US crude rises 1.6%, settling at $45.33, but posts third straight weekly loss

CNBC

  • Oil prices rise, recovering slightly from heavy losses this week, but post their third straight weekly loss.
  • Crude futures remain close to the lowest levels in over a year as rising U.S. inventories and concern over global economic growth rattle markets.
  • U.S. crude inventories were down by 46,000 barrels in the week to Dec. 21, the Energy Information Administration said on Friday.

Oil pumpjacks in the Permian Basin oil field are getting to work as crude oil prices gain.

Spencer Platt | Getty Images
Oil pumpjacks in the Permian Basin oil field are getting to work as crude oil prices gain.

Oil prices ticked were higher on Friday after a week of volatile trading, but shed early gains on profit-taking ahead of the New Year holiday as global crude benchmarks hovered near their lowest levels in more than a year.

U.S. light crude ended Friday’s session up 72 cents, or 1.6 percent, to $45.33, after reaching $46.22 a barrel earlier.

Brent crude oil futures were up 6 cents at $52.22 a barrel by 2:28 p.m. ET, having earlier risen to $53.80 a barrel. It had dropped 4.2 percent on Thursday.

Both benchmarks posted their third straight week of losses, with Brent dropping about 3 percent and WTI falling roughly half a percent.

Critchlow:  It seems unlikely oil will firm up in the first half of 2019

Critchlow: It seems unlikely oil will firm up in the first half of 2019  

Oil prices fell to their lowest levels in a year and a half this week and are down more than 20 percent for the year, depressed by rising supply and concerns about the health of the global economy.

U.S. crude inventories were down by 46,000 barrels in the week to Dec. 21, the Energy Information Administration said on Friday. Gasoline stocks rose by 3 million barrels, compared with analysts’ expectations in a Reuters poll for a gain of 28,000 barrels.

“The report was modestly bearish, as crude oil stocks held steady versus expectations of a sizeable decline,” said John Kilduff, a partner at Again Capital Management in New York. “The net effect of the report should keep prices fairly flat ahead of the weekend.”

Traders appeared to be squaring their books ahead of expected light volumes on Monday and a market closure on Tuesday for the New Year’s Day holiday.

“Looks like some people in the U.S. and UK got a nice opportunity to bail out of longs,” Sukrit Vijayakar, principal and trader at Trifecta Consultants in Mumbai, told Reuters Global Oil Forum.

Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore, said crude prices had been pressured by slowing economic growth “coupled with the expectation of strong U.S. production in the new year.”

Trader sees another rally ahead for crude

Trader sees another rally ahead for crude  

The United States has emerged as the world’s biggest crude producer this year, pumping 11.6 million barrels per day, more than both Saudi Arabia and Russia.

Earlier this month, OPEC and its allies, including Russia, agreed to cut output by 1.2 million bpd, or more than 1 percent of global consumption, starting in January.

Russian Energy Minister Alexander Novak said on Thursday that Russia would cut its crude output by between 3 million and 5 million tonnes in the first half of 2019 as part of the deal.

Novak also told reporters the U.S. decision to allow some countries to trade Iranian oil after putting Tehran under sanctions was one of the key factors behind the OPEC deal.

Imports of Iranian crude oil by major buyers in Asia hit their lowest level in more than five years in November as the U.S. sanctions on Iran’s oil exports took effect last month, government and ship-tracking data showed.

Oil dips on swelling US inventories, but expected OPEC supply cut stems losses

CNBC

  • U.S. commercial crude oil inventories rose to their highest level since December 2017 last week, according to a weekly report by the Energy Information Administration.
  • The Middle East-dominated producer cartel of the Organization of the Petroleum Exporting Countries (OPEC) next meets on Dec. 6.

A truck used to carry sand for fracking is washed in a truck stop in Odessa, Texas.

Getty Images
A truck used to carry sand for fracking is washed in a truck stop in Odessa, Texas.

Oil prices dipped on Thursday after U.S. crude inventories increased to their highest level since December 2017 amid concerns of an emerging global glut, although an expected supply cut by producer cartel OPEC prevented further drops.

U.S. West Texas Intermediate (WTI) crude futures, were at $53.38 per barrel at 0141 GMT, 25 cents, or 0.5 percent below their last settlement.

Front-month Brent crude oil futures were at $63.28 per barrel, down 20 cents, or 0.3 percent, from their last close.

U.S. commercial crude oil inventories rose by 4.9 million barrels to 446.91 million barrels last week, the Energy Information Administration (EIA) said in a weekly report on Wednesday. That was the highest level since December last year.

U.S. crude oil production remained at a record 11.7 million barrels per day (bpd), the EIA said.

“U.S. inventory data…continued to show significant supply builds, which comes on the back of sustained record U.S. crude oil production,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.

Some analysts have warned that despite high global production, oil markets have little spare capacity to handle unforeseen supply disruptions.

However, Innes said that once U.S. pipeline bottlenecks were alleviated, which he said he expected in 2019, “the entire notion of a tight global spare capacity argument goes down the well”.

Fearing a glut, the Middle East-dominated producer cartel of the Organization of the Petroleum Exporting Countries (OPEC) is considering supply cuts when it next meets on Dec. 6, although some members, like Iran, are expected to resist any voluntary reductions.

“While there is talk that OPEC plus Russia may again agree to a production cut, the concern is that not all relevant parties will be able to come to an agreement,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.

“Saudi Arabia has hinted at a unilateral cut, but it will want to be careful about annoying the U.S. given that President Trump has been vocal about his desire for lower oil prices,” he added.

Trump on Wednesday praised Saudi Arabia over recent oil prices and called for prices to go even lower.

“Oil prices getting lower. Great! Like a big Tax Cut for America and the World. Enjoy!… Thank you to Saudi Arabia, but let’s go lower!” Trump tweeted.

Oil prices edge up on surprise drawdown in US crude stockpiles

CNBC

  • U.S. crude inventories declined by 2.1 million barrels in the previous week, according to data from the American Petroleum Institute.

Oil prices extended gains into a fourth session on Wednesday, buoyed as industry data showed a surprise decline in U.S. crude inventories and as geopolitical tensions over the disappearance of a prominent Saudi journalist stoked supply worries.

U.S. West Texas Intermediate crude was up 15 cents, or 0.2 percent, at $72.07 a barrel by 0255 GMT on Wednesday, having settled up 14 cents.

Brent crude was up 12 cents, or 0.2 percent, at $81.53 a barrel, after settling up 63 cents the session before. The global benchmark, which hit a more than two-week low late last week as equity markets dropped, is trading around $5 below a four-year high of $86.74 marked on Oct. 3.

U.S. crude inventories fell by 2.1 million barrels last week, compared with analyst expectations for a build of 2.2 million barrels, American Petroleum Institute data showed after Tuesday’s settlement.

“The market is reacting to the unexpected decline as inventories tend to rise at this time of year,” said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo, adding that anxieties about the outlook for the global economy were capping gains.

U.S. gasoline stocks dropped by a larger-than-expected 3.4 million barrels, while distillate fuel stockpiles declined by a smaller-than-expected 246,000 barrels, the API data showed.

Inventory data from the U.S. Energy Department’s Energy Information Administration is due at 1430 GMT on Wednesday.

U.S. President Donald Trump gave Saudi Arabia the benefit of the doubt in the disappearance of journalist Jamal Khashoggi even as U.S. lawmakers pointed the finger at the Saudi leadership and Western pressure mounted on Riyadh to provide answers.

Jim Ritterbusch, president of Ritterbusch and Associates, said Saudi Arabia could cut as much as 500,000 barrels per day of crude production “as a warning shot should the U.S. opt to impose any type of sanction in response to the Khashoggi developments”.

Meanwhile, OPEC Secretary-General Mohammad Barkindo on Tuesday urged oil producing companies to increase capacities and invest more to meet future demand as spare oil capacity shrinks worldwide.

The Russian government is no longer capping oil output increases by local producers, one of the country’s top energy companies, Gazprom Neft, said on Tuesday.

The market has been supported by reports that Iranian crude exports may be falling faster than expected ahead of Nov. 4, the date U.s. sanctions on the commodity are due to start.

Oil prices rise on tightening market, traders expect further increases

CNBC

  • U.S. crude inventories at lowest level since 2015.
  • Tighter U.S. market comes ahead of new Iran sanctions.
  • Merchants, banks say crude could spike above $90 soon.

Oil prices rose on Monday as U.S. markets tightened just weeks ahead of Washington’s plan to impose new sanctions against Iran, with major traders and banks expecting prices to rise over $90 per barrel in coming months.

Brent crude futures were at $79.82 per barrel at 0501 GMT, up by $1.02 cents, or 1.3 percent from their last close.

U.S. West Texas Intermediate (WTI) crude futures rose by 82 cents, or 1.2 percent, to $71.60 a barrel.

Amid a tightening market, U.S. commercial crude oil inventories are at their lowest level since early 2015. And while output remains around the record of 11 million barrels per day (bpd), recent subdued U.S. drilling activity points towards a slowdown.

Commodity merchants Trafigura and Mercuria said on Monday that Brent could rise to $90 per barrel by Christmas and even above $100 in early 2019 as markets tighten once U.S. sanctions against Iran are implemented from November.

J.P. Morgan expects the sanctions could lead to a loss of 1.5 million bpd, while Mercuria warned that as much as 2 million bpd could be knocked out of the market.

The Middle East dominated Organization of the Petroleum Exporting Countries (OPEC) as well as top producer Russia are discussing raising output to counter falling supply from Iran, although no decision has been made public yet.

“We expect that those OPEC countries with available spare capacity, led by Saudi Arabia, will increase output but not completely offset the drop in Iranian barrels,” said Edward Bell, commodity analyst at Emirates NBD bank.

J.P. Morgan said in its latest market outlook, published on Friday, that “a spike to $90 per barrel is likely” for oil prices in the coming months due to the Iran sanctions.

The bank said it expects Brent and WTI to average $85 and $76 per barrel, respectively, over the next six months.

Struggling with high feedstock crude prices and record lows for the rupee against the dollar, Indian refiners are preparing to cut back crude imports and instead use up commercial inventories.

Oil prices climb amid fall in US stockpiles, supply worries

CNBC

  • Oil prices rose for a third day on Thursday following another drawdown in U.S. inventories and strong U.S. gasoline demand.
  • U.S. crude oil stockpiles fell for a fifth straight week to 3.5-year lows in the week to Sept. 14, while gasoline inventories also showed a larger-than-expected draw on unseasonably strong demand, the Energy Information Administration said on Wednesday.

Oil rose for a third day on Thursday amid another drawdown in U.S. inventories and strong U.S. gasoline demand, while signs OPEC may not raise output to address shrinking supplies from Iran also supported prices.

Global benchmark Brent crude was up by 26 cents, or 0.3 percent, at $79.66 by 0611 GMT, after gaining half-a-percent on Wednesday.

U.S. West Texas Intermediate crude was up 60 cents, or 0.8 percent, at $71.72 a barrel, after rising nearly 2 percent the previous session.

U.S. crude oil stockpiles fell for a fifth straight week to 3.5-year lows in the week to Sept. 14, while gasoline inventories also showed a larger-than-expected draw on unseasonably strong demand, the Energy Information Administration said on Wednesday.

Crude inventories declined by 2.1 million barrels, the EIA data showed, compared with expectations for a decrease of 2.7 million barrels.

“The bulls are back in charge, even more so after traders were conveying a high degree of resistance to the unexpected build on the API survey,” said Stephen Innes, head of trading for Asia-Pacific at OANDA in Singapore.

He was referring to the weekly survey from the oil industry group the American Petroleum Institute (API) on Tuesday that indicated U.S. stocks had risen by 1.2 million barrels last week.

U.S. sanctions affecting Iran’s oil exports come into force on Nov. 4 and many buyers have already scaled back Iranian purchases. But it is unclear how easily other producers can compensate for any lost supply.

The Organization of the Petroleum Exporting Countries and other producers including Russia meet on Sunday in Algeria to discuss how to allocate supply increases within their quota framework to offset the loss of Iranian supply.

“The current market betting line suggests price levels rather than global supply levels will be the key determinant on turning on the oil taps,” Innes said.

OPEC sources have told Reuters no immediate action was planned and producers would discuss how to share a previously agreed output increase.