Oil falls on rising output from OPEC and United States

CNBC

  • OPEC output hit 2018 high in August – survey
  • But U.S. sanctions to target Iran’s oil exports from November.
  • U.S. rig count climbs, pointing to more production.

Oil prices fell on Monday amid rising supply from OPEC and the United States, outweighing concerns that falling Iranian output will tighten markets once U.S. sanctions bite from November.

International Brent crude oil futures were at $77.43 per barrel at 0222 GMT, down 21 cents, or 0.3 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $69.62 per barrel, down 18 cents, or 0.3 percent, from their last settlement.

Output from the producer cartel of the Organization of the Petroleum Exporting Countries (OPEC) rose by 220,000 barrels per day (bpd) between July and August, to a 2018-high of 32.79 million bpd, a Reuters survey found.

Output was boosted by a recovery in Libyan production and as Iraq’s southern exports hit a record.

Meanwhile, U.S. drillers added oil rigs for the first time in three weeks, energy services firm Baker Hughes reported on Friday, increasing the rig count by 2 units to 862.

The high rig count has helped lift U.S. crude oil production by more than 30 percent since mid-2016, to 11 million bpd.

Despite the price dip, Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA said Brent was “supported by the notion that U.S. sanctions on Iranian crude oil exports will eventually lead to constricted markets”, which he said would likely push up prices.

“Iranian production is already showing signs of decline, falling by 150,000 barrels per day (bpd) last month … (as) importers of Iranian barrels will already be moving away from taking shipments,” said Edward Bell, commodity analyst at Emirates NBD bank in Dubai.

Many analysts have warned that an economic slowdown because of trade disputes between the United States and other major economies including China and the European Union would drag on oil demand.

Amid rising trade tariffs raised by Washington and Beijing, China’s manufacturing activity grew at the slowest pace in more than a year in August, with export orders shrinking for a fifth month and employers cutting more staff, a private survey showed on Monday.

Despite this, OANDA’s Innes said it was too early to say whether an economic slowdown would put a serious dent on oil prices.

“While the analysts continue fretting that $200 billion in tariffs could drag down oil demand, it isn’t at all clear that such type of economic headwinds will topple oil prices given … the constant barrage of supply outages,” he said.

Oil prices nod up as US fuel supply falls and sanctions on Iran loom

CNBC

  • Oil prices were up slightly on Thursday, extending their gains from the prior session from a drop in U.S. crude inventories and expected disruptions to supply from Iran and Venezuela.
  • The International Energy Agency said global oil markets are likely to tighten toward the end of 2018.

Oil prices inched up on Thursday, extending solid gains from the previous session on a fall in U.S. crude inventories and expected disruptions to supply from Iran and Venezuela.

International Brent crude oil futures were at $77.21 per barrel at 0114 GMT, up 7 cents from their last close.

U.S. West Texas Intermediate (WTI) crude futures were up 14 cents at $69.65 a barrel.

The rises came after crude hit multi-week highs during the previous session.

U.S. commercial crude inventories fell by 2.6 million barrels in the week to Aug. 24, to 405.79 million barrels. U.S. production was flat from the previous week’s record 11 million barrels per day (bpd).

“Oil prices rose on the back of an unexpected U.S. inventory draw, the second week in a row of declines, together with gasoline demand reaching a record high,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.

“The looming sanctions against Iran are beginning to impact oil supply lifting crude prices,” added Alfonso Esparza, analyst at futures brokerage OANDA.

The Organization of the Petroleum Exporting Countries (OPEC), of which Iran is the third biggest producer, will discuss in December whether it can compensate for a sudden drop in Iranian oil supply after U.S sanctions against Tehran start in November, the head of Iraq’s state-oil marketer SOMO, Alaa al-Yasiri, said on Wednesday.

Iran’s August crude oil exports will likely drop to just over 2 million bpd, versus a peak of 3.1 million bpd in April, as importers bow to American pressure to cut orders.

The International Energy Agency (IEA) warned of a tightening market towards the end of the year, due to a combination of supply concerns, such as Iran and also Venezuela, and strong demand especially in Asia.

“Definitely there are some worries that oil markets can tighten towards the end of this year,” the IEA’s chief Fatih Birol told Reuters on Wednesday.

Crude oil exports in crisis-struck OPEC-member Venezuela have halved in recent years to only around 1 million bpd.

Oil stable as U.S./Sino trade row weighs, Iran sanctions cut supply outlook

CNBC

  • Oil prices saw a slight decline on Monday amid concerns over the potential impact of the U.S.-China trade dispute on global economic growth.
  • The decline in prices was kept in check by impending U.S. sanctions on Iran in November, a move which is expected to remove at least 1 million barrels per day of crude oil from the market.

Oil prices dipped slightly on Monday on concerns that a U.S.-China trade dispute will erode global economic growth, although looming U.S. sanctions against Iran’s oil sector kept crude from falling further, traders said.

International Brent crude oil futures were at $75.75 per barrel at 0122 GMT, down 7 cents from their last close.

U.S. West Texas Intermediate (WTI) crude futures were down 9 cents at $68.63 a barrel.

“Falling U.S. rig counts and last week’s decline in U.S. inventories are supporting oil prices amid a protracted U.S.-China trade war that could dampen global growth and weigh on oil demand,” said Stephen Innes, Head of Trading for Asia/Pacific at futures brokerage OANDA in Singapore.

U.S. energy companies cut nine oil drilling rigs last week, dropping to 860, the biggest reduction since May 2016, energy services firm Baker Hughes said on Friday.

“Despite growing concerns about potential oversupply, the markets will continue to get a fillip from U.S. sanctions against Iran,” Innes added.

Washington will target Iran’s oil exports with sanctions from November.

OPEC-member Iran has exported around 2.5 million barrels per day (bpd) of crude oil so far this year. Most analysts expect this figure to fall by at least 1 million bpd once sanctions kick in.

International oil prices slip amid escalation of US-China trade spat; drop in US crude inventories offers support

CNBC

  • U.S. crude oil prices saw more gains on Thursday as commercial crude inventories stateside declined.
  • Meanwhile, international crude markets were down as a result of concerns over the ongoing U.S.-China trade dispute.

International oil prices slipped on Thursday, weighed down by the escalating trade dispute between the United States and China, although a decline in U.S. commercial crude inventories offered some support.

International benchmark Brent crude oil futures were at $74.63 per barrel at 0422 GMT, down 18 cents, or 0.2 percent, from their last close.

West Texas Intermediate (WTI) crude futures were at $67.90 per barrel, up 4 cents from their last settlement, buoyed by the decline in U.S. crude inventories.

International markets weakened as the intensifying trade spat between the United States and China was seen as a drag on economic growth.

The United States and China escalated their acrimonious trade war on Thursday, implementing punitive 25 percent tariffs on $16 billion worth of the other’s goods. Washington is holding hearings this week on a proposed list of an additional $200 billion worth of Chinese imports to face duties.

“These (overall) measures are expected to shave up to 0.3-0.5 percentage points from China’s real GDP growth in 2019,” said rating agency Moody’s Investor Service.

“For the U.S. … trade restrictions will trim off about one quarter of a percentage point from real GDP growth to 2.3 percent in 2019.”.

In U.S. oil markets, a decline in commercial crude inventories provided WTI with stronger support than Brent.

Greg McKenna, chief market strategist at futures brokerage AxiTrader said the U.S. crude price support came “as the EIA inventory data showed a big draw in U.S. crude and a solid run rate of 98.1 percent for refineries”.

U.S. commercial crude oil inventories fell by 5.8 million barrels in the week to Aug. 17 to 408.36 million barrels, the Energy Information Administration (EIA) said on Wednesday.

In production, U.S. crude oil output rose back to 11 million barrels per day, the EIA report said.

That means the world’s three top producers, Russia, the United States and Saudi Arabia, now all churn out around 11 million bpd, meeting a third of global demand.