Energy Prospectus

This is why I believe we will see an "emergency meeting" of OPEC in the 1st quarter and why I thin oil price may rebound by Q2.

Full article:
http://www.oilandgas360.com/opec-update ... d-26401157

Algeria’s oil minister, Youcef Yousfi, on Sunday called on OPEC to cut production in order to raise oil prices and defend smaller producers in the cartel. The country is struggling to deal with oil prices losing nearly half their value in the last six months as other OPEC members keep production levels steady.

“For us, OPEC has to intervene to correct the imbalance and cut production to bring up prices and defend the income of its member states,” Yousfi said in remarks carried by the state news agency.

While Algeria has some $200 billion in foreign reserves (enough to cover imports for the next several years), it is dependent on oil revenue, which provides 97% of its hard currency income and 60% of the budget, reports the Associated Press.

In a cabinet meeting Tuesday, President Abdelaziz Bouteflika expressed concern over the “worrisome” situation and made promises to cut costs. The first of the austerity measures came Saturday when Prime Minister Abdelmalek Sellal said there would be a freeze on public sector hiring in 2015. Government positions account for some 60% of jobs in Algeria.

Major infrastructure projects are also expected to be put on hold for the time being. Public transportation in Algiers and highways in the countryside may be put off until the government has a more robust source of income.

Yousfi said that it is OPEC’s responsibility to take action to help member countries in times like these. He said, “We believe that OPEC should defend the interests of its members by cutting output so prices will go up. We do not share the views of big producers inside OPEC who say the market can regulate the prices,” reports Reuters.

Saudi Arabia expects $80 per barrel for 2015

Bloomberg reports that Saudi Arabia’s 2015 budget is “probably assuming an oil price of $80 a barrel,” and will be seen as a sign of confidence in the market, according to a former economic adviser to the country’s government.

The assumption is down from $103 a barrel for this year, but still higher than the $60 a barrel many were expecting. The Kingdom set spending for 2015 at 860 billion riyals ($229 billion) with revenue falling to 715 billion riyals ($190 billion) from 1.046 trillion riyals ($278 billion) in 2014, the Finance Ministry said.

“Everyone was expecting to see a budget built on a price around $60, but that would have sent a negative message to the oil market,” said John Sfakianakis, former chief economic adviser to Saudi Arabia’s Ministry of Finance. “With a fiscal breakeven price of $80 a barrel, the government is sending a message to the market that we are expecting to see a rebound in oil prices.”

it's becoming a daily topic on CNBC amongst, predicting oil prices for 2015. "How low will they go?" We heard $80, then $70, then $60, now we have low $50s, and today a guest predicted a 4-handle very soon. With such uncertainty, no wonder energy stocks are getting hammered, along with year end tax loss selling.