Oil trades higher after two days of heavy losses

CNBC

  • Oil prices rose on Thursday and recouped a portion of the losses over the last two days that were driven by reports showing surprise gains in U.S. inventories of crude.
  • U.S. crude traded at $67.92 a barrel and global benchmark Brent was at $72.64.
  • U.S. crude inventories rose 3.8 million barrels last week as imports jumped, the government’s Energy Information Administration said.

Oil prices rose on Thursday, recouping a portion of the losses of the last two days that were driven by reports showing surprise gains in U.S. inventories of crude, along with mounting concern over trade friction between the U.S. and China.

Brent crude futures were up 25 cents, or 0.4 percent, at $72.64 a barrel by 0055 GMT, after dropping 2.5 percent on Wednesday.

U.S. West Texas Intermediate (WTI) crude futures increased by 26 cents, or 0.4 percent, to $67.92 a barrel. They fell $1.6 percent in the previous session.

U.S. crude inventories rose 3.8 million barrels last week as imports jumped, the government’s Energy Information Administration said.

Analysts polled by Reuters had expected a decline of 2.8 million barrels.

There were some bullish elements in the report, notably gasoline stocks declining by 2.5 million barrels.

Also, crude stocks at the Cushing, Oklahoma, delivery hub for WTI futures were down, dropping by 1.3 million barrels, EIA data showed.

On Tuesday, the EIA reported that U.S. crude production fell 30,000 barrels per day to 10.44 million bpd in May.

Nonetheless, the tough talk from Washington on trade with China has put pressure on oil prices.

U.S. President Donald Trump sought to ratchet up pressure on China for trade concessions by proposing a higher 25 percent tariff on $200 billion worth of Chinese imports, his administration said on Wednesday.

China said it would hit back if the United States takes further steps on trade.

Brent prices fell more than 6 percent and U.S. crude slumped about 7 percent, the biggest monthly declines for both benchmarks since July 2016.

Brazilian oil exports hit a record in July, nearly three times its shipments in June and 50 percent higher than a year earlier, government data showed on Wednesday.

Iraq exported 3.543 million barrels per day (bpd) of crude from its southern ports in July, slightly above the June average, the oil ministry said on Wednesday.

Russian oil production last month was on average above the level Moscow promised following the Organization of the Petroleum Exporting Countries and non-OPEC meeting in June, energy minister Alexander Novak indicated on Wednesday.

Novak said that higher production was needed to maintain the market’s stability.

Oil prices drop on worries about oversupply

CNBC

  • Oil prices extended declines into a second session on Tuesday.
  • Attention shifted to the risk of oversupply, with market participants shrugging off escalating tensions between the United States and Iran.

A pump jack and pipes at an oil field near Bakersfield, California.

Lucy Nicholson | Reuters
A pump jack and pipes at an oil field near Bakersfield, California.

Oil prices extended declines into a second session on Tuesday as attention shifted to the risk of oversupply, with market participants shrugging off escalating tensions between the United States and Iran.

Brent crude oil was down 19 cents, or 0.3 percent, at $72.87 a barrel by 0345 GMT, after settling down 1 cent on Monday. U.S. crude was down 21 cents, or 0.3 percent, at $67.68 a barrel. The contract fell 37 cents the previous day.

Earlier in Monday’s session, the market had risen after President Donald Trump warned of dire consequences for Iran if it threatened the United States.

“While oil prices were the primary beneficiary of the weekend’s headline battle between President Trump and Iranian President Rouhani, that boost started to fizzle as traders then veered to oversupply concerns,” said Stephen Innes, head of trading for APAC at brokerage OANDA.

Iran has been under increasing pressure from the United States, with Trump’s administration pushing countries to cut all imports of Iranian oil from November.

Saudi Arabia and large producers are ramping up output to offset losses that are likely to come as the November deadline approaches.

Meanwhile, U.S. crude inventories at the delivery hub at Cushing, Oklahoma gained in the four days to Friday, according to information supplier Genscape, traders said.

On a weekly basis, stockpiles at the hub were expected to fall for the 10th consecutive week, traders said.

The market has also been dented by concerns about the impact on global economic growth and energy demand of escalating disputes over global trade.

G20 finance leaders on the weekend voiced concern about the risk to global growth from trade tensions between the United States and China, among others.

“The lingering trade war effects continue to raise global growth concerns that continue to dampen sentiment,” Innes said.

Oil falls after US softens stance on Iranian sanction waivers

CNBC

  • Oil prices fell on Wednesday, with Brent dropping by more than $1, after the United States said it would consider requests for waivers from sanctions due to snap back into place on Iranian crude exports.

A pump jack operates at a well site leased by Devon Energy Production Co. near Guthrie, Oklahoma.

Nick Oxford | Reuters
A pump jack operates at a well site leased by Devon Energy Production Co. near Guthrie, Oklahoma.

Oil prices fell on Wednesday, with Brent dropping by more than $1, after the United States said it would consider requests for waivers from sanctions due to snap back into place on Iranian crude exports.

Brent crude futures were down $1.10, or 1.4 percent, at $77.76 a barrel by 0112 GMT. U.S. crude was down 68 cents, or 0.9 percent, at $73.43.

Both contracts had posted gains earlier in the previous session after industry data showed inventories fell more than expected last week in the United States.

Washington will consider requests from some countries to be exempted from sanctions it will put into effect in November to prevent Iran from exporting oil, U.S. Secretary of State Mike Pompeo said on Tuesday.

“There will be a handful of countries that come to the United States and ask for relief from that. We’ll consider it,” Pompeo said, according to the text of an interview in Abu Dhabi with Sky News Arabia released by the U.S. State Department. He did not identify any countries.

Washington had earlier told countries they must halt all imports of Iranian oil from Nov. 4 or face U.S. financial measures, with no exemptions.

The U.S. pulled out of a multinational deal in May to lift sanctions against Iran in return for curbs to its nuclear program.

Later on Tuesday, after arriving in Brussels for a NATO summit, Pompeo stressed the need to keep up pressure on Iran in coordination with allies. He also planned to reassure allies about alternative oil supplies.

Oil's holding steady above $70, and one trader says there's more room to run

Oil’s holding steady above $70, and one trader says there’s more room to run  

Efforts by the Organization of the Petroleum Exporting Countries (OPEC) and other producers have led to a tighter oil market after a persistent glut.

With the impending sanctions on OPEC member Iran and supply disruptions from Canada to Libya, prices have risen and sparked fears of shortages, amid rising demand.

U.S. crude inventories fell last week by 6.8 million barrels, according to data from industry group, the American Petroleum Institute.

That decline was larger than expected, causing crude futures to gain in post-settlement trading.

Analysts polled by Reuters forecast that crude stocks fell on average by 4.5 million barrels, ahead of government data at 10:30 a.m. EDT (1430 GMT) on Wednesday.

Oil prices edge up as investors eye tight market

CNBC

  • Oil prices rose on Monday as investors focused on tight market conditions after data late last week showed U.S. crude inventories fell to their lowest in more than three years.

Oil pumpjacks in silhouette at sunset.

Oil pumpjacks in silhouette at sunset.

Oil prices rose on Monday as investors focused on tight market conditions after data late last week showed U.S. crude inventories fell to their lowest in more than three years.

Global benchmark Brent rose 37 cents, or 0.5 percent, to $77.48 a barrel by 0305 GMT. U.S. crude futures added 29 cents, or 0.4 percent, to $74.09.

Official data that came out on Thursday, a day later than normal due to the July 4 public holiday, showed inventories at Cushing, the delivery point for U.S. crude futures, fell to their lowest in 3-1/2 years.

“Cushing is clearly screaming out for crude, with the prompt few months more than $2 backwardated,” said Virendra Chauhan, an analyst at Energy Aspects in Singapore.

Backwardation refers to a market situation that suggests tightness as prices for immediate delivery are higher than those for later dispatch.

Investors are also focusing on how much exports from Saudi Arabia and other Gulf states will rise, Chauhan said.

The Organization of the Petroleum Exporting Countries and other countries agreed earlier this month to a modest increase in output to dampen a rally in oil prices, which recently hit a 3-1/2 year high.

An increase in supply will reverse some of the output cuts that OPEC and other major producers put in place in early 2017 to end several years of supply glut.

The tightness at Cushing and the potential increase in Gulf exports “both have implications for how quickly the prompt overhang in the market can clear, and thus provide some direction for prices,” Chauhan said.

U.S. producers are continuing to bring more rigs into oilfields already producing at record levels. The U.S. rig count, an early indicator of future output, was up by five in the week to July 6, according to General Electric Co’s Baker Hughes energy services firm.

That brings the total count to 863, up 100 from last year.

Concerns that oil prices will be weighed down by a trade conflict between the U.S. and China have faded to some extent, analysts said.

The United States and China exchanged the first salvos in what could become a protracted trade war on Friday, slapping tariffs on $34 billion worth of each others’ goods and giving no sign of willingness to start talks aimed at a reaching a truce.

Don’t count on further gains in oil prices after Trump’s Iran announcement, expert says

CNBC

  • Oil prices are unlikely to take another leg higher even if the U.S. ends up reversing itself and pulling out of the Iran deal, said Alejandro Barbajosa, vice president at Argus Media.
  • Prices have been recently buoyed by concerns of Washington reimposing sanctions on Iran.
  • A potential decrease in Iranian oil could create an “exit strategy” of sorts for the rest of OPEC.

Oil prices, which have risen on worries about Washington’s possible withdrawal from the Iran agreement, are unlikely to take a leg higher even if the U.S. ultimately pulls out of deal, according to one expert.

Markets have already factored in the possible effect of the U.S. re-sanctioning Iran, currently the third-largest oil producer in the Organization of the Petroleum Exporting Countries.

“We’ve already seen that bullishness factored in over the past few weeks … The markets have already reacted to the expectation of less supplies going forward,” Alejandro Barbajosa, vice president at Argus Media, told CNBC’s Nancy Hungerford.

As a result, it will be difficult for oil prices to advance under current circumstances, Barbajosa said.

Saudi Arabia would be ready to compensate for war-related disruption of oil, says expert

Oil prices will slide even if Trump only delays Iran decision: expert  

Oil prices declined in Asia trade on Tuesday, following a tweet from President Donald Trumpthat he will announce his decision on the Iran deal on Tuesday at 2 p.m. ET.

The 2015 accord lifted economic sanctions on Iran in exchange for the country limiting its nuclear program and allowing regular inspections of its to atomic facilities. The United States agreed to those terms, and Iran does not appear to have violated the deal, but the Trump administration has said it wants to scrap the agreement.

U.S. crude futures, which had topped the $70 per barrel mark in the last session for the first time since end-2014, had slid 1.2 percent to around $69.88. Brent crude futures were down 1.01 percent at $75.40.

An ‘exit strategy’ for OPEC

Trump has criticized the Iran deal very extensively, saying it should never have been made. Barbajosa said he expects a “significant decline” in oil prices, should the U.S. attempt to delay a decision on the deal in order to buy time.

“It’s just pushing the decision further into the future, but that just means that that buffer of supply that is coming from Iran at present would continue to be there for an extended period of time,” he said.

Analysts expect renewed sanctions to take out as many as 500,000 barrels of Iranian oil a day. That may have a limited impact on markets, but it would also hand other OPEC members a chance to increase production.

“OPEC might use this as an opportunity as an exit strategy from the current strategy of restrained supplies, because what we see is that there is little scope for them to start producing again at the levels they would like to produce without having a negative effect on prices,” Barbajosa said.

“If Iran gets out of the market, it might be a very natural way for them to say, ‘Oh, we need to increase production now, because Iran is no longer there,'” he said.

— CNBC’s Tom DiChristopher contributed to this report.