Oil prices steady, focus turns to G-20 gathering

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Reuters

KEY POINTS
  • Brent crude futures were up 5 cents, or 0.08%, at $66.60 per barrel by 0043 GMT.
  • U.S. West Texas Intermediate (WTI) crude futures were down 2 cents, or 0.03%, at $59.41 a barrel.
RT: Oil Russia Bashneft company 150128
Sergei Karpukhin | Reuters

Oil prices were steady on Friday, with focus shifting to the G20 summit where a scheduled meeting between U.S. President Donald Trump and Chinese President Xi Jinping has stirred hopes that trade tensions could ease.

Brent crude futures were up 5 cents, or 0.08%, at $66.60 per barrel by 0043 GMT.

U.S. West Texas Intermediate (WTI) crude futures were down 2 cents, or 0.03%, at $59.41 a barrel.

The leaders of the G20 countries meet on Friday and Saturday in Osaka, Japan, but the most anticipated meeting is between Trump and Xi on Saturday.

A trade dispute between the world’s two biggest economies has weighed on oil prices, fanning fears that slowing economic growth could dent demand for the commodity.

“While there are no expectations of a truce between the two parties, it will set the scene for the OPEC meeting a couple of days later,” ANZ Bank said in a note.

Trump said on Wednesday a trade deal with Chinese President Xi was possible this weekend but he is prepared to impose U.S. tariffs on most remaining Chinese imports should the two countries disagree. [nL2N23X1WK]

“Even if U.S.-China trade talks turn positive, we think OPEC will extend the current production cuts until the end of the year. However, deeper cuts look unlikely, given the rising supply issues, ” ANZ said.

The Organization of Petroleum Exporting Countries (OPEC) and some non-members including Russia, known as OPEC+, will hold meetings on July 1-2 in Vienna to decide whether to extend their supply cuts.

OPEC+ agreed to curb their oil output by 1.2 million barrels per day from Jan.1.

Russian President Vladimir Putin said in an interview with the Financial Times on Thursday that the OPEC-led supply cut helped stabilize oil markets and the future of the output deal was expected to be on the agenda at the G20 summit.

Tensions between the United States and Iran have also been keeping markets on edge.

A week after U.S. President Donald Trump called off air strikes on Iran at the last minute, the prospect that Tehran could soon violate its nuclear commitments has created additional diplomatic urgency to find a way out of the crisis.

Oil prices fall as market awaits G20, OPEC

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Reuters

KEY POINTS
  • Brent crude futures were down 44 cents, or 0.7%, at $66.05 by 0059 GMT.
  • U.S. West Texas Intermediate (WTI) crude futures were down 41 cents, or 0.7%, at $58.97.
RT: Offshore oil rig Norway 160211
An offshore oil rig off the coast of Norway.
Nerijus Adomaitis | Reuters

Oil fell on Thursday, erasing some of the previous session’s strong gains, as traders eye the G20 summit in Japan and a meeting of OPEC and other oil producers to decide on an extension of output cuts.

Brent crude futures were down 44 cents, or 0.7%, at $66.05 by 0059 GMT.

U.S. West Texas Intermediate (WTI) crude futures were down 41 cents, or 0.7%, at $58.97.

Oil prices rose more than 2% on Wednesday and hit their highest in about a month, buoyed by U.S. government data showing a larger-than-expected drawdown in crude stocks as exports hit a record high and surprise drops in refined product stockpiles.

However, traders said concerns that a hoped-for breakthrough on trade at the G20 may not eventuate and some nervousness about continued output cuts were crimping follow-through buying.

“I think the length of the speculative positioning might be stretched too tight ahead of G20 and of course OPEC,” said Stephen Innes, managing partner at Vanguard Markets in Bangkok, said.

U.S. President Donald Trump will meet with Chinese President Xi Jinping at the Group of 20 summit that starts on Friday in Osaka, Japan to seek a breakthrough in negotiations to end a trade war that has been hitting global economic growth.

Trump said on Wednesday that a deal was possible but also spoke of a Plan B that would involve reducing business ties with China.

“With Trump stirring up trade war dust via “Plan B” there is still that element of the unknown,” Innes said.

Almost immediately after the G20 summit ends on Saturday, the Organization of the Petroleum Exporting Countries (OPEC) meets on Monday to discuss an extension of production cuts to support prices.

The day after that OPEC members meet with other producers including Russiain a grouping known as OPEC+, which agreed in December to reduce supply by 1.2 million barrels per day from Jan. 1. The agreement is due to expire on June 30.

Crude inventories in the United States, the largest producer and consumer of oil, fell 12.8 million barrels last week, the Energy Information Administration said, far surpassing analyst expectations for a decrease of 2.5 million barrels.

That was the most since September 2016, according to the statistical arm of the Department of Energy.

Net U.S. crude imports fell last week by 1.2 million barrels per day (bpd). Overall crude exports rose to 3.8 million bpd, beating the previous record of 3.6 million bpd in February.

Oil prices jump as US crude stocks fall, Middle East worries add support

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Reuters

KEY POINTS
  • Front-month Brent crude futures, international benchmark for oil, were up 1.3% at $65.91 by 0341 GMT. They earlier touched their highest since May 31 at $66 a barrel.
  • U.S. West Texas Intermediate (WTI) crude futures were at $58.98 per barrel, up 1.8% from their last settlement. WTI earlier hit its strongest level since May 30 at $59.03 a barrel.
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An oil pumpjack operates near Williston, North Dakota.
Andrew Cullen | Reuters

Oil prices rose more than 1% on Wednesday to their highest in nearly a month as industry data showed U.S. crude stockpiles fell more than expected, underpinning a market already buoyed by worries over a potential U.S.-Iranconflict.

Front-month Brent crude futures, international benchmark for oil, were up 1.3% at $65.91 by 0341 GMT. They earlier touched their highest since May 31 at $66 a barrel.

U.S. West Texas Intermediate (WTI) crude futures were at $58.98 per barrel, up 1.8% from their last settlement. WTI earlier hit its strongest level since May 30 at $59.03 a barrel.

Analysts said the gains were mainly driven by American Petroleum Institute (API) data showing a fall in U.S. crude inventories.

U.S. crude stockpiles fell by 7.5 million barrels in the week ended June 21 to 474.5 million, compared with analyst expectations for a decline of 2.5 million barrels, the data showed. Crude stocks at U.S. delivery hub Cushing, Oklahoma, fell by 1.3 million barrels.

“Oil prices went ballistic after the API report,” said Stephen Innes, a managing partner at Vanguard Markets.

“Oil prices have been squeezing higher on escalating tensions in the Middle East. But with late-day draws showing up in the API report, this is a strong signal for the energy market, ” Innes said.

The data came as traders watched for any signs that tensions between the United States and Iran could escalate into military conflict.

U.S. President Donald Trump threatened on Tuesday to obliterate parts of Iran if it attacked “anything American”, in a new war of words with Iran. Tehran has condemned a fresh round of U.S. sanctions as “mentally retarded.”

Bilateral tensions between the two have spiked anew after Iran shot down a U.S. drone last week in the Gulf. Relations have been tense since Washingtonblamed attacks on oil tankers just outside the Gulf in May and June on Iran, while Tehran has repeatedly said it had no role in the incidents.

Conflict between Washington and Tehran has stoked fears that shipments passing through the Strait of Hormuz — the world’s busiest oil supply route — could be disrupted.

Seeking to calm a nervous market, the head of national oil company Saudi Aramco said on Tuesday the company can meet the oil needs of customers using its spare capacity.

Oil prices drop amid demand worries, but US-Iran tensions support

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Reuters

KEY POINTS
  • Benchmark Brent crude futures were down 57 cents, or 0.9%, at $64.29 a barrel by 0342 GMT. They dropped 0.5% on Monday.
  • U.S. crude futures were down 58 cents, or 1%, at $57.32 a barrel. The U.S. benchmark rose 0.8% in the previous session.
Reusable Oil Texas
Oil pumpjacks in the Permian Basin oil field are getting to work as crude oil prices gain.
Spencer Platt | Getty Images

Oil fell on Tuesday amid concerns over the outlook for crude demand, but prices were supported after Washington announced new sanctions on Iran amid mounting tensions in the Middle East.

Benchmark Brent crude futures were down 57 cents, or 0.9%, at $64.29 a barrel by 0342 GMT. They dropped 0.5% on Monday.

U.S. crude futures were down 58 cents, or 1%, at $57.32 a barrel. The U.S. benchmark rose 0.8% in the previous session.

Brent climbed 5% last week and U.S. crude surged 10% after Iran shot down a U.S. drone on Thursday in the Gulf, adding to tensions stoked by attacks on oil tankers in the area in May and June. Washington has blamed the tanker attacks on Iran, which denies having any role.

U.S. President Donald Trump targeted Iranian Supreme Leader Ayatollah Ali Khamenei and other top Iranian officials with sanctions on Monday, taking an unprecedented step to increase pressure on Iran after Tehran’s downing of the drone.

“This would appear to effectively rule out any talks or negotiations to end the crisis,” said Tom O’Sullivan, founder of energy and security consultancy Mathyos Advisory.

Trump also said on Twitter that other countries should protect their own oil shipping in the Middle East rather than have the United States protect them.

Some said the threat of immediate military conflict had eased slightly.

“Traders have lessened their odds for an immediate U.S.-Iran escalation in this forever smouldering hot spot,” said Stephen Innes, managing partner at Vanguard Markets in Bangkok.

Meanwhile, hopes are waning for progress in Sino-U.S. trade talks at this week’s G20 meeting as investors await a meeting between Trump and Chinese President Xi Jinping. That could further hurt global growth prospects, hitting demand for oil and other commodities.

Weak manufacturing data released on Monday by the Federal Reserve Bank of Dallas added to worries about slipping demand for crude oil.

However, supply is expected to remain relatively tight, as the Organization of the Petroleum Exporting Countries and its allies including Russia, an alliance known as OPEC+, appear likely to extend a deal on curbing output when they meet on July 1-2 in Vienna, analysts said.

Russian Energy Minister Alexander Novak said on Monday that international cooperation on crude production had helped stabilize oil markets and was more important than ever. He also voiced concerns about demand.

Sanctions on Iran and Venezuela imposed by Washington have cut oil exports from the two OPEC members but U.S. production has been rising, leading some Russian officials to accuse Washington of carving out market share for its energy exports.

Oil prices climb as Middle East tensions simmer

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Reuters

KEY POINTS
  • Brent futures were up 25 cents, or 0.4%, at $65.45 a barrel by 0325 GMT.
  • West Texas Intermediate crude was up 37 cents, or 0.6%, at $57.80 a barrel.
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A pump jack operates at a well site leased by Devon Energy Production Co. near Guthrie, Oklahoma.
Nick Oxford | Reuters

Oil prices climbed on Monday as tensions remain high between Iran and the United States, with U.S. Secretary of State Mike Pompeo saying “significant” sanctions on Tehran would be announced.

Brent futures were up 25 cents, or 0.4%, at $65.45 a barrel by 0325 GMT.

West Texas Intermediate crude was up 37 cents, or 0.6%, at $57.80 a barrel.

U.S. President Donald Trump said last week that he called off a military strike to retaliate for Iran’s downing of an unmanned U.S. drone, and he said on Sunday that he was not seeking war with Iran.

But Pompeo also said “significant” sanctions on Iran would be announced on Monday aimed at further choking off resources that Tehran uses to fund its activities in the region.

“The Middle East clashes should support oil prices at the start of the week as crude markets will wait to see Iran’s response to the threat of additional sanctions, ” said Edward Moya, senior market analyst at OANDA in New York.

Oil prices surged last week after Iran shot down a drone that the United States claimed was in international airspace and Tehran said was over its territory.

Amid the escalating tensions, Brent racked up a gain of about 5% last week, its first weekly gain in five weeks, and WTI jumped about 10%, its biggest weekly percentage gain since December 2016.

Trump said he had aborted a military strike on Iran because such a response to Tehran’s downing of the unmanned U.S. surveillance drone would have caused a disproportionate loss of life.

Iranian officials told Reuters that Tehran had received a message from Trump through Oman overnight warning that a U.S. attack on Iran was imminent.

“We’re prepared to negotiate with no preconditions,” Pompeo told reporters on Sunday. “They know precisely how to find us. I am confident that at the very moment they’re ready to truly engage with us we’ll be able to begin these conversations. I’m looking forward to that day.”

Meanwhile, U.S. energy companies last week increased the number of oil rigs operating for the first time in three weeks.

Companies added one oil rig in the week to June 21, bringing the total count to 789, Baker Hughes said in a closely followed report on Friday.