OIL PRICE FORECASTS AGAIN CUT BY BANKS
Banks are dialing down expectations that oil prices will continue to rise, reports The Wall Street Journal.
The global oil glut that has pressured prices for three years has started to decline in recent weeks due to an increased U.S. appetite for crude and reduced output by major oil producers. But some analysts say the receding flows could reverse later in the year as U.S. crude production continues to grow.
“A poll of 15 investment banks, surveyed by The Wall Street Journal at the end of July, predicted that Brent crude, the international benchmark, will average $53 a barrel this year, down $2 from the June survey. The banks expect West Texas Intermediate, the U.S. oil gauge, to average $51 a barrel this year, down a dollar from the previous survey,” write Marina Force and Georgi Kantchev.
Analysts at financial institutions are also lowering their oil price projections for 2018.
Oil prices continued to slide Friday morning, as investors again worried that OPEC was failing to rein in output and make a dent in the continuing global supply glut.
Brent crude, the global benchmark, fell 0.8%, to $51.62 a barrel, in London midmorning trading. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.8%, at $48.66 a barrel.
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OIL TRADER ANDREW HALL IS CLOSING HIS ASTENBECK HEDGE FUND
The downturn in oil has claimed yet another trader. Andrew Hall, an investor who made billions betting on oil’s rise, is shutting down his hedge fund after he misjudged the impact of the U.S. shale oil production boom, write Alison Sider and Rob Copeland.
Mr. Hall, a former Citibank trader, confirmed Thursday that he is closing the main fund at the firm he founded, Astenbeck Capital Management LLC. The decision to shutter the fund follows years of investor defections.
“Astenbeck’s unwinding is the latest in what has been an escalating series of stumbles for Wall Street traders who created multibillion-dollar hedge funds off their reputations as big bettors at major investment banks,” the Journal reports.
Ex- Goldman Sachs Group trader Richard Perry, who made more than $1 billion for clients betting against subprime mortgages during the financial crisis, closed his eponymous hedge fund last year.
PUERTO RICO GASPORT PROJECT STALLS OVER UTILITY BANKRUPTCY
A $380 million offshore gas project in Puerto Rico is stalling, caught up in the fallout from a $9 billion utility bankruptcy, writes Andrew Scurria.
“Excelerate Energy LP gave notice last week it had canceled contracts with Puerto Rico’s electric utility to construct a floating natural gas terminal off the island’s southern coast. The cancellations weren’t widely known until Wednesday, when local energy regulators demanded an explanation from the public utility known as Prepa,” the Journal reports.
“The planned Aguirre Offshore GasPort project, or AOGP, was designed to import cheap natural gas, helping to wean Puerto Rico’s electric utility off dirtier sources of fuel. Now the project’s timetable is in doubt over Prepa’s deteriorating financial,” writes Mr. Scurria.