Video

Playlist: EQNR:xosl

Show less
3:05
Hansen: We are facing a new world order in oil
Ole Hansen
29 October 2014 at 13:32 GMT
1:41
Norway's USD 870 Billion oil fund shows who's boss
Alex Forrest Whiting
11 August 2014 at 11:02 GMT
Video / 29 October 2014 at 13:32 GMT

Hansen: We are facing a new world order in oil

Ole Hansen
Statoil is the latest energy company to post a loss in its third quarter earnings. It follows bad news from BP, BG Group and Total. Saxo’s Ole Hansen says there’s a crude reason for these poor results and that's a 'collapse' in the oil price.

He says that after being used to the oil price averaging 110 USD/bbl for the last four years, it's been a shock that crude is trading around 80 - 85 USD/bbl. This has been a contributing factor in why many companies have made large write downs. For Statoil, Canada was its largest.

Hansen says that decision was made because of the falling price in West Canadian Select (WCS). It's trading around USD 13 less than WTI, bringing the price down to USD 70. He says that makes it difficult for companies like Statoil to make a profit.

Over the last few years, oil supply across the globe has been rising particularly in the US. Although geopolitical risks have offset this, Hansen says that's fading as countries like Libya are now producing oil once more. That, however, is resulting in a supply surplus of around one million barrels a day and is expected to rise further.  "It's a new world order that we have to get used to," says Ole. "It's good for consumers but not good for producers." 

Join the conversation below to be a part of the social trading experience.






4y
Ole Hansen Ole Hansen
West Canadian Select crude oil price developments compared with WTI crude oil
4y
fxtime fxtime
Ole would you know if fracking gives a steady oil and gas return or are the ''wells'' drilled for a fast one shot extraction then another is redrilled to maintain supply volumes? I often wonder how sustainable and at what level of CAPEX is incurred for each well. OPEC et al at least have deep extraction facilities that permit constant oil/gas flows but is fracking a dependable constant flow too?
4y
Ole Hansen Ole Hansen
Extraction techniques have improved dramatically during the past few years but it does not remove the heavy cost involved with this process as new wells constantly have to be drilled in order to maintain a constant flow. I read somewhere that production from horizontal drilling formations declines by 60 to 70 percent in the first year so new wells constantly have to be drilled.
A short video from Shell describing the process: http://www.shell.us/aboutshell/shell-businesses/onshore.html
4y
fxtime fxtime
Goodness so drops in oil causes potential impairment charges as the basis of oil price changes from their baseline values and b/e rates !! This market could soon become very volatile if they drop too far. Thx for the info and link.
4y
Ole Hansen Ole Hansen
OPEC's general secretary today claimed that 50% of shale producers will be "out of the market" at current prices. A somewhat higher percentage than the IEA have put forward. See attached
4y
fxtime fxtime
Thx Ole for the b/e thresholds
4y
truth truth
Pure PUTIN and Russia they are going to run out of Money......Cudos to China who is now buying CHEAP RUSSIAN oil.

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Tradingfloor.com and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Tradingfloor.com is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Tradingfloor.com or as a result of the use of the Tradingfloor.com. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail