US crude rises 1.6%, settling at $45.33, but posts third straight weekly loss

CNBC

  • Oil prices rise, recovering slightly from heavy losses this week, but post their third straight weekly loss.
  • Crude futures remain close to the lowest levels in over a year as rising U.S. inventories and concern over global economic growth rattle markets.
  • U.S. crude inventories were down by 46,000 barrels in the week to Dec. 21, the Energy Information Administration said on Friday.

Oil pumpjacks in the Permian Basin oil field are getting to work as crude oil prices gain.

Spencer Platt | Getty Images
Oil pumpjacks in the Permian Basin oil field are getting to work as crude oil prices gain.

Oil prices ticked were higher on Friday after a week of volatile trading, but shed early gains on profit-taking ahead of the New Year holiday as global crude benchmarks hovered near their lowest levels in more than a year.

U.S. light crude ended Friday’s session up 72 cents, or 1.6 percent, to $45.33, after reaching $46.22 a barrel earlier.

Brent crude oil futures were up 6 cents at $52.22 a barrel by 2:28 p.m. ET, having earlier risen to $53.80 a barrel. It had dropped 4.2 percent on Thursday.

Both benchmarks posted their third straight week of losses, with Brent dropping about 3 percent and WTI falling roughly half a percent.

Critchlow:  It seems unlikely oil will firm up in the first half of 2019

Critchlow: It seems unlikely oil will firm up in the first half of 2019  

Oil prices fell to their lowest levels in a year and a half this week and are down more than 20 percent for the year, depressed by rising supply and concerns about the health of the global economy.

U.S. crude inventories were down by 46,000 barrels in the week to Dec. 21, the Energy Information Administration said on Friday. Gasoline stocks rose by 3 million barrels, compared with analysts’ expectations in a Reuters poll for a gain of 28,000 barrels.

“The report was modestly bearish, as crude oil stocks held steady versus expectations of a sizeable decline,” said John Kilduff, a partner at Again Capital Management in New York. “The net effect of the report should keep prices fairly flat ahead of the weekend.”

Traders appeared to be squaring their books ahead of expected light volumes on Monday and a market closure on Tuesday for the New Year’s Day holiday.

“Looks like some people in the U.S. and UK got a nice opportunity to bail out of longs,” Sukrit Vijayakar, principal and trader at Trifecta Consultants in Mumbai, told Reuters Global Oil Forum.

Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore, said crude prices had been pressured by slowing economic growth “coupled with the expectation of strong U.S. production in the new year.”

Trader sees another rally ahead for crude

Trader sees another rally ahead for crude  

The United States has emerged as the world’s biggest crude producer this year, pumping 11.6 million barrels per day, more than both Saudi Arabia and Russia.

Earlier this month, OPEC and its allies, including Russia, agreed to cut output by 1.2 million bpd, or more than 1 percent of global consumption, starting in January.

Russian Energy Minister Alexander Novak said on Thursday that Russia would cut its crude output by between 3 million and 5 million tonnes in the first half of 2019 as part of the deal.

Novak also told reporters the U.S. decision to allow some countries to trade Iranian oil after putting Tehran under sanctions was one of the key factors behind the OPEC deal.

Imports of Iranian crude oil by major buyers in Asia hit their lowest level in more than five years in November as the U.S. sanctions on Iran’s oil exports took effect last month, government and ship-tracking data showed.

Oil prices fall after jump the day before; glut, economy worries weigh

CNBC

  • Both Brent and U.S. crude futures slipped as of 0611 GMT after soaring at least 7.9 percent each during the previous session.
  • Both crude benchmarks are down at least 37 percent from highs touched in October.

A truck used to carry sand for fracking is washed in a truck stop in Odessa, Texas.

Getty Images
A truck used to carry sand for fracking is washed in a truck stop in Odessa, Texas.

Oil fell on Thursday after soaring at least 7.9 percent in the previous session, as worries over a glut in crude supply and concerns over a faltering global economy pressured prices even as a stock market surge offered support.

Brent crude oil futures were down 16 cents, or 0.29 percent, at $54.31 per barrel by 0611 GMT. They rose 7.9 percent to $54.47 a barrel the day before.

U.S. West Texas Intermediate (WTI) crude futures fell 0.37 percent to $46.05 per barrel. They jumped 8.7 percent to $46.22 per barrel in the previous session.

Both crude benchmarks are down at least 37 percent from highs touched in October.

Global stocks rebounded on Wednesday on the back of the Trump administration’s attempt to shore up investor confidence and a report on strong U.S. holiday spending.

Shim Hye-jin, a commodity analyst at Samsung Securities in Seoul, said oil prices were still low despite gains made the day before.

“But if OPEC’s cuts are fulfilled, WTI prices are expected to rise to $50-60 a barrel, while Brent is expected to go up to between $58-70 a barrel next year.”

The Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, agreed at a meeting earlier this month to limit output by 1.2 million barrels per day starting in January.

Meanwhile, potentially bolstering oil prices, a preliminary Reuters poll on Wednesday forecast that U.S. crude inventories would drop 2.7 million barrels in the week to Dec. 21, marking their fourth straight week fall.

The American Petroleum Institute’s (API) inventory data is due on Thursday, while the government’s Energy Information Administration (EIA) is set to release its report on Friday.

— CNBC contributed to this report.

US oil prices rebound after tumbling to lowest since June 2017 on economy fears

CNBC

  • U.S. crude futures gained 0.68 percent, at $42.82 per barrel, at 0355 GMT.
  • Meanwhile, Brent crude oil futures slipped 0.22 percent at $50.36 per barrel.
  • Both Brent and U.S. crude futures plunged to their weakest levels in more than a year in the previous session.

174362712AB024_OIL_BOOM_SHI

Andrew Burton | Getty Images

Oil prices were mixed in thin trading on Wednesday as the U.S. benchmark rebounded from steep losses in the previous session, even though concern over the health of the global economy continued to overshadow the market in the longer term.

U.S. West Texas Intermediate (WTI) crude futures, were up 29 cents, or 0.68 percent, at $42.82 per barrel, at 0355 GMT, having at one point risen as high as 2 percent from the last close. They had slumped 6.7 percent in the previous session to $42.53 a barrel – the lowest since June 2017.

Meanwhile Brent crude oil futures were down 11 cents or 0.22 percent at $50.36 a barrel, having skidded 6.2 percent in the previous session to $50.47 a barrel, the weakest since August 2017.

“$50 is a psychological support level (for Brent),” said Margaret Yang, market analyst for CMC Markets in Singapore.

“But market confidence needs to be restored for oil price…that include an equity market rebound and/or a bigger production cut from major oil exporters,” Yang said, referring to an OPEC-led agreement to lower output from next month.

Broader financial markets have been under pressure on worries about a global economic slowdown amid higher U.S. interest rates and the U.S.-China trade dispute.

“U.S. equity futures are trading a bit firmer this morning triggering some little buying interest in the oil markets,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.

But Innes added macroeconomics fears will continue unless the Organization of the Petroleum Exporting Countries (OPEC) “reassures markets the viability of their supply cuts and even impose deeper ones as some members have suggested”. OPEC and allies led by Russia agreed this month to cut oil production by 1.2 million barrels per day from January.

Russian Energy Minister Alexander Novak said on Tuesday that oil prices would become more stable in the first half of 2019, supported by OPEC and non-OPEC countries’ joint efforts to cut output.

Elsewhere, U.S. political turmoil triggered by the partial shutdown of the federal government is also adding to market concerns. President Donald Trump said on Tuesday that shutdown could last until his demand for U.S.-Mexico border wall money is met.

Brent crude edges up, but concern over demand limits gains

CNBC

  • Brent fell 11 percent last week and hit its lowest since September 2017, while U.S. futures slid to their lowest since July 2017, bringing the decline in the two contracts to 35 percent so far this quarter.
  • The price drop has caused U.S. shale oil producers to curtail drilling plans for next year.

Oil tanker

Jean-Paul Pelissier | Reuters

Oil prices edged up on Monday after evidence that a recent fall to 15-month lows may be affecting output in the United States, the world’s largest producer, although concern about the outlook for demand tempered gains.

Brent crude futures were up 12 cents at $53.94 a barrel by 0858 GMT, while U.S. crude futures lost 3 cents to $45.56.

Brent fell 11 percent last week and hit its lowest since September 2017, while U.S. futures slid to their lowest since July 2017, bringing the decline in the two contracts to 35 percent so far this quarter.

The price drop has caused U.S. shale oil producers to curtail drilling plans for next year.

The boom in shale output has made the United States the world’s largest oil producer, overtaking Saudi Arabia and Russia.

Physical prices for Brent have also fallen in the last six weeks, driven by a drop in demand from Chinese refiners in particular, which has weighed on the value of barrels of anything from North Sea to Nigerian crude.

“The recent weakness in the physical Brent structure can be attributed to a broader easing of purchases by Asian refiners at this point, with lower end-Q1 intake weighing on spot assessments, and we can expect this pressure to carry through over the coming weeks,” consultancy JBC Energy said in a report.

Still, the macroeconomic picture and its impact on oil demand continue to pressure prices. Global equities have fallen nearly 9.5 percent so far in December, their biggest one-month slide since September 2011, when the euro zone debt crisis was unfolding.

The trade dispute between the United States and China and the prospect of a rapid rise in U.S. interest rates have brought global stocks down from this year’s record highs and ignited concern that oil demand will be insufficient to soak up any excess supply.

The Organization of the Petroleum Exporting Countries and allies led by Russia agreed this month to cut oil production by 1.2 million barrels per day from January.

Should that fail to balance the market, OPEC and its allies will hold an extraordinary meeting, United Arab Emirates Energy Minister Suhail al-Mazrouei said on Sunday.

“Oil ministers are already taking to the airwaves with a ‘price stability at all cost’ mantra,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.

Oil prices rise as OPEC output cuts seen to be deeper than previously expected

CNBC

  • The Organization of the Petroleum Exporting Countries (OPEC) plans to publish details of output cut quotas, OPEC’s secretary-general Mohammad Barkindo said in a letter reviewed by Reuters on Thursday.
  • WTI and Brent futures have declined more than 30 percent from their peak in October.

Oil pumpjacks in the Permian Basin oil field are getting to work as crude oil prices gain.

Spencer Platt | Getty Images
Oil pumpjacks in the Permian Basin oil field are getting to work as crude oil prices gain.

Oil prices climbed on Friday after tumbling 5 percent in the previous session on signs OPEC’s production cuts that start next month will be deeper than expected.

Benchmark Brent crude futures were up 27 cents, or 0.5 percent, at $54.62 per barrel at 0448 GMT, after dropping $2.89 in the previous session. Brent is set to drop 9.4 percent for the week.

U.S. West Texas Intermediate (WTI) crude futures rose 33 cents, or 0.7 percent, to $46.22 per barrel. WTI is set to decline about 9.5 percent for the week.

Crude prices have fallen along with major equity markets as investors fret about the strength of the global economy heading into next year. Further concerns were raised as the United States, the world’s biggest oil consumer, may have a government shutdown later on Friday.

The Organization of the Petroleum Exporting Countries (OPEC) plans to release a table detailing output cut quotas for its members and allies such as Russia in an effort to shore up the price of crude, OPEC’s secretary-general Mohammad Barkindo said in a letter reviewed by Reuters on Thursday.

Barkindo said to reach the proposed cut of 1.2 million barrels per day, the effective reduction for member countries was 3.02 percent.

That is higher than the initially discussed 2.5 percent as OPEC seeks to accommodate Iran, Libya and Venezuela, which are exempt from any requirement to cut.

“The current oil prices will force OPEC to increase compliance with the production cut deals, supporting Brent prices,” said Wang Xiao, head of crude research at Guotai Junan futures.

“The temporary recovery in prices has been driven by short- sellers buying back,” said Wang, referring to investors buying futures to close out positions that profit from falling oil prices.

WTI and Brent futures are down more than 30 percent from their peak in October on concerns of oil demand will drop because of a slowing global economy and signs of a supply glut.

Stephen Innes, head of trading for Asia-Pacific at OANDA said in a note that market volatility was “getting exaggerated by immensely thin liquidity conditions, risk sentiment, and holiday market participation”.