Oil prices steady ahead of key OPEC meeting

21 Sep 2017   Prices

Oil prices steadied on Thursday, holding most of their recent gains before a meeting of oil producers that could extend production limits aimed at clearing a glut that has depressed the market for more than three years. Ministers from the Organization of the Petroleum Exporting Countries, Russia and other producers meet in Vienna on Friday and are due to consider extending output cuts that began in January. OPEC and its allies have agreed to reduce output by about 1.8 million barrels per day (bpd) until March 2018 in an attempt to empty inventories. Many analysts now expect them to extend the deal, possibly to the end of next year. “An extension of the agreement or an increase […]

Oil Prices Gain On Improving Market Signals

21 Sep 2017   Prices

Oil prices rose to a four-month high on Wednesday, boosted by optimism that production cuts have brought down global inventories as demand remains steady. Light, sweet crude for October delivery settled up 93 cents, or 1.9%, to $50.41 a barrel on the New York Mercantile Exchange, the highest close since May 24. The October contract expired on Wednesday, and the more actively traded November contract rose 79 cents, or 1.6%, to $50.69. Brent, the global benchmark, gained $1.15, or 2.1%, to $56.29. Investors have become more optimistic about the oil market’s prospects recently amid signs of tighter balance between supply and demand in the global market. “Everything is basically falling into place for the last quarter of the year,” said Peter Cardillo, chief market economist at First Standard Financial. “Today’s close signals that $55 oil is not that far away.” U.S. refiners continued to ramp up operations as the […]

Oil up 2 percent despite U.S. crude build; set for best third quarter since 2004

21 Sep 2017   Prices

Oil prices rose nearly 2 percent on Wednesday, despite a rise in U.S. crude inventories, with the market heading for its largest third-quarter gain in 13 years after the Iraqi oil minister said OPEC and its partners were considering extending or deepening output cuts. Brent crude futures rose $1.06, or 1.9 percent, to $56.20 a barrel by 12:19 p.m. EDT (1619 GMT), while U.S. West Texas Intermediate (WTI) crude futures gained 91 cents, or 1.8 percent, to $50.39. Crude prices were on course for a rise of nearly 16 percent this quarter, which would make this year’s performance the strongest for the third quarter since 2004. U.S. crude oil stockpiles jumped last week as imports and production increased, the U.S. Energy Information Administration said, as operations resumed from the impact of Hurricane Harvey which hit the Gulf Coast on Aug. 25. Crude inventories rose for […]

IEA: Price Spike Coming In 2020

21 Sep 2017   Prices

The oil market has been awash in crude for more than three years, and OPEC has struggled to accelerate the rebalancing effort, but the world could be heading for a supply crunch in a few years due to the sharp fall in industry spending. The halving of oil prices from $100 per barrel before 2014 down to just $50 today has led to a corresponding plunge in upstream investment. But even as benchmark prices seem to have stabilized over the past year, with most analysts predicting gradual and modest gains in the year ahead (depending on OPEC’s actions), there’s still no sign of a serious rebound in spending levels. The problem of a shortage of supply seems very far off today, given the swift turnaround in U.S. shale and persistently high levels of crude storage. But demand continues to rise—the IEA just upgraded its demand growth estimate for 2017 […]

OPEC Has Success at Last, But Oil Revival May Be Short-Lived

21 Sep 2017   OPEC, Prices

When OPEC and its allies gather this week, they’ll have the best evidence yet that their efforts to clear a global oil glut are succeeding. It may prove short-lived. Crude prices have rebounded to a three-month high and the world’s bloated fuel inventories are shrinking, signaling that nine months of production cuts by the alliance of the Organization of Petroleum Exporting Countries and nations including Russia are at last paying off. Yet as U.S. shale oil continues to thrive and seasonal demand wanes, the surplus that has weighed on markets for three years looks set to come back. “The strategy finally has a window of opportunity in which it can work,” said Ed Morse, head of commodities research […]

Platts plans to publish U.S. crude prices in Asia as imports rise

21 Sep 2017   Prices, USA

Oil pricing agency S&P Global Platts said on Thursday it planned to publish U.S. crude prices during the Asia market close from December after U.S. exports to the region rose. Platts’ move comes a year after rival price reporting agency Argus launched two Asia-delivered price indexes for U.S. crude as they compete to be the benchmark for oil flows on the trade route that has opened up after Washington lifted a decades-old ban on crude exports at the end of 2015. About a third of the United States’ crude exports, or more than 56 million barrels, landed in Asia in the first half of 2017, Platts said in a note on its website. Platts said it plans to […]

Oil set for strongest third quarter since 2004, Iraq hints at OPEC extension

20 Sep 2017   Prices

Oil rose on Wednesday, set for its largest third-quarter gain in 13 years, after the Iraqi oil minister said OPEC and its partners were considering extending or deepening supply cuts to erode an existing global surplus. Brent crude futures rose 29 cents to $55.43 a barrel by 0800 GMT, while U.S. West Texas Intermediate (WTI) crude futures were up 42 cents at $49.90 a barrel. The oil price is on course for a rise of 15.5 percent this quarter, which would make this year’s performance the strongest for the third quarter since 2004. “An improving macro-economic backdrop should spur oil demand growth over the next couple of quarters and if OPEC increases its adherence to production cuts, higher prices will come,” ANZ Research said in a note. “All things being equal, we still expect oil prices to test new highs (for 2017) by the end of […]

Oil Trades in Narrow Range

20 Sep 2017   Prices

Oil prices faltered Tuesday, giving up gains in earlier trading as investors weighed the possibility that OPEC will extend its production cuts again against the prospect of rising U.S. oil output at higher prices. U.S. crude futures fell 43 cents, or 0.86%, to $49.48 a barrel on the New York Mercantile Exchange, after climbing as high as $50.42 in earlier trading. Brent, the global benchmark, fell 34 cents, or 0.61%, to $55.14 a barrel on ICE Futures Europe. “We’re zigzagging in the range,” said Michael Hiley, a trader at LPS Futures. “We failed the highs from last week and are back down into the same range we’ve been in for three days.” Prices were buoyed in earlier trading by a weaker dollar and signals from Iraq’s oil minister that the country could be open to extending OPEC’s production-cut agreement through next year. But analysts and traders say that $50 […]

Oil edges off recent high ahead U.S. stock data, OPEC meet

20 Sep 2017   Prices

Oil prices edged lower on Tuesday, retreating from near-five-month highs in advance of data expected to show a build in U.S. crude inventories as imports resume and refineries were still restarting after recent storm activity. The market, however, remained buoyant ahead of Friday’s meeting between the Organization of the Petroleum Exporting Countries with non-OPEC producers to discuss progress of their 1.8-million barrel per day supply cut deal. OPEC’s second-biggest producer Iraq said that the group was discussing several options for its supply pact, including an extension beyond March and a further output cut. Nigeria and Libya will send representatives to the meeting despite being exempt from the current deal, two OPEC sources said. Rising output from both countries has kept a lid on price gains, prompting suggestions that they could be included in the deal. Brent crude futures LCOc1 were down 45 cents at $55.03 […]

Have Oil Markets Reached A Turning Point?

20 Sep 2017   Prices

Big Oil has been wheelin’ and dealin’ across the globe as geopolitical risks mount, and OPEC delivered a sigh of relief to crude markets with a signal that has brought the bulls out to play. (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) • The EIA projects total world energy consumption will rise by 28 percent between 2015 and 2040, with most growth coming from developing countries. • Non-OECD Asia accounts for nearly two-thirds of the growth, and that category is dominated by China and India. • All major energy sources will see demand rise except for coal. Renewables post the strongest growth rate at 2.3 percent per year. Market Movers • Royal Dutch Shell (NYSE: RDS.A) said it began restarting its Deer Park refinery in Texas on Sunday, a facility that has a capacity of 325,000 bpd. ExxonMobil (NYSE: XOM) could restart most of […]

Nigeria: Crude Won’t Be an Income Resource in 10 Years – Kachikwu

20 Sep 2017   Prices

The Minister of State for Petroleum Resources, Ibe Kachikwu, says the world is moving away from oil, hence, it will no longer be an income resource in 10 years’ time. Mr. Kachikwu said this in Abuja on Thursday while answering questions on “His Outlook for the Commodity in 2018.” According to him, 2018 looks like a better year for crude in terms of pricing but countries are focusing on alternative energy. He said, “Everything all added up together is showing us that towards the last quarter of 2018 we expect a better market. Does that better market translate to your 100 dollars price (per barrel)? “Never! I don’t see it, frankly I don’t see it. It’s going to take a major calamity. Largely because on the back of all these, countries are racing away from oil. “If Europe is saying in five years time, ‘we are going to exit […]

U.S. natural gas prices rise as winter stocks look tight

U.S. natural gas stocks look somewhat tight after low prices this summer worked off the excess stocks that built up in the first half of the year. Current stocks are in line with the five-year seasonal average but that may not be enough given the increase in exports and the number of additional combined-cycle power plants that have become operational in 2017. The last two winters have been exceptionally mild; if this winter proves colder, which is likely simply on the basis of probabilities, inventories could come under pressure. To ration power burn this winter the price of gas for delivery at Henry Hub in January 2018 has already risen by 29 cents per million British thermal units or […]

Hurricane-related spike in gas prices ebbing

20 Sep 2017   Prices

The retail price for gasoline is coming off seasonal highs as the U.S. refining sector returns to normal after Hurricanes Harvey and Irma, AAA reports.  The motor club lists a national average price for a gallon of regular unleaded gasoline at the retail level of $2.62, down about 2 percent from last week and the lowest in more than two weeks. Retail prices spiked in early September after Hurricane Harvey forced more than a dozen refineries, including one of the largest in the country, to close down. Demand pressures later increasedwhen Hurricane Irma hit Florida, which upended the market because the state has no refineries of its own.

Oil steady on tighter Middle East supplies, as rising U.S. output weighs

19 Sep 2017   Prices

Oil markets held largely steady on Tuesday, even as OPEC producers Saudi Arabia and Iraq pointed to a reduction in supplies in line with efforts to tighten the market and prop up prices. Prices were capped by rising U.S. shale output and fears that another strong hurricane hitting the Caribbean could knock out refineries and disrupt shipping to and from the United States. Brent crude futures LCOc1, the international benchmark for oil prices, were at $55.50 per barrel at 0653 GMT, up 2 cents from their last close. U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $50.01 per barrel, up 10 cents, or 0.2 percent, from their last settlement. Iraq’s oil minister Jabbar al-Luaibi said on Tuesday that his country’s crude oil production was currently at 4.32 million barrels per day (bpd). That compares to almost 4.5 million bpd in May and June. His […]

Oil Ends Mixed as Investors Pause After Last Week’s Rally

19 Sep 2017   Prices

Oil prices were mixed Monday, with the U.S. benchmark edging up to a seven-week high and the global benchmark falling, as investors paused after last week’s rally. U.S. crude futures for October delivery settled up 2 cents, or 0.04%, at $49.91 a barrel on the New York Mercantile Exchange—their highest settlement since July 31. The more actively traded November contract fell 9 cents to $50.35 a barrel. Brent, the global benchmark, snapped a five session winning streak, falling 14 cents, or 0.25% to $55.48 a barrel. Prices were buoyed last week by data showing tightening supplies. But analysts said investors will need more convincing for the U.S. benchmark to push above the $50 mark and stay there. “I think that we need to see a drumbeat of positive information to drive the market higher,” said Gene McGillian, research manager at Tradition Energy. Hurricane Harvey, which shuttered refineries in Texas, […]

Crude oil prices brush up against apparent ceiling

19 Sep 2017   Prices

Oil prices lose momentum after running their course following hurricanes that upended dynamics in the U.S. energy sector. File photo by Monika Graff/UPI Sept. 18 (UPI) — Emerging analyst sentiment that the upside potential for the recent rally in crude oil prices is limited may be contributing to the drop witnessed early Monday. The price for Brent crude oil, the global benchmark, is up about 4 percent since the end of August, when Hurricane Harvey struck the southern coast of Texas and hit the large concentration of refiners in the region. Most of the ports in Florida that were closed by Hurricane Irma have since reopened, easing supply-side strains for a state that has no refineries of its own for gasoline supplies. As of 11 a.m. EDT, Sunday, there were three refineries still closed because of Hurricane Harvey, representing about 2 percent of total U.S. refining capacity. The lingering […]

Global Oil Demand is Surging But That’s Still Not Enough to Fix the Oil Market

19 Sep 2017   Prices

The oil industry just can’t seem to snap out of its doldrums this year. Crude remains stubbornly low, which has stalled the industry’s attempts at a recovery. However, while weaker prices have been bad for oil producers, they’ve been great for consumers because it has kept prices for refined products like gasoline down, which is fueling robust demand growth this year. That said, this accelerating demand hasn’t been enough to propel the oil market, due in part because shale drillers have unleashed a gusher of new production. Drilling down into the latest numbers That give and take market was on display this week when the International Energy Agency (IEA) released its monthly commentary. One of the highlights of the report was recent data showing accelerated demand growth. Last quarter, for example, demand grew by 2.3 million barrels per day (Bpd), which is up 2.4% year over year thanks to […]

U.S. oil prices hit $50 on rising refinery demand, falling rig count

18 Sep 2017   Prices

U.S. crude oil prices rose above $50 per barrel on Monday and were near last week’s multi-month highs as the number of U.S. rigs drilling for new production fell and refineries continued to restart after getting knocked out by Hurricane Harvey. U.S. West Texas Intermediate (WTI) crude futures CLc1 were trading up 10 cents, or 0.2 percent, at $49.99 by 0653 GMT, after earlier nudging above the $50 per barrel mark towards the more than three-month high of $50.50 reached last Thursday. Brent crude futures LCOc1, the benchmark for oil prices outside the United States, were at $55.66 a barrel, up 4 cents, and also not far from the near five-month high of $55.99 touched on Thursday. “Demand forecasts […]

Sub-$50 Oil Could Kill Shale

18 Sep 2017   Prices, Shale Oil

Oil prices are at their highest levels in months on the back of strong demand and some key supply outages around the world. But the next price movements are unclear, as is the response from U.S. shale. As the International Energy Agency (IEA) noted last week, global oil supply fell in August by about 720,000 bpd—a large contraction after months of sizable gains. Much of that is probably temporary, particularly in the U.S. and Libya, two countries that saw unexpected outages. But the demand story is arguably more important: the IEA upgraded its demand forecast for the year, as consumption has surprised on the upside. WTI is now back in the vicinity of $50 per barrel, while Brent topped $55 per barrel in recent days—its highest level since the beginning of 2017. But that doesn’t mean that the price gains will continue. There are a few reasons to be […]

Oil Wavers on Mixed Supply Signals

16 Sep 2017   Prices

Oil prices ended unchanged Friday, as investors grappled with mixed signals for global supply and demand. Light, sweet crude for October delivery settled flat at $49.89 a barrel on the New York Mercantile Exchange, after fluctuating between gains and losses throughout the session. Brent, the global benchmark, rose 15 cents, or 0.3%, to $55.62 a barrel. Oil prices were mainly neutral because of profit-taking and consolidation in the market following the strong gains of the past weeks, said Giovanni Staunovo, a commodity analyst at UBS Wealth Management. But overall, “sentiment has completely changed” to the upside over the past month, Mr. Staunovo said. “Demand is now stronger than supply,” he added. Prices have been rising this week on the back of bullish data for demand and signs of shrinking global inventories, sending Brent to its highest level since mid-April. The International Energy Agency on Wednesday said global oil supplies […]

Soaring Demand Drives Oil Market Recovery

16 Sep 2017   Prices

WTI rose to its highest level in more than a month this week, hovering just around $50 per barrel. Brent surpassed $55 per barrel on Thursday, the highest level since the beginning of the year. Strong demand combined with easing fears about hurricane disruptions in the U.S. has pushed oil up this past week. Plus, another missile launch from North Korea has kept the markets on edge. IEA: supply down, demand up. The IEA published an encouraging Oil Market Report this week, noting that global oil supply contracted for the first time in months while demand remains very robust. The Paris-based energy agency said that oil demand growth could hit 1.6 mb/d this year, an upward revision from the 1.5 mb/d […]

Is An Oil Price Spike Imminent?

16 Sep 2017   Prices

As the U.S. market begins its recovery from the double whammy served up by hurricanes Harvey and Irma, my earlier projections of where crude oil prices are headed have come true. Just a little quicker than anticipated. As I am writing this, WTI (West Texas Intermediate, the benchmark crude rate for futures contracts written in New York) has moved above $50 a barrel for the first time in over five weeks. In fact, it’s up 6.1 percent in barely three days. Meanwhile, Brent (the equivalent and more globally used benchmark set daily in London) is approaching $56. Two months ago, I said WTI would be at $52-$54 and Brent at $55-$57 by the end of September. Currently, WTI is within $2 a barrel of its predicted range and Brent has already reached it. What’s interesting is the fact that this rise is taking place while much of the Gulf […]

U.N. report links rise in hunger to climate change

16 Sep 2017   Prices

Global hunger is on the rise, affecting 11 percent of the world’s population, in part because of climate change, an annual report from the United Nations found. An annual State of Food Security report prepared jointly for the first time with help from the World Health Organization and UNICEF found that, after declining for more than a decade, the number of people affected by hunger was on the rise at 815 million last year. “The increase — 38 million more people than the previous year — is largely due to the proliferation of violent conflicts and climate-related shocks,” the report read. For Yemen, still reeling from the civil conflict that grew out of the Arab Spring movements, more than 14.1 million people […]

Hurricanes Harvey and Irma lead to higher gasoline prices in Florida

16 Sep 2017   Prices, USA

Gasoline and Diesel Fuel Update Note: Prices for Miami, Florida, are unavailable for September 11, 2017 because of insufficient survey responses. Hurricane Irma significantly disrupted gasoline markets in Florida, first by prompting increased demand and then by disrupting the supply chain needed to deliver the fuel. The evacuation of people in anticipation of Hurricane Irma led to higher demand for transportation fuels and logistical challenges in supplying fuel to Florida that began before the hurricane made landfall on September 10, 2017. There are no petroleum refineries in Florida or major pipelines connecting Florida to supply centers along the U.S. Gulf Coast or from neighboring states, so Florida is almost entirely supplied by marine movements of petroleum products from domestic and international sources. Because Florida is largely dependent on marine movements of gasoline from the U.S. Gulf Coast, any threat of or actual disruption to […]

Oil prices set for weekly gains as demand outlook brightens

15 Sep 2017   Prices

Oil prices were lower on Friday but on course for weekly gains, the third in a row in the case of Brent, as the clean-up after hurricanes in the United States gathered pace and the outlook for demand took on a firmer tone. U.S. West Texas Intermediate crude CLc1 was down 17 cents, or 0.4 percent, at $49.72 a barrel at 0620 GMT. It briefly broke above $50 on Thursday, hitting a four-month high, and finished 1.2 percent higher at $49.89, its highest close since July 31. Brent crude LCOc1 futures were down 23 cents, or 0.4 percent, at $55.24 a barrel. They gained 0.6 percent to settle at $55.47 the previous session, the […]

WTI Breaks $50 As Bullish Sentiment Builds

15 Sep 2017   Prices

Buoyed by strong global oil demand growth and reduced OPEC supply, U.S. benchmark WTI jumped above the psychologically important US$50 threshold on Thursday, topping that level for the first time in five weeks and aiming for the highest closing since the end of May. At 12:30pm EST today, WTI traded up 1.74 percent at US$50.16, while Brent was up 1.05 percent at US$55.74. Brent is now above the US$55 psychological level for the first time since May 25, when OPEC decided to extend the production cuts as-is in a move that largely disappointed a market that was expecting a firmer “whatever it takes” action. Today is the fourth consecutive day of gains for oil prices that have been enjoying a good week, in which OPEC reported lower production for August, followed by the International Energy Agency’s (IEA) assessment for strong demand growth. On Tuesday, OPEC’s Monthly Oil Market Report […]

Oil jumps to five-month high on forecasts that glut will recede

15 Sep 2017   Prices

Oil prices rose on Thursday, with Brent briefly touching a five-month high, a day after the International Energy Agency (IEA) forecast the market would continue to tighten as fuel demand increased. Brent crude LCOc1 futures were up 56 cents, or 1 percent, at $55.72 a barrel by 12:16 p.m. EDT (1616 GMT). The session high for the global benchmark was $55.99, its highest since April 13. The contract remained in technically overbought territory for a second day in a row. U.S. West Texas Intermediate CLc1, meanwhile, was up 84 cents, or 1.7 percent, at $50.14 per barrel, its first time over $50 since August. WTI touched $50.50, its highest since May 25, and surpassed its 200-day moving average. […]

U.S. oil hits $50/barrel, sterling jumps; Dow at new high

15 Sep 2017   Prices

Rising demand pushed U.S. crude above $50 a barrel on Thursday, while sterling jumped after the Bank of England said it was likely to raise interest rates for the first time in a decade in coming months. Energy shares rose on Wall Street and in Europe, but stocks were mixed worldwide. A gauge of global equity indexes fell slightly, as did the S&P 500 in the United States, while major European indexes gained and the Dow set a new closing high. West Texas Intermediate, the U.S. crude benchmark, rose more than 2 percent before paring gains after a forecast by the International Energy Agency on Wednesday and dollar weakness prompted bullish sentiment in the oil market. “Anticipation is growing that this could quicken the pace of oil market rebalancing,” said Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics in London. U.S. crude […]

Global use of liquid fuels to grow by nearly a fifth by 2040: EIA

15 Sep 2017   Prices

Global use of petroleum and other liquid fuels will grow by nearly a fifth by 2040, driven by the transportation and industrial sectors, the U.S. government said on Thursday. Consumption is set to grow from 95 million barrels per day in 2015 to 104 million bpd in 2030 and 113 million bpd in 2040, according to the U.S. Energy Information Administration’s international energy outlook for 2017. That reference case would mean a 19 percent increase between 2015 to 2040. Countries outside of the Organization for Economic Cooperation and Development account for most of the increase, with demand rising by 1.3 percent per year, compared with a slight decrease for those in the group. OPEC countries will maintain or increase their combined market share of crude and lease condensate production, the EIA added. Meanwhile, renewables will remain the world’s fastest-growing energy source, with consumption increasing by […]

Oil holds gains, buoyed by stronger demand

14 Sep 2017   Prices

Oil prices steadied on Thursday, holding on to recent gains after forecasts for stronger oil demand by the International Energy Agency (IEA). Benchmark Brent crude LCOc1 was up 20 cents at $55.36 a barrel by 0930 GMT, after rising 89 cents or 1.6 percent on Wednesday. U.S. light crude CLc1 was up 25 cents at $49.55 after gaining 2.2 percent in the previous session. Brent has now climbed more than $10 a barrel over the last three months and is close to where it was at the beginning of the year, trading between about $55 and $57 a barrel. “By breaking $55.00 a barrel, Brent is moving back to the price range of January/February,” said Olivier Jakob, analyst at […]

Oil rises as IEA forecast overshadows U.S. crude build

14 Sep 2017   Prices

Crude oil prices rose on Wednesday after the International Energy Agency (IEA) said a global surplus of crude was starting to shrink, even though U.S. data showed another big increase in domestic inventories due to Hurricane Harvey. U.S. gasoline prices fell despite a record drawdown in fuel inventories. Analysts expect supply to increase as refineries return online after Harvey shut nearly a quarter of U.S. capacity. Demand is expected to slip due to the effects of Hurricane Irma on high-consuming states of Florida and Georgia. U.S. Energy Information Administration (EIA) data showed a build of 5.9 million barrels of crude last week, exceeding expectations. [EIA/S] Much of that was due to a near 10 million-barrel increase in stocks in the U.S. […]

Oil edges up as IEA sees higher oil demand, shrinking inventories

13 Sep 2017   Prices

Oil prices ticked higher on Wednesday after the International Energy Agency said the global oil surplus was starting to shrink due to robust global demand and an output drop from OPEC and other producers. U.S. West Texas Intermediate (WTI) CLc1 was up 11 cents, or 0.2 percent, at $48.34 a barrel at 0944 GMT after dropping earlier in the day. International benchmark Brent crude LCOc1 was up 13 cents, or 0.2 percent, at $54.40 a barrel. “Based on recent bets made by investors, expectations are that markets are tightening and that prices will rise, albeit very modestly,” the IEA, which coordinates energy policies in industrialised nations, said in its monthly report. “Demand growth continues to be stronger than expected, particularly in Europe […]

Oil Prices Rise After API Reports Largest Gasoline Draw On Record

13 Sep 2017   Prices

The American Petroleum Institute (API) reported a build of 6.181 million barrels in United States crude oil inventories, compared to analyst expectations that inventories would build by 10.1 million barrels for the week ending September 8 as many refineries in the Gulf Coast remain offline and demand in Florida wanes in the wake of the most recent hurricane. Gasoline inventories fell more than anticipated—by 7.896 million barrels for the week ending September 8, against an expected draw of 4.0 million barrels. Crude oil prices rose on Tuesday as OPEC reported lowered production in August—down to 32.755 million barrels daily per month in August, down from 32.834 million bpd in July, according to OPEC’s Monthly Oil Market Report published on Tuesday. The production decreases were more due to Libya’s unrest that saw a 112,300-barrel decline in August’s production, rather than a conscious effort to adhere to the cartel’s production cut […]

Mind the gap: Brent and WTI point in opposite directions – Kemp

13 Sep 2017   Prices

Commuters and tourists are regularly warned to “mind the gap” between train doors and the platform at certain stations on the London Underground. But the warning could just as easily apply to traders in Brent and WTI after the two crude benchmarks diverged sharply over the last month. Commodity markets abhor a gap and will find a way to arbitrage it away. Such a large gap between forward Brent and WTI prices is unlikely to persist for every long. Either Brent prices and calendar spreads must weaken, WTI prices and spreads must strengthen, or some combination of both. In the short term, Hurricanes Harvey and Irma have extensively disrupted oil refineries, distribution systems and motorists along the U.S. Gulf Coast. The result has been to cut […]

Oil up on OPEC output decline; U.S. refinery restarts

13 Sep 2017   Prices

Oil prices rose on Tuesday after OPEC forecast higher demand in 2018 and Russia and Venezuela confirmed their commitment to a production-cutting deal to reduce the global crude glut. In its monthly report, the Organization of the Petroleum Exporting Countries also said the two hurricanes that hit the United States in recent weeks would have a “negligible” impact on demand. About 6.1 million customers were without power following Hurricane Irma, down from a peak over 7.4 million late Monday, according to local utilities. The market was assessing Irma’s effect on demand, even as refinery restarts in the wake of Hurricane Harvey boosted expectations for crude oil consumption. The largest refinery in the United States, in Port Arthur Texas, was running at reduced rates, sources told Reuters. Brent crude LCOc1 settled up 43 cents or 0.8 percent to $54.27 per barrel. Its session low was $53.42. […]

Despite storms, U.S. gas prices more or less steady

13 Sep 2017   Prices

While regional volatility is extreme, gas prices at the national level are more or less steady despite the impact of severe U.S. weather, market analysis found. Motor club AAA reports a national average retail price for a gallon of regular unleaded gasoline at $2.66 for Tuesday, a fraction of a percent lower than Monday, but about 2 cents higher than last week. All things considered, AAA said it appears the market situation is leveling out as the U.S energy sector adjusts to the impacts from Hurricanes Harvey and Irma. Harvey made landfall in southern Texas in late August and idled parts of the U.S. energy sector for weeks. Some refineries in the area are still out of service and […]

Oil prices steady as traders assess U.S. hurricane impact

12 Sep 2017   Prices

Oil prices were steady on Tuesday, as traders weighed up the dampening effect on demand of Hurricane Irma versus refinery restarts in the wake of Hurricane Harvey that should lead to more crude oil processing. International benchmark Brent crude LCOc1 was down 4 cents, or 0.07 percent, at $53.80 per barrel by 0655 GMT from the previous close. U.S. West Texas Intermediate (WTI) crude CLc1 was down 3 cents, or 0.06 percent, at $48.04 a barrel. U.S. refineries, including the largest U.S. refinery Motiva Enterprises [MOTIV.UL], have started to come back online. Motiva restarted production on Monday after being shut for about two weeks as Hurricane Harvey ripped through the U.S. Gulf coast. On Harvey’s heels, Hurricane Irma slammed into Florida on Sunday, leaving more than 7.4 million homes and businesses without power, but has since been downgraded to a tropical storm. U.S. crude inventories likely […]

Oil Edges Higher as Hurricane Concerns Ease

12 Sep 2017   Prices

Oil prices settled higher on Monday, as refineries planned restarts and Saudi Arabia debated the possibility of extending a deal to curb output among major producers. Light, sweet crude for October delivery settled up 59 cents, or 1.2%, at $48.07 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 6 cents, or 0.1%, to $53.84 a barrel. Hurricanes Harvey and Irma have spurred volatile trading in energy markets in the past few weeks, as traders assess how the damage across major cities will impact demand for oil. When Harvey made landfall at the end of August, the wind and rain knocked out more than 20% of the country’s refining capacity. However, prices began to recover as several refiners affected by the storm announced plans to restart operations. “Some pretty material chunks have started coming back,” said John Saucer, vice president of research and analysis at […]

Forecast for major oil benchmarks lowered

12 Sep 2017   Prices

Because of the conflicting forces at play for crude oil prices, the trend is sluggish and the forecast for major benchmarks is lower, RBC Capital Markets said. The price for Brent crude oil is, at about $53.50 per barrel early Monday, about $6 per barrel higher than this time last year, but still about $40 less than it was three years ago. A plan implemented by the Organization of Petroleum Exporting Countries in January to erase the surplus on the five-year average for global crude oil inventories through managed production declines helped put a floor under crude oil prices, but it’s a shaky one. “Signs of improving market fundamentals have become increasingly […]

Oil benchmarks pulled in two different directions by hurricanes

12 Sep 2017   Prices

The mixed impact from hurricanes in the United States left the U.S. and global benchmarks for crude oil moving in opposite directions early Monday. Irma was downgraded to a tropical storm early Monday by the U.S. National Hurricane Center. Making landfall as a hurricane, it left millions of Florida residents without power and many of the regional airports were closed Monday because of heavy flooding. Though weakening as it makes its way northwest, the NHC forecast said Irma has a “very large wind field,” with hurricane-force winds extending outward as far as 60 miles. Southern Gulf Coast states, meanwhile, continue to pick up the pieces from Harvey, which struck a central part of the U.S. energy […]

Oil mixed amidst Irma demand fears, Saudi cut extension talks

12 Sep 2017   Prices

Oil prices were mixed on Monday, with Hurricane Irma’s continued pounding Florida raising demand fears, while U.S. refinery restarts and Saudi cut extension talks gave upward pressure. Brent crude oil futures were down 13 cents, or 0.2 percent, at $53.65 a barrel at 12:17 p.m. (1617 GMT) while U.S. West Texas Intermediate crude rose by 59 cents, or over 1 percent, to $48.07. Hurricane Irma knocked out power to nearly 5.8 million Florida homes and businesses on Sunday after millions were told to evacuate ahead of the storm. Irma hit Florida on Sunday morning as a dangerous Category 4 hurricane. It gradually lost strength and weakened to a tropical storm by Monday morning as it headed towards Georgia. Harvey struck the U.S. oil hub of Texas two weeks ago, knocking out a quarter of the nation’s refineries. Now many refineries are restarting, including the largest […]

Goldman: Harvey, Irma Cause 900,000 Bpd Drop In Demand

12 Sep 2017   Prices, USA

In the wake of the hurricanes Harvey and Irma, oil demand is expected to drop by some 900,000 bpd this month, Goldman Sachs said on Monday. “Irma will have a negative impact on oil demand but not on oil production or processing,” Goldman analysts said in a note, as carried by Reuters. “Harvey’s negative impact on demand will remain larger, however, given the large concentration of energy-intensive petrochemical activity in its path,” the bank said. According to Goldman’s estimates, the combined effects of production disruption and demand drop from hurricanes Harvey and Irma alone will lift global oil inventories by 600,000 bpd in September. For next month, estimates are that the hurricanes will lower oil demand by some 300,000 bpd, according to Goldman Sachs. Gasoline demand will suffer the most from the storms, adding to the expected 150,000-bpd drop this month due to seasonal factors, Goldman said. Harvey hit […]

Hurricanes Add to Problems for Oil Bulls

12 Sep 2017   Prices

The havoc wreaked by major summer storms stands to deepen a global crude-supply glut that has depressed oil prices for more than three years. By paralyzing giant swaths of the southern U.S. ranging from Texas to South Carolina for days at a time, hurricanes Harvey and Irma will dent energy demand from consumers and refiners even as drilling continues and crude in storage is abundant. The effect, analysts say, will be to push millions more barrels of crude oil into oil caverns and floating tankers at a time when storage is already in heavy use. That will undermine efforts by producers such as the Organization of the Petroleum Exporting Countries to “rebalance” the market by cutting output. U.S. crude prices haven’t exceeded $50 for more than a trading day since May, and […]

Russia’s Rosneft Expects $40 Oil In 2018

12 Sep 2017   Prices, Russia

Russia’s largest oil producer, Rosneft, expects oil prices to average between $40 and $43 per barrel next year, and is preparing for such prices, Rosneft’s CEO Igor Sechin told TV channel Rossiya 24 in an interview broadcast on Monday. Last week, Sechin was quoted as saying that the recent rise in oil prices was due to a weak dollar , instead of efforts by OPEC to combat the global crude supply glut. Sechin’s oil price forecast is basically in line with Russia’s economic estimates from earlier this year. At the beginning of June, Russia’s Economy Minister Maxim Oreshkin said that Russia was “actually ready to live forever at oil prices $40 or below,” as oil at US$40 is the current underlying key assumption of Russia’s economic policies. A couple of weeks later, Bank of Russia Governor Elvira Nabiullina said that Russia’s central bank was keeping its oil price forecast […]

Oil weakens on fears Irma could dent U.S. demand

11 Sep 2017   Prices

Oil prices edged lower on Monday on concerns that Hurricane Irma’s pounding of heavily populated areas of Florida could dent oil demand in the world’s top oil consuming nation. Losses were capped by weekend talks between Saudi Arabia’s oil minister and counterparts over a possible extension to a pact to cut global oil supplies beyond next March. Brent crude oil futures for November delivery LCOc1 were up 5 cents at $53.73 a barrel while benchmark U.S. West Texas Intermediate crude CLc1 advanced by 32 cents to $47.80. Hurricane Irma knocked out power to nearly four million Florida homes and businesses on Sunday after millions were told to evacuate ahead of the storm. “We believe that Irma will have a negative impact on oil demand but not on oil production or processing,” Goldman Sachs analysts said in a note. Irma is forecast to weaken to a tropical […]

Oil Is Unlikely To Return To $80

11 Sep 2017   Prices

Gail Tverberg is a writer and speaker about energy issues. She is especially known for her work with financial issues associated with peak oil. Prior… (Click to enlarge) Figure 1. From Wikipedia: The price P of a product is determined by a balance between production at each price (supply S) and the desires of those with purchasing power at each price (demand D). The diagram shows a positive shift in demand from D1 to D2, resulting in an increase in price (P) and quantity sold (Q) of the product. Unfortunately, this model is woefully inadequate. It sort of works, until it doesn’t. If there is too little of a product, higher prices and substitutions are supposed to fix the problem. If there is too much, prices are supposed to fall, causing the higher-priced producers to drop out of the system. This model doesn’t work with oil. If prices drop, […]

Can WTI Break Out Of The High $40s?

11 Sep 2017   Prices

Comparative inventories have fallen dramatically since mid-February yet oil prices languish in the mid-to-upper $40 range. But what will it take for oil prices to break out of the $45 to $55 range? WTI prices increased from below $45 to almost $55 per barrel based on expectation that OPEC cuts would quickly balance international oil markets and result in near-term higher oil prices. While that expectation lasted, prices remained near $55 from late November 2016 until early March 2017 (Figure 1). (Click to enlarge) Figure 1. WTI Prices Have Been Largely Range-Bounded Between $45 and $55/Barrel Since The OPEC-NOPEC Production Cuts. Source: EIA, Bloomberg and Labyrinth Consulting Services, Inc. Prices adjusted downward four times between March and August as it became clear that output cuts were not enough to produce a meaningful price recovery. Since mid-August, markets have rallied back to the ~$49 per barrel price average since November. […]

Bearish Backlash Drives Oil Prices Down

9 Sep 2017   Prices

Oil prices collapsed again on Friday as China aims to reduce the capacity of its teapot refineries and Hurricane Irma zeros in on Florida. This dramatic drop in oil prices has ended several days of strong gains and created the largest spread between WTI and Brent in two years. Harvey recovery continues . More refineries are trickling online. Crude is getting loaded on tankers in the ports of Corpus Christi for export. According to IHS Markit, Galveston Bay is operational, and the Houston shipping channel is mostly open. Three refineries in Lake Charles are finally receiving crude oil. Railroads are mostly back up and running. IHS Markit says that 8 of the 20 refineries impacted by Harvey are running at “normal” rates, while all […]

Oil Prices Slip Amid Falling U.S. Rig Count

9 Sep 2017   Prices

The number of active oil and gas rigs in the United States rose this week by 1 rig. Baker Hughes Rig Count last week was largely unchanged as well, with data for 47 counties South Texas largely unavailable last week due to the Hurricane, according to BH. The total oil and gas rig count in the United States, two weeks post-Harvey, now stands at 944 rigs, up 436 rigs from the year prior, with the number of oil rigs in the United States decreasing by 3 this week and the number of gas rigs increasing by 4. Oil rigs in the United States now number 756—342 rigs above this time last year. The number of rigs fell in Arkoma Woodford (1), DJ-Niobrara (1), Fayetteville (1), and Granite Wash (1). Permian, Haynesville, and Cana Woodford, and Marcellus all gained two rigs. Prices fell on Friday despite promises of decreased exports […]

Oil Market Tighter After Hurricane Harvey

9 Sep 2017   Prices

– Crude oil flat price, spreads, refining margins and product spreads all mean-reverted this week as PADD III refineries came back on line to the tune of roughly 2m bpd and the remaining outages developed a more clear return time frame. Refining margins and product spreads still remain elevated but we were struck by the snap-back in crude oil time spreads and flat price while 2-month WTI volatility languished near 26%-29%. In our view, the quick recovery following such traumatic fundamental stress is great evidence of the strength of the sideways oil market narrative. Trading flows of crude oil and products were rerouted from the North Sea to LatAm to Singapore, massive refiner and production outages occurred and WTI bounced back to its pre-Harvey level at $48 in just three days. – EIA data released yesterday has given us a picture of how harshly Harvey impacted crude oil markets […]