KUALA LUMPUR, July 30 (Bernama) -- Bursa Malaysia's key index closed at an intraday high today, supported by continued buying interest even as renewed geopolitical tensions and a weaker overnight lead from Wall Street following the US Federal Reserve's (Fed) decision to stand pat on interest rates weighed on broader sentiment. The Fed has decided to hold rates steady for the fifth consecutive meeting, with the Federal Funds Rate unchanged between 3.50 per cent and 3.75 per cent. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.84 points to 1,720.40 from yesterday’s close of 1,715.56. The benchmark index, which opened 1.14 points lower at 1,714.42, hit its lowest level of 1,710.69 in early trade before gaining momentum for the rest of the day. However, the broader market was negative with losers outpacing gainers 581 to 411, while 612 counters were unchanged, 1,173 untraded, and 87 suspended. Turnover declined to 2.49 billion units valued at RM2.25 billion from ...
The OPEC war against the shale producers are heated up as shale producers look to Wall Street for support.
Simply put: Another reason to be bearish on crude prices.
Pioneer Natural Resources Co. announced on Tuesday it was tapping investors for $1.4 billion in fresh equity to help finance an increase this year in spending and production in Texas, where wells are still profitable. The share sale shows capital markets are still willing to back the shale industry as crude trades at the lowest in 11 years.
The move, if followed by other top shale producers, could lead to a shallower drop in U.S. oil production than currently expected, putting further downward pressure on crude prices. On Tuesday, Brent, the global oil benchmark, fell below $35 a barrel for the first time since 2004.
Based on the chart from Bloomberg, the oil production in US peaked at almost 9.7 million barrels a day in April. Since then, it has dropped to 9.3 million barrels as companies tightened their belts to cope with low prices. The U.S. Energy Information Administration, a federal body that tracks supply trends, expects production to drop to 8.8 million on average in 2016.
SUPPORT FROM WALL STREET
In a sign of investors’ appetite to support shale companies, Pioneer increased the size of its offering to 12 million shares from 10.5 million shares within hours of its first announcement. The company said it expected to sell the new shares at $117 apiece, a 6.5 percent discount to Tuesday’s close, raising gross proceeds of $1.4 billion.
Of course, even with the support, not all is rosy for the shale companies.
At current prices, investment bank Tudor Pickering Holt & Co. in Houston estimates that the shale industry will spend $9 billion more than it will earn this year, although the gap could be "partially covered" with asset sales and additional cuts to investment programs.
With this, things may be intensified...with the shale companies relying on Wall Street for support while OPEC is counting on the pain from the low prices to rebalance the oil market.
Definitely not a very good sign for the oil companies with this news....will the oil price goes lower? Will it hurt Ringgit further? Ouch! I'm definitely hoping that things will turn better but I ain't so optimistic about it.
Simply put: Another reason to be bearish on crude prices.
Pioneer Natural Resources Co. announced on Tuesday it was tapping investors for $1.4 billion in fresh equity to help finance an increase this year in spending and production in Texas, where wells are still profitable. The share sale shows capital markets are still willing to back the shale industry as crude trades at the lowest in 11 years.
The move, if followed by other top shale producers, could lead to a shallower drop in U.S. oil production than currently expected, putting further downward pressure on crude prices. On Tuesday, Brent, the global oil benchmark, fell below $35 a barrel for the first time since 2004.
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| US Oil Production seen slowing down slightly but not enough |
Based on the chart from Bloomberg, the oil production in US peaked at almost 9.7 million barrels a day in April. Since then, it has dropped to 9.3 million barrels as companies tightened their belts to cope with low prices. The U.S. Energy Information Administration, a federal body that tracks supply trends, expects production to drop to 8.8 million on average in 2016.
SUPPORT FROM WALL STREET
In a sign of investors’ appetite to support shale companies, Pioneer increased the size of its offering to 12 million shares from 10.5 million shares within hours of its first announcement. The company said it expected to sell the new shares at $117 apiece, a 6.5 percent discount to Tuesday’s close, raising gross proceeds of $1.4 billion.
Of course, even with the support, not all is rosy for the shale companies.
At current prices, investment bank Tudor Pickering Holt & Co. in Houston estimates that the shale industry will spend $9 billion more than it will earn this year, although the gap could be "partially covered" with asset sales and additional cuts to investment programs.
With this, things may be intensified...with the shale companies relying on Wall Street for support while OPEC is counting on the pain from the low prices to rebalance the oil market.
Definitely not a very good sign for the oil companies with this news....will the oil price goes lower? Will it hurt Ringgit further? Ouch! I'm definitely hoping that things will turn better but I ain't so optimistic about it.
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