Oil Prices

The bearish view is everywhere. IIRC, only very few international fund managers are betting contrarily...

Low oil price hits $200 billion in mega-projects

LONDON (June 16): Deepwater oil projects and complex gas facilities worth around $200 billion have been cancelled or put on hold worldwide in recent months, due to the sharp drop in oil prices over the past year, consultancy Ernst and Young said on Tuesday.

Further project cuts and delays are likely as the industry braces for an extended period of lower oil prices as a result of a supply glut.

"The mind set in the industry at the moment is that prices are unlikely to be bouncing up materially in the near term," the consultancy's Andy Brogan said in a presentation. "There is an expectation that volatility is with us for a reasonable period of time to come and companies need to cope with that."
...
http://www.theedgemarkets.com/sg/node/209500

I recently initiated a position in ASX listed BPT, Beach Energy. Fun managers' view to me is irrelevant. Businessmen views are more significant...

http://www.smh.com.au/business/seven-gro...h5gfd.html

Australian media monger Kerry Stoke has taken a keen interests in 2 South Australian based O&G plays.

His 7 Group Holdings is on the verge of a GO for these companies.

7 Group has hired an ex Woodside executive to explore new businesses and hence to me its another follow the smart $, follow the Godfather investment:

GG

(17-06-2015, 09:35 AM)CityFarmer Wrote: The bearish view is everywhere. IIRC, only very few international fund managers are betting contrarily...

Low oil price hits $200 billion in mega-projects

LONDON (June 16): Deepwater oil projects and complex gas facilities worth around $200 billion have been cancelled or put on hold worldwide in recent months, due to the sharp drop in oil prices over the past year, consultancy Ernst and Young said on Tuesday.

Further project cuts and delays are likely as the industry braces for an extended period of lower oil prices as a result of a supply glut.

"The mind set in the industry at the moment is that prices are unlikely to be bouncing up materially in the near term," the consultancy's Andy Brogan said in a presentation. "There is an expectation that volatility is with us for a reasonable period of time to come and companies need to cope with that."
...
http://www.theedgemarkets.com/sg/node/209500

Credit Suisse won't rule out second slump in crude oil prices
Date
June 19, 2015 - 11:45AM

Angela Macdonald-Smith
Energy Reporter


Credit Suisse says if investors expect another price drop and need to be invested in the energy sector, Sinopec, Inpex, PTT and Woodside will probably continue to do well. Photo: Bloomberg

Crude oil prices could take another tumble before the year is out, posing a risk for investors given the huge variation in performance of oil and gas stocks across the Asia-Pacific since prices started to fall on global oversupply, according to Credit Suisse.

Brent crude oil had risen 40 per cent from its lows in January but US production had not declined, despite dramatic cutbacks in the number of drilling rigs in shale regions, while stockpiles of reserves were around the highest they have been for decades, the bank noted.

Should US production decline "promptly" from here, current prices for crude oil could be maintained, it said. But if US output remained strong, a second downward "correction" in prices was likely, which would then be followed by a recovery towards year-end, Credit Suisse's Singapore-based energy team advised its clients.

The lifting of sanctions on Iran under a potential agreement with the "P5+1" group of countries also posed a risk for prices, with the US Energy Information Administration advising that baseline crude oil price forecasts could be cut by $US5 to $U15 a barrel if sanctions were removed, the bank noted. A meeting between Iran and the P5+1 group is scheduled for June 30 in Vienna.

Credit Suisse saif if investors expected another price drop and needed to be invested in the energy sector, then the stocks that had outperformed their peers, such as majors Sinopec, Japan's Inpex and Thailand's PTT, and Australia's Woodside Petroleum would probably continue to do well.

On the other hand, if oil prices remained around current levels throughout the northern summer, and potentially increased towards the end of the year, investors should look to stocks that had lagged the sector so far, such as InterOil, Drillsearch Energy and Singapore's KrisEnergy.

On Friday, Brent oil was steady at about $US64 a barrel, while West Texas Intermediate, the US benchmark, was also little changed at about $US60.

In Credit Suisse's analysis of Asian energy stocks since oil prices started to collapse in mid-2014, Woodside Petroleum and Origin Energy have outperformed, with Woodside benefiting from its 80 per cent dividend payout policy, while Origin was partly protected from the oil slump by its utilities business.

Among the laggards are ASX-listed Senex Energy, which has seen some of the deepest declines in its share price and is only just off its December lows, despite the modest recovery in prices. Santos and Beach Energy have also underperformed.

Credit Suisse's base case forecast for Brent crude oil is for a December quarter 2015 price of $US71 a barrel. But it noted that the next two months "may be the most interesting period of this crude price cycle", given the uncertainty of just when US production will turn around and head south and whether and how quickly Iranian sanctions are removed.

Bernstein Research is a little more bullish on oil prices, noting that global demand for oil is higher than most expected. Estimates at the start of the year were for growth of 0.9 million barrels a day, but those estimates have since been increased, and Bernstein is holding to its expectation that growth could be closer to 2 million b/d. That supports its view that prices will recover towards the marginal cost of supply as the market tightens.

Bernstein said although the lifting of Iranian sanctions could increase supply from the Organisation of Petroleum Exporting Countries by 500,000 b/d in the near term, it expected a "significant deficit" in non-OPEC supply in the December half. That should push oil prices back towards the marginal cost of about $US80 a barrel.

Top stock picks for Bernstein among Asian oil and gas include Inpex and InterOil, along with CNOOC and Oil Search.

More bearish on prices is National Australia Bank, which sees no recovery until 2016 amid expectations the "global glut" will continue through the rest of this year at least. It is expecting prices to remain around current levels in the near term, but sees a gradual increase over 2016 as supply consolidates and demand picks up.

NAB's forecast for Brent in the December quarter is just $US63 a barrel, only reaching $US70 in the September quarter next year.

^^ wow either way CS is right just as an ex-forumer was

http://www.cnbc.com/id/102808892

As rig counts rise, is $70 oil still on the cards?
Jenny Cosgrave | @jenny_cosgrave
8 Hours Ago
CNBC.com

Oil rig counts in the U.S. rose for the first time since December 2014 last week, weighing on the commodity's price and serving as a reminder of oversupply fears, which could impact year end price targets.

U.S. crude futures and Brent crude for August delivery both fell roughly 2.5 percent on Friday to trade around $55.60 and $60.40 respectively on Friday—despite a number of more bullish price forecasts in recent months.

This was after data from Baker Hughes showed the U.S. oil rig count rose by 12 to 640 in the last week, putting a stop to 29 consecutive weeks of decline. Since peaking at 1,609 rigs in October last year, the count has slumped around 60 percent.


58465797
Getty Images
Chief oil analyst at Energy Aspects, Amrita Sen, said that last week's number were "distorted" due to flooding and the closure of the Houston ship channel, one of the busiest waterways in the world, and pointed to the consistent falls seen this year.

However, oversupply fears also hit oil prices on Wednesday, after the U.S. Energy Information Administration reported that U.S. crude-oil stockpiles rose last week for the first time in nine weeks. And this followed data that showed a sharp ramp up in U.S. production in April to levels not seen in decades.

Last week, UBS became the latest firm to upgrade its outlook for the price for Brent crude oil to $61.59 per barrel from $56.25 on signs that non-Organization of the Petroleum Exporting Countries (OPEC) investment was slowing.

This is a smidgen above the consensus among market watchers for Brent at $60 per barrel the end of the year.


But a number of bullish forecasts from the likes of investment boutique Oppenheimer & Co. and billionaire oil tycoon Boone Pickens in recent months have boosted some expectations to $70 by the end of 2015.

However, Sen said: "I think to see a break to the upside; you need inventories to start falling and not just in the U.S., globally. That means production needs to start falling, or the Chinese need to start to buying, which is happening but needs to pick up speed."

She added that "Downside risks are plenty."

"In the macro space there is Greece, there is the Chinese stock market, ultimately inventories are still very high, unless that cleans up I think prices are going to be capped. I don't think prices should break significantly to the downside, but you know getting anywhere close to $70 is quite some time away."

In the short-term, worries surrounding the Greek referendum this Sunday could hit the price of oil, Sen said, as the U.S. dollar could strengthen, which is traditionally negative for oil prices.

"European demand is up about 400,000 barrels per day this year. Greece or no Greece, I think that continues, but on the oil price, through the dollar you can get some negative impact—but I hope that a lot of this is priced in already," she added.

Jenny Cosgrave journalist CNBC
Jenny Cosgrave
Writer / Producer, CNBC.com

Shale Boom Shows Strength as Rigs Gain With Oil Under $60
http://www.bloomberg.com/news/articles/2...resilience

I read that article too, but I'm getting conflicting signals from analysts - the other camp is saying that because of its higher cost of extraction than the Saudis, the shale producers are forced to stay out until price rises to around USD 100. Who's right, I really dunno!

Usd 70 breakeven was the previous shale estimate. Shale tech is probably getting more cost effective.. we could be seeing even lower oil prices soon. Maybe will finally get to usd30 again..

sent from my Galaxy Tab S

it's US way of countering the saudis, commonize the shale tech at a large scale until it's profitable even at US$30!!
FED is printing free money anyway!

way to go!

Unless the demand for energy goes up by a lot, if not oil as a energy source will face huge competition in the future.

The first few minutes are a good watch

Solar power - bright future?
http://www.aljazeera.com/programmes/insi...37224.html