Connect with us

Commodities

Oil Prices Plunge as Saudi Arabia Prepares Record Output

Published

on

Oil prices declined sharply Monday amid reports that Saudi Arabia is heeding to President Trump’s request to keep the energy market well supplied. OPEC’s kingpin is stepping up its contractual obligations to key Asian markets amid disruptions from Venezuela and Libya, among others.

Oil Prices Drop

Crude futures in New York and London were down more than 4% on Monday. U.S. West Texas Intermediate (WTI) contracts for August settlement bottomed at $67.92 a barrel on the New York Mercantile Exchange, the lowest in nearly a month. Prices would later consolidate at $68.11 a barrel for a decline of $2.90, or 4.1%.

ICE Brent futures for September delivery bottomed at $71.80 a barrel, the lowest in three months. It was last down $3.16, or 4.1%, at $72.17 a barrel.

Saudi Arabia Ramping Up Production

Bloomberg reported Monday that the Saudis are planning to offer extra crude volumes to some of their Asian buyers less than a month after Riyadh convinced fellow OPEC members to crank up daily production levels.

Saudi Arabian Oil Co. has offered extra cargoes of its Arab Extra Light crude to at least two buyers in Asia, Bloomberg said. If approved, the additional supplies will be shipped for August.

Last month, the Organization of the Petroleum Exporting Countries agreed to raise production by 600,000 barrels per day, paving the way for an eventual 1 million-barrel-per-day increase for the cartel and its allies. The Saudis are planing to pump at record levels to offset supply disruptions elsewhere.

OPEC’s secondary sources indicate that the Saudis began ramping up production before the biannual meeting in Vienna on June 22, where cartel members agreed to ease supply restrictions. According to the data, Saudi Arabia boosted its daily output by 405,400 barrels in June compared with May.

Riyadh is also looking to pick up the slack from Iran, which faces renewed sanctions after U.S. President Donald Trump pulled out of the 2015 nuclear deal. The Saudis are said to be targeting crude output at 10.8 million barrels per day, the largest on record.

Trump Succeeding in Reining In Oil Prices

President Trump has criticized OPEC’s policies and has called on producers to raise their output in order to cap runaway price growth.

“Oil prices are too high, OPEC is at it again. Not good!” Trump tweeted in June. Earlier this month, he said: “The OPEC Monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher as the United States defends many of their members for very little $’s. This must be a two way street. REDUCE PRICING NOW!”

With political pressure to rein in oil prices intensifying ahead of the midterm elections, the Trump administration has announced it is considering tapping the nation’s emergency crude supply. The Strategic Petroleum Reserve currently houses a total inventory of 660 million crude barrels, though options under review suggest that figure is between 5 million barrels and 30 million barrels lower.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 649 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




Feedback or Requests?

Commodities

Oil Prices Drop amid Large U.S. Stockpile Accumulation, Saudi Backlash

Published

on

Oil prices extended losses on Wednesday after U.S. government data showed a bigger than expected rise in weekly crude inventories, possibly signaling a slowdown in demand for the world’s largest economy. Meanwhile, pressure on Saudi Arabia mounted as the kingdom launched an investigation into the disappearance and likely death of a prominent dissident.

Oil Prices Continue Lower

The West Texas Intermediate (WTI) benchmark for U.S. crude futures reached a session low of $69.63 a barrel on the New York Mercantile Exchange. It was last seen trading at $69.80 a barrel, down $2.12, or 3%.

Brent crude, the international futures benchmark, bottomed at $79.17 a barrel on London’s ICE futures exchange. The futures price was last down $1.75, or 2.2%, at $79.66 a barrel.

A rising U.S. dollar placed downward pressure on commodity markets, which are largely denominated in the greenback. The U.S. dollar index (DXY), which tracks the performance of USD against a basket of six rivals, rose 0.4% to 95.41.

Stockpiles Surge

U.S. commercial crude inventories rose by 6.5 million barrels in the week ended Oct. 12, nearly three times higher than expected, according to the Energy Information Administration (EIA). The official figures contradict earlier data by the American Petroleum Institute (API), which showed a 2.1 million-barrels drop during the same week.

The U.S. imported an average of 7.6 million barrels of crude last week, data showed.

Despite the recent spike in commercial stockpiles, the market for commercial crude is expected to remain tight as the U.S. ramps up sanctions against Iran. A sharp drop in Iranian exports could propel crude prices higher in the medium term, with some analysts eyeing a return to $100 a barrel next year.

Saudi in the Spotlight

Saudi Arabia has faced a global backlash following the disappearance of Jamal Khashoggi, who was last spotted entering a Saudi consulate in Istanbul, Turkey. Although Saudi authorities have denied any involvement – sentiment that was shared by U.S. President Donald Trump – Turkish and American press have reported gory details of Khashoggi’s death.

Turkish officials have reportedly obtained audio recordings that prove Khashoggi was beaten, killed and dismembered at the consulate.

The Saudis have vowed to retaliate against Western critics who link Riyadh to the killing, including business leaders who are considering cutting ties to the kingdom. According to analysts, the oil-rich kingdom could slash crude exports by 500,000 barrels a day should the U.S. or any other nation pursue sanctions.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 649 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




Feedback or Requests?

Continue Reading

Commodities

Gold Prices Approach Three-Month Highs as Fundamental Risks Weigh

Published

on

The price of gold continued higher on Tuesday, as the combination of rising interest rates, looming U.S. midterm elections lifted demand for safe havens. However, upside could be capped by rebounding stock prices as U.S. markets opened sharply higher. The yellow metal has rebounded 4% over the past eight days.

Precious Metals Rise

Precious metals were higher across the board, with gold futures resuming their climb above $1,230.00. December gold, the most actively traded futures contract, rose $4.90, or 0.4%, to $1,235.20 a troy ounce on the Comex division of the New York Mercantile Exchange.

Silver futures followed a similar trajectory, rising 10 cents, or 0.7%, to $14.83 a troy ounce, the highest since Aug. 28.

The U.S. dollar, which often trades inversely with precious metals, declined for a fifth time in six sessions. The dollar index fell 0.2% to 94.86, a new three-week low.

Fundamentals in Focus

Rising bond yields have put a damper on risk appetite in global stocks, helping to engineer one of the biggest declines of the year. In China, equity markets are down a whopping 23% this year, with the latest selloff only exacerbating a volatile climate for investors. The benchmark Shanghai Composite Index fell a further 0.9% on Tuesday.

China is at the center of a global trade controversy after U.S. President Donald Trump invoked heavy trade tariffs on the country. Last month, the Trump administration implemented additional duties of 10% on $200 billion of Chinese goods. Although Beijing has responded, its massive surplus with the U.S. means it won’t be able to match Trump’s tariffs dollar-for-dollar. The International Monetary Fund (IMF) expects trade hostilities will contribute to slower economic growth in the U.S., Chinese and global economies next year.

Europe is also in the spotlight as investors await the details of Italy’s forthcoming budget. Rome’s new government on Tuesday submitted its budget to the European Union for review. The plan reportedly pushes Italy’s deficit to 2.4% of GDP, which is well above the EU’s guidelines and sets the stage for further clashes with Brussels.

Meanwhile, U.K. Prime Minister Theresa May has called for political unity after securing the backing of cabinet for her Brexit negotiating strategy. May is expected to press EU leaders to unblock stalled negotiations after European lawmakers ditched plans to publish a draft declaration on the bloc’s future trade deal with the United Kingdom.

Wall Street Opens Higher

U.S. stock markets were trading higher after the opening bell on Tuesday, with technology shares leading the rally. The large-cap S&P 500 Index was up 0.7%, with all 11 primary sectors reporting gains. The tech-heavy Nasdaq Composite Index shot up 1.1%. Dow industrials rose more than 200 points.

U.S. equities faltered Monday afternoon after a back-and-forth session. The major indexes are coming off their worst week since February with losses ranging from 3.7% to 4.2%. The selloff triggered a massive spike in volatility, with the CBOE VIX reaching six-month highs.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
2 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 5 (2 votes, average: 5.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 649 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




Feedback or Requests?

Continue Reading

Commodities

Crude Prices Mixed as Saudi Arabia Threatens Oil as a Weapon

Published

on

Oil prices traded modestly on Monday after Saudi Arabia threatened to retaliate against punitive measures tied to the disappearance of Jamal Khashoggi, a Washington Post columnist who was also one of the kingdom’s most vocal dissidents.

Oil Markets Creep Higher

A combination of geopolitics, supply constraints and a weaker dollar lifted commodity prices at the start of the week. U.S. West Texas Intermediate (WTI) crude rose by as much as 1.9% on Monday, hitting a high of $72.70 a barrel. The contract would later reverse course to trade 0.3% lower at $71.20 a barrel in New York.

ICE Bent, the global crude benchmark, peaked at $81.92 a barrel. At press time, it was down 0.1% at $80.32 a barrel.

The U.S. dollar, which often trades inversely with commodities, fell 0.2% against a basket of currencies. The DXY dollar index is currently trading at 95.02.

Khashoggi Disappearance

Saudi Arabia is facing an international backlash over the disappearance of Jamal Khashoggi. The columnist was last seen entering the Saudi consulate in Istanbul, Turkey on Oct. 2 before disappearing. Turkish news outlets say they have evidence linking the Saudis to his disappearance.

According to Sabah, a pro-government newspaper, the moments of Khashoggi’s “interrogation, torture and killing were audio recorded and sent to both his phone and to iCloud.” The newspaper said conversations of Khashoggi’s killers were also recorded.

U.S. President Donald Trump will send Secretary of State Mike Pompeo to Saudi Arabia to discuss the situation with Crown Prince Mohammad Bin Salman. Trump tweeted on Monday that the King denied having any knowledge of Khashoggi’s whereabouts.

“Just spoke to the King of Saudi Arabia who denies any knowledge of whatever may have happened ‘to our Saudi Arabian citizen.’ He said that they are working closely with Turkey to find answer. I am immediately sending our Secretary of State to meet with King!” he said.

Economic Retaliation

Trump has warned of grave consequences for Saudi Arabia if evidence emerged that the kingdom was responsible for Khashoggi’s disappearance. However, the president stopped short of threatening to block major arms deals to the kingdom as that would undermine U.S. jobs.

For the first time in 45 years, the Saudi regime has threatened to use oil as a political weapon to deter the West from attacking its economic interests. The Saudis issued a statement that the king plays “an influential and vital role in the global economy,” which is an implicit reference to its abundant oil wealth.

Following the disappearance of Khashoggi, several top business executives have pulled out of a high-profile Saudi investment conference, setting the stage for a bigger global backlash against the kingdom. According to CNN, the heads of J.P. Morgan Chase, Ford and BlackRock have cancelled plans to attend the summit.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 649 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




Feedback or Requests?

Continue Reading

Recent Comments

Recent Posts

A part of CCN

Hacked.com is Neutral and Unbiased

Hacked.com and its team members have pledged to reject any form of advertisement or sponsorships from 3rd parties. We will always be neutral and we strive towards a fully unbiased view on all topics. Whenever an author has a conflicting interest, that should be clearly stated in the post itself with a disclaimer. If you suspect that one of our team members are biased, please notify me immediately at jonas.borchgrevink(at)hacked.com.

Trending