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Yahoo
31-07-2025
- Business
- Yahoo
Standard Chartered: Oil Prices Likely Headed Higher Over The Long Term
Crude oil futures have jumped to the highest levels in six weeks after U.S. President Donald Trump ratcheted up threats to slap Russia with extra sanctions and tariffs unless it agrees to a ceasefire with Ukraine. Brent crude for September delivery gained 1.2% to trade at $73.34/barrel in Wednesday's morning session, while WTI crude was up 1.5% to $70.24. Trump told reporters that he would give Russia 10 more days to negotiate a truce with Ukraine, extending his earlier deadline to August 3 from July 14. Trump says he is not concerned about the impact of Russian sanctions on the oil market, probably because he reckons it will give an opportunity for U.S. producers to ramp up oil output. "The new deadline caught many analysts by surprise and, if enforced, could tighten Russian crude and fuel supplies to the global market," BOK Financial Securities wrote in a note. Also driving oil prices higher was a trade deal struck between the U.S. and the European Union, that averted a full-blown trade war. The deal establishes a new baseline for commerce between the two economies, with the EU now facing a maximum 15% tariff on exports to the U.S. However, a large U.S. crude inventory build acted as a crude oil stocks rose by 7.7 million barrels in the week ending July 25, according to data released by the U.S. Energy Information Administration on Wednesday. Total stockpiles reached 426.7 million barrels, still 6% below the five-year seasonal average, but the size of the weekly increase surprised markets. The EIA figures came one day after the American Petroleum Institute reported a smaller build of 1.54 million barrels, underscoring a notable gap between public and private data. While geopolitical headlines and trade news pushed prices higher, the unexpected surge in inventories helped limit the scale of the rally. And now, commodity analysts at Standard Chartered have predicted that oil prices are likely to trend higher in the coming years. Current oil prices have remained close to $70/bbl in the post-pandemic period, and are roughly in-line with the 20-year average at $73.38/bbl. However, StanChart says the economics of U.S. shale that previously allowed oil prices to fall from the $90-100/bbl range in the runup to the Global Financial Crisis to below $60 per barrel have changed quite dramatically. The analysts point out that the U.S. shale patch now needs higher oil prices to prevent a precipitous decline in shale oil output. Higher input costs for steel, labor, and frac materials, courtesy of Trump's tariffs, are not helping, either. Indeed, we previously reported that, 'the average breakeven price for Permian producers is now edging back toward the mid-$60s, up from the mid-$50s just two years ago.' StanChart is not the only oil expert that holds this bullish view, with multiple energy analysts now sounding the alarm that oil prices at current levels are not sustainable. Back in May, Rystad Energy provided estimates that the breakeven price for new horizontal wells in key shale plays now hovers ~$68 per barrel, a sharp rise from just two years ago, 'There's an expectation of tight capital budgets and slower reinvestment — even if prices recover modestly,' said Artem Abramov. Wood Mackenzie shares a similar sentiment, 'This is not 2014. Investors want cash flow, not growth,' said Robert Clarke, WoodMac's VP of upstream research. 'If the price floor doesn't come back, the rig count will absolutely fall.' Well, maybe oil executives have communicated this harsh reality to Trump. Maybe they've warned him that his 'drill, baby drill' mantra will remain a mere political slogan as long as oil prices remain at these levels, hence his sudden antagonism towards Moscow. Indeed, U.S. rig count is going through a protracted decline, a precursor for falling oil production. According to the latest Baker-Hughes data, the U.S. oil rig count fell for the 13th consecutive week, losing seven w/w to a 46-month low of 415, with the YTD decline now clocking in at 68 rigs. The latest fall was heavily concentrated in Texas where oil drilling fell by six w/w to a 47-month low of 212. Oil drilling in the Eagle Ford formation of south Texas fell by five w/w to 34 rigs, with overall basin activity supported by a three-rig rise to 14 rigs in gas drilling. Delaware Basin drilling fell by two to 146 rigs while, elsewhere in the Permian, Midland Basin drilling fell by one to 91 rigs and other Permian drilling was unchanged at 23 rigs. Meanwhile, the U.S. gas rig count gained five w/w to a 23-month high of 122, bringing the year-to-date increase in gas drilling to 21 rigs. By Alex Kimani for More Top Reads From this article on Error al recuperar los datos Inicia sesión para acceder a tu cartera de valores Error al recuperar los datos Error al recuperar los datos Error al recuperar los datos Error al recuperar los datos
Yahoo
03-04-2025
- Business
- Yahoo
Oil tanks 6% amid 'panic selling' as Trump tariffs, OPEC+ supply increases send prices reeling
Oil futures tanked more than 6.5% on Thursday as Trump's tariffs sent financial markets reeling and new global supply developments suggested balance in the global oil market would remain under pressure. The price of West Texas Intermediate (CL=F) crude oil, the US benchmark settled at $66.95 per barrel. Brent (BZ=F), the international benchmark traded near $70 a barrel. "The panic selling that's occurring is very likely an over-exaggeration of the true fundamentals. Near term however there's a lot of unknowns so you're seeing a lot of funds unwind positions," Dennis Kissler, senior vice president for trading at BOK Financial Securities, told Yahoo Finance on Thursday morning. Energy (XLE) related equities also led to the downside amid a market sell-off as the Dow (^DJI), S&P 500 (^GSPC) and Nasdaq (^IXIC) all plummeted. Following Trump's tariff announcement on Wednesday, the Organization of Petroleum Exporting Countries and its allies, OPEC+, agreed to hike supply more than expected beginning in May. 'Markets are still digesting tariffs, but the combination of increased oil production and a weaker global economic outlook puts downward pressure on oil prices — potentially marking a new chapter in a volatile market," said KPMG US energy leader Angie Gildeaon Thursday morning. This decision will add 411,000 barrels per day to the global oil market, and this news deepened losses that began late Wednesday after the Trump administration announced sweeping tariffs on its trading partners. Although energy was exempt from the levies announced on Wednesday, the move escalated Trump's global trade war and raised concerns about demand should economic growth slow worldwide as a result of these rejiggered trade arrangements. Read more: What Trump's tariffs mean for the economy and your wallet For instance, tariffs on goods imported from China are now set to total 54%; the country is the world's largest importer of crude oil. "[The] 54% tariff on China is a significant negative surprise," CIBC Private Wealth senior energy trader Rebecca Babin told Yahoo Finance. "The tariffs on growing emerging economies that contribute most to crude demand growth (not absolute demand) are getting hit the hardest." Ahead of these announcements, oil prices had been rallying after recent moves from the Trump White House — including pressure on Iran to agree to a nuclear deal, tariff threats on imports from countries that buy crude from Russia, and "secondary tariffs" on Venezuelan energy — pointed to a tighter global supply environment. On Wednesday, gas prices in the US reached their highest level since September, as this rally in oil prices had pushed the average price of a gallon of gas toward $3.25 a gallon. Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre. Click here for in-depth analysis of the latest stock market news and events moving stock prices
Yahoo
03-04-2025
- Business
- Yahoo
Oil tanks 7% amid 'panic selling' as Trump tariffs, OPEC+ supply increases send prices reeling
Oil futures tanked more than 7% on Thursday morning as Trump's tariffs sent financial markets reeling and new global supply developments suggested balance in the global oil market would remain under pressure. Near 11 a.m. ET on Thursday, the price of West Texas Intermediate (CL=F) crude oil, the US benchmark, fell over 7.5% to trade near $66.10 per barrel. Brent (BZ=F) crude oil, the international benchmark, was down over 7% to trade below $70 a barrel. "The panic selling that's occurring is very likely an over-exaggeration of the true fundamentals. Near term however there's a lot of unknowns so you're seeing a lot of funds unwind positions," Dennis Kissler, senior vice president for trading at BOK Financial Securities, told Yahoo Finance on Thursday morning. Following Trump's tariff announcement on Wednesday, the Organization of Petroleum Exporting Countries and its allies, OPEC+, agreed to hike supply more than expected beginning in May. 'Markets are still digesting tariffs, but the combination of increased oil production and a weaker global economic outlook puts downward pressure on oil prices — potentially marking a new chapter in a volatile market," said KPMG US energy leader Angie Gildeaon Thursday morning. This decision will add 411,000 barrels per day to the global oil market, and this news deepened losses that began late Wednesday after the Trump administration announced sweeping tariffs on its trading partners. Although energy was exempt from the levies announced on Wednesday, the move escalated Trump's global trade war and raised concerns about demand should economic growth slow worldwide as a result of these rejiggered trade arrangements. Read more: What Trump's tariffs mean for the economy and your wallet For instance, tariffs on goods imported from China are now set to total 54%; the country is the world's largest importer of crude oil. "[The] 54% tariff on China is a significant negative surprise," CIBC Private Wealth senior energy trader Rebecca Babin told Yahoo Finance. "The tariffs on growing emerging economies that contribute most to crude demand growth (not absolute demand) are getting hit the hardest." Ahead of these announcements, oil prices had been rallying after recent moves from the Trump White House — including pressure on Iran to agree to a nuclear deal, tariff threats on imports from countries that buy crude from Russia, and "secondary tariffs" on Venezuelan energy — pointed to a tighter global supply environment. On Wednesday, gas prices in the US reached their highest level since September, as this rally in oil prices had pushed the average price of a gallon of gas toward $3.25 a gallon. Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre. Click here for in-depth analysis of the latest stock market news and events moving stock prices Sign in to access your portfolio
