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FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » Brent falls below $80 for first time in four years

Brent falls below $80 for first time in four years

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SHARK aka TAH

SHARK aka TAH
Expert
Expert
Brent falls below $80 for first time in four years Blog_9b7647126372be88b1d30dc8a5554b9b2ae2246a

Benchmark crude Brent fell below $80 a barrel for the first time in four years following further signs that China’s economy may be slowing.

Brent has fallen more than 30 percent since June, and comments from certain OPEC members have not helped the situation when they said demand for its members' oil could drop by about a million barrels per day in 2015 due to the U.S. shale boom.

Overnight, data from Beijing showed factory output and investment growth was close to a 13-year low, and below-forecast, reinforcing signs that the world's biggesteconomywould see its weakest growth for almost 24 years this year.

Falling energy costs, while a positive for consumers, have raised concerns about profitability of major oil companies and their capitalspending, analysts said.

Many view $80 Brent as the absolute minimum that producers will be able to tolerate. Any prices below this and questions start to get asked about the viability of new drilling projects as well as the on-going profitability of oil companies.

Brent is currently trading at $79.00 a barrel down $1.38 or 1.76 percent.

All eyes will now be on the next OPEC meeting, which is scheduled to be held in Vienna on November 27. It has already been reported that Saudi Arabai has already cut supply to try and address the current glut. However, all OPEC members agree that more will need to be done in order to make sure oil prices don’t go in to a further dive.

dineshfernando


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
The December quarter should be superb for LIOC. I think the oil price dropped over US$ 20 between September and now.

LIOC will report record profits in December quarter and don't be surprised if the price goes to 100/= by that time.

LIOC is the next LLUB. This is the best time to collect if you want regular dividends and capital gains in the mid term.

I feel that they will start paying at least 70% of their earnings as dividends from next year since the parent company Indian Oil Corporation holds over 75% of the shares of LIOC. The future dividends might be in the range of 5 to 7 rupees annually. Now I think they are in a consolidation and expansion phase.

The government can't reduce the oil price significantly as CPC running at a huge loss and any reduction will worsen the situation.

LIOC is a future gem for me.

Shark please give your inputs on the above.

CSE1

CSE1
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@SHARK aka TAH wrote:Brent falls below $80 for first time in four years Blog_9b7647126372be88b1d30dc8a5554b9b2ae2246a

Benchmark crude Brent fell below $80 a barrel for the first time in four years following further signs that China’s economy may be slowing.

Brent has fallen more than 30 percent since June, and comments from certain OPEC members have not helped the situation when they said demand for its members' oil could drop by about a million barrels per day in 2015 due to the U.S. shale boom.

Overnight, data from Beijing showed factory output and investment growth was close to a 13-year low, and below-forecast, reinforcing signs that the world's biggesteconomywould see its weakest growth for almost 24 years this year.

Falling energy costs, while a positive for consumers, have raised concerns about profitability of major oil companies and their capitalspending, analysts said.

Many view $80 Brent as the absolute minimum that producers will be able to tolerate. Any prices below this and questions start to get asked about the viability of new drilling projects as well as the on-going profitability of oil companies.

Brent is currently trading at $79.00 a barrel down $1.38 or 1.76 percent.

All eyes will now be on the next OPEC meeting, which is scheduled to be held in Vienna on November 27. It has already been reported that Saudi Arabai has already cut supply to try and address the current glut. However, all OPEC members agree that more will need to be done in order to make sure oil prices don’t go in to a further dive.

thanks to sharing us

worthiness


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
As published, increased production/supply from Russia, Iraq & Libya, slowing growth in Europe & China & new shale boom from USA are the main causes for declining oil prices. Also, analyst believe that current price range will remain in next year though Opec cartel plans to cut the production capacity. If effectively managed, the benefit out of present low pricing level could be wiped out the accumulated losses of CPC.

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