Oil prices and the broader financial markets have suffered from acute bout of volatility so far in 2016, with no signs of letting up. The CBOE Crude Oil Volatility Index, a fund that tracks (as it name suggests) the volatility of crude oil, has spiked to a level not seen since the global financial meltdown…
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Historic OPEC-Russia Agreement Will Have Minimal Impact
Several top OPEC producers made headlines with Russia on Tuesday, revealing that a secret meeting between their respective energy ministers led to a deal to “freeze” production in an effort to boost oil prices. The agreement is monumental in the sense that OPEC and Russia are poised to agree to cooperate, the first OPEC and…
Oil Production Rumor Mill Continues To Turn As Iran Hints At Freeze
After Russia and several top OPEC nations, including Saudi Arabia and Qatar, announced a general agreement to freeze oil production, sights shifted to Tehran to see if the proposal had any chance of survival. Oil ministers from Iraq, Qatar, and Venezuela traveled to Tehran on Wednesday to see if they could bring their Iranian counterpart…
Why OPEC Production Freeze Could Pave The Way For Actual Cuts
Defying skepticism that their countries could agree on any measures to stabilize global crude markets and prices, Saudi Petroleum and Natural Resource Minister Ali al-Naimi and Russian Energy Minister Novak, along with their Venezuelan and Qatari colleagues, reached agreement February 16 In Doha to freeze their countries’ output at their January 2016 levels. Initially, global…
Shale Set To Decline Substantially This Year
U.S. shale has weathered the oil crash better than many expected, but the stubborn persistence of low prices through 2016 could amount to the “straw breaking the camel’s back” for shale production. The International Energy Agency released its Medium Term Oil Market Report on February 22 at the IHS CERA Week conference in Houston, an…
Oil Price Volatility And Market Predictions
Oil market observers will appreciate that the oil price has become more volatile of late with daily movements of several percent common place. A friend suggested I could look into this to see if past patterns of price volatility had any predictive powers. Figure 1 Daily d$ for WTI since January 1988. Periods of enhanced…
Contraction In U.S. Shale Pushes Oil To $40
Crude oil prices have rallied by more than 30 percent since early February and investors are growing more confident that a rebound is in order. Have oil prices finally turned a corner? The sudden wave of cautious optimism surrounding the direction of oil prices can be boiled down to the decline in U.S. oil production,…
Six Reasons The Current Oil Short Covering May Have Legs
The professional money managers covered 25,639 short contracts for crude oil last week—the highest figure in the past 11 months. These large short squeezes are indicative of bottom formations, which are driving the first leg of this new trend. However, sustenance depends on fresh buying, so a short squeeze will only propel the markets so…
Oil Prices Up In Spite Of Crude Inventory Build
On the 84th birthday of the most wonderful Keely Smith (no relation, by the way), the oil market is reversing yesterday’s losses and going ‘zooma zooma’ to the upside, despite an impending solid build to crude stocks from the weekly EIA inventory report. Here are six things to assess relating to the oil market today:…
Why Oil Prices May Not Move Higher
It is similar to the false March-June 2015 rally. In both cases, prices increased largely because of sentiment. As in the earlier rally, current storage volumes are too large and demand is too weak to sustain higher prices for long. WTI prices have increased 47 percent over the past 20 days from $26.21 in mid-February…
OPEC-Russia Meeting Set For April With Or Without Iran
OPEC and Russia are pushing ahead with a planned meeting to discuss a production freeze, and have agreed to meet in Doha on April 17. Qatar is billing the meeting as the “Doha Initiative,” an arrangement that it says has “put a floor under the oil price” and is largely responsible for the 40 percent…
Playing The Volatility Game In Oil
Crude inventory data from the Department of Energy (DOE) has the tendency to cause massive volatility in today’s market, with prices hovering perilously close to resistance levels; but the chances of these weekly inventory reports prompting any defining move in the market are marginal. Crude oil markets are affected by a myriad of ‘news’ articles,…
Oil Refinery 