One day after Saudi Arabia declared war on U.S. oil producers by lowering prices in an attempt to dump cheap crude in the United States (US) market, the White House and private oil companies responded. White House spokesman Josh Earnest said that the U.S. is monitoring the global oil supply and demand situation but has no comment on whether it might look at replenishing the Strategic Petroleum Reserve. Then, later in the day, the Wall Street Journal reported that BP is going to export ultra-light crude without the permission of the U.S. government in a move that not only starts to breakdown the US export ban, but also is a direct challenge to OPEC and other producers for market share. Both of these developments temporarily gave support to the petroleum complex, but it still was not enough to overcome the perception of overwhelming supply and Bank of Japan Gov. Haruhiko Kuroda’ s prescription against the disease deflation. Continue reading
Depleting your oil ‘savings account’ might not be the wisest idea when you are both one of the largest consumers of oil in the world and not one of the largest producers.
Oil prices are on the brink of possibly their biggest correction since the global financial crisis after Vladimir Putin’s gamble to use Russia’s crude as a political weapon backfired spectacularly on the Kremlin.
A potent energy superpower, Russia had thought that it could use its status as the world’s largest oil producer and biggest exporter of natural gas through cross-border pipelines to intimidate and quite literally bully Western powers into submission over Ukraine. Continue reading