Prices

Oil edges up, but U.S. drilling drags on prices

20 Feb 2017   Prices

Oil prices rose on Monday, but gains were minimal as investors gauged whether an increase in U.S. drilling and record stockpiles would undermine efforts by producers to cut output and bring the market into balance. Brent futures LCOc1 were up 1 cent at $55.82 a barrel at 0050 GMT, while U.S. West Texas Intermediate crude CLc1 rose 3 cents to $53.43 a barrel. U.S. energy companies added oil rigs for a fifth consecutive week, Baker Hughes said on Friday, extending a nine-month recovery with producers encouraged by higher crude prices, which have traded mostly over $50 a barrel since late November. [RIG/U] The Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, agreed last year to cut output almost 1.8 million barrels per day […]

Oil Hovers in Tight Trading Range Amid Global Supply Tug-of-War

20 Feb 2017   Prices

Oil held above $53 a barrel, after spending last week in the smallest trading range in 13 years, as investors weighed rising U.S. drilling activity against OPEC production cuts. Futures rose 0.3 percent in New York after fluctuating in the narrowest range since January 2004. U.S. drillers boosted the rig count to the highest since October 2015, Baker Hughes Inc. said on Friday. Meanwhile, hedge funds raised net-long positions on West Texas Intermediate to a record, according to Commodity Futures Trading Commission data. Oil has held above $50 a barrel since the Organization of Petroleum Exporting Countries and 11 other nations started trimming supply on Jan. 1 to ease a global glut. While Goldman Sachs Group Inc. predicts the market will shift into deficit during the first half of this year, U.S. crude stockpiles have increased the past six weeks to the highest level in more than three decades. […]

Oil Slips as U.S. Crude Stocks Rise

18 Feb 2017   Prices

Crude futures eased on Friday, caught between larger-than-expected growth in U.S. crude stocks and reports that the Organization of the Petroleum Exporting Countries could consider extending its production cuts beyond the six-month deal. Brent crude, the global oil benchmark, fell 0.4% to $55.40 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.3% at…

Oil firms as OPEC floats extended output cut; markets still bloated

18 Feb 2017   Prices

Oil prices edged up on Friday, lifted by a report that producer club OPEC could extend an output cut aimed at reining in a global fuel supply overhang. Brent crude futures were trading at $55.76 per barrel at 0311 GMT (10:21 p.m. ET on Thursday), up 11 cents from their last close. U.S. West Texas Intermediate (WTI) crude futures, were up 10 cents at $53.46 per barrel. The Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia plan to cut output by almost 1.8 million barrels per day (bpd) during the first half of 2017, and estimates suggest compliance by OPEC is around 90 percent. The cuts are aimed at curbing oversupply that has dogged markets since 2014. To help rebalance the market, OPEC sources told […]

Something Has Got To Give In Oil Markets

18 Feb 2017   Prices

Oil wrestled with positive fundamental expectations and bearish present circumstances this week to remain glued to the $53 mark. In the present, stress of record high crude oil and gasoline inventories in the US resulted in a 2 cpg drop in the prompt 1-month gasoline spread. Meanwhile positive fundamental expectations were revealed in the steady climb of the Brent June/July spread which yielded just 14 cents contango suggesting that physical traders see massive inventory draws in the middle of 2017. In flat price the result of the tug of war between present bearish circumstances and positive expectations has been an extraordinarily sideways market near the $53 mark. Year to date WTI has managed a range of just $4.53. Over the last twenty trading days WTI has managed a range of just $3.12- the last time WTI had a 20-day range of $3.12 or less was in July of […]

Only Crisis Or Cuts Will Move Oil Markets

18 Feb 2017   Prices

Despite hints from OPEC that the cartel would be extending its production cut deal, oil prices fell slightly this week. Oil continues to trade within a range with volatility falling to almost a three year low. (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) Friday, February 17, 2017 Oil prices fell slightly this week as more signs emerged that the market is still oversupplied. OPEC officials said that they were considering extending the production cut deal for another six months, a move that could be interpreted as bullish in the sense that they will keep oil off of the market for longer. However, it failed to inspire confidence – an extension would come because the market is still woefully oversupplied. Oil prices reacted in a way that has become a familiar pattern in recent weeks – moving only slightly […]

Oil Slips as U.S. Crude Stocks Rise

17 Feb 2017   Prices

Crude futures eased on Friday, caught between larger-than-expected growth in U.S. crude stocks and reports that the Organization of the Petroleum Exporting Countries could consider extending its production cuts beyond the six-month deal. Brent crude, the global oil benchmark, fell 0.4% to $55.40 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.3% at…

Record High Oil Inventories Crush Hopes For $70 Oil

17 Feb 2017   Prices

Another week brings yet more signs that the highly-anticipated oil market “balance” will not occur in the immediate future. Heading into 2017, there was a broad consensus that global oil production would fall below demand in the first half of the year, a deficit that would help bring down inventories and lead to relative balance between supply and demand. Mid-2017 seemed to be the timeframe that everyone was looking at for this development to occur. But there are growing signs that the oil market won’t reach balance by then, and perhaps not this year at all. “We don’t really see a real balancing of the market coming until much much later,” Richard Gorry of JBC Energy Asia told CNBC in an interview. “Right now the oil market is oversupplied by about 500,000 barrels per day in the first quarter. So to see inventories continue to go up is absolutely […]

Oil Gains on Possible Extension to Production Cuts

17 Feb 2017   Prices

U.S. oil prices edged higher Thursday as growing U.S. inventories were offset by reports that the Organization of the Petroleum Exporting Countries was prepared to consider extending supply cuts. Light, sweet crude for March delivery settled up 25 cents, or 0.5%, at $53.36 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, lost 10 cents, or 0.2%, to $55.65 a barrel on ICE Futures Europe. On Thursday,…

Oil prices steady on OPEC cuts, but record U.S. fuel stocks weigh

17 Feb 2017   Prices

Oil prices held steady on Thursday, supported by ongoing supply cuts led by producer group OPEC, although rising fuel inventories and crude production in the United States weighed on sentiment. Brent crude futures were trading at $55.73 per barrel at 0209 GMT (9:09 p.m. ET on Wednesday), down just 2 cents from their last close. U.S. West Texas Intermediate (WTI) crude futures, were down 4 cents at $53.07 per barrel. The Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia have agreed to cut output by almost 1.8 million barrels per day (bpd) during the first half of 2017, and estimates suggest compliance by OPEC is around 90 percent. The production cuts are aimed at reining in a global fuel supply overhang that has dogged markets for over two […]

Natural Gas Falls to Nearly-Three-Month Low

17 Feb 2017   Prices

Natural gas fell to new lows after storage levels failed to shrink as quickly as analysts expected, a bearish signal that the market may be oversupplied in the months to come. The U.S. Energy Information Administration said natural-gas stockpiles shrank by 114 billion cubic feet last week, compared with the 127 bcf expected by forecasters surveyed by The Wall Street Journal. Total storage fell to 2.4 trillion cubic feet, or 3.7%…

Oil firms as OPEC floats extended output cut; markets still bloated

17 Feb 2017   Prices

Oil prices edged up on Friday, lifted by a report that producer club OPEC could extend an output cut aimed at reining in a global fuel supply overhang. Brent crude futures were trading at $55.76 per barrel at 0311 GMT (10:21 p.m. ET on Thursday), up 11 cents from their last close. U.S. West Texas Intermediate (WTI) crude futures, were up 10 cents at $53.46 per barrel. The Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia plan to cut output by almost 1.8 million barrels per day (bpd) during the first half of 2017, and estimates suggest compliance by OPEC is around 90 percent. The cuts are aimed at curbing oversupply that has dogged markets since 2014. To help rebalance the market, OPEC sources told […]

Oil prices steady on OPEC cuts, but record U.S. fuel stocks weigh

16 Feb 2017   Prices

Oil prices held steady on Thursday, supported by ongoing supply cuts led by producer group OPEC, although rising fuel inventories and crude production in the United States weighed on sentiment. Brent crude futures were trading at $55.73 per barrel at 0209 GMT (9:09 p.m. ET on Wednesday), down just 2 cents from their last close. U.S. West Texas Intermediate (WTI) crude futures, were down 4 cents at $53.07 per barrel. The Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia have agreed to cut output by almost 1.8 million barrels per day (bpd) during the first half of 2017, and estimates suggest compliance by OPEC is around 90 percent. The production cuts are aimed at reining in a global fuel supply overhang that has dogged markets for over two […]

Higher inventories send oil prices lower

16 Feb 2017   Prices

More signs of recovery in U.S. shale oil basins and indications of a build in inventories sent crude oil prices lower early Wednesday. Crude oil prices rallied Tuesday to offset dramatic losses from earlier this week. Markets in general rallied after Federal Reserve Chair Janet Yellen issued a general upbeat assessment of the U.S. economy. Oil prices have moved in a narrow band around $55 per barrel more or less since late 2016 as markets watch for signs of a healthy balance between supply and demand. An agreement by the Organization of Petroleum Exporting Countries to limit output has been countered by a rise in North American oil production, which reflects improved economics in the energy sector. Markets early Wednesday were reacting […]

Oil Closes Near $53 as Record U.S. Supply Counters OPEC Cuts

16 Feb 2017   Prices

Oil closed near $53 a barrel as record U.S. inventories tempered the impact of OPEC’s production cuts. American crude supplies climbed 9.53 million barrels to 518.1 million, the highest level in weekly data going back to 1982 and more than twice the 3.5 million-barrel gain forecast by analysts surveyed by Bloomberg before a government report Wednesday. Gasoline stockpiles also rose to a record, while refinery oil demand slipped as seasonal maintenance was performed. Saudi Arabia told OPEC that it cut output last month by the most in eight years, more than it pledged under a deal to curb supply, the group’s monthly market report on Monday showed. Oil has traded above $50 a barrel since the Organization of Petroleum Exporting Countries and 11 other countries started trimming supply on Jan. 1. OPEC’s secondary source estimates indicate that the 11 members subject to the accord are achieving more than 90 […]

U.S. gas prices likely at short-term low

16 Feb 2017   Prices

Feb. 15 (UPI) — A retail price watchdog said this may be the short-term seasonal low point for U.S. gasoline prices as refiners start switching to a different blend. “You’ve been warned,” an emailed report from GasBuddy.com read. “Gas prices are about to get pumped up, eventually climbing to the year’s highest levels as refineries across the nation are preparing for maintenance season and the seasonal switch to cleaner burning gasoline, a tradition despised by many.” The price watchdog group lists an average retail price for a gallon of regular unleaded gasoline at about $2.26, relatively steady over the last week. Gas prices have moved more or less in parallel with crude oil prices, which have traded in a narrow band around the $55 per barrel mark since late last year. GasBuddy explains retail gasoline prices usually spike in the weeks heading into the Memorial Day holiday season as […]

Oil dips over doubts that high OPEC compliance with announced cuts will last

15 Feb 2017   Prices

Oil prices dipped on Wednesday over concerns that producer club OPEC would not be able to maintain its high compliance so far with output cuts aimed at reining in a global fuel supply overhang. Brent crude futures LCOc1 were trading at $55.80 per barrel at 0115 GMT, down 17 cents from their last close. U.S. West Texas Intermediate (WTI) crude futures CLc1, were down 20 cents at $53 per barrel. The Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia have agreed to cut output by almost 1.8 million barrels per day (bpd) during the first half of 2017. BMI Research said that, based on a calculated compliance of 92.8 percent by OPEC […]

In oil mystery, traders resort to ‘buy the builds’ mantra

15 Feb 2017   Prices

A mystery is confounding the US oil market: when inventories rise, prices rise, too. That is not the way it is supposed to work. At 508.6m barrels as of early February, stocks of crude sitting in commercial tanks were 8 per cent higher than a year before and close to a record. In theory, the excess supply should weigh on markets. But this year a loose pattern has emerged after the US government releases weekly oil data: surprisingly large increases in crude stocks have prompted spurts of buying. “The mantra is ‘buy the builds’,” said Andy Lebow of Commodity Research Group, a US consultancy. “It seems to be working, week after week, as inventories build.” The midweek petroleum status report of the Energy Information Administration is watched obsessively by traders, shedding light on supply and demand in the leading oil-consuming nation. The next one is due on Wednesday morning Washington time. Over the last five reports US commercial crude oil stocks rose by a total of 29.6m barrels. Each weekly rise surpassed expectations. While declining immediately after each report, the price of the West Texas Intermediate oil benchmark was trading higher 20 minutes later, often accompanied by a burst of volume. WTI prices also settled higher after four of the past five releases.

A Bloodbath Looms Over Oil Markets

15 Feb 2017   Prices

Oil prices have traded reliably in the $50s per barrel since OPEC agreed to cut production last November, but having failed to break through a ceiling in the upper-$50s, crude prices are in danger of falling back again. The oil market had wind in its sails on expectations of substantial drawdowns in inventories following the pending cut of a combined 1.8 million barrels per day (1.2 mb/d from OPEC plus nearly 0.6 mb/d from non-OPEC countries). Indeed, the IEA reports that oil inventories in OECD countries have declined for five consecutive months, although they still stand above the running five-year average. Meanwhile, in the U.S. oil inventories have actually increased significantly so far in 2017. The shockingly high compliance rate that OPEC has thus far achieved this year, one would think, should have pushed oil prices up much higher. But crude prices have barely budged since several key market […]

Why Sub $50 Oil Is More Likely Than $70 Oil

15 Feb 2017   Prices

It is more likely that oil prices will fall below $50 per barrel than that they will continue to rise toward $70. Prices have increased beyond supply and demand fundamentals because of premature expectations about the effects of an OPEC production cut on oil inventories. Last week’s 13.8 million barrel addition to U.S. storage was the second largest in history. It moved U.S. crude oil inventories to new record high levels. Meanwhile, 130 horizontal rigs have been added to tight oil drilling since the OPEC cut was first announced in September. That means that U.S. output will surge and will continue to be a drag on higher prices. Comparative inventory analysis suggests that the current ~$53 per barrel WTI oil price is at least $6 per barrel too high. Don’t hold your breath for $70 oil prices. Inventory Is The Key Most analysts believe prices will increase steadily now […]

Are OPEC’s Cuts Adding Up to Lower Oil Prices?

15 Feb 2017   Prices

Measuring the success of OPEC’s production cuts has never been harder. Oil traders say they aren’t just looking at the most recent numbers from the Organization of the Petroleum Exporting Countries showing it is complying with its pledge to cut almost 1.2 million barrels a day from the global market. Instead, they are watching for signs that U.S. oil output is growing, that oil storage is falling and that other big producers like…

Milestones on the oil market’s road to rebalancing

15 Feb 2017   Prices

Crude oil stockpiles are expected to empty significantly during the third quarter as continued production restraint from OPEC interacts with the seasonal increase in consumption. OPEC and non-OPEC countries are committed to reducing production by an average of nearly 1.8 million barrels per day in the first six months of 2017, with an option to extend cuts for a further six months. Production assessments by independent agencies suggest compliance with the agreement has so far been high from OPEC especially from Saudi Arabia and its allies. Further reductions from non-OPEC could be phased in over the next few months, with Russia in particular committed to increase its production cuts progressively during the compliance period. Set against this is the risk of “compliance fatigue” if OPEC and non-OPEC countries […]

U.S. gas prices remain relatively stable

15 Feb 2017   Prices, USA

Retail gasoline prices in the United States continue to hold steady despite regional fluctuations because oil markets in are limbo, a market survey found. Motor club AAA reports an average retail price for a gallon of regular unleaded gasoline at $2.28, only a fraction of a cent higher than the previous day and less than a percent, or about 2 cents, higher than one week ago. By region, the West Coast markets remains the most expensive in the country with California holding the honors of the state in the Lower 48 with the highest price for gas at $2.87 per gallon. AAA data indicates some price hikes may be in store for this market because of a decline in gasoline inventories and unplanned maintenance […]

Oil Prices Head Lower In Spite Of Bullish OPEC Data

14 Feb 2017   Prices

Oil is charging lower to start the new week, as the monthly OPEC oil market report has done little to assuage oversupply concerns – despite the cartel’s proclamations of production cut compliance and upward revisions to oil demand growth. Hark, here are five things to consider in oil markets today: 1) Even though Russia is apparently cutting production, it is still set to boost exports of Urals, its medium sour grade . Russia’s Energy Minister Alexander Novak has been keen to point out that although Russia is cutting production, it is not cutting exports. The Russian Energy Ministry has further endorsed this notion, confirming exports via Transneft’s pipeline system in January were up 114,000 bpd from December’s level. As our ClipperData illustrate below, export loadings of Urals averaged 2.6 million barrels per day in 2016, up 16 percent versus the year prior. Loadings last month also held above 2.6 […]

Oil prices dip as markets remain bloated despite OPEC-led cuts

14 Feb 2017   Prices

Oil prices dipped on Monday on signs that global fuel markets remained bloated despite OPEC-led crude production cuts that have been more successful than most initially expected. Brent crude futures were trading at $56.55 per barrel at 0035 GMT, down 15 cents from their previous close. West Texas Intermediate (WTI) crude futures were down 12 cents at $53.74 a barrel. The Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia have agreed to cut output by almost 1.8 million barrels per day (bpd) during the first half of 2017 in a bid to rein in a global fuel supply overhang. There was widespread scepticism that all producers would actually make the promised cuts, but compliance with the announced reductions is now estimated to be around 90 […]

Investor Honeymoon With OPEC Falters as Shale Drilling Booms

14 Feb 2017   OPEC, Prices

IEA Sees OPEC Achieving 90% Production Cut Compliance There are limits to investors’ love affair with OPEC. After unprecedented optimism that the Organization of Petroleum Exporting Countries will manage to ease a global supply glut, money managers reduced their bets on rising West Texas Intermediate prices for the first time in a month. While the group and other major exporters are pumping less crude, U.S. inventories and production are on the rise, and shale drillers keep adding rigs. The U.S. benchmark has traded mostly between $50 and $55 a barrel for the last two months. “There’s starting to be fatigue about the range we’ve been trading in,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by telephone. “It won’t be summer until we break out to the upside.” OPEC achieved the […]

Oil Slips as Investors Weigh OPEC Compliance Versus U.S. Rigs

13 Feb 2017   Prices

Oil retreated near $53 a barrel as investors weighed rising U.S. drilling activity against OPEC production cuts that the International Energy Agency estimates achieved a record 90 percent initial compliance rate. Futures lost as much as 0.9 percent in New York after advancing 3.2 percent over the previous three sessions. Saudi Arabia reduced production by more than it had pledged, while higher demand is helping to rebalance the market, the IEA said Friday. OPEC is due to release its monthly report Monday, offering the group’s first update on its progress. In the U.S., drillers increased the rig count to the highest since October 2015, according to Baker Hughes Inc. Oil has fluctuated above $50 a barrel since the Organization of Petroleum Exporting Countries and 11 other nations started trimming supply from Jan. 1 to ease a global glut. The market will shift into a deficit during the first half […]

Oil prices dip as markets remain bloated despite OPEC-led cuts

13 Feb 2017   Prices

A gas station attendant pumps fuel into a customer’s car at PetroChina’s petrol station in Beijing, China, March 21, 2016. Oil prices dipped on Monday on signs that global fuel markets remained bloated despite OPEC-led crude production cuts that have been more successful than most initially expected. Brent crude futures were trading at $56.55 per barrel at 0035 GMT, down 15 cents from their previous close. West Texas Intermediate (WTI) crude futures were down 12 cents at $53.74 a barrel. The Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia have agreed to cut output by almost 1.8 million barrels per day (bpd) during the first half of 2017 in a bid to rein in a global fuel supply overhang. There was widespread scepticism that all producers would actually make the promised cuts, but compliance with the announced reductions is now estimated to be around 90 […]

Is $60 Oil Within Reach?

13 Feb 2017   Prices

The oil market is in a “wait-and-see mode” as OPEC implements its production cuts, with the record level of compliance boding well for tighter conditions, the IEA said in its latest Oil Market Report. The Paris-based energy agency said that OPEC’s 90 percent compliance rate was a record high for the group, which took collective production down to 32.1 million barrels per day (mb/d). And while it is still early and the data is still murky, “OPEC nevertheless appears to have made a solid start to what is a six-month process. This first cut is certainly one of the deepest in the history of OPEC output cut initiatives,” the IEA said. Saudi Arabia, Qatar and Angola appeared to have cut more than they promised . The additional cuts of 558,000 bpd promised from a litany of non-OPEC countries is a little less clear – the IEA projects that Russia […]

Opec beats oil output cut expectations, says watchdog

11 Feb 2017   Prices

Opec countries drastically curbed their output in the first month of their new production agreement, in the clearest sign to date that the world’s biggest oil producers are committed to living up to the November pact to cut global supplies. The limits adopted by the oil cartel in January have been “one of the deepest in the history of Opec output cut initiatives”, the International Energy Agency said on Friday. Brent crude, the international benchmark, jumped more than $1 a barrel after the IEA announced its finding, rising to $56.73. Opec has a poor record of meeting targets and does not apply penalties to members who break limits, leading some analysts to question whether the November pact, the cartel’s first production cut in eight years, would be enforced. Opec said it was targeting around 1.2m barrels a day in reductions among members alone. The IEA said Opec crude production fell by 1m b/d to 32.06m b/d in January, surpassing expectations at the start of the six-month supply agreement, helping to ease a global supply glut that caused the most severe price crash in more than a decade.

Oil Prices Rise as OPEC Complies With Production Cuts

11 Feb 2017   Prices

Oil prices rose Friday after a top energy watchdog said exporters are following through on promises to cut oil production to end a longstanding glut in the market. The International Energy Agency reported Friday that production from the Organization of the Petroleum Exporting Countries fell to 32.06 million b/d in January, a decline of about 1 million b/d compared with OPEC’s October baseline. The cut “is certainly one of the deepest…

Oil overhang points to need for extended OPEC output cuts

11 Feb 2017   Oil Supply, Prices

An OPEC-led production cut may well be accelerating a drawdown in global oil stocks that began last year, but implementing the reduction for just six months means the producer group will fall short of achieving its objective of rebalancing the market. The Organization of the Petroleum Exporting Countries and non-OPEC producers in December reached their first deal since 2001 to curtail oil output jointly, by around 1.8 million barrels per day. In the months leading up to the deal and after it was struck, OPEC ministers said tackling an overhang in crude and oil product inventories that has depressed oil prices for over two years was one of their main objectives. So far, OPEC kingpin Saudi Arabia, which is contributing the biggest chunk of the cut, has said the deal does not need to […]

Oil prices stable on OPEC-led production cuts, but bloated inventories weigh

10 Feb 2017   Prices

Oil prices were stable early on Friday, with OPEC-led production cuts supporting the market while soaring U.S. fuel inventories were weighing on crude. U.S. West Texas Intermediate (WTI) crude futures CLc1 were trading at $53.08 per barrel at 0106 GMT, up 8 cents from their last settlement. Brent crude futures LCOc1, the international benchmark for oil prices, were up 3 cents at $55.66 a barrel. Both crude futures have traded within a $5 range since the beginning of the year, and traders said this was due to competing price drivers. “Oil prices continue to struggle to break out of the current range,” ANZ bank said on Friday. “The push and pull between competing forces in the crude oil market continued overnight. Despite the stronger U.S.-dollar .DXY and lingering concerns about U.S. (oil) inventories, […]

Oil Rises As Bullish Sentiment In Markets Persists

10 Feb 2017   Prices

Oil prices are moving back toward the top of their recent trading range, looking to muster a test of resistance once more. As positivity abounds amid new intraday record highs for U.S. equity markets, hark, here are five things to consider in oil markets today: 1) There were a couple of things to note from this week’s monthly release from the EIA, the Short Term Energy Outlook (STEO) . One is an upward adjustment to both Chinese oil consumption and supply, as well as the tweaking of some other consumption estimates for other non-OECD countries. The result of which has lead to a tightening in its market expectations; rather than stock builds over the next few quarters, it now views the market to be largely in balance. (Click to enlarge) 2) The report also references the start-up of U.S. crude exports from Occidental’s Ingleside terminal, which kicked off late […]

Natural Gas Edges Higher on Report of Tight Supplies

10 Feb 2017   Prices

Natural gas prices edged higher Thursday after government data indicated that natural gas supplies are tight even though mild temperatures have limited demand for the fuel. The U.S. Energy Information Administration reported that stockpiles shrank by 152 billion cubic feet of gas last week. But that number also included what was an essentially an accounting change. The EIA reclassified 5 billion cubic feet of natural gas as “base…

OPEC Keeps Its Promise About Crude Oil Cuts, IEA Says

10 Feb 2017   Prices

OPEC achieved the best compliance rate in its history at the outset of an accord to clear the oil glut, a plan that’s being supported by surprising strength in demand, the International Energy Agency said. The Organization of Petroleum Exporting Countries implemented 90 percent of promised output cuts in January, the first month of its agreement, as key member Saudi Arabia reduced production by even more than it had committed, the agency said. Resilient oil demand is aiding OPEC’s bid to re-balance world markets, growing more than expected last year and poised to do so again in 2017. OPEC “appears to have made a solid start to what is a six-month process,” said the Paris-based IEA, which advises most of the world’s major economies on energy policy. “The first cut is certainly one of the deepest in the history of OPEC output cut initiatives.” OPEC and Russia are leading […]

U.S. gasoline tax hike may dent fuel demand in oversupplied market

10 Feb 2017   Prices, USA

A potential increase in gasoline taxes in several U.S. states could put a dent in demand at the pumps and mark another setback for a market already flooded with excess fuel. States where gasoline taxes in some cases have not risen in decades, are discussing hikes. Conditions might be ripe for the proposed increases to win approval in state legislatures, tax experts said this week. The discussions come at a time when U.S. refiners are still reeling from their worst year since the shale boom and face the prospect of weak retail demand for the first time in five years. Oversupply, in the world’s second largest energy consumer, was rampant in 2016 and this year looks no different. Any significant increase in taxes is likely to be […]

Oil stable after drop in U.S. gasoline stocks, but market remains bloated

9 Feb 2017   Prices

Oil prices stabilized on Thursday, boosted by an unexpected draw in U.S. gasoline inventories, although bloated crude supplies meant that fuel markets remained under pressure. Brent crude futures LCOc1, the international benchmark for oil prices, were trading at $55.27 per barrel at 0137 GMT, up 15 cents from their last close. U.S. West Texas Intermediate (WTI) crude CLc1 was up 14 cents at $52.48 a barrel. The U.S. Energy Information Administration (EIA) said on Wednesday that gasoline stocks USOILG=ECI fell by 869,000 barrels last week to 256.2 million barrels, versus analyst expectations for a 1.1 million-barrel gain. Traders said that this surprise increase in U.S. gasoline inventories had helped push up crude, though most added that fuel markets were still bloated and that this would likely prevent further big price rises. “We remain highly […]

Oil Edges Higher on Signs of Gasoline Demand

9 Feb 2017   Prices

Oil prices closed higher Wednesday as signs of rising gasoline demand negated a larger-than-expected build in inventory levels. Light, sweet crude for March delivery settled up 17 cents, or 0.3%, to $52.34 a barrel on the New York Mercantile Exchange, after trading as low as $51.50 a barrel earlier in the session. Brent, the global benchmark, settled up 7 cents, or 0.1%, at $55.12 a barrel. Prices reversed course after the…

Oil’s Sedate Market Poised for Data Shot on OPEC-Led Cuts

9 Feb 2017   Prices

Oil prices caught in a trance above $50 a barrel are set for a jolt as evidence on pledged output curbs from OPEC and other producing nations hits the market over two sessions. The International Energy Agency and OPEC will publish their monthly oil market reports on Friday and Monday, respectively, which will provide their first full-month production and inventory data since the group’s decision to cut supply took effect on Jan. 1. Tanker-tracker Petro-Logistics SA estimated late last month that OPEC had implemented about 75 percent of cuts, while a Bloomberg survey predicts the group is about 60 percent of the way toward its target . “The goal of the agreement is to reduce global inventories, so we’ll need to see evidence of that occurring,” said Daniel Hynes, an analyst in Sydney at Australia & New Zealand Banking Group Ltd. “There are some that see OPEC doing more […]

U.S. states see favorable conditions for gas tax hikes

9 Feb 2017   Prices

A man changes the price for a gallon of gasoline at a gas station in Medford, Massachusetts December 4, 2014. U.S. states where gasoline taxes have not risen in decades are now discussing an increase and conditions might be ripe for the proposed hikes to win approval in state legislatures, tax experts said this week. Low gas prices, a desperate need for revenue to fix crumbling roads, and a post-election period that gives politicians the space to tackle controversial issues have breathed life into efforts to raise the taxes, said Carl Davis, research director at the non-partisan Washington D.C.-based Institute on Taxation and Economic Policy. In all, 21 state legislatures will consider bills aimed at increasing gas taxes this year, Davis said. “Some states that have gone 10 or 20 or almost 30 years without a gas tax rate increase, and they’ve seen the purchasing power of their taxes […]

Oil Falls to Two-Week Low After Data Shows U.S. Stockpile Gains

8 Feb 2017   Prices

Oil Declines on Projected U.S. Crude Stockpiles Oil fell to the lowest in more than two weeks after industry data showed a surge in U.S. crude stockpiles, undermining OPEC’s efforts to re-balance global markets. Futures slid as much as 1.8 percent in New York after falling 3.1 percent the previous two sessions. Crude supplies rose by 14.2 million barrels last week, the American Petroleum Institute was said to report Tuesday. Government data Wednesday is forecast to show stockpiles climbed for a fifth week. Oil output from the U.S. will surge next year to the highest level since 1970, according to updated estimates from the Energy Information Administration. Oil has fluctuated above $50 a barrel since a deal to trim output between the Organization of Petroleum Exporting Countries and 11 other nations took effect on Jan. 1. While OPEC members implement pledged […]

Oil prices slump on bloated U.S. fuel inventories, stalling China demand

8 Feb 2017   Prices

Oil prices dropped on Wednesday to extend falls from the previous day, as a massive increase in U.S. fuel inventories and a slump in Chinese demand implied that global crude markets remain oversupplied despite OPEC-led efforts to cut output. International Brent crude futures LCOc1 were trading at 54.54 per barrel at 0214 GMT, down 51 cents, or 0.9 percent, from their previous close. U.S. West Texas Intermediate (WTI) crude CLc1 was at $51.52 a barrel, down 65 cents, or 1.3 percent. These slumps came after over 1-percent falls the previous day. The sharp declines came on the back of unexpectedly big increases in U.S. fuel inventories, as reported by the American Petroleum Institute (API) on Tuesday. [API/S] “The API delivered a Goliath crude inventory number… The second highest on record. The reaction was […]

Oil Prices Fall Ahead Of Inventory Data

8 Feb 2017   Prices

Oil is getting tonked for a second consecutive day, as prices have run into resistance at the top of their trading range, sending them staggering lower once more. With record net-long speculative positioning, a couple of days of selling could really ignite a bout of profit-taking (especially with the prospect of another bearish inventory report tomorrow). Hark, here are five things to consider in oil markets today. 1) An article today highlights how the East Coast last year received the most crude imports since 2013. Our ClipperData show this trend holding in January, with waterborne imports reaching their highest level since last July. Waterborne crude imports last year to the U.S. East Coast were 36 percent higher than in the year prior; the biggest increases came through from Canada, Nigeria, Angola, Venezuela and Iraq, while Mexican crude saw the biggest drop, shrinking by a factor of five to just […]

Oil Markets On A Knife Edge Despite 91% OPEC Compliance

7 Feb 2017   Prices

The first month of the six-month OPEC deal is in the books and the early signs suggest that the oil group is thus far coming close to delivering on its promises. According to S&P Global Platts , the 10 OPEC countries that promised to reduce their production as part of the Nov. 30 deal have achieved a 91 percent compliance rate with the targeted cuts. The combined output from those 10 countries in January was 1.14 million barrels per day (mb/d) lower than October levels. The figures from S&P Global Platts are particularly important to watch because unlike other market watchers, S&P Global Platts is one of the sources used in OPEC’s official “secondary sources” survey in its monthly oil market reports. For January, OPEC’s total output stood at 32.89 mb/d, while the group has promised to take production down to 32.5 mb/d. The early progress is encouraging because […]

U.S. Oil and Gas Prices May Tumble On Trump’s ‘Energy Revolution’

7 Feb 2017   Prices

President Trump’s vow to “unleash an energy revolution” by reversing regulations may send oil and natural gas prices tumbling in 2018, according to Bank of America Merrill Lynch. Domestic oil and gas prices will likely suffer as the U.S. continues to increase its output, analysts including Francisco Blanch, head of commodities research, wrote in a note dated Feb. 3. Though U.S. oil and natural gas producers could see a surge in investment under Donald Trump’s numerous proposals from a likely reform of the corporate tax code to a possible border tax, prices may suffer from the resulting increase in output. “The industry has high hopes for less red tape, a more pragmatic approach to regulation and lower costs of having to comply with climate change rules,” the analysts said. The impact of Trump’s policies will take months if not years to play out. The implementation of such a tax […]

Oil Falls After Biggest Loss in 2 Weeks on Rising U.S. Supply

7 Feb 2017   Prices

Oil fell in New York after the biggest drop in more than two weeks, on estimates that crude stockpiles continued to pile up in the U.S. Futures slipped 0.5 percent after retreating 1.5 percent Monday. Crude supplies probably increased by 2.5 million barrels last week for a fifth weekly gain, according to a Bloomberg survey before a report Wednesday from the Energy Information Administration. BP Plc on Tuesday reported fourth-quarter earnings that missed analyst estimates after higher oil prices failed to fully compensate for lower income from refining. Oil has fluctuated above $50 a barrel since a deal to trim output between the Organization of Petroleum Exporting Countries and 11 other nations took effect on Jan. 1. While OPEC members implement pledged cuts and Russia says its own reductions are ahead of schedule, U.S. production has edged higher as drillers boosted the rig count to the most since October […]

Oil Prices Fall On Glut Fears Despite Tighter Market

7 Feb 2017   Prices

Rather than rallying like Tom Brady and the New England Patriots, oil today is instead dropping faster than Lady Gaga’s mic, ushered lower by a stronger dollar and ongoing expectations of an amply-supplied market. Hark, here are five things to consider in oil markets today: 1) While OPEC’s export loadings to Asia were strong in January, we are seeing much lower flows destined for North America. Although December’s loadings were boosted by strong volumes from Saudi Arabia, our ClipperData show that total loadings last month dropped below 3 million barrels per day for the first time since August, as OPEC seemingly favors keeping its Asian clients well-supplied. That said, with U.S. oil inventories just 17 million barrels away from last year’s record level, and with refiners moving into maintenance season, there should be few concerns about a lack of supply. (Click to enlarge) 2) As we shift into the […]

Oil Trades Near $54 as Rising U.S. Drilling Offsets Iran Tension

7 Feb 2017   Prices

Oil traded near $54 a barrel as increased tension between Iran and the U.S. countered expectations of rising American production. Futures rose 0.3 percent in New York, extending a third weekly gain. U.S. President Donald Trump’s administration imposed new sanctions on Iran and warned the Islamic Republic that it was “playing with fire” by testing missiles. U.S. drillers boosted the rig count by 17 to 583, the most since October 2015, according to Baker Hughes Inc. U.S. crude futures have fluctuated above $50 since the Organization of Petroleum Exporting Countries and 11 other nations started curbing output Jan. 1. While OPEC members have implemented most of their cuts and Russia says its own reductions are ahead of schedule, U.S. production has edged higher as drillers put more rigs to work. Rising tensions with Iran aren’t yet seen threatening a broader nuclear deal that lifted sanctions on the country’s oil […]

Column: Oil becoming a crowded trade as hedge funds pile in

7 Feb 2017   Prices

Hedge funds have accumulated a record bullish position in crude futures and options, betting on further price rises, but the lopsided nature of the positioning has become a key source of risk in the oil markets. Hedge funds and other money managers had accumulated a record net long position in the three main Brent and West Texas Intermediate (WTI) futures and options contracts equivalent to 885 million barrels by Jan. 31 ( tmsnrt.rs/2kiH2WU ). Fund managers added an extra 41 million barrels to their net long position in the seven days to Jan. 31, according to the latest reports published by regulators and exchanges. Funds now have long positions equivalent to almost 1 billion barrels across the three major contracts, while short […]