Category: Peak Oil Review

“Oil prices remained stable for most of last week with NY oil climbing a dollar or so and London oil falling about the same. On Friday however a number of factors came together to send NY oil down $2.23 a barrel to close Friday at $84.86. London also fell, closing at $105.64, down $2.53. These were the lowest settlement prices in both markets since last July. The downward pressure came in the aftermath of Superstorm Sandy when it became apparent that two major refineries with a combined capacity of 308,000 b/d, which were shut down for the storm, could not resume operations immediately.”

“After falling rapidly for nearly a week, oil prices stabilized on Thursday and Friday with NY oil closing at $86.28 and London at $109.55. The two week price drop which stemmed mainly from concerns about economic prospects took NY oil down about $7 a barrel and London down some $5. By week’s end, concerns over the disruptions that Hurricane Sandy will cause to the five refineries located in its path, producing 600,000 b/d, pushed up gasoline and heating oil prices taking crude with it. Heating oil supplies in the NY area are far below normal levels so prolonged closure of refineries accompanied by colder weather will likely lead to a price surge…”

“Oil traded in a narrow range until Friday when an accumulation of economic problems ranging from weak demand, growing inventories, and a seeming lack of progress at the EU summit meeting sent prices down more than $2 a barrel. The futures market closed out the week at $90.05 a barrel in NY and $110.14 in London. Widespread pessimism about the global economy coupled with a lack of any immediate threats to Middle Eastern oil supplies are believed responsible for Friday’s decline…”

“Oil prices jumped about two dollars on Tuesday as Turkish-Syrian tensions increased, but remained relatively steady for the rest of the week with Brent closing down $1 on Friday at $114.62 a barrel and NY down to $91.86. The IEA’s new forecast of slightly lower oil demand for 2012 and 2013 helped send prices down on Friday. The IMF now is forecasting that world economic growth will be only 3.3 percent this year and 3.6 next year, adding to the pressure. Europe continues to grapple with the Greek and Spanish debt problems amid growing concerns that another global recession is in the offing…”

“It was a volatile week with oil prices falling some $3.50 a barrel on Tuesday, recovering on Wednesday, and falling again on Friday. At week’s end NY oil ended down a couple of dollars for the week at $89.88 and London ended largely unchanged at $112.02. These moves widened the spread between NY and London oil to $22.14, the widest in almost a year largely due to increasing US production. Declining production from the North Sea suggests that the Brent benchmark may become less relevant as a gauge of global oil’s value in the future. Except for the refining situation in California, oil supplies in the US are adequate, with domestic production the highest in 16 years at 6.5 million b/d, weak demand of 18.3 million b/d, and crude stockpiles up 8.4 percent from last year…”

“After a two week decline of nearly $10 a barrel, oil prices reversed last week and climbed a little on Thursday and Friday leaving NY oil at $92.19 and London at $112.39. Despite the steep decline in September, oil prices still registered the biggest quarterly increase this year on concerns that Middle Eastern problems could disrupt oil supplies. Higher gasoline prices also contributed to the increase. Friday saw an unusual short squeeze on the closing October gasoline contract in NY which sent prices up 19 cents to close at $3.34 a gallon. The sudden surge was technical in nature as one or more traders scrambled to cover short positions before the contract expired…”

“After falling by nearly $8 a barrel during trading on Monday, Tuesday, and Wednesday, prices recovered a bit on Thursday and Friday to close at $111.42 in London and $92.89 in N.Y. The drop came after nearly 3 months of steady gains and was likely related to talk of an SPR release, assurances from the Saudis that they will keep up production, and an unexpected drop in US crude inventories on Wednesday.”

“Oil prices rose steadily last week on the expectation, then the news, that the US Federal Reserve was going to resume quantitative easing by buying $40 billion of mortgage-backed securities a month for an indeterminate period. The open-endedness of the program came as a surprise and at one point NY oil futures briefly topped $100 a barrel, but slid back to close at $99…”

“Oil prices were little changed at the end of the four-day trading week. NY and London futures finished with small weekly losses after a surge of more than 9 percent in August. Brent closed at $114.25 a barrel and NY at $96.42. Much of the impetus for market moves last week came in anticipation of large government financial bailouts on both sides of the Atlantic…”

“Oil prices were little changed for the week: first climbing on the threat posed by hurricane Isaac; then falling as the hurricane proved to be less of a danger to oil production; and finally recovering on Friday as Fed Chairman Bernanke hinted that the US might have to launch a stimulus program. Such a program would likely weaken the dollar, thereby boosting oil prices. NY oil futures closed at $96 and London at $114, a dollar or so below recent highs.”