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, 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...
dragging crude to 2-month lows...