Translate This Page

Malaysia Bank Swift Code

What is Swift code? Swift code is known as ISO 9362 and is a standard format of Bank Identifier Codes approved by the International Organiza...

Wednesday, January 13, 2016

Crude Oil - Below $30 a Barrel

I just posted about how the nightmare continues for the oil & gas industry in 2016 as the oil price continues to fall but I didn't expect it to drop like this.

Looking at the dynamics, looking at the charts...it's just a free fall.





Oil price free fall



Oil dropped below $30 a barrel in New York for the first time in 12 years on concern that turmoil in China’s markets will curb fuel demand.

West Texas Intermediate crude tumbled to the lowest since December 2003. Concerns that China’s economic growth may slow has soured investors on the prospects for a quick recovery, turning hedge funds the least bullish in five years. A rapid appreciation of the U.S. dollar may send Brent oil to as low as $20 a barrel, Morgan Stanley said.


A SHORT HISTORY ON OIL PRICE

Between 2010 and 2014, oil demand was soaring around the world, as countries recovered from the financial crisis but the supply was never able to keep up. 

Many older oil fields were stagnating. Conflicts in places like Libya and Iraq were restricting supply. Countries had to draw down their stockpiles, and prices soared to around $100 per barrel.

Those high prices were attractive for suppliers and spurred more drillers in the United States to use innovative hydraulic fracturing and horizontal drilling techniques to unlock vast quantities of oil from shale formations in places like North Dakota and Texas. The impact, US crude oil production has nearly doubled since 2010.

Of course, eventually, supply caught up with demand and then surpassed it, and it's really no rocket science....the crash came eventually. 

Things became worse when demand slowed down in the mid 2014. 

Europe had its mess and most importantly, China's economy was starting to slow down. 
The demand slowed down but the supply continues....United States was still producing more and more oil. Iraq and Libya were also starting to bring back more production. So prices began sliding.

In an attempt for Saudi to maintain market share, they too (together with OPEC) decided to increase production in order to maintain market share, hoping that the subsequent fall in oil prices would crush US frackers, who require higher prices to stay profitable.


US drillers turned out to be far more adaptable to low oil prices than the Saudis thought — companies cut costs and boosted productivity in order to keep the oil flowing. US production has stopped growing lately, but the decline has been far less severe than originally predicted. Iraq has nearly doubled production since 2014 as it recovers from conflict. Thanks to the nuclear deal with the US, Iran is expected to start exporting more oil soon, further adding to the supply glut.


The demand slide continues as China's slowdown continues...and here is the dynamics, and it's not good. As long as supply far surpassed the demand, it's difficult to see any comeback in oil prices. 

WHEN WILL OIL PRICE REBOUNDS?

That is really the question isn't it? Some banks project oil prices to keep plummeting down to $20 per barrel this year. Others expect a rebound to around $40 or $50 per barrel as the US shale boom tapers off and demand recovers.

But ultimately, the supply and demand dynamic is the thing for us to keep an eye on. 

If say, a cold war between Saudi Arabia and Iran heat up and caused disruption in the production, the oil price may start to rebound. If China's economy suddenly rebounds unexpectedly, that could have a similar effect. Or maybe Iran will do something that causes European Union and US oil sanctions to snap back into place. Alternatively, maybe low oil prices will persist indefinitely.

No comments:

Post a Comment

Labels

Investment News share market bursa malaysia FBM KLCI market daily report stock stock market Brokers Report Malaysia Financial Management brokers call Personal Finance research report Financial Economy General stock investment Money Articles FBMKLCI Stocks market PublicInvest Research Budget Wall Street Update PublicInvest research report Wall Street KLCI oil & gas 1MDB Hong Leong Investment Bank research report Personal Opinion Dow Jones Issue US bursa Credit Card Debt Kenanga research report equity market kenanga research oil price politics ringgit Market Watch PPP klse najib property development Malaysia Weekly Highlights Nasdaq oil property thoughts EPF Hong Leong Investment Bank Research Income Tax construction Maybank Research Misc Money Master Najib Razak S&P 500 Index The Edge Financial Daily US stock market bank negara weekly weekly investment term China Companies in Focus Inflation Loan Rules Theedgemarkets business maybank plantation s&P 500 warren buffett Crude Oil Insurance MIDF research report Maybank IB research Retirement Planning Reuters business news finance global opinion spending stocks with momentum technology Bank Brokers Feng Shui OPEC Savings Wealth bear market currency financial services global market investing microsoft wallstreet 1 Malaysia Development Bhd 1Malaysia Development Bhd BNM International Reserves Billionaire Budget 2016 Commodity Disney Investment Term Malaysia News PCB Petronas Richest People STD Saudi Arabia bloomberg british american tobacco gaming sector low oil price media publicInvest russia share investment stock pick telecommunication top glove trading wallstreet update weakened Ringgit 2010 2016 Air Asia America Bad Debt Bill Gates Billy Toh Budget 2017 Calculation Chinese New Year Currency Exchange Education Fed Forex Gold IPIC Income Iran Kenanga Research research report Lembaga Tabung Haji MAS Macquarie research report Oil & Gas sector Quote RHB Semiconductor Industry Association (SIA) Star Wars Star Wars: The Force Awakens US Fed hike affin hwang capital airasia analyst apple axiata bearish market business highlights construction & engineering consumer products dow jones industrial average earnings report equity expenses global bear market healthcare hup seng industries berhad inari inari amertron berhad interest rate learning malaysia airlines market news maybank investment bank oil and gas oil palm plantation oil prices opr overnight policy rate (OPR) s&P500 s&p satya nadella scandal thought thought of the day 2013 2014 Bank Negara reserves Broker Report Budget 2020 Cash Rebate Donald Trump Earn Financial Planning Financial World Forbes Global Competitiveness Report Global News Global semiconductor sales Goldman Sachs Good Debt How The Rich Get Richer IOI Corp Bhd India Intelligent Investor Interest Rates Linear Income M&A Securities Mahathir Malaysia Business Highlights Maybank 2 card P1 Passive Income Privacy Policy PublicInvest Bank research report REIT RHB Investment Research RHB Research Report RM SIA Sector review TA Research TM TPPA Telekom Malaysia Tun Dr Mahathir US news USD USD against MYR United States Wall Street Journal World Economic Forum Zeti airasia x airlines apple inc asset allocation automotive aviation sector azure banking sector bat beverage bonds box office brent crude budget 2015 bumi armada buy property cash consumer discretionary default developer electricity tariff hike engineering financial market global economy greece gst home hong leong investment bank house infrastructure iphone jobs kossan rubber industries macquarie equities research report malaysia Ringgit market close market updates mukhriz nadella new era for oil opinions pipeline services politic public bank random rate hike research retirement ringgit crisis sector update semiconductor semiconductor sales semiconductor sector shale producers share sime darby stock market. oil & gas industry tax technical analysis telco sector the edge weekly news world market 0% Easy Payment Plan 1MDB scandal 1mdb story 20 cents 2009 2011 29 minutes 3.25% 53 cost cutting measures 7-eleven 9 Things Rich People Do Differently Every Day ABNxcess AFP NEWS AMMB Abu Dhabi fund AirAsia X Bhd Alcohol AmInvestment Bank research report Amazon Ambank Aminvestment research report Ann Joo Ann Joo Resources Bhd Anwar Apple watch Asia Asian stock market Avengers BIMB Securities Research BJ Auto BP Plastics Holding Bhd BSI Singapore Bailout Banking and finance sector Benjamin Graham Biden Bio Osmo Book Borneo Oil Bhd CIMB CLIQ Energy Bhd CPO export tax CPO price CSI 300 Carlos Slim Carlsberg Cepatwawasan Group Bhd Charts China General Nuclear Power Corp China's bond market China's wealthiest man Christmas Circuit breaker Citibank Cash Back card Commodity Watch Credit Customer Service DSKH Holdings (M) Bhd Dagang NeXchange Bhd Datasonic Group Bhd David cameron Debt Status Deficit Deloitte Dividend Domestic news Dutch Lady Milk Industries Bhd E.U ECB EON Eastern & Oriental Bhd Eco World Eco World Development Group Bhd Edra Euro Europe Central Bank European Union Evergreen External Trade FPSO Genesis Fed rate hike Federal Reserves Federal rate Fitbit Fitbit Inc Gamuda Genting Malaysia Berhad George Kent (M) Bhd Global Competitiveness Index Global Issue Gordon Growth Greece exit Greed is Good Guan Chong Bhd Guinness HSBC Hasbro Hektar Reit Hiap Teck Ventures Bhd Highlights Hillary Clinton Hock Seng Lee Hong Leong Bank Bhd Hong Leong Bank Investment research report Hong Leong Bank Wise card Hong Leong Industries Bhd ICB IMF INTC IPO IPOs IT Ibraco Bhd Intel Corporation International Petroleum Investment Company (IPIC) Islamic Banking and finance sector Ismail Sabri JF Apex Securities JF Apex Securities Research Janet Yellen Jerasia Capital Bhd Junk KNM KNM Group Bhd KVMRT 2 Investment KWSP Keep Up With The Joneses Khir Toyo LHDN Leissner Lim Kit Siang Lucasfilm M+ online Market Wrap MARA MH370 MIDA MISC Bhd MLTA MPC MRTA MSN Money News Madza Malaysia Airports Holdings Malaysia Banking Malaysia Bond Market Malaysia fund Malaysian Palm Oil Board Malaysian Ringgit Mara Digital Store March CPO export tax Maxis Maybankard 2 Card Microsoft in the new era Millionaire Next Door Mistakes Motivation N2N Connect NAP 2014 NTPM Holdings Bhd Nazir Razak News Update News at a Glance Nikkei O&G OCBC OPEC war OSA Obama Office 365 Windows 10 Oil Watch PTPTN Packet One Parkson Paypal Perdana Perisai Petronas Chemicals Group Bhd Petronas Gas Bhd Pintaras Jaya Bhd Pioneer Natural Resources Co Power Practical ways on spending Prestariang Bhd Public Investment Research PublicInvestresearch report RBC Capital Markets RCP average poll of US election RGB International Bhd RHB Research RM crisis RM2.6 billion ROE Ranhill Holdings Bhd Rants Rating Raya holiday Recession Ringgit's volatility SEM SKB Shutters Corp Bhd SME segment SP Setia SRR Saizen REIT SapuraKencana Seacera Group Bhd Shale oil Sime Darby Bhd Simee Darby Singles Stimulus Plan Stock Selection for the Enterprising Investor Sunway Construction Bhd Superlon Holdings Bhd Swift Code TIME TMI TNB TOYOTA TRC Synergy Tan Sri Tony Fernandes Tax Reliefs Technorati Tenaga Tenaga Nasional Bhd The Citizens Declaration The Edge Weekly The Negative Side The New York Times Tim Cook Titijaya Land Bhd Trans-Pacific Partnership Agreement Trump v Clinton Tsipras U.K UEM Edgenta Bhd UMNO UMW Oil & Gas UOA US Box Office US election US fed US manufacturing data US market US patent and trademark US prosecutors US stocks USA USD/MYR USEconomy Uchi Technologies Bhd Ultra-Rich Networth individuals UniFi United Kingdom Uob one card Versatile Creative Bhd W-8BEN WCT Holdings Wahid Wal-Mart Wall Street support Warren's Way Windows 10 Yak Yew Chee Yellen Yinson Holding abenomics aemulus affordable housing ahmad bashah ahmad zahid airline airports alibaba alternative investment aluminium asian market audit automobile azure machine learning bank negara malaysia below $30 a barrel berjaya auto bhd berjaya food bond market borneo utara highway brexit britain broadband budget 2018 budget revision bulk purchase of property bullish bullish market burse cloud computing cocoa coffee consumer staples consumption power cost of having a baby crane customer data debt investor deflation risk development downpayment for your home early election earnings per share economic outlook economic outlook 2016 economic sanction economics economy outlook ecoworld effective gross income egi election election budget electric utility electricity electricity bill electricity production endowment plan energy sector entertaiment eps essay european central bank eversendai eversendai corp export data family food beverage food services forecasts foreign-worker levy hike fundamental questions on retirement genting group genting plantation george soros global energy global stock market globetronic glove goldman great eastern group purchase of property has oil bottom? health higher price home business household & Personal product how low can ringgit drop? humor industrial package industry product interest internet investment income investment plan investment strategy iraq jack ma jack ma ready to take on the world jaks resources bhd japan jobless kimlun klci index knowledge land reclaimation work lawsuits life lifestyle lifestyle inflation liquefied natural gas (LNG) machine learning maintain buy malaysia government managing debt manchester united manufacture polyrethane product manufacturing marine engineering market closing market outlook markets mazda medical insurance metering microsoft earnings middle class monetary policy committee moneymaster mortgage movie negative nestle noon market offshore marine support services oil & gas services oil gain oil madness oil market oil production oil rally oil&gas oldtown opr hike patent petrol petrol chemical petroleum petronas gas pipeline project positive power generation power plant prime minister primus pacific private placement profitability ratios project reference property & infrastructure property development and investment putrajaya quantitative easing relative strength index (RSI) renewable energy reputational risk resources retail retailing retirement fund rhb research institute risk risks ruble salesforce sapurakencana petroleum savings for retirement scicom scientex scomi energy services bhd sector sell share markets share price shinzo abe shipbuilding shopping mall stagnation star publication (M) bHd starbucks statistics steel stock market bursa malaysia stock market investment stock price swiss swiss bank takaful tech technical indicator telco the malaysian insider the star thermo-vacuum form plastic packaging manufacturer time value money top gainers top losers trade volume index (TVI) traditional healthcare uchi tech umw holdings upstream oil & gas ursa malaysia value of compounding wal-mart effect warren buffet water related engineering wearable tech webe windows worldwide sales zecon