China's land reclamation around reefs in the disputed South China Sea is undermining freedom and stability, and risks provoking tension that could even lead to conflict, U.S. Deputy Secretary of State Antony Blinken told a conference in Jakarta.
The dollar was a contributing factor to oil’s crash between June and January as it rose 16 per cent against a basket of other currencies. However, the 60 per cent decline in crude from about $115 to $45 a barrel over the same period illustrates how crude was largely trading on its own fundamentals, as the US shale boom contributed to oversupply.
More than $100bn of spending on new projects by the world’s energy companies has been slowed, postponed or axed following the oil price plunge, evidence of the drastic industry action that will curb output in coming years.
Sanctions have stopped Russia’s state-controlled oil group Rosneft expanding its trading operations, the company revealed on Tuesday, preventing it from capitalising on one of the main revenue sources tapped by western rivals during the oil price rout.
The rebound in oil prices has wide-reaching implications. For one, it certainly affects the situation in Russia and the Ukraine. As the price of oil stabilizes, the Russian government has become more comfortable with its fiscal situation, despite the fact that low oil prices and Western sanctions have sunk the country into a recession that will likely last through next year.
As Saudi Arabia pumps more and more crude, creating a glut in global supplies, US producers recently have begun to curtail oil production as prices plummeted. The cost of production for US shale producers is significantly higher than for conventional production in Saudi Arabia and in other OPEC countries, which gives those producers an advantage at a time of sagging oil prices.
Saudi Arabia strategy was an attempt to put pressure on high-cost producers such as the US shale drillers.
EIA’s Drilling Productivity Report (DPR) for April had forecast a 57,000 b/d decline during May in total crude oil production from seven U.S. regions, which together accounted for about 95% of U.S. crude oil production growth during 2011-13. This was the first time the DPR had indicated a decline in expected production since the report was first issued in October 2013. Signs of declining U.S. tight oil production amid lower crude oil prices have been a widely watched market indicator of firming oil market balances. The latest DPR, released on May 11, expects a further decline in crude oil output from the seven regions during June. Overall, EIA is now projecting U.S. oil production to average 9.2 million b/d in 2015, 40,000 b/d lower than in last month’s forecast.
The late start of the overseas expansion of Chinese oil companies means that their foreign oil assets are largely located in Africa rather than in main oil producing countries in the Middle East
North Sea Brent crude oil prices averaged $60/barrel (b) in April, a $4/b increase from March and the highest monthly average of 2015. Despite increasing global inventories, several factors contributed to higher prices in April, including indications of higher global oil demand growth, expectations for declining U.S. tight oil production in the coming months, and the growing risk of unplanned supply outages in the Middle East and North Africa.