OIL IS DOWN ON BEARISH DATA
Oil prices were down again Wednesday, a day after their biggest decline since Oct. 6 on the back of bearish data showing a rise in U.S. crude supplies and a weaker global demand outlook.
Brent crude, the global benchmark, was down 1.27%, at $61.41 a barrel on London’s Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 1.11%, at $55.00 a barrel.
The U.S. Energy Information Administration is expected to release official inventory data Wednesday afternoon.
Investors are also anticipating an important meeting on November 30 between members of the Organization of Petroleum Exporting Countries and external producers such as Russia, that have been involved in an ongoing effort to cut 2% global supply and prop up crude prices.
Oil futures are down more than 1% from recent multi-year highs suggesting investor confidence in the cartel’s supply action may be waning.
OPEC is set to assess whether to extend the cut agreement after it expires in March of next year.
CARLYLE EYES VARO ENERGY IPO, VALUING IT AT AROUND $2 BILLION
Varo Energy BV’s owners, including U.S. private equity giant Carlyle Group and commodities trader Vitol Group, are eyeing an initial public offering next year that could value the European oil refiner at around $2 billion.
The IPO plan comes as Europe’s oil refineries have enjoyed a period with strong demand for refined products, despite the fall in oil prices. By contrast, when Carlyle acquired half of Varo in 2013, the sector was struggling.
Varo is expected to list its shares on the Amsterdam stock exchange. The company owns and operates an oil refinery in Cressier, Switzerland and holds a 45% stake in the Bayernoil facility in Germany.
CFTC FINES NORWAY’S STATOIL, CITING MARKET MANIPULATION
The U.S. Commodity Futures Trading Commission said it fined Norway’s Statoil ASA $4 million for attempting to manipulate energy markets in 2011, writes Sarah Kent.
The regulator said the state-backed oil giant “tried to influence the price of a key benchmark for propane between October and November 2011 to benefit its market positions after it saw significant losses in its gas-liquids unit that year,” writes Ms. Kent.
The moves were intended to benefit Statoil’s positions held in swaps cleared through the New York Mercantile Exchange, the CFTC said.
Statoil said Tuesday that it “cannot give details outside what has been published in the settlement order. We have worked cooperatively with the CFTC to resolve this matter.”
SANDRIDGE ENERGY NEARS DEAL TO BUY BONANZA CREEK ENERGY
Oil and gas producer SandRidge Energy Inc. is close to inking a deal to buy Bonanza Creek Energy Inc. for about $750 million, writes Dana Mattioli and Ryan Dezember.
“Bonanza Creek and SandRidge were among the largest of more than 120 North American oil-and-gas producers bankrupted in recent years by plunging oil prices,” the Journal reports.