Weekly Crude Losses Skirt a 10-Month Low Thanks to Overly-Sensitive Traders: Analyst
Meanwhile, Iran teases the idea of deeper cuts to rebalance the market.
Iran has teased the idea of deeper cuts to rebalance the market.
Although West Texas Intermediate on Friday rose27 cents to settle at $43.01 and Brent climbed 29 cents to $45.51, crude remained down for a fifth consecutive week - and skirted a 10 month low, causing critics to once again cite the Organization of the Petroleum Exporting Countries (OPEC) for failing to reduce the global glut via its production cutback agreement.
With oil prices down 20 percent this year, the market is headed for its biggest first half percentage fall since the late 1990s, and analysts at Bank of America Merrill Lynch said in a note on Friday that "We doubt that demand growth will accelerate sufficiently to break the current downward price momentum."
Still, some experts believe the market is overreacting: Phil Flynn, senior market analyst at Price Futures Group Inc., told Bloomberg, "It's becoming bearish mania: I think they're overdoing it.
It's becoming bearish mania: I think they're overdoing it
Phil Flynn, senior market analyst, Price Futures Group Inc
"If we keep going down, we're not going to be adding rigs in a few months, we're not going to be adding production."
As for OPEC's role in improving market stability, Thomas Finlon, director of Energy Analytics Group LLC, remarked, "It's very difficult to see at what point in time the original objective of this OPEC/non-OPEC agreement can be reached; it's a finish line that is getting farther and farther away."
Perhaps sensitive to the sustained criticism that the cartel may have extended its cuts until next year but failed to deepen them, there is now talk among OPEC members that more cuts may be in the offing.
While he stressed that the existing cuts need more time to work, Bijan Namdar Zanganeh, oil minister for Iran, told media, "We are consulting with OPEC member states to have them prepared to make a decision: decision-making would mean for OPEC to make further cuts."
He conceded that reaching a consensus would be "difficult": "Making decisions in this organization is very difficult because any decision will mean production cuts for the members."
But one source close to OPEC told Reuters that a deepening of cuts won't occur "unless Iran would accept being included in the cut"; and three other OPEC delegates dismissed the prospect outright.
Also last week, John Kilduff, founding partner of Again Capital, theorized that only an outright war in the Middle East over Syria would escalate crude prices; otherwise, he thinks "the most likely way forward for prices is lower still, into at least the mid-$30s."
Skangas duel fuel LNG carrier Coral Energy (image credit/Skangas)
Liquified natural gas (LNG) bunker tanker Coralius has made its first trip loading and delivering LNG to and from Norwegian ports, according to trade press reports.
The 5,800 cubic meter capacity tanker, which is owned by Norwegian gas company Skangas, was delivered to the company in June. Skangas also operates LNG carrier Coral Energy.
OPEC Cutback Extension to be Discussed in November, But Developments Could Render Any Deal Meaningless
Analysts say everything from Saudi exploration to rising tensions with North Korea could radically alter the dynamics of the international market. File Image / Pixabay
Ever since the Organization of the Petroleum Exporting Countries (OPEC) extended the duration of its production cuts earlier this year to March of 2018, speculation has been rampant that the meager cutback volume coupled with the large number of members