Post Tagged with: "Oil Futures"

Source: CNBC

The sell-off in oil isn’t ‘entirely comparable’ to what happened with SARS, says CEO

CNBC There’s a “bear stampede” in the oil market as a new coronavirus spreads, but that may not be directly comparable to the sell-off in 2003 associated with the outbreak of severe acute respiratory syndrome (SARS), according to an energy analyst. Oil futures slid for a sixth session on Tuesday amid reports of a rising number of cases and casualties. “It is based on a lot of fear and panic,” Vandana Hari, founder and CEO of energy markets consultancy Vanda Insights, told CNBC’s “Capital Connection” on Tuesday. “That fear and panic will probably not die down anytime soon.” “It’s natural, very human to … hark back to SARS,” she said. “However, when it comes to the oil market, I don’t think it’s entirely comparable.” Energy prices also slumped during the SARS outbreak in 2003. But she said there was “another, much bigger influence” in the oil market back then — the U.S. invasion of Iraq. Brent crude went down from[Read More…]

Growth in Tight Oil Shakes Up Oil Futures Markets and Hedging Needs

Growth in Tight Oil Shakes Up Oil Futures Markets and Hedging Needs

From Bloomberg Declines in open interest of WTI forward contracts seen: CFTC Shale boom has shifted producers’ need to hedge farther out The vibrations of the shale boom are now shaking the futures market. A visible decline in open interest of West Texas Intermediate crude futures contracts for delivery five or more years in the future is due to the growth of tight oil fields and the shift in producers’ need to hedge oil so far out in the future, according to a study by the U.S. Commodity Futures Trading Commission. That’s because oil extraction has become more efficient in tight oil fields compared to conventional wells and producers have more flexibility in turning on and off the taps in response to oil prices. The increasing amount of crude coming in from tight oil in portfolios of production firms has left them with less crude to sell five or more years forward,[Read More…]

September 7, 2018 - 1:05 pm Closing Bell Story, Commodity Pricing, Energy News