The overnight tumble lows in most 'risk' assets is being revisited by oil and gas prices following unhelpful comments from Genel's Tony Hayward that "the next 6-12 months will become challenging" for many in the industry, more details emerging with regard US selling SPR crude to cover budget needs [5], and finally OPEC's Saudi officials proclaiming that crude prices should be set by the market. NatGas (Nov contract) tumbled under $2 and WTI (Dec) cracks to fresh 2-month lows, erasing well more than half of the August month-end panic-buying surge...
Genel’s Hayward Says Some Oil Companies Won’t Survive Next Yr
- Next 6-12 mos. will “become challenging” for many in industry, Chairman Tony Hayward says at conference in Cape Town.
- Capital mkts closed for many participants
- Mkt oversupplied by 2m-3m b/d
- Shale oil “completely overwhelmed” underlying demand
- Saudi production strategy “is working;” U.S. rig counts, output dropping
- Mkt will need 18-30 mos. to clear w/o intervention
- Supply-side “wild cards” include Iran, Libya: both could ramp up
- Oil prices will recover; $50 won’t sustain industry
Congressional leaders proposed to sell 58 million barrels of oil from U.S. emergency reserves over six years starting in fiscal 2018 to help pay for a budget deal that ends mandatory spending cuts, according to a copy of the bill posted to a congressional website.
Led to an ugly last 24 hours...
[6]
dragging crude to 2-month lows...
[7]
Charts: Bloomberg