Oil prices fall for second day on weak economic data

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Reuters

KEY POINTS
  • Brent crude futures were down 16 cents, or 0.3%, at $60.78 a barrel by 0215 GMT. They fell 1.7% in the previous session on concerns about slowing global growth.
  • U.S. West Texas Intermediate (WTI) crude futures were down 12 cents, or 0.2%, at $51.92. They dropped 1.1% on Monday.
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Andrew Burton | Getty Images

Oil prices were falling for a second day on Tuesday, after more signs that global economic growth is being hit by U.S.China trade tensions, although losses were limited amid tensions in the Middle East after tanker attacks last week.

Brent crude futures were down 16 cents, or 0.3%, at $60.78 a barrel by 0215 GMT. They fell 1.7% in the previous session on concerns about slowing global growth.

U.S. West Texas Intermediate (WTI) crude futures were down 12 cents, or 0.2%, at $51.92. They dropped 1.1% on Monday.

The New York Federal Reserve said on Monday that its gauge of business growth in New York state posted a record fall this month to its weakest level in more than 2-1/2 years, suggesting an abrupt contraction in regional activity.

U.S. business sentiment has sagged as tensions over trade have escalated between China and the United States and on signs of softness in the labor market.

“The (oil) market is in a rut and desperately in need of some robust economic data to get it out of this funk,” said Stephen Innes, managing partner at Vanguard Markets in Bangkok.

Oil prices have fallen around 20% since 2019 highs reached in April, in part due to concerns about the U.S.-China trade war and disappointing economic data.

U.S. President Donald Trump and China’s President Xi Jinping could meet at the G20 summit in Japan later this month. Trump has said he would meet Xi at the event, although China has not confirmed the meeting.

Putting further pressure on oil, the U.S. energy department said on Monday that shale oil output is expected to reach a record in July.

But tensions in the Middle East are likely to keep prices supported, analysts said.

Acting U.S. Defense Secretary Patrick Shanahan announced on Monday the deployment of about 1,000 more troops to the Middle East for what he said were defensive purposes, citing concerns about a threat from Iran.

Fears of a confrontation between Iran and the United States have mounted since last Thursday when two oil tankers were attacked, which Washington has blamed on Tehran. Iran has denied involvement.

Oil prices rise after tanker attacks stoke Middle East tensions

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Reuters

KEY POINTS
  • Brent futures had climbed 26 cents, or 0.4%, to $62.27 a barrel by 0314 GMT. They gained 1.1% on Friday.
  • U.S. West Texas Intermediate (WTI) crude futures were up 17 cents, or 0.3%, at $52.68 a barrel. They rose 0.4% in the previous session.
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A Petrobras oil platform floats in the Atlantic Ocean near Guanabara Bay in Rio de Janeiro.
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Oil prices rose on Monday after U.S. Secretary of State Mike Pompeo said Washington will take all actions necessary to guarantee safe navigation in the Middle East, as tensions mounted following attacks on tankers last week.

Brent futures had climbed 26 cents, or 0.4%, to $62.27 a barrel by 0314 GMT. They gained 1.1% on Friday.

U.S. West Texas Intermediate (WTI) crude futures were up 17 cents, or 0.3%, at $52.68 a barrel. They rose 0.4% in the previous session.

Prices had jumped as much as 4.5% on Thursday after the attacks on two oil tankers near Iran and the Strait of Hormuz.

It was the second time in a month tankers have been attacked in the world’s most important zone for oil supplies as tensions increase between the United States and Iran. Washington blamed Iran for Thursday’s attacks, prompting a denial and criticism from Tehran.

“We don’t want war. We’ve done what we can to deter this,” Pompeo said in an interview with Fox News Sunday, adding: “The Iranians should understand very clearly that we will continue to take actions that deter Iran from engaging in this kind of behaviour”.

Tensions between Iran and the United States have risen since U.S. President Donald Trump pulled out of a deal last year between Iran and global powers that aimed to curb Tehran’s nuclear ambitions in exchange for sanctions relief.

Iran has repeatedly warned it would block the Strait of Hormuz if it cannot sell its oil because of U.S. sanctions.

“Growing tensions in the Middle East remain a cause for concern as traders fear supply disruptions over an escalation towards militaristic conflicts,” said Benjamin Lu, an analyst at Phillip Futures in Singapore.

Also supporting prices were comments over the weekend by the Saudi energy minister, Khalid al-Falih, that OPEC would probably meet in the first week of July and he hoped it would reach an agreement on extending oil output curbs.

“We are hoping that we will reach consensus to extend our agreement when we meet in two weeks time in Vienna,” Falih told reporters while attending a G20 energy and environment ministerial meeting in Karuizawa, northwest of Tokyo.

The Organization of the Petroleum Exporting Countries plus Russia and other producers, an alliance known as OPEC+, have a deal to cut output by 1.2 million barrels per day (bpd) from Jan. 1. The pact ends this month and the group meets in coming weeks to decide the next move.

U.S. energy companies also cut the number of oil rigs operating for a second week in a row, with production growth expected to slow as crude prices fell to near their lowest levels of the year.

Oil bounces back, but markets remain fragile amid trade disputes

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Reuters

KEY POINTS
  • Brent crude futures, the international benchmark for oil prices, were at $68.50 per barrel at 0231 GMT, up 74 cents, or 1.1%, from their last close.
  • U.S. West Texas Intermediate (WTI) crude futures were up 63 cents, or 1.1%, at $58.54 per barrel..
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A Petrobras oil platform floats in the Atlantic Ocean near Guanabara Bay in Rio de Janeiro.
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Oil prices jumped more than 1% on Friday amid OPEC supply cuts and Middle East tensions, but still did not fully recoup losses earlier in the week on economic slowdown jitters and swelling inventories — their steepest drops since the start of the year.

Brent crude futures, the international benchmark for oil prices, were at $68.50 per barrel at 0231 GMT, up 74 cents, or 1.1%, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were up 63 cents, or 1.1%, at $58.54 per barrel.

“Multiple supply risks remain, as tension continues between Iran and the U.S., which could turn disruptive, ” ANZ bank said on Friday.

The Organization of the Petroleum Exporting Countries (OPEC) has led supply cuts since the start of the year aimed at tightening the market and propping up prices.

ANZ said U.S. sanctions on Iran’s and Venezuela’s oil industries would likely further reduce crude exports from OPEC, of which both countries are members.

But Friday’s firmer prices could not make up the much bigger slumps from earlier in the week, which have put crude futures on track for their biggest weekly losses this year.

From mid-week, rising oil inventories in the United States started weighing on prices.

“Increasing (oil) inventories and slumping U.S. manufacturing activity exacerbated trade related concerns about global demand,” Michael McCarthy, chief market strategist at CMC Markets in Australia, said in a note, pulling WTI below $60 per barrel and Brent below $70 per barrel.

And the glut has spread beyond North America. Struggling to cope with oversupply from fuels, Asian refinery margins this week fell to their lowest seasonal levels since the financial crisis a decade ago, triggering plans for refinery run cuts.

“In China, gasoline stockpiles at seaports were seen rising to a multi-year high, this can shrink the margins for refiners and lead to softer oil demand from China, ” ANZ bank said on Friday.

“Oil remains acutely vulnerable to any trade headlines, and with Asian currencies and stocks most likely to be dragged lower, any rallies may be short-lived,” said Jeffrey Halley, senior analyst at futures brokerage OANDA.

Asian shares were hobbled near four-month lows on Friday on worries the U.S.-China trade spat was developing into a more entrenched strategic dispute between the world’s two largest economies.

Oil rises as Middle East tensions mounts, set for weekly gains

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Reuters

KEY POINTS
  • Brent crude futures were at $73.00 a barrel at 0303 GMT, up 38 cents, or 0.5%, from their last close, rising for a fourth straight session. Brent was up 3.4% for the week, on track for its first gain in three weeks.
  • U.S. West Texas Intermediate (WTI) crude futures were at $63.32 per barrel, up 46 cents, or 0.7%. WTI was also up for a fourth day and was headed for a weekly gain of 2.7%, the first rise in four weeks.
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A worker is seen at the new CPF3 oil station in the Halfaya oilfield in southern of Maysan province, Halfaya, Iraq December 12, 2018.
Essam al-Sudani | Reuters

Oil prices rose again on Friday and were on track for the first weekly gains this month, as rising tensions in the Middle East stoked fears of supply disruptions.

Brent crude futures were at $73.00 a barrel at 0303 GMT, up 38 cents, or 0.5%, from their last close, rising for a fourth straight session.

Brent was up 3.4% for the week, on track for its first gain in three weeks.

U.S. West Texas Intermediate (WTI) crude futures were at $63.32 per barrel, up 46 cents, or 0.7%. WTI was also up for a fourth day and was headed for a weekly gain of 2.7%, the first rise in four weeks.

Saudi-led military coalition in Yemen carried out several air strikes on the Houthi-held capital Sanaa on Thursday after the Iranian-aligned movement claimed responsibility for drone attacks on two Saudi oil pumping stations earlier in the week.

Earlier this week, U.S. staff were evacuated from the American embassy in Baghdad, while U.S. President Donald Trump ordered the deployment of an aircraft carrier group, B-52 bombers and Patriot missiles to the Middle East.

“When tensions are this high, with the U.S. deploying a sizable military force, even a mistake or a tactical error by Iran could ignite the Middle East powder keg,” Stephen Innes, head of trading and market strategy at SPI Asset Management told Reuters by email.

“There are lots of supply risks with tensions this high,” he said, adding prices could test 2019 highs reached in April.

Still, Trump has told his top advisers he does not want to get the United States involved in a war with Iran, three U.S. officials said on Thursday.

The market is also awaiting a decision from the Organization of the Petroleum Exporting Countries (OPEC) and other producers over whether to continue with supply cuts that have boosted prices more than 30% so far this year.

A meeting of OPEC’s ministerial monitoring committee in Saudi Arabia this weekend will assess member states’ commitment to a deal reducing oil production, Iraq’s oil minister said on Thursday.

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.
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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.