OIL PRICES FALLING
Oil prices are in free fall this morning after it emerged that Saudi Arabia, the world's largest exporter, had slashed its contract price for its US customers in a further sign of an escalating war for control of global energy markets.
Brent crude - a benchmark made of oil from 15 North Sea fields against which almost half the world's petroleum is priced - fell 1.4pc to $83.61 in the morning trading session in London.
US crude futures are now trading at around $77 per barrel, a figure that will squeeze the profitability of shale oil producers in the US who are seen to be the biggest threat to the domination of the Organisation of Petroleum Exporting Countries (Opec) in terms of controlling the price of crude.
Today's falls were triggered by state-owned Saudi Aramco - the world's largest state-owned oil company by production and reserves - slashing the contracted price for its sale of crude to the US.
Opec, of which Saudi is the leading member - has been losing market share to shale oil producers in the world's largest economy with Nigeria recently dropping out of the list of member countries that supply North America.
At the same time, Opec members are producing too much crude to meet falling demand for the current market driving down prices further. According to estimates of the International Energy Agency, the call on Opec in the fourth quarter will total 30.3 million barrels per day, while next year it will fall to just 29.3 million barrels per day.
Pressure is on the 12-member cartel - which controls about a third of the world's oil supply - to cut production at its next meeting on November 27. However, its leading producers led by Saudi appear to be willing to keep the spigots open in order to defend market share and cripple some of their major rivals.
Russia, which pumps over 10m barrels per day of crude, has been a major loser in the current oil price rout. Deutsche Bank now expects Russia's economy to contract by 0.2pc next year, recovering slightly in 2016 to a moderate growth rate of 0.8pc. Russia's main export blend Urals oil is priced off Brent, the benchmark for about half the world's oil.
Opec is due to publish annual World Oil Outlook on Thursday which should provide further insight into its longer term planning to meet world energy market demand.
|October, 19, 11:30:00|
|October, 19, 11:25:00|
|October, 19, 11:20:00|
|October, 19, 11:15:00|
|October, 19, 11:10:00|
|October, 19, 11:05:00|
PLATTS - Norwegian natural gas exports to the UK jumped to their highest in six months Wednesday as consistently high UK prices incentivized flows normally only reserved for wintry periods.
AZERNEWS - The estimated cost of construction of nuclear power plant of Russian design in Uzbekistan will be about $ 11 billion, the launch of the first power unit has been planned for 2028, the Aide to the President of the Russian Federation Yury Ushakov said.
SHANA - Managing Director of the Iranian Gas Engineering and Development Company (IGEDC) Hassan Montazer Torbati said the supply of one billion cubic meters per day of natural gas by National Iranian Gas Company (NIGC) was one of the goals of the company by 2021.
WNN - China and Belgium have signed a framework agreement on cooperation in the peaceful use of nuclear energy. The agreement was one of several accords signed in Brussels yesterday during a meeting between Chinese Premier Li Keqiang and Belgian Prime Minister Charles Michel.