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Wednesday, 17 October 19:44 (GMT -05:00)



Stock and commodities markets

American Oil Export to Europe Quadruples Thanks to OPEC+


As predicted by many experts, the OPEC+ agreement has been favoring American shale oil producers. The export of American oil to Europe has quadrupled. The thing is that the agreement between the OPEC and Russia-led non-OPEC oil producers pushed oil prices high enough to make American shale oil production profitable again.
 
In the near future, the U.S. oil production growth may lead to the United States to the position of the world’s biggest oil producer to oust Saudi Arabia and Russia. American shale oil companies have already started exporting their oil to Europe pretty heavily. Like we said, the export has quadrupled. The only thing that detains the direct competition with Russia is the fact that most European oil refineries are till incapable of refining American oil. However, this may well change in the near future.
 
At the same time, international experts a calling it a turning point in the global production of crude oil. The thing is, American shale oil companies have started generating positive cash flows for the first time in a long period of time. They used to borrow heavily just to stay afloat. The first shale oil wells in the USA appeared in 2008. Since then, those companies have collectively borrowed around 300 billion dollars. Last year, they placed their bonds to the amount of 60 billion dollars.
 
Thanks to the improvement of fracking and other related technologies, the production costs have dropped considerably over the last 10 years to make it a more promising business. At this point, for such companies to stay profitable, crude oil need to cost at least $53/b.
 

 

According to the analytic department of NordFX, the WTI futures are trading around $68/b.

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At the same time, Pioneer Natural Resources reports that they have succeeded in dropping the production costs all the way down to just $20/b. Developing new shale oil fields allows the USA to boost the local oil production at a record pace. Back in January 2018, they used to produce 102 million b/d, which is an all-time record for the USA. The U.S. Department of Energy expects the local production to boost up to 10,7 million b/d and 11,3 million b/d in 2018 and 2019 respectively. If that’s the case, the USA is going to become the world’s biggest crude oil producer.
 
The OPEC+ helped American companies to get to the next level
 
As you probably know, Russia and the OPEC led by Saudi Arabia keep on sticking to their OPEC+ agreement designed to cap their oil production for the sake of restoring the balance in the global market of crude oil and raising oil prices higher through less considerable oversupply.
 
It’s mostly thanks to the OPEC+ agreement that Brent oil has been trading around $74/b for a while. Donald Trump didn’t share this enthusiasm and blamed the OPEC+ participants for raising oil prices artificially. However, they responded with the fact that apart from the OPEC+, the prices have been moved by a number of other major factors, including the production of shale oil in the USA.
 
As for the USA, the local oil production has increased by 1,5 million b/d over the last 18 months, which is about the amount that the OPEC+ participants have contracted their production by. Over the period of January through April 2018, American shale oil companies have quadrupled their oil exports to Europe as compared to the same period 12 months ago. With that being said, more and more experts say that the exported American shale oil may well completely make up for the artificial contraction created by the OPEC+ deal.
 
On the other hand, few refineries are capable of refining the shale oil from the USA, which is why the industry will need extra investments and time to reorient. This means that despite the abundance of shale oil, the global prices on crude oil may drop all the way down to 30-35 dollars per barrel only if there is huge oversupply of Brent and WTI oil. Still, the rise of the US shale oil industry has been raising a lot of concerns among conventional oil producers worldwide.

 

 

 

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USA Leaves China Without Crude Oil, Russia Is Ready To Compensate

The trade war between the United States and China is still underway. Earlier this month, America made another attempt to undermine the Chinese economy. The thing is, that up until recently, America used to be one of the biggest exporters of crude oil to China. In summer, the U.S. export of crude oil to China used to be equal to 10,5 million barrels a month. At this point, America has almost suspended the export of crude oil to China. Last month American oil companies shipped as little as 600K barrels, with no oil shipping planned for this month.

Publication date: 17 October 10:29 AM

Evgeniy Filichkin: FortFC Launches pre-ICO

While skeptics armed with political axioms, and complicated math formulas, are trying to persuade the world that sooner or later, the cryptomarket industry is doomed to exhaust its potential at some point in the future, the cryptomarket itself is becoming a part of the global economy.

Publication date: 03 October 09:10 AM

Trump is helpless: oil prices keep going up

Oil prices keep going up. Brent oil has just exceeded $83/b. Obviously, Donal Trump's attempts to urge the OPEC to increase their oil production have filed so far. For those of you who don't know, not so long ago Donald Trump threatened the OPEC in general and Middle-Eastern oil producers in particular with consequences if they refuse to start increasing their oil production to dump international oil prices as soon as possible. However, those threats seem to have had no impact on the OPEC and the prices are still going up. 

Publication date: 01 October 10:15 AM

Trump Will Take Revenge on Middle East because of Crude Oils

Donald Trump threated some Middle Eastern oil producers to take revenge on them because of crude oil prices. This is not the first time the American president is criticizing the Middle East in Twitter for being reluctant to contribute to lower oil prices. 

Publication date: 24 September 10:02 AM

China declares crude oil war on USA

Beijing is now considering the opportunity to cut down on the export of crude oil from the United States in response to Washington's decision to raise the import duties on Chinese products. The energy war between the USa and China may also affect Russia.

Publication date: 11 September 11:55 AM

China's dependence on crude oil increases fast

Over the last few years, China has been getting more and more dependent on the import of crude oil and some other energy carriers. Most of those oil imports are of Russian origin. the thing is that CHina's domestic oil and natural gas production has been contracting over the last few years while the country's production capacities have increased and are now in high demand of more energy.

Publication date: 11 September 10:40 AM

Trump Is Close to His Goal - Oil at $50/b

According to Finanz, President Trump is close to making oil prices drop down to $50/b like never before. Last week was bearish for the global market of crude oil. This happened mainly due to the agreement between the U.S. president and the King of Saudi Arabia.

Publication date: 23 August 11:36 AM

Investment Banks Raise Their Oil Forecasts

The world's biggest investment banks have raised their oil forecasts again, for the 10th month in a row, The Wall Street Journal reports. 

Publication date: 02 August 12:00 PM

Oil Prices May Skyrocket to $400/b if Iran Blocks the Strait of Hormuz

Blocking the Strait of Hormuz will inevitably trigger a global energy crisis while pushing oil prices to unseen heights, maybe even all the way up to $400/b. This is what the experts interviewed by PRIME think about the situation.

Publication date: 19 July 09:45 AM

Higher OPEC+ Production Quotas Won’t Raise Oil Prices, Kudrin Says

Chairman of the Russian Accounts Chamber Alexei Kudrin assumes that the OPEC+ participants’ decision to increase the daily oil production quotas won’t affect international oil prices.

Publication date: 16 July 09:58 AM