Oil climbs from 3-month low as more oil workers strike in Norway

CNBC

  • Brent crude prices rose from a three-month low on Tuesday after more oil workers went on strike in Norway.
  • The market has been dominated by oversupply issues in recent days.

Oil fracking

David McNew | Getty Images

Brent crude prices rose from a three-month low on Tuesday after more oil workers went on strike in Norway, supporting a market that has been dominated by oversupply issues in recent days.

Brent crude futures had climbed 28 cents, or 0.4 percent, to $72.12 a barrel by 0331 GMT. They fell 4.6 percent on Monday, at one point touching their lowest since mid-April.

U.S. West Texas Intermediate futures were down 1 cent at $68.05. They fell 4.2 percent on Monday.

An oil worker strike in Norway intensified on Monday when hundreds more walked out in a dispute over pay and pensions after employers failed to respond to union demands for a new offer.

The strike, which began last Tuesday, has had a limited impact on Norway’s oil production so far, but some drillers warned of possible contract cancellations if the dispute goes on for a month or more.

“The threat of further supply disruptions hasn’t totally evaporated,” ANZ said in a morning note.

ANZ also said that “production from Libya remains susceptible to further declines, despite its ports reopening”.

While Libyan ports are reopening, output at the Sharara oilfield was expected to fall by at least 160,000 barrels per day (bpd) after two workers were abducted by an unknown group, the National Oil Corporation said on Saturday.

On July 11, the NOC said four export terminals were being reopened after eastern factions handed over the ports, while a lengthy shutdown at the El Feel oilfield in the southwest also ended. Two days later, output at the nearby 300,000 bpd Sharara was slashed.

U.S. oil output from seven major shale formations is expected to rise by 143,000 bpd to a record 7.47 million bpd in August, the U.S. Energy Information Administration said in a monthly report on Monday.

Production is expected to climb in all seven formations, with the largest gain of 73,000 bpd seen in the Permian Basin of Texas and New Mexico. All shale regions except for Appalachia are at a high, according to the data.

Oil prices dip as markets eye potential supply increases 

CNBC

  • Oil prices fell on Monday as concerns about supply disruptions eased and Libyan ports resumed export activities.
  • Traders eyed potential supply increases by Russia and other oil producers.

Pump jacks and wells are seen in an oil field on the Monterey Shale formation, March 23, 2014, near McKittrick, Calif.

Getty Images
Pump jacks and wells are seen in an oil field on the Monterey Shale formation, March 23, 2014, near McKittrick, Calif.

Oil prices fell on Monday as concerns about supply disruptions eased and Libyan ports resumed export activities, while traders eyed potential supply increases by Russia and other oil producers.

Brent crude futures were down 26 cents, or 0.4 percent, at $75.07 a barrel at 0057 GMT.

U.S. West Texas Intermediate (WTI) crude was down 27 cents, or 0.4 percent, at $70.74 a barrel.

Supply outages in Libya and strike action in Norway and Iraq pushed oil prices higher late last week, although prices still ended down for a second straight week.

“Crude oil prices fell as fears of supply disruptions eased. News that Libya’s state oil producer had restarted output from a major oil field ignited the selloff earlier in the week,” ANZ Bank said in a note.

The market focus shifted towards possible supply increases, even as a Norwegian union for workers on offshore oil and gas drilling rigs stepped up a six-day strike.

Russia and other major oil producers may increase output further should supply shortages hit the global oil market, Russian Energy Minister Alexander Novak said on Friday.

Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA, said U.S.-China trade tensions “should subside this week and could be a possible plus for oil prices,” but a possible sale of U.S. oil reserves would weigh on prices.

“With the Trump administration actively considering tapping into the nation’s Strategic Petroleum Reserve, it could weigh negatively,” Innes said.

The United States holds a reserve of about 660 million barrels, and the Trump administration was considering drawing on the country’s oil reserve, which would increase supply, according to a Bloomberg report.

Meanwhile, the number of rigs drilling in the United States remained unchanged at 863 in the week to July 13 as the rate of the growth slowed amid a fall in crude prices.

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 prices climb on tightening US market

CNBC

  • Oil prices edged up on Wednesday.
  • Prices were lifted by a report of declining U.S. fuel inventories amid the ongoing crude supply outage at Syncrude Canada in Alberta.

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Oil prices edged up on Wednesday, lifted by a report of declining U.S. fuel inventories amid the ongoing crude supply outage at Syncrude Canada in Alberta, which usually supplies the United States.

U.S. West Texas Intermediate (WTI) crude futures were at $74.60 a barrel at 0044 GMT, up 46 cents, or 0.6 percent, from their last settlement. WTI the previous day hit its highest since November 2014 at $75.27 a barrel.

Brent crude futures were at $77.82 per barrel, up 6 cents from their last close.

Trading activity is expected to by limited on Wednesday due to the U.S. Independence Day holiday.

U.S. crude inventories fell by 4.5 million barrels in the week to June 29 to 416.9 million barrels, according to the American Petroleum Institute (API) on Tuesday. Gasoline and distillate stocks, which include diesel and heating oil, were also down, the API said.

Traders said the decline in fuel inventories was largely down to the outage at Syncrude Canada’s 360,000 barrels per day (bpd) oil sands facility near Fort McMurray, Alberta, which is expected to last through July.

Oil market disruptions and limited supply can't keep oil prices at bay

Oil market disruptions and limited supply can’t keep oil prices at bay  

Outside North America, looming U.S. sanctions against major oil exporter Iran were the focus of attention.

The U.S. government plans to shut Iran’s oil exports out of the market from November, demanding that all countries stop buying its oil.

To make up for potential shortfalls in supply from Iran sanctions as well as other disruptions including Libya and Venezuela, the Organization of the Petroleum Exporting Countries (OPEC) has agreed with Russia and other oil-producing non-OPEC members to raise output from July.

OPEC-member Iran, however, has warned it would not accept other producers reaping the benefits by taking its market share.

Iran’s President Hassan Rouhani on Tuesday said it was “unwise to imagine that some day all producer countries will be able to export their surplus oil and Iran will not be able to export its oil.”

Oil rises as Libya declares force majeure on supplies, but demand slowdown looms 

CNBC

  • Oil prices climbed on Tuesday after Libya declared force majeure on significant amounts of its supply.
  • Rising overall output from OPEC as well as in the United States was dragging on markets.

An oil pump jack in Gonzales, Texas.

Getty Images
An oil pump jack in Gonzales, Texas.

Oil prices climbed on Tuesday after Libya declared force majeure on significant amounts of its supply, but rising overall output from OPEC as well as in the United States was dragging on markets.

Brent crude oil futures were at $78.06 per barrel at 0112 GMT, up 76 cents, or 1 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were up 75 cents, or 1 percent, at $74.69.

Traders said that disruptions to Libyan supplies were pushing up prices on Tuesday, outweighing a rise in June in supply from the Organization of the Petroleum Exporting Countries (OPEC).

OPEC’s June output was 32.32 million barrels per day (bpd), a Reuters survey showed on Monday, up 320,000 bpd from May. The June total is the highest since January 2018.

Libya’s National Oil Corporation (NOC) declared force majeure on loadings from Zueitina and Hariga ports on Monday, resulting in total production losses of 850,000 bpd due to the closure of eastern fields and ports.

Traders have also been watching U.S. oil production, which has surged by 30 percent over the last two years to 10.9 million barrels per day (bpd), absorbing at least some of the recent disruptions.

Overall, however, analysts said OPEC’s production policy as well as unplanned supply disruptions were currently the main price drivers.

Oil prices drop on higher supply from Russia and Saudi Arabia

Oil prices drop on higher supply from Russia and Saudi Arabia  

“In the near-term, the level of OPEC production – deployment of spare capacity by Saudi Arabia, Iraq, UAE, Kuwait (and ex-OPEC by Russia), and involuntary disruptions in Libya, Venezuela, Iran – are more important drivers of crude prices,” Goldman Sachs said in a note published late on Monday.

Demand slowdown

What has become a concern, at least for producers, is a slowdown in demand which may end years of consecutive records.

“U.S. petroleum demand growth slowed significantly to 385,000 bpd year-on-year in April, compared with a growth of more than 730,000 bpd year-on-year in Q1,” Braclays bank said, adding that this was mostly due to higher fuel prices.

In Asia, the world’s biggest oil consumption region, seaborne oil imports have been falling since May, as higher costs turned off consumers and the escalating trade dispute between the United States and China starts to impact the economy.

“There are … signs that growth in China has slowed in recent months, particularly infrastructure spending by local governments. I would assume that infrastructure investment is quite energy intensive, so perhaps that had a knock-on effect to oil demand,” said Frederic Neumann, Co-Head of Asian Economic Research at HSBC in Hong Kong.

“At this stage, however, it appears more that growth in Asia is softening, rather than decelerating sharply,” he added.