Utilities

now browsing by tag

 
 

Oil settles at $48.04

CNBC

Reuters

Oil settles at $48.04, down 20 cents, as US crude stockpiles swell

Oil

Lucy Nicholson | Reuters

Oil prices recouped much of their losses after sliding to almost four-month lows on Wednesday after data showed U.S. crude inventories rising faster than expected, piling pressure on OPEC to extend output cuts beyond June.

The U.S. Energy Information Administration (EIA) said U.S. inventories climbed by almost 5 million barrels to 533.1 million last week, far outpacing forecasts for an increase of 2.8 million.

“A persistent increase in U.S. oil production, together with a rise in imports from Canada, contributed towards a large build in crude oil inventories,” said Abhishek Kumar, senior energy analyst at Interfax Energy in London.

“The market remains nervous about rising U.S. production, which is also reducing the effectiveness of output cuts by the OPEC and some non-OPEC countries,” Kumar added.

A close look at close oil sentiment

A close look at close oil sentiment   

Global benchmark Brent crude futures for May delivery were down 31 cents at $50.65 a barrel by 2:33 p.m. EDT (1833 GMT). The contract fell as low as $49.71.

On its first day as the front-month, U.S. West Texas Intermediate (WTI) crude futures for May settled 20 cents lower at $48.04 per barrel. The session low was $47.01.

Both benchmarks hit their lowest since Nov. 30 when OPEC countries agreed to cut output, and both remained in technically oversold territory. WTI was oversold for the third day in a row, Brent for the second.

A deal between the Organization of the Petroleum Exporting Countries and some non-OPEC producers to reduce output by 1.8 million barrels per day (bpd) in the first half of 2017 has done little to reduce bulging global oil stockpiles.

OPEC, which sources say is leaning toward extending cuts, has broadly delivered on pledged reductions, but non-OPEC states have yet to cut fully in line with commitments.

Trader sees oil reversing course for a rally

Trader sees oil reversing course for a rally   

“OPEC has used up most of its arsenal of verbal weapons to support the market. One hundred percent compliance by all is the only tool they have left and on that account they are struggling,” said Ole Hansen, head of commodity strategy at Saxo Bank.

U.S. shale oil producers have been adding rigs, boosting the country’s weekly oil production to about 9.1 million bpd for the week ended March 10 from an average 8.9 million bpd for 2016, according to U.S. data.

“OPEC’s market intervention has not yet resulted in significant visible inventory drawdowns, and the financial markets have lost patience,” U.S. bank Jefferies said in a note.

But the bank said the market was undersupplied and, if OPEC extended cuts into the second half, inventories would draw down and prices recover above $60 in the fourth quarter.

However, it said U.S. crude production was expected to grow by 360,000 bpd in 2017 and 1 million bpd in 2018, and a price recovery could spur more U.S. shale activity.

Bullish Citi analysts call for crude oil to hit $70 by year end but elsewhere skepticism grows

CNBC

Citi analysts predict crude oil will hit $70 by the end of 2017   

Crude oil prices could shoot up to $70 a barrel by the end of 2017 as supply and demand levels continue to rebalance in coming months, according to analysts at Citi.

Nearer-term, the research team has raised price estimates modestly by $5 to an average $55 per barrel for the first quarter and by $2 to an average $56 per barrel for the second quarter.

Yet investors will likely have to wait a few more months for a more sustained rise, says Citi in the note published Tuesday, as Brent traded up marginally to around $56 in early European trade.

“Oil prices are not likely to stray far from their current $53-58 per barrel range in the near term as record investor net length and bearish inventory data will likely cap prices until more tangible evidence of a tighter market emerges,” write the analysts.

Citi’s research team is looking to the second quarter for positive effects from both the reported 93 percent compliance level of OPEC participants in last November’s production cut agreement as well as substantial refinery maintenance in Asia scheduled for the spring.

However, a close eye must be kept on delivery timetables, David Ernsberger, Global Head of Energy at S&P Global Platts, told CNBC’s Squawk Box on Tuesday.

“There is the shadow looming of new supply coming to market not just from Iran but also from the U.S. and what we’re looking at heading into the second quarter is when will that oil come to market and will it begin to take the edge off prices a little bit,” he noted.

Looking beyond 2017, Citi’s optimism also fades on expectations that increasing numbers of shale producers will be enticed back into the market by more favorable pricing.

However, the impact of shale is hard to accurately predict given the lack of uniformity in the product says S&P Global Platt’s Ernsberger.

“One cargo of shale oil is not like another and you don’t really know what is going to happen when you put it through your refinery until it lands at your port and that’s a little more uncertainty that even the oil refinery industry – which is used to uncertainty – is really willing to embrace right now,” Ernsberger explained.

“So there’s a stability of new supply issue that really needs to get worked out in the next few years,” he added, saying this was the “big story” regarding shale right now.

US shale oil to rise massively in months: Commerzbank

US shale oil to rise massively in months: Commerzbank   

Another prominent concern in the market is the distribution of derivative positioning with record net long positions and a current long to short positioning ratio of around 10:1, with this being a key reason why oil will soon drop to below $50 per barrel, Eugen Weinberg, Head of Commodity Research at Commerzbank, told CNBC’s Street Signs on Tuesday.

Weinberg also argued that the focus on OPEC compliance levels were like a distracting “magician’s show” while the real action is taking place in the U.S., which he claims is on the way to regaining its crown as the world’s largest oil producer.

“OPEC must at some point recognize and understand that they are no more the marginal producers and marginal production will be coming from shale oil so prices will come under massive pressure during this year once investors recognize oil supplies are not going to disappear,” he opined.

“The world is awash with oil at the moment and there continues to be endless supply so therefore I don’t see a real reason for prices to rise above $60 or $70…so I’m really seeing probably the risks of the prices falling below $50 for a considerable period of time and probably even touching the levels of $40 to $45 this year,” he concluded.

US Crude Oil Up 29 cents

CNBC

US crude settles at $53.83, up 29 cents, after US Treasury imposes sanctions on Iran

Oil prices gave up much of their gains after jumping on Friday as the United States imposed sanctions on some Iranian individuals and entities, days after the White House put Tehran “on notice” over a ballistic missile test.

Front month U.S. West Texas Intermediate crude futures settled 29 cents higher at $53.83 a barrel. For the week, the contract was up about 1 percent.

Brent crude futures were up 24 cents at $56.80 a barrel by 2:34 p.m. ET (1934 GMT). Brent was on track to gain about 2 percent on the week, its first significant weekly rise this year.

Volume in U.S. crude futures was relatively low on Friday, with about 335,000 contracts changing hands by 12:15 p.m., on track to fall short of the 200-day moving average for 528,000 contracts.

This is the first move by the administration of President Donald Trump against Iran. It follows his vows during the 2016 campaign to get tough on Tehran.

Shuaiba oil refinery south of Kuwait City, Kuwait.

Iran relationship a black swan for oil?   

Under the sanctions, announced by the U.S. Treasury, 13 individuals and 12 entities cannot access the U.S. financial system or deal with U.S. companies.

A senior U.S. administration said Friday’s sanctions were an “initial step” in response to Iran’s “provocative behavior,” suggesting more could follow if Tehran does not curb its ballistic missile program and continues support for Houthi militia in Yemen.

The news added to volatility in what had already been a day of choppy trading. Analysts said the market is torn between promised cuts from the Organization of the Petroleum Exporting Countries and fears over rising U.S. shale oil production.

“While the market is taking these actions in stride so far as unlikely to result in a larger military conflict that would put Persian Gulf crude oil supplies at risk, the odds of that scenario are certainly higher than a week ago,” wrote Timothy Evans, energy analyst at Citi Futures in New York.

Trump had warned on Twitter that “Iran is playing with fire” after its missile test.

“The ‘trumperament’ of the new U.S. president is being tested by Iran and soon maybe also by Russia and China,” said Olivier Jakob, managing director of consultancy PetroMatrix. “And that is adding some geopolitical support to crude oil.”

Here's how to play a rally in crude

Here’s how to play a rally in crude   

Comments by Russian energy minister Alexander Novak that oil producers had cut their output as agreed under a deal with OPEC, also helped to support prices, analysts said.

Novak said that Russian companies might cut oil production more quickly than required by its deal with late last year. He said that 1.4 million barrels per day (bpd) was cut from global oil output last month as part of the deal.

Oilfield services firm Baker Hughes reported U.S. drillers added 17 oil rigs in the last week. The count has been recovering since June and now stands at 583 rigs, compared with 467 rigs last year.

Analysts said oil’s advance could run out of steam quickly. PVM Oil Associates noted the market “is sandwiched between supportive OPEC-led output cuts and the bearish impact of a resurgence in U.S. crude production.”

The prospect of more oil output from Nigeria and also from other non-OPEC producers such as Brazil also looms.

“Record speculative length threatens to trigger a sharp price fall as unease builds amid the ongoing wait for a conclusive upside breakout,” Commerzbank said in a note.

— CNBC’s Tom DiChristopher contributed to this report.

Oil Rebounds

CNBC

Oil rebounds as US sanctions individuals and entities over Iran missile test

A worker stands next to a pump jack at an oil field Sergeyevskoye owned by Bashneft company north from Ufa, Bashkortostan, Russia.
A worker stands next to a pump jack at an oil field Sergeyevskoye owned by Bashneft company north from Ufa, Bashkortostan, Russia.

Oil prices recovered on Friday after the United States announced sanctions related to Iran’s ballistic missile test, and on signs big oil producers are cutting output.

The Trump administration on Friday rolled out new measures against 13 individuals and 12 entities following Tehran’s ballistic missile test.

U.S. President Donald Trump said “nothing is off the table” in dealing with the country, which has seen its oil exports surge after the lifting of international sanctions last year under the previous U.S. administration.

“The ‘trumperament’ of the new U.S. president is being tested by Iran and soon maybe also by Russia and China,” Olivier Jakob, managing director of consultancy PetroMatrix, said. “And that is adding some geopolitical support to crude oil.”

Shuaiba oil refinery south of Kuwait City, Kuwait.

Iran relationship a black swan for oil?   

Brent crude futures were up 27 cents at $56.83 a barrel by 1:07 p.m. ET (1807 GMT). Brent was on track to gain more than 2 percent on the week, its first significant weekly rise this year.

Front month U.S. West Texas Intermediate crude futures climbed 24 cents to $53.78 a barrel. For the week, the contract is up about 1 percent.

Prices held their gains after oilfield services firm Baker Hughes reported U.S. drillers added 17 oil rigs in the last week. The count has been recovering since June and now stands at 583 rigs, compared with 467 rigs last year.

Comments by Russian energy minister Alexander Novak that oil producers had cut their output as agreed under a deal with OPEC, also helped to support prices, analysts said.

Russia’s Novak said that Russian companies might cut oil production more quickly than required by its deal with Organization of the Petroleum Exporting Countries (OPEC) late last year.

He said that 1.4 million barrels per day (bpd) was cut from global oil output last month as part of the deal.

Prices briefly pared gains after the official start of the day session, reflecting pent-up selling pressure following the U.S. jobs report for January, according to John Kilduff, founding partner at energy hedge fund Again Capital.

“The energy market did not necessarily like the weak wage component of the employment report. Gasoline demand is already weak, due to higher prices, so that hurts energy disproportionately,” he told CNBC.

The U.S. Labor Department reported the United States added more jobs than analysts expected and the unemployment rate ticked up to 4.8 percent.

Here's how to play a rally in crude

Here’s how to play a rally in crude   

News that Norway restarted a field that produces 100,000 barrels per day also weighed on prices, Kilduff said.

Analysts said oil’s advance could run out of steam quickly. PVM Oil Associates noted the market “is sandwiched between supportive OPEC-led output cuts and the bearish impact of a resurgence in U.S. crude production.”

The prospect of more oil output from Nigeria and also from other non-OPEC producers such as Brazil also looms.

“Record speculative length threatens to trigger a sharp price fall as unease builds amid the ongoing wait for a conclusive upside breakout,” Commerzbank said in a note.

— CNBC’s Tom DiChristopher contributed to this report.

US Crude settles at $52.75

CNBC

US crude settles at $52.75, down 43 cents, after EIA reports bearish oil, fuel stockpile data

Build in crude oil inventories

Build in crude oil inventories   

Oil prices fell on Wednesday after earlier shrugging off a report from the U.S. Energy Information Administration that showed the nation’s crude inventories rose and gasoline stocks increased sharply.

U.S. light crude settled down 43 cents at $52.75. Benchmark Brent crude fell 25 cents a barrel to $55.19 by 2:54 p.m. ET (1954 GMT).

Futures fell early in the day after builds in U.S. inventories reinforced expectations that increasing shale output this year would reduce the impact of production cuts by OPEC and other major exporters. However, they turned positive after the EIA report amid market strength.

Again Capital founding partner John Kilduff said there was little to cheer in the report, but oil futures can’t fight the strength on Wall Street on a day when the Dow crossed 20,000 for the first time ever and markets were broadly higher.

“It was a very bearish report, and it’s a cloud over this market, but it’s no asset class left behind at the moment,” Kilduff said.

Trump revives pipelines: Who wins & loses?

Trump revives pipelines: Who wins & loses?   

U.S. crude stockpiles rose by 2.8 million barrels in the week through Jan. 20, matching analysts expectations and roughly in line with an earlier report from the American Petroleum Institute.

U.S. gasoline futures fell to a session low after EIA reported gasoline stocks rose by 6.8 million barrels, compared with analysts’ expectations in a Reuters poll for a 498,000-barrel gain. It pared losses shortly after the report came out.

Distillate stockpiles, which include diesel and heating oil, increased by 76,000 barrels, versus expectations for a 1 million-barrel drop, the EIA data showed.

Oil prices have found support in recent weeks from plans by the Organization of the Petroleum Exporting Countries and other producers to reduce output.

Around 1.5 million barrels per day (bpd) has already been taken out of the market from about 1.8 million bpd agreed by oil majors starting on Jan. 1, energy ministers said on Sunday, as producers look to reduce oversupply.

Bernstein Energy said global oil inventories declined by 24 million barrels to 5.7 billion barrels in the fourth quarter of last year from the previous quarter. The amount remaining equates to about 60 days of world oil consumption.

Bearish on oil for the short term: Pro

Bearish on oil for the short term: Pro   

But as OPEC is cutting, U.S. shale output is rising.

U.S. oil production has increased by more than 6 percent since mid-2016, although it remains 7 percent below its 2015 peak. Output is back to levels reached in late 2014, when strong U.S. crude output contributed to a crash in oil prices.

President Donald Trump‘s promise to support the U.S. oil industry has encouraged analysts to revise up their forecasts of growth in U.S. oil production, which is already benefiting from higher prices.

A push by Republicans in the U.S. House of Representatives for a shift to border-adjusted corporate tax could help push U.S. crude prices higher than global benchmark Brent, triggering large-scale domestic production, according to Goldman Sachs.

— CNBC’s Tom DiChristopher contributed to this report.

US Crude up 29 cents

CNBC

US crude settles at $51.37, up 29 cents as IEA sees oil market tightening

Jonathan Alcorn | Reuters
Oil jack pumps are pictured in the Kern River oil field in Bakersfield, Calif.

Oil prices edged higher on Thursday, but swelling U.S. crude stockpiles limited the rebound from a one-week low after the International Energy Agency said oil markets had been tightening even before cuts agreed by OPEC and other producers took effect.

The IEA said that while it was “far too soon” to gauge OPEC members’ compliance with promised cuts, commercial oil inventories in the developed world fell for a fourth consecutive month in November, with another decline projected for December.

U.S. West Texas Intermediate crude oil settled up 29 cents at $51.37 per barrel, having dropped to a one-week low on Wednesday at $50.91 a barrel.

International benchmark Brent crude was up 34 cents at $54.26 a barrel by 2:33 p.m. ET (1933 GMT), after closing down 2.8 percent in the previous session.

A strong U.S. dollar limited oil’s advance.

RBC strategist: Oil will grind higher

RBC strategist: Oil will grind higher   

Prices tumbled to session lows after U.S. Energy Information Administration (EIA) data showed crude inventories rose unexpectedly last week as refineries sharply cut production.

U.S. commercial crude inventories rose by 2.3 million barrels in the week through Jan. 13 to 485.5 million barrels, well above the expectations of a 342,000-barrel decline.

The data also showed much larger-than-expected increases in stocks of gasoline and a surprise drop distillates inventories. Stockpiles of gasoline in the U.S. East Coast swelled to the highest weekly levels on record for this time of year, when refiners typically begin storing barrels ahead of summer driving season.

“At the end of the day, the focus is on the bigger picture and the bigger picture still looks positive which is why we are still up,” said Scott Shelton, energy specialist at ICAP in Durham, North Carolina.

“The bigger picture includes the OPEC/non-OPEC supply cuts and the IEA report, which was pretty supportive.”

Oil prices have gyrated this year as the market’s focus has swung from hopes that oversupply may be curbed by output cuts announced by the Organization of the Petroleum Exporting Countries and other producers to fears that a rebound in U.S. shale production could swamp any such reductions.

The head of the IEA, Fatih Birol, said in Davos, Switzerland, that he expected U.S. shale oil output to rebound by as much as 500,000 barrels per day over the course of 2017, which would be a new record.Oil and Gas

Futures Now: Oil slips on supply concerns

Futures Now: Oil slips on supply concerns   

It raised its 2016 demand growth estimate, and said the data indicated that rising demand was slowly tightening global oil markets.

Still, analysts warned that keeping the cuts was crucial, particularly as a resilient U.S. shale industry threatened to add more barrels to the market.

“Discipline and strict adherence to the new quotas will be needed probably throughout 2017 and beyond to see the long-awaited and sustainable rebalancing finally arrive,” PVM Oil Associates analyst Tamas Varga said in a note.

OPEC, which is cutting oil output alongside independent producer Russia for the first time in years, wants a lasting partnership with Moscow, Saudi Energy Minister Khalid al Falih told Reuters. He also said extending the deal for a full year if the market rebalances was not needed.

OPEC itself said its cuts would help balance the market, and said its output had already fallen in December. But it also pointed to the possibility of a rebound in U.S. output amid higher oil prices.

US Crude nearly down 2,7%

CNBC

US crude settles at $51.08, down nearly 2.7% on prospect of rising US shale production

A pump jack operates at a well site leased by Devon Energy Production Co. near Guthrie, Oklahoma.

Nick Oxford | Reuters
A pump jack operates at a well site leased by Devon Energy Production Co. near Guthrie, Oklahoma.

Oil prices fell to their lowest level in a week on Wednesday on expectations U.S. producers would boost output, while OPEC signaled a drop in the global oil supply surplus this year as the producer group’s output fell from a record high.

U.S. West Texas Intermediate (WTI) crude oil futures settled down $1.40, or 2.7 percent, at $51.08 per barrel.

Brent crude futures, the international benchmark for oil prices, were down $1.51, or 2.7 percent, at $53.96 a barrel at 2:34 p.m. ET (1734 GMT).

U.S. shale production is set to snap a three-month decline in February, the U.S. Energy Information Administration said on Tuesday, as energy firms boost drilling activity with crude prices hovering near 18-month highs.

February production will edge up 40,750 barrels per day (bpd) to 4.748 million bpd, the EIA said. In January, it was expected to drop by 5,900 bpd.

Too much OPEC optimism?

Too much OPEC optimism?   

“The petroleum markets have turned lower again in Wednesday trade amid talk that higher oil prices will translate into additional U.S. shale-oil production as a counter-balance to OPEC efforts to trim supply and reduce excess inventories,” Tim Evans, Citi Futures’ energy futures specialist, said in a note.

The Organization of the Petroleum Exporting Countries signaled a falling oil supply surplus in 2017 on Wednesday as the exporter group’s output slips from a record high ahead of a deal to cut supply and outside producers show positive initial signs of complying with the accord.

Under the agreement, OPEC, Russia and other non-OPEC producers have pledged to cut oil output by nearly 1.8 million bpd, initially for six months, to bring supplies back in line with consumption.

However, OPEC, in a monthly report, also pointed to the possibly of a rebound in U.S. output, as higher oil prices following supply cuts by other producers support increased shale drilling.

“OPEC’s regular dose of bullish rhetoric intending to prop up values has begun to wear thin,” Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates, said in a note

OPEC, excluding Indonesia, pumped 33.085 million barrels per day (bpd) last month, according to figures OPEC collects from secondary sources, down 221,000 bpd from November.

OPEC cut its forecast of supply in 2017 from non-member countries following pledges by Russia and other non-members to join OPEC in limiting output.

Risk in a few years of an oil price shock: Crescent Petroleum

Risk in a few years of an oil price shock: Crescent Petroleum   

OPEC now expects non-OPEC supply to rise by 120,000 bpd this year, down from growth of 300,000 bpd last month, despite an upwardly revised forecast of U.S. supply.

A committee responsible for monitoring compliance with the agreement meets in Vienna on Jan. 21-22.

The output cuts agreed by OPEC and others are likely to come largely from field and refinery maintenance, BMI Research said in a note. It said oil producers are expected to use lower volumes needed for domestic power generation in a bid to maintain export volumes.

“Sticking to output targets is important but export volumes from the participating countries are a much better indicator of how the cuts will affect the market,” it said.

“Participating members are keen not to sacrifice vital export revenue so are trying to find ways to limit domestic crude usage in order to prioritize filling their contracts to foreign refiners.”

Analysts forecast U.S. crude stocks fell by about 1 million barrels in the week ended Jan. 13. The American Petroleum Institute (API) will release its inventory report on Wednesday at 4:30 p.m. EST.

US crude settles at $50.82, striking one-month low on strong dollar, OPEC cut doubts

CNBC

Oil prices fell about 2 percent on Tuesday, extending the previous session’s sharp sell-off, as the U.S. dollar strengthened and doubts over implementation of a global deal to cut output loomed.

Members of the Organization of the Petroleum Exporting Countries (OPEC), such as Saudi Arabia, appear to be reducing production under a global deal to rein in oversupply but it is unclear whether other big producers like Iraq will follow suit.

Iraq, OPEC’s second-largest producer, said it would raise crude exports from its main Basra port to an all-time high in February. The country’s southern oil exports in the first nine days of January held steady near a record high, despite the agreed start of OPEC cuts on Jan. 1, according to a source and loading data.

“The petroleum markets are consolidating at the lower levels reached in Monday trade after doubts emerged over the degree of compliance with OPEC production cuts as Iraqi exports remain high, as well as the more general pace of market rebalancing,” Tim Evans, energy futures specialist at Citigroup said in a note.

“Fresh reports that non-OPEC producers Russia and Kazakhstan have reduced output have produced little price reaction, with the failure to rally on bullish news suggesting that the market is overbought and vulnerable to a further downward correction.”

Oil markets to continue tightening: Expert

Oil markets to continue tightening: Expert   

U.S. light crude oil settled down $1.14, or 2.2 percent, at $50.82. That was its weakest daily closing level since Dec. 7.

Brent crude was last down $1.26 a barrel, or 2.3 percent, to $53.68.

Both crude contracts fell more than $2 a barrel, or around 4 percent, on Monday on doubts that the Organization of the Petroleum Exporting Countries (OPEC) and other key oil producers would cut output as promised to try to reduce a global oversupply.

The dollar rose on Tuesday, retracing early losses against a basket of currencies, and pressuring greenback-denominated oil as a stronger dollar tends to discourages buying by consumers holding other currencies.

Higher oil future prices through December encouraged investors to buy large volumes of crude contracts and many of these “long” positions are likely to be unwound unless the market stays strong, analysts and brokers said.

Supplies are also increasing in North America.

The U.S. Energy Information Administration revised its forecast for 2017 U.S. crude output, expecting growth of 110,000 barrels per day compared with last month’s forecast of a 80,000 bpd year-over-year decline.

 

JP Morgan: Remain constructive on EU oil

JPMorgan: Remain constructive on EU oil   

In the United States, energy companies last week added rigs for a 10th week in a row, extending the drilling recovery into an eighth month as crude prices remained at levels at which many U.S. drillers can operate profitably.

The average Canadian rig count for December 2016 was 209, up 36 from the 173 counted in November 2016, and up 49 from the 160 counted in December 2015, said Matt Stanley, a fuel broker at Freight Services International in Dubai.

“A 30 percent increase in Canadian rigs in a year … The bear in me is well and truly back,” Stanley said.

Weekly inventory data from industry group the American Petroleum Institute (API) is scheduled at 4:30 p.m. EST, with analysts forecasting a 1.2 million-barrel build in U.S. crude stocks in the week to Jan. 6.

Adding one-off supplies, the U.S. Department of Energy on Monday announced a sale for crude from its Strategic Petroleum Reserve (SPR), with bids for 8 million barrels of light, sweet oil due by Jan. 17.

— CNBC’s Tom DiChristopher contributed to this report.

US crude settles at $53.99

US crude settles at $53.99, up slightly this week as traders parse signs OPEC is cutting output

CNBC

Oil traded higher on Friday as investors bought futures ahead of the weekend, but a strong U.S. dollar limited gains, as did lingering doubts about whether all OPEC producers would cut output in line with an agreement.

Trading was choppy, and market players cited end-of-week position-squaring and relatively low volumes during the first trading week of the year.

Brent crude futures, the benchmark for international oil prices, were up 11 cents at $57 per barrel at 2:35 p.m. ET (1935 GMT), having swung from a high of $57.47 to a low of $56.28.

In the United States, West Texas Intermediate (WTI) crude futures settled up 23 cents at $53.99 a barrel, recovering from a session low of $53.32 and off a high of $54.32.

The contract rose about 0.5 percent on the week, marking the fourth straight weekly gain.

US shale to kick in in second half of 2017: JPMorgan

US shale to kick in in second half of 2017: JPMorgan   

“There’s a lot of volatility, or at least changes in direction,” ABN Amro senior energy economist Hans van Cleef said. “People think the long-term trend is up, but after a gain of a few dollars, they take profit.”

The dollar gained broadly against major currencies after the U.S. non-farm payrolls report showed a slowing in hiring in December but an increase in wages, setting the economy up for further interest rate increases from the Federal Reserve this year.

A stronger greenback makes oil more expensive for holders of other currencies.

Top crude exporter Saudi Arabia and fellow Gulf members Abu Dhabi and Kuwait showed signs they were cutting production in line with an agreement by OPEC and other producers, yet market watchers have doubts about overall compliance.

Saudi Arabia’s state oil producer Saudi Aramco has started talks with customers globally on possible cuts of 3 percent to 7 percent in February crude loadings.

A Kuwaiti oil official said that country had also reduced production in line with the deal, and there are also reports of supply cuts from Abu Dhabi.

Energy CEO: We're in initial stages of a recovery

Energy CEO: We’re in initial stages of a recovery   

But there are still doubts about other producers’ compliance.

“There will be some countries who will cheat…we expect zero compliance from Baghdad… And we definitely do not expect the Kurds to join in, given that they are autonomous from the federal government,” Energy Aspects said in its 2017 oil market outlook, published this week.

Iraq Prime Minister Haider al-Abadi said this week the autonomous Kurdish region wasexporting more than its allocated share of oil. Iraq is the Organization of the Petroleum Exporting Countries’ second-largest producer.

Iran has sold more than 13 million barrels of oil that it had long held on tankers at sea, capitalizing on an OPEC output cut deal from which it is exempted to regain market share and court new buyers, according to industry sources and data.

In the past three months, Tehran has sold almost half the oil it had held in floating storage, which had tied up many of its tankers as it struggled to offload stocks in an oversupplied global market.

Oil markets to continue tightening: Expert

Oil markets to continue tightening: Expert   

National Iranian Oil Company (NIOC) is also negotiating with the Philippines over exporting four million barrels of crude per month to the country, Iran’s English-language Press TV quoted a statement published on Friday by the NIOC as saying.

Iran, OPEC’s third-largest oil producer, won special terms from the group’s production cuts agreed on Nov. 30 and may raise output slightly.

Overall supply from OPEC in December fell only slightly to 34.18 million barrels per day (bpd) from a revised 34.38 million bpd in November, according to a Reuters survey this week based on shipping data and information from industry sources.

U.S. energy companies this week added oil rigs for a 10th week in a row, bringing the total count up to 529, the most since December 2015, energy services firm Baker Hughes said on Friday.

Crude up 11 cents

US crude settles at $52.23, up 11 cents, as analysts forecast big draw in stockpiles

CNBC

Oil prices edged higher on Tuesday on forecasts of a steep draw in U.S. crude oil stocks that could indicate a global oversupply is starting to shrink.

Analysts polled by Reuters expected weekly U.S. crude oil inventories to show a draw of 2.4 million barrels in the week ending Dec. 16.

The American Petroleum Institute, an industry group, said U.S. crude stockpiles fell by 4.1 million barrels in the previous week.

International Brent crude oil futures rose 64 cents to $55.56 per barrel at 4:56 p.m. ET (2156 GMT).

U.S. West Texas Intermediate (WTI) crude oil futures settled Tuesday’s trade up 11 cents at $52.23 per barrel.

OPEC Vienna Deal bigger thana nyone thought

OPEC will comply with roughly 80 percent of deal quota: Analyst   

Both contracts rose despite a strong dollar, which hit a 14-year high. Crude prices often decline when the dollar strengthens, as it then becomes more expensive to hold dollar-denominated oil contracts.

“There are expectations that we’ll see supplies start to tighten by the end of the year,” said Phil Flynn, analyst at Price Futures Group in Chicago. “We’ll get more heating oil demand this weekend and could see a drop in production next week and even last week because of the cold temperatures.”

One outlying factor that has flummoxed some analysts has been a series of increases in U.S. inventories at the key oil storage hub in Cushing, Oklahoma. Flynn said this rise has been largely offset by a drop in Gulf Coast inventories.

Crude stocks fell more than expected last week, feeding expectations for another large drop in this week’s figures.

Traders said they were starting to square their books ahead of the upcoming Christmas weekend and the week running up to New Year. As a result, and barring major price-moving news, they said markets would likely remain tepid this week.

A deal to cut global supply among OPEC and non-OPEC producers struck this month has boosted oil prices to 17-month highs. The gains have set up 2016 to be the first year since 2012 in which Brent has risen.

“We are in a wait-and-see mood after OPEC-newsflow caused much volatility,” said Frank Klumpp, oil analyst at Stuttgart-based Landesbank Baden-Wuerttemberg. “The new balance seems to be between $53 and $57 a barrel on Brent for the next weeks.”

Russian energy minister Alexander Novak told Russian newspaper Vedomosti that Russia may extend a production cut beyond the first half of the year if needed.

Crucial price for oil is $55: Expert

Crucial price for oil is $55: Expert   

Reports late on Monday that Saudi Arabian crude oil exports fell by 176,000 barrels per day (bpd) in October had initially supported markets, but the effect later fizzled out due to an increase in Saudi exports of refined fuel products.

Barclays bank said that it expected a Saudi crude export cut to largely affect light crude oil grades, which mostly go to the United States.

“We think it is likely that the Saudis will curtail production/exports of their Arab Light crude and other lighter crudes this spring, easing the typical pre-summer ramp up in shipments to the U.S.,” the British bank said.

Saudi Arabia’s rising refined product output is part of a wider trend that affects mostly Asia.

Asia is seen posting its biggest net refining capacity additions in three years in 2017, further boosting demand for crude in the world’s biggest and fastest growing oil consuming region.

The increase amounts to about an additional 1.5 percent of refining capacity on top of Asia’s total installed capacity of nearly 29 million bpd.

Still, traders see no outright supply shortage for Asian refineries, as OPEC is shielding most of its Asian customers from the planned cuts.