Oil rises on tighter fundamentals, but China warning holds back market

20 Oct 2017   Prices

Oil prices rose on Friday, supported by signs of tightening supply and demand fundamentals, although a warning about excessive China economic optimism still weighed somewhat on markets. A man walks at a petrol station in Riyadh, Saudi Arabia October 8, 2017. REUTERS/Faisal Al Nasser Brent crude futures LCOc1, the international benchmark for oil prices, were at $57.45 at 0639 GMT, up 22 cents, or 0.4 percent from their last close. U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $51.54 per barrel, up 25 cents, or 0.5 percent. The higher prices came after a more than 1 percent fall in prices the previous day. This was put down to profit-taking following four days of straight gains, but also to a sudden market slump which spooked traders after the veteran but outgoing governor of China’s central bank warned of a “Minsky moment”, a reference to excessive […]

Oil Drops as Geopolitical Worries Ease

20 Oct 2017   Prices

Prices rose to a three-week high on Wednesday, boosted by rising political tensions in the Middle East. Clashes between Iraqi government forces and troops from the northern, semiautonomous Kurdish region have led to temporary shutdowns in crude production from the oil-rich Kirkuk province. However, the rally ran into resistance as traders stepped back and awaited more information on the extent of the disruption. “The market’s tired. It’s had a big rally,” said Donald Morton, senior vice president at Herbert J. Sims & Co., who oversees an energy trading desk. “I think you’ve got to look for escalation or if it slowly moves into the background.” Investors have remained skeptical of oil’s ability to break above $52 a barrel, especially as U.S. shale producers have used rallies as opportunities to hedge and lock in prices for future production. Harry Tchilinguirian, global head of commodity markets strategy at BNP Paribas , […]

Oil drops more than one percent on profit taking after four days of gains

20 Oct 2017   Prices

Oil prices fell more than 1 percent on Thursday, breaking four days of gains, pressured by larger-than-expected product inventories in the United States and profit-taking after a recent run-up in markets. FILE PHOTO: The Philadelphia Energy Solutions oil refinery owned by The Carlyle Group is seen at sunset in front of the Philadelphia skyline March 24, 2014. Picture taken March 24, 2014. REUTERS/David M. Parrott/File Photo Brent crude LCOc1 settled down 92 cents, or 1.6 percent, at $57.23 a barrel. The global benchmark is still about 30 percent above its mid-year levels. U.S. light crude CLc1 settled down 75 cents, or 1.4 percent, to $51.29, but is still nearly 25 percent higher than June’s lows. Sponsored Ongoing tension in the Middle East has boosted prices, but analysts say those concerns may now be priced into the market. “The geopolitical risk that came rushing into the market […]

World’s Biggest Oil Traders See Wildly Diverging Crude Price

20 Oct 2017   Prices

Gunvor and Glencore see crude at $60 as demand growth quickens ‘Huge’ wave of U.S. shale could push price to to $45: Vitol The world’s biggest oil traders say crude could rise above $60 a barrel in a year as demand grows and OPEC keeps cutting. Or it might fall to $45 as another wave of U.S. shale hits the market. The disagreement between Glencore Plc , Gunvor Group Ltd. and Trafigura Group Pte on the bullish side, and Vitol Group on the other, underscores the huge uncertainty over the key drivers of oil supply and demand. Growth in consumption has been stronger than expected this year, helping the recent price gain, but the speed of the expansion in U.S. output has also proved hard to predict. A big surprise from one of those competing forces in 2018 could tip markets in either direction. “Towards the back end of […]

Oil steadies on tighter U.S. market, expected OPEC cuts

19 Oct 2017   Prices

Oil prices steadied on Thursday, holding onto most recent gains, supported by OPEC-led supply cuts, tension in the Middle East and lower U.S. production. Brent crude was down 20 cents at $57.95 a barrel by 0745 GMT, still around 30 percent above mid-year levels. U.S. light crude was 20 cents lower at $51.84, almost 25 percent higher than its lows in June. “The oil market is tightening gradually,” said Tamas Varga, analysts at London brokerage PVM Oil Associates. “OPEC is expected to roll over output restrictions for another nine months, supplies are at risk in the Middle East and U.S. inventories are falling.” The U.S. Energy Information Administration said on Wednesday […]

Oil Prices Rise After Data Show Drop in U.S. Crude Supplies

19 Oct 2017   Prices

Still, oil prices pulled back from earlier gains and at times traded in negative territory as investors tried to gauge the impact of Hurricane Nate on last week’s data, as well as figures indicating that fuel demand declined last week. The U.S. Energy Information Administration reported Wednesday that crude inventories fell by 5.7 million barrels last week, more than the 3.2 million barrels that analysts were expecting, according to a survey by The Wall Street Journal. But some of that was driven by a sharp but temporary decrease in oil output as offshore producers shut in around Hurricane Nate, which hit the Gulf Coast earlier this month. U.S. production fell nearly 1.1 million barrels a day last week, according to the EIA. “Normally we would expect the market to have a more positive tone to it, but people are expecting we’ll jump back up,” said Gene McGillian, research manager […]

Oil prices rallying again on short-term drains on supply

19 Oct 2017   Prices

After a rough start for October, crude oil prices linger in rally mode as U.S. hurricanes keep crude oil out of storage basins.  Short-term market metrics lingering from a U.S. hurricane gave support to crude oil prices Wednesday, even though balance seemed slow to emerge. The American Petroleum Institute reported late Tuesday that crude oil inventories in the United States moved lower last week by 7.1 million barrels. The API report was far more bullish than the 3.9 million barrel draw reported in an analyst survey earlier in the week by commodity pricing group S&P Global Platts. Crude oil inventories matter for traders watching the supply-side pressures that pushed oil prices below $30 per barrel last year fade away. The drain on the surplus of the five-year average in global crude oil inventories is supported by a production ceiling steered […]

Oil slips from earlier gains as U.S. gasoline, diesel stocks rise

19 Oct 2017   Prices

Brent oil prices retreated from three-week highs reached earlier in the day on Wednesday, after a surprising fall-off in U.S. refining runs and an unexpected increase in inventories of gasoline and diesel.  Prices had been higher due to ongoing tensions around oil-rich Iraq and Iran, which raised risk premiums. International benchmark Brent crude futures LCOc1 fell two cents to $57.86 a barrel as of 11:18 a.m. EDT (1518 GMT). They reached their highest in three weeks earlier in the session at $58.54 a barrel. U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 11 cents to $51.77 a barrel. Sponsored Weekly U.S. crude inventories fell by 5.7 million barrels, the Energy Information Administration said, exceeding expectations. [EIA/S] Refiners throttled down activity as the fall […]

The World’s Top Crude Trader Sees Brent Crashing To $45

19 Oct 2017   Prices

The world’s largest oil trader sees the price of the Brent barrel falling almost $14 to $45 in 2018, from its current price of $58.01, according to Ian Taylor, CEO of Vitol Group. Taylor is predicting a surge in oil production from US drillers—an event that would likely drag oil prices downward in 2018 to $45 per barrel. Despite the general optimism in the industry regarding oil prices, Taylor sees this optimism as false hope. “I think there’s a chance oil could fall closer to $40 than $50, because I think there’s still one more big surge coming from U.S., which will knock prices down.” Vitol’s CEO just last week offered up his opinion that US oil production will continue to increase in 2018—its final production spike before prices dip too far and production slumps once again. US oil production has steadily increased throughout 2017. Production in the first […]

Oil prices rise on tighter U.S. market, Middle East tensions

18 Oct 2017   Prices

Oil prices rose on Wednesday, lifted by a fall in U.S. crude inventories and concerns that tensions in the Middle East could disrupt supplies. Oil barrels are pictured at the site of Canadian group Vermilion Energy in Parentis-en-Born, France, October 13, 2017. REUTERS/Regis Duvignau Brent crude futures LCOc1, the international benchmark for oil prices, were at $58.27 at 0131 GMT, up 39 cents, or 0.7 percent from their last close – and a third above mid-year levels. U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $52.08 per barrel, up 20 cents, or 0.4 percent and almost a quarter above mid-June levels. Traders said that prices were pushed up by a drop in U.S. crude inventories as well as concerns that fighting in Iraq and mounting tensions between the United States and Iran could affect supplies. U.S. crude inventories fell by 7.1 million barrels in […]

Oil steady as U.S. output gains offset Middle East tensions

18 Oct 2017   Prices

Oil prices ended little changed on Tuesday, steadying after earlier gains and losses, as expectations of high U.S. production and exports offset concerns that fighting between Iraqi and Kurdish forces could threaten the country’s crude output.  Brent crude futures LCOc1 gained 6 cents, or 0.1 percent, to settle at $57.88 per barrel, while U.S. crude CLc1 gained 1 cent to settle at $51.88. Both contracts traded up nearly 1 percent and down over 1 percent during the day. The Baghdad government recaptured territory across northern Iraq from Kurds on Tuesday, widening a campaign that has shifted the balance of power in the country. The fighting in one of […]

Oil Prices Swing With Geopolitical Risks Still in Focus

18 Oct 2017   Prices

U.S. crude futures pared losses late in the session after falling as much as 1.3% and closed up 1 cent, or less than 0.1%, to $51.88 a barrel on the New York Mercantile Exchange—its third straight session of gains. Brent, the global benchmark, finished up 6 cents, or 0.1%, at $57.88 a barrel. Concerns the conflict between Iraqi forces and forces from Iraq’s semiautonomous Kurdish region in the oil-rich province of Kirkuk might crimp supply in the region have supported prices recently, though some investors and analysts said that buying was overdone. On Tuesday, Iraq’s Oil Minister Jabbar al-Luaibi told The Wall Street Journal that production from Iraq’s Kirkuk oil fields, seized by Baghdad from Kurdish forces Sunday, was running as normal. Uncertainty about whether the U.S. will impose fresh sanctions on Iran has also boosted prices of late. Amir Zamaninia, Iran’s deputy oil minister, said Tuesday the U.S. […]

Risk premium may be waning for oil prices

18 Oct 2017   Prices

Disruptions to U.S. oil production from Hurricane Nate may support a risk-fueled rally in oil prices Tuesday, but concerns about global outages may be fading. Crude oil prices soared during the Monday session as tensions boiled over in the northern provinces of Iraq. Iraqi and Kurdish forces are sparring over control of the so-called disputed territories in the north and by Tuesday , the Iraqi military had taken the oil fields in Kirkuk. The Organization of Petroleum Exporting Countries said in a market report published before fighting intensified that geopolitical tensions over the September referendum for independence in the Kurdish north had already added a risk premium to the price of oil. Citing sources close to an […]

Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw

18 Oct 2017   Prices, USA

Crude oil inventories are still coming down. The American Petroleum Institute (API) reported a huge draw of 7.130 million barrels in United States crude oil inventories, compared to an S&P Platts’ survey of analysts that expected inventories would draw down by 3.9 million barrels for the week ending October 13. Gasoline inventories, according to the API, saw a surprise build of 1.941 million barrels for the week ending October 13, against an expected draw of 340,000 barrels. Both WTI and Brent benchmarks were up on Monday on concerns that a US/Iran standoff could disrupt oil supplies, along with internal struggles in Iraqi Kirkuk oilfields as the referendum continues to pit Turkey, Iran, and Iraq governments against the Iraqi Kurds—a volatile situation that could spark a civil war. A further boost to oil prices came as Gulf Coast oil production continued to see significant disruptions through last week caused by […]

Oil Fundamentals Overturn Geopolitical Risk

18 Oct 2017   Prices

Oil posted gains on Monday on news that the Iraqi military had seized control of Kirkuk, but oil fundamentals and the large supply capacity of both OPEC and U.S. shale saw prices fall back on Tuesday. U.S. oil production will average 9.4 million barrels per day in the second half of 2017, according to the EIA, an increase of 340,000 bpd from the first half of the year. – Production is set to surge to 9.9 mb/d next year, which, if it comes to pass, will be the largest annual average output on record, surpassing the previous all-time high of 9.6 mb/d in 1970. – Most of the production increase will come from the Permian basin. Market Movers – Phillips 66 (NYSE: PSX) was downgraded by Jefferies from Hold to Underperform, with a $77 price target. […]

Where’s Oil and Gas Travel Getting Pricier (and Cheaper)?

18 Oct 2017   Prices

Read this if you’re heading to Aberdeen, Houston or other oil and gas hubs in 2018. Whenever I’ve had the opportunity to chat with oil and gas professionals at conferences and other events, the conversation has often drifted to where their work has taken them. I’ve always found geography interesting, and I enjoy learning about various parts of the world from those who’ve worked and even lived in places I’ve only read about. Indeed, many of the folks who make up the oil and gas industry crisscross the globe on a regular basis. Buying a plane ticket to reach some of the world’s oil and gas hubs, along with staying in a hotel while you’re there, should get more expensive over the next 18 months, according to a recent report by Carlson Wagonlit Travel (CWT). A CWT executive said the higher travel costs represent a positive sign for oil […]

U.S. retail gas market in post-hurricane recovery mode

18 Oct 2017   Prices

Barring a few select markets, most U.S. drivers are seeing a decline in gas prices as the energy sector recovers from recent hurricanes, market analysis found. Motor club AAA recorded a national average retail price for regular unleaded for Tuesday at $2.47 per gallon, a fraction of a percent lower than last week and 6 percent, or 16 cents per gallon, less than one month ago. AAA spokesperson Jeanette Casselano said demand nation-wide is starting to wind down from the strains of the travel-heavy summer, while the refineries and pipelines idled by recent hurricanes in the U.S. south are starting to return to normal. “Drivers will see stabilized or decreasing prices at the pump throughout this month due to […]

Oil rises 1 percent as Iraq fighting shuts output in Kirkuk

17 Oct 2017   Prices

Crude prices rose 1 percent on Monday as Iraqi forces entered the oil-rich city of Kirkuk, seizing territory from Kurdish fighters and briefly cutting some crude output from OPEC’s second-largest producer. “We’re seeing increased geopolitical tension in the Middle East providing support in the market today, namely in Iraqi Kurdistan, and some uncertainty around Iran,” said Anthony Headrick, energy market analyst at CHS Hedging LLC in Inver Grove Heights, Minnesota. Iraqi Kurdistan briefly shut down some 350,000 barrels per day (bpd) of production from the major Bai Hassan and Avana oilfields due to security concerns. Iraq launched the operation on Sunday as the crisis between Baghdad and the Kurdish Regional Government (KRG) escalated. The KRG voted for independence in a Sept. 25 referendum. Brent crude futures LCOc1 settled up 65 cents, or 1.1 percent, to $57.82 per barrel while U.S. crude ended 42 cents, or […]

Kemp: Investors Hit Peak Bullishness On Oil

17 Oct 2017   Prices

The wave of investor bullishness towards oil that started back in July and August may have peaked at the end of September, according to the latest position records published by regulators and exchanges. Hedge funds and other money managers cut their net long position in the five major futures and options contracts linked to petroleum by a total of 32 million barrels in the week to Oct. 10. Hedge funds cut their net long position in every one of the major benchmarks including Brent (-16 million barrels), WTI (-7 million barrels), U.S. gasoline (-4 million) and U.S. heating oil (-5 million). Fund managers had accumulated a record number of […]

Geopolitical risk adds big premium to oil prices Monday

17 Oct 2017   Prices

Geopolitical issues and concerns added a considerable risk premium to the price of oil on Monday as fighting erupted in the north of OPEC member Iraq. Much of the oil production and distribution centers in Iraq are near the southern port city of Basra, though traders have focused on operations in the north since the Kurdish region held a contentious referendum for independence in late September. Hundreds of thousands of barrels of oil production could be caught in the crossfire as Iraqi forces fight for control over the disputed northern city of Kirkuk.There are competing narratives over the flow of oil at the Kirkuk oil fields, though the federal government in recent weeks made it clear […]

Are the Days of Low Oil Prices Receding?

17 Oct 2017   Prices

Oil prices rose on Monday, fueled by jitters about a disruption in supplies after government forces in Iraq moved on the Kurdish-held city of Kirkuk and on oil installations seized by the Kurds in 2014. The jousting between Baghdad and the Kurds came as markets were already weighing the geopolitical climate, including the possible reimposition of sanctions on Iran and the tumult in Venezuela . Brent crude, the international benchmark, rose by 1.3 percent on Monday, to $57.91, close to the psychologically important level of $60 a barrel. Oil prices have been edging up since July and are now well above their early-2016 lows of less than $30 a barrel. After notable declines in recent years , are oil prices now on an upward trend? And how would that affect the world economy? After the […]

Oil rises as fighting escalates in Iraq’s oil-rich Kirkuk

16 Oct 2017   Prices

Oil markets jumped on Monday as Iraqi forced entered the oil city of Kirkuk, taking territory from Kurdish fighters and raising concerns over exports from OPEC’s second-largest producer. Flames are seen coming from a burn off valve at the American Refining Group, Inc., (ARG) the oldest continuously operated refinery in the United States founded in 1881, in Bradford, Pennsylvania, U.S. October 6, 2017. REUTERS/Brendan McDermid Iraq launched the operation in the multi-ethnic region on Sunday as the crisis between Baghdad and the Kurdish Regional Government (KRG) escalated. Tensions have been building since the KRG voted for independence in a Sept. 25 referendum. Sponsored International Brent crude futures LCOc1 were at $57.75 per barrel at 0733 GMT, up 58 cents from the previous close, after trading as high as $58.13. U.S. WTI crude was at $51.95 per barrel, up 50 cents. Earlier in the day, it traded […]

What’s Stopping An Oil Price Rally?

16 Oct 2017   Prices

Oil supply disruptions, high OPEC oil cut deal compliance rates, an extra-violent hurricane season, and the threat of new U.S. sanctions against Iran have fed optimism in oil markets over the past couple of months. Yet there’s bad news for bulls: a growing number of experts and industry insiders warn that the lower-for-longer scenario is nowhere near its end. Earlier this week, Deloitte Services released a survey of 250 U.S. oil industry executives that revealed two-thirds of them expected oil benchmarks to remain below $60 through 2018. In fact, the majority of executives polled said they didn’t expect crude to rise above $70 before the end of the decade. Also, 60 percent said they expected the number of drilling rigs in the country to decline next year, and half said that capital spending will likely fall in 2018. The president of Facts Global Energy consultancy shared a similar message […]

Strong Chinese Crude Imports Boost Oil Prices

14 Oct 2017   Prices

Chinese crude imports rose by roughly 1 million barrels a day in September, on the month, to 9 million barrels a day, according to government data released Friday. The news alleviated investor concern that demand in the world’s largest crude importer might be waning amid faltering economic growth. The September “bounce back” was the highest import volume in China since May, according to analysts at ING Groep. On Friday, President Donald Trump said he wouldn’t recertify a 2015 international agreement with Iran to curb its nuclear program in exchange for economic-sanctions relief. The lifting of sanctions at the start of 2016 has allowed Iran to significantly increase its production to around 3.8 million barrels a day. But disavowal of the deal or the imposition of fresh sanctions on Iran could undermine the country’s export capacity. At the same time, tensions are building between Iraq’s central government in Baghdad and […]

Oil Prices Spike On Middle East Tensions

14 Oct 2017   Prices

Oil prices rose on Friday on bullish data from China showing an uptick in oil imports by 1 million barrels per day in September, from a month earlier. On top of that, anxiety over President Trump’s decision to decertify the Iran nuclear deal, plus simmering tension in Iraq likely added a bit of upward pressure on crude prices. WTI and Brent gained more than 2 percent in early trading on Friday. (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) Friday, October 13th, 2017 Trump to decertify Iran deal . President Trump has confirmed his plan to decertify the Iran nuclear deal on Friday, a move that could ratchet up tensions between the two nations. However, he will stop short of calling for new sanctions. Instead, he will ask the U.S. Congress to hold […]

Geopolitical risk, Asian demand drives oil prices higher

14 Oct 2017   Prices

A geopolitical risk premium and signs of growing demand in the Asian economies helped drive crude oil prices sharply higher Friday, wrapping up a volatile week. Crude oil prices see-sawed wildly during the data-heavy week. Economists at the Organization of Petroleum Exporting Countries sparked a rally Wednesday with a report on a balancing market, though gains were more or less erased on Thursday when the International Energy Agency said that balance was fragile. Traders are watching supply and demand figures closely. OPEC is leading an effort to balance an oversupplied market, which is supporting crude oil prices that dropped below $30 per barrel last year because of supply-side strains. U.S. data this week […]

Oil rallies nearly 2 percent on China import boost, U.S.-Iran tensions

14 Oct 2017   Prices

Oil prices on Friday closed at their highest level in October on bullish news from strong Chinese oil imports, U.S. President Donald Trump’s decision not to certify that Iran is complying with a nuclear agreement and other tensions in the Middle East. A oil pump is seen at sunset outside Scheibenhard, near Strasbourg, France, October 6, 2017 . REUTERS/Christian Hartmann Brent LCOc1 futures gained 92 cents, or 1.6 percent, to settle at $57.17 a barrel, while U.S. crude CLc1 rose 85 cents, or 1.7 percent, to settle at $51.45 per barrel. That put both contracts at their highest settlements since Sept. 29. For the week, Brent was up almost 3 percent and U.S. was up over 4 percent. Traders said the oil market pulled back from even higher gains – both contracts were up over 2 percent – earlier in the day out of relief […]

Top global trading houses see range-bound, stable oil price

14 Oct 2017   Prices

A rebalancing of the global oil market is underway helped by supply curbs led by OPEC, although the chance of big further gains in prices looks unlikely in the next year or so as tighter supply may not last, top trading firms told Reuters. Brazil’s state-run oil company Petrobras LPG fuelling stations are seen in the Guanabara bay in Rio de Janeiro, Brazil October 7, 2017. REUTERS/Pilar Olivares The Organization of the Petroleum Exporting Countries and other countries led by Russia are curbing oil production by around 1.8 million barrels per day until March 2018 to get rid of a global surplus in crude and refined products. Oil inventories in the industrialized world are coming down although they remain above the five-year average. Brent crude, after hitting a 12-year low near $27 in January 2016 has rallied to $57, but is still half its level […]

Oil rises on tighter U.S. market, strong China imports

13 Oct 2017   Prices

Oil prices rose on Friday as both U.S. crude production and inventories declined, pointing towards a tightening market. A oil pump is seen at sunset outside Scheibenhard, near Strasbourg, France, October 6, 2017 . REUTERS/Christian Hartmann Strong Chinese oil import data also supported crude prices, traders said. With the Organization of the Petroleum Exporting Countries (OPEC) leading a production cut, analysts said that global oil markets were now broadly balanced after years of oversupply. U.S. West Texas Intermediate (WTI) crude futures were trading at $50.88 per barrel at 0350 GMT, up 28 cents, or 0.6 percent, from their last settlement. U.S. crude inventories dropped 2.7 million barrels in the week to Oct. 6, to 462.22 million barrels, the Energy Information Administration (EIA) said late on Thursday. Crude production slipped 81,000 barrels per day (bpd) to 9.48 million bpd. In international markets, Brent crude futures were at […]

U.S. crude inventories fall, gasoline posts surprise build: EIA

13 Oct 2017   Prices

 Crude inventories dropped 2.7 million barrels in the week to Oct. 6, slightly more than analysts’ expectations in a Reuters poll for a decrease of 2 million barrels. Sponsored Inventories have been declining in recent weeks, after an interruption due to Hurricane Harvey that knocked out nearly half of the Gulf Coast’s refining capacity at the end of August. Refinery crude runs rose by 229,000 barrels per day as utilization rates rose by 1.1 percentage points to 89.2 percent of total capacity, the EIA data showed. “The report is supportive given the larger than expected decline in crude […]

Global oil market seen balanced in 2018, even with rising output: IEA

13 Oct 2017   Prices

In its monthly oil market report, the Paris-based IEA said it continues to see global demand for crude growing by 1.6 million barrels per day (bpd) in 2017, before moderating to 1.4 million bpd in 2018. “Looking into 2018, we see that three quarters out of four will be roughly balanced — again using an assumption of unchanged OPEC production, and based on normal weather conditions,” the agency said. Sponsored “Taking 2018 as a whole, oil demand and non-OPEC […]

Goldman Sachs: Inventory Drawdowns Will Not Continue

13 Oct 2017   Oil Supply, Prices

The September oil price rally was predicated on improving oil market fundamentals, bolstering confidence that the rebalancing process was accelerating. But the inventory declines reported in the third quarter might be “as good as it gets,” with inventories returning to small increases next year, according to a new report from Goldman Sachs. The third quarter appeared to finally be the turning point for an oil market suffering from a more than three-year downturn. The OPEC deal was finally bearing fruit—inventories started posting substantial declines after a few years at or near record levels. That translated into a newfound bullishness in the market, and sizable price increases for WTI and Brent, particularly in September. But Goldman says that the third quarter could have been the peak for drawdowns, due to a variety of factors that could partially reverse going forward. For example, oil production outside of OPEC (excluding the U.S.) […]

Surprise Oil Inventory Build Shocks Markets

12 Oct 2017   Prices

The American Petroleum Institute (API) reported a surprise build of 3.097 million barrels in United States crude oil inventories, compared to an S&P Platts’ survey of analysts that expected inventories would draw down by 400,000 barrels for the week ending October 6. Gasoline inventories, according to the API, saw a decrease of 1.575 million barrels for the week ending October 6, against an expected build of 1.4 million barrels. Both WTI and Brent benchmarks were up on Tuesday as much of US offshore production remains offline after more than 92% of Gulf of Mexico production in the US was taken out by Tropical Storm Nate. Saudi Arabia also lifted some spirits as it promised to lower November exports, although China is likely behind much of the Saudi’s export cuts as it shutters refineries for maintenance as planned , and as China’s government sets strict import levels—and shows signs of […]

Oil slips despite expected OPEC extension of output cuts

12 Oct 2017   Prices

LONDON (Reuters) – Oil prices slipped on Thursday as U.S. fuel inventories rose despite efforts by OPEC to cut production  Brent crude oil was down 20 cents at $56.74 a barrel by 0840 GMT. U.S. light crude was 35 cents lower at $50.95. Both benchmarks have risen more than 20 percent from their lows in June as world oil markets tightened.  The Organization of the Petroleum Exporting Countries and other producers including Russia agreed last year to reduce output by 1.8 million barrels per day (bpd) to prop up prices and the cuts, from January, have helped drain inventories.

The OPEC-led deal helped lift oil from the $30 to $40 per barrel range in late 2016/early 2017. But traders say supplies remain ample despite these cuts, thanks in large part to surging U.S. production.  OPEC is widely expected to extend its cuts beyond the current expiry date of end-March 2018.  “There is little doubt that leading producers have re-committed to do whatever it takes to underpin the market,” the International Energy Agency said in a report on Thursday.  “For next year, the crude and product markets look broadly balanced, assuming OPEC holds output steady at around current levels,” the IEA added.  Many analysts expect Brent to stay between $50 and $60 a barrel as long as global markets stay balanced. But risks remain, including the possibility of tension in the Middle East.

Oil Prices Rise for Third Straight Day

12 Oct 2017   Prices

Oil prices have been grinding higher in recent weeks amid signs of strong demand and depleting stockpiles. The U.S. Energy Information Administration on Wednesday raised its forecast for 2017 oil prices by $1 a barrel, reflecting recent increases. “The bulls are in charge for the most part,” said Ric Navy, senior vice president for energy futures at RJ O’Brien & Associates LLC. “There’s an upward slant, but we’re still within a range—we’ll find out where the lines are drawn.” Prices rose amid signs of escalating tensions between Iraq and Iraqi Kurdistan following the Kurdish independence referendum,” Mr. Navy said. Earlier in the day, prices had wavered between gains and losses after the Organization of the Petroleum Exporting Countries reported its collective production shot up by 90,000 barrels a day in September. The increase was driven by higher production in Libya, Nigeria, Iraq and Gabon. But OPEC also revised upward […]

Oil Prices Poised To Rise In Early 2018

12 Oct 2017   Prices

Oil prices will be lower for longer—that is the conventional wisdom. Data suggests, however, that oil supplies are tightening and that higher prices are likely in the relatively near-future. Refined Product Demand and Crude Oil Exports U.S. crude oil plus products comparative inventories have fallen 120 mmb (million barrels) in 26 of the last 32 weeks (Figure 1). Strong domestic demand for refined products and increased crude oil exports are the main reasons. That translates into lower net imports of both crude oil and petroleum products to the United States. The year-to-date average of U.S. product net imports is down 0.5 mmb/day from 2016. That’s 3.5 mmb/week which is about the average weekly storage withdrawal since mid-February. (Click to enlarge) Figure 1. Approximately 3.3 mmb/week (470 kb/d) Decrease in Net Petroleum Product Imports Account for Most Inventory Reductions in 2017. Comparative Inventories Have Fallen 126 mmb Since Mid-February. Source: […]

Most U.S. oil executives see prices below $60/barrel through 2018

12 Oct 2017   Prices, USA

Nearly two-thirds of U.S. oil executives see crude oil prices remaining below $60 per barrel through 2018 and not hitting $70 until at least the next decade, according to a survey published on Wednesday by consultancy Deloitte Services LP [DLTE.UL]. FILE PHOTO – A pump jack used to help lift crude oil from a well in South Texas’ Eagle Ford Shale formation stands idle in Dewitt County, Texas, U.S. on January 13, 2016. REUTERS/Anna Driver/File Photo The survey, based on a poll of 250 executives at companies that produce, transport and refine oil and natural gas, reflects a shift from last year when many respondents forecast commodity prices would rise and capital spending budgets grow. U.S. oil prices CLc1 fell slightly on Wednesday to $50.79 per barrel. This year’s more dour view, especially among shale industry managers, comes as executives are focusing on cost controls and […]

Oil rises on signs of tighter market, but 2018 looks more uncertain

11 Oct 2017   Prices

Oil prices edged up on Wednesday, rising for a third day on signs that markets are gradually tightening after years of oversupply, although the outlook for 2018 remained less certain. FILE PHOTO: Pump jacks pump oil at an oil field on the shores of the Caspian Sea in Baku, Azerbaijan, October 5, 2017. Picture taken October 5, 2017. REUTERS/Grigory Dukor Brent crude futures, the international benchmark for oil prices, were trading at $56.75 per barrel at 0649 GMT, up 14 cents, or 0.25 percent, from their last close. Brent also rose 2 percent the previous day. U.S. West Texas Intermediate (WTI) crude futures were at $51.09 a barrel, up 17 cents, or 0.33 percent, from their last settlement. Prices rose 2 percent the day before to back above $50 a barrel. Traders said they would look to U.S. fuel inventory data on Wednesday and Thursday for […]

Oil Back Above $50 as Supply Glut Shows Signs of Wearing Down

11 Oct 2017   Prices

Saudi Aramco will sell much less than requested in November A weaker dollar is seen lending support to crude oil prices Oil surged following signals that the world’s biggest crude exporters may extend or deepen supply cuts. Futures advanced 2.7 percent in New York for the biggest gain in two weeks. OPEC Secretary-General Mohammad Barkindo said more nations may join production limits the group hammered out with Russia and other exporters in late 2016, while the Saudis plan to restrict their own sales by a record amount within weeks. The falling value of the U.S. dollar also spurred some investors to buy because crude is priced in the currency. “There is a sense that we’re going to get a deal done,” Phil Flynn, senior market analyst at Price Futures Group Inc. in Chicago, said by telephone. Saudi Arabia’s announcement that it’ll sell fewer barrels than ordered next month “is […]

Supply Crunch To Lead To Oil Price Spike By 2020s, Expert Says

11 Oct 2017   Prices

Several years of underinvestment in large oil projects could lead to oil price spikes of $80-$100 per barrel by the 2020s unless mega projects are sanctioned very soon, Jonathan Chanis, Vice President of Policy at Securing America’s Future Energy (SAFE), told Platts in an interview on Monday. “We’re at a very perilous point because we’ve had two years of a really, really marked decline in investment,” said Chanis , who was Senior Trader at Caxton Associates, a Vice President at Goldman Sachs’s commodities division, and a Managing Director at Tribeca Global Management. Chanis is not undermining the rise in U.S. shale supply, but he thinks that shale production will not be enough to offset the future decline in supplies if big projects are not given final investment decisions soon. “If we don’t start seeing some large-scale final investment decisions on mega-projects — projects over $10 billion-$15 billion apiece — […]

Oil market balance, IMF forecast drive crude oil prices higher

11 Oct 2017   Prices

Crude oil prices recovered from their October slump to jump higher in early Tuesday trading after OPEC’s secretary general said markets were balancing. “The oil supply and demand variables are fast returning to balance after a record three years of unprecedented downturn, as evidenced by the continued positive fundamentals, due largely to the full and timely implementation of supply adjustments by OPEC and non-OPEC countries,” OPEC Secretary General Mohammad Sanusi Barkindo said from New Delhi. The Organization of Petroleum Exporting Countries and a handful of non-member state producers started cutting crude oil production in January in an effort to draw the five-year average for global crude oil inventories back to even after years […]

Oil rises to $56 on Saudi export cut

10 Oct 2017   Prices

Oil rose to around $56 a barrel on Tuesday, supported by Saudi Arabian export cuts in November and comments from OPEC and trading companies that the market is rebalancing after years of oversupply. Saudi Arabia has cut November allocations by 560,000 barrels per day (bpd), in line with its commitment to an OPEC-led supply reduction pact. In the United States, some production remains offline following Hurricane Nate, lending additional support. Sponsored “Prices have been boosted by news that Saudi Arabia is planning to reduce its oil shipments to customers in November,” said Carsten Fritsch, analyst at Commerzbank in Frankfurt. Brent crude LCOc1, the international price benchmark, was up 32 cents at $56.11 a barrel at 0950 GMT. U.S. crude gained 29 cents to $49.87. The Organization of the Petroleum Exporting Countries, Russia and other non-member producers are cutting output by about 1.8 million barrels per day […]

Oil Stable After OPEC Chief Suggests ‘’Extraordinary Measures’’

10 Oct 2017   Prices

Brent crude and West Texas Intermediate started the week with gains after yesterday OPEC’s Secretary General, Mohammed Barkindo, said the cartel may have to take some “extraordinary measures” to restore the oil market stability. The jump follows a 3.3-percent decline last week, the sharpest weekly fall in four months. “There is a growing consensus that, number one, the re-balancing process is underway. Number two, to sustain this into next year, some extraordinary measures may have to be taken in order to restore this stability on a sustainable basis going forward ,” the top OPEC man said without elaborating on what these measures might include, although he mentioned that OPEC would welcome more participants in the production cut deal. Barkindo was speaking at the India Energy Forum in New Delhi yesterday. The OPEC agreement with Russia and 10 other producers to take off 1.8 million bpd from the global oil […]

Oil Prices Rise Ahead of Crude Market Data

10 Oct 2017   Prices

Saudi Arabia said Monday that its state oil company was undertaking an “unprecedented” effort to cut petroleum exports, as the kingdom tries to bolster oil prices by withholding supply. The move is part of Saudi Arabia’s efforts to boost confidence in production cuts totaling almost 2% of the global oil market by the cartel, the Organization of the Petroleum Exporting Countries, and allies like Russia. Saudi Arabian Oil Co., known as Aramco, is slashing over 7% of the crude it exports by sea in November compared with last year, the kingdom’s oil ministry said. The move underlined Saudi Arabia’s new emphasis not only on cutting its oil production but also the amount that it exports into the global market. The export allocation of 7.15 million barrels a day in November remains higher than the 6.7 million barrels a day of exports that Saudi Arabia sent into global crude markets […]

Brent crude oil prices lower despite Gulf of Mexico idling

10 Oct 2017   Prices

Crude oil prices were drifting into negative territory early Monday on suggestions that more U.S. shale oil could move into the global marketplace. Crude oil prices have been on a general downward trend for most of October, eating into September gains sparked by the upheaval that Hurricanes Harvey and Irma brought to the U.S. energy sector. Markets so far have shrugged off the impact from now post-tropical cyclone Nate, which idled about 90 percent of the total oil production capacity in the Gulf of Mexico. An emailed report from Bank of America- Merrill Lynch said Monday that recent gains in crude oil prices could help drive U.S. shale production through next year. “Given its short-cycle nature and large […]

Has The Bear Market In Oil Finally Ended?

10 Oct 2017   Prices

Following the 17-month bear market that ended in March 2009, one of the longest-running bull markets in U.S. history began. The current bull market is the second longest streak on record without a 20% drop in the S&P 500. But the performance across the S&P 500 sectors has been uneven. When oil prices collapsed in the second half of 2014, the energy markets entered a bear market even as the broader markets continued to prosper. Although the energy sector rebounded in 2016, the fundamental reasons that led to the energy bear market hadn’t changed substantially. The global oil market remained oversupplied. So, the gains in 2016 were mostly given back in the first half of 2017. But the International Energy Agency’s (IEA) most recent Oil Market Report gives some reasons to believe that the bear market in the energy sector may finally be coming to an end. The report […]

Oil stable on lower U.S. rig count, expectation of ongoing Saudi output restraint

9 Oct 2017   Prices

Oil prices stabilized on Monday, after a 2 percent slide on Friday, as the number of rigs drilling for new oil in the United States dipped and on expectations that Saudi Arabia would continue to restrain its output to support the market. U.S. West Texas Intermediate (WTI) crude futures were trading at $49.38 per barrel at 0702 GMT, up 9 cents from their last close. Brent crude futures were flat from their last close, at $55.62 a barrel. Trading activity was low on Monday due to the Columbus Day holiday in the United States, although markets there are open. Oil tumbled by 2 percent on Friday, with WTI dipping back below $50 per barrel, as concerns of overproduction […]

Oil prices hit as US gulf coast faces hurricane

7 Oct 2017   Prices

The price of crude oil was driven down on Friday as Tropical Storm Nate was forecast to strengthen and hit the US Gulf of Mexico coast with hurricane force winds on Saturday night, and as traders anticipate disruption to refineries. West Texas Intermediate, the US crude benchmark, fell 3 per cent to $49.29 a barrel, taking its weekly losses to nearly 5 per cent, the first weekly drop in more than a month. Brent, the global benchmark, fell 2.4 per cent to $55.62 a barrel, ending a five-week rise that was the longest since June 2016. The National Weather Service on Friday issued hurricane and storm surge warnings for the gulf coast from eastern Louisiana to the Alabama/Florida border, including the city of New Orleans.  Oil companies on Thursday began shutting down offshore platforms in the gulf, halting 1.2m barrels per day or 71 per cent of the region’s production, according to the US Bureau of Safety and Environmental Enforcement. Nate’s expected track would take it through a region of the central gulf that holds a large number of oil and gas installations. BP and Chevron said they were shutting all the platforms they operate in the gulf, including two of the region’s largest: BP’s Thunder Horse and Chevron’s Jack/St Malo. Modern weather forecasting gives oil companies several days warning of approaching storms, allowing them time to shut production and evacuate on a measured timetable.

Oil Markets Brace For Another Hurricane

7 Oct 2017   Prices

Oil prices fell from last week’s highs as investors pocketed gains. Not all hope is lost, however. Saudi Arabia and Russia just announced some promising news regarding the rebalancing of the oil markets. Friday, October 6, 2017 (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) Friday, October 6, 2017 Oil prices were soft this week as concerns about oversupply resurfaced and investors pocketed gains from the recent bull run. But positive comments from Saudi Arabia and Russia regarding their resolve to rebalance the oil market helped sooth worries about faltering prices. Gulf of Mexico oil production disrupted by storm. Tropical storm Nate is making its way through the Gulf of Mexico, forcing a range of oil producers to shut in production and evacuate staff. Nate is expected to strengthen into a hurricane before it makes landfall […]

Oil set to end multi-week bull run as oversupply concerns resurface

6 Oct 2017   Prices

Oil traded largely unchanged on Friday after a week of profit-taking and the return of oversupply concerns led the market lower, snapping a multi-week bull run that was Brent’s longest in 16 months. Investors were wary of tropical storm Nate shutting down some oil production in the Gulf of Mexico ahead of its expected arrival in the area as a hurricane on Sunday. “The biggest impact (from Nate) could be on gasoline prices, depending on how many refineries are forced to shut down. But I don’t think we will see another bull run,” said Frank Schallenberger, head of commodity research at LBBW in Stuttgart. Global benchmark Brent crude futures LCOc1 were up 7 cents at $57.07 a barrel at 0848 GMT. Week on week, […]