Oil prices seesaw as US trade dispute with China rattles market

CNBC

  • Oil prices dipped on Tuesday, easing after strong gains in the previous session.
  • Despite a softening of trade concerns, oil markets still face an abundance of supplies.
  • The American Petroleum Institute is due to publish oil storage data later on Tuesday while official data from the U.S. Energy Information Administration is due on Wednesday.

An oil pump jack in Gonzales, Texas.

Getty Images
An oil pump jack in Gonzales, Texas.

Oil prices dipped on Tuesday, easing after strong gains in the previous session when hopes that trade disputes between the United States and China could be resolved buoyed global markets.

Despite a softening of trade concerns, oil markets still face an abundance of supplies that puts pressure on producers to keep their prices competitive in order not to lose market share.

U.S. WTI crude futures were at $63.26 a barrel at 0031 GMT, down 16 cents, or 0.3 percent, from their previous settlement.

Brent crude futures were at $68.52 per barrel, down 13 cents, or 0.2 percent.

The dips came after a more than 2 percent rally on Monday during European and American trade hours.

“Oil prices rose sharply (on Monday) as a weaker U.S.-dollar and easingconcerns about the trade war saw investor appetite return,” ANZ bank said.

“Reports that back-channel talks over the trade dispute between the U.S. and China are ongoing helped soothe investor angst,” it added.

Concerns of a prolonged trade dispute between the world’s two biggest economies and uncertainty over the supply and demand balance of global oil markets have resulted in volatile yet range-bound recent trading.

“Oil prices remain rangebound with WTI oil right in the middle of the $60-$65 per barrel range that has largely held since January of this year,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.

“U.S. oil inventories had been rising for the past couple of months but the data released last week showed an unexpected draw. This week’s data may be crucial for determining the direction of WTI,” he added.

The American Petroleum Institute is due to publish oil storage data later on Tuesday while official data from the U.S. Energy Information Administration is due on Wednesday.

Oil markets have generally been supported by healthy demand as well as supply restraint led by the Organization of the Petroleum Exporting Countries.

However, soaring U.S. crude production, which has jumped by a quarter since mid-2016 to 10.46 million barrels per day (bpd), is threatening to undermine OPEC’s efforts to tighten the market and prop up prices.

The United States late last year overtook top exporter Saudi Arabia as the world’s second biggest crude producer. Only Russia pumps more crude out of the ground, at almost 11 million bpd.

In a sign that oil supplies remain ample, China’s Sinopec, Asia’s largest refiner, plans to cut Saudi crude imports in May by 40 percent, instead buying from alternative sources, after Saudi Aramco set higher-than-expected prices, a company official said on Monday.

Oil inches lower on expectations for US crude stock build

CNBC

  • Oil prices slipped on expectations for a build-up in U.S. crude inventories.
  • Russian government comments on prospects for stepping up cooperation with OPEC to coordinate output cuts braked steeper declines.
  • Official U.S. inventory data will be published by the Energy Information Administration late on Wednesday.

Oil jack pumps in the Kern River oil field in Bakersfield, California.

Jonathan Alcorn | Reuters
Oil jack pumps in the Kern River oil field in Bakersfield, California.

Oil prices slipped on Wednesday on expectations for a build-up in U.S. crude inventories, but Russian government comments on prospects for stepping up cooperation with OPEC to coordinate output cuts braked steeper declines.

U.S. WTI crude futures were at $63.36 a barrel at 0208 GMT, down 15 cents, or 0.24 percent, from their previous settlement.

Brent crude futures dipped to $67.94 per barrel, down 18 cents, or 0.26 percent, after it rose 0.7 percent on Tuesday.

U.S. crude inventories likely saw a build for the second straight week, while refined product stockpiles were forecast to have declined last week, an expanded Reuters poll showed on Tuesday.

“With the change in prices being only a few cents, I think the oil market is waiting for the next development and of course the U.S. inventories data due tonight (Wednesday) is very good reason for traders to be waiting,” said Michael McCarthy, Chief Market Strategist at brokerage CMC Markets.

Industry group the American Petroleum Institute, however, said on Tuesday U.S. crude stocks have unexpectedly fallen last week as refineries boosted output.

“With total combined stocks of crude oil and refined products coming in around unchanged on the week, I would call it a neutral data point,” said Dominic Chirichella, senior partner at the Energy Management Institute in New York.

Official U.S. inventory data will be published by the Energy Information Administration late on Wednesday.

“The EIA data has not (always) been in sync with the API data so we could see a different set of data points Wednesday morning,” Chirichella said.

Meanwhile, Russian Energy Minister Alexander Novak said on Tuesday that a joint organisation between the Organization of the Petroleum Exporting Countries and non-OPEC countries may be set up after the current deal on production cuts expires at the end of this year.

“Russia is testing the upper production bands but provided they don’t ramp up dramatically I think this news will be viewed in a positive light for prices,” said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore.

Oil has risen from a multi-year low near $27 a barrel in January 2016, helped by production cuts led by OPEC and Russia, which began in 2017 in order to rein in over-supply and prop up prices.

Top producer Russia’s oil output rose in March to 10.97 million barrels per day, up from 10.95 million bpd in February, official data showed earlier this week, prompting some traders to worry the OPEC-non-OPEC alliance to help balance oil markets was under threat.

Oil prices firm as global stock markets rebound

CNBC

  • Oil prices rose on Tuesday, lifted by a rebound in global stock markets that followed sharp falls last week.

Oil jack pumps are pictured in the Kern River oil field in Bakersfield, Calif.

Jonathan Alcorn | Reuters
Oil jack pumps are pictured in the Kern River oil field in Bakersfield, Calif.

Oil prices rose on Tuesday, lifted by a rebound in global stock markets that followed sharp falls last week.

U.S. West Texas Intermediate (WTI) crude futures were at $59.44 a barrel at 0103 GMT. That was up 15 cents, or 0.25 percent, from their last settlement.

Brent crude futures were at $62.78 per barrel, up 19 cents, or 0.3 percent, from the previous close.

“Oil markets attempted a half-hearted recovery overnight on little more than an equity market correlated bounce,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.

Stock markets were roiled last week by some of the sharpest falls on record, shaking confidence across markets.

With markets seemingly returning to calmer waters, oil traders said attention was turning to inventory levels to gauge crude supply levels.

“The change in inventories this week will be crucial for determining whether further declines in the oil price are on the cards,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.

Russia won't flood the oil market, says OPEC secretary general

Russia won’t flood the oil market, says OPEC secretary general  

The private American Petroleum Institute (API) is due to publish crude inventory estimates on Tuesday, while the government U.S. Energy Information Administration (EIA) is set to release its fuel storage and crude production data on Wednesday.

On the demand side, the Organization of the Petroleum Exporting Countries (OPEC) said on Monday it expected world oil demand to climb by 1.59 million barrels per day (bpd) this year, an increase of 60,000 bpd from the previous forecast, reaching 98.6 million bpd.

The rising consumption is being met by increased output from outside OPEC, the Middle East dominated producer club said.

OPEC said the United States and other outside producers would boost supply by 1.4 million bpd this year, up 250,000 bpd from last month and the third consecutive rise from 870,000 bpd in November.

OPEC said because of non-OPEC production growth, oil markets would only return to a supply and demand balance “towards the end of this year.”

In an effort to tighten markets and prop up prices, OPEC and a group of other producer including Russia have been withholding supplies since 2017. The cuts are scheduled to last through 2018.

EIA data shows that world oil markets were in a supply deficit in 2017, due in large part to the OPEC-led supply cuts, but the data shows an expected return of a surplus for large parts of this year.

U.S. oil benchmark ends below $60 a barrel for first time in 2018

MarketWatch

Shutterstock
By

MyraP. Saefong

Markets/commodities reporter

NeandaSalvaterra

Oil futures fell for a sixth straight session on Friday, with the U.S. benchmark settling below $60 a barrel for the first time in 2018 to notch its biggest weekly loss in more than a year.

Data released Friday revealed the biggest weekly jump in the number of U.S. oil-drilling rigs since January 2017, contributing to concerns about a surge in U.S. production.

March West Texas Intermediate crude CLH8, -3.43% dropped $1.95, or 3.2%, to settle at $59.20 a barrel on the New York Mercantile Exchange. Prices saw their lowest finish since Dec. 22. For the week, it was down roughly 9.6%, which was the biggest such decline since January 2016.

April Brent crude LCOJ8, -3.24% the global oil benchmark, fell $2.02, or 3.1% to end at $62.79 a barrel on London’s ICE Futures exchange. Brent, which settled at its lowest since Dec. 13, retreated roughly 8.4% this week.

Baker Hughes BHGE, -3.64%  on Friday reported that the number of active U.S. rigs drilling for oil jumped by 26 to 791 this week. That marked a third straight week of increases and the largest weekly rise in more than a year.

This offers a “path for much more than a million barrels a day U.S. production increase this year, but prices will need to remain above $50,” said James Williams, energy economist at WTRG Economics. “Not a good Friday for OPEC.”

Until recently, oil prices have been buoyed by production cuts from the Organization of the Petroleum Exporting Countries and other large producers among other threats to supply.

However, OPEC member Iran also plans to raise its oil production in the next four years, according to a report from Reuters.

That has “added to market fears of an increase in global supplies,” said Mihir Kapadia, chief executive officer and founder of Sun Global Investments. “With reports suggesting China could be launching its crude oil futures contract next month, traders could be looking to the Far East to see how such a move could affect global prices.”

Oil-market fundamentals are also changing as recent increases in prices provided incentive for the U.S. to crank up output.

In a monthly report this week, the Energy Information Administration forecast record U.S. crude production of 10.59 million barrels a day this and 11.18 million barrels a day next year. A separate report from the agency also revealed that daily domestic output topped 10 million barrels a day last week—the highest such figure based on EIA records dating back to 1983.

Meanwhile, the downturn in the oil market has come amid a recent selloff in the equity markets, as investors there fret about the potential for higher inflation and central bank action. Stocks in Europe and Asia were on pace on Friday for their worst week in two years after a late slump Thursday pushed the Dow Jones Industrial Average DJIA, +1.38%  and S&P 500 SPX, +1.49%  into correction territory. U.S. stocks saw volatile Friday, with the Dow was set for a weekly loss of nearly 6%.

In other energy dealings, March gasoline RBH8, -3.66%  dropped 3.7% to $1.70 a gallon, with prices suffering a weekly loss of 9.2%, while March heating oil HOH8, -3.66%  lost 3.5% to $1.855 a gallon—down about 9.7% on the week.

March natural gas NGH18, -3.41%  fell 4.2% to $2.584 per million British thermal units, its lowest finish since late February 2017, for a weekly decline of 9.2%.

—Sara Sjolin contributed to this article

Oil prices steady as high US output offsets report of lower crude stockpiles

CNBC

  • Industry group the American Petroleum Institute says U.S. crude inventories fell by 1.1 million barrels, ahead of official government figures.
  • Oil prices are on pace for a second weekly decline following a two-day equity sell-off and as volatility returns to financial markets.
  • Climbing U.S. production looms over the market as the U.S. Energy Information Administration forecasts American output to average 10.6 million barrels a day this year.

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 were broadly steady on Wednesday, as the boost from a report showing a drop in U.S. crude inventories last week was offset by evidence of soaring U.S. output.

Brent crude futures edged up 11 cents to $66.97 a barrel by 9:13 a.m. ET (1413 GMT). The contract is 2.7 percent for the week.

U.S. West Texas Intermediate (WTI) crude futures eased 13 cents to $63.26 a barrel, down 3.6 percent so far this week.

Global equities recovered modestly after their largest one-day fall in nearly two years on Monday, when volatility surged and investors ditched stocks and bonds.

Some oil majors starting to increase spending, analyst says  

“The risk-off move impacted oil, but that impact has been limited because commodities are consumption or real assets, as opposed to equities or bonds, which are investment assets,” BNP Paribas head of commodity strategy Harry Tchilinguirian said.

“The curve pays you for being long oil,” he said, adding the main issue affecting oil prices was “the efforts of supply restraint by producers that in the second half of 2017 started to bear fruit.”

The Organization of the Petroleum Exporting Countries and other producers, including Russia, have cut production since last January to force down global inventories.

Crude inventories in the United States have fallen by 20 percent since hitting record highs in April 2017.

The futures curve shows prompt prices for oil are above those for future delivery, suggesting investors are counting on demand outpacing supply.

Data on Tuesday showed U.S. crude inventories fell by 1.1 million barrels in the week to Feb. 2 to 418.4 million barrels, helping support the oil price.

Commodities tomorrow:

Commodities tomorrow: Crude holds tight range on the day  

“Evidence points to a global inventory market that has arguably already balanced – with days of forward cover in the low single digits or possibly even lower – which should support the spot price going forward,” said Richard Robinson, manager of the Ashburton Global Energy fund.

But rising U.S. oil production has been looming over the market. Output has risen by 1 million barrels per day in the last year to about 10 million bpd.

The U.S. Energy Information Administration (EIA) expects U.S. output to reach an average of 10.59 million bpd in 2018 and 11.18 million bpd by 2019, potentially overtaking Russia as the world’s largest producer.

“The strong growth that is expected in U.S. production supports our more bearish outlook for the oil market,” Hamza Khan, head of ING commodities strategy, said in a note.

Oil prices hit fresh highs as market tightens

CNBC

  • Oil prices on Thursday hit fresh two-and-a-half year highs
  • Markets tightened amid tensions in Iran and due to ongoing OPEC-led production cuts
  • Prices were also buoyed by Asia’s stock markets, which flirted with 10-year highs on Thursday

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 on Thursday hit fresh two-and-a-half year highs and were at levels last seen at the start of the commodity slump in 2014/2015, with markets tightening amid tensions in Iran and due to ongoing OPEC-led production cuts.

Prices were also buoyed by Asia’s stock markets, which flirted with 10-year highs on Thursday amid strong data from leading economies including the United States, Japan and Germany.

U.S. West Texas Intermediate (WTI) crude futures were at $62.10 a barrel at 0445 GMT, up 47 cents, or 0.8 percent, from their last close. They hit $62.14 shortly before, the highest level since May 2015.

Brent crude futures – the international benchmark for oil prices – were at $68.13 a barrel, up 29 cents, or 0.4 percent, after hitting a May-2015 high of $68.16 shortly before.

Geopolitical tensions biggest bullish risk to oil prices: ClipperData's Matt Smith

Geopolitical tensions biggest bullish risk to oil prices: ClipperData’s Matt Smith  

Beyond a brief intraday spike in May, 2015, these were the highest crude price levels since December, 2014, at the start of the oil price downturn.

Freezing weather in the United States has also spurred short-term demand, especially for heating oil.

“The market is clearly getting more bullish on oil as inventory levels get closer to the five-year average. Geopolitical uncertainty in Iran, OPEC’s third largest producer, is also helping to support the price as citizens are again protesting the government,” said by William O’Loughlin, investment analyst at Australia’ Rivkin Securities.

Iran’s elite Revolutionary Guards have deployed forces to three provinces to put down anti-government unrest that has been ongoing for a week, their commander said on Wednesday.

In the United States, crude oil inventories fell by 5 million barrels in the week to Dec. 29 to 427.8 million barrels, industry group the American Petroleum Institute said on Wednesday.

Potentially undermining the trend towards tighter market conditions is U.S.oil production, which has risen by almost 16 percent since mid-2016, hitting 9.75 million barrels per day (bpd) at the end of last year.

Official U.S. Energy Information Administration (EIA) storage and production data is due on Thursday.

Oil prices close 2017 at 2½-year high above $60

MarketWatch

Natural-gas futures fall 21% in 2017, but 11% weekly surge helps cap uglier fall

Reuters
Record-breaking snow in Erie, Pennsylvania seen in late December 2017

By

MARKDECAMBRE

BARBARAKOLLMEYER

MARKETS REPORTER

Crude-oil futures ended Friday trade on a decidedly upbeat note, settling above $60 for the first time in more than two years to wrap up 2017.

West Texas Intermediate crude on the New York Mercantile Exchange CLG8, +0.43% finished up 1%, or 58 cents, to $60.42 a barrel. That represents its first close above $60 since June 23, 2015, according WSJ Market Data Group. U.S. benchmark oil is up 12.5% in 2017, nearly 17% this quarter, 5.3% for the month, and 3.3% this week.

March Brent LCOH8, +0.70%  rose 71 cents, or 1.1%, to $66.87 a barrel. The international benchmark for crude has gained 18% this year, more than 16% over the last three months of the year, 5.2% for the month, and 0.6% for the week.

The market has improved amid optimism about years of oversupply finally ebbing, capped by rising demand and the production-limit deal, led by the Organization of the Petroleum Exporting Countries, being extended through 2018. Both oil contracts rallied to end at 2½-year highs.

Moves for crude prices came as Baker Hughes on Friday reported a small drop in rig counts for the week, with rigs drilling for gas down by two to 182, while those drilling for oil remained unchanged at 747. Over the year, however, total rigs have climbed by 271 to a total rig count at 929.

On Thursday, the market took cues from inventory reports that showed a steady decline in U.S. crude stocks. The U.S. Energy Information Administration reported that domestic-crude supplies fell by 4.6 million barrels for the week ended Dec. 22, compared with a 6-million-barrel drawdown reported by the American Petroleum Institute late Wednesday.

Meanwhile, natural gas NGG18, +1.41%  for February jumped 3.9 cents, or 1.3%, to settle at $2.9530 per million British thermal units, after surging 6.4% on Thursday, posting the biggest daily rise since Dec. 21, 2016, according to FactSet. Natural-gas futures, however, have declined 21% in 2017, retreated 1.8% on the quarter, fell 2.4% on the month, but an 11% surge this week, amid freezing weather, helped mitigate more brutal losses.

January heating oil HOF8, +0.89% rose by about 2.34 cents, or 1.1%, to $2.0755 a gallon, marking a fresh 52-week high and the highest settlement since Feb. 27, 2015. Futures have gained 22% this year, about 15% this quarter, 10% in December, and 5.4% gain on the week.

Arctic cold air has been chilling portions of the U.S., with forecasts calling for a continuation of that weather into the first week of January. Record-cold levels were set in Minnesota and Michigan on Thursday, according to The Weather Channel. Cold weather could support further buying of natural gas and heating oil.

January gasoline RBF8, -0.06% rose 0.62 cent, or 0.4%, to $1.7992 a gallon. Gasoline futures are up 8.1% in 2017, 12% over the past three months, 4.1% on the month, with a 2.1% advance this week.

— Biman Mukherji contributed to this article