Barclays: Oil prices continue to be supported in the near term

Oil price risk remains to upside in the short term and natural gas prices are recovering but with capped upside, Barclays said in its most recent Energy Market Outlook, released Aug. 16.

Factors for softness in crude markets include record-high net speculative length, tepid demand growth due to refinery maintenance in September and October, incremental supplies from US shale oil, better Canadian supply, and even the possibility of some new production from Iraq, Barclays analysts said.

While facing countervailing pressures, oil prices are unlikely to be weakened due to high supply-side losses, they said. Strong upward pressure on prices, meanwhile, is being supplied by intensifying conflict in the Middle East, exacerbated supply disruptions from members of the Organization of Petroleum Exporting Countries, upstream field maintenance, and prestocking requirements from new refinery capacity, Barclays analysts said.

“Overall, we see oil price risk skewed to the upside,” Barclays said.

US natural gas prices are moderately recovering, with the prompt contract currently trading at about $3.40/MMbtu. The recovery was attributed to storage increase and favorable weather expectations, including stirring tropics. However, Barclays believes the upside remains capped by continued gas production growth.

Contact Conglin Xu at conglinx@ogjonline.com.

Related Articles

NGSA asks Congress to pass bills facilitating LNG exports

03/27/2014 The Natural Gas Supply Association called on Congress to support legislation that would facilitate more LNG exports. “Exporting LNG overseas will h...

IHS: Western sanctions indirectly could hinder Russian oil, gas revenues

03/27/2014 Western sanctions imposed against Russian government officials and business executives regarding Russia’s conflict with Ukraine could slow the avai...

US, European energy leaders to discuss gas diversification measures

03/27/2014 Top US government energy officials and their counterparts from other G7 nations will meet early next week to discuss reducing Europe’s heavy relian...

EIA: Cushing inventories down 32% over the last 2 months

03/27/2014 According to the US Energy Information Administration, crude oil inventories at Cushing, Okla., the primary crude oil storage location in the US, d...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected