Prices

Oil prices fall on lingering oversupply concerns

27 Apr 2017   Prices

Oil prices dipped on Thursday, weighed down by a general sentiment of globally bloated markets, though traders said that prices seemed to have found support around current levels. U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were trading at $49.34 per barrel at 0137 GMT, down 28 cents, or 0.56 percent from their last close. WTI has lost around 8.5 percent in value from its April peak. Brent crude futures LCOc1, the international benchmark for oil prices, were at $51.58 per barrel, down 24 cents, or 0.46 percent, from their last close. Brent is almost 9 percent below its April peak. Traders said that the falls in recent weeks were a result of a realization that global oil markets remained oversupplied, despite efforts led by the Organization of the […]

Oil Seen at or Below $40 If OPEC Doesn’t Extend Output Cuts

27 Apr 2017   Prices

ADIA’s Ruehl Iraq, Iran seen gaining from production cuts at Saudi expense Crude will probably drop to $40 a barrel or below unless OPEC and allied producers extend their collective cuts in output beyond June, according to analysts including the Abu Dhabi Investment Authority ’s head of research. The six-month cuts that took effect in January have set a floor for prices, but an increasing supply of U.S. shale oil together with record-high inventories are keeping the per-barrel price of crude from rising beyond the upper $50s, Christof Ruehl said Wednesday at a conference in Dubai. “If OPEC and the coalition don’t extend the agreement to continue cuts, that price floor will go,” he said. “Without it, prices would fall, and there’s nothing to stop oil going below $40 a barrel.” The Organization of Petroleum Exporting Countries and other major producers including Russia […]

Oil Tankers to Cruise Ships Fueled by LNG Offer Hope on Glut

27 Apr 2017   Prices

LNG-fuelled fleet may rise to 200 by 2020: Energy Aspects Total, Shell sign deals to develop LNG bunkering operations When Russia’s biggest tanker operator launches four new vessels next year, they won’t just be carrying oil to northern Europe but the hopes of the liquefied natural gas industry. Sovcomflot’s Aframax ships, capable of shifting 600,000 barrels of oil through the icy waters of the Baltic Sea to the port of Rotterdam, will be the first tankers run on LNG. That’s good news for fuel supplier Royal Dutch Shell Plc and the other energy companies that have invested more than $700 billion in LNG projects over the past decade. While ships won’t transform the market — Energy Aspects Ltd. estimates that LNG as a marine fuel will account for less than 2 percent of total demand by 2025 — Russian tankers and Mediterranean cruise liners will help ease a global […]

Oil Trades Below $50 Amid Mixed Signals on U.S. Crude Stockpiles

26 Apr 2017   Prices

Nationwide supplies gained 897,000 barrels last week: API Crude prices to climb to new highs in coming months: Andurand Oil traded below $50 a barrel in New York amid conflicting signs on whether U.S. crude stockpiles are retreating. Futures were little changed, having fallen to a three-week low on April 24. The industry-funded American Petroleum Institute was said to report U.S. crude supplies increased by 897,000 barrels last week. Meanwhile, a Bloomberg survey forecasts stockpiles probably fell by 1.75 million barrels before an Energy Information Administration report Wednesday. Oil’s rally faltered last week amid concern rising U.S. output will offset efforts by the Organization of Petroleum Exporting Countries and its allies to trim a global glut. While OPEC members mull an extension of the six-month deal past June, American drillers targeting crude continue to add rigs to shale fields. The “latest API report on U.S. petroleum stocks was filled […]

Oil falls on bulging U.S. crude inventories, record global supplies

26 Apr 2017   Prices

Oil prices resumed their downward trend on Wednesday as data showed a rise in U.S. crude inventories and record supplies in the rest of the world cast doubt on OPEC’s ability to cut supplies and tighten the market. U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were trading at $49.32 per barrel at 0052 GMT, down 24 cents, or 0.5 percent from their last close, after gaining 0.7 percent in the previous session. WTI has fallen for seven of the past eight sessions. Traders said that a report late on Tuesday by the American Petroleum Institute (API) that U.S. crude oil inventories rose by 897,000 barrels in the week to April 21 to 532.5 million barrels had weighed on WTI. Brent crude futures LCOc1, the international benchmark […]

Top 5 Risks To Oil Prices

26 Apr 2017   Prices

Global oil inventories have started to decline and the supply/demand balance will soon tip into a deficit, if it hasn’t already. That will accelerate the drawdowns in crude oil stocks, and bring the market back into “balance,” providing a lift to oil prices. That, at least, is the working assumption. But there are a series of gigantic question marks out there – a handful of countries could upend the theory that the oil market is on a smooth trajectory towards balance. Here are the five countries that could provide an unexpected jolt to the oil market: 1. Venezuela. Venezuela’s economy has been in freefall since oil prices collapsed in 2014. The situation has deteriorated rapidly more recently, however, with hundreds of thousands of people taking to the streets. While things could certainly drag on, the situation in Caracas definitely has the feel of some sort of final stage for […]

U.S. gas prices continue slow summer rise

26 Apr 2017   Prices, USA

The price for a gallon of gasoline in the United States is on the increase and could move higher as summer demand figures into market metrics, analysis finds. Motor club AAA reports a national average retail price for a gallon of regular unleaded gasoline at $2.42, relatively unchanged from last week, but 13 cents higher than one month ago. Refiners are moving forward with a summer blend of gasoline, which is more expensive to make because of the additional environmental safeguards needed in warmer months. Coupled with the expected rise in demand, AAA said it expects gas prices to move steadily higher. “As gas prices continue to reach new heights and hit an all-time high for the year, the summer demand has not kicked in, […]

Oil Steadies After Six-Day Slide as U.S. Stockpiles Seen Falling

25 Apr 2017   Prices

U.S. inventories probably fell 1.95 million barrels last week Russia’s Novak will meet nation’s oil bosses on OPEC-led deal Oil halted a six-day slide before U.S. government data that’s forecast to show crude stockpiles fell for a third week. Futures were little changed in New York after dropping 7.4 percent over the previous six sessions. Stockpiles probably slid by 1.95 million barrels last week, according to a Bloomberg survey before a report from the Energy Information Administration on Wednesday. Russian Energy Minister Alexander Novak will meet with the nation’s oil bosses this week to discuss extending an accord by global producers to cut output. Oil’s rally faltered last week amid concern that rising U.S. output will offset efforts by the Organization of Petroleum Exporting Countries and its allies to trim a global glut. While OPEC members mull an extension to the six-month deal past June, American drillers targeting crude […]

Oil Slides on Signs of Oversupply

25 Apr 2017   Prices

Oil prices retreated Monday, as growing U.S. production and other signs of global oversupply keep thwarting a widely-expected rally. Monday’s downturn from overnight gains is the latest sign oil may continue to fall instead of rising toward $60 a barrel as many predicted, brokers and analysts said. Losses Monday would mark the sixth down session in a row for U.S. oil. It is now off 8.3% from the one-month high it hit April 11 and…

Oil recovers some ground, rise in U.S. drilling caps gains

25 Apr 2017   Prices

Oil prices recovered some lost ground on Monday after big losses last week, driven by expectations that OPEC will extend output cuts till the end of 2017, although a relentless rise in U.S. drilling capped gains. Brent crude futures LCOc1 rose 54 cents by 0920 GMT to $52.50 per barrel. U.S. West Texas Intermediate (WTI) crude oil futures CLc1 added 49 cents to reach $50.11 a barrel. Oil prices fell steeply last week on the back of stubbornly high crude supplies, despite a pledge by the Organization of the Petroleum Exporting Countries (OPEC) and some other producers to cut production by almost 1.8 million barrels per day (bpd) for six months from Jan. 1 to support the market. But prices on Monday received a respite after a panel of OPEC and […]

The Bullish Case For Oil Is Fading Fast

25 Apr 2017   Prices

Oil prices took another dip on Monday, and with WTI down to $49 per barrel, crude oil has given up most of the gains that it had made so far this month, taking prices down to their lowest levels since late March. Major investors are also losing a bit of confidence in oil’s comeback. Hedge funds and other money managers took a breather in the buildup, buying up long positions in the most recent week for which data is available. Much of the rally in oil prices between the end of March and mid-April occurred as investors closed out short positions and took on bullish bets. Since then, however, hedge funds have slowed their net-long builds, a sign of waning confidence in higher oil prices. Also, the futures market no longer looks all that encouraging. The contango is back, a sign of concerns about near-term oversupply. Front-month contracts are […]

Oil recovers some ground, rise in U.S. drilling caps gains

24 Apr 2017   Prices

Oil prices recovered some lost ground on Monday after big losses last week, driven by expectations that OPEC will extend output cuts till the end of 2017, although a relentless rise in U.S. drilling capped gains. Brent crude futures LCOc1 rose 54 cents by 0920 GMT to $52.50 per barrel. U.S. West Texas Intermediate (WTI) crude oil futures CLc1 added 49 cents to reach $50.11 a barrel. Oil prices fell steeply last week on the back of stubbornly high crude supplies, despite a pledge by the Organization of the Petroleum Exporting Countries (OPEC) and some other producers to cut production by almost 1.8 million barrels per day (bpd) for six months from Jan. 1 to support the market. But prices on Monday received a respite after a panel of OPEC and […]

Oil Halts Five-Day Slide as Markets Rally and OPEC Keeps Cutting

24 Apr 2017   Prices

Committee said to conclude March compliance at 98%: delegate U.S. dollar weakens versus euro after French election results Oil rose for the first time in six days as an OPEC-led committee was said to back prolonging supply cuts and as other markets rallied after the first round of French presidential elections. Futures climbed as much as 0.9 percent in New York after slumping 6.7 percent last week, the first drop in four weeks. A six-month extension to the output cut deal is necessary, the committee concluded, according to delegates with knowledge of the matter. Equities gained and the dollar weakened against the euro as a snap poll by Ipsos showed centrist Emmanuel Macron would win the second round of voting in France. Oil had retreated below $50 a barrel amid concern rising U.S. crude production will offset efforts by the Organization of Petroleum Exporting Countries to trim a global […]

Oil Crashes Into $40’s As Hedge Funds Sell Off

22 Apr 2017   Prices

Oil prices fell fast on Friday afternoon as traders see the rising rig count as yet another sign that the markets are still grossly oversupplied. (Click to enlarge) Friday, April 21, 2017 Oil is heading for its largest weekly drop in over a month as doubts resurfaced over OPEC’s resolve. That comes despite the highly optimistic comments from top officials from Saudi Arabia and Kuwait. There seems to be a growing consensus within OPEC in favor of an extension of the deal. But the one holdout could be Russia, without which an extension is uncertain. Russia’s energy minister Alexander Novak was guarded when asked about Russia’s support for an extension, declining to take a position while citing progress that has already been made in the reduction of oil stocks. “The situation has gradually been improving since the beginning of March,” Novak said to reporters. Goldman says ignore the crude […]

Oil dives below $50 as confidence in Opec wavers

22 Apr 2017   Prices

Oil was set for the biggest weekly drop in a month as market confidence in Opec’s ability to overpower a resurgent US shale industry wavered. US benchmark West Texas Intermediate fell below $50 a barrel on Friday — down $1.32 to $49.39 — by 6.45pm in London. The global Brent marker dropped $1.24 to $51.75 a barrel. Both benchmarks fell by more than 7 per cent this week, marking the biggest falls since early March. As supply curbs by Opec producers and those outside of the cartel took effect in January — sending prices higher in 2017 — US shale production has rebounded, locking the oil market into the middle of two competing forces. Data from US drilling company Baker Hughes on Friday showed that the number of rigs drilling for oil in the US rose for a 14th consecutive week. Drillers added five rigs in the week to April 21, bringing the total count to 688 — the most since April 2015. Analysts at Goldman Sachs said the price falls this week, however, were technical and not based on supply and demand fundamentals.

Why the crude rally has fizzled, continued: Market analysis series

22 Apr 2017   Prices

This is the second of a three-part look at why oil prices have failed to rally despite OPEC’s best efforts at managing supply cuts. Read part 1 here . So, why is everyone so bullish? Many oil analysts take as a fait accompli that OPEC-led production cuts thus far are key to balancing the crude market. If this is the case, though, why hasn’t it happened yet? But the bulls say give it time. In the long run, the market will balance. Everyone knows what Keynes said about the long run (that we are all dead). That the market is prime for a rally has become gospel truth. But isn’t something so paradigmatic just a little bit risky? “Oil prices will get better, and you can take that to the bank,” David Purcell, head of macro research at Tudor, Pickering and Holt, said at a recent Dallas conference. “The […]

Oil Price Volatility and US EIA Data

22 Apr 2017   Prices

A number of news media pieces have recently suggested that oil prices may fall due to soaring output in the US. Output from US light tight oil (LTO) may not rise as quickly as some EIA reports may suggest. One source of confusion is that the EIA creates many reports and some are more reliable than others. The two charts below cover US LTO and US crude plus condensate (C+C) output. US LTO Output from the EIA Drilling Productivity Report (DPR) and EIA Tight Oil (LTO) estimates in kb/d. US EIA monthly C+C output and centered 4 week average output in kb/d. The data for the DPR and for tight oil output are found at the links provided at the US EIA website. The data for US monthly C+C output and the 4 week average US C+C output is also from the EIA. The 4 week average data is […]

Oil prices claw back ground after sharp drop, buoyed by U.S. crude stock dip

21 Apr 2017   Prices

 Oil prices regained some ground on Thursday after steep losses the previous day, with a slight drop in U.S. crude inventories stoking hopes that a push to rein in global oversupply could be gathering at least some momentum. Brent crude futures were at $53.31 per barrel at 0108 GMT, up 38 cents, or 0.72 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures had risen 31 cents, or 0.61 percent, to $50.75 a barrel. Traders said that the gains came on the back of a reduction in commercial U.S. crude stocks, which fell by 1 million barrels last week to 532.34 million barrels, according to the U.S. Energy Information Administration (EIA). However, that level was still near a record high. Price increases came after both […]

Oil prices could tumble again on U.S. shale influx: Total CEO

21 Apr 2017   Prices

Oil prices could fall again by the end of the year due to a rapid increase in U.S. shale production, the chief executive of French oil and gas giant Total said on Thursday. Crude has recovered from lows reached in January 2016 and has mostly hovered above $50 a barrel since the beginning of the year following an agreement by the Organization of the Petroleum Exporting Countries to cut production. “The price may fall again … U.S. producers who have recovered quickly, will regenerate an influx of supply by the end of the year and this could have a negative impact on the markets,” Patrick Pouyanne said during a conference in Paris. U.S. shale oil producers are planning to expand production following the rebound in prices. “The OPEC agreement is in place and […]

Offshore Crude Backlog Haunts Oil Price Recovery

21 Apr 2017   Oil Supply, Prices

Oil is trying to recover after yesterday’s shellacking, but oversupply fears still remain. As rumors and murmurs circulate about an extension to the OPEC production cut, hark, here are five things to consider in oil markets today: 1) Yesterday we mentioned how we’re seeing a strong influx of arrivals into the U.S. Gulf Coast from the Middle East this week (something we originally alluded to last month ). This is in response to an increase in March loadings heading to the U.S., after Middle East producers favored sending crude to Asia in January and February. That said, while we are seeing increasing arrivals into the U.S. Gulf, it may not necessarily translate to higher imports this week. After reaching its lowest point since last September early last week, crude waiting offshore in the U.S. Gulf has been rising, up over 9 million barrels in the last ten days: (Click […]

Oil markets remain cautious on record supplies

21 Apr 2017   Prices

Oil opened the last day of a choppy trading week on a cautious note over doubts that an OPEC-led production cut was having the desired effect of restoring balance to a market that has been dogged by oversupply for more than two years. Brent crude futures LCOc1 were at $53.07 per barrel at 0113 GMT, up 8 cents from their last close. U.S. West Texas Intermediate (WTI) crude futures CLc1 had risen 8 cents to $50.79 a barrel. The stable prices came after a more-than-3.5 percent fall in both benchmarks earlier this week as doubts emerged over the effect of an effort led by the Organization of the Petroleum Exporting Countries (OPEC) to cut production by almost 1.8 million barrels per day (bpd) during the first half of the […]

Goldman Says Ignore the Technical, Savor the Fundamental on Oil

21 Apr 2017   Prices

Bank says recent selloff in prices driven by technical reasons Goldman sees pace of U.S. inventory declines as encouraging Goldman Sachs Group Inc. says there’s no fundamental evidence in the oil market to justify this week’s selloff in prices. The bank finds the pace of declines in U.S. crude inventories encouraging, with an acceleration in draw downs expected through the second quarter as OPEC cuts output and demand grows, according to a report dated April 20. Meanwhile, a mid-week slide in prices was driven by crude trading through its 50-day and 100-day moving averages, Goldman said. Goldman is reiterating its confidence in oil at a time when investors are fretting over whether U.S. production, which has climbed to the highest since August 2015, will undermine curbs by the Organization of Petroleum Exporting Countries and its allies. After posting three straight weekly gains on expectations OPEC will extend its supply […]

The Real World of Oil Has a Warning for Financial Markets

21 Apr 2017   Prices

OPEC supply management yet to work as producer group intended Brent is benchmark for more than half the world’s crude oil The Brent physical oil market is flashing signs of weakness again as dwindling Asian purchases, an influx of American crude to Europe, and supplies flowing out of storage all combine to recreate a glut in the North Sea. The weakness comes at a time when speculators have started rebuilding bullish positions after a sell-off last month, betting the market will tighten in the second quarter. Yet, Brent physical oil traders say the opposite is happening so far, according to interviews with executives at several trading houses, who asked not to be identified discussing internal views. “We need to see the market going really into deficit for oil prices to rise,” Giovanni Staunovo, commodity analyst at UBS Group AG in Zurich, said. “If this is temporary, it could be […]

Weak U.S. gasoline prices prompts NY Harbor-bound tanker to change course

21 Apr 2017   Prices

A tanker of gasoline en route to New York Harbor from Europe has been diverted to a Caribbean storage hub because a narrow window of opportunity for shipping profitably to the U.S. East Coast appears to have shut, traders said. At least 16 tankers carrying some 600,000 tonnes of gasoline blending components were booked early in April to send fuel from Europe to the East Coast. Since, a Long-Range 2 (LR2) vessel AMOREA, floating offshore carrying summer-grade RBOB gasoline, known as F2-grade, set sail to New York. An LR2 going to New York was uncommon to begin with, but the recent closing of the arb, or the window, caused the vessel to be diverted to the BORCO storage hub in the Caribbean, according to Reuters vessel tracking data and three sources with knowledge of the matter. “It’s a big deal,” one East Coast trader noted, “haven’t seen an LR2 […]

Oil prices claw back ground after sharp drop, buoyed by U.S. crude stock dip

20 Apr 2017   Prices

Oil prices regained some ground on Thursday after steep losses the previous day, with a slight drop in U.S. crude inventories stoking hopes that a push to rein in global oversupply could be gathering at least some momentum. Brent crude futures were at $53.31 per barrel at 0108 GMT, up 38 cents, or 0.72 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures had risen 31 cents, or 0.61 percent, to $50.75 a barrel. Traders said that the gains came on the back of a reduction in commercial U.S. crude stocks, which fell by 1 million barrels last week to 532.34 million barrels, according to the U.S. Energy Information Administration (EIA). However, that level was still near a record high. Price increases came after both […]

Oil futures fall sharply after data shows US gasoline build

20 Apr 2017   Prices

A surprise build in US gasoline stocks last week triggered a sharp sell-off across the oil complex Wednesday, even though weekly US inventory data also showed draws in both crude and distillate inventories. Gasoline stocks rose 1.542 million barrels to 237.672 million barrels in the week ending April 14, Energy Information Administration data showed. Analysts surveyed Monday by S&P Global Platts were looking for a draw of 2 million barrels. NYMEX May RBOB settled 5.20 cents lower at $1.6590/gal. On the Atlantic Coast, home to the New York Harbor-delivered NYMEX RBOB futures contract, gasoline stocks fell 1.276 million barrels, but still sit at a 5 million barrel surplus to the five-year average for this time of year. Distillate stocks fell 1.955 million barrels last week, EIA data showed. Analysts were looking for a draw of 1.4 million barrels. Inventories have fallen 10 straight weeks by a total of 22.5 […]

Oil slides toward $50 as stockpiles show unexpected spike

20 Apr 2017   Prices

Oil dropped more than $2 a barrel after data showed an unexpected rise in US gasoline stockpiles for the first time since February and US crude production hit its highest level since mid-2015. US marker West Texas Intermediate dropped more than 4 per cent to a low of $50.09 a barrel, before recovering slightly to settle at $50.44. The global Brent benchmark also fell by more than 4 per cent to $52.58 a barrel, but then rebounded to $52.93. The US energy department’s statistics, published on Wednesday, set in motion a price fall in mid-morning trading in New York. Both benchmarks — which were set for the biggest daily percentage falls since early March — fell to the lowest in two weeks. Gasoline inventories rose by 1.5m barrels in the week ending April 14 compared with expectations of a drop of 1.9m barrels, the Energy Information Administration said. The data followed figures from the American Petroleum Institute, an industry group, which showed gasoline supplies rose by 1.4m barrels. Analysts raised concerns about whether there would be continued robust demand for crude from US refiners, to make oil products such as gasoline, which weighed on prices.

Bullish Oil Price Predictions Should Be Treated With Caution

20 Apr 2017   Prices

Despite prices levelling off and a continued resurgence in American production, bullish predictions on future prices are stacking up as analysts weigh in on where oil is headed. Citigroup Inc. has predicted that oil will rally past $60 per barrel by the end of this year. Citi analysts expect shale to come “roaring back” to life thanks to 2017’s higher prices, while further OPEC production cuts will offset increased output from the U.S. That should produce the conditions necessary for oil to break through past $60 by January 2018, according to Bloomberg . The Citi prediction came shortly after encouraging words from Barclays, Again Capital and Bloomberg indicating a “great rebalancing” was in progress and that prices would likely recover in the near-term. These predictions are bullish compared to those of Goldman Sachs, which predicts prices hovering around $50 and stabilizing there, while the International Energy Agency (IEA) worried […]

Don’t Believe The Hype: Oil Markets Far From Recovery

20 Apr 2017   Oil Supply, Prices

Global oil inventories are falling because of OPEC and non-OPEC production cuts, but the road to market balance will be long. Production cuts have removed approximately 1.8 million barrels per day (mmb/d) of liquids from the world market since November 2016 (Figure 1). (Click to enlarge) Figure 1. OPEC-NOPEC Have Cut 1.8 mmb/d Liquids Since November 2016. Source: EIA April 2017 STEO, EIA International Data and Labyrinth Consulting Services, Inc. Saudi Arabia has cut 619 kb/d (35 percent of total) and the Gulf States Cooperation Council—including Saudi Arabia—has cut 1,159 kb/d (65 percent of the total). Other significant contributors outside the GCC include Iraq (12 percent), Russia (12 percent) and Mexico (9 percent) (Table 1). Nigeria’s cuts are probably involuntary since it was exempted from the OPEC agreement. Iran and Libya–also exempted–and both increased production. Table 1. Summary table of OPEC-Non OPEC production cuts, November 2016 through March 2017. […]

Oil prices dip on bloated U.S. market, mixed Saudi signals

19 Apr 2017   Prices

Oil prices dipped on Wednesday as bloated U.S. supplies weighed on markets while a fall in Saudi crude exports was offset by rising production in the country. Brent crude futures LCOc1, the international benchmark for oil, were at $54.84 per barrel at 0059 GMT, down 5 cents from their last close. U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 4 cents at $52.37 a barrel. “Crude oil prices were slightly weaker as the focus turned back to U.S. inventories and output,” ANZ bank said on Wednesday. Data from the American Petroleum Institute (API) on Tuesday showed that U.S. markets remained bloated. Although crude inventories fell by 840,000 barrels in the week to April 14 to 531.6 million barrels, still close to record highs, gasoline stocks rose […]

U.S. Shale Surging, But Oil Holds Steady

19 Apr 2017   Prices

Rising production in the two biggest U.S. shale basins and Saudi Arabia’s newly ambiguous stance on the OPEC deal extension have resulted in oil prices falling early this week. (Click to enlarge) (Click to enlarge) Chart of the Week (Click to enlarge) • China has surpassed the U.S. as the largest oil importer in the world, with imports rising due to growing demand and falling domestic production. • But while OPEC countries have historically been China’s main supplier, the growth of imports is being captured by new suppliers , giving the cartel a run for its money. • 65 percent of the growth of imports came from non-OPEC countries between 2012 and 2016, with top suppliers including Russia (14 percent of China’s total imports), Oman (9 percent) and Brazil (5 percent). Market Movers • Energy Transfer Partners (NYSE: ETP) says that the Dakota Access Pipeline will begin interstate oil […]

Oil Trades at One-Week Low on Signs of Rebound in U.S. Supplies

19 Apr 2017   Prices

Shale output forecast to climb as drillers add more rigs OPEC’s cutbacks will eventually reduce stockpiles: Citigroup Oil traded at its lowest in more than a week in New York on signs U.S. production is continuing to recover, undermining OPEC’s efforts to clear a global glut. Futures dropped 0.6 percent in New York after falling 1 percent Monday. Crude output at major U.S. shale plays is forecast to climb to 5.2 million barrels a day in May, the highest since 2015, according to the Energy Information Administration’s monthly Drilling Productivity report. Drillers in the nation have added rigs for the past 13 weeks, data from Baker Hughes Inc. show. Oil had rallied above $53 a barrel after some producing countries voiced support for prolonging a six-month supply-cut deal by the Organization of Petroleum Exporting Countries and its allies. While U.S. shale output could come “roaring back” amid higher prices, […]

Oil prices fall on expected surge in U.S. shale output

19 Apr 2017   Prices, Shale Oil

Oil prices fell on Tuesday on news that U.S. shale oil output was expected to post the biggest monthly rise in more than two years, fuelling concerns that U.S. production growth is undermining OPEC-led efforts to rein in oversupply. The latest U.S. government drilling data showed shale production in May was set to rise to 5.19 million barrels per day (bpd), with output from the Permian play, the largest U.S. shale region, expected to reach a record 2.36 million bpd. Global benchmark Brent crude futures were down 26 cents at $55.10 a barrel at 0803 GMT. They touched an intraday low of $54.98, the weakest level in 11 days. U.S. West Texas Intermediate (WTI) crude futures traded down 21 cents at $52.44 a barrel, the lowest since April […]

National Oil Companies Join The Fight For Investment Dollars

19 Apr 2017   Prices

Independence & Simplicity and the U.S. Shale Revolution The dynamics of the oil industry have changed dramatically since the beginning of 2010. Because of the U.S. shale revolution, the U.S. is now a country with oil production rivaling that of Saudi Arabia and Russia. The fundamental shift in oil power has come as a direct result of investment in the technology of horizontal drilling and hydraulic fracturing tight oil formations in the U.S. In 2010, U.S. production from tight oil shale formations were marginal in comparison to total U.S. oil production; however, tight oil now makes up 52 percent of all U.S. oil production. (Click to enlarge) The simplistic nature of the U.S.’ royalty/tax contracts has fostered the growth in technology and the subsequent use of shale drilling resulting in a 64 percent increase in oil production from 2010 to 2016. Oil & gas royalty/tax contracts in the U.S. […]

Citi Sees $65 Oil By Christmas

19 Apr 2017   Prices

Maybe the surge in U.S. shale production won’t kill off the oil price rally after all. Oil prices could rise as high as the mid-$60s per barrel by the end of the year, according to a new analysis from Citigroup. That even takes into account the ongoing rebound in U.S. shale production. U.S. oil production is up nearly 700,000 bpd from a low point in the third quarter of 2016, with total output now up to more than 9.2 million barrels per day. But the shale industry is just getting started. Some of those gains came from offshore projects in the Gulf of Mexico that were in the works for a long time. Meanwhile, the rig count in the Permian basin has been rising, but because production data shows up on a several month lag compared to the rig count, further gains in output are surely forthcoming. In fact, […]

Oil Trades at One-Week Low on Signs of Rebound in U.S. Supplies

18 Apr 2017   Prices

Shale output forecast to climb as drillers add more rigs OPEC’s cutbacks will eventually reduce stockpiles: Citigroup Oil traded at its lowest in more than a week in New York on signs U.S. production is continuing to recover, undermining OPEC’s efforts to clear a global glut. Futures dropped 0.6 percent in New York after falling 1 percent Monday. Crude output at major U.S. shale plays is forecast to climb to 5.2 million barrels a day in May, the highest since 2015, according to the Energy Information Administration’s monthly Drilling Productivity report. Drillers in the nation have added rigs for the past 13 weeks, data from Baker Hughes Inc. show. Oil had rallied above $53 a barrel after some producing countries voiced support for prolonging a six-month supply-cut deal by the Organization of Petroleum Exporting Countries and its allies. While U.S. shale output could come “roaring back” amid higher prices, […]

Oil prices fall on expected surge in U.S. shale output

18 Apr 2017   Prices

Crude oil storage tanks are seen from above at the Cushing oil hub, in Cushing, Oklahoma, March 24, 2016. Oil prices fell on Tuesday on news that U.S. shale oil output was expected to post the biggest monthly rise in more than two years, fuelling concerns that U.S. production growth is undermining OPEC-led efforts to rein in oversupply. The latest U.S. government drilling data showed shale production in May was set to rise to 5.19 million barrels per day (bpd), with output from the Permian play, the largest U.S. shale region, expected to reach a record 2.36 million bpd. Global benchmark Brent crude futures were down 26 cents at $55.10 a barrel at 0803 GMT. They touched an intraday low of $54.98, the weakest level in 11 days. U.S. West Texas Intermediate (WTI) crude futures traded down 21 cents at $52.44 a barrel, the lowest since April […]

Crude Slips Below $53 as U.S. Drilling Surge Stokes Output Fears

18 Apr 2017   Prices

U.S. rig data shows the longest stretch of gains since 2011 Global oil market moving closer to balance: Saudi Aramco CEO Oil declined below $53 a barrel as the U.S. continued to ramp up drilling, stoking concern that the nation’s surge in output this year will offset OPEC-led efforts to cut a global supply surplus. Futures fell as much as 1 percent in New York, paring last week’s 1.8 percent advance. U.S. explorers added 11 rigs last week, capping the longest stretch of gains since 2011, according to Baker Hughes Inc. data. Prices fell even after Saudi Arabian Oil Co. Chief Executive Officer Amin Nasser said the global oil market is moving closer to balance despite the U.S. shale boom. The recovery in U.S. drilling activity is damping optimism that had sent prices above $53 a barrel after some members of the Organization of Petroleum Exporting Countries voiced support […]

Did Algos Drive The Latest Oil Price Rally?

18 Apr 2017   Prices

We have seen before how machines, or more precisely the algorithmically programmed computers, are increasingly responsible for setting prices in the WTI futures pit. The algos feed on news flow, but don’t seem capable of being able to distinguish between quantitative news and qualitative news. The most recent run in WTI from just over $47 at the end of March to just under $53 today (an almost 12 percent move in roughly two weeks) is a case in point. It’s getting harder to provide any sort of rationale for moves of this magnitude. Or is it even profitable to continue looking for one? For WTI, it’s really an existential question. The news flow has focused on speculation that OPEC production levels would continue to decline and even be extended into the second half of this year. Helpful and timely comments from Saudi Arabian sources suggesting as much were clearly […]

Analysts Remain Bullish With $70 Oil By Year-End

18 Apr 2017   Prices

Despite slow start to oil price growth in 2017, Raymond James says $70 WTI is on the horizon. Bullish global oil demand is expected to draw 1 million barrels per day off inventories in 2017, positioning the supply/demand dynamic to boost WTI price of oil by more than 32 percent by year-end. For the last two years, analysts at Raymond James have forecast a draw of 900,000 barrels per day (bpd), and massive inventories at the beginning of the year did give them pause, they said in a note to investors. “So, did our model change after revisiting and scrubbing the most recent oil supply/demand trends? Short answer: it actually looks slightly more bullish than we originally thought!” they said. Prices in the low $50s per barrel have driven up demand by 400,000 bpd, making the RayJa model show the market as about 100,000 bpd undersupplied than expected in […]

Bullish Oil Bets Gain on Signs OPEC Cuts to Outdo U.S. Boom

18 Apr 2017   Prices

Money managers’ WTI net-longs increase for second week: CFTC WTI oil tops $53 a barrel; U.S. crude supply drops from record OPEC is finally making some headway in its race against the tide of surging U.S. supplies, and speculators are giving the group greater credence. Hedge funds boosted bets on higher West Texas Intermediate crude prices a second week as futures topped $53 a barrel for the first time in a month, U.S. Commodity Futures Trading Commission data show. While more OPEC members are seen ready to extend output cuts, U.S. crude stockpiles dropped from a record. Fuel supplies are shrinking week after week at a time refineries are stepping up their crude processing ahead of the summer driving season. “There’s renewed faith that OPEC and non-OPEC will be able to get global inventories lower,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that […]

Reeling From Low Oil Prices, Saudis Look To Freeze Megaprojects

18 Apr 2017   Prices, Saudi Arabia

Saudi Arabia will start reviewing a number of multi-billion-dollar infrastructure and development project—remnants from a better past when crude oil prices were in three-digit territory. Some of these, according to government sources, will be shelved and others will be restructured. The review is part of urgent reforms prompted by the oil price rout from 2014, which saw Saudi Arabia plunge into a budget deficit for the first time in its history. As part of efforts to reform the oil-reliant economy, last year Deputy Crown Prince Mohammed bin Salman removed from their positions the Kingdom’s long-serving oil and finance ministers, Ali al-Naimi and Ibrahim al-Assaf. At the time, the Finance Minister defended these same megaprojects that will now be scrutinized by the Bureau of Capital and Operational Spending Rationalization, saying that when the investment decisions were made, the economic outlook was very different from where it was in 2016. At […]

Citi Sees Oil Surging $10 as OPEC Combats Roaring U.S. Shale

18 Apr 2017   OPEC, Prices, Shale Oil

Mid-$60 oil seen by end-2017 as effects of OPEC cuts increase Bank sees commodity investment flows rising in second quarter Citigroup Inc. joined Goldman Sachs Group Inc. in backing commodities, saying it’s the season to have faith in raw materials and oil will probably rally to the mid-$60s by the end of the year. While U.S. shale output may come “roaring back” amid higher crude prices, production curbs by OPEC and its allies should help offset that increase over the next six to nine months, Citi analysts including Ed Morse and Seth Kleinman wrote in an April 17 report. The producers need to extend their deal to cut supplies through the end of the year amid concerns that Russia is lagging behind on its pledged reductions, the bank said. While the historic agreement between producers that went into effect Jan. 1 “induced a euphoric and unsustainable surge” in bullish […]

After years of soaring growth, Asia’s fuel demand falters

18 Apr 2017   Asia, Prices

After years of often explosive growth, fuel consumption in Asia’s biggest economies is stuttering, undermining efforts led by the Organization of the Petroleum Exporting Countries (OPEC) to end a global supply glut and lift prices. Gobbling up over a third of global supplies, Asia is the world’s biggest and fastest growing region for oil consumption, and its seemingly insatiable fuel thirst has long been a core support for prices. Now, some say that picture of buoyant growth in demand is crumbling. “The signs of growing demand aren’t quite what they seem. Chinese fuel growth is at a three year low, Japanese fuel demand is down,” said Matt […]

Crude Slips Below $53 as U.S. Drilling Surge Stokes Output Fears

17 Apr 2017   Prices

U.S. rig data shows the longest stretch of gains since 2011 Global oil market moving closer to balance: Saudi Aramco CEO Oil declined below $53 a barrel as the U.S. continued to ramp up drilling, stoking concern that the nation’s surge in output this year will offset OPEC-led efforts to cut a global supply surplus. Futures fell as much as 1 percent in New York, paring last week’s 1.8 percent advance. U.S. explorers added 11 rigs last week, capping the longest stretch of gains since 2011, according to Baker Hughes Inc. data. Prices fell even after Saudi Arabian Oil Co. Chief Executive Officer Amin Nasser said the global oil market is moving closer to balance despite the U.S. shale boom. The recovery in U.S. drilling activity is damping optimism that had sent prices above $53 a barrel after some members of the Organization of Petroleum Exporting Countries voiced support […]

Oil down slightly in subdued trade after failed North Korean missile test

17 Apr 2017   Prices

Crude oil futures fell slightly in quiet trading on Monday, after a three-day Easter break, as investors digested a third consecutive weekly gain in prices along with North Korea’s failed missile launch on Sunday. Benchmark Brent crude futures were down 18 cents 55.71 at 0047 GMT. On Thursday, before the break closed most major markets, they settled up 3 cents at $55.89 a barrel. U.S. West Texas Intermediate crude futures were also down 18 cents at $53. They rose 7 cents to $53.18 a barrel on Thursday. Both benchmarks closed out the Easter holiday eve higher for a third consecutive week, with Brent adding 1.2 percent over the four days and WTI up 1.8 percent. The subdued start to this week came as markets braced […]

Bullish Oil Bets Gain on Signs OPEC Cuts to Outdo U.S. Boom

17 Apr 2017   Prices

Money managers’ WTI net-longs increase for second week: CFTC WTI oil tops $53 a barrel; U.S. crude supply drops from record OPEC is finally making some headway in its race against the tide of surging U.S. supplies, and speculators are giving the group greater credence. Hedge funds boosted bets on higher West Texas Intermediate crude prices a second week as futures topped $53 a barrel for the first time in a month, U.S. Commodity Futures Trading Commission data show. While more OPEC members are seen ready to extend output cuts, U.S. crude stockpiles dropped from a record. Fuel supplies are shrinking week after week at a time refineries are stepping up their crude processing ahead of the summer driving season. “There’s renewed faith that OPEC and non-OPEC will be able to get global inventories lower,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that […]

Oil Prices Rally Amid Rising Rig Count

15 Apr 2017   Prices

Oil prices have rallied back into the mid $50’s on a bout of bullish data, but a rising rig count and elevated production in the Gulf of Mexico could cap oil prices in the near term. (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) Friday, April 14, 2017 Oil posted some solid gains this week on outages in Libya, further confidence in an OPEC extension, and the first sizable drawdown in U.S. crude stocks this year. The IEA added its voice to the growing chorus of analysts seeing light at the end of the tunnel. IEA: oil market very close to balance. The IEA said in its latest report that the oil market is probably already balanced, although more data is needed. Oil inventories are falling in many parts of the world and have started to […]

Aramco CEO Sees Oil Market Closer to Balance Despite U.S. Boom

15 Apr 2017   OPEC, Prices

Rise in U.S. output leading to short-term price drop: Nasser Aramco IPO is “on track” and “everything is going well” The global oil market is moving closer to balance even as increases in U.S. oil production push prices down in the short-term, Saudi Arabian Oil Co. Chief Executive Officer Amin Nasser said. “This is not a good indication of where the market is likely to be headed going forward, as the large new production capacity and investment we will need in the future are lagging,” Nasser said during an event at Columbia University in New York Friday. “While the short-term market is pointing to a surplus of oil, the supply required in the coming years is falling behind.” Many indicators are pointing to a more balanced market, Nasser said. The combined inventories of countries in the Organization for Economic Cooperation and Development are flattening and poised to drop, among […]

Saudi Arabia, Iraq, Kuwait Aim for $60 a Barrel Oil Price

Some of OPEC’s biggest oil producers, including Saudi Arabia, are now targeting $60 a barrel as the level where they want to push crude prices, OPEC officials said, signaling they will support additional production cuts next month. Saudi Arabia, Iraq and Kuwait believe $60 a barrel will lift their economies and allow for more energy-industry investment, the officials said, without jumpstarting too much American shale output, which…