Oil prices fall as market awaits G20, OPEC

CNBC

Reuters

KEY POINTS
  • Brent crude futures were down 44 cents, or 0.7%, at $66.05 by 0059 GMT.
  • U.S. West Texas Intermediate (WTI) crude futures were down 41 cents, or 0.7%, at $58.97.
RT: Offshore oil rig Norway 160211
An offshore oil rig off the coast of Norway.
Nerijus Adomaitis | Reuters

Oil fell on Thursday, erasing some of the previous session’s strong gains, as traders eye the G20 summit in Japan and a meeting of OPEC and other oil producers to decide on an extension of output cuts.

Brent crude futures were down 44 cents, or 0.7%, at $66.05 by 0059 GMT.

U.S. West Texas Intermediate (WTI) crude futures were down 41 cents, or 0.7%, at $58.97.

Oil prices rose more than 2% on Wednesday and hit their highest in about a month, buoyed by U.S. government data showing a larger-than-expected drawdown in crude stocks as exports hit a record high and surprise drops in refined product stockpiles.

However, traders said concerns that a hoped-for breakthrough on trade at the G20 may not eventuate and some nervousness about continued output cuts were crimping follow-through buying.

“I think the length of the speculative positioning might be stretched too tight ahead of G20 and of course OPEC,” said Stephen Innes, managing partner at Vanguard Markets in Bangkok, said.

U.S. President Donald Trump will meet with Chinese President Xi Jinping at the Group of 20 summit that starts on Friday in Osaka, Japan to seek a breakthrough in negotiations to end a trade war that has been hitting global economic growth.

Trump said on Wednesday that a deal was possible but also spoke of a Plan B that would involve reducing business ties with China.

“With Trump stirring up trade war dust via “Plan B” there is still that element of the unknown,” Innes said.

Almost immediately after the G20 summit ends on Saturday, the Organization of the Petroleum Exporting Countries (OPEC) meets on Monday to discuss an extension of production cuts to support prices.

The day after that OPEC members meet with other producers including Russiain a grouping known as OPEC+, which agreed in December to reduce supply by 1.2 million barrels per day from Jan. 1. The agreement is due to expire on June 30.

Crude inventories in the United States, the largest producer and consumer of oil, fell 12.8 million barrels last week, the Energy Information Administration said, far surpassing analyst expectations for a decrease of 2.5 million barrels.

That was the most since September 2016, according to the statistical arm of the Department of Energy.

Net U.S. crude imports fell last week by 1.2 million barrels per day (bpd). Overall crude exports rose to 3.8 million bpd, beating the previous record of 3.6 million bpd in February.

Oil prices dip, still set for weekly gains amid Middle East tensions, rate cut hopes

CNBC

Reuters

KEY POINTS
  • Brent crude was down 10 cents, or 0.16%, at $64.35 a barrel by 0458 GMT. The global benchmark jumped 4.3% on Thursday, leaving it set for a weekly gain of nearly 4%.
  • U.S. West Texas Intermediate crude was down 20 cents, or 0.35%, at $56.87 a barrel. But the U.S. benchmark surged 5.4% on Thursday and is on track for a more than 8% increase this week.
RT: Oil workers Iraq OPEC 170511
Men work for Iraqi Drilling Company at Rumaila oilfield in Basra, Iraq,
Essam Al-Sudani | Reuters

Oil prices reversed earlier gains on Friday but benchmark Brent crude was still set for its first weekly gain in five weeks amid rising tensions in the Middle East and on hopes for a drop in U.S. interest rates that may stimulate global growth.

Brent crude was down 10 cents, or 0.16%, at $64.35 a barrel by 0458 GMT. The global benchmark jumped 4.3% on Thursday, leaving it set for a weekly gain of nearly 4%.

U.S. West Texas Intermediate crude was down 20 cents, or 0.35%, at $56.87 a barrel. But the U.S. benchmark surged 5.4% on Thursday and is on track for a more than 8% increase this week.

U.S. President Donald Trump initially played down Iran’s downing of a U.S. military drone earlier this week. But reports on Friday said Trump had approved strikes against Iran before pulling back, raising concerns about crucial oil supplies being disrupted after the tanker attacks last week.

“There is no doubt that a severe disruption to the transit of oil through this vulnerable route would be extremely serious,” said consultancy FGE Energy in a note.

Tension has been rising in the Middle East, home to over 20% of the world’s oil output, after attacks on two tankers near the Strait of Hormuz, a choke point for oil supplies.

Washington blamed Tehran for the tanker attacks. Iran denied any role.

The demand-side picture has also improved, with expectations that the U.S. Federal Reserve may cut interest rates at its next meeting.

Potential supply “disruptions have boosted energy prices combined with the dollar weakness after the Fed signalled an interest rate is near,” Alfonso Esparza, senior market analyst at OANDA, said in a note.

A weaker greenback tends to support oil prices because crude is usually priced in dollars.

Another macroeconomic factor supporting prices is the plan by Beijing and Washington to resume talks to resolve a trade tariff war that has hit economic growth prospects.

“Trade anxiety has died down, pushing energy prices higher as global growth will not be pressured by a prolonged tariff war,” Esparza said.

Concern about slowing economic growth and a U.S.-China trade dispute had pulled oil lower in recent weeks. That came after Brent reached a 2019-high above $75 in April.

Oil falls after Trump says he pressed OPEC to make up for Iranian sanctions

CNBC

Reuters

KEY POINTS
  • Oil prices continue to fall after Friday’s sharp pullback.
  • President Donald Trump on Friday said he called OPEC and told the producer group to pump more oil to offset U.S. sanctions on Iran.
  • Oil markets are already tight as OPEC and allies cut supplies and U.S. sanctions curb Iranian and Venezuelan exports.
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A Petrobras oil platform floats in the Atlantic Ocean near Guanabara Bay in Rio de Janeiro.
Getty Images

Oil prices fell on Monday, extending a slump from Friday that ended weeks of rallying, after President Donald Trump claimed that he demanded OPEC raise output to soften the impact of U.S. sanctions against Iran.

Brent crude futures were down 14 cents at $72.01 a barrel around 8:35 a.m. ET (1235 GMT). U.S. West Texas Intermediate crude futures lost 14 cents to $63.16.

Both benchmarks fell around 3% in the previous session, after Trump said he told OPEC to lower oil prices.

“Gasoline prices are coming down. I called up OPEC, I said you’ve got to bring them down. You’ve got to bring them down,” Trump told reporters on Friday.

“Spoke to Saudi Arabia and others about increasing oil flow. All are in agreement,” the president later tweeted.

The national average U.S. gasoline price is actually still rising, and sources denied that several high-level OPEC and Saudi officials spoke to Trump.

Trump’s remarks triggered a selloff, putting at least a temporary ceiling on a 40 percent price rally in oil prices since the start of the year.

The rally had gained momentum in April after Trump tightened sanctions against Iran by ending all exemptions that major buyers, especially in Asia, previously had.

U.S. sanctions on Venezuela are also working to tighten global supply as fighting in Libya threatens to curb output there as well.

“We are dealing with a market that’s not actually short of supply but is short due to politically-motivated action, and we know how quickly that can be turned around if necessary,” Saxo Bank analyst Ole Hansen told Reuters.

“Being a bear in the market is a very lonely place now.”

Traders said the market was shifting its focus to the voluntary supply cuts led by OPEC, de facto headed by the world’s top exporter Saudi Arabia.

“We are of the view that Saudi Arabia will increase output as soon as May, something they were likely to do anyway in the lead up to summer,” ING bank said. “The Kingdom could increase output by 500 million barrels per day (bpd) and still be in compliance with the OPEC+ deal for the month of May.”

The cuts have been supported by some non-OPEC producers, notably Russia, but analysts said this cooperation may not last beyond a meeting between OPEC and its other allies, a group known as OPEC+, scheduled for June.

Russia has said it would be able to meet China’s oil demand needs as Beijing tries to replace the imports it usually gets from Iran.

“Russia appears to have every reason to resume ramping up production levels and the base case should start to become (that) we will not see OPEC+ agree upon extending production cuts, with tweaks to cover the shortfall from Iran,” said Edward Moya, senior analyst at futures brokerage OANDA.

— CNBC’s Tom DiChristopher contributed to this report.

Oil near 2019 highs after US ends all Iran sanction exemptions

CNBC

Reuters

KEY POINTS
  • Brent crude futures were at $74.40 per barrel at 0239 GMT, up 0.5 percent from their last close and not far off a 2019 peak of $74.52 reached on Monday.
  • U.S. West Texas Intermediate (WTI) crude futures hit their highest level since October 2018 at $65.95 per barrel before edging back to $65.89 by 0239 GMT, which was still up 0.5 percent from their last settlement.
RT: Oil Iraq OPEC flames 161014
Flames emerge from a pipeline at the oil fields in Basra, southeast of Baghdad, Iraq, October 14, 2016.
Essam Al-Sudani | Reuters

Oil prices were near 2019 highs on Tuesday after Washington announced all Iran sanction waivers would end by May, pressuring importers to stop buying from Tehran.

Brent crude futures were at $74.40 per barrel at 0239 GMT, up 0.5 percent from their last close and not far off a 2019 peak of $74.52 reached on Monday.

U.S. West Texas Intermediate (WTI) crude futures hit their highest level since October 2018 at $65.95 per barrel before edging back to $65.89 by 0239 GMT, which was still up 0.5 percent from their last settlement.

The United States on Monday demanded that buyers of Iranian oil stop purchases by May 1 or face sanctions, ending six months of waivers which allowed Iran’s eight biggest buyers, most of them in Asia, to continue importing limited volumes.

Before the reimposition of sanctions last year, Iran was the fourth-largest producer among the Organization of the Petroleum Exporting Countries(OPEC) at almost 3 million barrels per day (bpd), but April exports have shrunk well below 1 million bpd, according to ship tracking and analyst data in Refinitiv.

Barclay’s bank said in a note following the announcement that the decision took many market participants by surprise and that the move would “lead to a significant tightening of oil markets”.

The British bank added that Washington’s target to cut Iran oil exports to zero posed a “material upside risk to our current $70 per barrel average price forecast for Brent this year, compared with the year-to-date average of $65 per barrel”.

ANZ bank said in a note on Tuesday that “the decision is likely to worsen the ongoing supply woes being felt with Venezuelan sanctions, the OPEC supply cut, and intensifying conflict in Libya. ”

The move to tighten Iran sanctions comes amid other sanctions Washington has placed on Venezuela’s oil exports and also as producer club OPEC has led supply cuts since the start of the year aimed at tightening global oil markets and propping up crude prices.

Ellen Wald, non-resident senior fellow at the Global Energy Center of the Atlantic Council, said the United States “seem to expect” Saudi Arabia and the United Arab Emirates to replace the Iranian oil, but she added “that this is not necessarily the way Saudi Arabia sees it.”

Saudi Arabia is the world’s biggest exporter of crude oil and OPEC’s de-facto leader. The group is set to meet in June to discuss its output policy.

“Should OPEC decide to end their supply cut program going into the second half of the year, this could limit oil’s upside in the coming months,” said Lukman Otunuga, analyst at futures brokerage FXTM.

Meanwhile, the Atlantic Council said the U.S. move would hurt Iranian citizens.

“We’re going to see their currency collapse more, more unemployment, more inflation,” said Barbara Slavin, director for the Future of Iran Initiative at the Atlantic Council, adding that the U.S. sanctions were “not going to bring Iran back to the (nuclear) negotiating table.”

Oil prices slip amid ample US output, Brent drifts away from five-month high

CNBC

Reuters

KEY POINTS
  • Brent crude futures were at $71.42 a barrel at 0235 GMT, down 20 cents, or 0.3 percent, from their last close. Brent fell 0.1 percent on Wednesday, after earlier touching its highest since Nov. 8 at $72.27 a barrel.
  • U.S. West Texas Intermediate (WTI) crude futures were at $63.69 per barrel, down 7 cents, or 0.1 percent, from their previous settlement. WTI closed the last session down 0.5 percent.
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An oil pumpjack operates near Williston, North Dakota.
Andrew Cullen | Reuters

Oil prices dropped on Thursday as the impact of plentiful U.S. production offset a surprise decline in U.S. inventories, leaving international benchmark Brent retreating from a five-month high touched in the previous session.

Brent crude futures were at $71.42 a barrel at 0235 GMT, down 20 cents, or 0.3 percent, from their last close. Brent fell 0.1 percent on Wednesday, after earlier touching its highest since Nov. 8 at $72.27 a barrel.

U.S. West Texas Intermediate (WTI) crude futures were at $63.69 per barrel, down 7 cents, or 0.1 percent, from their previous settlement. WTI closed the last session down 0.5 percent.

U.S. crude inventories fell by 1.4 million barrels in the week to April 12, compared with analyst expectations for an increase of 1.7 million barrels, Department of Energy (DoE) showed on Wednesday.

“A persistent rise in U.S. oil output, together with lingering demand-side concerns emerging from the U.S.-China trade dispute, is limiting price gains, ” Abhishek Kumar, Head of Analytics at Interfax Energy in London.

While official data on Wednesday showed China’s economy grew by 6.4 percent in the first quarter, defying expectations for a further slowdown, talks on a U.S.-China trade deal have yet to bear fruit.

While the U.S.-China trade war has rumbled on, prices have been supported this year by an agreement reached by the Organization of the Petroleum Exporting Countries (OPEC) and allies, including Russia, to limit their oil output by 1.2 million barrels per day.

Global supply has also been tightened further by U.S. sanctions on OPEC members Venezuela and Iran.

Iran’s crude exports have dropped in April to their lowest daily level this year, tanker data showed and industry sources said, suggesting a drawdown in buyer interest ahead of expected further pressure from Washington.

Surging U.S. production has filled some of the gap in supplies, although not all of the lost production can be immediately replaced by U.S. shale oil due to refinery configurations.

“The unexpected drawdown in U.S. commercial crude oil stocks was balanced by lower-than-expected withdrawals in the country’s gasoline and distillate inventories,” Kumar said.

Gasoline stocks fell by 1.2 million barrels, less than analysts’ expectations in a Reuters poll for a 2.1 million-barrel drop.

Distillate stockpiles, which include diesel and heating oil, fell 362,000 barrels, also not as much as forecasts for a 846,000-barrel drawdown, the EIA data showed.

Net U.S. crude imports fell last week by 659,000 barrels per day.