Pump Prices in U.S. Rise for Third Time Since June in Survey
(Bloomberg) -- The average price of regular gasoline at U.S. pumps rose 20.98 cents in the two weeks ending March 6 to $2.5384 a gallon, according to Lundberg Survey Inc.
Prices rose for the third time since June as the margin on gasoline improved for refiners and retailers just as the higher-cost summer gasoline blend season approaches, according to Trilby Lundberg, president of Lundberg Survey. A strike by members of the United Steelworkers union at 12 refineries and refinery outages contributed to higher prices, she said.
“Assuming crude oil prices do not change appreciably, we can expect a few more pennies per gallon in some parts of the country,” Lundberg said in a telephone interview on Sunday.
The survey is based on information obtained at about 2,500 filling stations by the Camarillo, California-based company. Prices are 97.14 cents lower than a year ago.
The highest price for gasoline in the lower 48 states among the markets surveyed was $3.48 a gallon in Los Angeles, Lundberg said. The lowest price was in Baton Rouge, Louisiana, where customers paid an average $2.16 a gallon. Regular gasoline averaged $2.59 a gallon in Long Island, New York.
West Texas Intermediate crude, the U.S. benchmark priced in Cushing, Oklahoma, fell 73 cents, or 1.5 percent, to $49.61 a barrel on the New York Mercantile Exchange in the two weeks to March 6.
Rising Output
U.S. oil output continues to rise, reaching 9.32 million barrels a day in the seven days ending Feb. 27, the highest level in weekly Energy Information Administration data dating back to 1983. Crude inventories rose to 444.4 million barrels, also the highest level on record.
Gasoline futures on the Nymex rose 24.12 cents, or 15 percent, to $1.8819 a gallon from Feb. 20 to March 6.
U.S. refineries operated at 86.6 percent of capacity in the week ending Feb. 27, down from 87.4 percent a week earlier, EIA data show.
The United Steelworkers’ union and Royal Dutch Shell Plc are scheduled to resume talks Monday amid a strike that includes 12 refineries and three other facilities. The union has rejected seven contract offers from Shell, which is representing companies including Exxon Mobil Corp. and Chevron Corp.
Philadelphia Energy Solutions put the restart of a fluid catalytic cracker on hold for a week before introducing feed to the unit Thursday, according to a person familiar with plant operations. Multiple units at Exxon’s Torrance site in California remain shut after a Feb. 18 blast.
China’s February Exports Rise 48.9%
by Bloomberg News
(Bloomberg) -- China’s exports grew steadily in the first two months of the year, driven by the U.S. economic recovery, while imports fell in a reflection of weakened domestic demand and lower commodity prices.
Exports gained more than 48 percent from a year earlier in February, exceeding the median analyst forecast for a 14 percent jump, though the number was skewed by distortions from the timing of the Lunar New Year holiday. Together with January, overseas sales rose 15 percent. The government is targeting a 6 percent gain in trade for 2015.
A strengthening U.S. has helped underpin China’s economy as it seeks to cut excess capacity and transition to reliance on domestic consumption rather than debt-fueled infrastructure spending. The import numbers reflected headwinds facing the world’s second-biggest economy. In his work report to the annual National People’s Congress session last week, Premier Li Keqiang said those challenges include overcapacity and insufficient innovation.
“Chinese exports are humming along, which is a relief as the domestic investment momentum is struggling,” said Yao Wei, a Paris-based China economist at Societe Generale SA.
Trade Surplus
The trade surplus for February was $60.6 billion, above January’s record of $60 billion, the customs administration said in Beijing yesterday. Exports to the U.S. in the first two months jumped 21 percent in yuan terms. Shipments to Association of Southeast Asian Nations rose 38 percent.
In his work report March 5, Li announced a 2015 economic growth target of about 7 percent, the lowest set in more than 15 years. The government set the expansion goal for total trade at 6 percent. Chinese Commerce Minister Gao Hucheng said Saturday that he is “confident” the target will be reached.
Whether China can do so will depend in part on the U.S., where labor data last week showed employers added more jobs than forecast in February and the jobless rate fell to the lowest since 2008.
American Propeller
“The U.S. is the single most important propeller, and Chinese exports basically follow the U.S. economy,” said Larry Hu, head of China Economics at Macquarie Securities Ltd. in Hong Kong. Hu estimates that a 3 percent expansion in the American economy will add an additional 0.5 to 1 percentage point to China’s growth by boosting the exports by 8 to 9 percent.
The drop in imports was sharper than the median estimate of a 10 percent decline, signaling continued weakness in internal demand as well as the fall in commodity prices. Analysts said producers may be seeking to maximize exports to compensate for weak domestic demand.
“If exports are good, they can do less in other aspects such as infrastructure investment,” Hu said.
Yuan Trading
The larger trade surplus, which compared to a survey figure of $6 billion, will add uncertainty for the Chinese currency. The yuan, which posted its first weekly advance in three last week, has declined 1.2 percent against the dollar since Jan. 15. China has cut interest rates twice since November and lowered the reserve-ratio requirement.
“It’s only the central bank leaning against market pressure that is preventing sharper falls,” Tom Orlik, chief Asia economist at Bloomberg Intelligence in Beijing, wrote in a note.
This year’s later-than-usual lunar new year holidays -- when much of China shuts down -- distorted the February figures. March exports in part as a result are likely to grow by less than 10 percent, according to Goldman Sachs Group Inc. economists including Beijing-based Yu Song. Imports “may show some improvement in March” after policy makers added stimulus, they wrote in a note.
Kuwait Stocks Lead Gulf Market Drop as Oil Sinks Most in 8 Weeks
(Bloomberg) -- Kuwait stocks led the majority of Gulf Cooperation Council markets lower after the price of Brent crude fell the most in almost two months last week. Dubai’s shares declined.
Kuwait’s SE Price Index retreated 0.4 percent to 6,513.90, the lowest since Jan. 8. The volume of shares traded dropped to 123 million, 49% of the 3-month daily average. Dubai’s DFM General Index slid 0.2 percent on less than half the 12-month daily average traded volume.
“A lot of investors are clearly in a wait and see mode on oil prices, which is reflected in the volumes,” Amer Khan, the head of asset management at Shuaa Capital PSC, said by e-mail today. “Until we see interest pick up in first quarter earnings that is likely to remain the case.”
Brent crude decreased 1.2 percent on Friday, bringing its weekly decline to 4.6 percent, the most since the five days ending Jan. 9. Oil fell as the dollar surged to an 11-year high against the euro after the Labor Department said American employers added more jobs than forecast in February, bolstering the case for the Federal Reserve to raise interest rates and reducing the investment appeal of commodities.
The six-nation GCC, which includes the United Arab Emirates, Saudi Arabia and Qatar, is home to about a third of the world’s proven oil reserves. Crude has lost 45 percent in 12 months.
14-Day RSI
The Kuwait gauge’s 14-day relative strength index declined to about 33, the lowest since Dec. 18. A level below 30 indicates to some analysts the measure is oversold and poised to rebound.
Bahrain’s BB All Share Index and Qatar’s QE Index ended little changed. Abu Dhabi’s ADX General Index was up 0.1 percent.
Emaar Properties PJSC, the builder of the Burj Khalifa, fell 0.4 percent in Dubai on less than half its three-month daily average traded volume to 7.10 dirhams, the lowest since Feb. 2. Arabtec Holding Co., the United Arab Emirates construction company in talks with the Egyptian government over a 1 million home deal, lost 0.3 percent, dropping for a sixth day to 2.9 dirhams.
The Tadawul All Share Index in Saudi Arabia, the world’s biggest exporter of crude, closed 0.7 percent higher in Riyadh. Etihad Etisalat Co. led gains, jumping 9.8 percent as 116 stocks rose, 40 declined and 13 were unchanged.
The phone operator known as Mobily extended its rally from Thursday, when it jumped the most in more than six years after overhauling top management and restating financial results. The stock has now increased 21 percent since it resumed trading on March 5, the biggest two-day jump since October 2008. The shares were suspended on Feb. 25 as the market regulator sought an explanation for a discrepancy in the company’s 2014 results.
Israel Record
Israel’s TA-25 Index added 0.5 percent to 1,537.69, the highest close on record. Perrigo Co., a global health-care supplier, led the increase with a 2.8 percent jump, its biggest since December.
Gilat Satellite Networks Ltd. surged the most since September 2012 to 20.92 shekels, the highest since July 2013. Peru’s Fitel awarded the company a $285 million regional telecommunications infrastructure project, its largest ever contract win.
The yield on Israel’s benchmark government bond due March 2024 increased 11 basis points, the most since Dec. 23, to 1.79 percent. Investors sold treasuries after the U.S. Labor Department published better-than-forecast employment growth on March 6, increasing speculation the Federal Reserve will raise interest rates this year.
“This is tracking global markets after last week’s strong employment figures in the U.S.,” Sagie Poznerson, the head of trading at Leader Capital Markets in Tel Aviv, said by phone. “The Bank of Israel is also sending a message that it’s going to be very combative to weaken the shekel in its fight against low inflation.”
Egypt Climbs
The central bank stepped up efforts to weaken Israel’s currency when it cut the base lending rate to 0.1 percent on Feb. 23, surprising most economists. It also purchased over $1 billion in foreign currency last month. The shekel depreciated a second week, weakening to 4.0183 against the dollar on March 6.
Egypt’s benchmark EGX 30 Index rose 0.7 percent to the highest level in three weeks. EFG-Hermes Holding SAE led the increase with a 1.9 percent gain.
Egypt will host an economic conference on Friday to lure investments and boost the country’s economy.
Tech Startups Bloom in Gulf as States Try Diversifying From Oil
(Bloomberg) -- By day, Farah Al Qaissieh is employed at a government agency in the United Arab Emirates. By night, she works as chief executive officer of her fledging company, Xenia.
She got there with help from Abu Dhabi, the richest of the seven sheikdoms of the U.A.E. After winning a government entrepreneurship competition, she learned to develop a business plan and got two years of free office space, a trade license and app developers. Discover Dhabi, her mobile application taking users on scavenger hunts of Abu Dhabi tourist spots, will be released this month.
“Many people have amazing ideas, but they’re just too afraid to take that step into entrepreneurship, thinking that they’ll fail,” Al Qaissieh, 25, said in an Abu Dhabi cafe, dressed in a black abaya robe and a headscarf. “If they do fail, that’s still a phenomenal experience because they still took one step further than anyone else.”
The U.A.E.’s leadership declared 2015 the “year of innovation,” reflecting aspirations of the Gulf Arab nations to diversify away from oil. With rising youth populations and declining oil prices, Gulf governments and other groups are funding entrepreneurship programs seeking to wean privileged citizens from a public sector that can’t offer them all jobs.
That’s one reason why local tech startups are making headway in the six countries of the Gulf Cooperation Council, where as many as three-quarters of employed nationals work in the public sector.
The entrepreneurs have to struggle to obtain finance and to overcome regulatory and cultural obstacles in countries where many aren’t ready to shed the government’s safety net.
Regulatory Challenges
“The prevailing system is more inclined to train young Emiratis to become employees, rather than entrepreneurs,” said Abdul Baset Al Janahi, CEO of Dubai SME, a public agency helping small and medium-sized businesses.
Entrepreneurs face changing regulatory requirements from different government entities, Al Janahi said. Startup founders also say their operating environments favor big businesses and franchises rather than small enterprises. Expenses add up with pricey licensing fees and workspace.
Banks perceive startups to be riskier than established companies because they lack corporate governance, financial track records headed by inexperienced managers, Rajeev Patel, director of financial advisory at Deloitte Corporate Finance Limited in Dubai, said.
Budget Deficit
Innovation could be key as Gulf nations look to expand their economies beyond oil and reduce public spending. GCC countries will post a combined budget deficit of 7 percent of gross domestic product compared with an average surplus of about 8 percent between 2000 and 2011, according to the International Monetary Fund.
“Across the Gulf, they understand that challenge very much because they cannot absorb all these young talented people into the government anymore,” said Fadi Ghandour, co-founder and vice chairman of Aramex PJSC, a Dubai-based transportation and logistics company. “Not when oil was at $100 and certainly not when oil is at $50 or going below $50.” He’s also executive chairman of Wamda Capital, an entrepreneur-focused venture capital fund.
Crude revenue has allowed the GCC, which includes Saudi Arabia and the U.A.E., to transform deserts into modern cities relying on the expertise and labor of expatriates who make up more than 75 percent of private sector employment in the region.
Job Challenge
The citizens who work tend to go into secure government jobs with generous perks.
“With a rapidly rising youth population,” the IMF said in an October report, “private-sector job creation for GCC nationals has become a challenge, and unemployment could rise in the coming years.”
Tech entrepreneurs from Egypt, Syria, Lebanon and elsewhere have long flocked to the Persian Gulf, which grants stability and access to the Middle East’s largest economies. Dubai-based Souq.com, founded in 2005 by Syrian CEO Ronaldo Mouchawar and two Jordanian colleagues, says it is the largest e-commerce site in the Arab world with more than 30 million visitors a month.
Mobile Companies
Now more Gulf nationals are joining in, said Muhammed Mekki, founder of AstroLabs in Dubai, a startup “accelerator” partnering with Google for Entrepreneurs, an entity of Google Inc. to open a tech hub nurturing new online and mobile companies in April. In the past two years, 58 entrepreneurs who are Gulf nationals have participated in AstroLabs’ startup training programs, he said.
Mohammed Kazim left his government health care job in Dubai after founding Allinque, a website for booking personal assistants, in 2010. In 2013, he also set up Tamashee, selling sandals inspired by traditional Bedouin designs online and at the Dubai Mall. The 31-year-old Emirati pumped his own money into the ventures and learned to navigate red tape. He makes enough money to pay the small staff and business partners who work with him, he said.
“If they ease regulations and cost structure and create some clarity for small businesses, I’m sure you’ll have amazing businesses,” Kazim said.
In Bahrain, Mohammed Toraif had a couple of failed businesses before starting Fish Transporter, a site that delivers area fishermen’s fresh catch. The 30-year-old computer engineer got seed funding from Tenmou, an angel investment firm in Bahrain, and two years later, is reaping modest profits.
Toraif, who said he’s been selected for the Silicon Valley-based 500 Startups accelerator program, said entrepreneurship is still “not part of the culture.”
Saudi Startups
“A lot of my friends told me, ‘you are going to fail,’’ he said. ‘‘I’m capable of running this business and taking it to the next level either regionally or globally.’’
A budding ecosystem is forming to serve increased local interest in Saudi Arabia, the biggest Arab economy, where youth unemployment was close to 30 percent in 2012, according to the IMF.
Flat6Labs, a regional startup accelerator program, has shepherded 16 Saudi-owned companies at its Jeddah branch since 2013, offering investment, mentoring and other aid. They include Sawerly, an online outlet to book photographers, and AyaGames, a mobile gaming studio that develops ‘‘culturally relevant’’ content.
Six more Saudi startups are enrolled in its current program in Saudi Arabia. Qotuf Alriyadah, the foundation that runs Flat6Labs, says 18,000 people have attended its entrepreneurship events in Saudi Arabia over the past two years. The group recently opened a branch in Abu Dhabi, where a handful of Gulf nationals are among a cohort beginning the startup training.
‘‘Many people here have the managerial mindset as opposed to the entrepreneurial mindset. As in, ‘I have a great idea, I’ll start it up, I’ll hire someone to manage it,’” said Al Qaissieh, the founder of Xenia, adding that she’s working on her profit model. “I don’t see myself doing that. I get too attached to the project.”
NYMEX crude weaker in Asia as China import data weighs on demand views
Crude oil prices dipped in early Asia on Monday as China showed a drop in imports overall even as exports surged.
On the New York Mercantile Exchange, crude oil for delivery in April fell 0.35% to $49.44 a barrel.
On Sunday, China reported a trade surplus of $60.6 billion in the January-February period, compared to expectations for a surplus of $10.8 billion and up from a surplus of $60.0 in January.
Exports surged 48.3% from a year earlier last month, above expectations for a 14.2% increase, while imports tumbled 20.5%, much worse than forecasts for a decline of 10.0%.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Last week, crude oil futures fell sharply on Friday, as the U.S. dollar strengthened broadly following the release of upbeat U.S. employment data.
The Labor Department reported that the U.S. economy added 295,000 jobs in February, far more than the 240,000 forecast by economists.
The unemployment rate ticked down to 5.5% from 5.7% in January, the lowest since May 2008. Economists had forecast the unemployment rate would fall to 5.6%.
The robust jobs report fuelled expectations that the Federal Reserve will start raising interest rates as early as June, boosting the greenback.
Industry research group Baker Hughes (NYSE:BHI) said Friday that the number of rigs drilling for oil in the U.S. fell by 63 last week to 923, the lowest since June 2011.
Market players have been paying close attention to the shrinking rig count in recent months for signs it will eventually reduce the glut of crude flowing into the market.
However, total U.S. crude oil inventories stood at 444.4 million barrels as of last week, the most in at least 80 years, indicating that cheap prices have yet to affect output.
Elsewhere, on the ICE Futures Exchange in London, Brent for April delivery shed 75 cents, or 1.24%, on Friday to settle the week at $59.73 a barrel by close of trade.
In the week ahead, markets will be watching talks on Greece by euro zone finance ministers in Brussels on Monday, while Thursday’s U.S. retail sales report will also be closely watched for further indications on the strength of the recovery.
Chinese government data on consumer price inflation and industrial production will also be closely-watched.
BP drops bid to oust Gulf spill claims administrator
By Jonathan Stempel
(Reuters) - BP Plc on Friday ended its bid to oust the administrator overseeing payouts to businesses and individuals claiming damages arising from the 2010 Gulf of Mexico oil spill, citing steps the administrator has taken to reduce the threat of fraud.
The British oil company withdrew its appeal of a federal judge's decision not to remove the administrator, Patrick Juneau, who is reviewing claims under a 2012 settlement tied to the explosion of the Deepwater Horizon drilling rig.
BP had long complained that Juneau was awarding excessive payouts, including to claimants who suffered no harm, and was tainted by a conflict of interest.
But it said a review of payout procedures by former FBI director Louis Freeh shows that improvements have been made, including the addition of "scores" of fraud investigators.
"This marks the beginning of a new and more productive relationship between BP and the claims program," BP America President John Mingé said in a statement.
BP last month raised its estimate of the settlement's cost to $9.9 billion. It originally had estimated $7.8 billion.
Steve Herman and Jim Roy, lawyers who helped negotiate the settlement on behalf of claimants, said in a joint statement that they hope BP's decision will enable Juneau to "fully focus on getting the remaining claims paid as quickly as possible."
Oil Price Crash A Blessing In Disguise For US Shale
By Mark Hill
Despite the doom & gloom, something new is happening in the oil industry. You need to prepare for the coming surge.
One of the subtlest, most effective moves in sports is the head-fake. It's a thing of beauty when done well. In the energy commodity business, it can be disastrous to anyone who falls for it.
Right now, everyone is focused on low crude oil prices, and the subsequent layoffs and rig shutdowns that follow. I say it's a head-fake, because too many companies are buying into the narrative and scurrying for cover, while the smart money slips past them to victory.
In the past, a downward move of 50% would have spelled disaster for the oil and gas industry. This time, a convergence of new factors suggests a different view of what's happening. If you can read between the lines, you can seize your share of opportunities now, while prices are down, and march into the next cycle well ahead of your competition.
The news gets better the closer you look.
Despite lower prices and dire news, particularly in the American oil markets, the fundamentals generally point to a flurry of need. If oil prices can merely get back to the $60-$70 a barrel range in the next 12 months, and stay there for a reasonable period of time, U.S. production is poised to respond.
Certainly, many wells have shut down. Headcount has been reduced. But, the infrastructure is there to pick up the pace at a moment's notice. The recent volatility has created a much leaner breed of competitor. And from a logistics standpoint, a multitude of options have emerged – including rail, barge and tankers, to name a few – mostly over the past five years.
In 2015, oil field, drilling and information technology have combined to create a perfect storm of capability and agility that will allow American oil markets to respond with a speed typically only seen in the digital realm.
Production is not dropping.
The U.S. Energy Information Administration (EIA) recently reported that oil production in the lower 48 states is stable, despite expected near-term reductions in in rig count. The report says, "Other key factors include the efficiency of drilling…the rate of decline in production from existing wells, and changes in the amount of time between the start of drilling and the completion of the well."
As little as five years ago, it could take as long as nine months to get oil out of the ground. Today, thanks to rapid advances in drilling and information technology, it now takes no longer than 30 days to see results. You can literally go on holiday at the start of the process and come back to a producing well, just like that.
What's more, because production has not dropped, the need for transport to market has not dropped. Oil tankers, pipelines, rail systems and the tracking technology behind these modes have all gotten more sophisticated in the past five years. As a result, there may be no better time to be in the global oil-transportation business.
Moore’s Law arrives in the oil sector
As in many businesses, the 80-20 rule applies. Sixteen per cent of the wells in operation across North America account for 82% of the oil produced. And, generally speaking, production is up.
It is the abundance of supply that is placing downward pressure on prices, with supply growth outside of OPEC nations growing at the fastest rate. According to the International Energy Agency, non-OPEC countries produced 1.9 million more barrels per day in 2014 than they did a year ago, with the U.S. leading the way at 1.1 million barrels.
As producers become more efficient, the number of rigs required to yield the same amount of production naturally drops. So, while the industry freely announces sensational rig count reductions, little to no impact on actual production is seen. That's because the industry is taking this opportunity to shutdown low performing rigs.
In the case of the Eagle Ford region, one of the most prolific in North America, rigs are producing at a rate 18 times more efficiently than they were in 2008, and 65 percent more efficiently than they were in 2013.
Technology is whitewashing old school rules. In many ways, Moore's Law has finally arrived in the oil patch.
Moore's Law, if you are not familiar, was introduced by Gordon Moore, one of the founders of Intel, who, in the 1960s observed that small improvements in technology over time led to a doubling of the density of transistors each year. The numbers exhibited in the Eagle Ford alone suggest that technology is accelerating the capabilities in oil field production by at least that pace, if not greater.
As the months unfold, advancements in pad drilling and rig mobility, among other breakthroughs, will only ensure more of the same, rendering rig counts as a measure of industry health obsolete.
Wells produce more, faster.
It is not unusual, considering advancements in the way wells are drilled in present day, for production rates at any given site to peak early and yield faster than in the past. The peaks are nearly three times higher than they were just five years ago, creating enhanced production rates, even during decline, due to drilling efficiencies realized by more effective horizontal drilling and hydraulic fracturing practices.
Again, to cite the Eagle Ford as an example, the EIA reports that first-year decline rates in the region fluctuated between 60% and 70% between 2009 and 2013, while second-year rates steadily increased to nearly 50% for wells drilled more recently. A recent Wall Street Journal article supports the notion, stating that EOG Resources Inc. reported 4.3 days to drill an average well in the Eagle Ford Shale, "down from 14.2 days in 2012."
Clearly, the ability to locate wells that promise higher oil output, combined with the speed at which wells reach peak production, is supporting a quality versus quantity approach to the oil and gas business that can be directly traced to improvements in technology. These advancements make it possible for oil companies to turn a profit, even at today's depressed market prices, as the cost of producing oil continues to fall in step.
So have oil prices hit rock bottom?
The question, in light of recent production efficiencies, is moot. Writes Leonardo Maugeri of Harvard University's Belfer Center, "the truth is that U.S. shale production can be turned on and off almost immediately." This, according to Pulitzer Prize-winning author, Danie Yergin, positions the U.S. as the world's new "swing producer," a tag used to describe Saudi Arabia, for its ability to offset prices fluctuations with a counter in production (effectively "swinging" the market out of a boom or bust).
So, if prices are moot, how are you, as a market player, reacting to the media's obsession with low oil prices and industry layoffs? Are you falling for the head-fake? Or, are you sacking the opportunity while it's right in front you?
I believe that there will be two camps who emerge from the current industry cycle characterized by depressed oil prices: those who curtail their innovation and shrink their business in lock step with the price of oil (as has been the practice during prior oil busts), and those who take advantage of the opportunity to trim the fat, beef up on technology and position themselves for aggressive growth when the cycle ultimately breaks.
Do you have the speed and agility to get your product to market efficiently? Are you able to take a macro view of your transport options and create margin, literally in the margins? Where can you tighten your timelines? Improve operational efficiency? Reduce risk exposure and expand the upside?
Now is the time to inspect and assess your technology assets, prepare for increased volume and business complexity, and sunset your old way of doing things. If you lay the right foundation now, you'll be ready to run for daylight the moment the pendulum swings.
By Mark A. Hill for Oilprice.com
--Mark Hill is a vice president of Allegro Development Corporation, based in Dallas.
Kuwaiti oil minister warns crude price is tied to global economic recovery
The National staff
A drop in shale oil production has triggered a bounce in global oil prices, but they will not rise sharply as long as the world’s economy stays sluggish, said the Kuwaiti oil minister Ali Al Omair.
Many factors are affecting oil prices, including violence in Iraq and Libya, state news agency Kuna quoted the minister as saying late on Saturday during a visit to Bahrain for an energy industry conference.
Reduction of output will not have a major impact without a global economic recovery that would spur demand, he said.
He said projections showed prices might improve this year, but added that they might also stay between US$50 and $60 per barrel. “Forecasts for the oil price this year indicate that it will gain or at least stabilise between $50 and $60 a barrel,” Kuna quoted him as saying.
The minister said prices are currently supported by conflict in Iraq and Libya and by a drop in sand oil and shale oil output.
But that is counterbalanced by slow global economic growth, which is dampening demand, Mr Al Omair said.
World prices dropped at the close on Friday as the dollar rose sharply, making dollar-priced crude more expensive for buyers using weaker foreign currencies.
West Texas Intermediate for delivery in April slid $1.15 to $49.61 on the New York Mercantile Exchange, ending near its week-ago level.
Brent North Sea crude for April, the international benchmark, dropped 75 cents to $59.73 a barrel in London. Brent is up from lows near $45 hit in mid-January.
Asked about Opec’s decision in November to maintain output instead of cutting it in an effort to support prices, Mr Al Omair said it “was not a hostile resolution but balanced”.
The issue of oil’s drop is the collective responsibility of all oil-producing countries, both Opec and non-Opec, he said.
Last week, Saudi Arabia’s oil minister Ali Al Naimi said he expected oil prices to stabilise as supply and demand balanced, and urged non-Opec producers to help balance the market.
* with Reuters, AFP
Oil price decline a net positive
In the short term austerity has a negative impact on economic growth
By Usman Hayat, Special to Gulf News
Gulf News
Economist Nouriel Roubini says that the sharp drop in oil price is primarily caused by increases in supply, including the increases in production of shale gas and oil in North America and increases in production from the Middle East, including Iran and some unstable countries, such as Iraq and Libya. He believes that the increase in oil supply was significantly underestimated, especially by the International Energy Agency. The oil production decision by Saudi Arabia or the Organisation of Petroleum Exporting Countries (Opec) is, in general, an economic decision and not a geopolitical move against Iran and Russia, Roubini stated. Roubini believes that the impact of lower oil prices on the global economy is ultimately a net positive, as it will facilitate growth and reduce inflation.
According to CFA Institute’s 2015 Middle East Market Sentiment Survey, which offers regional financial insight and assesses forecasted outcomes of some of the region’s most pressing priorities and concerns, the vast majority of respondents (88%) in the UAE believe that the drop in oil prices is not beneficial to the sustainability of the UAE economy. Of respondents based in the UAE, one-third believe that financing for UAE will tighten between $31-40 per barrel, while another one-third believe this would happen at $41-$50 per barrel.
US Showing Robust Growth
Roubini’s assessment approaches the global economy as four engines — the United States, the European Union (EU), Japan, and China. Only the United States is showing robust economic growth, with an estimated GDP growth rate of around 3%. Despite the recent appreciation of the US dollar and anaemic global aggregate demand, Roubini expects the US recovery to continue. The economist believes that the Eurozone is “in trouble” and “just one shock away” from recession and that Japan introduced a consumption tax too soon. China is slowing, with an expected GDP growth of 6.5% this year and around 5.5% next year. Although China realises that it needs to shift its growth model from fixed investment to consumption, the rebalancing of the Chinese economy will be slow.
The difference between economic policy and recovery in the United States compared to the EU is attributed to “[more aggressive] monetary easing, fiscal easing, backstopping, and the recapitalisation [of banks]” in the United States, argued Roubini. EU fiscal stimulus has been a case of too little too late. Roubini clarified that raising taxes and reducing government expenditure is necessary to manage fiscal deficits in the medium term, but in the short term, fiscal austerity has a negative impact on economic growth. He expects the EU to maintain its quantitative easing (QE) against the risk of deflation and the euro to continue falling toward parity to the US dollar.
Six years after the global financial crisis, some economists had wrongly expected that easy money would lead to hyperinflation, a fall in the value of the US dollar, and the rise of gold and bitcoin, claimed Roubini. On the contrary, the US dollar has strengthened, gold is trading way below its highs, and bitcoin was the world’s worst-performing currency in 2014. However, Roubini added, QE is a zero-sum game. In a world where domestic demand is anaemic, amid deleveraging and fiscal drag, countries have been vying for export-led growth by depreciating their currencies. He stated that a depreciation of one currency means a relative appreciation of the other and a trade surplus by one means a trade deficit by the other.
Grexit Too Risky, Too Costly
Roubini strongly believes that Grexit would be a disaster for the Eurozone and will therefore be avoided. Grexit could lead to a run on banks, not just in Greece, but also in some other parts of the Eurozone. Furthermore, dealing with contagion would cost much more than keeping Greece in the Eurozone. The relative size of Greece’s debt and economy are quite small compared to the economy of the Eurozone, and it is not logical to jeopardise the Eurozone because of Greece, he argued. Grexit may also cause Greece to end up in the arms of Russia, just as Russia is becoming more threatening.
-- Writer is Director Islamic Finance & ESG Investing at CFA Institute
Drop in shale output 'helped oil rebound'
A drop in shale oil production has triggered a rebound of global oil prices, but prices will not rise sharply as long as the world's economy stays sluggish, Kuwaiti Oil Minister Ali Al-Omair was quoted as saying by state news agency Kuna.
Many factors are affecting oil prices, including violence in Iraq and Libya, Kuna quoted Al-Omair as saying late on Saturday during a visit to Bahrain for an energy industry conference.
Reduction of output will not have a major impact without a global economic recovery that would spur demand, he added.
He said projections showed prices might improve this year, but added that they might also stay between $50 and $60 a barrel. Brent crude oil closed Friday just below $60, up from lows near $45 hit in mid-January.
Asked about Opec's decision last November to maintain output instead of cutting it in an effort to support prices, Al-Omair said it "was not a hostile resolution but balanced".
The issue of oil's drop is the collective responsibility of all oil producing countries, both Opec and non-Opec, he added without elaborating.
Last week, Saudi Arabia's Oil Minister Ali Al-Naimi said he expected oil prices to stabilise as supply and demand balanced, and urged non-Opec producers to help balance the market. - Reuters
Opec, others must work together: Badri
The Organisation of the Petroleum Exporting Countries (Opec) Secretary-General said on Sunday Opec and non-OPEC producers should work together to stabilise oil markets, suggesting oversupply could amount to two million barrels per day (bpd).
But Abdullah al-Badri added in remarks to a conference in Bahrain he had no doubt markets would return to balance in the second half of 2015, explaining that he did not believe fundamentals warranted a price drop of the extent markets had seen.
"Tremendous opportunity" in oil remained, despite recent market volatility and uncertainties, he said, adding that the industry's long term outlook remained healthy.
Oil prices have slid sharply in recent months as a result of a large supply glut, due mostly to a sharp rise in US shale production as well as weaker global demand.
The rapid decline has left several smaller oil producing countries reeling and has forced oil companies to slash budgets.
Yet Badri said he expected energy demand to increase by 60 per cent by 2040 and oil would remain a central energy source.
Badri said that since 2008, supplies from non-Opec producers had risen by almost six million bpd, while in contrast Opec production had been fairly steady at about 30 million bpd.
Meanwhile, United Arab Emirates oil minister Suhail bin Mohammed Al-Mazroui said the market will decide a fair and sustainable price for oil. -Reuters
Mideast oil and gas transactions dip in 2014
DUBAI, 16 hours, 36 minutes ago
The number of transactions in the oil and gas sector in the Middle East decreased from 32 to 12 from 2013 to 2014, a report said, noting that the total value was only marginally down at almost $600 million.
In terms of the upstream sector, Middle East transaction value relative to the total global upstream transaction value represented less than 0.3 per cent in 2014, which is the lowest share over the past five years, added the Global Oil and Gas Transactions Review 2014 published by EY, a global leader in assurance, tax, transaction and advisory services.
The deal activity was geographically spread over the Middle East region with countries such as the UAE and Iraq being the locations of multiple transactions.
As is consistent with the past three years, no midstream transactions were completed in 2014, the report said.
This is a result of the very high level of state ownership of these strategically important assets and therefore little, if any, availability in the market.
In the downstream sector, again, there were no transactions in the Middle East which is against a backdrop of only very limited transaction activity in 2012 and 2013.
David Baker, Mena Oil and Gas Transactions leader at EY, said: “Prior to the drop in oil price in the second half of 2014, oil price had been unusually stable over past the 3 years, largely trading around $100-120 per barrel despite some major geopolitical events.”
“When oil price did dip, the speed and extent of the price correction took many by surprise. The industry has responded by making a number of recent announcements regarding projects and capital expenditure cuts.
“Globally we are expecting a strengthening oil and gas M&A market in 2015 as companies reallocate capital to optimize their portfolios, remove underperforming and lower yield businesses, and pursue opportunistic acquisitions,” he added.
In terms of timing, the drop in oil price is expected to affect the industry in the following order; oil field services, exploration and production (E&P) then midstream/downstream. Oil field services, beginning with entities aligned to discretionary capex (Seismic/Exploration), are likely to be affected first, followed by onshore drilling and then development, according to the report.
E&P will also clearly be impacted, beginning with the highly leveraged E&P entities and those with disproportionate exposure to high marginal cost production, said Baker.
On the other hand, the price drop may be beneficial to midstream/downstream businesses. However, the businesses embedded in integrated oil companies may come under further pressure to de-capitalize their value chains.
“Looking forward, there are a number of potential refinery upgrade and expansion projects in the region that could drive some future transaction activity. The future of transactions in the oil and gas industry will largely be dependent on how much the oil price fluctuates and the length of time it takes for the price to stabilize,” concluded Baker. – TradeArabia News Service
Adnoc offers record volume of naphtha from Ruwais
SINGAPORE, 17 hours, 33 minutes ago
Abu Dhabi National Oil Company (Adnoc) has offered 120,000 to 125,000 tonnes of low-sulphur naphtha for mid-April lifting from Ruwais, its largest offer in a single spot tender as production has increased following its refinery expansion, traders said.
Adnoc, which does not offer spot naphtha regularly, sold mostly spot naphtha in 50,000-tonne cargo size in 2014.
The fresh offer was done through a tender closing on March 10, with bids valid until March 12.
"The offer from Adnoc may have some impact on the market," said a trader, adding that the Middle Eastern refiner would have more to sell as it has more than doubled the capacity of its Ruwais refinery from 415,000 barrels per day (bpd).
The refinery is currently running at 50 to 60 per cent of its capacity, and is expected to export its first gasoline cargo in April when it starts up a residual fluid catalytic cracking (RFCC) unit, a source said. - Reuters
Oil in biggest weekly drop since January on dollar
NEW YORK, 1 days ago
Crude oil prices closed down on Friday, with benchmark Brent losing its most in a week since January, as a resurgent dollar and fear of a US rate hike diverted attention from the shrinking number of rigs drilling for oil in the United States.
Worries about the security of Libyan and Iraqi crude supplies, which had put a floor beneath the market in early trade, also took a backseat.
A strong dollar makes oil, quoted and traded in the greenback, costlier for holders of the euro and other currencies. The dollar rocketed to 11-/12-year highs against a basket of currencies after the US government reported the US jobless rate fell to 6-1/2-year lows.
Many US Federal Reserve officials consider that to be full employment, and the central bank could decide on an interest rate hike in June.
Benchmark Brent oil settled down 75 cents, or 1.2 per cent, at $59.73 a barrel. It fell 4 per cent on the week, its sharpest decline since the week ended Jan. 9.
US crude settled down $1.15, or 2.3 per cent, at $49.61 a barrel. It posted a slight loss on the week, for a third straight week of declines.
"Today's focus is on the absolute strength of the dollar and what that could mean for near-term interest rates in the United States," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut. "The rig count data hasn't mattered as much, frankly."
The number of rigs drilling for oil in the United States fell by 64 this week to 922, the smallest number in operation since April 2011, oil services firm Baker Hughes said in a weekly survey.
It was a sign US shale oil producers, which had flooded the market with crude supplies, were winding down output. Last week, the rig count fell by 33, the smallest decline since the year began.
Oil traded higher earlier in the day, with Brent reaching above $61 and US crude over $51, reacting to violence in northeast Iraq, where Islamic State militants had set ablaze oilfields. Libya had also closed 11 of its oilfields on worsening security.
While those situations were supportive to crude prices, traders were also wary of the West reaching a nuclear deal with Iran that would lift sanctions allowing Tehran to export more oil into an already flooded market. – Reuters
A new approach: Iran announces supporting cheap oil for the first time
An Iranian top oil official announced for first time that Tehran supports the lower oil prices.
Mohsen Ghamsari, director for international affairs at the National Iranian Oil Company said March 6 that the cheap oil is in favor of crude oil producers.
The OPEC oil basket price has plunged from about $108 in 1Q14 to around $55.77 on March 5.Ghamsari said that the oil price wouldn't go above $60/barrel in the next two years.
According to Mehr News Agency, Iran's crude oil export slipped below one million barrels per day during recent months and the country's rivals are attempting to fill the vacuum in international markets.
Iran's crude oil export was above 2.2 million barrels per day (mb/d) in 2011, but the western sanctions imposed in mid-2012 have pushed Iranian oil export volume to around one mb/d in 2013.
After achieving an interim nuclear agreement in November 2013, Iran's oil export increased steadily to around 1.11 mb/d, however, the volume reportedly decreased slightly during recent months again.
Ghamsari said Iran will do as much as possible to recapture lost market share after sanctions are eliminated.
"We are currently selling oil to China, India, Japan, South Korea, Taiwan and Turkey," he said.
Ghamsari dismissed the reports published in some media outlets saying that Iran offers discounts to its oil clients
Ghamsari said that the oil price wouldn't go above $60/barrel in the next two years.
[Cihan News Agency (CNA)] [3] Copyright © 2015 Cihan News Agency. All right reserved.
US crude prices could drop to $40, warns Goldman
SINGAPORE, 0 hours, 27 minutes ago
Oil prices will reverse their recent gains as global crude inventories begin to increase again, with US crude likely to drop as far as $40 a barrel in the near-term, Goldman Sachs said.
Oil prices rose by almost a third between January and February on the back of Middle East supply disruptions, strong winter demand and high refinery margins. That followed a rout that had seen price falls of around 60 per cent between June 2014 and January this year.
But Goldman said that "the activity pull is sequentially weakening" and that global crude inventories would therefore rise, pushing West Texas Intermediate (WTI) crude to $40 a barrel, levels last seen at the peak of the global financial crisis in late 2008, early 2009. It stood at around $49.40 on Monday.
"While we continue to forecast a strong demand recovery in 2015, we believe that sequentially weaker activity, the end of winter and the end of potential restocking demand, will lead to a sequential deceleration in demand-growth as we enter the spring," the bank said.
Goldman said that Brent prices would also come under renewed pressure.
"As a result and absent further unexpected Opec disruptions, we expect Brent oil prices and timespreads to reverse their recent strength, although the lack of a meaningful build in the past few months leaves risk to our forecast for (WTI) oil prices remaining at $40/barrel for two quarters skewed to the upside," the bank said in a note dated March 8.
The bank said that it expected "OECD Asia demand to decline in 2015 as stronger industrial production is offset by the continued switch to LNG (liquefied natural gas) for power generation and the impending start-up of the two Sendai nuclear reactors in Japan".
A two-thirds drop in Asian LNG prices is making the fuel cost competitive against oil in the industrial power sector.
In Japan, the regulator has given approval for several reactors to be restarted this year. All its 48 reactors were taken offline after the meltdowns at the Fukushima Daiichi plant following an earthquake and tsunami in 2011.
In the US, Goldman said that "the build in US inventories has surprised to the upside, especially in Cushing".
The bank said that its WTI price prices forecast of $65 a barrel for 2016 was "skewed to the downside" as currently idled assets could quickly be redeployed, especially as operating costs were falling. -Reuters
Iraq Narrows Oil Discount to Asia by Most in 3 Years on Demand
(Bloomberg) -- Iraq narrowed the discount for April crude deliveries to Asian buyers by the most since November 2011, joining other Middle East producers in raising official selling prices amid signs demand is improving.
Iraq, OPEC’s second-biggest producer, will sell its Basrah Light crude at $2.80 a barrel below Middle East benchmark Oman and Dubai grades in April, the state-run Oil Marketing Co., known as SOMO, said Monday. That’s $1.30 less than the discount for March. Saudi Arabia last week increased the pricing terms for Arab Light sold to Asia, while Abu Dhabi and Qatar raised export prices.
Saudi Arabia led a November decision by the Organization of Petroleum Exporting Countries to maintain output and defend market share against rising U.S. output that sent crude prices almost 50 percent lower in 2014. The imbalance in the global crude market will even out in the second half of this year, OPEC Secretary-General Abdalla El-Badri said Sunday.
“Saudi Arabia’s OSP has been a very important indicator of oil demand recently,” Mark Keenan, the head of commodities research for Asia at Societe Generale SA in Singapore, said by phone. “This extension into Iraq and other regional producers will be viewed as confirmation of the initial comments from Saudi Arabia that Asia demand is picking up.”
State-owned Saudi Arabian Oil Co. said last week it will sell cargoes of Arab Light in April at 90 cents a barrel below Asia’s regional benchmark. That narrows the discount by $1.40 from March, the biggest price increase since January 2012, according to data compiled by Bloomberg.
Abu Dhabi National Oil Co. set its Murban crude at $56.55 a barrel for February from $46.40 in January, raising prices for the first time since June, according to a March 4 statement. Qatar also increased prices for Marine and Land crude in February, the state-run Qatar News Agency reported March 5.
The 12-member OPEC pumped about 30.57 million barrels a day in February, according to data compiled by Bloomberg. The group, which supplies about 40 percent of the world’s oil, kept its collective quota at 30 million barrels a day at a Nov. 27 meeting.
China Commodities Imports Slow as Lunar New Year Cools Trade
(Bloomberg) -- China’s commodity trade slowed in February as the Lunar New Year holiday crimped imports of oil, iron ore, copper and soybeans while exports of aluminum and steel fell.
Inbound shipments of copper tumbled by the most in four years, soybeans to the least since October, while oil and iron ore imports slowed to the weakest in three months, according to customs data released Sunday in Beijing. Steel exports fell for the first time since August and the country shipped the smallest amount of aluminum products in four months.
The slowdown in raw materials trade reflects the impact of the country’s most-important festival, when factories and output slow before and during the weeklong holiday. Total exports gained more than 48 percent from a year earlier in February, driven by a recovery in the U.S. economy. Imports slid 20.5 percent, leaving a record trade surplus of $60.6 billion.
“The Chinese New Year is a major distortion for trade data,” said Xie Zhaowei, a Shanghai-based analyst at Huatai Great Wall Futures. “Demand remained subdued inside China even if you strip out the impact of the week-long holiday as the economy is slowing.”
Chinese Premier Li Keqiang last week announced the country set its economic growth target at 7 percent for this year, the lowest goal in more than 15 years, as headwinds including a property slump, excess industrial capacity and disinflation prompted the second interest-rate cut in three months.
Lagging Growth
Imports of unwrought copper and products in February fell 32 percent from the previous month to 280,000 metric tons, the biggest decline since February 2011. The nation’s imports of ore and concentrates, used to make the refined metal, slid for a second month. Benchmark prices in London are down 9.1 percent this year.
China’s copper demand will grow by 5 percent in 2015, unable to keep pace with the country’s economy as the government shifts its focus away from infrastructure and manufacturing toward consumption, Li Baomin, chairman of Jiangxi Copper Co., the nation’s biggest producer of the metal, said in an interview last week.
Crude imports fell 8.7 percent from January while iron ore imports slid 9.5 percent, both the lowest since November. The country remained a net oil-product importer, with inbound purchases outpacing exports by 1 million tons.
Activity Curtailed
“There have been reports of manufacturing and industrial activity being curtailed earlier than normal leading into the Chinese New Year,” said Daniel Hynes, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. “It seemed to be greater than previously thought and obviously had a big impact on imports through that month.”
Outbound shipments of steel products fell for the first time in six months as new tax rules designed to cut oversupply in the industry began to slow sales. The country’s shipments fell 24 percent to 7.8 million tons from a record the previous month. Aluminum product exports slid for a second month to the lowest since November.
The weaker trade data will “drive a bearish tone in commodity markets, especially industrial metals,” ANZ said in a note Monday. Copper for delivery in three months on the London Metal Exchange fell 0.4 percent to $5,725 a ton at 12:33 p.m. in Hong Kong.
China’s trade data “is lower than the market expected and is a bit of a surprise as analysts had stripped off the impact of the Lunar New Year holidays and reduced their expectations,” said Helen Lau, a Hong Kong-based analyst at Argonaut Securities. “The commodities import data in February may reflect a weaker domestic demand than we previously expected.”
(Bloomberg) -- Hedge funds cut bets on rising oil prices at the fastest pace since December 2012 as U.S. inventories expanded to the highest in more than three decades.
Speculators pared their net-long position in West Texas Intermediate crude by 19 percent in the week ended March 3, U.S. Commodity Futures Trading Commission data show. Short wagers increased to a record for a second week.
Oil producers are spending less, idling rigs and delaying wells to stem output that the government predicts will reach a four-decade high this year. That’s having little effect so far, with U.S. crude inventories expanding by 10.3 million barrels in the week ended Feb. 27, the most since 2001.
“The supply builds are astounding and we’re going to run out of places to put the stuff,” Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $3.4 billion, said by phone March 6. “Ultimately something has got to give and the CFTC shows people are positioning for a collapse of the front contract.”
WTI rose $1.24, or 2.5 percent, to $50.52 a barrel on the New York Mercantile Exchange in the period covered by the CFTC report. The U.S. benchmark grade lost 25 cents to $49.36 a barrel in electronic trading on the New York Mercantile Exchange at 12:07 p.m. Singapore time.
Cushing Stockpiles
Crude supplies nationwide reached 444.4 million barrels, the most in weekly Energy Information Administration data going back to 1982. Inventories at Cushing, Oklahoma, the delivery point for WTI, rose to 49.2 million, the most since June 2013. Stockpiles in the Midwest advanced to a record 133.3 million, while those along the Gulf Coast surged to an all-time high of 219.9 million.
“Excess storage capacity has been shrinking fast,” Mike Wittner, head of oil research at Societe Generale SA in New York, said by phone March 6. “It’s not far-fetched to think about supply hitting the tank tops in a couple of months.”
U.S. crude production rose to 9.32 million barrels a day, the most in weekly estimates that started in January 1983. Output will rise 7.8 percent this year to average 9.3 million barrels a day, the EIA said in a Feb. 10 report.
From North Dakota to Texas, there are more than 3,000 wells that have been drilled but not tapped, based on estimates from Wood Mackenzie Ltd. and RBC Capital Markets LLC.
Brent crude, the benchmark for more than half the world’s oil, rose 4.2 percent in London this year while WTI dropped 6.9 percent. The gains in Brent were driven in part by attacks on pipelines, ports and fields in Libya, which holds Africa’s biggest crude reserves.
Gasoline Wagers
Net-long positions for WTI dropped by 38,299 to 164,310 futures and options in the week ended March 3, according to the CFTC, the lowest level since November. Short bets climbed 17 percent to 138,007 and long positions fell 5.6 percent to 302,317.
In other markets, bullish bets on gasoline climbed 2.7 percent to 42,312 contracts, the first gain in three weeks. Futures rose 20 percent to $1.9499 a gallon on Nymex in the reporting period.
Regular gasoline at U.S. pumps has rebounded after falling in January to the lowest level since April 2009. The average retail price slipped 0.4 cent to $2.454 a gallon March 7, the first drop in more than five weeks, according to data from Heathrow, Florida-based AAA, the nation’s biggest motoring group.
Bearish wagers on U.S. ultra low sulfur diesel decreased 27 percent to 11,084 contracts, the least since August. The fuel dropped 4.4 percent to $1.9395 a gallon in the report week.
Natural Gas
Net-short wagers on U.S. natural gas slipped 4.8 percent to 40,191, the lowest since January. The measure includes an index of four contracts adjusted to futures equivalents: Nymex natural gas futures, Nymex Henry Hub Swap Futures, Nymex ClearPort Henry Hub Penultimate Swaps and the ICE Futures U.S. Henry Hub contract.
Nymex natural gas fell 6.5 percent to $2.712 per million British thermal units in the report week.
U.S. crude inventories continued to climb even as the number of active rigs tumbled. Baker Hughes Inc. said Friday that drillers idled rigs for a 13th week, cutting them by 64 to 922, the fewest since April 2011.
“They are being strategic about the cuts and trimming the weakest rigs and fields first,” Stewart Glickman, an equity analyst at S&P Capital IQ in New York, said by phone March 6. “Eventually we will get to equilibrium but not any time soon, certainly not in 2015.”
