On Thursday, the U.S. Federal Energy Regulatory Commission approved the $2.5 billion Jordan Cove liquefied natural gas import terminal and related pipeline project. This project is expected to help meet growing natural gas demand in the Pacific Northwest.
The news release is quoted as saying:
The terminal, to be located on Coos Bay in Oregon, would provide [...]
On Wednesday, gas rose above 80$ per barrel. The dollar continues to weaken against other currencies.
The news article is quoted as saying:
The dollar has fallen steadily for most of this year and hit a 15-month low this week, helping drive commodities higher as investors have sought hard assets to hedge against the depreciating currency.
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On Monday, The Organization of the Petroleum Exporting Countries (OPEC) president Jose Botelho de Vasconcelos said it was still too early for the oil exporters’ group to make a decision on production changes. Global oil market still oversupplied.
The news article is quoted as saying:
The Organization of the Petroleum Exporting Countries will meet in Luanda, Angola, [...]
Flagging of its interest in the black gold this week, China National Oil Corporation secured its place in Iraq. Together with BP, it signed the first big oil deal. Why the sudden interest in oil?
All eyes are on oil majors, as they battle a refining slump. BP reports results Tuesday, followed by Conoco on Wednesday, Exxon and Shell on Thursday, and Chevron on Friday. Though the sector is up 20 per cent, refineries are struggling as demand remains limp. Is there a way out?
Gold may be taking off right now, but it’s not the only thing in an uptrend. Energy is also moving higher. The considerable drop of investment in oil exploration and production is, however, set to bring the risk of oil prices hike in the future. In Iraq, a different picture is playing out.
Even as investors are mulling mixed signals over crude supply numbers from the Energy Information Administration, there are clear indications that the Gulf state leaders have no plans to stop pricing oil in dollars. The rumour had traders hitting the panic button.
If bearish sentiment continues for a bit, expect to see a potential break below support levels around $67.35. Further declines in shipping rates due to reduced Chinese demand can be expected to continue, highlighted by expectations for a 50 per cent drop in freight rates in the next four months.
Investment in new oil fields has not been robust; when the current overcapacity is sucked up, the gap between supply and consumption will narrow again, forcing prices up. On that thinking, $75 per barrel can look like a good bet. Juniors lead the way!
Prices of light, sweet crude on the New York Mercantile Exchange are currently trading at half their peak hit in July last year. This has led some producers to postpone oil sands projects as they are capital-intensive and need crude futures above a certain threshold to be viable. US oil demand is also in the doldrums due to the global economic downturn, making it harder for producers to justify investments in new crude oil production. However, PetroChina has gone ahead with its investment in Canadian oil sands.
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