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Oil Prices Drop To 7-Week Lows - Here's Why
WTI Crude hit new 7-week lows, dropping below $57 (front-month) for the first time since April 15th's 'inventory draw' rip. In addition to reports from Reuters of leaked details about OPEC not expectated to cut production (did anyone really expect that), a combination of renewed inventory builds (as reported by API last night) and reports that Iraq is increasing its supply to new record highs is forcing futures prices to catch down to physical markets.
Weakness driven by...Iraq supply concerns...(as RT reports)
Iraq is ready to increase its crude exports to a record 3.75 million barrels per day in June, continuing OPEC’s strategy of ousting US shale producers from the market.
The extra oil from Iraq comes to about 800,000 barrels per day, more than from another OPEC member, Qatar, said Bloomberg, referring to Iraq's oil shipments schedule.
Iraq is increasing oil exports in two directions. The first is in the Shiite south, where companies such as BP and Royal Dutch Shell work. The second is Nothern Iraqi Kurdistan, whose government last year received Baghdad's consent to independent oil deliveries.
In April, Iraq exported almost 3.1 million barrels of oil per day, which is a record.
And Iran remains a worry...
Forget #OPEC as a whole, the two countries to watch are #Iraq and #Iran as #oil output rises pic.twitter.com/ZphwyVMJqb
— Javier Blas (@JavierBlas2) May 27, 2015
And inventory builds reappear...
And leaked details of OPEC's report suggests no cut in production... (via Reuters)
OPEC is not expected to cut oil production at its meeting in June, and the meeting is expected to be a short one, Saudi Arabia's Al Hayat newspaper quoted an unnamed OPEC source as saying on Thursday.
Saudi Arabia will continue producing oil to meet customer demand, and its output is now at about 10.3 million barrels per day in light of growth in demand from China and India, the source added.
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See here, here, here and here.
Michael Snyder, I'm looking at you... lol!
So I should wait about a month to fill my Home Heating oil tank?
~"What we have here is a failure to communicate..."~
I guess this sort of news has escaped the socialist government of the State of California. Unleaded regular gas is at $3.60 a gallon as of yesterday in one location on I-10 in SoCal, but more like $3.69 to $4.09 in most places.
Folks, don't let liberals get in charge of your state. Ever.
Yes, and in the Utah it is 2.99 to 3.55, Nevada 3.54 after 2.9 in Denver this is a bit hard to take. Lower fuel prices of earlier this year would have more people vacatiing the money around voluntarily.
Yes, and in the Utah it is 2.99 to 3.55, Nevada 3.54 after 2.49 in Denver this is a bit hard to take. Lower fuel prices of earlier this year would have more people vacatiing the money around voluntarily.
See? Our investment in the invasion of Iraq and killing of thousands of civilians is finally paying off. Moar cheap oil just in time to save the driving season. And as an added bonus we got gamma radition proof anthrax out of the deal.....#winning........ All hail the MIC.
Looks like it's time for some good ol' fasioned naked aggression to save U.S. Shale Oil.
A few bunker busters will take Iran down a peg or two.
They've already had the naked aggression part working, just not in the direction they were expecting. We're going to hit the point of not selling anything to anybody which is the new Utopia.....
fk. what am i going to do with my gazprom calls...
And please tell me again, why and how would Iraq try to get rid of US shale production by boosting their own??
Wouldnt dumping the price just be shitting in your own pants? And aren't Iraq currently under full puppeteering control by the USA?
Wake up, Random, Iran is the puppet master of Iraq.
so Iran tries to destroy USA by giving away their oil? Considering that USA is a net importer all of this makes a lot of sense..
Sorry I must have been sleeping very deep, what have I missed?
We really don't import that much from the middle east anymore, but we broke it, so we're paying for it now.....
"we" rained white phosphorus and depleted uranium all over iraq in order to put our own domestic oil production out of business? that's the plan? all hail big oil and big business! viva la bonus!
When you say it like THAT it sounds all bad and stuff.
Hm. I thought there was only like a couple trillion barrels total to suck out. Maybe the earth is going to deflate now because too much oil is extracted and so all the mountains will suck down flat and then Saudi Arabia will sink into a giant hole like that Sarlacc lives in and we'll all die. Or something. Or maybe I should turn in my degree in petrolatum theory. That's what I get for listening to Algore.
US Dollar IMO - UUP bottomed-out around 24.5 on 5.15.2015 and has been grinding higher since. USO short-term rally ended right around 21.25 on that same day. USD still acts as a wrecking ball.
Well, for all the BULLS out there : An oil trading G_d somewhere in Connecticut says that the ABSOLUTE FLOOR for oil is $ 40.00/bbl.
That's because he has pending buy orders at $39.95. ;-)
Absolute floor is likely $34. Support will kick in between $45 and $34 - your number fits perfectly.
With prices below $85, tight oil and older fields worldwide continue bleeding from their eyes and ears. Even an H2 rally (many are calling for it) probably wouldn't be able to maintain $85, the Fed would have to reverse course and launch QE4. That would (will) be the next leg down - instant recession as energy costs blow a hole in budgets. They'll need to triple adjust GDP.
OIL is heading further down regardless of geo-politics...
http://www.globaldeflationnews.com/oil-light-sweet-crudeelliott-wave-upd...
Demand has dropped too.
Demand growth is certainly slowing. People forget it's not all supply side.
expectated???
Expectorated.
meaningless while price per gallon at the pump is $2.79
Wrong again...................
Is Cushing full yet? When will oil be $20?
Just as soon as gasoline hits $5/gal
Zero is Oil's Gartman, apparently
I guess the value of the dollar is climbing.
All depends on what article you read on ZH.
It is. Especially if the economy strengthens/Fed can begin to raise rates. As the rest of the world continues printing money, their currencies will become relatively devalued. More than half the DXY is the EUR/USD rate.
The Iran situation is incedibly divergent.
1. Iran agrees to a deal. Tensions are relieved, and their oil enters the market. Downward price pressure.
2. No deal is reached. Iran continues building its nuclear program. Their oil stays off the market. Upward price pressure.
In June we'll know if Saudi has succeeded in forcing the Non-OPEC producers' hands and they cut. Until then OPEC is losing money, but making it up for it splendidly having killed half of US tight oil and punished every other (higher marginal production cost) producer.
Iran has nothing to with this, they're treading water just to stay barely afloat and avoid revolution, at the mercy of the rest of OPEC.