Breakingviews

Oil flirting with the $20s gives OPEC cause to cut

January 12, 2016

That bleak outlook for oil is gaining traction among analysts. Such bearish predictions may prove correct unless bickering OPEC puts aside its differences and agrees to deep cuts. But for that to happen, Russia and other producers outside the cartel will have to play ball.

OPEC indecision could engulf big oil majors

December 4, 2015

Instead of cutting output, the oil cartel has cleared the way for its members to keep flooding the market with more crude. For investors in oil companies this means a year of deeper spending cuts. Lower earnings are almost guaranteed to follow.

Saudi has chance to teach hedge funds a lesson

December 3, 2015

The largest OPEC producer has long complained that the biggest risk to a stable oil market is hedge funds who bet on falling prices. A deal to cut production in Vienna on Dec. 4, while a drop in the bucket for Saudi, could push up oil prices and leave speculators with big losses.

Oil market rests on Saudi-Iranian output deal

November 24, 2015

Saudi Arabia says it will work with the world’s biggest oil producers to maintain price stability. To be effective, the OPEC kingpin will also have to make room for Iran to add barrels to the flooded market. The geopolitics are fast moving. But logic points to a deal.

IEA history lesson makes $100 oil more likely

November 10, 2015

The Paris-based International Energy Agency says the world’s reliance on low-cost Middle East oil could return to 1970s levels. By cutting capex, oil majors are bolstering that dependence. Supply squeezes could feed through to higher crude sooner rather than later.

Why $65 per barrel oil looks like a ceiling, not a floor

June 1, 2015

Most industry observers expect a slow climb from the current levels. But global supply is rising, as U.S. shale drillers cut costs fast and Saudi Arabia and others go for volume. With non-U.S. shale on the horizon, $65 a barrel for Brent looks more like a ceiling than a floor.

Market too bearish on European oil services

November 28, 2014

Petrofac has fared especially badly, falling 30 pct in a week. Sub-$75 oil is rattling explorers’ and producers’ nerves. As projects are shelved, oil service companies are being hurt. Share ratings reflect the pain and much depends on oil prices. But some stocks now look cheap.

Sub-$90 oil would quickly restore OPEC harmony

By Christopher Swann
November 29, 2011

Spats like the one at the oil cartel in June once often stemmed from the hugely different crude prices members needed to balance their books. Now, even Nigeria’s ultra-low $20 a barrel mark six years ago is up to $80. If prices fall anywhere near that level, OPEC will reunite.

OPEC desperately looking for a deal, any deal

December 14, 2011

Global oil markets are fragile, but it might not matter whether the cartel maintains or increases its output target when it meets later this week. Quotas are already ignored. After OPEC’s last acrimonious get together, simply reaching a consensus would soothe buyers and sellers.

Iraq rise will upset OPEC power balance

June 12, 2012

The war-torn country is already the cartel’s third biggest producer and has grand ambitions. But an unchecked increase would lead to durable oversupply and lower prices. OPEC has to find a way to keep Iraq in the cartel with a reasonable quota. Negotiations will be delicate.