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Wednesday, 22 November 04:45 (GMT -05:00)



Stock and commodities markets

Why Are OPEC and Russia Unable to Trigger Oil Price Rally?


Not so long ago, oil prices reached the 10-month low. Since early 2017, oil prices have already dropped by 20%. The low efficiency of the joint efforts to cap oil production in order to support oil prices is now rated differently by the international expert community.
 

 

 

 

In June 21, the prices dropped by 2% at a time. This brought them to the 10-month low, which came as a shock to most observers out there. After the OPEC and Russia agreed to extend the so-called Vienna Accord, most experts started predicting higher oil prices, but they have failed so far, as you can clearly see.
 
Apparently, the oil exporters were hoping for the same scenario that was previously seen a number of times in the past. The thing is, production cuts have always resulted in higher oil price, but not this time. Being encouraged by the optimism expressed by the oil exporters, many traders and investors started loading up on oil futures, but now they seem to have failed on their oil deals since the bias is now bearish despite the oil agreement extension.

 

 

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A couple of months after the initial agreement was signed, the participants found out that their oil inventories waiting to be exported were actually shrinking at a slower-than-expected pace. The demand for crude oil around the globe happened to be lagging behind their expectations as well. On top of that, American shale oil companies started behaving the way it was expected.
 
Small-scale American companies producing shale oil used to be on the verge of bankruptcy due to cheap Saudi oil exported in quite large amounts and over an extended period of time. However, the shale companies survived this and even revived as soon as oil prices started going up earlier this year. They unexpectedly started pumping more oil with the help of fewer oil rigs.
 

 

As a result, nobody can deny the shale oil phenomenon today. Yet, the impact seems to be serious. The thing is, despite the civil war in Yemen, the Qatar crisis, and the disputes between Russia and the USA over the situation in Syria, oil prices have still been going down over the last few weeks. The whole point is, previously any of those factors could have triggered an oil rally in an instance. But this is not happening now, and chances are the U.S. shale oil industry is currently one of the key drivers of the downtrend in the global market of crude oil. Of course, the downtrend can be partially explained by higher production in Libya, Brazil and some other oil-exporting countries. However, there is no denying the fact that the abundance of American shale oil and natural gas is the key factor pressing oil prices. For the first time in many decades, the USA has become a major oil exporter.

 

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Saudi Arabia Doesn’t Want Oil Prices to Grow Too Fast

Reuters reports that Saudi Arabia doesn’t want oil prices to grow too fast. This is what Minister of Energy, Industry and Mineral Resources of Saudi Arabia Khalid A. Al-Falih told during his speech at the UN Climate Change Conference 2017 in Bonn, Germany.

Publication date: 19 November 08:58 AM

What’s the Fair Price of Crude Oil Today?

For many economies out there, especially those dependent on the export of crude oil, oil prices have always been a major indicator to monitor. These days, the international expert community is divided over the future of the global oil market. 

Publication date: 18 November 09:36 AM

Crude Oil Stops Being a Lifeline for the Russian Ruble

 The U.S. Dollar is getting more expensive against the Russian Ruble again as the Russian currency is feeling pressure from the new round of the Western sanctions. Crude oil seems to have stop saving the day for the Russian economy and national currency.

Publication date: 18 November 09:33 AM

Oil Market Shows No Reaction To Optimistic OPEC Report

Oil market showed almost no reaction to the annual OPEC oil report released on November 13th, even though the report happened to be fairly optimistic. In particular, while WTI oil futures for December delivery increased in price by as little as 0,11% up to $56,80/b, Brent oil futures for January delivery lost 0.09% and moved down to $63,46/b.

Publication date: 18 November 09:26 AM

Russia Is Still Dependent On Crude Oil

Is the Russian economy getting rid of its dependency on crude oil? Even though Russian politicians say that’s really the case, famous Russian economist Igor Nikolaev tried to find out the truth backed by figures.

Publication date: 17 November 11:52 AM

High Oil Prices Threaten OPEC+

 Today’s oil prices, which are relatively high, as well as some tensions in Saudi Arabia, may hinder the prolongation of the OPEC+ agreement signed last year, PRIME reports.

Publication date: 17 November 11:49 AM

Oil Prices Won’t Exceed $75/b, BofA Experts Say

Even if the geopolitical situation is the most favorable for the global oil market, oil prices are still never going to exceed the $75/b threshold again, Bank of America Merrill Lynch (BofA) experts believe.

Publication date: 17 November 11:13 AM

Wall Street Banks Improve Their Oil Forecasts

For the first time in 6 months, Wall Street banks seem to be optimistic about the near future of crude oil, The Wall Street Journal reports.

Publication date: 10 November 07:06 AM

Cryptocurrency Market Cap Goes Above $200 Billion

Last week, the cryptocurrency market capitalization exceeded the $200 billion threshold for the first time in history. According to Coinmarketcap, a resource monitoring 1254 digital currencies on 6400 online exchanges, Bitcoin was the biggest market driver of the market-cap rally. 

Publication date: 10 November 01:12 AM

CME Group Announces Bitcoin Futures

CME Group, the world’s biggest operator of futures exchanges, has announced Bitcoin futures, the world’s first and most popular cryptocurrency to date. The information was first made public by The Financial Times.

Publication date: 10 November 01:08 AM