The U.S surpass Saudi Arabia & Russia on Oil reserves

The U.S. holds more oil reserves (264B barrels) than Saudi Arabia (212B) and Russia (256B), the first time it has surpassed those held by the world's biggest exporting nations, according to a new study by Rystad Energy. The analysis of 60K fields worldwide, conducted over a three-year period, shows total global oil reserves at 2.1T barrels. That is 70x the current production rate of about 30B barrels of crude per year.

Crude futures falls hitting fresh to its lowest level of 2003

Crude futures are getting slammed again, with U.S. oil falling to its lowest since September 2003 on worries about a global glut. The drop comes after the International Energy Agency, which advises industrialized countries on energy policy, warned on Tuesday that oil markets could "drown in oversupply". Stocks data from the American Petroleum Institute is due later today, while official figures from the Energy Information Administration will be released tomorrow. WTI -2.3% to $27.80/bbl; Brent -2.3% to $28.09/bbl.

Brent Crude hit record low as oversupply concerns & a strong dollar weigh on market

Brent crude is shattering records, losing a fifth of its value in the last month and a third since early October. The benchmark has now hit levels not seen since 2004, skidding 2% to as low as $36.06 per barrel, as oversupply concerns and a strong dollar continue to weigh on the market. With a ban on U.S. oil exports lifted and new supplies looming from Iran, West Texas Intermediate crude is also feeling the pressure, down 0.9% at $34.42/bbl, its lowest since February 2009.

Crude futures down 2.2% ahead of stockpiles data.

Oil extended losses to a seventh day, with crude futures down 2.2% at $44.20, ahead of stockpiles data and the Federal Reserve's monetary policy decision. U.S. crude stocks are forecast to have surged for the tenth straight week to a new record high, fueling new supply concerns of a global oil glut. The Fed is also likely to cut the word "patient" from its policy statement, leaving the door wide open for a rate hike in June.

Oil prices are on the decline

As renewed concerns over global demand brought an end to a rally that pushed up prices by about 19% over the past four sessions. Growth concerns in China have especially prompted renewed concern for demand, after the HSBC China services PMI reported a six-month low of 51.8 in January, compared with 53.4 in December. Crude futures -3.2% to $51.41, as investors ask if oil has really found a bottom.

My opinion on Oil

In current news, oil prices continue to slide.  I’ve read a lot of articles that suggest this is a long-term play by big oil companies to stop the growing number of natural gas and small competitors that are popping up all over the world (think about the growth in the Calgary area for example).  This is seriously knocking the supply and demand of energy out of whack. When the price per barrel drops below a certain threshold, it becomes very difficult for natural gas companies to be profitable and competitive.  It’s also difficult to say how long this will last, but I don’t expect it to change for at least a couple quarters (that’s just me).  My opinion is based on the idea that it’ll take some time to suffocate the small companies and see the cycle re-emerged and rebalance.  I don’t have any positions in this sector right now, but I’ll continue to watch it closely.  When you are determining the value of individual companies, or the industry as a whole, you must account for the price of oil in the future, not the past.  Using a conservative price for oil (like $50 or $60 dollars) will help you keep a margin of safety when you conduct your valuations. There is a lot of CAPEX in this industry too.