Oil Trades Above $60 on Signs of Saudi Confidence in Rebound

[Omaha Steve]

Source: Bloomberg

By Sharon Cho

Brent futures rose as much as 0.6 percent, gaining for the second time in three days. Saudi Arabia’s assumption of oil at $80 a barrel for next year is sending a message that the government expects a rebound in prices, according to John Sfakianakis, a former economic adviser to the kingdom’s finance ministry. Implied volatility for at-the-money options this week climbed to the highest since October 2011, data compiled by Bloomberg show.

Oil has declined 46 percent this year, poised for the biggest drop since 2008, as the Organization of Petroleum Exporting Countries resists supply cuts to defend market share while the highest U.S. production in three decades exacerbated a global glut. Crude prices are “fair” at about $70 to $80 a barrel, Iraq’s Oil Minister Adel Abdul Mahdi said.

“The market is fluctuating today as there’s less liquidity,” Will Yun, an analyst at Hyundai Futures Corp. in Seoul, said by phone today. “Uncertainties still linger in the market as OPEC and the U.S. haven’t signaled any output cuts or a slowdown in their production.”

Brent for February settlement advanced as much as 38 cents to $60.62 a barrel on the London-based ICE Futures Europe exchange and was at $60.37 at 10:15 a.m. Singapore time. The contract fell $1.45 to $60.24 on Dec. 24. The European benchmark crude traded at a premium of $4.24 to West Texas Intermediate. Prices have decreased 1.7 percent this week, set for a fifth weekly loss.

FULL story at link.




Read more: http://www.businessweek.com/news/2014-12-25/oil-trades-near-56-as-saudi-budget-seen-as-sign-of-confidence

[misterhighwasted]

1. Most Oil Speak I have heard also expects oil ppb to settle at $80-$90 eventually

That gives a most fair & acceptable price range.

Who knows, oil is a volatile business.
I personally think it all has to do with squeezing out smaller players, & thus asset buying by the big players.
Sort of how big corporations all get bigger, isn't it?

[cprise]

5. Saudi, Russia recently signed a cooperation pact

http://www.bloomberg.com/news/2014-11-21/russia-has-no-plans-yet-to-cut-oil-production-minister-says.html

Saudis may have got tired of playing pump wars.

[misterhighwasted]

6. e gad! good link. And the comments, even more so.

Wow! The game of world power.

[dixiegrrrrl]

2. Gas Buddy says "prices rising"

It was 2.09 for regular today.
Happily we have the Explorer filled ( @2.13)
and tomorrow I go fill the Tercel
I might go thru a tank in 6-7 months, so can enjoy these bargain prices for a long time.

[Phlem]

3. Oh Boy!

One or two days of reasonable gas prices. Well we can't have that!

“The market is fluctuating today as there’s less liquidity,” right, the market is rigged.

[Spitfire of ATJ]

4. Only on Wall Street are low prices at the pump considered a disaster.

[misterhighwasted]

7. Ain't that the truth. Pump prices will go up faster than it went down

I better keep the tank on Full.