This is why crude oil is up BIG the day after Christmas. As supply & demand tighten (demand exceeds supply today), unplanned supply disruptions can and will cause big moves in the price of oil.
BENGHAZI, Libya (Reuters) - Armed men blew up a pipeline pumping crude oil to Es Sider port on Tuesday, cutting Libya's output by up to 100,000 barrels per day (bpd), military and oil sources said. The state-run National Oil Corporation (NOC) said in statement output had been reduced by 70,000-100,000 bpd. The cause of the blast was unclear, it added.
The attackers arrived at the site near Marada in two cars and planted explosives on the pipeline, a military source said.
Pictures purportedly showing a huge cloud from the blast in central eastern Libya circulated on social media.
The damage was still being assessed, one oil source said. Oil prices rose on the report.
Islamic State fighters had a presence in the area until government forces expelled them from their main stronghold in Sirte a year ago.
The operator of the pipeline is Waha, a subsidiary of the NOC and a joint venture with Hess Corp (NYSE:HES), Marathon Oil Corp (NYSE:MRO) and ConocoPhillips (NYSE:COP).
Waha pumps a total 260,000 barrels a day, its chairman said last month.
The North African state's oil production was last put by officials at around one million bpd but exact figures are hard to obtain in a country riven by factional conflict.
Oil Price - Dec 26
Oil Price - Dec 26
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - Dec 26
By Trevor Hunnicutt at Reuters at 3PM ET
Investors scooped up commodities on Tuesday during a holiday-shortened week, but took a far more mixed view of U.S. equities as shares of Apple Inc (NASDAQ:AAPL) sagged.
The main equity gauges on Wall Street were under pressure following a 2.6 percent drop in Apple's shares on reports of weak iPhone X demand.
Many markets around the world, including in parts of Europe and Asia, were shut on Tuesday after the Christmas Day holiday, and trading volumes were light.
Commodities firmed, with oil moving to its highest since 2015, supported by an explosion on a crude pipeline in Libya and voluntary supply cuts led by the Organization of the Petroleum Exporting Countries.
U.S. crude rose 2.24 percent to $59.78 per barrel and Brent was last at $66.25, up 2.35 percent.
Gold prices hit more than three-week highs, and palladium hit its highest since February 2001 on supply worries. Spot gold added 0.6 percent to $1,282.61 an ounce.
Bitcoin (BTC=BTSP) rebounded from a brutal selloff last week. The digital asset gained 14 percent on Tuesday, rising to nearly $16,000 on the Bitstamp exchange, after sinking by more than a quarter from Dec 16 to 25.
Apple put a damper on an equity market that has posted strong gains in 2017 on the back of a U.S. tax bill signed into law last week and stronger sales that were expected to extend into the holiday season.
Yet, bearish brokerage calls on iPhone X demand put the company's shares on track for their worst single-day percentage fall since Aug. 10. The company will slash its sales forecast for its flagship phone in the current quarter to 30 million units, down from what it said was an initial plan of 50 million units, Taiwan's Economic Daily reported, citing unidentified sources.
The news hit shares of Apple suppliers, including Broadcom (O:AVGO), Skyworks Solutions (O:SWKS), Finisar (O:FNSR) and Lumentum Holdings (O:LITE).
"There probably are a good number of U.S. investors that have slight to moderate overexposure to domestic stocks - we've had a great performance year," said Invesco Ltd (N:IVZ) Chief Global Market Strategist Kristina Hooper.
"It could be an opportunity to do some profit-taking, a little bit of trimming, and moving to areas that have lower valuations."
The Dow Jones Industrial Average (DJI) fell 5.09 points, or 0.02 percent, to 24,748.97, the S&P 500 (SPX) lost 2.44 points, or 0.09 percent, to 2,680.9 and the Nasdaq Composite (IXIC) dropped 27.91 points, or 0.4 percent, to 6,932.05.
MSCI's gauge of stocks across the globe (MIWD00000PUS) shed 0.04 percent.
Two-year U.S. Treasury yields rose to nine-year highs, exacerbating a collapse of the gap in yields between short and long-term bonds. The gap between 2-year and 10-year yields shrank to 58.6 basis points as investors focused on new supply that will be sold into the light market this week.
Benchmark 10-year notes (US10YT=RR) last rose 7/32 in price to yield 2.4648 percent, from 2.488 percent late on Friday. The 2-year note (US2YT=RR) last fell 1/32 in price to yield 1.9033 percent, from 1.895 percent.
Currencies were mixed. The dollar index (DXY), tracking the U.S. unit against a basket of major currencies, fell 0.1 percent, with the euro down 0.03 percent to $1.1865.
The Japanese yen strengthened 0.05 percent versus the greenback to 113.21 per dollar, while sterling was last trading at $1.3371, up 0.02 percent on the day.
Emerging market stocks lost 0.18 percent. MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) closed 0.24 percent lower, while Japan's Nikkei (N225) lost 0.20 percent.
Investors scooped up commodities on Tuesday during a holiday-shortened week, but took a far more mixed view of U.S. equities as shares of Apple Inc (NASDAQ:AAPL) sagged.
The main equity gauges on Wall Street were under pressure following a 2.6 percent drop in Apple's shares on reports of weak iPhone X demand.
Many markets around the world, including in parts of Europe and Asia, were shut on Tuesday after the Christmas Day holiday, and trading volumes were light.
Commodities firmed, with oil moving to its highest since 2015, supported by an explosion on a crude pipeline in Libya and voluntary supply cuts led by the Organization of the Petroleum Exporting Countries.
U.S. crude rose 2.24 percent to $59.78 per barrel and Brent was last at $66.25, up 2.35 percent.
Gold prices hit more than three-week highs, and palladium hit its highest since February 2001 on supply worries. Spot gold added 0.6 percent to $1,282.61 an ounce.
Bitcoin (BTC=BTSP) rebounded from a brutal selloff last week. The digital asset gained 14 percent on Tuesday, rising to nearly $16,000 on the Bitstamp exchange, after sinking by more than a quarter from Dec 16 to 25.
Apple put a damper on an equity market that has posted strong gains in 2017 on the back of a U.S. tax bill signed into law last week and stronger sales that were expected to extend into the holiday season.
Yet, bearish brokerage calls on iPhone X demand put the company's shares on track for their worst single-day percentage fall since Aug. 10. The company will slash its sales forecast for its flagship phone in the current quarter to 30 million units, down from what it said was an initial plan of 50 million units, Taiwan's Economic Daily reported, citing unidentified sources.
The news hit shares of Apple suppliers, including Broadcom (O:AVGO), Skyworks Solutions (O:SWKS), Finisar (O:FNSR) and Lumentum Holdings (O:LITE).
"There probably are a good number of U.S. investors that have slight to moderate overexposure to domestic stocks - we've had a great performance year," said Invesco Ltd (N:IVZ) Chief Global Market Strategist Kristina Hooper.
"It could be an opportunity to do some profit-taking, a little bit of trimming, and moving to areas that have lower valuations."
The Dow Jones Industrial Average (DJI) fell 5.09 points, or 0.02 percent, to 24,748.97, the S&P 500 (SPX) lost 2.44 points, or 0.09 percent, to 2,680.9 and the Nasdaq Composite (IXIC) dropped 27.91 points, or 0.4 percent, to 6,932.05.
MSCI's gauge of stocks across the globe (MIWD00000PUS) shed 0.04 percent.
Two-year U.S. Treasury yields rose to nine-year highs, exacerbating a collapse of the gap in yields between short and long-term bonds. The gap between 2-year and 10-year yields shrank to 58.6 basis points as investors focused on new supply that will be sold into the light market this week.
Benchmark 10-year notes (US10YT=RR) last rose 7/32 in price to yield 2.4648 percent, from 2.488 percent late on Friday. The 2-year note (US2YT=RR) last fell 1/32 in price to yield 1.9033 percent, from 1.895 percent.
Currencies were mixed. The dollar index (DXY), tracking the U.S. unit against a basket of major currencies, fell 0.1 percent, with the euro down 0.03 percent to $1.1865.
The Japanese yen strengthened 0.05 percent versus the greenback to 113.21 per dollar, while sterling was last trading at $1.3371, up 0.02 percent on the day.
Emerging market stocks lost 0.18 percent. MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) closed 0.24 percent lower, while Japan's Nikkei (N225) lost 0.20 percent.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - Dec 26
Go here to find daily videos from CME Group on oil trading activity: http://www.cmegroup.com/trading/energy/ ... crude.html
I urge you to watch the December 26th video because they explain why WTI is getting close to a VERY SIGNIFICANT technical trading range. The Wall Street Herd is watching this carefully.
Supply/Demand fundamentals are what will push up WTI and keep it higher, but the technical stuff is very important. As I have been pointing out in my weekly podcasts, there is very little technical resistance for WTI above $60.00. In fact, the only resistance that I see at all is around $62.50.
I urge you to watch the December 26th video because they explain why WTI is getting close to a VERY SIGNIFICANT technical trading range. The Wall Street Herd is watching this carefully.
Supply/Demand fundamentals are what will push up WTI and keep it higher, but the technical stuff is very important. As I have been pointing out in my weekly podcasts, there is very little technical resistance for WTI above $60.00. In fact, the only resistance that I see at all is around $62.50.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - Dec 26
Oil discoveries hit lowest point in 70 years. Houston Chronicle.
Major oil discoveries have fallen to their lowest levels in more than seven decades, as drillers across the world wrestle with stubbornly low prices and the tantalizing draw of quick returns in U.S. shale fields. Global oil companies are projected to end 2017 with discoveries totaling just 7 billion barrels of oil and gas - less than one-quarter of the 30 billion barrels identified in 2012, according to Norwegian research firm Rystad Energy. That falloff eventually could translate into supply shortages and sharply rising prices as global demand diminishes existing reserves.
We haven't seen anything like this since the 1940s," senior Rystad analyst Sonia Mladá Passos said in a report. "We have to face the fact that the low discovered volumes on a global level represent a serious threat to the supply levels some 10 years down the road." Exploration budgets - the cash oil companies spend on finding new fields - have fallen for three consecutive years, Rystad said, dropping by more 60 percent in total. And the shale revolution has further diverted company spending from offshore and conventional exploration to U.S. fields, where hydraulic fracturing unleashed vast and previously unknown oil reserves.
-----------------------
This is how the next boom gets started.
There is NO WAY that U.S. shale plays can meet future global oil demand on their own. The math simply won't work much longer.
Major oil discoveries have fallen to their lowest levels in more than seven decades, as drillers across the world wrestle with stubbornly low prices and the tantalizing draw of quick returns in U.S. shale fields. Global oil companies are projected to end 2017 with discoveries totaling just 7 billion barrels of oil and gas - less than one-quarter of the 30 billion barrels identified in 2012, according to Norwegian research firm Rystad Energy. That falloff eventually could translate into supply shortages and sharply rising prices as global demand diminishes existing reserves.
We haven't seen anything like this since the 1940s," senior Rystad analyst Sonia Mladá Passos said in a report. "We have to face the fact that the low discovered volumes on a global level represent a serious threat to the supply levels some 10 years down the road." Exploration budgets - the cash oil companies spend on finding new fields - have fallen for three consecutive years, Rystad said, dropping by more 60 percent in total. And the shale revolution has further diverted company spending from offshore and conventional exploration to U.S. fields, where hydraulic fracturing unleashed vast and previously unknown oil reserves.
-----------------------
This is how the next boom gets started.
There is NO WAY that U.S. shale plays can meet future global oil demand on their own. The math simply won't work much longer.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - Dec 26
Technical Analyst says WTI hits $64/bbl before kickoff of the next Super Bowl: https://www.linkedin.com/feed/update/ur ... 0973230080
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - Dec 26
OPEC compliance reaches highest level in November. OPEC’s resolve looks stronger than ever. In the run up to the late-November decision to extend the production cuts through the end of 2018, the group posted its best compliance rate with the agreed upon production cuts yet. OPEC reported a 122-percent compliance rate in November, a figure that bodes well as the group seeks to keep those curbs in place for another year. < Could it be that OPEC really CAN'T produce a lot more oil than it is today?
Russia supports gradual, managed exit from OPEC cuts. In another bit of news that bolsters the OPEC deal, Russian energy minister Alexander Novak said that Russia supports a gradual exit from the production cuts, reducing the risk of a messy conclusion and return to full production. < It would be insane to do otherwise.
Iraq oil minister sees market balanced in first quarter. Iraq’s oil minister Jabar al-Luaibi said that he was optimistic that the oil market would reach a balance in the first quarter of 2018, which will be accompanied by higher oil prices. His comments are some of the most bullish out there among OPEC members, most of which see such an event unfolding in the second half of the year. < Oil price cycles NEVER end with a "balanced market". By June it will be clear that the global market is under-supplied and only higher oil prices will stimulate the necessary growth to meet demand. De-regulation and lower corporate taxes in the U.S. will push U.S. GDP over 4% and send demand for oil much higher than IEA is currently predicting.
Russia supports gradual, managed exit from OPEC cuts. In another bit of news that bolsters the OPEC deal, Russian energy minister Alexander Novak said that Russia supports a gradual exit from the production cuts, reducing the risk of a messy conclusion and return to full production. < It would be insane to do otherwise.
Iraq oil minister sees market balanced in first quarter. Iraq’s oil minister Jabar al-Luaibi said that he was optimistic that the oil market would reach a balance in the first quarter of 2018, which will be accompanied by higher oil prices. His comments are some of the most bullish out there among OPEC members, most of which see such an event unfolding in the second half of the year. < Oil price cycles NEVER end with a "balanced market". By June it will be clear that the global market is under-supplied and only higher oil prices will stimulate the necessary growth to meet demand. De-regulation and lower corporate taxes in the U.S. will push U.S. GDP over 4% and send demand for oil much higher than IEA is currently predicting.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group