US drillers enjoy higher oil prices

30 March, 2017

In a surprise move pulled off late last year, it has been revealed that U.S. drillers hedged their bets last year  against falling oil prices, which is likely to add more pressure to the oil price and push the OPEC cartel into more production cuts.

A report by consultancy group Wood Mackenzie showed that American firms rushed to lock in higher prices when oil was trading significantly higher last year which seems to have turned out to be a a clever move.

The practice of Hedging oil protects buyers against falling prices as they are able to lock in a price to at the time of the agreement (in the case of US drillers when the prices were much higher last year) and then sell to the market at the agreed price.

A major stumbling block for OPEC in the quest for further production cuts is Non OPEC member Russia, who have so far reneged on the last deal by only agreeing to cut half of the oil supplies they signed up for.

If they don’t jump on board with the new agreement other countries are expected to follow suite meaning the deal will fall apart and the oil price is likely to tumble further.

However, if they do come to the party and agree to further cuts and stick with their promises we could see a substantial lift in the oil price and a new bottom for the foreseeable future,

“The onus is now on Russia to show they’re serious about this, If Russia come to the fold with non-Opec, we’re going to see a floor around $60 a barrel.” noted Mercuria chief executive Marco Dunand.


Source link  
Oil awaits Fed decision

The Oil price was trading lower again yesterday on Monday, weighed down by worries about the current state of economic growth, and some major...

Oil surges on conflict concerns

The oil price has continued to rise in today’s trading session after yesterday’s gains on the back of attacks on two oil tankers in the Gulf of Oman...

Gold need to hold this level

The gold price is now trading at its lowest level since the start of the year and is now consolidating around the $1275 mark and according to one...


Gold faces key moment

The gold price has remained above the $1300 mark in today's trading session after breaking this important level yesterday and today's outcome...

US dollar down on dovish Fed

As predicted yesterday, the Fed kept interest rates on hold but the following monetary statement was much more dovish than analysts had predicted...

Gold needs some big news

The gold price is under further pressure in today's trading session as investors ponder the chances of another rate hike from the US Federal Reserve after the release...


Good news for the precious metal

Gold just got another reason to cheer after the latst minutes meeting from the US Federal reserve where the tone left many analysts predicting that...

Gold to stay above $1300

The gold price has recovered strongly over the past 3 trading sessions after coming perilously close to touching the $1300 mark and...

Oil price hinges on trade talks

Oil is down once again in today's trading session as investors and the market alike remain divided on the future direction of the price with a lot...

  


Share it on:   or