Close Menu
BlogSpotTipsBlogSpotTips
  • Home
  • Education
  • Finance
  • Latest Internet News
    • Social Media
    • Software
  • Game
  • Contact Us !
Facebook X (Twitter) Instagram
BlogSpotTipsBlogSpotTips
  • Home
  • Education
  • Finance
  • Latest Internet News
    • Social Media
    • Software
  • Game
  • Contact Us !
Facebook X (Twitter) Instagram
BlogSpotTipsBlogSpotTips
Home»Finance»THIS will bring oil producers to their knees: Kilduff
Finance

THIS will bring oil producers to their knees: Kilduff

DeepBy DeepFebruary 6, 2016No Comments3 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
Share
Facebook Twitter LinkedIn Pinterest Email

With crude futures trading below $30 per barrel, analyst John Kilduff said Friday that prices will spiral even lower before they bounce.

The most bearish outlooks now see oil bottoming around $10 per barrel. While those estimates sound crazy, the long-awaited recovery will not come until the market finds a price that will finally persuade drillers to turn off the tap, Again Capital’s founder said.

“The market is going to have to get to a shock price point that’s going to bring producers … really to their knees and to finally react,” he told CNBC’s “Squawk Box.”

High-cost production has thus far weathered a Saudi-led OPEC policy of maintaining output in order to maintain market share and pressure non-OPEC members.

U.S. drillers have proved more resilient at lower prices than previously thought, while exporting nations dependent on oil revenue, such as Russia, have refused to draw down production.

Russia's President Vladimir Putin.

If Putin seems friendlier lately, thank oil prices

But Kilduff noted that Russian officials have begun to entertain the notion of doing just that. On Wednesday, Russian Deputy Finance Minister Maxim Oreshkin told Russian news agency Tass that current prices may result in “quite hard and fast closures” of some producers in the coming months.

However, the bad news just keeps on coming for the oil markets, Kilduff said.

Overnight, Reuters reported that Iran’s crude oil exports are on target to hit a nine-month high in January as buyers prepare for the lifting of sanctions against the Middle Eastern country within days.

Iran is on track to ship 1.10 million barrels per day of crude excluding condensate this month, according to an industry source with knowledge of the OPEC member’s tanker loading schedule.

The market is already oversupplied by 500,000 to 2 million barrels per day, according to various estimates.

On the demand side, Kilduff pointed to separate data that showed China’s new bank loans slowed in December, raising questions over the quality of borrowing in the face of weak demand and deflationary pressure.

oil refinery

Brace yourself. Oil to get worse before it getsbetter

Ultimately, OPEC needs to come together and cut back supply to get prices up in order to sell less oil at higher numbers and bring in more revenue, Kilduff said.

Some members have advocated for production cuts, but those calls have so far been resisted by top exporter Saudi Arabia, which has some of the lowest production costs, hundreds of billions in reserve assets, and ample ability to borrow.

“I don’t know when that’s going to dawn on them, but it’s going to be lower from here. It seems pretty clear,” Kilduff said.

Matt Smith, director of commodity research at ClipperData, said Friday oil prices can fall farther as the market remains trapped in a vicious circle, in which economic concerns exert pressure on crude, which in turn eggs on economic concerns.

Pump jacks and storage tanks

Oil credit crunch may be worse than housingcrisis

Diverging central bank policy around the world will also have implications for crude, as easy money abroad drives down international currencies, making dollar-denominated oil more expensive around much of the globe, Smith told “Squawk Box.”

He noted that the weaker dollar propelled crude prices higher between 2009 and 2012, followed by a period of peaking crude costs through mid-2014, which dovetailed with the lows for the U.S. dollar.

With the U.S. outperforming relatively week economies abroad, dollar strength looks set to persist, he said.

“From that perspective, if you think the dollar is going to strengthen going forward, you’ve really got to expect headwinds for the crude market,” Smith said..

[“source -cncb”]

THIS will bring oil producers to their knees: Kilduff
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
Deep

Related Posts

Discounted Cash Flow (DCF) Formula: What It Is & How to Use It

June 25, 2025

Financial Audits and Payment Compliance: The Role of TPS

June 2, 2025

Using AI-powered Enterprise Interfaces to Optimize Operational Efficiency

May 20, 2025
Recent Post
  • Discounted Cash Flow (DCF) Formula: What It Is & How to Use It
  • Financial Audits and Payment Compliance: The Role of TPS
  • Social Media and Relationships
  • Online Counselling for Individuals and Couples
  • The Best Time to Post on Threads in 2025 — Data from 700K+ Posts
  • Using AI-powered Enterprise Interfaces to Optimize Operational Efficiency
  • How to Grow Your Brand with Micro Influencer Marketing
  • What Are the 8 Different Types of Video Game Articles?
Search
  • Home
  • Privacy Policy
  • Contact Us !
© 2025 BlogSpotTips. Designed by BlogSpotTips.

Type above and press Enter to search. Press Esc to cancel.