Oil Heads for Longest Weekly Losing Streak Since 1986 Amid Glut : Oil headed for the longest run of weekly declines since March 1986 as OPEC forecast weaker demand for its crude, adding to signs that a global supply glut that spurred last year’s price collapse may persist. Futures swung between gains and losses in New York and are set for an eighth weekly drop. Demand for oil from the Organization of Petroleum Exporting Countries will average 28.8 million barrels a day, the lowest in 12 years, the group said in a report on Jan. 15. Venezuela, one of OPEC’s 12 members, is seeking to coordinate a plan to calm prices, according to President Nicolas Maduro. Oil fell almost 50 percent last year, the most since the 2008 financial crisis, as supplies swelled amid the fastest pace of U.S. production in more than three decades while OPEC resisted calls to cut output. Goldman Sachs Group Inc. and Societe Generale SA were among banks to reduce their price forecasts this week. “It’s a broader global poker game in oil markets -- the first to blink loses,” Michael McCarthy, a chief strategist at CMC Markets in Sydney, said by phone. “OPEC has gotten away with its cartel actions for many decades now and there are clear signs that it’s no longer working. Their power over the oil price is being vastly eroded.” West Texas Intermediate for February delivery was at $46.70 a barrel in electronic trading on the New York Mercantile Exchange, up 45 cents, at 1:01 p.m. Singapore time. The contract slid $2.23 to $46.25 on Jan. 15. The volume of all futures traded was about 27 percent above the 100-day average. Prices are down 3.5 percent this week. U.S. Supply Brent for March settlement was 45 cents higher at $48.72 a barrel on the London-based ICE Futures Europe exchange. The February contract expired on Jan. 15 after decreasing $1.02 to $47.67. The European benchmark crude traded at a premium of $1.56 to WTI for the same month. OPEC, which supplies about 40 percent of the world’s crude, pumped 30.2 million barrels a day in December, an increase of 140,000 barrels led by gains in Iraq, according to the report. The group’s share of the global oil market will shrink to 31.2 percent this year from 31.9 percent in 2014, it estimated. U.S. production rose to 9.19 million barrels a day through Jan. 9, the fastest pace in weekly records dating back to January 1983, data from the Energy Information Administration show. Stockpiles climbed by 5.39 million barrels to 387.8 million, according to the Energy Department’s statistical arm. Venezuela, Russia Venezuela plans to coordinate with OPEC and non-OPEC producers to restore “the normalization of prices” in the next few weeks, Maduro said on state television. The president met his Russian counterpart Vladimir Putin in Moscow to discuss global oil markets as the price slump threatened the economies of both countries. Venezuela, which holds the world’s biggest crude reserves, relies on oil sales for almost 95 percent of foreign currency earnings, while Russia is the largest producer globally. Prices need to drop further and stay there for the first half of this year for supply and demand to “re-balance,” Goldman said in an e-mailed report on Jan. 12. The “war” for market share means oil is skewed to the downside, Australia & New Zealand Banking Group predicted on Jan. 15. WTI may extend losses next week, a Bloomberg News survey shows. Twenty one of 40 analysts and traders, or 53 percent, forecast crude will decline through Jan. 23 while 11 said futures will advance.
Posted on: Fri, 16 Jan 2015 05:51:13 +0000
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