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Oil rebounds on Saudi assurances Russia will extend supply cuts

Business News |

REUTERS

By Scott DiSavino | NEW YORK

NEW YORK Oil prices closed 1.5 percent higher on Friday, rebounding from five-month lows, following positive U.S. jobs data and assurances by Saudi Arabia that Russia is ready to join OPEC in extending supply cuts to reduce a persistent glut.

The market, however, remained in technically oversold territory with futures trading down as much as 19 percent from highs in mid April, prompting some speculators to exit their long positions.

Brent futures gained 72 cents, or 1.5 percent, to settle at $49.10 a barrel, while U.S. West Texas Intermediate crude climbed 70 cents, or 1.5 percent, to close at $46.22 per barrel.

After falling almost 5 percent on Thursday, both contracts continued to collapse overnight with WTI falling to $43.76, its lowest since Nov. 15, and Brent down to $46.64, its lowest since Nov. 30 when the Organization of the Petroleum Exporting Countries (OPEC) agreed to cut production during the first half of 2017.

Both benchmarks pared losses after Saudi Arabia’s OPEC Governor Adeeb Al-Aama told Reuters that OPEC and non-OPEC nations were close to agreeing to extend a deal to curb production by 1.8 million barrels per day (bpd) for six months from Jan. 1.

“Based on today’s data, there’s a growing conviction that a six-month extension may be needed to rebalance the market, but the length of the extension is not firm yet,” the Saudi official said.

OPEC sources said on Thursday that OPEC is likely to extend cuts when it meets on May 25 but that a deeper cut is unlikely.

In the United States, meanwhile, job growth rebounded sharply in April and the unemployment rate dropped to 4.4 percent, near a 10-year low, according to government data.

“The jobs report is extremely positive for the U.S. economy…and should help boost oil demand,” said Mark Watkins, regional investment manager for U.S. Bank’s private client group in Park City, Utah.

Despite gains on Friday, both benchmarks declined for a third week in a row – Brent by about 5 percent and WTI by 6 percent – in their longest losing streak since November.

“The energy complex is slowly succumbing to an opinion that this year’s OPEC production cuts have been ineffective,” Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates, said in a note.

“We feel that the (OPEC) cartel has come to a fork in the road in which the current agreement will be abandoned or steps will need to be taken to double down on current efforts by increasing production curtailments,” Ritterbusch said.

Brent traded volumes on Thursday reached a record high of nearly 542,000 contracts, suggesting that hedge funds had accelerated reductions to their long positions. (tmsnrt.rs/2oSQUu5).

Pierre Andurand, who runs one of the biggest hedge funds specializing in oil, liquidated his fund’s last long positions in oil last week and is running a very reduced risk at the moment, a market source familiar with the development said.

“It is now-or-never for oil bulls,” said U.S. commodity analysis firm The Schork Report. “They either put up a defense here or risk further emboldening the bears for a run at the $40 threshold (for WTI).”

(Additional eporting by Dmitry Zhdannikov in London and Henning Gloystein, Mark Tay and Roslan Khasawneh in Singapore; Julia Simon in New York; Editing by Marguerita Choy and David Goodman)

Oil just dropped to a 5-month low below $46 and analysts say it could go much further

CNBC

  • Benchmark oil futures fell to their lowest levels in five months on Thursday.
  • U.S. crude dropped below $47 a barrel, while Brent breached $50.
  • Analysts see support for U.S. crude around $45 a barrel and then at the $42 level.

Price of oil his 5-month low

Price of oil his 5-month low 

A worker prepares to lift drills by pulley to the main floor of a drilling rig in the Permian basin.

Oil prices plunge to five-month lows 

Oil prices struck a new 2017 low on Thursday as mixed U.S. stockpile data compounded bearishness that has permeated the energy complex in recent weeks.

U.S. West Texas Intermediate crude fell below $46 and international benchmark Brent breached $49, both sinking to the lowest level since Nov. 30, the day the Organization of the Petroleum Exporting Countries agreed to cut output.

Analysts said WTI could eventually decline to $42 now that it broke this key level.

U.S. West Texas Intermediate 3-day performance

The move lower came after the U.S. Energy Information Administration reported a much smaller-than-expected drop in crude oil inventories and another week of soft gasoline demand.

John Kilduff, founding partner at energy hedge fund Again Capital, said there was no one headline moving oil on Thursday. Instead, he chalked it up to more technical trading.

“That $47 level … is huge,” he said.

On Tuesday, oil breached the previous week’s low of $48.20, sparking a round of high-volume, late-afternoon selling.

There is some support around the $45 level, Kilduff said. But if U.S. crude settles below $47 a barrel on Thursday, he believes the contract could plunge to the November lows of $42 a barrel.

Just before noon, U.S. crude broke through a major support zone at $45.90 flagged by Seaport Global Securities earlier in the day. The next critical level is $42.70, the firm said in a morning research note.

Roberto Friedlander, head of energy trading at Seaport Global Securities, pointed to “terrible” demand for refined products, uncertainty around future oil consumption and “what seems like an endless supply of oil.”

An oil well owned and operated by Apache Corporation in the Permian Basin are viewed on February 5, 2015 in Garden City, Texas.

Futures Now: Oil falls on supply data   

Both Kilduff and Friedlander said oil futures appeared to be getting caught up in a broader sell-off in commodities on concerns about Chinese demand.

Thursday’s sell-off appeared to validate the bearish views of technical traders who analyze charts, said Tom Kloza, global head of energy analysis at Oil Price Information Service.

“Chartists have been the smartest guys in the room, and the smartest guys in the room, their charts say expect something in the $45 to $46 range before this whole chapter is all done,” he said.

Investors are looking forward to OPEC’s May 25 meeting, where the exporter group will decide whether to extend its six-month production cut through the second half of 2017. OPEC and other exporters agreed to reduce output by 1.8 million barrels a day late last year.

While OPEC compliance has been good and many expect the group to extend its share of the cuts, global inventories have so far remained stubbornly high, including in the United States.

A Reuters survey indicating that compliance with the output cut deal fell among some OPEC members in April has weighed on oil prices. News of growing output from OPEC member Libya, which is exempt from the deal, also hurt sentiment.

Price of oil his 5-month low

Price of oil his 5-month low 

Crude Oil: No Pain No Gain

Seeking Alpha

 by: Nima Karamlou
Nima Karamlou

Summary

WTI Crude fell nearly 3% following negative headlines on Libya and OPEC.

Agreement between militants and Libyan government pave the way to higher Libyan output.

Our analysis suggests crude has downside to ~$45 in the short-run, but will be higher by year end.

Overview

WTI crude dropped nearly 3% in midday trade after a wave of bearish news surfaced regarding OPEC and Libya. Crude oil has been a laggard (3.30%) over the month and nearly (10%) in the last 3. Primary drivers of the declines in crude are expected shale ramps (increasing rig count), uncertainty around OPEC, and a reversal of fortunes for Libya.

Source: FactSet

In the energy markets, there will be no gain without pain.

OPEC & Libya In Focus

A Bloomberg article surfaced today citing the recent agreement between the Libyan prime minister, Fayez Al-Sarraj, and the Eastern Commander Khalifa Haftar that will presumably lead to a cease fire. Political upheaval and violence impacted Libyan oil production severely.

Source(s): TradingEconomics, FactSet

Rampant fighting began in 2011, closely followed by volatile swings in production. Libyan oil production that was eclipsing 1.8 mmb/d cratered below 400 tb/d. Production levels had trouble reaching 1 mmb/d during the fighting, but have steadily crept up in 2017. Libyan production has since reached 700 tb/d, falling within our bear case forecast that has Libyan production pegged between 680 tb/d-710 tb/d. It would appear that the Libyans are desperately looking to boost oil production that will provide a steady stream of revenue to the country, which was cut off during the war. The recent peace deal between the militants and the prime minister should allow for such production ramp.

Oil prices turn positive as US crude stockpiles fall by 3.6 million barrels, more than expected

CNBC

Getty Images
Rusted out ‘pump-jacks’ in the oil town of Luling, Texas.

Oil prices edged higher on Wednesday after government data showed U.S. crude inventories fell more than expected after an industry report had indicated a surprise build in fuel stocks.

U.S. commercial crude inventories fell by 3.6 million barrels to a total of 528.7 million barrels in the week through April 21, the Energy Information Administration said. The decline came as refineries hiked output and despite a 515,000 barrels-per-day rise in net U.S. crude imports.

U.S. inventory data issued late on Tuesday by the American Petroleum Institute (API) showed crude stockpiles rose 897,000 barrels, defying expectations of a fall of 1.7 million barrels.

U.S. West Texas Intermediate (WTI) was trading up 22 cents at $49.78 per barrel by 10:38 a.m. ET (1438 GMT), after gaining 0.7 percent in the previous session.

North Sea Brent crude, the international benchmark for oil prices, pared losses to trade down 2 cents at $52.08 per barrel. Brent is about 7 percent below its April peak.

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The line in the sand for crude: Trader

The line in the sand for crude: Trader   

Offsetting the headline crude stockpile data was a rise in fuel inventories, unusual for this time of the year.

Gasoline stocks rose by 3.4 million barrels, compared with analysts’ expectations in a Reuters poll for a 1 million-barrel drop. Distillate stockpiles, which include diesel and heating oil, rose by 2.7 million barrels, versus expectations for a 1 million-barrel drop, the EIA data showed.

U.S. gasoline futures were down 0.7 percent on Wednesday, paring earlier losses and turning positive year to date.

Analysts say lackluster gasoline demand could leave stockpiles of the fuel elevated even through the summer driving season, when consumption surges. That would potentially hurt demand for feedstock crude oil.

Brent and WTI also found support from Saudi Energy Minister Khalid al-Falih, who said he was interested in talks between the Organization of the Petroleum Exporting Countries and non-OPEC producers to stabilize oil prices.

Man who called oil price collapse now sees this

Man who called oil price collapse now sees this   

OPEC and a handful of big producers, including Russia, pledged to cut output by 1.8 million barrels per day (bpd) in the first half of 2017. Gulf and some other producers have indicated cuts could be extended to the end of 2017. An extension will be discussed when OPEC meets in May.

“The market remains heavy with doubts about OPEC’s ability to achieve a successful extension of the current deal with Russia adopting a lukewarm ‘wait and see’ approach,” said Ole Hansen, head of commodity strategy at Saxo Bank.

The average value of the Brent crude forward curve has fallen by over $5 per barrel since the start of the year, when the OPEC-led supply cut started.

The slump in Brent is a result of record crude oil volumes in circulation on ships around the world. Thomson Reuters Eikon shipping data showed 50 million barrels per day were booked for shipment on tankers this month, up 10 percent since December.

— CNBC’s Tom DiChristopher contributed to this report.

Iraq to boost crude oil production

ABC News

Minister: Iraq to boost crude oil production by year’s end

Iraq’s oil minister said on Sunday that his country plans to increase daily crude oil production to 5 million barrels by the end of this year, up from the current rate of about 4.4 million barrels per day, to secure sorely needed cash for its ailing economy.

Iraq, where oil revenues make up nearly 95 percent of the budget, has been reeling under an economic crisis since 2014, when oil prices began their descent from a high of above $100 a barrel. The Islamic State group’s onslaught, starting in 2014, has exacerbated the situation — forcing Iraq to divert much of its resources to a long and costly war.

Addressing an energy conference in Baghdad, Oil Minister Jabar Ali Al-Luaibi didn’t give details on which of the country’s oil fields would supply the increased output.

Late last year, Iraq joined a deal by OPEC and non-OPEC members to lower production for six months by 1.8 million barrels a day in order to prop up global oil prices. The mutual production decrease began on Jan. 1. Iraq’s share in the deal is to reduce output by 210,000 barrels a day to 4.351 million barrels.

“There are positive elements in that deal and we achieved a lot of its targets,” al-Luaibi told reporters on the sideline of the conference. “Work and cooperation are underway … to reach the 1.8 (million barrels a day) reduction,” he added, without divulging whether Iraq is going to support an extension to that deal.

OPEC Secretary General, Mohammed Barkindo, said the compliance among the participants was 86 percent in January and 94 percent in February. Barkindo told reporters that OPEC members would consider whether to extend the production decrease agreement at a meeting next month.

The deal propped up the crude price to around $50 per barrel.

Iraq holds the world’s fourth-largest oil reserves. This year, it added 10 billion barrels, bringing its total reserves up to 153.1 billion barrels.

Al-Luaibi also said that more 15 billion barrels are planned to be added by 2018.

Iraq’s 2017 budget stands at about 100.67 trillion Iraqi dinars, or nearly $85.17 billion, running with a deficit of 21.65 trillion dinars, or about $18.32 billion. That’s based on an estimated oil price of $42 per barrel and daily export capacity of 3.75 million barrels.

Iraq is also grappling with a major humanitarian crisis. The U.N. estimates that more than 3 million people have been forced from their homes since 2014. It also faces growing dissatisfaction among residents of areas recaptured from IS who have had their properties demolished and suffer from scarce public services.

Crude Oil Price Forecast

Oil Has Best Week In 2017 On OPEC Hopes

by  Tyler Yell, CMTForex Trading Instructor

Position Trading based on technical set ups, Risk Management & Trader Psychology.

In a divorce from typical correlations, both US Dollar via the DXY and Crude Oil have found life at the end of Q1 17. Month end flows tend to be erratic, and thus, the broader multi-week trend should take preference over the multi-day move. However, the overall correlation of DXY & USOIL has dropped to a level of near meaningless with a 20-day correlation as of March 30 of -.138.

In addition to the erratic end of month order flow, it’s worth keeping an eye on the headlines for Crude Oil, which have recently touted initial support from OPEC members to extend the cut. The Production, which reached agreement in late November is scheduled to expire in June, but the option to extend the cuts were seen as a possibility if such action would help secure a balancing in the Oil. Given the large rise in Shale production in the US, which has seen a doubling of active Oil rigs since the May 2015 low per Baker Hughes International, a production cut extension from OPEC and likely Russia, could go a long way in putting a higher price floor under Oil.

CRUDE OIL – Technical Analysis: Whether or not Crude Oil is correcting a downtrend or beginning a new rise to 2017 highs is the key questions. The price is at a key juncture whereas a corrective move higher, that would favor new lows would favor price resistance near $52/bbl. Specifically, $51.97 is the 61.8% retracement of the late-February to March range. A turnaround lower below or near $52 that subsequently breaks below $47 would open up a move to the $40-44 zone we’ve long watched as likely support in a more significant downturn.

However, absent the risk of a turnaround lower in Crude, traders should watch for a clean break higher to nullify the view that we’ll see an extension lower. Traders would do well to watch a break above $52 as an argument that Crude may have put in another higher price floor near the 200-DMA ($48.63/bbl.).

Are commodity prices matching DailyFX forecasts so far in 2017? Find out here!

Crude Oil Price Forecast: Oil Has Best Week In 2017 On OPEC HopesChart created using TradingView

The price action in late March has looked like consolidation, but one concern worth mentioning is the strong bounce in RSI(5). The bounce in RSI(5) looks corrective, which favors a trend continuation move lower and possibly to the $44/40 zone in the coming weeks if further weakness surfaces.

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Crude Sentiment Shows Retail Bulls Adding To Longs In Hope Of A Bullish Reversal

Crude Oil Price Forecast: Oil Has Best Week In 2017 On OPEC HopesIG Retail trader data shows 65.1% of traders are net-long with the ratio of traders long to short at 1.87 to 1. In fact, traders have remained net-long since Mar 01 when Oil – US Crude traded near 5433.1; theprice has moved 7.2% lower since then. The number of traders net-long is 12.0% lower than yesterday and 9.5% lower from last week, while the number of traders net-short is 23.2% higher than yesterday and 7.3% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Oil – US Crude prices may continue to fall. Traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Oil – US Crude price trend may soon reverse higher despite the fact traders remain net-long. (Emphasis Mine)

— Written by Tyler Yell, CMT, Currency Analyst & Trading Instructor for DailyFX.com

Key LevelsOver the Next 48-hrs of Trading as ofThursday, March 30, 2017

Crude Oil Price Forecast: Oil Has Best Week In 2017 On OPEC HopesFor those interested in shorter-term levels of focus than the ones above, these levels signal important potential pivot levels over the next 48-hours of trading.

Oil rallies to 3-week high as traders cheer U.S. supply data

MARKET WATCH

Bloomberg News/Landov
A crude oil storage tank at Cushing storage terminal in Cushing, Oklahoma
By

MyraP. Saefong

Markets/commodities reporter

SaraSjolin

Markets reporter

Oil prices rallied Wednesday, settling at their highest level in roughly three weeks after data from the Energy Information Administration showed a weekly rise in U.S. crude inventories that was below some market forecasts, along with bigger-than-expected declines in gasoline and distillate stockpiles.

Disruptions to crude output in Libya, as well as hopes for a six-month extension to the production cut agreement, led by the Organization of the Petroleum Exporting Countries, added further support to oil prices.

Combined, the upbeat factors “offered the market a touch of optimism that perhaps things are headed in the right direction for global balance,” said Jenna Delaney, senior oil analyst at Platts Analytics, a unit of S&P Global Platts.

May West Texas Intermediate crude CLK7, +0.71%  rose $1.14, or 2.4%, to settle at $49.51 a barrel on the New York Mercantile Exchange. The contract settled at its highest level since March 9, according to FactSet data. May Brent LCOK7, +0.17%  gained $1.09, or 2.1%, to $52.42 a barrel.

The EIA reported that crude inventories rose by 900,000 barrels to a weekly record 534 million barrels for the week ended March 24. But that rise was less than half the 1.9 million-barrel climb posted by the American Petroleum Institute late Tuesday.

Analysts polled by S&P Global Platts forecast a climb of 300,000 barrels, while others expected an even larger increase, with Citi Futures forecasting a 2 million- to 3 million-barrel rise.

“An extremely big jump in refinery activity on the Gulf Coast, a tick lower in imports and a rebound in exports has led to a lower-than expected-build to crude inventories,” said Matt Smith, director of commodity research at ClipperData. But that’s “an increase nonetheless—lifting oil inventories to a further new record.”

Still, Phil Flynn, senior market analyst at Price Futures Group, pointed out that supplies in the Strategic Petroleum Reserve fell by more than 700,000 barrels and “if you add that to commercial-oil inventories, the increase in supply looks smaller.”

The EIA also said gasoline supplies dropped 3.7 million barrels, while distillate stockpiles fell 2.5 million barrels last week. The Platts survey forecast a fall of 2.1 million for gasoline and decline of 1.1 million for distillates.

On Nymex, April gasoline RBJ7, +0.53%  rose 3.7 cents, or 2.3%, to $1.672 a gallon, while heating oil for the same month HOJ7, +0.51%  gained 2.6 cents, or 1.7%, to $1.543 a gallon.The feud between Iran and Saudi Arabia intensified at the start of last year, but the two nations have since made moves to bridge their longstanding divide.

Elsewhere in energy trading, natural gas for April US:NGJ17  ended at $3.175 per million British thermal units, up 7.9 cents, or 2.6%. The contract expired at the day’s settlement.

The EIA will issue its weekly update on U.S. natural-gas supplies Thursday, with an S&P Global Platts survey of analysts forecasting a decline of 43 billion cubic feet.

Daily FX

Crude Oil Price Forecast: Oil To 200DMA On Libya’s Force Majure Claim

Crude Oil has shown volatility on Tuesday afternoon ahead of the DoE data on news that Libya’s largest Oil field confirmed Force Major and will bring production in Libya down to 560,000 barrel a day from its previous range of 700-800k. The closed pipeline accounts for ~20% of Libya’s output, and early reports are blaming fighting between armed forces as the reason for closure, but there has not been confirmation. The welcomed news will contend with Wednesday’s US production data, which is expected to further add to the fear that oversupply will weaken OPEC’s efforts.

On the charts, the technical focus has solely been on the 200-DMA, which has historically been a key divisor of the market between Bullish and Bearishness. The 200-DMA currently sits at $48.62/bbl as of Tuesday afternoon and price looks set to push lower.

Are commodity prices matching DailyFX forecasts so far in 2017? Find out here!

Crude Oil Price Forecast: Oil To 200DMA On Libya’s Force Majure ClaimChart created using TradingView

The price action in late March has looked like consolidation, but one concern worth mentioning is the strong bounce in RSI(5). The bounce in RSI(5) looks corrective, which favors a trend continuation move lower and possibly to the $44/40 zone in the coming weeks if further weakness surfaces.

The price zone in focus if we continue under the 200-DMA encompassing the 38.2-50% retracement of the February-January price range that also houses the November low and the Median Line of Andrew’s Pitchfork drawn off the key pivots in mid-2015 through February. The zone is $44/$40.57. Naturally, a break back above the 200-DMA that aligns with USD-weakness (CL1 to DXY 20-day correlation is -.256) would help turn the focus higher toward the $55/57 zone.

Interested in Joining Our Analysts, Instructors, or Strategists For a Free Webinar? Register Here

The price of Crude Oil recently traded below the 200-DMA with RSI(5) registering a bearish extreme. If the price pops higher as it did in April, August, and November of last year, the Bulls may feel as though they have dodged a bullet. However, the Crude Oil market does not have the fundamental support that other commodity sectors like base metals have, which could lead to an eventual breakdown toward the November low of $43.75/42.25.

Wednesday’s US Production data, which recently showed stockpiles at record highs will continue to stoke worries about increasing oversupply alongside a lack of buying pressure. When combining those two components alongside sentiment, it’s my preference to favor a further drop in Crude Prices or at least a further drift sideways as the forwards curve show.

CrudeSentiment Shows Retail Bulls Holding On To Longs In Hope Of A Reversal

Crude Oil Price Forecast: Oil To 200DMA On Libya’s Force Majure ClaimIG Crude Oil retail trader data shows 74.4% of traders are net-long with the ratio of traders long to short at 2.9 to 1. In fact, traders have remained net-long since Mar 01 when Oil – US Crude traded near 5433.1; theprice has moved 11.0% lower since then.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Oil – US Crude prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Oil – US Crude-bearish contrarian trading bias. (Emphasis Mine)

Written by Tyler Yell, CMT, Currency Analyst & Trading Instructor for DailyFX.com

Key LevelsOver the Next 48-hrs of Trading as ofTuesday, March 28, 2017

Crude Oil Price Forecast: Oil To 200DMA On Libya’s Force Majure ClaimFor those interested in shorter-term levels of focus than the ones above, these levels signal important potential pivot levels over the next 48-hours of trading.

Contact and follow Tyler on Twitter: @ForexYell

Oil prices finished slightly higher Friday, but logged their third weekly loss in a month.

5 key signatories to the OPEC output deal meet in Kuwait on Sunday

Reuters
Comments from Saudi Arabia are giving oil prices a bump higher on Friday
By

MyraP. Saefong

Markets/commodities reporter

SaraSjolin

Markets reporter

Oil prices finished slightly higher Friday, but logged their third weekly loss in a month.

Traders continued to weigh signs of OPEC-led cutbacks in global crude production ahead of a meeting of oil producers this weekend, against data pointing to the likelihood of further gains in U.S. output.

May West Texas Intermediate crude CLK7, +0.92%  rose 27 cents, or 0.6%, to settle at $47.97 a barrel on the New York Mercantile Exchange. It touched intraday highs above $48 early Friday following news that Saudi Arabia said it cut oil exports to the U.S. in March by around 300,000 barrels a day.

For the week, May WTI oil futures saw a loss of about 1.7% from the week-ago settlement of $48.78 for the April contract, which was the front month at the time. The May contract itself lost 2.7% for the week, according to FactSet data.

May Brent crude LCOK7, +0.81%  added 24 cents, or 0.5%, to $50.80 a barrel—for a weekly loss of about 1.9%.

For the session, “oil managed to rebound not because of an uptick in buyer interest, but because of book-squaring into this weekend’s OPEC gathering,” Tyler Richey, co-editor of the Sevens Report, told MarketWatch.

Five representatives of the countries that signed up to the output agreement—Kuwait, Algeria, Venezuela, and non-OPEC nations Russia and Oman—will meet in Kuwait on Sunday to review the current level of compliance. Most members of the Organization of the Petroleum Exporting Countries are adhering to their pledges to make cuts, but data suggest not all non-OPEC producers are sticking to their quotas.

If OPEC says ‘something crazy while electronic markets are closed between now and Sunday night, it could cause futures to gap higher at next week’s open.’

Tyler Richey, Sevens Report

“There is no question that OPEC is losing its grip on the market, but if they say something crazy while electronic markets are closed between now and Sunday night, it could cause futures to gap higher at next week’s open,” Richey said.

But then there’s the U.S., which isn’t part of the agreement.

“OPEC has done their part, but U.S. inventory data is still rising, keeping the lid on the oil price,” said Naeem Aslam, chief market analyst at Think Markets.

Data on the number of active U.S. oil rigs from Baker Hughes BHI, -0.29%  released Friday revealed a rise of 21 to 652 rigs this week—suggesting the likelihood of a rise in domestic production to come. The oil rig count has climbed every week this year so far, except for one.

Oil prices have been under pressure for most of the week, as U.S. stockpiles hit a record, based on weekly data from the EIA going back to 1982.

Read: Past oil spending could make for glut next year: Goldman Sachs

Also see: Explaining why some say Keystone will create thousands of jobs, and others say 35

Elsewhere in the energy spectrum, gasoline for April RBJ7, +1.34%  settled up 1% at $1.605 a gallon, to end the week up 0.4%, while April heating oil HOJ7, +1.12%  added 0.5% at $1.498 a gallon, down about 0.7% for the week.

Read: Gasoline prices notch smallest price move in 8 years

Natural gas for April NGJ17, +0.98%  added 0.8% to $3.076 per million British thermal units—settling about 3.4% higher for the week.

Oil ends lower as April contracts expire ahead of U.S. crude-supply data

MARKET WATCH

Trades look for hints on potential for OPEC output cut extension

Shutterstock/zhengzaishuru

By

MyraP. Saefong

Markets/commodities reporter

RachelKoning Beals

News editor

Oil prices settled lower Tuesday in volatile trading tied to the expiration of the April futures contracts, ahead of data expected to reveal a rise in weekly U.S. crude supplies.

Traders also kept an eye out for hints on whether the Organization of the Petroleum Exporting Countries will extend the production-cut agreement between its members and other major producers beyond June. OPEC sources have indicated that members increasingly favor an extension but want the backing of non-OPEC oil producers, which have yet to deliver fully on existing cuts.

April West Texas Intermediate crude CLJ7, -1.49% declined by 88 cents, or 1.8%, to settle at $47.34 a barrel on the New York Mercantile Exchange. The contract, which expired at the settlement, finish at their lowest level since November, according to FactSet data. May WTI CLK7, -0.58% which is now the front-month contract, shed 67 cents, or 1.4%, to finish at $48.24 a barrel.

May Brent crude LCOK7, -0.51% lost 66 cents, or 1.3%, to $50.96 a barrel on the ICE Futures exchange in London.

“WTI crude oil was unable to hold on to early gains despite a falling U.S. dollar providing support to commodity prices in general,” Colin Cieszynski, chief market strategist at CMC Markets, told MarketWatch.

“Given the high volatility and big surprises in both directions of the last three weeks, it appears some traders may be going to the sidelines ahead of the [supply data] news, while others may be expecting a big build after last week’s surprise decline,” he said.

Petroleum inventory data are due out from the American Petroleum Institute late Tuesday and Energy Information Administration early Wednesday. Analysts surveyed by S&P Global Platts forecast a climb of 2 million barrels in crude inventories for the week ended March 17.

“A lot of the recent volatility in oil has been around traders trying to figure out if the big build we saw in U.S. inventories in the winter is over or not,” said Cieszynski. EIA data released last week showed the first decline in crude stockpiles in 10 weeks.

The world’s biggest crude exporter is conceding ground to shale producers in the U.S., people familiar with current Saudi policy said. Saudi Arabia’s crude exports to the U.S. for the week ended March 10 fell by 426,000 barrels a day compared with the previous week, according to U.S. data.

Elsewhere in energy trading, April gasoline RBJ7, -0.28%  fell by 0.4% to $1.605 a gallon, while April heating oil HOJ7, -0.39%  lost 0.7% to $1.503 a gallon.

April natural gas NGJ17, -0.32%  settled at $3.093 per million British thermal units, up 1.7%.