The market in Toronto jumped significantly, in part due to the merger announcement between Suncorp (TSE:SU) and Petro-Canada (TSE:PCA). Petro-Canada was up 20 per cent at the end of the day and many of the other Canadian oil patch companies rose along with it. EnCana (TSE:ECA), Canadian Natural Resources (TSE:CNQ) and Talisman Energy (TSE:TLM) all closed up significantly.
It is obvious that a barrel price below $60 on the NYMEX is bad news for oil companies. Part of the drop reflects a strengthening American dollar, but recent demand forecast revisions are bleak. Governments, companies and investors think a prolonged recession or period of low growth is in the offing, and everyone should take note.
Mounting proof of a US recession and waning Chinese demand sent crude oil prices drifting below the previous day’s closing. Victor Shum, energy analyst at consultancy Purvin & Gertz, said: The manufacturing data along with weak U.S. auto sales “poured cold water” on the oil market, The overriding concern is the economy in the U.S. [...]
Along with OPEC production cuts and healthy company numbers, (both discussed below) the market is clearly disjointed. The tenor of discussions in the business pages and networks lately suggests that Yeats was right, and the centre cannot hold. Recession or recovery, echo boom or bust, few are predicting prolonged instability somewhere between these extremes.
Oil fell more than 3 percent to another 17-month low on Monday, extending deep losses amid increasing doubts over whether world governments can tame a crisis that threatens towards global recession. David Moore, a commodities strategist at the Commonwealth Bank of Australia, said: I think OPEC has actually taken a fairly decisive step to cut production but [...]
Crude oil pared gains in New York due to concerns that global demand for fuel will slow as the U.S. and Europe.is likely to enter a recession phase. Russell Norton, head of commodity sales at Barclays Capital, said: The demand question is the current focus of the market. We’ve seen demand come off in the OECD countries [...]
OPEC members plan to slash production and raise prices just as developed nations face their worst recession since 1983. Algerian minister and OPEC president, Chakib Khelil, said: There is a consensus to reduce production, but there is no agreement on how much to cut. Reduction at the group’s Oct. 24 meeting in Vienna may be only [...]
Clearly Monday was not particularly good news for oil companies. With futures settling below $90 per barrel, ($87.81 when Benchmark went to proofing) the industry is seeing the lowest prices since February.
Oil prices declined below $ 116 a barrel on Friday due to growing recession fears in eurozone triggered by strong dollar against the Euro. For full story, click here
Get our independent commentary on oil trends and companies delivered to your inbox.
