Oil/petroleum is the single most traded commodity on our planet. As some derivative of oil can be found in nearly all products of daily life, it is hardly possible to exaggerate the importance of oil for our civilization.
Not all enterprises that are called "oil companies" actually produce oil. The oil and gas industry is commonly divided into three parts: upstream, midstream and downstream. Only the upstream industry (also called E&P - exploration and production) produces oil. Midstream is active in transportation and downstream is involved in refining of crude oil. Most companies are involved in more than one of these sectors.
Companies active in upstream can be roughly divided into two groups: NOCs and IOCs.
IOC stands for International Oil Company. Here one can find well-known names like ExxonMobil, Shell or BP. The operations of these companies are not confined to a particular region, so they produce a
U.S. energy commodities outperform in a dismal week for commodities.
Commodities nosedived this week, led by palladium and wheat, which fell by more than 5 percent. Only natural gas eked out a gain, while stock markets lost less than 1 percent. The S&P 500 is now up 7.8 percent year-to-date.
In a relatively light week for news, this week's highlight was the U.S. retail sales data out on Friday. According to the Commerce Department, retail sales in the country rose by 0.6 percent in August, matching expectations. At the same time, July's figure was revised up from no change to a gain of 0.3 percent.
The figures once again underscored the fact that the U.S. economy is on solid footing, and that the Fed may have to raise interest rates sooner rather than later. Next week's Fed meeting may be a significant one, with expectations growing that the
By Stuart Burns
In a recent post we looked at the state of the crude oil market, how demand has been weak as a result of refinery maintenance closures in Europe and lower domestic consumption in China. Even though China is buying more crude, it has increased exports of refined oil products depressing prices in the Asian market and hurting regional refinery utilization rates.
A Crude Situation
The solution would be for crude oil producers to limit output, but with OPEC only controlling a third of world supply and no appetite among any of its member nations to reduce revenue streams, it seems voluntary reductions of any significance are unlikely. Saudi Arabia as the main swing producer is the most likely to adjust output and a report this week in the FT states output was reduced by 400,000 barrels per day in August from 10 million barrels per day to