Oil prices edge lower ahead of US stockpile numbers

CNBC

Reuters
KEY POINTS
  • Brent futures were down 6 cents at $61.51 a barrel by 0311 GMT, having fallen 0.7% on Monday.
  • U.S. West Texas Intermediate (WTI) crude was down 12 cents at $55.69, after falling 1.5% in the previous session.
GP: Oil Tankers on the Mississippi in Louisiana 191029
A line of oil tankers transporting fuel to the refineries located along the Mississippi River just north of New Orleans, Louisiana.
Art Wager | Getty Images

Oil prices slipped on Tuesday as investors awaited U.S. crude inventory data for a pointer on oil demand trends, while concerns about slower economic growth overshadowed signs of a thawing in the trade war between Washington and Beijing.

Brent futures were down 6 cents at $61.51 a barrel by 0311 GMT, having fallen 0.7% on Monday.

U.S. West Texas Intermediate (WTI) crude was down 12 cents at $55.69, after falling 1.5% in the previous session.

Prices rose sharply last week amid a decline in U.S. inventories and signs of an easing in the U.S.-China trade war, but worries on Monday about weaker economic growth offset hopes of a rise in oil demand even if trade talks progress.

“The inventory read last week is still reverberating through trading, although we did see that finally start to give way last night, but we can see there is very little appetite to go on with it today,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

U.S. crude inventories were forecast to have increased by around 700,000 barrels last week, according to a Reuters poll of analysts, having unexpectedly fallen the previous week, the first decline in six weeks.

U.S. crude oil stockpiles at Cushing, Oklahoma, the delivery point for WTI, have risen by about 1.5 million barrels in the week through Oct. 25, traders said earlier, citing data from market intelligence firm Genscape.

The American Petroleum Institute releases industry data later on Tuesday, while the U.S. government’s Energy Information Administration releases inventory data on Wednesday.

The United States Trade Representative is studying whether to extend tariff suspensions on $34 billion of Chinese goods set to expire on Dec. 28 this year, the agency said on Monday.

U.S. President Donald Trump said earlier on Monday he expected to sign a significant part of the trade deal with China ahead of schedule but did not elaborate on the timing.

Leaders of the world’s two biggest economies are working to agree on the text for a “Phase 1” trade agreement announced by Trump on Oct. 11. Trump has said he hopes to sign the deal with China’s President Xi Jinping next month at a summit in Chile.

The trade war has hit economic growth around the world and kept oil prices range-bound for months.

Oil hits six-week high on hopes of extended OPEC output cuts

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Reuters
KEY POINTS
  • Brent was up 26 cents, or 0.4%, at $62.85 a barrel by 0349 GMT.
  • U.S. crude was 27 cents, or 0.5%, higher at $58.12 a barrel.
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Morgan Brennan | CNBC

Oil futures hit a six-week high on Tuesday, rising for a fifth day on optimism that OPEC and other countries may agree to extend production cuts in a bid to support prices.

Brent was up 26 cents, or 0.4%, at $62.85 a barrel by 0349 GMT, while U.S. crude was 27 cents, or 0.5%, higher at $58.12 a barrel. Brent touched its highest since Aug. 1, while U.S. crude rose to the highest since July 31.

U.S. oil gained more than 2% on Monday, while Brent finished the day 1.7% higher as the market reacted to the appointment by Saudi Arabia’s king of his son, Prince Abdulaziz bin Salman, as energy minister on Sunday.

Prince Abdulaziz, a long-time member of the Saudi delegation to the Organization of the Petroleum Exporting Countries (OPEC), said the pillars of Saudi Arabia’s policy would not change and a global deal to cut oil production by 1.2 million barrels per day would be maintained.

He added that the so-called OPEC+ alliance, made up of OPEC and non-OPEC countries including Russia, would be in place for the long term.

A meeting of OPEC and OPEC+ countries in Abu Dhabi this week “is stirring up hopes for additional supply cuts,” said Stephen Innes, Asia Pacific market strategist at AxiTrader.

Still, Russia’s oil output in August exceeded its quota under the OPEC+ agreements.

“Markets will need to see concrete progress on the production front, even as the world’s economy slows, to sustain gains,” said Jeffrey Halley, senior market analyst at OANDA.

Should oil end Tuesday higher it will be the longest run of gains since late July but headwinds remain as the U.S.-China trade war rumbles on.

Executives at the annual Asia Pacific Petroleum Conference said on Monday they expect oil prices this year to be pressured by uncertainties surrounding the global economy, the U.S.-China trade war and increasing U.S. supplies.

In the United States, crude stockpiles are likely to have fallen for a fourth consecutive week last week, a preliminary Reuters poll showed on Monday.

Five analysts polled by Reuters estimated, on average, that crude inventories fell 2.6 million barrels in the week to Sept 6.

Oil rises as Saudi Arabia signals OPEC cuts to continue under new energy minister

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Reuters
KEY POINTS
  • Global benchmark Brent was up 53 cents, or 0.9%, at $62.07 a barrel by 0425 GMT.
  • U.S. West Texas Intermediate was 57 cents, or 1%, higher at $57.09 a barrel.
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Jerome Favre | Bloomberg | Getty Images

Oil rose on Monday on expectations that Saudi Arabia, the world’s largest oil exporter, will continue to support output cuts by OPEC and other producers to prop up prices under new Energy Minister Prince Abdulaziz bin Salman.

Prices climbed for a fourth day and were also supported by comments from the United Arab Emirates’ energy minister that OPEC and its allies are committed to balancing the crude market.

Global benchmark Brent was up 53 cents, or 0.9%, at $62.07 a barrel by 0425 GMT, while U.S. West Texas Intermediate was 57 cents, or 1%, higher at $57.09 a barrel.

Salman, a long-time member of the Saudi delegation to the Organization of the Petroleum Exporting Countries (OPEC), was named to the position on Sunday, replacing Khalid al-Falih. He is the son of Saudi King Salman and this is the first time the energy portfolio has been handed to a member of the royal family.

He helped to negotiate the current agreement between OPEC and non-OPEC countries including Russia, a group known as OPEC+, to cut global crude supply to support prices and balance the market.

A Saudi official said on Sunday that there would be no shift in Saudi and OPEC policy on the cuts and that Prince Abdulaziz would work to strengthen OPEC and non-OPEC cooperation.

“The change at the top doesn’t necessarily mean a shift in policy as much as it’s being viewed as a move to improve relations within OPEC and with non-OPEC producers in the wake of the latest Russian compliance fissures,” said Stephen Innes, Asia Pacific market strategist at Axi Trader.

Russia’s oil output in August exceeded its quota under the OPEC+ agreements.

UAE’s Minister of Energy and Industry Suhail al-Mazrouei said on Sunday that members of OPEC and non-OPEC producers are “committed” to achieving oil market balance.

Asked about possible deeper production cuts, the minister told a news conference in Abu Dhabi that he was not concerned about current oil prices, rather the level of oil inventories.

Trade and geopolitical tensions are affecting the market more than demand and supply, Mazrouei said, but he was quick to rule out hasty steps influenced by the trade war between the United States and China.

“The fear of slower (oil) demand is only going to happen if that tension is escalating and I am personally hopeful that is not the case,” Mazrouei told Reuters on Sunday.

Prices on Monday were also supported by a rise in oil imports in China in August, with shipments to the world’s biggest importer up 3% from July and nearly 10% higher in the first eight months of 2019 from a year earlier.

“With (refinery) maintenance season wrapping up, oil imports stayed buoyant. Attractive profit margins continues to favour higher imports; despite the industry burdened by higher products inventories,” ANZ Research said in a note.

In the U.S., drilling companies cut the number of operating oil rigs for a third week in a row last week.

Oil prices slip as demand outlook, trade dispute weigh

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Reuters
KEY POINTS
  • Oil prices dipped on Monday amid worries about an economic slowdown and the Sino-U.S. trade war, which have led to a cut in the growth outlook for oil demand.
  • International benchmark Brent crude futures were at $58.35 a barrel by 0249 GMT, down 18 cents, or 0.3%, from their previous settlement.
  • U.S. West Texas Intermediate (WTI) futures were at $54.29 per barrel, down 21 cents, or 0.4%, from their last close.
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A drilling crew secures a stand of drill pipe into the mouse hole on a drilling rig near Midland, Texas February 12, 2019.
Nick Oxford | Reuters

Oil prices dipped on Monday amid worries about an economic slowdown and the Sino-U.S. trade war, which have led to a cut in the growth outlook for oil demand.

International benchmark Brent crude futures were at $58.35 a barrel by 0249 GMT, down 18 cents, or 0.3%, from their previous settlement.

U.S. West Texas Intermediate (WTI) futures were at $54.29 per barrel, down 21 cents, or 0.4%, from their last close.

Both benchmarks fell last week, with Brent losing more than 5% and WTI falling about 2%.

“Oil prices are falling at the start of the trading week due to lower demand forecasts published last week and  pessimism about a U.S.-China trade deal,” said Alfonso Esparza, senior market analyst at OANDA in Toronto.

The U.S.-China trade dispute rocked global equity markets last week, while a surprise build in U.S. crude stocks added downward pressure to oil prices, which have lost around 20% from their 2019 peaks reached in April.

Goldman Sachs said in a note on Sunday that fears of the U.S.-China trade war leading to a recession were increasing and it expected a trade deal between the two countries to happen before the 2020 U.S. presidential election.

Mounting signs of an economic slowdown and a ratcheting up of the trade row have caused global oil demand to grow at its slowest pace since the financial crisis of 2008, the International Energy Agency (IEA) said on Friday.

The Paris-based agency cut its 2019 and 2020 global oil demand growth forecast to 1.1 million and 1.3 million barrels per day (bpd), respectively.

Elsewhere, Russia’s oil production rose to 11.32 million bpd on August 1-8, up from 11.15 million bpd on average in July, according to two industry sources familiar with the energy ministry data.

In July, the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia agreed to extend their supply cuts until March 2020 to prop up oil prices.

In a sign of lower production in the United States, the weekly U.S. oil rig count, an early indicator of future output, fell for a sixth week in a row as producers cut spending on new drilling and completions.

Oil prices rise amid bigger-than-expected fall in US stockpiles

CNBC

Reuters

KEY POINTS
  • West Texas Intermediate (WTI) crude had climbed 81 cents, or 1.4%, to $58.64 by 0151 GMT.
  • Brent was up 61 cents, or 1%, at $64.77, having earlier hit $64.95.
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A Petrobras oil platform floats in the Atlantic Ocean near Guanabara Bay in Rio de Janeiro.
Getty Images

Oil prices rose on Wednesday, led by U.S. crude after an industry group reported that U.S. stockpiles fell for a fourth week in a row, alleviating concerns about oversupply amid global trade tensions.

West Texas Intermediate (WTI) crude had climbed 81 cents, or 1.4%, to $58.64 by 0151 GMT. Brent was up 61 cents, or 1%, at $64.77, having earlier hit $64.95.

The U.S. and global benchmarks have gained this year as the Organization of the Petroleum Exporting Countries (OPEC) and big producers such as Russiahave honored commitments to cut output.

Investors have also been on the lookout for any signs that unrelenting production from the United States is being consumed.

U.S. crude stockpiles fell more than forecast last week, while gasoline inventories decreased and distillate stocks built, data from industry group the American Petroleum Institute (API) showed on Tuesday.

Crude inventories fell by 8.1 million barrels in the week to July 5 to 461.4 million, compared with analyst expectations for a decrease of 3.1 million barrels, according to the data.

Official figures from the government’s Energy Information Administration (EIA) are due later on Wednesday.

“Prices are finely balanced right now as investors await fresh stimulus,” said Fawad Razaqzada, technical analyst at FOREX.com. “The stimulus could come in the form of a sharp change in U.S. crude oil inventories.”

Oil prices have been under pressure from concerns about global economic growth amid growing signs of harm from the U.S.-China trade war that has rumbled on over the last year. Lower economic growth typically means reduced demand for commodities such as oil.

“Global economic growth remains under pressure, with the latest manufacturing surveys weakening,” NAB said in a note.

“This is likely to impact demand for commodities, although stimulus measures may in some cases support commodity demand,” NAB said, citing China as an example.

Still, U.S. crude oil production is forecast to rise to a record of 12.36 million barrels per day (bpd) in 2019 from the high of 10.96 million bpd last year, the EIA’s Short Term Energy Outlook said on Tuesday.

OPEC and allied producers led by Russia agreed last week to extend their supply-cutting deal until March 2020. Brent has risen nearly 20% in 2019, supported by the pact and tensions in the Middle East, especially the row over Iran’s nuclear program.