Oil prices fall for second day on weak economic data

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Reuters

KEY POINTS
  • Brent crude futures were down 16 cents, or 0.3%, at $60.78 a barrel by 0215 GMT. They fell 1.7% in the previous session on concerns about slowing global growth.
  • U.S. West Texas Intermediate (WTI) crude futures were down 12 cents, or 0.2%, at $51.92. They dropped 1.1% on Monday.
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Andrew Burton | Getty Images

Oil prices were falling for a second day on Tuesday, after more signs that global economic growth is being hit by U.S.China trade tensions, although losses were limited amid tensions in the Middle East after tanker attacks last week.

Brent crude futures were down 16 cents, or 0.3%, at $60.78 a barrel by 0215 GMT. They fell 1.7% in the previous session on concerns about slowing global growth.

U.S. West Texas Intermediate (WTI) crude futures were down 12 cents, or 0.2%, at $51.92. They dropped 1.1% on Monday.

The New York Federal Reserve said on Monday that its gauge of business growth in New York state posted a record fall this month to its weakest level in more than 2-1/2 years, suggesting an abrupt contraction in regional activity.

U.S. business sentiment has sagged as tensions over trade have escalated between China and the United States and on signs of softness in the labor market.

“The (oil) market is in a rut and desperately in need of some robust economic data to get it out of this funk,” said Stephen Innes, managing partner at Vanguard Markets in Bangkok.

Oil prices have fallen around 20% since 2019 highs reached in April, in part due to concerns about the U.S.-China trade war and disappointing economic data.

U.S. President Donald Trump and China’s President Xi Jinping could meet at the G20 summit in Japan later this month. Trump has said he would meet Xi at the event, although China has not confirmed the meeting.

Putting further pressure on oil, the U.S. energy department said on Monday that shale oil output is expected to reach a record in July.

But tensions in the Middle East are likely to keep prices supported, analysts said.

Acting U.S. Defense Secretary Patrick Shanahan announced on Monday the deployment of about 1,000 more troops to the Middle East for what he said were defensive purposes, citing concerns about a threat from Iran.

Fears of a confrontation between Iran and the United States have mounted since last Thursday when two oil tankers were attacked, which Washington has blamed on Tehran. Iran has denied involvement.

Oil slips to $71, hit by talk of higher OPEC+ production

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Reuters

KEY POINTS
  • Analysts expect U.S. crude stockpiles to have risen by 1.9 million barrels last week, the fourth straight increase.
  • Oil fell Monday after comments from Russia raised concern the OPEC-led supply-cutting pact may not be renewed.
  • OPEC and its allies are due to meet in June to decide whether to continue the arrangement.
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Andrew Burton | Getty Images

Brent oil slipped to around $71 a barrel on Tuesday, pressured by expectations of higher U.S. inventories and concern about Russia’s willingness to stick with OPEC-led supply cuts.

Analysts on average expect U.S. crude stockpiles to have risen by 1.9 million barrels last week, the fourth straight increase. The first of this week’s stockpile reports is due at 2030 GMT from the American Petroleum Institute.

“We have already seen these inventories going higher in the last week’s print,” said Naeem Aslam, chief market analyst at TF Global Markets in London.

“The rising inventory data has raised many questions for investors – no one wants to see the oil glut again.”

Brent crude, the global benchmark, was down 12 cents at $71.06 a barrel at 0801 GMT. U.S. West Texas Intermediate (WTI) crude gained 6 cents to $63.46.

While OPEC-led supply cuts have boosted Brent by more than 30 percent this year, gains have been limited by worries that slowing economic growth could weaken demand for fuel.

Oil also fell on Monday after comments from Russia raised concern the OPEC-led supply-cutting pact may not be renewed. Russia and the producer group may decide to boost output to fight for market share with the United States, TASS news agency ited Finance Minister Anton Siluanov as saying.

The Organization of the Petroleum Exporting Countries and other producers including Russia, an alliance known as OPEC+, have been cutting output since Jan. 1. They decide in June whether to continue the arrangement.

“There is a growing concern that Russia will not agree on extending production cuts and we could see them officially abandon it in the coming months,” said Edward Moya, senior market analyst at OANDA.

Oil rises on Iran sanctions threat, Venezuela shutdown

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Reuters

KEY POINTS
  • Brent crude rose 26 cents, or 0.4 percent, to $69.27 a barrel by 0025 GMT, having earlier touched $69.29, a new high for 2019.
  • U.S. West Texas Intermediate (WTI) futures rose 28 cents, or 0.5 percent to $61.87 a barrel, earlier reaching $61.89, also a new high for 2019. WTI closed up 2.4 percent on Monday.
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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 rose to fresh highs for the year on Tuesday, after a U.S. official said Washington is considering more sanctions on Iran and a key Venezuelanexport terminal halted operations.

Prices were also underpinned by a Reuters survey showing OPEC oil supply sank to a four-year low in March, and positive data from the world’s biggest economies, the United States and China.

Brent crude rose 26 cents, or 0.4 percent, to $69.27 a barrel by 0025 GMT, having earlier touched $69.29, a new high for 2019.

U.S. West Texas Intermediate (WTI) futures rose 28 cents, or 0.5 percent to $61.87 a barrel, earlier reaching $61.89, also a new high for 2019. WTI closed up 2.4 percent on Monday.

The U.S. government is considering additional sanctions against Iran that would target areas of its economy that have not been hit before, a senior Trump administration official told reporters on Monday.

The official also suggested that the U.S. may not extend waivers from sanctions on Iranian oil exports to a group of eight importers that expire next month.

“That, I think, is where we’re headed,” the official said.

Venezuela’s Jose crude export terminal has halted operations due to a lack of electricity supply, two sources with knowledge of the situation said, after restarting on Friday following a prolonged blackout.

Production cuts from the Organization of the Petroleum Exporting Countries (OPEC) helped push the group’s supply to a four-year low in March, a Reuters survey found.

The world’s biggest exporter, Saudi Arabia, over-delivered on the group’s supply-cutting pact while Venezuelan output fell further due to U.S. sanctions and earlier power outages.

Markets also rallied on Monday after upbeat economic numbers from the United States and China eased worries about slowing global growth.

Oil prices push higher as supply worries drive gains

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Reuters
KEY POINTS
  • Brent crude for June delivery was up by 43 cents, or 0.6 percent, at $68.01 a barrel by 0214 GMT, having risen 27 percent in the first quarter.
  • U.S. West Texas Intermediate (WTI) futures rose 32 cents, or 0.5 percent, to $60.46 barrel, after posting a rise of 32 percent in the January-March period.
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Stacked rigs are seen along with other idled oil drilling equipment in Dickinson, North Dakota, June 26, 2015.
Andrew Cullen | Reuters

Oil prices rose on Monday, adding to gains in the first quarter when the major benchmarks posted their biggest increases in nearly a decade, as concerns about supplies outweigh fears of a slowing global economy.

Brent crude for June delivery was up by 43 cents, or 0.6 percent, at $68.01 a barrel by 0214 GMT, having risen 27 percent in the first quarter.

U.S. West Texas Intermediate (WTI) futures rose 32 cents, or 0.5 percent, to $60.46 barrel, after posting a rise of 32 percent in the January-March period.

U.S. sanctions on Iran and Venezuela along with supply cuts by members of the Organization of the Petroleum Exporting Countries (OPEC) and other major producers have helped support prices this year, overshadowing concerns about global growth and the U.S.-China trade war.

However, future gains will be limited by potential softness in the global economy as well as the ability of U.S. oil producers to ramp up production when prices spike, said Phin Ziebell, senior economist at National Australia Bank in Sydney.

“It’s tough to see a really big rally from here,” he said.

Still, analysts have turned cautiously optimistic on crude oil prices this year, a Reuters poll showed on Friday.

U.S. production has also steadied, with the U.S. government reporting on Friday that domestic output in the world’s top crude producer edged lower in January to 11.9 million bpd.

U.S. energy firms last week reduced the number of oil rigs operating to the lowest level in nearly a year, cutting the most rigs in a quarter in three years, Baker Hughes energy services firm said.

Sigal Mandelker, U.S. under-secretary of the Treasury for Terrorism and Financial Intelligence, told reporters in Singapore on Friday that the United States had placed further “intense pressure” on Iran.

U.S. officials are keen to ensure see that Malaysia, Singapore and others are fully aware of illicit Iranian oil shipments and the tactics Iran uses to evade sanctions, Mandelker said.

The U.S. has also instructed oil trading houses and refiners to further cut dealings with Venezuela or face sanctions themselves, even if the trades are not prohibited by published U.S. sanctions, three sources familiar with the matter said.

A deal between OPEC and allies such as Russia to cut output by around 1.2 million barrels per day, which officially started in January, has also supported prices.

Hedge funds and other money managers raised their net long U.S. crude futures and options positions to 243,209 in the week to March 26, the U.S. Commodity Futures Trading Commission (CFTC) said.

Oil prices steady after steep drop on Trump’s OPEC tweet

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 | 
Reuters
KEY POINTS

  • Oil prices steady after steep drop on President Donald Trump’s renewed pressure campaign on OPEC.
  • OPEC-led production cuts and U.S. sanctions on Iran and Venezuela are supporting prices.
  • Analysts polled by Reuters expect U.S. crude stockpiles to rise for a sixth week.
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A truck used to carry sand for fracking is washed in a truck stop in Odessa, Texas.
Getty Images

Oil traded roughly flat on Tuesday as Saudi Arabia and the rest of OPEC were expected to stick to their policy of cutting production, despite renewed pressure from U.S. President Donald Trump.

Prices slid on Monday, when many traders were out of the office attending International Petroleum Week, a series of industry events in London, after Trump called on OPEC to ease its efforts to boost the oil market. Prices were “getting too high,” the president said.

“Yesterday was a typical price action you see during IP Week when you have a headline,” said Olivier Jakob, oil analyst at Petromatrix. “But I don’t think it will change anything in current OPEC supply policy.”

Brent crude, the global benchmark, rose 28 cents to $65.04 around 10:10 a.m. ET (1510 GMT), after losing 3.5 percent on Monday. U.S. West Texas Intermediate crude fell 1 cent to $55.47, stabilizing after a roughly 3-percent fall.

Expectations that U.S. crude inventories had risen for a sixth straight week limited the rally.

U.S. crude stocks were seen 3.6 million barrels higher in weekly inventory reports, underlining that supply is adequate in the world’s top consumer. The first such report is due at 4:30 p.m. ET (2130 GMT) from the American Petroleum Institute, following by more comprehensive government figures on Wednesday morning.

Oil is up about 20 percent since the start of the year, when OPEC and non-member producers, such as Russia, began cutting production in an effort to reduce a global glut.

Saudi Arabia and other OPEC members are likely to be cautious about relaxing their supply-cut plan, Jakob said, after a boost in output in the second half of last year ahead of U.S. sanctions on Iran led to a steep slide in prices.

“Will the kingdom budge and increase production or at least keep it steady,” said PVM’s Tamas Varga. “Just two weeks after announcing deeper cuts, it would be a capitulation.”

An OPEC source, in comments to Reuters on Tuesday, agreed with the analysts’ views.

U.S. sanctions against OPEC members Iran and Venezuela have also contributed to the gains and are providing a floor for prices, analysts say.

Optimism about a U.S.-China trade deal also helped prices to rally.

Trump on Monday said he may soon sign a deal to end a trade war with Chinese President Xi Jinping if their countries can bridge remaining differences.

— CNBC’s Tom DiChristopher contributed to this report.