U.S. withdrawal of energy stocks as oil falls below $ 60

Energy stocks fell Tuesday as Wall Street Muller oil prices below $ 60 a barrel and more difficult long-term prospects for major oil companies face pressure to replace the aging wells.
OPEC also hanging over investors' collective radar screen this week, with the oil cartel expected to prevent further cuts in production this week at a confab.
In this context, the Amex Oil Index (XOI) fell 1.3% to 919, the Amex Natural Gas Index (XNG) lost 2.2% to 405, and the Philadelphia Oil Service Index (OSXX) fell by 0.4 and 161%.
While mega-projects like Thunder Horse project in the Gulf of Mexico is helping in the production, oil majors like BP (BP) are still squeeze through the fields of ripening and cuts in capital spending, even while maintaining dividend payments.
"Above all, the need to reassure investors that the large distribution of cash are sustainable," Liam Denning writes in The Wall Street Journal Heard on the Street column on Tuesday. "That means that when it comes to replacement barrels, which can go out and find, not buy more horses Thunder."
Among energy stocks in the spotlight, Exxon Mobil (XOM) fell 1.1% to $ 68.03. The leader in the oil and gas sector is expected to hold its annual meeting Wednesday. Some shareholders are worried about moving the company to spend $ 104 billion in stock buybacks in recent years, rather than strengthen the reserves, according to a Bloomberg article on Tuesday.
Royal Dutch Shell (RDSA) Executive Director Linda Cook is off the oil on June 1 after a power struggle surrounding the retirement of chief executive Jeroen van der Veer this summer. For 29 years, an employee of the company, headed by the Cook massive natural gas business. Shares of Royal Dutch Shell fell 0.6% to $ 51.12.
Of PetroChina (PTR) shares dipped 1.2% to $ 107.13 in transactions on the New York Stock Exchange. The state oil company, management has proposed a $ 1 billion purchase of a minority stake in Singapore Petroleum Co.
Among analyst ratings, FBR updated on Tuesday, Southwestern (SWN) to overcome market perform. Shares fell 4 cents to $ 40.07.
Credit Suisse deck ratings on several energy companies through the improvement of Noble Energy (NBL) and Occidental (Oxy) to outperform from market perform downgrading EOG Resources (EOG) and Ultra Petroleum (UPL) expected from neutral.
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Oil scenario to $100 a barrel ?

The United States Oil Fund (NYSE: USO) has been moved up by 1.8% this year, following a fall of 54.8% in 2008. Even with the recovery we have seen crude oil prices since February, oil is only about $ 60 per barrel today - or about 60% below its record set last summer.

It could be some time before you see $ 100 barrels of oil, although it may be closer than one might expect. In a new report published by the International Energy Agency, the organization warned of the possibility of very high oil prices over the next three years the world economy should regain its footing. The idea is that the hike in oil prices would result in demand caused by the postponement of the oil companies huge amounts of investment in future oil supplies, while the recession continues.

Surprisingly, the USO has raised to 48.2% since bottoming in mid-February. Whether or not the recent momentum is sustainable in the short term is another matter entirely. Earlier this month the Department of Energy reported that crude inventories had reached its highest level in 18 years. It has also been reported that OPEC is unlikely to slow its production anytime soon. Taken together, these factors present a strong argument that the recent rise in oil prices is driven more by speculation and not by the underlying fundamentals. [Source]

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Oil price will follow economic data coming out from Japan and the U.S for dirrection

Changed oil hovered just above $ 56 a barrel on Monday 18 May 2009, the break of the previous meeting of the loss of nearly 4 percent as the market expects more economic data and movements in equity markets for directions .

U.S. Crude for June delivery CLc1 rose 36 cents to $ 56.70 per barrel for 2256 GMT. The contract fell $ 2.28 to settle at $ 56.34 per barrel on Friday compared to a period of six months high of over $ 60 before beating last week.

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oil price hit $56 a barrel in US on Wednesday

On Wednesday oil price hit $56 a barrel in US after government announced that unused crude oil being placed in storage slowed a bit last week. In the oil market, Crude oil for June delivery is around $56.34 a barrel (increase 4.6 % since middle November last year)

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Oil price hit $54 a barrel, America Looking for alternative energy source

Oil prices increase again and now the oil price is at $54 a barrel. Some investor hope that the oil price can increase again to $60 and this is different with what expert expect that the oil price will not go to $150 just like in 2008.

Expert in America is looking for alternative source of energy to minimize the impact of oil price that can be increase in the next few months.

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The Impact of High Oil Prices on Global and Regional Natural Gas and LNG Markets

Oil prices are notoriously hard to predict, but they are an important input in many energy and economic models. This paper explores the effects of different oil price assumptions on natural gas markets (production, consumption, prices in different regions) in the International Natural Gas Model (INGM). Three cases from the INGM are presented: a reference case, a high oil price case and a second high oil price case, where gas-to-liquids (GTL) capacity additions are constrained. The results show that regardless of constraints on GTL capacity additions, higher oil prices lead to higher production and consumption of natural gas. However, when GTL capacity is allowed to expand, higher oil prices generally lead to higher natural gas prices and to less gas consumption in the electric power and industrial sectors as they switch to cheaper fuels and more natural gas is diverted to the production of GTLs. [Source]

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Understanding Crude Oil Prices

This paper examines the factors responsible for changes in crude oil prices. The paper reviews the statistical behavior of oil prices, relates this to the predictions of theory, and looks in detail at key features of petroleum demand and supply...Our overall conclusion is that the low price-elasticity of short-run demand and supply, the vulnerability of supplies to disruptions, and the peak in U.S. oil production account for the broad behavior of oil prices over 1970-1997. Although the traditional economic theory of exhaustible resources does not fit in an obvious way into this historical account, the profound change in demand coming from the newly industrialized countries and recognition of the finiteness of this resource offers a plausible explanation for more recent developments. In other words, the scarcity rent may have been negligible for previous generations but may now be becoming relevant...The $140/barrel price in the summer of 2008 and the $60/barrel in November of 2008 could not both be consistent with the same calculation of a scarcity rent warranted by long-term fundamentals. Notwithstanding, the algebra of compound growth suggests that if demand growth resumes in China and other countries at its previous rate, the date at which the scarcity rent will start to make an important contribution to the price, if not here already, cannot be far away.[Source]

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United States crude oil drop again

United States crude fell by 3.21 dollars, or about 6 percent, to $ 49.03 per barrel yesterday, while Brent crude shed $ 3.00 to $ 51.06. It was after the International Energy Agency (IEA) had drastically reduced its forecast for oil demand, offsetting the impact of earlier data showing Chinese imports of oil rose to the second highest in historyDue to the Passover feast, yesterday was the first day of trading Thursday in almost 6 percent profit on the oil market, propelled by a rally on Wall Street.But it is not all bad news as hopes rose Nigeria is to export crude oil, and Shell Petroleum Development Company (SPDC) yesterday put out a fire in its pipeline Bomu Manifold Ogoniland rivers in the state.

It was part of the oil company's efforts to restart the oil, it is estimated that the output of 120,000 barrels per day (BPD), which had been closed due to accident.
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Is It Time the right time to Buy Oil

These indicate a bullish oil inevitability "peak oil", arguing that the time will come when hit global peak oil production. From that point on we will be able to pump less and less crude oil in the earth. In economic terms, we will be faced with declining supply.Meanwhile, bulls argue that the demand will grow significantly as China and other emerging markets, fuel their growth, with crude oil. On average, each person in the United States consumes about 25 barrels of crude oil per year, each person in China uses more than just two. It is a lot of possible future demand. And all of us amateur economists know what happens if the restriction of supply while increasing demand: an increase in prices.Read more >>

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