Oil dips on rising US crude inventories, darkening economic outlook

CNBC

  • Oil prices fell on Wednesday, pulled down by a report of increased U.S. crude inventories.
  • A darkening economic outlook stoked expectations of lower fuel demand.

Oil pumps wells Monterey Shale fracking

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Oil prices fell on Wednesday, pulled down by a report of increased U.S. crude inventories and as a darkening economic outlook stoked expectations of lower fuel demand.

Front-month Brent crude oil futures were at $72.33 per barrel at 0408 GMT, down by 13 cents, or 0.2 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were down 25 cents, or 0.4 percent, at $66.79 per barrel.

U.S. crude stocks rose by 3.7 million barrels in the week to Aug. 10, to 410.8 million barrels, private industry group the American Petroleum Institute (API) said on Tuesday. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 1.6 million barrels, the API said.

“Oil prices … fell after the API inventory data showed an unexpected crude build last week,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.

Oil prices down on demand fears amid Turkey crisis

Oil prices down on demand fears amid Turkey crisis  

Official U.S. fuel inventory data is due to be published later on Wednesday by the Energy Information Administration.

Sentiment was also clouded by a darkening economic outlook which could start impacting oil demand, traders said.

The OECD’s composite leading indicator, which covers the western advanced economies plus China, India, Russia, Brazil, Indonesia and South Africa, peaked in January but has since fallen and slipped below trend in May and June.

World trade volume growth also peaked in January at almost 5.7 percent year-on-year, but nearly halved to less than 3 percent by May, according to the Netherlands Bureau for Economic Policy Analysis.

BMI Research said oil markets would “struggle for direction, as uncertainty around both the impact on supply from the Iranian sanctions and escalating trade tensions between the U.S. and China persists.”

Oil prices steady on falling US crude stocks, Iran sanctions

CNBC

  • Oil prices held steady on Wednesday.
  • Prices were supported by a report of rising U.S. crude inventories as well as the introduction of sanctions against Iran.

Oil pumpjacks in silhouette at sunset.

Oil pumpjacks in silhouette at sunset.

Oil prices held steady on Wednesday, supported by a report of rising U.S. crude inventories as well as the introduction of sanctions against Iran.

Front-month U.S. West Texas Intermediate (WTI) crude futures were at $69.28 per barrel at 0408 GMT, up 11 cents from their last settlement.

Brent crude oil futures were at $74.61 per barrel, down 4 cents from their last close.

Both futures contracts have risen during the previous two sessions.

“Crude oil prices rose as the reality of U.S. sanctions on Iran weighed on sentiment. News from key buyers suggests the market is already adjusting to the new regime,” ANZ bank said in a note on Wednesday.

The U.S. government introduced a raft of new sanctions against Iran on Tuesday, targeting Iran’s purchases of U.S. dollars – in which oil is traded – metals trading, coal, industrial software and its auto sector.

From November, Washington will also target Iran’s petroleum sector. Iran is the third-largest producer among the members of the Organization of the Petroleum Exporting Countries (OPEC). It shipped out almost 3 million barrels per day (bpd) of crude in September, equivalent to around 3 percent of global demand.

The price of oil is correct, says Jim Cramer

The price of oil is correct, says Jim Cramer  

Beyond the sanctions, the oil market was focusing on the U.S. market, where the American Petroleum Institute said on Tuesday that crude inventories fell by 6 million barrels in the week to Aug. 3 to 407.2 million.

Official U.S. fuel storage data is due to be released later on Wednesday by the Energy Information Administration.

In terms of production, the EIA on Tuesday slightly cut its 2018 expectation for average 2018 U.S. crude output to 10.69 million bpd, down from its previous estimate of 10.79 million bpd.

On the demand side, China’s July crude oil imports recovered slightly in July after falling for the previous two months, but were still among the lowest this year due to a drop-off in demand from the country’s smaller independent, or “teapot”, refineries.

Shipments into the world’s biggest importer of crude came in at 36.02 million tonnes last month, or 8.48 million bpd, up from 8.18 million bpd a year ago, and just up on June’s 8.36 million bpd, data from the General Administration of Customs showed.

However, July imports were still the third-lowest so far this year.

Oil supported as new hedges placed, but rising global supplies weigh

CNBC

  • Oil prices were steady on Friday, supported by traders placing new hedges in the futures market in anticipation of a decline in U.S. crude inventories.
  • Prices were held back from advancing by the prospect of rising global supplies.

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Oil prices were steady on Friday, supported by traders placing new hedges in the futures market in anticipation of a decline in U.S. crude inventories, but held back from advancing by the prospect of rising global supplies.

U.S. West Texas Intermediate (WTI) crude futures were at $69.06 per barrel at 0421 GMT, up 10 cents from their last settlement.

Brent crude futures were at $73.40 per barrel, down 5 cents from their last close.

Overall U.S. crude oil inventories actually rose by 3.8 million barrels last week to 408.74 million barrels, according to data from the Energy Information Administration (EIA), however stocks at the key Cushing storage hub in Oklahoma fell by 1.3 million barrels, the EIA data showed.

“Hedges (are) thought to be a factor in oil prices being well bid,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore.

“There’s increasing chatter about … Cushing inventories (being) down … This primary U.S. oil hub’s inventory now sits at the lowest levels since 2014,” he said.

ANZ bank said on Friday in a note the drop in Cushing inventories were a driver for rising crude oil prices “amid signs that last week’s (overall) build in inventories won’t last very long.”

Even with last week’s rise, overall U.S. crude inventories are below the 5-year average of around 420 million barrels.

Bearish factors

There were also factors holding oil markets in check. WTI is heading for a roughly flat week after four weekly falls, while Brent is on track to post a fourth week of declines in five, set for a drop of 1.4 percent.

Analysts said the outlook beyond the short-term was turning bearish.

“Bulls are fighting a losing battle … Brent oil may fall to $67 per barrel,” said Reuters technical commodities analyst Wang Tao. Russian oil output rose by 150,000 barrels per day (bpd) in July from a month earlier, to 11.21 million bpd, energy ministry data showed on Thursday.

Output by top exporter Saudi Arabia has also risen recently, to around 11 million bpd, and U.S. production is around that level as well.

Reacting to rising supplies, Saudi Aramco cut its September price for its Arab Light grade for Asian customers by $0.70 a barrel versus August to a premium of $1.20 a barrel to the Oman/Dubai average, it said on Thursday.

Oil prices rise for second day, buoyed by fall in US inventories

CNBC

  • Oil prices rose for a second day on Wednesday.
  • Industry group data showed U.S. crude inventories fell more than expected last week, easing worries about oversupply.

Oil fracking California

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Oil prices rose for a second day on Wednesday after industry group data showed U.S. crude inventories fell more than expected last week, easing worries about oversupply that had dragged on markets in recent sessions.

Brent crude was up 54 cents, or 0.7 percent, at $73.98 a barrel by 0318 GMT. The global benchmark settled 38 cents higher at $73.44 a barrel on Tuesday, after climbing to as high as $74.

U.S. West Texas Intermediate rose 24 cents, or 0.4 percent, to $68.76, having settled the previous session up 63 cents, or nearly 1 percent.

U.S. crude and fuel stockpiles dropped more than expected last week, industry group the American Petroleum Institute (API) said on Tuesday. Reports that China will increase infrastructure spending also helped reduce concerns that U.S.-China trade tensions will dent the country’s demand for oil.

“Prices are moving higher after the API reported a more massive draw than analysts had expected,” said Stephen Innes, Head of Trading, APAC at brokerage OANDA.

U.S. crude inventories fell by 3.2 million barrels in the week to July 20 to 407.6 million barrels, compared with analyst expectations for a decrease of 2.3 million barrels.

Crude stocks at the Cushing, Oklahoma, delivery hub dropped by 808,000 barrels, the API said. Refinery crude runs declined by 60,000 barrels per day.

Gasoline stocks fell by 4.9 million barrels, compared with analyst expectations in a Reuters poll for a 713,000-barrel drop.

Distillate fuels stockpiles, which include diesel and heating oil, fell by 1.3 million barrels, compared with expectations for a 207,000-barrel gain, the API data showed.

U.S. crude imports last week eased by 249,000 barrels per day to 8.3 million bpd.

Official figures from the U.S. Department of Energy’s Energy Information Administration are due at 10:30 a.m. EDT (1430 GMT) on Wednesday.

Oil prices dip as Iran signals support for small OPEC supply increase

CNBC

  • Oil prices dipped as Iran signaled it could be won over to a small rise in OPEC crude output.
  • That likely paved the road for the producer cartel to agree on a supply increase.

OPEC

Heinz-Peter Bader | Reuters

Oil prices dipped on Thursday as Iran signaled it could be won over to a small rise in OPEC crude output, likely paving the road for the producer cartel to agree on a supply increase during a meeting on June 22.

However, prices were prevented from falling further by record refinery runs in the United States and a large decline in U.S. crude inventories, a sign of strong fuel demand in the world’s biggest economy.

Brent crude futures, the international benchmark for oil prices, were at $74.55 per barrel at 0040 GMT, down 19 cents, or 0.3 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $65.63 a barrel, down 8 cents.

Iran, a major supplier within the producer cartel of the Organization of the Petroleum Exporting Countries (OPEC), signaled on Wednesday it could agree on a small increase in the group’s output during a meeting at OPEC’s headquarters in Vienna on June 22.

“There appears to be an air of confidence that this deal will move through,”said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore.

How this week's OPEC meeting could impact oil prices

How this week’s OPEC meeting could impact oil prices  

Tehran had previously resisted pressure by OPEC’s de-facto leader Saudi Arabia to raise output.

OPEC, together with other key producers including Russia, started withholding output in 2017 to prop up prices, but a tightening market in 2018 led to calls by major consumers for more supplies.

In a sign of strong demand, U.S. refineries processed a seasonal record of 17.7 million barrels per day (bpd) of crude oil last week, according to data from the Energy Information Administration (EIA) said on Wednesday.

Amid strong consumption, commercial U.S. crude inventories dropped by 5.9 million barrels in the week to June 15, to 426.53 million barrels, the EIA said.

U.S. crude oil prodution was flat week-on-week, remaining at a record 10.9 million bpd.