Brent crude oil futures sank more than 2% on Monday, as concerns of an imminent strike on Syria eased, and traders reduced positions that had reflected fears of oil supply disruption in the Middle East.
Brent crude oil sank to its lowest mark in one week, narrowing its premium over the U.S. crude oil contract which did not fall by as much.
Profits from shipping oil by rail are shrinking as U.S. and global benchmarks converge to the narrowest since 2010, making pipeline deliveries more attractive and slowing the demand for train cargoes like the one that derailed and exploded in Quebec.
Brent crude oil rose more than $1 to a 12-week high on Thursday after news of a sharp cut in Saudi oil production, an explosion in Yemen that halted most of the country’s oil exports and bullish Chinese trade data.
Saudi Arabia cut its crude oil production by around 700,000 barrels a day (bpd) over the last two months of last year, with December output at around 9.0 million bpd, an industry source familiar with Saudi oil policy said.
Global energy service giants are banking on a boom in Saudi oil and gas drilling over the next few years to revive profits that are being squeezed by overcapacity in the North American market.
Schlumberger, Halliburton and Baker Hughes have all singled out Saudi Arabia as a major growth market for next year as they search the globe for better returns than the saturated U.S. and Canadian markets offer.
I've just finished a new research paper with my former student (and now University of Chicago Professor) Cynthia Wu. In our new paper, we study how increased purchases of crude oil futures contracts by financial investors may have affected the prices on those contracts.