Oil prices mixed after edging up from two-week lows; set for weekly drop

CNBC

  • U.S. oil prices were mixed on Friday, after three days of declines.
  • Gains were limited as Asian share markets extended a selloff on Wall Street after news of planned U.S. tariffs on steel and aluminium.

U.S. oil prices were mixed on Friday, after three days of declines, but any gains were limited as Asian share markets extended a selloff on Wall Street after news of planned U.S. tariffs on steel and aluminium raised fears of a trade war.

President Donald Trump announced he would impose hefty tariffs on the two metals to protect U.S. producers, risking retaliation from major trade partners like China, Europe and neighboring Canada.

U.S. West Texas Intermediate (WTI) crude was down 1 cent at $60.98 by 0432 GMT after touching a two-week low of $60.18 a day earlier.

Global benchmark Brent was up 7 cents, or 0.1 percent, at $63.90 a barrel, after settled down 1.4 percent on Thursday, also a two-week low. Brent is set for a weekly fall of 5.1 percent.

U.S. crude is on track for a 4 percent drop this week, its first weekly decline in three, having given up much of the gains in recent weeks when sentiment was boosted by a fall in inventories at the Cushing delivery point for WTI.

Oil and gas sectors drop on steel and aluminum tariff news  

“The market is not showing any obvious signs of turning around the mood. We are being driven by the pick up in U.S. inventories and in general terms the market went a bit to far too soon,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.

“Then we have the volatility in the U.S. dollar and the implications of the tariff news to factor in,” he said.

U.S. crude stocks rose last week even as refineries hiked output, increasing by 3 million barrels, compared with expectations for an increase of 2.1 million barrels.

Still, stocks fell again at Cushing in Oklahoma, with inventories down by 1.2 million barrels, the 10th consecutive week of declines, the Energy Information Administration said this week.

“Although destocking in Cushing has continued, with stocks there falling below 30 million barrels for the first time since late 2014, the overall increase in U.S. oil stocks has overshadowed the good news,” Fawad Razaqzada, market analyst at Forex.com, said in a note.

The Organization of the Petroleum Exporting Countries (OPEC) will hold a dinner on Monday in Houston with U.S. shale firms, the latest sign of the producer group widening talks about how best to tame a global oil glut.

U.S. crude output slipped in the last month of 2017, but in November hit an all-time high of 10.057 million barrels per day (bpd). Weekly data showed another record and further gains are expected.

US oil extends gains to hold near 3-week high

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  • U.S. oil prices rose for a fourth session on Tuesday to near a three-week high hit a day earlier.
  • Prices were supported by signs of robust production curbs by OPEC and non-OPEC countries.

An oil pump jack in the oil town of Gonzales, Texas.

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An oil pump jack in the oil town of Gonzales, Texas.

U.S. oil prices rose for a fourth session on Tuesday to near a three-week high hit a day earlier, supported by signs of robust production curbs by OPEC and non-OPEC countries and a slight fall in U.S. production.

U.S. West Texas Intermediate crude for April delivery was up 10 cents at $64.01 a barrel by 0020 GMT. The contract hit $64.24 on Monday, its highest since Feb. 6.

London Brent crude had yet to start trading after settling up 19 cents at $67.50.

Saudi Arabian oil minister Khalid al-Falih indicated on Saturday that its crude production would be well below the production cap as the Organization of the Petroleum Exporting Countries and its allies were committed to reducing output to bring balance and stability to the market.

Prices were also supported by U.S. Energy Information Administration data on Thursday that showed domestic oil production dipped to 10.27 million barrels per day from 10.271 million bpd the week before.

U.S. crude inventories are forecast to have risen by 2.7 million barrels last week, a preliminary Reuters poll showed on Monday.

Gasoline stocks are seen down by 600,000 barrels, while distillate inventories, which include heating oil and diesel fuel, were seen down 700,000 barrels. The American Petroleum Institute is scheduled to release its weekly data later in the day.

US oil falls for sixth day as supply fears mount

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  • U.S. oil prices fell for a sixth day on Friday after Iran announced plans to boost production and U.S. crude output hit record highs.

Oil fracking California

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U.S. oil prices fell for a sixth day on Friday after Iran announced plans to boost production and U.S. crude output hit record highs, adding to concerns about a sharp rise in global supplies.

The falls come amid a rout in global share markets as inflation fears grip investors.

U.S. West Texas Intermediate (WTI) crude was down 63 cents, or 1 percent, at $60.52 by 0015 GMT. On Thursday, it closed down 64 cents, or 1 percent, to settle at $61.15, its lowest close since Jan. 2.

Brent futures were yet to trade. On Thursday, Brent fell 70 cents, or 1.1 percent, to settle at $64.81 a barrel, their lowest close since Dec. 20.

OPEC member Iran on Thursday announced plans to increase production within the next four years by at least 700,000 barrels a day.

The U.S. Energy Information Administration (EIA) this week said crude production last week rose to a record high of 10.25 million barrels per day (bpd).

At that level, U.S. production would overtake current output in Saudi Arabia, the biggest producer in the Organization of the Petroleum Exporting Countries.

OPEC and other producers, including Russia, have cut production since January 2017 to force down global inventories, but these cuts have been offset by rising U.S. oil production.

Adopt “some extraordinary measures” in 2018 in order to rebalance the market!

OPEC calls on US shale oil producers to accept ‘shared responsibility’ of slashing global supply

  • “We urge our friends, in the shale basins of North America to take this shared responsibility with all seriousness it deserves,” OPEC General Secretary, Mohammed Barkindo, said on Tuesday.
  • On Sunday, Barkindo had suggested that OPEC, as well as other oil producers, may be forced to adopt “some extraordinary measures” in 2018 in order to rebalance the market.

OPEC Secretary General Mohammad Barkindo

Source: OPEC
OPEC Secretary General Mohammad Barkindo

OPEC General Secretary, Mohammed Barkindo, called on U.S. shale oil producers to help support plans to curb global oil supply on Tuesday, warning that unprecedented measures may be necessary next year in order to rebalance the oil market.

“We urge our friends, in the shale basins of North America to take this shared responsibility with all seriousness it deserves, as one of the key lessons learnt from the current unique supply-driven cycle,” Barkindo said.

North American shale drillers have helped production soar by nearly 10 percent in the U.S. this year, according to Reuters, despite OPEC and some other producers — including Russia — cutting supplies in a bid to prop up prices.

Speaking at the India Energy Forum in New Delhi, Barkindo added that the U.S. and OPEC had agreed they must find a joint solution in order to ensure stability in the oil market.

We are writing a completely new chapter in the price of oil

We are writing a new chapter in the history of oil: OPEC secretary-general  

The price of oil collapsed from near $120 a barrel in June 2014 due to weak demand, a strong dollar and booming U.S. shale production. OPEC’s reluctance to cut output was also seen as a key reason behind the fall. But, the oil cartel soon moved to curb production — along with other oil producing nations – in late 2016.

Meantime, the world’s largest oil producing nation and OPEC kingpin, Saudi Arabia, said Monday it had cut crude oil allocations for November by 560,000 barrels per day. The announcement appeared consistent with the kingdom’s commitment to abide by an OPEC-led supply reduction agreement.

On Sunday, Barkindo had suggested that OPEC, as well as other oil producers, may be forced to adopt “some extraordinary measures” in 2018 in order to rebalance the market.

Saudi energy minister: Russia partnership breathes life back into OPEC