Boeing wants to resume 737 Max production months before the planes return to service

Boeing’s new CEO, Dave Calhoun, said Wednesday that he wants the company to resume production of the 737 Max months before regulators sign off on the planes and airlines prepare to return them to service. Boeing suspended production of the planes this month because a worldwide grounding of the jetliners after two fatal crashes lasted months longer than expected. The 737 Max production shutdown has already cost thousands of jobs and raised concerns about the crisis’ impact on the broader economy.


Boeing’s new CEO, Dave Calhoun, said Wednesday that he wants the company to resume production of the 737 Max months before regulators sign off on the planes and airlines prepare to return them to service.
Boeing suspended production of the planes this month because a worldwide grounding of the jetliners after two fatal crashes lasted months longer than expected.
The 737 Max production shutdown has already cost thousands of jobs and raised concerns about the crisis’ impact on the broader economy.
Boeing wants to resume 737 Max production months before the planes return to service Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-22  Authors: leslie josephs
Keywords: news, cnbc, companies, months, planes, 737, return, max, boeing, company, employees, service, production, wants, resume, sign, regulators


Boeing wants to resume 737 Max production months before the planes return to service

Boeing’s new CEO, Dave Calhoun, said Wednesday that he wants the company to resume production of the 737 Max months before regulators sign off on the planes and airlines prepare to return them to service.

Boeing suspended production of the planes this month because a worldwide grounding of the jetliners after two fatal crashes lasted months longer than expected. Boeing shares fell more than 3% on Tuesday after the company pushed back its estimate of when regulators would sign off on the planes by months to the middle of 2020.

The 737 Max production shutdown has already cost thousands of jobs and raised concerns about the crisis’ impact on the broader economy.

But Calhoun’s comments indicate the company does not expect the production pause to last more than a few months.

“We got to get that line started up again,” he said on a conference call with reporters. “And the supply chain will be reinvigorated even before that.”

Boeing shares were down 1.6% in afternoon trading, bringing their weekly losses to nearly 5%.

The 737 Max crisis has rippled through Boeing’s supply chain, which includes General Electric and Spirit AeroSystems. Treasury Secretary Steven Mnuchin earlier this month estimated that the issues stemming from the plane’s grounding could shave half a percentage point off U.S. economic growth this year.

Wichita, Kansas-based Spirit AeroSystems on Jan. 10 announced it would cut an initial 2,800 jobs because of the Max grounding.

Calhoun said Wednesday that Boeing is not planning to lay off or furlough any of its employees because of the production pause, even with Boeing’s new estimate that regulators will approve the planes again midyear.

Calhoun, a decadelong Boeing board member who took the helm of the manufacturer last week, is tasked with steadying the company, shaken by the 737 Max upheaval.

Internal emails that were recently made public revealed employees boasted about bullying regulators into accepting less time-consuming pilot training before officials allowed Boeing to deliver the planes to airlines. In other messages, Boeing employees expressed safety concerns about the plane. In the wide-ranging call with reporters, Calhoun said he intended to improve the company’s culture and lift employee morale.

A flight-control system Boeing included in the jets was implicated in the two Max crashes — a Lion Air flight in October 2018 and an Ethiopian Airlines flight less than five months later — which killed all 346 people on board. Boeing is now scrambling to get regulators to sign off on changes to that software and other fixes to the plane.

The Federal Aviation Administration has said several times that it doesn’t have a firm timeline to recertify the planes.


Company: cnbc, Activity: cnbc, Date: 2020-01-22  Authors: leslie josephs
Keywords: news, cnbc, companies, months, planes, 737, return, max, boeing, company, employees, service, production, wants, resume, sign, regulators


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Boeing CEO: 737 Max production to resume ‘months’ before return to service

Boeing CEO: 737 Max production to resume ‘months’ before return to serviceBoeing CEO Dave Calhoun said Wednesday that the company will not cut its dividend despite the extended grounding of its 737 Max jet. “I believe we have the financial capacity and capability to do the things we need to do … but the recovery, when we get to the end and start shipping airplanes, et cetera, supports maintaining our dividend. And I will stay on that path unless something dramatic changes,” Calhoun said on a c


Boeing CEO: 737 Max production to resume ‘months’ before return to serviceBoeing CEO Dave Calhoun said Wednesday that the company will not cut its dividend despite the extended grounding of its 737 Max jet.
“I believe we have the financial capacity and capability to do the things we need to do … but the recovery, when we get to the end and start shipping airplanes, et cetera, supports maintaining our dividend.
And I will stay on that path unless something dramatic changes,” Calhoun said on a c
Boeing CEO: 737 Max production to resume ‘months’ before return to service Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-22
Keywords: news, cnbc, companies, supports, calhoun, dividend, service, return, production, boeing, 737, things, start, max, resume, unless, months, ceo, stay


Boeing CEO: 737 Max production to resume 'months' before return to service

Boeing CEO: 737 Max production to resume ‘months’ before return to service

Boeing CEO Dave Calhoun said Wednesday that the company will not cut its dividend despite the extended grounding of its 737 Max jet. “I believe we have the financial capacity and capability to do the things we need to do … but the recovery, when we get to the end and start shipping airplanes, et cetera, supports maintaining our dividend. And I will stay on that path unless something dramatic changes,” Calhoun said on a conference call with reporters. CNBC’s Phil LeBeau reports.


Company: cnbc, Activity: cnbc, Date: 2020-01-22
Keywords: news, cnbc, companies, supports, calhoun, dividend, service, return, production, boeing, 737, things, start, max, resume, unless, months, ceo, stay


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OPEC oil production cuts likely to continue for the ‘whole of 2020’: Wood Mackenzie

OPEC is likely to continue with its oil supply cuts for the rest of 2020, a research director said Monday. “We expect OPEC to continue cutting production for 2020,” he said. Gupta argued that the additional cuts indicate OPEC is aware of oversupply in the oil market for at least the first half of this year. He added that Wood Mackenzie expects oil supply to outpace demand for “the whole of 2020.” “It’s more pronounced in the first half 2020 than the second half … but we expect (OPEC) to rollov


OPEC is likely to continue with its oil supply cuts for the rest of 2020, a research director said Monday.
“We expect OPEC to continue cutting production for 2020,” he said.
Gupta argued that the additional cuts indicate OPEC is aware of oversupply in the oil market for at least the first half of this year.
He added that Wood Mackenzie expects oil supply to outpace demand for “the whole of 2020.”
“It’s more pronounced in the first half 2020 than the second half … but we expect (OPEC) to rollov
OPEC oil production cuts likely to continue for the ‘whole of 2020’: Wood Mackenzie Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-20  Authors: abigail ng
Keywords: news, cnbc, companies, 2020, supply, continue, likely, oversupply, production, mackenzie, cuts, half, opec, market, oil, wood


OPEC oil production cuts likely to continue for the 'whole of 2020': Wood Mackenzie

OPEC is likely to continue with its oil supply cuts for the rest of 2020, a research director said Monday.

“One thing which we are seeing in our numbers is that the market is still not ready to absorb the production cuts back, even for (the) whole of this year,” Sushant Gupta, who heads Wood Mackenzie’s refining and oils market team in Asia, told CNBC’s “Capital Connection.”

“We expect OPEC to continue cutting production for 2020,” he said.

OPEC and its allies agreed in December 2019 to cut supply by an additional 500,000 barrels per day until its next meeting in March 2020, bringing the total reduction to 1.7 million barrels a day.

However, the duration of the deal remains uncertain. The energy alliance usually gathers every six months, so the announcement of a meeting in March caused some analysts to believe that tighter policy would only last for the first quarter of 2020.

Gupta argued that the additional cuts indicate OPEC is aware of oversupply in the oil market for at least the first half of this year.

“They will have to manage that oversupply somehow, by either higher compliance or even deeper cuts for (a) longer time,” he said.

He added that Wood Mackenzie expects oil supply to outpace demand for “the whole of 2020.” Part of that supply will come from non-OPEC, non-U.S. producers such as Brazil, Canada and Norway, he said.

“It’s more pronounced in the first half 2020 than the second half … but we expect (OPEC) to rollover production cuts for the whole of 2020,” he said.


Company: cnbc, Activity: cnbc, Date: 2020-01-20  Authors: abigail ng
Keywords: news, cnbc, companies, 2020, supply, continue, likely, oversupply, production, mackenzie, cuts, half, opec, market, oil, wood


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Toyota shifts Tacoma pickup production from Texas to Mexico; continues $13 billion US investment

DETROIT – Toyota Motor will shift all production of the Tacoma midsize pickup from Texas to Mexico as it restructures its North American footprint and invests $13 billion in U.S. manufacturing operations through next year. The Texas plant, which also assembles the Tundra full-size pickup, has produced the Tacoma since 2010. The announced shift comes a month after Toyota started Tacoma production at a new plant in Central Mexico in addition to another Mexican plant in Tijuana that has been produc


DETROIT – Toyota Motor will shift all production of the Tacoma midsize pickup from Texas to Mexico as it restructures its North American footprint and invests $13 billion in U.S. manufacturing operations through next year.
The Texas plant, which also assembles the Tundra full-size pickup, has produced the Tacoma since 2010.
The announced shift comes a month after Toyota started Tacoma production at a new plant in Central Mexico in addition to another Mexican plant in Tijuana that has been produc
Toyota shifts Tacoma pickup production from Texas to Mexico; continues $13 billion US investment Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-17  Authors: michael wayland
Keywords: news, cnbc, companies, texas, mexico, continues, pickup, plant, investment, suv, tacoma, plans, shift, toyota, announced, billion, shifts, production


Toyota shifts Tacoma pickup production from Texas to Mexico; continues $13 billion US investment

DETROIT – Toyota Motor will shift all production of the Tacoma midsize pickup from Texas to Mexico as it restructures its North American footprint and invests $13 billion in U.S. manufacturing operations through next year.

Toyota says no U.S. jobs will be lost as a result of the change, which also includes bringing the Sequoia SUV to the San Antonio plant by 2022. The Texas plant, which also assembles the Tundra full-size pickup, has produced the Tacoma since 2010.

The announced shift comes a month after Toyota started Tacoma production at a new plant in Central Mexico in addition to another Mexican plant in Tijuana that has been producing Tacoma pickups since 2004. Tacoma production at the new plant in Mexico had previously been announced, however not Toyota’s plans to end Tacoma production in Texas.

Toyota’s production plans come a day after the U.S. Senate approved the United States-Mexico-Canada Agreement, sending one of President Donald Trump’s top priorities to his desk for ratification. Trump, via Twitter, criticized Toyota two years ago for its plans to build the plant in Mexico, which at the time was expected to produce Corolla cars.

Months after the tweet, Toyota announced it had altered those plans to produce Corollas at a new jointly-operated plant with Mazda in Alabama and use the new Mexican plant for additional Tacoma production. It once again changed those last year to assemble an SUV at the new Alabama plant, which is expected to begin production in 2021, and Corollas at its Mississippi plant.


Company: cnbc, Activity: cnbc, Date: 2020-01-17  Authors: michael wayland
Keywords: news, cnbc, companies, texas, mexico, continues, pickup, plant, investment, suv, tacoma, plans, shift, toyota, announced, billion, shifts, production


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OPEC secretary general says oil demand has ‘upside potential’

Worldwide oil demand forecasts may be lower than in previous years, but OPEC Secretary-General Mohammed Barkindo said Friday to CNBC that demand growth is still “robust” and could surprise to the upside over the course of 2020 as trade tensions subside. In December OPEC+, which is the 14-member cartel as well as its allies, agreed to cut production by an additional 500,000 barrels per day for the first quarter of 2020. This lifted total production cuts to 1.7 million barrels per day, above the 1


Worldwide oil demand forecasts may be lower than in previous years, but OPEC Secretary-General Mohammed Barkindo said Friday to CNBC that demand growth is still “robust” and could surprise to the upside over the course of 2020 as trade tensions subside.
In December OPEC+, which is the 14-member cartel as well as its allies, agreed to cut production by an additional 500,000 barrels per day for the first quarter of 2020.
This lifted total production cuts to 1.7 million barrels per day, above the 1
OPEC secretary general says oil demand has ‘upside potential’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-17  Authors: pippa stevens
Keywords: news, cnbc, companies, equation, secretary, potential, day, total, cut, barkindo, upside, production, opec, demand, 2020, general, million, oil, barrels


OPEC secretary general says oil demand has 'upside potential'

Worldwide oil demand forecasts may be lower than in previous years, but OPEC Secretary-General Mohammed Barkindo said Friday to CNBC that demand growth is still “robust” and could surprise to the upside over the course of 2020 as trade tensions subside. “By and large what we see from our side is an upside potential of growth from the demand side of the equation, which will affect the total balance for the rest of the year,” he said. “We are hoping that some of the challenges that we’re facing in terms of international trade will be addressed.”

Oil finished 2019 with a nearly 35% gain, but prices remain well below their prior highs. Part of this is due to the shale production surge in the United States, which Barkindo said is a “major variable” in OPEC’s decisions. In December OPEC+, which is the 14-member cartel as well as its allies, agreed to cut production by an additional 500,000 barrels per day for the first quarter of 2020. This lifted total production cuts to 1.7 million barrels per day, above the 1.2 million barrels per day cut agreed upon in December 2018. Saudi Arabia, OPEC’s largest producer, also said that it would continue its voluntary cut of 400,000 barrels per day, effectively bringing the alliance’s total cut to 2.1 million barrels per day. “We remain focused on stability for the first and second quarter of 2020. The decision was to ensure that there’s no imbalance in these quarters,” Barkindo said. “But the total equation is looking at both supply and demand sides. We can only address the supply side of the equation. The demand side is something that we watch with very keen interest.”

Mideast tensions


Company: cnbc, Activity: cnbc, Date: 2020-01-17  Authors: pippa stevens
Keywords: news, cnbc, companies, equation, secretary, potential, day, total, cut, barkindo, upside, production, opec, demand, 2020, general, million, oil, barrels


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IEA says oil stocks, non-OPEC output to buffer market from shocks

Surging oil production from non-OPEC countries led by the United States and abundant global stocks mean the market can weather political shocks such as the U.S.-Iran standoff, the International Energy Agency (IEA) said on Thursday. “For now the risk of a major threat to oil supplies appears to have receded,” the Paris-based IEA said in a monthly report. “Today’s market, where non-OPEC production is rising strongly and OECD stocks are 9 million barrels above the five-year average, provides a soli


Surging oil production from non-OPEC countries led by the United States and abundant global stocks mean the market can weather political shocks such as the U.S.-Iran standoff, the International Energy Agency (IEA) said on Thursday.
“For now the risk of a major threat to oil supplies appears to have receded,” the Paris-based IEA said in a monthly report.
“Today’s market, where non-OPEC production is rising strongly and OECD stocks are 9 million barrels above the five-year average, provides a soli
IEA says oil stocks, non-OPEC output to buffer market from shocks Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-16
Keywords: news, cnbc, companies, iea, united, buffer, usiran, market, nonopec, weather, thursdayfor, production, oil, stocks, output, shocks


IEA says oil stocks, non-OPEC output to buffer market from shocks

Surging oil production from non-OPEC countries led by the United States and abundant global stocks mean the market can weather political shocks such as the U.S.-Iran standoff, the International Energy Agency (IEA) said on Thursday.

“For now the risk of a major threat to oil supplies appears to have receded,” the Paris-based IEA said in a monthly report.

“Today’s market, where non-OPEC production is rising strongly and OECD stocks are 9 million barrels above the five-year average, provides a solid base from which to react to any escalation in geopolitical tension,” the IEA said.


Company: cnbc, Activity: cnbc, Date: 2020-01-16
Keywords: news, cnbc, companies, iea, united, buffer, usiran, market, nonopec, weather, thursdayfor, production, oil, stocks, output, shocks


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Here’s why a sluggish manufacturing sector may bounce back soon

Purchasing managers have been gloomy on manufacturing for the past five months, but the weak Institute for Supply Management readings on the sector may have hit bottom. This reflects the cyclical dynamics of the manufacturing sector,” he said in a note. For December, the ISM manufacturing index fell to 47.2, the worst level since June, 2009, when it hit 46.3. He said the dates were first quarter, 1991; first quarter, 2001 and fourth quarter 2008 to first quarter, 2009. “Critically, these quarter


Purchasing managers have been gloomy on manufacturing for the past five months, but the weak Institute for Supply Management readings on the sector may have hit bottom.
This reflects the cyclical dynamics of the manufacturing sector,” he said in a note.
For December, the ISM manufacturing index fell to 47.2, the worst level since June, 2009, when it hit 46.3.
He said the dates were first quarter, 1991; first quarter, 2001 and fourth quarter 2008 to first quarter, 2009.
“Critically, these quarter
Here’s why a sluggish manufacturing sector may bounce back soon Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-16  Authors: patti domm
Keywords: news, cnbc, companies, production, lavorgna, times, manufacturing, level, heres, soon, inventories, fell, ism, sector, quarter, bounce, sluggish


Here's why a sluggish manufacturing sector may bounce back soon

A General Motors hi-lo driver moves newly assembled engines, used in a variety of GM cars, trucks and crossovers, from final assembly at the GM Romulus Powertrain plant in Romulus, Michigan, August 21, 2019.

Purchasing managers have been gloomy on manufacturing for the past five months, but the weak Institute for Supply Management readings on the sector may have hit bottom.

The ISM index has been in contraction, and the sector, which has been hurt by trade wars, could be about to spring back.

That is apparent, in part, from clues within the December ISM report, released earlier this month. Joseph LaVorgna, chief economist for the Americas at Natixis, says the ISM reported a sharp drop in the level of production n December.

“While the ISM has been in contractionary territory the last five months, an extremely important development occurred last month—the level of production fell below the level of inventories. This seldom happens, and when it does, it has always coincided with a dramatic upswing in factory activity. This reflects the cyclical dynamics of the manufacturing sector,” he said in a note.

LaVorgna late last year said the rebound in semiconductor stocks could be a precursor to a rebound in overall manufacturing, but in the last ISM report for December, there was no recovery yet. For December, the ISM manufacturing index fell to 47.2, the worst level since June, 2009, when it hit 46.3.

When there is less demand for goods, manufacturers cut back on production and employment drops. Producers pare back hiring and production to levels they see as a subsistence level. LaVorgna said this happens when production is below stock piling, and manufacturers can go too far in their pullbacks.

In the last quarter, production was nearly a point below inventories, a phenomena that has happened only when the economy was in recession, said LaVorgna.

“Indeed, we found only four times since the 1981—1982 downturn, when production fell below inventories, and two of these times happened during the depth of the last recession,” LaVorgna noted. He said the dates were first quarter, 1991; first quarter, 2001 and fourth quarter 2008 to first quarter, 2009.

“Critically, these quarters marked the bottom in the manufacturing ISM survey,” he added.

LaVorgna said he believes his theory has already played out in the Philadelphia Fed manufacturing survey, which rebounded sharply in January to 17, from 2.4 in December. “The details were also solid, as new orders, shipments, and employment all moved higher,” he noted.


Company: cnbc, Activity: cnbc, Date: 2020-01-16  Authors: patti domm
Keywords: news, cnbc, companies, production, lavorgna, times, manufacturing, level, heres, soon, inventories, fell, ism, sector, quarter, bounce, sluggish


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Jefferies and Deutsche increase Tesla price targets as analysts expect a strong 2020 performance

Tesla CEO Elon Musk views the new Tesla Model Y at its unveiling in Hawthorne, California on March 14, 2019. Analysts at Jefferies and Deutsche Bank increased price targets for Tesla on Tuesday, with both interpreting the electric automaker’s recent production milestones as a strong sign for the year ahead. Deutsche Bank is not quite as optimistic, as even the firm’s increased price target expects Tesla’s stock to slip 13%. But Deutsche analyst Emmanuel Rosner left room to the upside when explai


Tesla CEO Elon Musk views the new Tesla Model Y at its unveiling in Hawthorne, California on March 14, 2019.
Analysts at Jefferies and Deutsche Bank increased price targets for Tesla on Tuesday, with both interpreting the electric automaker’s recent production milestones as a strong sign for the year ahead.
Deutsche Bank is not quite as optimistic, as even the firm’s increased price target expects Tesla’s stock to slip 13%.
But Deutsche analyst Emmanuel Rosner left room to the upside when explai
Jefferies and Deutsche increase Tesla price targets as analysts expect a strong 2020 performance Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-14  Authors: michael sheetz
Keywords: news, cnbc, companies, increase, analysts, price, production, targets, deutsche, performance, shares, jefferies, stock, rosner, increased, model, tesla, expect, teslas, strong


Jefferies and Deutsche increase Tesla price targets as analysts expect a strong 2020 performance

Tesla CEO Elon Musk views the new Tesla Model Y at its unveiling in Hawthorne, California on March 14, 2019.

Analysts at Jefferies and Deutsche Bank increased price targets for Tesla on Tuesday, with both interpreting the electric automaker’s recent production milestones as a strong sign for the year ahead.

Jefferies was the more bullish of the two, expecting shares of Elon Musk’s company to continue its rally and climb another 14%. The firm stuck to its buy rating, with analyst Philippe Houchois writing that Tesla’s “auto business should turn profitable this year.”

“We think it would be wrong to exit Tesla on valuation given that: it is the only [automaker] engaged in a positive-sum game in [electric vehicles] amid rising market acceptance,” Houchois said.

Deutsche Bank is not quite as optimistic, as even the firm’s increased price target expects Tesla’s stock to slip 13%. But Deutsche analyst Emmanuel Rosner left room to the upside when explaining his mixed outlook, which could change if Tesla’s production and overall performance exceeds his expectation.

“Tesla truly seems to be firing on all cylinders currently … but with the stock hovering around all-time highs, we worry investor sentiment has gotten bullish too fast, ignoring some of the nearer-term execution risks,” Rosner said. “Ultimately, this year’s profits and free cash flow will depend on how successful the company is in ramping up output at its new Shanghai facility, and how quickly Model Y can start production.”

Tesla shares rose 3.3% in trading from its previous close of $524.86.


Company: cnbc, Activity: cnbc, Date: 2020-01-14  Authors: michael sheetz
Keywords: news, cnbc, companies, increase, analysts, price, production, targets, deutsche, performance, shares, jefferies, stock, rosner, increased, model, tesla, expect, teslas, strong


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Oil markets will soon have to rethink predictions of ‘ample’ global supply, minister says

Citizens of the Planet | Getty ImagesThere could be a recalibration of oil market expectations regarding an “ample” global oil supply, Bahrain’s oil minister said Monday, despite expectations that U.S. shale oil production could be hurtling towards 14 million barrels per day in the next few years. However, growth in supply is slowing from the last few years with 2018 growth of 1.6 million b/d and 2019 growth of 1.3 million b/d. “Despite the decline in rigs, EIA forecasts (oil) production will co


Citizens of the Planet | Getty ImagesThere could be a recalibration of oil market expectations regarding an “ample” global oil supply, Bahrain’s oil minister said Monday, despite expectations that U.S. shale oil production could be hurtling towards 14 million barrels per day in the next few years.
However, growth in supply is slowing from the last few years with 2018 growth of 1.6 million b/d and 2019 growth of 1.3 million b/d.
“Despite the decline in rigs, EIA forecasts (oil) production will co
Oil markets will soon have to rethink predictions of ‘ample’ global supply, minister says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-13  Authors: holly ellyatt
Keywords: news, cnbc, companies, markets, predictions, soon, rethink, oil, global, ample, shale, producers, million, prices, energy, production, opec, supply, minister


Oil markets will soon have to rethink predictions of 'ample' global supply, minister says

Oil well pump jacks located in Almond Orchard located over the Monterey Shale in San Joaquin Valley. Citizens of the Planet | Getty Images

There could be a recalibration of oil market expectations regarding an “ample” global oil supply, Bahrain’s oil minister said Monday, despite expectations that U.S. shale oil production could be hurtling towards 14 million barrels per day in the next few years. Speaking at a CNBC-moderated panel at the International Petroleum Technology Conference (IPTC) in Saudi Arabia, Bahrain’s Oil Minister Sheikh Mohammed bin Khalifa Al Khalifa said that an abundant supply of oil, currently seen amid rampant U.S. shale production, might not be so reliable as we progress through 2020. “Going forward, all eyes are on U.S. production again, if there’s going to be an extra million barrels (of production a day), yes, this will suppress oil prices but the current indicators of rig counts … are telling you that maybe that is going to be a challenge,” he told CNBC’s Hadley Gamble, speaking on the panel in Dhahran. “So, my recommendation is all eyes on U.S. production, if they can hit 14 million (barrels) then yes oil prices will extend a bit further but, eventually, this sentiment that there is ample supply will have to shift, there will be a scarcity impulse in supply and when that happens in the next few years, definitely, it could be as early as the end of this year, we will have to see.”

Al Khalifa cautioned that there had been few major oil discoveries recently and investment was ebbing; “So we are challenged, I think the future is challenged in terms of supply, more than people expect today.” “We can see that investments are not as bold as they once were, then perhaps that inflection point isn’t that far away,” he added. At that point, he said the challenge would be making sure that other producers “can meet the demand that keeps rising.” The U.S. Energy Information Administration (EIA) expects American oil production to average 13.2 million barrels a day (b/d) in 2020, an increase of 0.9 million b/d from the 2019 level. However, growth in supply is slowing from the last few years with 2018 growth of 1.6 million b/d and 2019 growth of 1.3 million b/d. In September 2019, the U.S. exported exported 90,000 b/d more total crude oil and petroleum products than it imported, the first month recorded in U.S. data where it had exported more than it had imported. But in its latest short-term energy outlook released in January, the IEA noted that slowing crude oil production growth will result from a decline in drilling rigs over the past year and that it expected this trend to continue into 2020. “Despite the decline in rigs, EIA forecasts (oil) production will continue to grow as rig efficiency and well-level productivity rises, offsetting the decline in the number of rigs,” it noted.

Shale’s place in the ecosystem

Benchmark Brent crude is trading around the $65 dollar mark while West Texas Intermediate (WTI) is trading just below the $60 per barrel level. Prices have been more or less stable since oil producer group OPEC, along with Russia and several other producers, curbed their own production to limit supply and rebalance global oil prices. They have done this in the face of (and pressure from) massive U.S. shale oil production, however. There are concerns, especially among the OPEC+ alliance as it is now known, that efforts to stabilize prices are being hampered by growing U.S. supply and a shaky outlook for demand. Jason Bordoff, professor and director at Columbia University’s Center on Global Energy Policy, characterized U.S. shale oil as a “new dynamic of shale in the global market — not just how much of it there is, but how short-cycle it is and how quickly it can respond to market changes,” when speaking on the same energy panel on Monday. Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said that while OPEC kept a close eye on U.S. shale oil inventories, he was more concerned that producers worked together so the energy market ecosystem was not undermined. “We’re not focused on shale oil particularly. I’d hate to see our endeavor and work in OPEC being challenged by any producer, because at the end of the day we are supporting the industry and we are supporting all producers and we’re welcoming everybody, as long as they are efficient producers,” he said.


Company: cnbc, Activity: cnbc, Date: 2020-01-13  Authors: holly ellyatt
Keywords: news, cnbc, companies, markets, predictions, soon, rethink, oil, global, ample, shale, producers, million, prices, energy, production, opec, supply, minister


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Oil posts worst week since July after US-Iran tensions ease

Oil fell on Friday to cap its worst week since July as tensions in the Middle East over Iran eased for now and investors focused on rising U.S. inventories and other signs of ample supply. Brent crude, the global benchmark, was down 45 cents at $64.92, while West Texas Intermediate crude slipped 52 cents to settle at $59.04. The weekly decline in both Brent and WTI crude futures have sent oil prices back to or below levels seen before the U.S. drone strike killed Iranian general Qassem Soleimani


Oil fell on Friday to cap its worst week since July as tensions in the Middle East over Iran eased for now and investors focused on rising U.S. inventories and other signs of ample supply.
Brent crude, the global benchmark, was down 45 cents at $64.92, while West Texas Intermediate crude slipped 52 cents to settle at $59.04.
The weekly decline in both Brent and WTI crude futures have sent oil prices back to or below levels seen before the U.S. drone strike killed Iranian general Qassem Soleimani
Oil posts worst week since July after US-Iran tensions ease Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-10
Keywords: news, cnbc, companies, worst, production, ship, usiran, oil, iran, market, ease, prices, inventories, week, jan, tensions, futures, posts


Oil posts worst week since July after US-Iran tensions ease

Oil fell on Friday to cap its worst week since July as tensions in the Middle East over Iran eased for now and investors focused on rising U.S. inventories and other signs of ample supply.

However, markets were still eyeing the longer-term risks of conflict, and prices were briefly supported on Friday by new U.S. sanctions on Iran in retaliation for its missile attack on U.S. forces in Iraq this week.

Also, a Russian navy ship “aggressively approached” a U.S. Navy destroyer in the North Arabian Sea on Thursday, the U.S. Navy’s Bahrain-based Fifth Fleet said in a statement on Friday.

Brent crude, the global benchmark, was down 45 cents at $64.92, while West Texas Intermediate crude slipped 52 cents to settle at $59.04. Crude’s weekly decline of more than 6% was the first since November.

“With the standing down of Iran there was a sense that oil supplies were pretty safe but now with the institution of sanctions and this report that a Russian ship was acting aggressively toward a U.S. ship, it’s put a little bit of fear back into the market place,” said Phil Flynn, oil analyst at Price Futures Group in Chicago.

The weekly decline in both Brent and WTI crude futures have sent oil prices back to or below levels seen before the U.S. drone strike killed Iranian general Qassem Soleimani on Jan. 3.

Iran responded to the U.S. drone strike on Jan. 8 with a missile attack on Iraqi air bases hosting U.S. forces that left no casualties. But a Revolutionary Guards commander said Iran would take “harsher revenge” soon.

Still, there has been no disruption to Middle East oil production as a result of the flare-up in tensions and other indications this week suggest supply is ample.

U.S. government data on Friday showed job growth slowed more than expected in December.

Crude inventories in the United States rose unexpectedly last week and gasoline inventories surged by their most in a week in four years, the Energy Information Administration said on Wednesday.

“We’re heading into a slack (fuel) demand period ahead of the summer driving season and rising inventories reminded folks this is still a somewhat oversupplied oil market,” said John Kilduff, partner at Again Capital LLC in New York.

In a bid to tackle any build-up of excess supply, the Organization of the Petroleum Exporting Countries plus allies including Russia are embarking on a further cut in production as of Jan. 1 this year.

Industry surveys, including from Reuters, showed that OPEC output declined in December ahead of the new pact. Still, production remains higher than the forecast demand for early 2020, according to some analysts.

But oil prices may find support in coming months due to improving fundamentals as the United States seems to have “plateaued on production, and OPEC is sticking with its cuts,” said Phil Streible, chief market strategist at Blue Line Futures in Chicago.


Company: cnbc, Activity: cnbc, Date: 2020-01-10
Keywords: news, cnbc, companies, worst, production, ship, usiran, oil, iran, market, ease, prices, inventories, week, jan, tensions, futures, posts


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