Market News

Global oil prices unlikely to fall below $100/b until 2025: Lukoil

Moscow (Platts)--18 June 2013

Global oil prices are unlikely to drop below $100/b until 2025, supported by OPEC's market management efforts and crude demand growth in Asia, Leonid Fedun, vice president of Lukoil said Tuesday, presenting key findings of the company's first public long-term global industry outlook.

"Under our estimates, prices aren't going to drop below $100/b, with the [oil pricing] dynamics to be determined by three factors...softening or hardening of the [US monetary] policies...growing demand [for crude] in Asia and, in the longer term, African markets, and OPEC's stabilization efforts," Fedun said in an interview with Russia's Business FM radio station.

The so-called shale boom in North America is unlikely to have a visible downward effect on oil prices, according to Lukoil's outlook, Fedun said. Read more...

Airbus breaks ground for first U.S. assembly line in Alabama


MOBILE, Alabama — As community leaders, elected officials, suppliers, construction officials and more spoke at the Airbus groundbreaking for the company’s first U.S. final assembly line (FAL) this morning, each concluded their remarks with the same theme: “It is a groundbreaking day.”

It is a groundbreaking day for Airbus as it expands its global footprint into North America. It is a groundbreaking day for Alabama’s gulf coast and Mobile Brookley Aeroplex, which will see 1,000 new jobs from the plant. And, it is a groundbreaking day for the state of Alabama, which is quickly becoming a center for aviation industry activity in the United States. Read more...

Why Is Gas Price Remaining High When Oil Price Is Going Down?


Logic would seem to dictate that if oil prices are going down, the price of gasoline should follow suit and go down also.
However the opposite has been observed lately. Of course as is the case in any fluctuation of oil prices, there is a range of reasons responsible for this.
So why exactly is the price of oil dropping whilst the price of gasoline at the pump is remaining high ?

Large US strategic petroleum reserves

A sluggish economy, and hence slow economic recovery has meant that there is low demand for oil. Many blame Obama's austerity measures for this.

What to Do When Oil Swings

By BEN LEVISOHN – The Wall Street Journal – July, 2012

The relationship between stocks and oil prices might be breaking down—but its impact is still being felt in two key sectors. Experts say investors who play those sectors smartly can benefit regardless of where oil prices go from here.

Crude gained 4.7% on July 2, as Iran tested missiles capable of hitting U.S. targets in the Middle East. That price jump, coupled with a 9.4% surge on June 29, capped a nearly 13% rise in just three days of trading, the largest such move since August 2009.

The spike was quite a turnaround from the first half of 2012, when crude shed about 14% of its value, its worst first-half performance since 1998.

But the broad stock market hasn't been following oil's lead. The Standard & Poor's 500-stock index has moved in the same direction as oil in just two of the first six months of 2012, after doing so in 75% of the months from the stock market's bottom in March 2009 through the end of 2011.

"People think of oil and stocks as moving together," says David Kelly, chief global strategist at J.P. Morgan Funds. "But it's a relatively recent phenomenon to think they should move in the same direction."

According to research from Adam Parker, chief U.S. equity strategist at Morgan Stanley, earnings for just two sectors—energy and consumer discretionary—are significantly affected by oil-price movements. Energy stocks receive a boost from higher oil prices, while consumer-discretionary stocks benefit when prices fall.

J.P. Morgan's Mr. Kelly says investors looking to bet on stocks that will benefit from cheaper oil should consider consumer stocks. "If you're not spending money on gasoline, it helps with your spending power," he says.

Consumers may have more to spend with oil prices low. Last year, they took an $80 billion hit from rising oil prices, something that won't occur in 2012 if estimates for lower oil prices from the Energy Information Administration prove accurate, according to Aram Rubinson, a retail analyst at Nomura Securities International.

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