Brent oil gains $1 to claw back some losses

CNBC

  • Brent crude rose more than $1 on Thursday, recouping some ground after its biggest one-day drop in two years in the previous session.
  • Those declines came on news that Libya would resume oil exports and U.S.-China trade tensions.

An oil pumpjack operates near Williston, North Dakota.

Andrew Cullen | Reuters
An oil pumpjack operates near Williston, North Dakota.

Brent crude rose more than $1 on Thursday, recouping some ground after its biggest one-day drop in two years in the previous session on news that Libya would resume oil exports and U.S.-China trade tensions.

Brent crude rose $1.31, or 1.8 percent, to $74.71 by 0242 GMT after slumping 6.9 percent on Wednesday.

U.S. West Texas Intermediate (WTI) added 42 cents, or 0.6 percent, to $70.80, after falling 5 percent the previous session.

“Markets in Asia are a lot more settled today,” said Greg McKenna, chief market strategist at AxiTrader in Sydney.

“Moves, the like of which we saw in Brent and to a lesser extent WTI, last night are often followed by some sort of bounce the following day or session,” he said.

The announcement by Libya’s National Oil Corp that four export terminals were being reopened, ending a standoff that had shut down most of Libya’s oil output, was one of the catalysts for a correction, analysts said.

The reopening allows the return of as much as 850,000 barrels per day of crude into international markets, while an escalating U.S.-China trade row has raised concerns about demand.

Oil had some supportive news late on Wednesday that U.S. crude oil stocks fell by nearly 13 million barrels last week, the most in nearly two years, dropping overall crude stocks to their lowest point since February 2015.

The decline in overall inventories was partially due to a fall-off in stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures, which were down by 2.1 million barrels.

“For WTI there is tightness at Cushing, which will be supportive over July and August,” said Virendra Chauhan, oil analyst at Energy Aspects in Singapore.

Supply to the U.S. market has also been squeezed by the loss of some Canadian oil production.

Oil dips in nervous trading as US-China trade war looms

CNBC

  • Oil prices dipped on Friday in a nervous market ahead of a raft of import tariffs expected to be imposed later in the day by the world’s two biggest economies, the United States and China.

Oil fracking California

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Oil prices dipped on Friday in a nervous market ahead of a raft of import tariffs expected to be imposed later in the day by the world’s two biggest economies, the United States and China.

Brent crude futures fell 25 cents, or 0.3 percent, to $77.14 per barrel by 0317 GMT from their last close.

U.S. West Texas Intermediate (WTI) futures were down 15 cents, or 0.2 percent, at $72.79.

Weighing on prices was a rise in U.S. crude inventories of 1.2 million barrels in the week to June 29, to 417.88 million barrels, the U.S. Energy Administration (EIA) said on Thursday.

Looming larger over markets is the U.S./China trade dispute. Washington has announced tariffs on Chinese goods from 12:01 a.m. Washington D.C. time (0401 GMT) on Friday.

China says it will retaliate, and U.S. President Trump said on Thursday he may ultimately impose tariffs on more than a half-trillion dollars worth of Chinese goods.

“We’re headed for an unparalleled trade conflict between the world’s largest economies,” said Stephen Innes, head of trading for Asia/Pacific at brokerage OANDA.

Beijing has threatened a 25 percent tariff on U.S. crude imports, although it has not specified an introduction date.

American crude shipments to China are around 400,000 barrels per day (bpd), worth $1 billion a month at current prices.

Tariffs would make U.S. oil uncompetitive in China.

An executive from China’s Dongming Petrochemical Group said he expected Beijing to soon impose the tariff on U.S. oil imports.

He added that his refinery had cancelled U.S. crude imports and would switch to Middle East or West African supplies instead.

Tariffs, sanctions and disruptions

The potential trade war between the United States and China comes amid a tight oil market.

Energy consultancy FGE on Friday issued a stark warning of looming supply shortages due to U.S. sanctions against Iran, and because of disruptions elsewhere.

“Iran’s exports are some 2.7 million bpd, including condensate,” it noted.

Even if the U.S. government grants some waivers to allies, FGE estimated 1.7 to 2 million bpd of crude and condensate would be cut out of markets once its sanctions are implemented.

Some are already reacting. South Korea, a major buyer of Iranian oil and condensate, will not lift any Iranian oil in July for the first time since August 2012, three sources familiar with the matter said on Friday.

Cutting Iran out from oil trading comes amid other disruptions.

“Venezuela…will lose another 400,000 bpd by year-end with production going to below 1 million bpd,” FGE said, adding that another 300,000 bpd of Libyan capacity was disrupted.

Although Saudi Arabia and Russia have said they would raise output to make up for disruptions, FGE said “there simply is not enough capacity to make up for Iran’s crude losses, plus Venezuela and Libya”, and warned of the possibility of oil prices rising to $100 per barrel.

US oil slumps as China threatens duty on U.S. crude imports

CNBC

  • U.S. oil prices slumped after China threatened duties on American crude imports in a trade dispute with Washington.
  • U.S. President Donald Trump last week pushed ahead with tariffs on $50 billion of Chinese imports, starting on July 6.
  • Oil producers will meet in Vienna on June 22 to decide forward production policy.

83093782SO011_Farmland_Tapp

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U.S. oil prices slumped on Monday after China threatened duties on American crude imports in an escalating trade dispute with Washington.

U.S. West Texas Intermediate (WTI) crude futures touched their lowest level since April, falling to $63.59 per barrel before edging back to $63.83 a barrel by 0426 GMT.

That was still down $1.23, or 1.9 percent, from their last settlement.

“Crude oil prices crashed as U.S.-China trade tensions escalated last Friday,” wrote Benjamin Lu of Singapore-based futures brokerage Phillip Futures.

In an escalating spat over the American trade deficit with most of its major trading partners, including China, U.S. President Donald Trump last week pushed ahead with hefty tariffs on $50 billion of Chinese imports, starting on July 6.

China on Friday said it would retaliate by slapping duties on American export products, including crude oil.

“Beijing has retaliated … with its position as a top importer from the U.S.,” Lu said.

“These punitive measures on bilateral trade have unnerved investors as it hurts global economic growth.”

RBC: You could say Russia is now leading OPEC

RBC: You could say Russia is now leading OPEC  

International oil prices also fell, with Brent crude futures down 76 cents, or 1.1 percent, at $72.67 per barrel.

This was in response to reports that top suppliers Saudi Arabia and Russia would likely increase production.

The producer cartel of the Organization of the Petroleum Exporting Countries (OPEC), which is de-facto led by Saudi Arabia, and some allies including Russia have been withholding output since the start of 2017.

They will meet in Vienna on June 22 to decide forward production policy.

“Most industry observers are expecting a production rise,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA, although he added that “the magnitude and timing of the boost remain uncertain”.

Oil drops after US President Trump threatens new China trade tariffs

CNBC

  • Oil prices fell along with equities as U.S. President Trump’s threat of new tariffs on China reignited fears of a trade war between the world’s two biggest economies.
  • While oil market watchers were wary of the brewing trade war, they did not expect to see steep falls amid signs of tightening supplies.

Oil jack pumps in the Kern River oil field in Bakersfield, California.

Jonathan Alcorn | Reuters
Oil jack pumps in the Kern River oil field in Bakersfield, California.

Oil prices fell on Friday after U.S. President Donald Trump’s threat of new tariffs on China reignited fears of a trade war between the world’s two biggest economies.

President Trump said on Thursday he had ordered U.S. trade officials to consider tariffs on $100 billion more of imports from China, escalating tensions with Beijing.

Brent crude for June delivery was down 32 cents, or 0.5 percent, at $68.01 per barrel at 0410 GMT.

U.S. West Texas Intermediate crude for May delivery was down 35 cents, or 0.6 percent, at 63.19 a barrel.

Shanghai September crude futures were untraded due to public holidays in China, after falling 0.8 percent on Wednesday. Shanghai trading will resume on Monday.

While oil market watchers were wary of the brewing trade war between the United States and China, they did not expect to see steep falls amid signs of tightening supplies.

“As the escalating trade tensions continue to weigh on the commodity sector, we view the oil market as the best sector in which to wait out the volatility,” analysts at ANZ bank said in a note. “Supply-side issues amid a backdrop of falling inventories should override any concern over weaker economic growth.”

The Energy Information Administration reported a 4.6 million-barrel draw in U.S. crude inventories last week, compared with analysts’ expectations for an increase of 246,000 barrels.

“U.S. oil inventories remain a volatile gauge, but they still provide a good litmus test for the short-term,” said Stephen Innes, head of trading for the Asia-Pacific region at futures brokerage OANDA in Singapore.

Meanwhile, Saudi Arabia said on Thursday it would raise its official selling price for May crude for Asian customers.

The Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC producers including Russia are committed to cutting output by around 1.8 million barrels per day through the end of 2018 in a bid to clear a global overhang and support prices.

Saudi Arabia, the de facto leader of the oil cartel, has said production cuts could be extended in one form or another.

OPEC and its allies should keep the cuts to ensure healthy price levels as a way to boost investment in the industry and avoid a supply and price shock in the long run, Qatar’s Energy Minister Mohammed al-Sada told Reuters.

Oil gains on US crude drawdown, easing of tension in US-China spat

CNBC

  • Oil prices rose on Thursday, buoyed by the U.S.government data showing a surprise drawdown in crude stockpiles.
  • Oil also got support from firm global equities, as the U.S. expressed willingness to negotiate a resolution on trade.

An oil pump jack in Gonzales, Texas.

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An oil pump jack in Gonzales, Texas.

Oil prices rose on Thursday, buoyed by the U.S.government data showing a surprise drawdown in crude stockpiles and an easing of tensions over a trade row between the United States and China.

U.S. West Texas Intermediate crude for May delivery was up 27 cents, or 0.4 percent, at $63.64 a barrel by 0445 GMT after settling down 14 cents.

Front-month London Brent crude for June delivery was up 30 cents, or 0.4 percent, at $68.32, having ended down 10 cents.

Oil also got support from firm global equities, as the United States expressed willingness to negotiate a resolution on trade after proposed U.S. tariffs on $50 billion in Chinese goods prompted a quick response from Beijing that it would retaliate by targeting key American imports.

Oil prices have recently closely tracked equities.

“The two countries are using discretion in their actions, and it does not look like the situation is developing into a full-scale trade war yet,” said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo. “There is also hope for dialogue.”

Before the rebound late on Wednesday, after the release of the Energy Information Administration inventory data, WTI and Brent had hit two-week lows after China proposed a broad range of tariffs on U.S. exports, feeding fears of a trade war.

U.S. crude inventories fell by 4.6 million barrels last week, compared with analysts’ expectations for an increase of 246,000 barrels, EIA data showed on Wednesday.

Oil has also received support after a Reuters survey showed on Wednesday that OPEC oil output fell in March to an 11-month low due to declining Angolan exports, Libyan outages and a further slide in Venezuelan output.

Shanghai crude futures trading was closed on Thursday due to a public holiday in China. Trading will resume on Monday.