Oil Prices Archives
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What the Iranian Nuke Deal Means for the Oil Markets

by Dr. Kent Moors | published November 26th, 2013

The big news over the weekend was the apparent “breakthrough” with Iran.

I say “apparent” because we don’t know much about the substance of the deal. The reason is because the substance doesn’t exist yet.

The real devil, I suspect, is coming in the details.

Nonetheless, this apparent step forward is creating its fair share of investor angst right now about oil prices – even though the initial conclusions have been largely baseless.

In fact, the news of the breakthrough has already revised my scheduled meetings in Moscow.  And even the Nigerians, with whom I met last week, are now concerned and would like another session.

Across the globe, the concern among the major crude producers I am talking to is all the same: If this really constitutes a major initiative, what will it do to the price of oil?

Meanwhile, investors have worries of their own – specifically how it will affect their investments.

Here’s the answer to both questions…

What the Next "Arab Spring" Means for Oil Prices

by Dr. Kent Moors | published July 2nd, 2013

I’m set to appear on Fox Business Network this afternoon (at about 2:50 Eastern) to deliver this revelation, but you heard it here first.

Recently, I have been suggesting a narrow trading band for both West Texas Intermediate (WTI) and Brent crude in London. They’re trading today at about $96.00 and $103.00, respectively.

But two developments are threatening to heat things up yet again – and fast.

One is the wild card of geopolitical events, which can be a catalyst for rapid gyrations in oil prices. The other is a factor rising inside the oil market itself (which I’ll get to in a moment).

The first – and the primary subject matter for this afternoon’s appearance – involves the renewed unrest in Egypt. Fox is going to be primarily interested in how this impacts oil availability and pricing.

But my take goes a bit beyond the current situation in Cairo – 1,204 miles east, to be precise.

For the biggest oil price concerns, look to this tiny island nation…

Europe’s New Economic Crunch (Oil Prices Sure Aren’t Helping)

by Dr. Kent Moors | published September 16th, 2011

As we sit down here in Krakow to begin government sessions on shale gas policy, and European Union ministers meet in the southwestern city of Wrocław, Poland, thoughts are turning once again to oil pricing…

In case you haven’t been watching, Brent prices in London trade are accelerating, approaching $113 per barrel, while the West Texas Intermediate (WTI) benchmark traded in New York is about to break the $90 per level again.

The spread between the two remains at all-time highs, indicating that Brent will continue to appreciate quicker than U.S. pricing, although both are rising.

That spread is “in favor” of Brent.

This creates a continuing problem for the E.U., which is faced with mounting eurozone currency and liquidity problems, weakness in its banking sector, and a European Central Bank that’s experiencing dissent – within its own ranks – over the proper course of action.

Today’s meeting in Wrocław concerns whether Greece will receive the next tranche of a bailout package. That package is already widely perceived as being insufficient to prevent some sort of Greek default. Plus, the Germans are taking a hard line on what is necessary for that largess to keep coming.

Meanwhile, the internal dispute is getting intense.

A good example is the decision made this morning by the ministers. Or actually the non-decision. The ministers decided… not to decide until next month.

The prospect of higher prices for Brent further complicates matters with the common currency.

The euro has been losing ground against the dollar throughout the latest period of the debt crisis. Of course, that says less about the dollar’s strength that it does about the euro’s enduring weakness.

That, combined with a rise in the cost of energy, means Europe is facing the prospect of a new economic crunch.

This one has the potential of completely derailing this continent-wide recovery already distinctive for its anemic performance.

In Krakow, Too, Our Problem Is Oil

There are essentially three reasons Poland has decided to expedite decisions on developing its domestic shale gas.

First, they may well have a lot of it. The estimate I will be giving them puts the extractable reserves in the five basins already identified in the country at more than 187 trillion cubic feet, or five times the rest of Europe combined.

Second, Poland is dependent upon Russian imported gas, introducing the latest stage in a political disagreement 500 years in the making.

But it is the third reason that is most compelling…

Click here to continue reading…

After the IEA Experiment, What's Next for Oil Prices

by Dr. Kent Moors | published July 22nd, 2011

The Paris-based International Energy Agency (IEA) announced yesterday that it would not continue releasing oil reserves into the global oil market.

The decision last month to release 60 million barrels from member strategic reserves, with 30 million coming from the U.S. Strategic Petroleum Reserves (SPR), did have an initial downward impact on oil prices.

But that turned out to be short-lived.

On June 22, when the surprise announcement was made, West Texas Intermediate (WTI) benchmark crude closed at $94.425 in New York, while Brent crude in London ended at $113.77.

At market open today, WTI stands at $99.175, and Brent is up to $117.80.

Thus ends a one-month experiment that has been largely a failure.

Click here to continue reading…

Why Russia’s Oil Fields Will Soon Be Crawling with Westerners

by Dr. Kent Moors | published December 11th, 2009

Western oil majors are about to help Moscow solve its energy problem. And that could be a boon for investors.

The traditional Russian oil fields in Western Siberia are well past peak production. Some satellite fields in the region remain, but the extraction gains will be marginal.

My sources in Russia’s Ministry of Natural Resources and Ecology (MNRE), the government entity responsible for distribution and oversight of development leases, now acknowledge that the country’s overall crude oil production could decline by more than 7% over the next several years.