largely due to stronger economic growth in emerging nations.

(Reporting By David Gaffen; Editing by Chizu Nomiyama) -

http://www.rigzone.com/news/oil_gas/a/144443/EIA_Sees_Brent_Oil_Prices_Rebounding_to_76_Per_Barrel_in_2017

EIA Sees Brent Oil Prices Rebounding to $76 Per Barrel in 2017



by Reuters

|
Wednesday, May 11, 2016

May 11 (Reuters) - The price of Brent crude oil should rebound in the next year to about $76 a barrel as consumption continues to increase in coming years, a key U.S. energy agency said on Wednesday.

The U.S. Energy Information Administration anticipates increased growth in fuel consumption, largely through growth in emerging economies in Asia, the Middle East and Africa, it said in an international outlook for the energy market. This is the first EIA International Energy Outlook report since September 2014.

The EIA said that due to the glut of supply, it expects the spread between U.S. crude and Brent to remain between $0 and $10 a barrel. The EIA said it expects liquids production to grow by 30.5 million barrels/day by 2040.

It said world GDP growth should average 3.3 percent in the next 25 years, largely due to stronger economic growth in emerging nations.

(Reporting By David Gaffen; Editing by Chizu Nomiyama) -

http://www.businessinsider.my/oil-prices-on-may-5-2016-5/

The oil industry just got some terrific news — and now crude is surging

Will Martin Finance  May. 5, 2016, 3:40 PM


Oil is on a charge on Thursday morning, surging on news that production in the USA fell to its lowest levels in 18 months.

Just after 8:30 a.m. BST (3:30 a.m. ET) both major oil benchmarks, West Texas Intermediate and Brent crude, have popped more than 2%, as the news of the production drop gave another suggestion to investors that the market may be on its way to balancing. Both major benchmarks are now at or above the $45 per barrel mark. Here’s how things look in the markets right now:

Oil’s charge on the day is being led by data from the US Energy Information Administration (EIA) released on Wednesday that showed oil production in the country has fallen to its lowest level since September 2014. US production decreased by 113,000 barrels per day last week, marking the biggest weekly decline in output since last July. US domestic output has now fallen for 11 consecutive weeks.

That further fall in production suggests that the markets are going someway to addressing the supply/demand imbalance that has plagued markets and caused prices to fall from more than $100 per barrel in 2014 to as low as $27 in January.

Oil was also given an extra boost after, as Accendo Markets’ Mike van Dulken says: “Wildfires in Canada were seen to affect production there, while an escalation of violence in Libya did the same on this side of the pond.”

Despite the good news from the EIA, oil inventories actually continued to grow last week. The EIA’s Weekly Petroleum Status Report showed that U.S. commercial crude inventories increased by 2.8 million barrels for the week ending April 29.

Cont...

You can see why I tend to have a much more radical view of the decline line in production beginning in late 2016 and lasting, in my view, at least until the middle of 2018, when production again only begins to get the funding (and time) it needs to try and “catch up”.

Meanwhile, there will be, as I see it, a violent crossing of the demand and supply lines in my graph – and an equally violent move in the price of oil because of it.

Finally, when this trajectory becomes obvious, the financial markets will waste no time taking full advantage of it – with a massive influx of speculative money, driving up prices even more quickly and steeply.

I’ve seen that before – and am currently alone in believing how close we are in seeing it again.

http://oilprice.com/Energy/Oil-Prices/120-Oil-As-Soon-As-2018.html

$120 Oil As Soon As 2018?

By Dan Dicker
Posted on Mon, 04 April 2016 20:18 | 19

Today, I’m going to try and tackle the reasoning for my ‘wild’ predictions for oil reaching triple digits by the end of 2017. While I am nearly alone in these forecasts, they are not just pulled out of space, but with deep regard for the fundamental supply/demand picture that everyone mostly agrees upon, combined with what I think is a deeper insight into the likely trajectory of oil company leverage, financing and the role of financial oil derivatives.

Despite the technical nature of this discussion, I think I can make a strong case for $120 oil in 2018 using only two charts of my own making – one charting global demand, which is more universally agreed upon, and then an overlay of global production, which is more open to prediction.

First, demand: Almost all analysts including the EIA and IEA agree that demand continues to grow at a steady pace throughout the rest of the decade, and even a minor economic downturn will only slow the pace of growth (green line), but not upend the upward trend line of demand. Sorry to those environmentalists who pray for an end to carbon use growth in the next decade – virtually no one currently believes it will happen.

Now, let’s overlay the rudimentary global production line(s) on top, put some likely dates on this chart and describe some of the possible scenarios:

First, we notice that the blue line of production going back before the oil crash is steeper than the demand line – hence the current gluts we are experiencing and low barrel prices. Low prices have made production growth begin to slacken, which I’ve indicated by easing the slope of the light blue line. It’s clear that if nothing else happened from here, we’d still see future production outstrip demand – hence some analysts’ fear of never seeing triple digit oil prices, or at least a much lower for much longer scenario.

But most analysts agree that the sharp drop in Capex budgets, not just among shale producers, will have its effect on sharply lowering production this year and putting growth in reverse, efficiencies and well cost reductions notwithstanding. What’s critical to note is how the media, and surprisingly most analysts, see global oil merely through the prism of U.S. independent shale players. To me, this is the critical grave mistake they make. Recent lease outcomes in the Gulf of Mexico, problems in Brazil and the likely end of spending for all new Russian oil projects are just a few of the other gargantuan gaps in global production we’re likely to see after 2016.

The current market turmoil has created a once in a generation opportunity for savvy energy investors.
Whilst the mainstream media prints scare stories of oil prices falling through the floor smart investors are setting up their next winning oil plays.

I’ve drawn two lines in black on production; one that most of the analysts including the EIA are making in how they see this production curve playing out, and mine – how I see it likely playing out.

While the EIA and most other analysts agree that sharp capex drops will begin to have their halting effects on oil production, they tend to argue over when those production drops come and how steep they will be. In all cases, they argue that any drop in production will be answered by a rally in oil prices, to the degree that U.S. shale players again ‘turn on the spigots’ and reestablish the gluts that have kept us under $50 a barrel for most of the last year. In this scenario, production never – or at least exceedingly slowly – rebalances to match demand.

I see it much differently. I could argue that the shale players, even with their low well drilling costs and backlog of ‘drilled but uncompleted wells’ (DUCs) cannot in any way repeat their frantic production increases they achieved from 2012-2014 ever again. I believe this because of financing constraints and the lack of quality acreage among other reasons – but I don’t have to even “win” this predictive argument.

Longer-term projects from virtually all other conventional and non-conventional sources that have not been funded for the past two years will see their results, in that there won’t be the oil from them that was planned upon. Chevron estimated in 2013 that oil companies would have to spend a minimum of $7-10 trillion dollars to 2030 to merely keep up with demand growth and the natural decline of current wells. And this was without factoring in the drop in exploration spending that is occurring now and throughout the next two years. Severe capex cuts from virtually every oil company and state-run producer over the last two years has put this necessary spending budget way behind schedule.

Up down Up down Up!


http://www.marketwatch.com/story/oil-prices-surge-on-fresh-hopes-for-a-production-freeze-2016-04-06


Oil prices surge on fresh hopes for a production freeze


Published: Apr 6, 2016 1:16 a.m. ET


By

Jenny
Hsu


Crude-oil prices were on a positive course in early Asia trade on Wednesday, driven by hopes that key global producers may agree to a production freeze later this month despite an escalating tussle between Iran and Saudi Arabia over the issue.

Prices rose overnight after Kuwait, a heavyweight in the Organization of the Petroleum Exporting Countries, expressed confidence that players within and outside the bloc will move ahead with the proposal to limit crude output.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in May CLK6, +2.62% traded at $36.88 a barrel, up $0.94, or 2.6% in the Globex electronic session but around 38% lower from a year ago. June Brent crude LCOM6, +1.77% on London’s ICE Futures exchange rose $0.73, or 1.9%, to $38.59 a barrel, down roughly 42% from the previous year.


Oil prices have been range-bound for months on speculation of a possible production freeze. Some analysts say that even if an agreement is reached at the Doha meeting on April 17, the move is unlikely to make any significant dent given persistent oversupply. Others view it as a step toward rebalancing the market.

However, sentiment fell last week after Saudi Arabia, OPEC’s largest producer and one of the original initiators of the plan, said Friday it would back out unless Iran is on board. Tehran plans to increase output until it reaches pre-sanction levels of around 4 million barrels a day.

“Oil prices are mainly moving on rhetoric by OPEC officials and not fundamental changes. Market watchers will be keeping their ears sharp until the suspense of a possible production freeze is over,” said Barnabas Gan, an OCBC commodities analyst.

BMI Research said an agreement to freeze production “looks increasingly less likely” and expects any price-supportive communique from the meeting to be short-lived.

The weekly U.S. crude inventories and production data are scheduled for release on Wednesday.

Based on a Wall Street Journal survey, U.S. oil inventories are expected to have risen 3.3 million barrels last week. Inventories have been rising for the past seven weeks and are approaching all-time highs.

The American Petroleum Institute, an industry group, said late Tuesday that its own data for the period showed a 4.3-million-barrel drop in crude supplies, a 100,000 barrel decrease in gasoline stocks and a 2.7-million-barrel rise in distillate inventories, according to market participants.

Nymex reformulated gasoline blendstock for May RBK6, +0.66% — the benchmark gasoline contract — rose 101 points to $1.3879 a gallon, while May diesel traded at $1.0900, 154 points higher.

ICE gasoil for April changed hands at $318.25 a metric ton, up $3.75 from Tuesday’s settlement.


More from MarketWatch

http://oilprice.com/Energy/Energy-General/Why-We-Could-See-An-Oil-Price-Shock-In-2016.html

Why We Could See An Oil Price Shock In 2016

By James Stafford
Posted on Wed, 23 March 2016 19:28 | 0

The depletion of old oil wells is expected to surpass new sources of supply in 2016, as the ongoing oil price slump puts a long list of oil projects on the shelf.

Bloomberg flagged new data from the Norwegian consultancy firm Rystad Energy, which predicts that legacy production will tip the supply balance into the negative in 2016 for the first time in years.

The production from an average conventional oil field typically ramps up in the early years, plateaus and then enters a period of decline. Depletion rates vary wildly from field to field, but a rule of thumb for conventional oil fields – which make up the bulk of total global supply – is that they decline something like 6 percent per year on average. Again, those depletion rates can differ depending on location, levels of investment, etc., but one thing that is clear is that the oil industry needs to bring new oil fields online every year in order to merely keep production flat.

Rystad Energy estimates that the crash in oil prices has cut into upstream investment so severely that natural depletion rates will overwhelm the paltry new sources of supply in 2016. Existing fields will lose about 3.3 million barrels per day (mb/d) in production this year, while new fields brought online will only add 3 mb/d. This does not take into account rising oil demand, which will soak up most of the excess supply by the end of the year.

But the 3 mb/d of new supply in 2016 will mostly come from large offshore projects that were planned years ago, investments that were made before oil prices started crashing. The EIA sees four offshore projects starting up in 2016 – projects from Shell, Noble Energy, Anadarko, and Freeport McMoran – plus two more in 2017. The industry completed eight projects in the Gulf in 2015. U.S. Gulf of Mexico production will climb from 1.63 mb/d in 2016 to 1.91 mb/d by the end of 2017.

However, outside of these large-scale multiyear offshore projects, the queue of new oil fields is starting to be cleared out. By 2017, the supply/depletion balance will go deeper into negative territory. Depletion will exceed new sources of production by around 1.2 mb/d before widening even further in 2018 and 2019.

The current market turmoil has created a once in a generation opportunity for savvy energy investors.
Whilst the mainstream media prints scare stories of oil prices falling through the floor smart investors are setting up their next winning oil plays.

A few months ago, Wood Mackenzie estimated that around $380 billion in planned oil projects had been put on ice due to the crash in oil prices. Wood Mackenzie says that between 2007 and 2013, the oil industry greenlighted about 40 large oil projects on average each year. That figure plunged to fewer than 10 in 2015.

The coming supply crunch stands in sharp contrast to the short-term picture. The EIA reported on March 23 that crude oil storage levels once again increased, surging by 9.4 million barrels last week to break yet another record. Total inventories in the U.S. now stand at 532.5 million barrels. Record high storage levels, which continue to climb, are signs of short-term oversupply. The IEA expects supply to continue to outstrip demand by about 1.5 mb/d until later this year. Oil storage levels will have to fall to more normal levels before oil prices can rise substantially.

But the Rystad Energy figures show that the supply-demand balance could quickly swing back in the other direction as upstream investment has screeched to a halt. As soon as later this year, or perhaps in 2017, demand could catch up to supply. Inventories will begin falling quickly and prices will start to rise. However, since supply is inelastic in the short run, the industry may struggle to satisfy demand at stable prices. The oil markets have always suffered from booms and busts, and this is just more of the same. The current bust is sowing the seeds of the next boom.

Of course, U.S. shale has demonstrated its ability to ramp up quickly, and those short lead times could allow new supply to come online as prices rise. But it remains to be seen if U.S. shale, more or less on its own in the short run, can meet rising demand in 2017 and 2018 as conventional oil drilling remains on the sidelines.

By James Stafford of Oilprice.com

http://timesofoman.com/article/79772/Oman/Government/Oman-confident-of-recovery-in-oil-prices-after-Doha-meet

Muscat: Oman’s minister of oil and gas Dr Mohammed bin Hamad Al Rumhy on Sunday said he is confident of a recovery in crude oil prices, after a meeting of Opec and non-Opec members scheduled to take place in Doha, Qatar, to decide on freezing output.

According to Dr Al Rumhy, oil prices might recover by 25 per cent by the end of the year, from the current level of around $35 per barrel for Oman Crude.

He said the oil producers first agree or reach an understanding on freezing production before the proposed meeting next month. “I hope there is an agreement or understanding so the idea of meeting is just to stamp what has already been agreed,” added Dr Al Rumhy, on the sidelines of the ministry’s annual press briefing.

Organisation of Petroleum Exporting Countries (Opec) members and key oil producers from outside the group will meet on April 17 in Doha in a bid to stabilise falling crude prices. The meeting is a follow-up to last month’s talks between Qatar, Russia, Saudi Arabia and Venezuela when they proposed an accord to freeze oil output at January levels.

Dr Al Rumhy said there are expectations of prices touching $60 or $70 per barrel towards the end of the year. “All indications are that it will happen because the supply is really affected and the demand is still increasing. I am optimistic about it. By the end of the year, we will see a 25 per cent increase in crude oil price.”

The minister said Oman will attend the Doha meeting, if invited. However, he noted that Oman’s willingness to cut production by 5 to 10 per cent would not influence supply much since the country is not a major oil producer. “We are trying to talking about countries cutting production by 1 million barrels or 1.5 million barrels per day.”

The minister said the average crude oil production of Oman this year would be around 990,000 barrels per day, against 980,000 barrels per day in 2015. Similarly, natural gas production will increase this year by 1.5 million cubic meters per day from 2015 level of 103 million cubic metres per day.

http://www.cnbc.com/2016/03/17/us-oil-falls-after-flirting-with-2016-high.html

US oil briefly breaks above $41 a barrel
18 March 2016
Reuters


U.S. oil prices briefly rose above $41 a barrel Friday, supported by expectations of a production freeze by major exporters and dollar weakness that have pushed prices towards a fourth straight weekly gain.

Brent crude's front-month contract was up 74 cents at $42.28 a barrel.


Oil prices have climbed by more than 50 percent from 12-year lows reached in December, bolstered as the Organization of the Petroleum Exporting Countries (OPEC) floated the idea of a production freeze, boosting Brent from about $27 and U.S. crude from around $26.

Many analysts think there is still steam in the rally.

"We are leaving the period of low demand and starting to move toward the period when demand increases over the summer," said Olivier Jakob, oil market analyst at Petromatrix at Zug in Switzerland.

He added that the massive oil glut that had helped to hammer prices last year at last appears to be stabilizing.

"We're moving towards looking at an old surplus, rather than a new one being built up," he said, adding that it is likely that Brent will stabilize around the mid-$40s.

Crude inventories in the United States increased by 1.3 million barrels in the week to March 11, to a record high of 523.2 million barrels, though that was a much smaller build than the 3.4 million barrels expected by analysts, the Energy Information Administration said on Wednesday.

Analysts said that dollar weakness was also lifting oil.

The dollar index is down 3.2 percent so far this month. A weaker dollar makes oil, which is priced in the U.S. currency, more affordable to holders of other currencies.

U.S. oil is heading for a fifth week of gains, while Brent is on course for a fourth weekly increase, the longest rising streak in about a year for both benchmarks. Oil is already up 17 percent in March, its strongest monthly gain since last April.

OPEC kingpin Saudi Arabia and non-OPEC producers led by Russia will meet on April 17 in the Qatar capital Doha in an effort to agree the first global supply deal in 15 years.

http://www.cnbc.com/2016/03/15/oil-prices-rise-as-us-producers-struggle-focus-shifts-to-inventory.html



US oil surges, ends 5.8 pct higher after Fed statement
5 Hours Ago
Reuters



U.S. oil prices closed sharply higher on Wednesday, having extended gains after the Federal Reserve left rates unchanged.

WTI, also known as U.S. crude, settled at $38.46 a barrel, up 5.8 percent, or $2.12. The U.S. benchmark was up 3.9 percent higher 10 minutes before the statement's release.

Brent futures also extended gains, trading at $40.26 a barrel, up 3.92 percent. Before the announcement, the international trademark was 2.89 percent higher, at $39.86.

Earlier, oil prices gained as U.S. stockpiles grew by less than half the levels expected while major oil producers readied to meet in Qatar next month on output freeze plan.

The market is also the lookout for a Federal Reserve policy statement due later in the day to glean direction on U.S. interest rates.


Crude inventories in the United States grew by 1.3 million barrels in the week to March 11 to 523.2 million, hitting record highs for a fifth straight week, data from the Energy Information Administration (EIA) showed. Analysts polled by Reuters had expected a 3.4 million-barrel gain.

"The data is moderately bullish with crude builds less than expected, coupled with strong gasoline demand driven by lower prices at the pump," said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland.

Oil prices, already up about 3 percent in early trade, gained further on the EIA data, before steadying ahead of the Fed announcement due at 2 p.m. EDT.

Earlier in the day, Qatari oil minister Mohammed Bin Saleh Al-Sada said producers from within and outside of the Organization of the Petroleum Exporting Countries will meet in Doha on April 17 to discuss output freeze plans. That helped crude prices resume their rally after a 5 percent slide over the past two sessions.

Around 15 OPEC and non-OPEC producers, accounting for about 73 percent of global oil output, support the output freeze initiative, the Qatari minister said in a statement.

Later in the day, a Saudi oil source said top OPEC producer Saudi Arabia fully supports an emergency meeting for oil producers in the Qatari capital Doha in April.

"Since Russia and other countries agree on having an emergency meeting for oil producers in Doha on April 17, Saudi Arabia fully supports this initiative," the source said.

http://www.cnbc.com/2016/03/15/oil-prices-rise-as-us-producers-struggle-focus-shifts-to-inventory.html

US oil surges, ends 5.8 pct higher after Fed statement
5 Hours Ago
Reuters


<p>Oil prices may have bottomed: BHP Billiton CEO</p> <p>Andrew Mackenzie, CEO of BHP Billiton, says there are signs of crude bottoming and the rally in iron ore prices will be short lived.</p>


U.S. oil prices closed sharply higher on Wednesday, having extended gains after the Federal Reserve left rates unchanged.

WTI, also known as U.S. crude, settled at $38.46 a barrel, up 5.8 percent, or $2.12. The U.S. benchmark was up 3.9 percent higher 10 minutes before the statement's release.

Brent futures also extended gains, trading at $40.26 a barrel, up 3.92 percent. Before the announcement, the international trademark was 2.89 percent higher, at $39.86.

Earlier, oil prices gained as U.S. stockpiles grew by less than half the levels expected while major oil producers readied to meet in Qatar next month on output freeze plan.

The market is also the lookout for a Federal Reserve policy statement due later in the day to glean direction on U.S. interest rates.


Crude inventories in the United States grew by 1.3 million barrels in the week to March 11 to 523.2 million, hitting record highs for a fifth straight week, data from the Energy Information Administration (EIA) showed. Analysts polled by Reuters had expected a 3.4 million-barrel gain.

"The data is moderately bullish with crude builds less than expected, coupled with strong gasoline demand driven by lower prices at the pump," said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland.

Oil prices, already up about 3 percent in early trade, gained further on the EIA data, before steadying ahead of the Fed announcement due at 2 p.m. EDT.

Earlier in the day, Qatari oil minister Mohammed Bin Saleh Al-Sada said producers from within and outside of the Organization of the Petroleum Exporting Countries will meet in Doha on April 17 to discuss output freeze plans. That helped crude prices resume their rally after a 5 percent slide over the past two sessions.

Around 15 OPEC and non-OPEC producers, accounting for about 73 percent of global oil output, support the output freeze initiative, the Qatari minister said in a statement.

Later in the day, a Saudi oil source said top OPEC producer Saudi Arabia fully supports an emergency meeting for oil producers in the Qatari capital Doha in April.

"Since Russia and other countries agree on having an emergency meeting for oil producers in Doha on April 17, Saudi Arabia fully supports this initiative," the source said.

4. Decommissioning

HMRC have published a technical note to clarify that companies that retain decommissioning obligations after the sale of an asset will be able to access corporation tax relief for those costs.

Comment:

Although only dealing with the CT aspects of decommissioning, this is a helpful clarification which confirms the view that a number of companies previously held. In particular the note clarifies that it is not necessary for the seller to remain on the licence, only that they should directly incur the costs. It should help companies dispose of interests in mature fields free of the decommissioning obligation to new companies without the uncertainty over the tax position of decommissioning relief.

Issues still remain with the PRT legislation in that it appears to require a company which retains an obligation to incur costs to remain on the licence to enable effective relief to be available. There is a clear disjoint here which it is hoped can be resolved but would appear to need a change in law.

There is a suggestion that further measures may be introduced to facilitate the transfer of late life assets, which is welcome.

5. Other Matters

5.1 The Government is to provide a further £20million of funding for seismic surveys in 2016-17.

Comment:

It is hoped that this will in a small way stimulate some further investment in the Basin.

5.2 There are a number of proposed changes to the general corporate tax regime which are specially excluded from applying to ring fence activities. These are:
•restriction on the use of carried forward losses and the increased flexibility on using losses against different sources of income
•the extension of the categories of income subject to royalty withholding taxes (which only apply to trade marks and brand names and not oil related royalties).

5.3 There are other proposed changes where it is not yet clear whether they will apply to ring fence activities. These are:
•instalment tax payment dates for “large” companies
•limitations on the deductibility of interest expense
•hybrid mismatch situations
•transfer pricing adjustment rules

Comment:

Industry has previously lobbied to be excluded from any tax payment and financing deduction changes on the basis that the ring fence regime is already fit for purpose in these respects, and will no doubt continue to do so.

5.4 The operation of the substantial shareholding exemption (SSE) is to be reviewed to make sure it is still meeting the original objectives.

Comment:

This relief is very generous and allows many transactions to be undertaken on a tax free basis so it is hoped that no unwarranted restrictions will be put on its application.

5.5 UK Guarantee scheme

It has been announced that the Government will consider using the scheme for oil and gas infrastructure projects.

Comment:

This could prove a catalyst for getting some of the North Sea’s infrastructure hubs into the hands of companies best suited to managing these assets provided the other tax hurdles of achieving this can be overcome.


CW Energy LLP

March 16, 2016

Very good news and info for Northsea O&G

http://cwenergy.co.uk/march-2016-budget-statement/

March 2016 Budget Statement


In his latest Budget George Osborne has introduced a number of measures to reduce the fiscal burden on the oil and gas industry and to clarify the regime for future years. There were a number of positive changes for industry as well as insulation from the swingeing changes to loss and interest relief that will apply to all other companies

1. Abolition of PRT

The chancellor announced that PRT is to be “effectively abolished” with effect from 1 January 2016.

Comment:

PRT will in fact remain, but with a reduced rate of 0%.

The reduction in the rate to 0% will be very welcome for those fields which are expected to have a net PRT liability going forward and indeed will represent a welcome cash flow saving for those fields expecting to pay PRT which would be repaid on decommissioning.

The stated motive behind the rate reduction is to simplify the regime for investors and level the playing field between investment opportunities in older fields and infrastructure and new developments.

In practice we believe that the measure will have mixed effects.

There will be some fields where we would expect PRT returns will no longer be needed, but returns will still be required for fields where there is an expectation or indeed a possibility that losses will be carried back into periods before 2016.

Rather than create a level playing field, it would seem that investments in PRT fields now become attractive from a fiscal point of view when compared to non PRT fields in the near term with income being taxed at 0% but spend which could create losses and PRT tax repayments.

2. SCT rate reduction

As widely speculated before Budget day, the Chancellor has announced a reduction in the rate of Supplementary Charge.

Supplementary Charge will reduce to 10% from the current rate of 20% with retrospective effect from 1 January 2016.

Comment:

Given that there are few companies paying CT and SCT in the North Sea the immediate benefit of a reduction in the SCT rate is likely to be enjoyed by only a small number of companies currently tax paying.

For the significant number of companies with tax losses the immediate impact of a reduction in the SCT rate will be a book hit as the value of any deferred tax asset will be reduced.

The reduction in rates will need to be reflected in the accounts for the next balance sheet date following enactment, which may be in the next few days if Government adopts the procedures used for previous rate changes.

Of course the reduction in the SCT rates does make future projects more attractive and assets more valuable.

3. Investment, Onshore and Cluster Allowance changes

3.1 Extension of Relevant Income definition

Secondary legislation will extend the definition of “relevant income” for Investment Allowance and Cluster Area Allowance (but not the Onshore Allowance) purposes to allow tariff income to activate the allowance.

Comment:

Up to now production income from a field was required to activate the Investment Allowance for expenditure in respect of a field. This disadvantaged fields with large amounts of tariff income where expenditure was incurred in respect of the tariff activity, as there was no field income to activate the field allowance. This change will be welcomed by the companies in these fields and should help to encourage expenditure on such systems.

3.2 Disqualification of expenditure on assets which have previously generated a field allowance

The government is amending the Onshore, Cluster Area, and Investment allowances to disqualify expenditure incurred on the acquisition of an asset in certain circumstances from generating allowance.

In particular, legislation will be introduced disqualifying the generation of onshore allowance on the acquisition of an asset on which allowance was previously generated, or where allowance was previously generated through the incurring of leasing expenditure on that asset.

Further, the generation of investment allowance on the acquisition of an asset prior to the determination of an oil field, where that asset has already generated allowance will also be disqualified.

These measures will have effect for expenditure incurred on and after 16 March 2016.

Comment:

These measures tighten up the definition of qualifying expenditure for the various allowances which should have little effect in practice.

hehehe more cut paste cut paste

Oh my...

http://www.theedgemarkets.com/my/article/amresearch-slashes-bumi-armada%E2%80%99s-fair-value-69-sen

AmResearch slashes Bumi Armada’s fair value to 69 sen

By The Edge Financial Daily / The Edge Financial Daily | March 16, 2016 : 10:21 AM MYT


KUALA LUMPUR: AmResearch Sdn Bhd has maintained its “sell” rating on Bumi Armada Bhd and slashed its fair value to 69 sen — from 86 sen — based on a larger 55% discount to its revised sum-of parts of RM1.53.

In a note yesterday, the research house said its forecast FY16-FY17 earnings have been cut by 5%-7% due to lower offshore support vessel utilisation and margin assumptions.

On Monday, Bumi Armada announced that it had filed a suit in the Supreme Court of Western Australia against Woodside Energy Julimar Pty Ltd to claim for damages arising from the termination of its Armada Claire floating production storage and offloading (FPSO) contract.

The FPSO unit had been operating in the Balnaves Field, off north-western Australia, since August 2014. Bumi Armada had said the contract’s termination was expected to impact the full-year 2016 financial results of the group.

Yesterday, AmResearch said besides the loss of revenues from Armada Claire, it remained concerned that this may not be the final FPSO termination as the EnQuest-operated Kraken project may face financial viability concerns if low crude oil prices persist towards the end of the year.

“Consensus estimates a FY16F (forecast) loss of £56 million (RM329 million) for EnQuest, which has a market capitalisation of £120 million — 12% of Bumi Armada.

“The US$1 billion (RM4.13 billion) Kraken FPSO, currently 80% completed and expected to be delivered later this year, accounts for 21% of the group’s current firm order book,” it said.

http://www.punchng.com/40751-2/



Oil prices: OPEC, non-OPEC producers to meet in April


March 16, 2016


OPEC members and key oil producers from outside the cartel will meet on April 17 in Doha in a bid to stabilise falling crude prices, Qatari energy minister Mohammed al-Sada said Wednesday.

The meeting is a “follow-up” to last month’s talks between Qatar, Russia, Saudi Arabia and Venezuela when they proposed an accord to freeze oil output at January levels, said a statement from Sada, the current OPEC president.

He said 15 countries accounting for some 73 per cent of global oil output supported the initiative, including the world’s top exporter Saudi Arabia, and Russia.

Russian energy minister Alexander Novak said this week that the meeting will “probably” be held in April.


Oil prices, which have plummeted more than 60 per cent since mid-2014 partly because of oversupply, recently recovered slightly following talk of an output freeze.

But Novak’s comments put pressure on oil prices after he indicated Iran could be excluded from a freeze deal to allow it to increase its crude production after Western sanctions over its nuclear programme.

One of the world’s biggest producers, Iran, returned to the export market in January.

According to OPEC’s monthly report released on Monday, Iran pumped out 3.1 million barrels per day of crude in February, up from 2.9 million in January. It pumped 4.0 million bpd before sanctions were imposed.

Overall production by the 13-nation cartel fell by 175,000 barrels per day in February to an average of 32.28 million bpd, largely because of a steep drop in Iraqi output and smaller falls in Nigeria and the United Arab Emirates, the report said.

Oil prices rebounded on Wednesday as investors bought back into the black gold after a two-day sell-off. At around 0600 GMT, US benchmark West Texas Intermediate for delivery in April was up 1.62 per cent, or 59 cents, to $36.93.

Brent for May was up 1.21 per cent, or 47 cents, at $39.21.

AFP

http://www.punchng.com/40751-2/


Oil prices: OPEC, non-OPEC producers to meet in April


March 16, 2016



OPEC members and key oil producers from outside the cartel will meet on April 17 in Doha in a bid to stabilise falling crude prices, Qatari energy minister Mohammed al-Sada said Wednesday.

The meeting is a “follow-up” to last month’s talks between Qatar, Russia, Saudi Arabia and Venezuela when they proposed an accord to freeze oil output at January levels, said a statement from Sada, the current OPEC president.

He said 15 countries accounting for some 73 per cent of global oil output supported the initiative, including the world’s top exporter Saudi Arabia, and Russia.

Russian energy minister Alexander Novak said this week that the meeting will “probably” be held in April.


Oil prices, which have plummeted more than 60 per cent since mid-2014 partly because of oversupply, recently recovered slightly following talk of an output freeze.

But Novak’s comments put pressure on oil prices after he indicated Iran could be excluded from a freeze deal to allow it to increase its crude production after Western sanctions over its nuclear programme.

One of the world’s biggest producers, Iran, returned to the export market in January.

According to OPEC’s monthly report released on Monday, Iran pumped out 3.1 million barrels per day of crude in February, up from 2.9 million in January. It pumped 4.0 million bpd before sanctions were imposed.

Overall production by the 13-nation cartel fell by 175,000 barrels per day in February to an average of 32.28 million bpd, largely because of a steep drop in Iraqi output and smaller falls in Nigeria and the United Arab Emirates, the report said.

Oil prices rebounded on Wednesday as investors bought back into the black gold after a two-day sell-off. At around 0600 GMT, US benchmark West Texas Intermediate for delivery in April was up 1.62 per cent, or 59 cents, to $36.93.

Brent for May was up 1.21 per cent, or 47 cents, at $39.21.

AFP

http://www.reuters.com/article/us-global-oil-idUSKCN0WI03Y


Oil rises as producers announce meeting on output freeze

LONDON | By Ahmad Ghaddar






Oil prices firmed on Wednesday on an announcement that producers will meet next month in Qatar to discuss a proposal to freeze output and on growing signs of a decline in U.S. crude production.


Producers both from and outside the Organization of the Petroleum Exporting Countries will hold talks in the capital Doha on April 17, Qatari oil minister Mohammed Bin Saleh Al-Sada said.


Around 15 OPEC and non-OPEC producers, accounting for about 73 percent of global oil output, support the initiative, the minister said in a statement.


Brent LCOc1 crude futures were up 48 cents at $39.22 a barrel at 0948 GMT.


U.S. crude futures CLc1 were trading 60 cents a barrel higher at $36.94.


Saudi Arabia, Qatar and Venezuela along with non-OPEC member Russia agreed last month to freeze output at January levels, but Iran has rejected such a deal.


On Monday, Russian Energy Minister Alexander Novak said a deal could be signed excluding Iran, which he said has the right to boost oil output after years of sanctions.


OPEC sources told Reuters a deal excluding Iran is not ideal, but not a deal breaker.


Analysts, however, said talks about freezing output would do little to rein in a global glut that sees more than 1 million barrels of crude produced every day in excess of demand.


"Any such deal would still not be a game changer. It would really just maintain the excess supply that is now in place," Thomas Pugh of Capital Economics said in a note.


But Standard Chartered said supply concerns due to non-OPEC production cuts could drive prices above $60 a barrel by the end of the year.


"We think that in coming months supply-side concerns will dominate, particularly when global inventories start to fall, which we think will happen in the third quarter," the bank said in a note.


U.S. shale producer Linn Energy (LINE.O) said on Tuesday that bankruptcy may be unavoidable as the company missed interest payments amid a slump in oil prices of as much as 70 percent since mid-2014.


Other companies, also fighting for survival, are seeking risky and costly borrowing from private equity firms.




(Additional reporting by Henning Gloystein in Singapore; Editing by Dale Hudson)

PETALING JAYA: Hong Leong Investment Bank (HLIB) Research had advised investors to go for oil and gas (O&G) companies with high price volatility and earnings sensitivity to crude oil prices if the Brent oil price rally continues to gain strength.

According to the research house, SapuraKencana Petroleum (Bhd) has the highest earnings and share price sensitivity to crude oil price movements, making it the best proxy for trading on crude oil price rally.

Similarly, it noted that rig players like UMW Oil & Gas Corp Bhd (UMWOG) and Perisai Petroleum Teknologi Bhd are also good trading stock on oil price movement with a higher than average share price correlation.

Analyst Jason Tan Yat Teng said that typically, the impact of upstream service companies’ earnings would only be felt six to 12 months after big movement in the oil price due to time lead for project re-basing.

However, he realised that the overall stock price movement is highly correlated to the oil price, implying that stock prices always move ahead of corporate earnings in response to oil prices.

“SapuraKencana stands out as the best trading stock with the highest correlation among stocks covered and appears to be the best trading option to ride on the potential oil market recovery.

On the other hand, rig players (UMWOG and Perisai) also possess high correlation after Sapurakencana.

“Under the current volatile environment, we believe a more trading-oriented approach with focus on potential oil price movements should be favoured over long-term holding approach while emphasising on stocks with high correlation to the crude oil price,” Tan said.

HLIB Research maintained its neutral call on the sector while its top pick includes mid-to- small cap companies such KNM Group Bhd.

http://www.thesundaily.my/news/1727762

PETALING JAYA: Hong Leong Investment Bank (HLIB) Research had advised investors to go for oil and gas (O&G) companies with high price volatility and earnings sensitivity to crude oil prices if the Brent oil price rally continues to gain strength.

According to the research house, SapuraKencana Petroleum (Bhd) has the highest earnings and share price sensitivity to crude oil price movements, making it the best proxy for trading on crude oil price rally.

Similarly, it noted that rig players like UMW Oil & Gas Corp Bhd (UMWOG) and Perisai Petroleum Teknologi Bhd are also good trading stock on oil price movement with a higher than average share price correlation.

Analyst Jason Tan Yat Teng said that typically, the impact of upstream service companies’ earnings would only be felt six to 12 months after big movement in the oil price due to time lead for project re-basing.

However, he realised that the overall stock price movement is highly correlated to the oil price, implying that stock prices always move ahead of corporate earnings in response to oil prices.

“SapuraKencana stands out as the best trading stock with the highest correlation among stocks covered and appears to be the best trading option to ride on the potential oil market recovery.

On the other hand, rig players (UMWOG and Perisai) also possess high correlation after Sapurakencana.

“Under the current volatile environment, we believe a more trading-oriented approach with focus on potential oil price movements should be favoured over long-term holding approach while emphasising on stocks with high correlation to the crude oil price,” Tan said.

HLIB Research maintained its neutral call on the sector while its top pick includes mid-to- small cap companies such KNM Group Bhd.

http://www.thesundaily.my/news/1727762

http://www.thetimes.co.uk/tto/business/industries/naturalresources/article4711416.ece?shareToken=b6e5312e9e408c61896a435247efbe1e

Sunday, March 13

North Sea oil fuels contract for Petrofac

The $250 million deal has secured 65 jobs at Petrofac
Danny Lawson/PA

The $250 million deal has secured 65 jobs at Petrofac
Danny Lawson/PA
Greig Cameron Scottish Business Editor
Published at 12:01AM, March 12 2016

This article was shared by a Times and Sunday Times member.

Get unlimited access to The Times and The Sunday Times, from £1 a week for 12 weeks.

Petrofac has won a $250 million contract to run offshore operations in several North Sea fields.
The engineering services company has been appointed duty-holder to Anasuria Operating Company, a joint venture between Hibiscus Petroleum and Ping Petroleum. As a result, Petrofac will take responsibility on behalf of the owners for a floating production, storage and offloading vessel, as well as for monitoring pipelines and wells at the Anasuria cluster.

The focus of the contract is about 175 kilometres east of Aberdeen and includes the Teal, Teal South, Guillemot A fields, with a 38.65 per cent stake in the Cook field. The remainder of the Cook field is owned by Ithaca Energy. Ping and Hibiscus, which are based in Malaysia, jointly acquired the Anasuria assets from Shell and ExxonMobil in August for about $105 million.

Walter Thain, managing director of Petrofac’s engineering and production services west division, said: “AOC’s acquisition of the Anasuria cluster is an investment in the future of the North Sea and it is a positive development for our industry during these challenging times. We aim to support AOC as they work to realise their vision for Anasuria to increase production and extend the life of [the] field.”

Petrofac said that about 65 offshore jobs would be transferred as part of the agreement.
Mark Paton, vice-president of new ventures and production for Hibiscus Petroleum, said: “We are new entrants to the North Sea, but we have experienced people and we aim to bring a fresh perspective along with our investment, to improve asset returns and extend the fields’ life.”

http://www.reuters.com/article/us-global-oil-idUSKCN0W9045

Oil at 2016 high above $40 per barrel after producer price support talk

NEW YORK | By Barani Krishnan

Global oil markets jumped more than 5 percent on Monday, with Brent hitting a 2016 peak above $40 a barrel, after Ecuador said it was holding a meeting of Latin American crude producers as OPEC sought a higher anchor price for oil.

Technically-driven buying in crude and a commodities rally also boosted oil. Industry data showing a smaller-than-expected build in stockpiles at the Cushing, Oklahoma delivery hub for U.S. crude futures was another supportive factor.

Oil has rallied more than 50 percent since hitting 12-year lows less than two months ago. The rally began after Russia and the Organization of the Petroleum Exporting Countries floated the idea of a production freeze to support prices in an oversupplied market.

Ecuador's Foreign Minister Guillaume Long said his government will host a meeting in Quito on Friday with Venezuela, Colombia, Ecuador and Mexico "to reach consensus over oil, especially prices."

Separately, major OPEC producers are talking about a new oil price equilibrium of around $50, New York-based consultancy PIRA told Reuters.


"It's more confirmation that oil producers are close to achieving some kind of a deal on price support," said Phil Flynn, analyst at Price Futures Group in Chicago. "It's feeding bullish sentiment into a market that's turned 180 degrees from where it stood just weeks ago."

Brent LCOc1, the global crude benchmark, settled up $2.12 at $40.84. Its session peak was $41.04, the highest since Dec. 9. That was 51 percent above the 12-year low of $27.10 on Jan 20.

U.S. crude CLc1 finished up $1.98 at $37.90 a barrel, near a 2-month high. On Feb. 11, it hit a 2003 low of $26.05.

Some of the recent gains in oil were also helped by chart-related buying as Brent and U.S. crude breached multiple resistance levels between $30 and $38.

Asset rotation by investors have also led to higher allocations into commodities, along with equities. Gold and iron ore prices hit multi-month highs on Monday while Asian equities rose to two-month highs.

Hedge funds raised their bullish bets on Brent to a record high and on U.S. crude to a November peak during the week to March 1.


On the production front, U.S. shale oil output was expected to fall for a sixth month in a row in April, a government forecast said.

Some analysts said the global crude market remained oversupplied by around 2 million barrels per day and higher prices could prompt U.S. shale producers to swiftly add rigs they had cut.

Morgan Stanley noted the rally was also driven by dollar depreciation. "The upside should be limited by bloated global inventories and producer hedging," it said.


(Additional reporting by Libby George in LONDON and Henning Gloystein and Manesha Pereira in SINGAPORE; Editing by Marguerita Choy)

http://www.reuters.com/article/us-global-oil-idUSKCN0W9045

Oil at 2016 high above $40 per barrel after producer price support talk

NEW YORK | By Barani Krishnan

Global oil markets jumped more than 5 percent on Monday, with Brent hitting a 2016 peak above $40 a barrel, after Ecuador said it was holding a meeting of Latin American crude producers as OPEC sought a higher anchor price for oil.

Technically-driven buying in crude and a commodities rally also boosted oil. Industry data showing a smaller-than-expected build in stockpiles at the Cushing, Oklahoma delivery hub for U.S. crude futures was another supportive factor.

Oil has rallied more than 50 percent since hitting 12-year lows less than two months ago. The rally began after Russia and the Organization of the Petroleum Exporting Countries floated the idea of a production freeze to support prices in an oversupplied market.

Ecuador's Foreign Minister Guillaume Long said his government will host a meeting in Quito on Friday with Venezuela, Colombia, Ecuador and Mexico "to reach consensus over oil, especially prices."

Separately, major OPEC producers are talking about a new oil price equilibrium of around $50, New York-based consultancy PIRA told Reuters.


"It's more confirmation that oil producers are close to achieving some kind of a deal on price support," said Phil Flynn, analyst at Price Futures Group in Chicago. "It's feeding bullish sentiment into a market that's turned 180 degrees from where it stood just weeks ago."

Brent LCOc1, the global crude benchmark, settled up $2.12 at $40.84. Its session peak was $41.04, the highest since Dec. 9. That was 51 percent above the 12-year low of $27.10 on Jan 20.

U.S. crude CLc1 finished up $1.98 at $37.90 a barrel, near a 2-month high. On Feb. 11, it hit a 2003 low of $26.05.

Some of the recent gains in oil were also helped by chart-related buying as Brent and U.S. crude breached multiple resistance levels between $30 and $38.

Asset rotation by investors have also led to higher allocations into commodities, along with equities. Gold and iron ore prices hit multi-month highs on Monday while Asian equities rose to two-month highs.

Hedge funds raised their bullish bets on Brent to a record high and on U.S. crude to a November peak during the week to March 1.


On the production front, U.S. shale oil output was expected to fall for a sixth month in a row in April, a government forecast said.

Some analysts said the global crude market remained oversupplied by around 2 million barrels per day and higher prices could prompt U.S. shale producers to swiftly add rigs they had cut.

Morgan Stanley noted the rally was also driven by dollar depreciation. "The upside should be limited by bloated global inventories and producer hedging," it said.


(Additional reporting by Libby George in LONDON and Henning Gloystein and Manesha Pereira in SINGAPORE; Editing by Marguerita Choy)