US crude rises 1.3%, settling at $68.72 and snapping 7-week losing streak

CNBC

  • Brent and U.S. crude rise, putting futures on pace to snap several weeks of declines.
  • Crude futures draw support from signs that U.S. sanctions on Iran are already reducing global crude supply.
  • The market remains cautious after U.S.-China talks aimed at resolving a trade dispute ended Thursday with no breakthrough

Oil pumpjacks in silhouette at sunset.

Oil pumpjacks in silhouette at sunset.

Oil prices rose on Friday, but pared gains ahead of the close, as the market remained on edge about potential oversupply despite signs that Iran sanctions could curb output.

“In the near term we’re still fairly well supplied,” said John Kilduff, a partner at Again Capital Management.

U.S. West Texas Intermediate crude rose 89 cents, or 1.3 percent, to $68.72. For the week, WTI gained 4.3 percent, snapping a seven-week losing streak.

Benchmark Brent crude oil was up $1.02, or 1.4 percent, at $75.75 a barrel by 2:24 p.m. ET. Brent was on track for a gain of more than 5 percent this week, following three consecutive weekly losses.

“Both crude markers are on track to end a steady run of weekly declines. This is largely due to a tightening fundamental outlook on the back of looming Iranian supply shortages,” said Stephen Brennock, analyst at London brokerage PVM Oil Associates.

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Concerns that an escalating trade war between China and the U.S. could slow economic growth and weigh on crude purchases eased slightly after sources told Reuters that China’s Unipec will resume purchases of U.S. crude oil in October, after a two-month halt due to the fight.

Worries that Mexico’s incoming administration would not strike a bilateral agreement over NAFTA with the U.S. also weighed on the market, traders said. A dispute over opening up the oil and gas sector is weighing on the talks, Bloomberg reported, citing two people familiar with negotiations.

At the same time, concerns about global crude supply intensified with signs that U.S. sanctions on Iran are curbing shipments.

The U.S. government re-imposed sanctions on Iran this month after withdrawing from a 2015 international nuclear deal, which Washington saw as inadequate for curbing Tehran’s activities in the Middle East and denying it the means to make an atomic bomb. Tehran says it has no ambitions to make such a bomb.

Iran is the third-biggest producer in the Organization of the Petroleum Exporting Countries, supplying around 2.5 million barrels per day (bpd) of crude and condensate to markets this year, equivalent to around 2.5 percent of global consumption.

“Third-party reports indicate that Iranian tanker loadings are already down by around 700,000 bpd in the first half of August relative to July, which if it holds will exceed most expectations,” U.S. investment bank Jefferies said on Friday.

“We expect that by Q4 the market will be dealing with either undersupply, dwindling spare capacity – or both,” it added.

Jackie DeAngelis commodity hit

Crude mostly flat on the day  

Energy consultancy FGE says it expects Iran’s crude and condensate exports to drop below 1 million bpd by mid-2019.

The dollar index served as a tailwind, said Bob Yawger, director of futures at Mizuho in New York. A key index of the dollar versus a basket of other currencies fell on Friday, boosting the price of oil and other dollar denominated commodities.

The dollar fell after Federal Reserve Chair Jerome Powell said steady rate hikes are the best way to protect the U.S. economic recovery.

U.S. energy companies cut nine oil drilling rigs this week, the biggest reduction since May 2016, General Electric Co’s Baker Hughes energy services firm said. Changes in the rig count serves as an indicator of future production trends.

Traders kept an eye on the North Sea, where workers on three oil and gas platforms plan to strike next month. Oil production will stop during the strikes. The three fields contribute about 45,000 to 50,000 bpd to the North Sea’s Forties and Brent crude streams.

— CNBC’s Tom DiChristopher contributed to this report.

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.