Energy companies and oil trading firms that teamed up to build several mini-refineries that convert a swelling surplus of ultra-light U.S. crude into fuels for export seemed like a pretty safe investment bet for a while.
OPEC forecast on Thursday that oil supply from non-member countries will fall more sharply next year, a development that would suggest its strategy reaffirmed last week of defending market share not prices is working.
Crude oil prices are rebounding after a reported drawdown in crude inventory and a cut in the dividend by Kinder Morgan, the largest pipeline operator in North America, that is signaling yet again that energy companies can’t take much more pain.
Oil prices fell to their lowest in nearly seven years on Monday after OPEC's meeting ended in disagreement over production cuts and without a reference to its output ceiling, while a stronger dollar made it more expensive to hold crude positions.
Crude oil prices roared back after a brief slip below $40.00 per barrel when Mario Draghi failed to wow the market with his stimulus magic and speculation that OPEC may create a roadmap for a production cut next year. Yet, as the real meeting gets underway, tensions are boiling over as the Saudis try to make a case that a production cut might not matter anyway.
Oil is unlikely to return to $80 a barrel before the end of the decade, despite unprecedented declines in investment, as yearly demand growth struggles to top 1 million barrels per day, the International Energy Agency said on Tuesday.