Shares of Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR), inclined 1.42% to $5.72, after oil prices dropped as U.S. crude inventories unpredictablely rose last week.
WTI crude is decreasing 3.92% to $40.95 per barrel, while Brent crude is slipping 3.22% to $47.24 per barrel, according to the CNBC.com index.
U.S. crude oil inventories raised by 2.6 million barrels for the week ended August 14 to a total of 456.2 million barrels, according to the U.S. Energy Information Administration’s weekly petroleum report.
Brent crude is predictable to remain $5 more per barrel than WTI through 2016.
China’s phenomenal growth over the past two decades led to boom times for other countries as well. China is a voracious consumer of all sorts of commodities – oil, gas, coal, copper, iron ore, agricultural products, and more. For countries exporting these goods, the run up in commodity prices since the middle of the last decade has been extraordinary.
Low oil prices are hurting Latin America’s exporters. Mexico’s state-owned oil company Pemex has already slashed its budget for the year, cutting spending from $27.3 billion to $23.5 billion. Pemex has also borne the brunt of government spending cutbacks. And the much-anticipated first auction of Mexico’s offshore oil resources following a historic liberalization of its energy sector produced disappointing results, as low oil prices scared away bidders. AmericaOilprice
Brazil has fared worse. Compounded by a colossal corruption scandal, Brazil’s Petrobras is drowning in debt as oil prices have plummeted. In late June, Petrobras declared it would slash spending by one-third, divest itself of billions of dollars in assets, and it lowered its long-term oil production target to just 2.8 million barrels per day (mb/d) by 2020, down from a previous target of 4 mb/d.
Petróleo Brasileiro S.A. Petrobras operates as an integrated energy company in Brazil and internationally. Its Exploration and Production segment engages in the exploration, development, and production of crude oil, natural gas liquids, and natural gas; and sale of crude oil and oil products produced at natural gas processing plants in domestic and foreign markets.
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