Oil rises amid escalating Middle East tensions

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Reuters

KEY POINTS
  • Brent crude futures were at $72.16 a barrel at 0349 GMT, up 39 cents, or 0.5%, from their last close. Brent closed up 0.7% on Wednesday.
  • U.S. West Texas Intermediate (WTI) crude futures were at $62.41 per barrel, up 39 cents, or 0.6%, from their previous settlement. WTI closed up 0.4% in the last session.
Reusable: Offshore oil drill Libya 150803
Offshore oil platforms are seen at the Bouri Oil Field off the coast of Libya.
Darrin Zammit Lupi | Reuters

Oil prices rose on Thursday for a third straight session, as the risk of conflict in the Middle East stoked fears of supply disruptions, negating an unexpected rise in U.S. inventories.

Brent crude futures were at $72.16 a barrel at 0349 GMT, up 39 cents, or 0.5%, from their last close. Brent closed up 0.7% on Wednesday.

U.S. West Texas Intermediate (WTI) crude futures were at $62.41 per barrel, up 39 cents, or 0.6%, from their previous settlement. WTI closed up 0.4% in the last session.

Analysts said oil was drawing support from heightened tensions in the Middle East, with helicopters carrying U.S. staff from the American embassy in Baghdad on Wednesday out of apparent concern about perceived threats from Iran.

While the gain in U.S. inventories overnight is helping to cap prices, so too is uncertainty about whether OPEC and other producers will maintain into the second half of the year supply cuts that have boosted prices more than 30% so far in 2019.

The Organization of the Petroleum Exporting Countries (OPEC) said on Tuesday that world demand for its oil would be higher than expected this year.

“Though supply-side disruptions remain supportive of oil prices, OPEC has yet to release indicative statements on supply plans,” Benjamin Lu, commodities analyst at Phillip Futures in Singapore, told Reuters by email.

Supply losses from OPEC members Iran and Venezuela, now under U.S. sanctions, have deepened the impact of the OPEC-led production restrictions.

The so-called OPEC+ group of producers, which includes Russia, meets next month to review whether to maintain the pact beyond June.

U.S. crude inventories rose unexpectedly last week to their highest since September 2017, while gasoline stockpiles decreased more than forecast, the Energy Information Administration (EIA) said.

Crude stocks swelled by 5.4 million barrels, surprising analysts who had expected a decrease of 800,000 barrels for the week ended on May 10.

Oil drops on surprise US stockpile rise, but Middle East tensions support

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Reuters

KEY POINTS
  • Brent crude futures were at $71.04 a barrel at 0358 GMT, down 20 cents, or 0.3%, from their last close. Brent closed 1.4% higher on Tuesday.
  • U.S. West Texas Intermediate (WTI) crude futures were at $61.38 per barrel, down 40 cents, or 0.7%, from their previous settlement. WTI closed up 1.2% in the previous session.
RT: Oil refinery Libya 131218
Ismail Zitouny | Reuters

Oil prices fell on Wednesday after data showed a surprise rise in U.S. crude stockpiles and Chinese industrial output for April grew less than expected, but prices were supported by mounting tensions in the Middle East.

Brent crude futures were at $71.04 a barrel at 0358 GMT, down 20 cents, or 0.3%, from their last close. Brent closed 1.4% higher on Tuesday.

U.S. West Texas Intermediate (WTI) crude futures were at $61.38 per barrel, down 40 cents, or 0.7%, from their previous settlement. WTI closed up 1.2% in the previous session.

U.S. crude stockpiles unexpectedly rose last week, while gasoline and distillate inventories increased, data from industry group the American Petroleum Institute showed on Tuesday.

Crude inventories rose by 8.6 million barrels in the week to May 10 to 477.8 million, compared with analysts’ expectations of a decrease of 800,000 barrels.

Crude stocks at the Cushing, Oklahoma, delivery hub rose by 2.1 million barrels, API said.

The U.S. Energy Department’s Energy Information Administration (EIA) reports official numbers later today.

“If the EIA report confirms a strong build we could see that weigh on oil prices…but too many geopolitical risks remain that should keep prices supported,” Edward Moya, senior market analyst at OANDA told Reuters by email.

Oil prices have drawn support after Saudi Arabia on Tuesday said armed drones struck two of its oil pumping stations, two days after the sabotage of oil tankers near the United Arab Emirates, while the U.S. military said it was braced for “possibly imminent threats to U.S. forces in Iraq ” from Iran-backedforces.

The attacks took place against a backdrop of U.S.-Iranian tension following Washington’s decision this month to try to cut Iran’s oil exports to zero and to beef up its military presence in the Gulf in response to what it said were Iranian threats.

Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) on Tuesday said that world demand for its oil would be higher than expected this year as supply growth from rivals including U.S. shale producers slows. That points to a tighter market if the exporter group refrains from raising output.

Elsewhere, growth in China’s industrial output slowed more than expected to 5.4% in April from a 4-1/2 year high in March, reinforcing views that Beijingwill have to roll out more stimulus measures as a trade war with the United States intensifies.

Oil prices edge up, but US-China trade tensions cap gains

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Reuters

KEY POINTS
  • Brent crude futures were at $70.27 a barrel at 0104 GMT, up 6 cents, or 0.1%, from their last close. Brent ended the previous session little changed.
  • U.S. West Texas Intermediate (WTI) crude futures were at $61.17 per barrel, up 12 cents, or 0.2%, from their previous settlement. WTI closed the last session steady on the day.
Reusable: Oil storage refinery Australia Caltex Oil 141014
Jason Reed | Reuters

Oil prices inched higher on Tuesday, though gains were checked amid an escalation in the trade war between the United States and China.

Brent crude futures were at $70.27 a barrel at 0104 GMT, up 6 cents, or 0.1%, from their last close. Brent ended the previous session little changed.

U.S. West Texas Intermediate (WTI) crude futures were at $61.17 per barrel, up 12 cents, or 0.2%, from their previous settlement. WTI closed the last session steady on the day.

Analysts said the U.S.-China trade war was overshadowing the market, though market fundamentals provided some support.

“A full-blown trade war would have lasting consequences on global growth, seriously limiting the upside for energy demand. Disruptions have balanced the market, but lower demand and rising U.S. production could make for a quick reversal,” said Alfonso Esparza, senior market analyst, OANDA.

China defied a warning from U.S. President Donald Trump and moved to impose higher tariffs on a range of U.S. goods including frozen vegetables and liquefied natural gas.

Focus was also on the Middle East after Saudi Arabia on Monday said that two of its oil tankers were among those attacked off the coast of the United Arab Emirates and described it as an attempt to undermine the security of crude supplies amid tensions between the United States and Iran.

The U.S. Energy Department said on Monday that it was confident global oil markets are well supplied.

Oil prices mixed amid US-China trade impasse

CNBC

Reuters

KEY POINTS
  • U.S. West Texas Intermediate (WTI) futures were at $61.58 per barrel, down 9 cents, or 0.2% at 0223 GMT, from their previous settlement. WTI closed the last session steady on the day.
  • Meanwhile Brent crude futures were at $70.73 a barrel, up 11 cents, or 0.2%, from their last close. Brent ended the previous session little changed.
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 futures were mixed on Monday, with U.S. crude edging lower, as investors and traders fretted over global economic growth prospects amid a standoff in Sino-U.S. trade talks.

U.S. West Texas Intermediate (WTI) futures were at $61.58 per barrel, down 9 cents, or 0.2% at 0223 GMT, from their previous settlement. WTI closed the last session steady on the day.

Meanwhile Brent crude futures were at $70.73 a barrel, up 11 cents, or 0.2%, from their last close. Brent ended the previous session little changed.

The trade conflict between the world’s top two economies escalated on Friday, with the United States hiking tariffs on $200 billion worth of Chinese goods after President Donald Trump said Beijing “broke the deal” by reneging on earlier commitments made during months of negotiations.

The parties appeared at a deadlock over negotiations on Sunday as Washingtondemanded promises of concrete changes to Chinese law and Beijing said it would not swallow any “bitter fruit” that harmed its interests.

The United States and China together accounted for 34% of global oil consumption in the first quarter of 2019, data from the International Energy Agency showed.

“The US-China trade war is set to intensify, which will limit gains in prices,” said Abhishek Kumar, head of analytics at Interfax Energy in London.

“Market participants will closely watch China’s retaliatory steps in response to the imposition of additional US tariffs on Chinese goods,” Kumar said, adding the dispute “could be particularly detrimental to the growth in global oil demand”.

Separately, in an early indicator of future output, U.S. energy companies last week reduced the number of oil rigs operating for the third time in four weeks.

Drillers cut two oil rigs in the week to May 10, bringing the total count down to 805, General Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday.

The rig count has declined over the past five months as independent exploration and production companies cut spending on new drilling.

Oil pares gains as US escalates trade war with China

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  • Brent crude futures were at $70.41 a barrel at 0523 GMT, up 2 cents from their last close, after rising to as high as $71.23 a barrel.
  • U.S. West Texas Intermediate (WTI) crude futures <were at $61.78 per barrel, up 8 cents, after rising to as high as $62.49 a barrel earlier in the day.
Russia oil

Sergei Karpukhin | Reuters

Oil prices pared earlier gains on Friday following U.S. President Donald Trump’s tariff increase on $200 billion worth of Chinesegoods took effect, escalating the trade dispute between the world’s two biggest economies and oil consumers.

Prices had risen more than 1 percent earlier in the day as optimism mounted that the tariffs would be averted after U.S. Trump said he received a “beautiful letter” from Chinese President Xi Jinping.

With no move from the Trump administration to reverse the hikes, U.S. Customs and Border Protection imposed the new 25% duty on affected U.S.-bound cargoes leaving China after 12:01 a.m. EDT (0401 GMT) on Friday.

Brent crude futures were at $70.41 a barrel at 0523 GMT, up 2 cents from their last close, after rising to as high as $71.23 a barrel.

U.S. West Texas Intermediate (WTI) crude futures <were at $61.78 per barrel, up 8 cents, after rising to as high as $62.49 a barrel earlier in the day.

U.S. stock futures fell and Asian shares pared gains as China said it would retaliate over the tariff increases.

“Oil prices along with most risk assets are moving almost in sync on trade tariff updates,” said Edward Moya, senior market analyst at futures brokerage OANDA.

Trump threatened to levy the additional tariffs on Sunday on signs that China would not accept portions of the trade agreement that it earlier indicated it accepted.

A break down in trade between the world’s two largest oil consumers would likely impact oil demand. The two countries combined to make up 34 percent of global oil consumption during the first quarter of 2019, according to data from the International Energy Agency.

Concerns of rising oil supply on reports of growing stockpiles along with the potential impact on demand has pushed oil prices lower for the week.

U.S. crude is heading for a weekly loss of 0.3%, its third week of consecutive declines. Brent is heading for its second weekly loss, down 0.6%.

However, the efforts by the Organisation of the Petroleum Exporting Countries (OPEC) to crimp supply to reduce global inventories has supported prices.

Overall expectations are also that demand in 2019 will rise.

The U.S. Energy Information Administration expects global oil demand to rise by 1.4 million barrels per day this year.