Oil prices inch down as U.S. crude stocks climb

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Reuters

KEY POINTS
  • International Brent crude oil futures were at $67.55 a barrel at 0929 GMT, down 28 cents from their last close.
  • U.S. West Texas Intermediate (WTI) crude futures were at $59.21 per barrel, down 20 cents from their last settlement.
  • Demand concerns on the back of economic jitters linked to the U.S.-Chinese trade war have capped prices.
RT: Venezuela oil pumps over water 150520
Oil pumps are seen in Lake Maracaibo, in Lagunillas, Ciudad Ojeda, in the state of Zulia, Venezuela.
Isaac Urrutia | Reuters

Oil prices were down on Thursday, extending losses into a second consecutive session following a surprise rise in U.S. crude inventories.

International Brent crude oil futures were at $67.55 a barrel at 0929 GMT, down 28 cents from their last close. U.S. West Texas Intermediate (WTI) crude futures were at $59.21 per barrel, down 20 cents from their last settlement.

U.S. crude inventories rose last week by 2.8 million barrels, compared with analysts’ expectations for a decrease of 1.2 million barrels, the U.S. Energy Information Administration said.

Demand concerns on the back of economic jitters linked to the U.S.-Chinese trade war have also capped prices.

In a fresh development, China has made unprecedented proposals on a range of issues, including forced technology transfer, as the two sides work to end their protracted dispute.

Overall, bullish sentiment underpins the market, which has seen Brent rise almost 30 percent this year.

“Today’s fall does not derail the short-term bullish argument that both the OPEC+ production cuts and supply outages will outweigh the global growth concerns and rising U.S. production,” said Edward Moya, senior market analyst, OANDA.

Oil prices have found support from efforts by the Organization of the Petroleum Exporting Countries (OPEC) and non-affiliated allies like Russia, known as OPEC+, to trim output as well as plummeting Venezuelan output.

On top of U.S. sanctions, power cuts have crippled Venezuela’s oil industry.

The country’s main oil export port of Jose and four crude upgraders, needed to convert Venezuela’s heavy oil into exportable grades, have been halted since Monday, industry sources said.

U.S. sanctions have also hit Iranian crude exports.

In early May, analysts expect the United States will extend some sanction waivers on Iranian oil but might reduce the number of countries receiving them.

The 180-day exemptions were granted in November to eight countries – China, India, Greece, Italy, Taiwan, Japan, Turkey and South Korea.

Washington seeks to bring Iranian oil exports to zero.

“Enjoy it whilst it lasts. The upcoming six months will bring relatively healthy demand for OPEC oil,” PVM’s Tamas Varga said in a note.

“If the unplanned supply cuts remain in place… oil prices should edge towards $75/bbl basis Brent in coming months as global inventories will draw.”

Oil hits 2019 highs amid OPEC-led supply cuts, US sanctions on Iran, Venezuela

CNBC

Reuters

KEY POINTS
  • U.S. West Texas Intermediate (WTI) crude futures also equalled a November 2018 high of $60.27 per barrel on Thursday.
  • International Brent crude oil futures hit a November 2018 high of $68.64 per barrel around at 0453 GMT on Thursday, up 14 cents, or 0.2 percent from their last close.
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 prices reached their highest so far for 2019 on Thursday as global markets tightened amid supply cuts led by producer club OPEC and U.S. government sanctions against Iran and Venezuela.

International Brent crude oil futures hit a November 2018 high of $68.64 per barrel around at 0453 GMT on Thursday, up 14 cents, or 0.2 percent from their last close.

U.S. West Texas Intermediate (WTI) crude futures also equalled a November 2018 high of $60.27 per barrel on Thursday.

Crude prices have been pushed up by almost a third since the start of 2019 by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC), as well as by sanctions enacted against Iran and Venezuela by the United States.

OPEC’s crude oil output has slumped from a mid-2018 peak of 32.8 million barrels per day (bpd) to 30.7 million bpd in February.

The U.S. sanctions are also disrupting supply.

“Venezuelan exports to the U.S. have finally dried up, after the sanctions were placed on them by the U.S. administration earlier this year,” ANZ bank said on Thursday.

Iranian oil exports have also slumped. The United States aims to cut Iran’s crude exports by about 20 percent to below 1 million bpd from May by requiring importing countries to reduce purchases to avoid U.S. sanctions.

The OPEC cuts and sanctions have also tightened supply within the United States.

U.S. crude oil stockpiles last week fell by nearly 10 million barrels, the most since July, boosted by strong export and refining demand, the Energy Information Administration said on Wednesday.

Stockpiles fell 9.6 million barrels, to 439.5 million barrels, their lowest since January.

Oil pulls back from four-month highs amid economic growth concerns

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Reuters

KEY POINTS
  • International Brent crude oil futures were at $67.50 a barrel at 0222 GMT, down 11 cents, or 0.2 percent, from their last close. Brent touched $68.20 a barrel on Tuesday, its highest since Nov. 16.
  • U.S. West Texas Intermediate (WTI) crude futures were at $58.83 per barrel, down 20 cents, or 0.3 percent, from their last settlement. WTI hit a high of $59.57 a barrel on Tuesday, the highest since Nov. 12.
Reusable: Crude oil refinery Philadelphia Energy Solutions 141024
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Oil prices dipped on Wednesday, retreating from a four-month high as economic growth concerns dampened the outlook for fuel consumption.

However, analysts said oil was still well supported by voluntary supply cuts led by producer club OPEC and U.S. sanctions against Iran and Venezuela.

International Brent crude oil futures were at $67.50 a barrel at 0222 GMT, down 11 cents, or 0.2 percent, from their last close. Brent touched $68.20 a barrel on Tuesday, its highest since Nov. 16.

U.S. West Texas Intermediate (WTI) crude futures were at $58.83 per barrel, down 20 cents, or 0.3 percent, from their last settlement. WTI hit a high of $59.57 a barrel on Tuesday, the highest since Nov. 12.

Analysts said the dip was mostly down to concerns that an economic slowdown could soon dent fuel consumption.

“Global growth concerns and ongoing oversupply fears (are) creating headwinds for the commodity,” said Lukman Otunuga, analyst at futures brokerage FXTM.

The dips come after crude prices rose by more than a quarter this year, pushed up by a pledge led by the Organization of the Petroleum Exporting Countries (OPEC) to withhold around 1.2 million barrels per day (bpd) of supply as well as by U.S. sanctions against oil exporters Iran and Venezuela.

“The shaky supply outlook with regard to Venezuela and Iran, as well as the petro-nations’ output restrictions are top of mind in the oil market,” said Norbert Ruecker, head of economics at Swiss bank Julius Baer.

Ruecker said oil prices were likely capped around $70 per barrel as fuel price inflation, as seen last year, would hit demand at that level.

At the same time, he said oil prices were supported above $50 per barrel as investment into U.S. shale output growth would cease below that price.

Between those price levels, Ruecker said “the U.S. shale boom almost fully meets global oil demand growth mirrored by the strongly expanding crude oil exports,” which hit a record 3.6 million bpd in February.

“We see … roughly 1.2 million bpd of U.S. shale oil growth over the coming year,” Ruecker said, which is in line with most global oil demand growth forecasts of 1 million to 1.3 million barrels per day for 2019.

The U.S. Energy Information Administration (EIA) is due to publish its weekly crude production and storage level report around 1700 GMT on Wednesday.

Oil rises 1 percent on supply cuts, but economic slowdown weighs on outlook

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  • Oil prices rose 1 percent on Tuesday amid supply cuts led by producer club OPEC and Russia, although a darkening economic outlook capped gains.
  • International Brent crude oil futures were at $59.64 per barrel at 0257 GMT, up 65 cents, or 1.1 percent, from their last close.
  • While OPEC and Russia cut supply and Iran is restrained by sanctions, crude oil production in the United States hit a record 11.7 million barrels per day late last year.

Men work for Iraqi Drilling Company at Rumaila oilfield in Basra, Iraq,

Essam Al-Sudani | Reuters
Men work for Iraqi Drilling Company at Rumaila oilfield in Basra, Iraq,

Oil prices rose 1 percent on Tuesday amid supply cuts led by producer club OPEC and Russia, although a darkening economic outlook capped gains.

International Brent crude oil futures were at $59.64 per barrel at 0257 GMT, up 65 cents, or 1.1 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $51.09 per barrel, up 58 cents, or 1.2 percent.

“The impact of OPEC+ (OPEC and others including Russia) cuts, Iran sanctions and lower month-on-month growth in U.S. production should help to support oil prices from current levels,” U.S. bank J.P. Morgan said in a note.

The Middle East-dominated producer club of the Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC allies, including Russia, agreed in late 2018 to cut supply to rein in a global glut.

Meanwhile, the United States last November re-imposed sanctions against Iran’s oil exports. Although Washington granted sanctions waivers to Iran’s biggest oil customers, mostly in Asia, the Middle Eastern country’s exports have plummeted since.

“Iranian exports have already fallen sharply and are likely to remain at around 1.3 million barrels per day (bpd) in 2019, 1.3 million bpd down vs their 1H18 average,” HSBC said in its 2019 oil market outlook.

While OPEC and Russia cut supply and Iran is restrained by sanctions, crude oil production in the United States hit a record 11.7 million bpd late last year.

The surging output increasingly allows U.S. oil producers to export crude, including to top importer China.

Three cargoes of U.S. crude are currently heading to China from the U.S.

Gulf Coast, the first departures since late September and a 90-day pause in the two countries’ trade war that began last month.

The tankers are scheduled to arrive at Chinese ports between late January and early March, according to shipbrokers and vessel tracking data.

Looming over oil and financial markets, however, is an economic slowdown.

Tuesday’s oil price increases came after crude futures fell by more than 2 percent the previous session, dragged down by weak Chinese trade data which pointed to a global economic slowdown.

“The outlook for the global economy continues to be highly uncertain,” HSBC said.

The bank said it had cut its average 2019 Brent crude oil price forecast by $16 per barrel, to $64 per barrel, citing surging U.S. production and an “increasingly uncertain demand backdrop”.

Oil prices dip on concerns Sino-US trade conflict could escalate

CNBC

  • Oil prices fell on Friday amid concerns the trade war between the United States and China could intensify.
  • Looming U.S. sanctions against Iran’s oil exports prevented markets from falling further.

Oil pumpjacks in silhouette at sunset.

Oil pumpjacks in silhouette at sunset.

Oil prices fell on Friday amid concerns the trade war between the United States and China could intensify, although looming U.S. sanctions against Iran’s oil exports prevented markets from falling further.

International Brent crude oil futures were at $77.55 per barrel at 0106 GMT, down 22 cents, or 0.3 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were down 6 cents at $70.19 a barrel.

Still, with Venezuelan supply falling sharply and concerns around U.S. sanctions against Iran that will target its oil exports from November, crude markets in August are on track to post a more than 4 percent rise for Brent and a 2 percent increase for WTI.

Despite this, some analysts cautioned that the trade disputes between the United States and other major economies, especially China and the European Union, could start to drag on economic growth and, by extension, fuel demand.

“You have to wonder if it (crude) can sustain these prices in a world where President Trump doubles down on his battle with the EU and China at the same time,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

Oil could hit mid-$90s in next few months, energy expert says

Oil could hit mid-$90s in next few months, energy expert says  

U.S. President Donald Trump is reportedly planning to ramp up trade conflict with China and has told aides he is ready to impose tariffs on $200 billion more in Chinese imports as soon as a public comment period on the plan ends next week, several media reported on Thursday.

“Assuming the trade war is about to escalate again, the questions traders will be wondering about is global growth (and) demand for crude,” McKenna said.

Shanghai delivery

Meanwhile, China’s Shanghai crude oil futures, launched in March, will see delivery of their first contract on Friday.

The speed of Shanghai crude’s take-up has surprised many traders and analysts.

Among the three major crude benchmarks – WTI, Brent and Shanghai – China’s front-month crude futures now make up a share of almost 15 percent in terms of monthly volumes.

Traders said Shanghai’s fast rise reflects China’s importance as the world’s biggest oil importer. It is also part of a policy by Beijing to increasingly use the yuan currency in global trade, especially during times of economic disputes with the United States.

Since its launch in March, front-month Shanghai crude oil futures have gained almost 10 percent in value to 481 yuan ($70.31) per barrel.