Profit Looking Up For Norway, Venezuela Hurting

By: Daniel Guttman / August 30, 2016

Yesterday the market saw losses across the board with October WTI crude settling down 66 cents to $46.98 and HO finishing down $0.0110 to $1.4862. Gasoline weakened the most, losing $0.0459 to $1.4669, as summer driving season begins to wrap-up and the transition to winter-grade higher RVP gasoline nears. Additionally, optimism in a possible production freeze is lessening. The storm which threatened the market last week is expected to land near Tampa, FL, away from the Gulf Coast refining hub, and therefore is not expected to impact supply. Tomorrow October contract takes over as front-month RBOB, currently trading 8 cents cheaper than September. Gasoline continues to see losses of $0.0150 this morning, while the market is trading fairly flat on HO and WTI Crude.

Norwegian oil and gas company, Statoil, has been restructuring and creating efficiencies to now be able to make profit at under $25 a barrel. Through cutting $99 billion in costs, rising their current production output over 60,000 bbls a day, and with plans to run at full capacity to 600,000 bbls a day, they have found a way to make money in such a tight-margin market.

At $23.50 to produce a barrel of oil, Venezuela’s production costs are fairly low. However, the country is now one of the hardest hit from the fall in oil prices. They are the ninth largest exporter of crude, and the drop in revenue currently has the country in threat of “economic collapse.” At higher production costs, Russia, Nigeria, and Canada are also suffering. Brazil has one of the highest production costs of $48.80, and will be feeling the pain of a huge fall in demand post-Olympics.

pic.jpgImage Source: Marketwatch.com

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Categories: Daily Market Update


Daniel Guttman

Written by

Daniel Guttman

With a background in wholesale and commercial sales as well as pipeline scheduling, Daniel is currently the Manager, Business Development in the Card Access Fuels department. He is tasked to find new and innovative solutions to increase sales opportunities for the sales team while managing and evaluating internal department processes. He assists with day to day personnel management, customer data analysis, as well as the daily Pacific Pride inventory and pricing direction.


Guttman Energy Daily Market Update Disclaimer – The information contained in this market update is derived from sources believed to be reliable; however this update could include technical inaccuracies or typographical errors and Guttman Energy does not guarantee the accuracy, completeness or reliability of this update. FURTHERMORE, THIS UPDATE IS PROVIDED "AS IS," WHERE IS, WITH ALL FAULTS AND WITHOUT ANY WARRANTY OR CONDITION OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY. GUTTMAN ENERGY ALSO SPECIFICALLY DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES. YOU USE THIS UPDATE AT YOUR SOLE RISK. This update and any view or comment expressed herein are provided for informational purposes only and should not be interpreted in any way as recommendation or inducement to buy or sell products, commodity futures or options contracts.


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