Over the last 12 months, a return on equity of -26.20 percent was realized due to the financial situation and earnings per share reached a value of $-1.73 earnings are projected to move up 10.00 percent for the coming five years.
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The cost of producing one barrel of oil in Saudi Arabia is $4 to $6 a barrel, close to $5 in Kuwait, $7 in Iraq and the Emirates, $15 in Qatar and Iran, $25 in Algeria, $30 in Nigeria and $40Angola. Speculators in the USA have raised bearish bets to an all-time high.
Investors were likely reacting to the release of the International Energy Agency’s (IEA) final Oil Market Report of the year, which indicated that global demand growth of 1.2 million barrels a day (mb/d) is forecasted in Q1 2016, down from a peak of 2.2 mb/d recorded in Q3 2015. “Gloom nourishes gloom”, said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt.
“We have been saying these net shorts have been stretched for a while and we might see a bit of trimming of positions going into the end of the year and possibly some of that is materialising right now”, Barclays commodities strategist Miswin Mahesh said. Brent crude fell to below US$36.70 a barrel for the first time since December 2008, Reuters reported. The volume of all futures traded was 35% above the 100-day average. Now, WTI contracts through 2024 are under $US60. The contract settled down 1 cent at $37.92 a barrel on Monday. The European benchmark crude was at a $1.57 premium to WTI. After spurring a rebound in American equities by failing to hold below $35 a barrel, US crude reverted to losses, falling for the seventh time in eight days amid persistent concerns over the global glut.
A year ago, Brent and United States crude were trading at around $US60 a barrel, and during early summer 2014, above $US100.
Iran, which expects global sanctions over its nuclear program to be lifted by the first week of January, has already secured customers for its planned supply expansion, Zamaninia said in an interview in Tehran.
“Arguably, the correlation between oil prices and the FTSE is as strong as it ever has been, and with oil breaking towards multi-year lows, this is not a good sign for stocks”. At the start of the year, production from countries outside the cartel was rising by 2.2 million barrels a day. OPEC set an output quota and abandoned production limit at a December 4 meeting.
The oil market, which also slumped on Friday, has been punished by OPEC’s recent decision to maintain output despite predictions of a stubborn surplus.
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Bouvier, meanwhile, claimed Japan and China would be the main beneficiaries of lower oil prices as they are among the world’s largest energy importers and said the “unexpected boon” for the countries’ would help fund investments across Asia.
