Oil prices rise with Libya's force majeure and emerging slowdown in demand held back markets.

Oil Stock Markets

Oil prices climbed on Tuesday after Libya declared force majeure on some of its supplies, although an overall rise in OPEC output and an emerging slowdown in demand held back markets. 

Brent crude oil futures LCOc1 were at $77.71 per barrel at 0217 GMT, up 41 cents, or 0.5 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 57 cents, or 0.8 percent, at $74.51.

OPEC’s June output was 32.32 million barrels per day (bpd), a Reuters survey showed on Monday, up 320,000 bpd from May. The June total is the highest since January 2018.

Libya’s National Oil Corporation (NOC) declared force majeure on loadings from Zueitina and Hariga ports on Monday, resulting in total production losses of 850,000 bpd due to the closure of eastern fields and ports.

Traders have also been watching U.S. oil production C-OUT-T-EIA, which has surged by 30 percent over the last two years to 10.9 million bpd, absorbing some of the recent disruptions.

Overall, however, analysts said OPEC’s production policy as well as unplanned supply disruptions
were currently the main price drivers.

“In the near-term, the level of OPEC production - deployment of spare capacity by Saudi Arabia, Iraq, UAE, Kuwait (and ex-OPEC by Russia), and involuntary disruptions in Libya, Venezuela, Iran - are more important drivers of crude prices,” Goldman Sachs said in a note published late on Monday.

What has become a concern, at least for producers, is a slowdown in demand which may end years of consecutive records.

In Asia, the world’s top oil consuming region, seaborne oil imports have been falling since May, as higher costs turned off consumers and as the escalating trade dispute between the United States and China starts to impact the economy.

Oil prices fall admist increasing Saudi output & Asian economic slowdown

Oil Stock Markets

Oil prices fell by more than 1 percent on Monday as supplies from top exporter Saudi Arabia rose and as signs of an economic slowdown in Asia dented the outlook for demand. 

Brent crude oil futures LCOc1 were at $78.16 per barrel at 0316 GMT, down $1.07, or 1.35 percent, from their last close.

U.S. West Texas Intermediate crude futures CLc1 were down 94 cents, or 1.3 percent, at $73.21 a barrel, after rising more than 8 percent last week.

U.S. President Donald Trump wrote in a tweet on Saturday that Saudi Arabia’s King Salman bin Abdulaziz Al Saud had agreed to produce more oil. The White House later walked back on the president’s comments, saying the king said his country can raise oil production if needed.

Saudi Arabia’s output is up by 700,000 barrels per day (bpd) from May, a Reuters survey found on Friday, and close to its 10.72 million bpd record from November 2016, more than making up for disruptions elsewhere within the Organization of the Petroleum Exporting Countries (OPEC).

Voluntary supply cuts by OPEC and some non-OPEC suppliers like Russia have tightened world oil markets since 2017, and unplanned disruptions from Canada to Venezuela and Libya along with upcoming new U.S. sanctions against major exporter Iran have sparked concerns of supply shortfalls.

Despite the apparent supply relief from Saudi Arabia, oil markets remain tense over escalating trade disputes between the United States and other major economies including China, the European Union, India and Canada.

Asia’s main economic hub around China, Japan and South Korea all reported a slowdown in export orders in June amid an escalating trade dispute with the United States.

Trump warned close U.S. allies in an interview that aired on Sunday with a threat to sanction European companies that do business with Iran.

Oil markets are also awaiting the impact of looming U.S. sanctions against major exporter crude Iran.

Oil climbs as market tightens on lost supply

Oil prices rose on Friday as U.S. sanctions against Iran threatened to remove a substantial volume of crude oil from world markets at a time of rising global demand.

Benchmark Brent crude LCOc1 jumped $1.49 to a high of $79.34 a barrel before easing back to around $79.00 by 1030 GMT.

U.S. light crude CLc1 was down 15 cents at $73.30. On Thursday, the contract hit its highest since November 2014 at $74.03 per barrel.

Iran is the fifth-largest oil producer in the world, pumping about 4.7 million barrels per day (bpd), or almost 5 percent of world’s oil, much of it to China and other energy-hungry nations such as India.

The U.S. government wants to stop Tehran exporting oil to cut off a vital supply of finance and hopes other big oil producers in the Organization of the Petroleum Exporting Countries and Russia will make up for the deficit.

But the world oil market is already tight and many analysts and big investors think strict enforcement of U.S. sanctions against Iran will push up prices sharply.

A Reuters survey of 35 economists and analysts on Friday forecast Brent would average $72.58 a barrel in 2018, 90 cents higher than the $71.68 forecast in last month’s poll and compared with the $71.15 average so far this year.

North American oil stocks have fallen as an outage at Canada’s Syncrude has locked in more than 300,000 bpd of production. The outage is expected to last at least through July, according to operator Suncor Energy

OPEC and Russia have said they will raise output to meet demand and replace crude from unplanned disruptions but many analysts think that the extra supply may be inadequate.

Oil edges up, but bulls remain wary ahead of OPEC meeting

Oil prices rose for a second day on Tuesday and volatility subsided to its lowest in three weeks, as investors prepared for a key meeting of the OPEC producer group next week.

Crude remained in a tight trading range, in line with the broader financial markets, which were largely unruffled by a U.S.-North Korea summit aimed at denuclearisation of the Korean peninsula. [MKTS/GLOB]

Brent crude futures LCOc1 were up 17 cents at $76.63 a barrel by 0855 GMT, while U.S. West Texas Intermediate crude futures CLc1 rose 11 cents to $66.21.

The Organisation of the Petroleum Exporting Countries, together with partners including Russia, has cut oil output by 1.8 million barrels per day (bpd) since January 2017 in an effort to boost the market.

Volatility in oil prices has subsided due to caution around the group’s meetings LCOATMIV scheduled for June 22/23, at which it will decide on future supply policy.

With U.S. sanctions threatening to cut Iranian exports and the potential for more declines in Venezuelan production, OPEC kingpin Saudi Arabia and Russia have indicated they would be willing to raise output to make up for any supply shortfall.

In physical oil markets, Middle East light crude grades are set to trade at discounts against their respective official selling prices amid ample supplies to Asia, including from the United States, four trade sources said.

Saudi Arabia has told OPEC that the country increased oil output to a little more than 10 million bpd in May, from 9.9 million bpd in April.

Oil prices mixed with expected pressure from increased output & U.S. record oil exports

Oil Stock Markets

Oil prices were mixed in Asian trading on Tuesday, but remained under pressure from expectations that Saudi Arabia and Russia would pump more crude to ease a potential shortfall in supply. 

Brent crude futures LCOc1 were up 31 cents, or 0.41 percent, at $75.61 a barrel at 0213 GMT, after settling at their lowest since May 8 at $75.30.

U.S. West Texas Intermediate (WTI) crude CLc1 was down $1.05, or 1.55 percent, at $66.83 a barrel, sitting around its lowest since April 17.

Concerns that Saudi Arabia and Russia could boost output have put downward pressures on oil prices, along with rising oil production in the United States.

Record crude oil volumes exported from the United States will be heading to Asia in the next couple of months to take another piece of the market away from Russia and producers in the Organization of the Petroleum Exporting Countries (OPEC). 

The United States is set to export 2.3 million barrels per day (bpd) in June, of which 1.3 million bpd will head to Asia, estimated a senior executive with a key U.S. oil exporters.

Data from the Energy Information Administration shows U.S. oil exports peaked at 2.6 million bpd two weeks ago. [EIA/S]

The record outbound volumes come as U.S. crude production hit all-time highs, depressing U.S. prices to discounts of more than $9 a barrel below Brent crude futures on Monday, the widest in more than three years and opening an arbitrage for excess supplies to other markets. WTCLc1-LCOc1

The difference in the key benchmarks was a chance for Asian refiners to reduce light crude imports from the Middle East and Russia after Brent and Gulf prices touched multi-year highs, traders in Asia said.

n Asia, China - led by Sinopec (600028.SS), the region’s largest refiner - is the biggest lifter of U.S. crude. The company, after cutting Saudi imports, has bought a record 16 million barrels (533,000 bpd) of U.S. crude, to load in June, two sources with knowledge of the matter said.

India and South Korea are the next biggest buyers in Asia, each lifting 6 million to 7 million barrels in June, sources tracking U.S. crude sales to Asia said. Indian Oil Corp (IOC.NS) bought 3 million barrels earlier this month via a tender, while Reliance Industries (RELI.NS) purchased up to 8 million barrels, the sources said, although it wasn’t clear if Reliance’s cargoes would all load in June.

U.S. exports to Thailand will increase to at least 2 million barrels. State oil company PTT PCL (PTT.BK) is 1 million barrels of WTI Midland, while Thai Oil (TOP.BK) and Esso Thailand (ESSO.BK) bought at least 500,000 barrels of Bakken crude each, said traders with knowledge of the country’s crude deals. 

But even if Asia and Europe are keen to take more U.S. crude, the record volumes are straining export infrastructure in the United States, limiting its ability to pump and ship more oil.

Oil prices dip with top three producers looking to increase supplies

Oil Stock Markets

Oil prices fell on Monday, extending a steep decline in the previous session, as the market eyed an increase in output from the world’s three top crude producers, Russia, the United States and Saudi Arabia.

Brent crude futures LCOc1 were at $75.34 per barrel at 0124 GMT, down $1.10, or 1.4 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $66.31 a barrel, down $1.57, or 2.3 percent.

Brent and WTI have fallen by 6.4 percent and nearly 9 percent respectively from peaks reached earlier in May.

In China, Shanghai crude oil futures ISCc1 tumbled by 4.5 percent to 459 yuan ($71.83) per barrel.

The Organization of the Petroleum Exporting Countries (OPEC), as well as top producer but non-OPEC member Russia, started withholding supplies in 2017 to tighten the market and prop up prices, which in 2016 fell to a more than a decade low of under $30 per barrel.

But prices have soared since the start of the cuts, with Brent breaking through $80 per barrel earlier in May, triggering consumer concerns that high prices would crimp economic growth and stoke inflation.
To address potential supply shortfalls, Saudi Arabia, de-facto leader of producer cartel OPEC, as well as top producer Russia said on Friday they were discussing raising oil production by some 1 million bpd.

Meanwhile, surging U.S. crude production also showed no sign of abating as drillers continue to expand their search for new oil fields to exploit.

U.S. energy companies added 15 rigs looking for new oil in the week ending May 25, bringing the rig-count to 859, the highest level since 2015, in a strong indicator that American crude production will continue to rise.

U.S. crude production C-OUT-T-EIA has already surged by more than 27 percent in the last two years, to 10.73 million barrels per day (bpd), bringing its output ever closer to that of Russia, which pumps around 11 million bpd.

Oil prices ease while Russia warns of gradual production increase

Oil Stock Markets

Oil prices eased on Friday as Russia hinted it may gradually increase output, after having withheld supplies in concert with producer cartel OPEC since 2017.
 

Brent crude futures LCOc1 were at $78.69 per barrel at 0208 GMT, down 10 cents from their last close, and more than 2.2 percent below the $80.50 November 2014 high they reached on May 17. Brent broke through $80 for the first time in more than three years earlier in May.

U.S. West Texas Intermediate (WTI) crude futures were at $70.62 a barrel, down 9 cents from their last settlement.

“Oil prices are now starting to drift a little,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader, adding that this was due to OPEC’s and Russia’s “moves toward an increase in production at the June meeting”.

The Middle East dominated Organization of the Petroleum Exporting Countries (OPEC) as well as a group of non-OPEC producers led by Russia started withholding output in 2017 to tighten the market and prop up prices.

But Russia, in particular, has been floating a potential end to the production cuts, with energy minister Alexander Novak saying on Thursday that restrictions on oil production could be eased “softly” if OPEC and non-OPEC countries see the oil market balancing in June.

 While Russia and OPEC benefit from higher oil prices, which have risen by almost 20 percent since the end of last year, their voluntary production cuts have opened the door to other producers to ramp up output and gain market share.

U.S. crude oil production C-OUT-T-EIA has risen by more than a quarter in the last two years, to 10.73 million barrels per day (bpd). Only Russia produces more, at around 11 million bpd.

Output by producers like the United States, Canada or Brazil who are not bound by the OPEC/Russian led agreement to cut, will likely rise further as higher crude prices improves their profitability.

Oil prices climb up amidst Venezuela & Iran supply worries

Oil Stock Markets

Oil prices rose on Tuesday on concerns that Venezuela’s crude output could drop further following a disputed presidential election and potential U.S. sanctions on the OPEC-member. 

The United States also toughened its stance on Iran and made a list of sweeping demands, which could further curb the country’s crude oil exports and boost oil prices.

Brent crude futures LCOc1 were at $79.39 per barrel at 0226 GMT, up 17 cents, or 0.2 percent, from their last close. Brent broke through $80 for the first time since November 2014 last week.

U.S. West Texas Intermediate (WTI) crude futures were at $72.47 a barrel, up 23 cents, or 0.3 percent.

Venezuela’s socialist President Nicolas Maduro faced widespread international condemnation on Monday after his re-election in a weekend vote his critics denounced as a farce cementing autocracy in the crisis-stricken oil producer.

The United States is actively considering oil sanctions on Venezuela, where output has dropped by a third in two years to its lowest in decades.

Concerns that looming U.S. sanctions on Iran will curb that country’s crude exports have also been boosting oil prices in recent weeks.

The United States on Monday demanded Iran make sweeping changes - from dropping its nuclear programme to pulling out of the Syrian civil war - or face severe economic sanctions as the Trump administration hardened its approach to Tehran.


Elsewhere, Washington and Beijing both claimed victory on Monday as the world’s two largest economies stepped back from the brink of a global trade war and agreed to hold further talks to boost U.S. exports to China.

Growing production of shale oil could curb oil prices eventually and widen the price spread between WTI and Brent crude oil, said Nunan.

Oil prices rose as China and U.S. put trade war 'on hold'

Oil Stock Markets

Oil prices rose on Monday as markets reacted to news that China and the United States have put a looming trade war between the world’s two biggest economies “on hold”. 

Brent crude futures LCOc1 were at $79.13 per barrel at 0121 GMT, up 62 cents, or 0.8 percent, from their last close. Brent broke through $80 for the first time since November 2014 last week.

U.S. West Texas Intermediate (WTI) crude futures were at $71.83 a barrel, up 55 cents, or 0.8 percent, from their last settlement.

The U.S. trade war with China is “on hold” after the world’s largest economies agreed to drop their tariff threats while they work on a wider trade agreement, U.S. Treasury Secretary Steven Mnuchin said on Sunday, giving global markets a lift in early trading on Monday.

Still, crude prices were some way off the November 2014 highs reached last week as many traders and analysts say there is enough supply to meet demand despite ongoing production cuts led by the Organization of the Petroleum Exporting Countries (OPEC), plunging output in crisis-struck Venezuela and looming U.S. sanctions against major oil producer Iran.
BP’s Chief Executive Bob Dudley said he expected a flood of U.S. shale and a possible reopening of OPEC taps to cool oil markets after crude rose above $80 a barrel last week.

Dudley said he saw oil prices falling to between $50 and $65 a barrel due to surging shale output and OPEC’s capacity to boost production to replace potential falls in Iranian supplies due to sanctions.

The U.S. oil rig count, an early indicator of future output, was at 844, according to energy services firm Baker Hughes. That was the same count as the week before, which marked the highest level since March 2015.

Oil steady on OPEC cuts with looming Iran sanctions and strong demand

Oil Stock Markets

Oil prices held firm on Friday on strong demand, ongoing supply cuts led by producer cartel OPEC and looming U.S. sanctions against major crude exporter Iran. 

But markets remained below multi-year highs from the previous day as surging output from the United States is expected to offset at least some of the shortfalls.

Brent crude futures LCOc1 were at $79.57 per barrel at 0310 GMT, up 27 cents, or 0.3 percent from their last close. Brent broke through $80 for the first time since November 2014 on Thursday.

U.S. West Texas Intermediate (WTI) crude futures were at $71.62 a barrel, up 13 cents, or 0.2 percent, from their last settlement.

Crude prices have received broad support from voluntary supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) aimed at tightening the market.

Beyond OPEC’s cuts, strong demand as well as falling output from Venezuela and a U.S. announcement earlier this month to renew sanctions against OPEC-member Iran helped push Brent up by 20 percent since the start of the year.

With crude prices at levels not seen since late 2014, Allardyce warned the high fuel costs could start crimping consumption.

At $80 per barrel, Asia’s thirst for oil costs the region a whopping $1 trillion a year, more than twice what it was in 2015/2016, the two years prior to the OPEC-cuts which started in 2017.

The crude oil price forward curve <0#LCO:> is in firm backwardation, a structure that suggests a tight market as prices for immediate delivery are higher than those for later dispatch.

Front-month Brent prices are now almost $1.80 per barrel more expensive than those for delivery in December.


U.S. crude oil production C-OUT-T-EIA has soared by more than a quarter in the last two years, to a record 10.72 million barrels per day.

That puts the United States within reach of top producer Russia, which pumps around 11 million bpd.

As a result of its surging production, U.S. crude is increasingly appearing on global markets as exports.

Oil prices firm as Brent creeping close to $80 per barrel

Oil Stock Markets

Oil prices firmed on Thursday, with Brent crude creeping ever closer to $80 per barrel, a level it has not seen since November 2014, as supplies tighten while demand remains strong. 

Brent crude futures were at $79.32 per barrel at 0027 GMT, up 4 cents from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $71.68 a barrel, up 19 cents, or 0.3 percent, from their last settlement.


U.S. crude inventories dropped by 1.4 million barrels in the week to May 11, to 432.34 million barrels.

ANZ said the falling U.S. inventories were “raising concerns of tight markets heading into the U.S. driving season,” during which demand typically rises.

Looking beyond seasonal changes, U.S. bank Morgan Stanley said it had raised its Brent price forecast to $90 per barrel by 2020, due to a steady increase in demand.

Not all pointed to a tighter market, however.

The International Energy Agency (IEA) said on Wednesday that it had lowered its global oil demand growth forecast for 2018 from 1.5 million barrels per day (bpd) to 1.4 million bpd.

The IEA said global oil demand would average 99.2 million bpd in 2018.

And although supplies currently only stand at 98 million bpd due to supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC), the IEA said that “strong non-OPEC growth ... will grow by 1.87 million bpd in 2018.”

Leading production increases is the United States, where crude output has soared by 27 percent in the last two years, to a record 10.72 million bpd.

That puts the United States within reach of top producer Russia, which pumps around 11 million bpd.
As a result of its surging production, U.S. crude is increasingly appearing on global markets as exports.

Commodity brokerage Marex Spectron said that the surge in U.S. supplies was a “strongly price-bearish development.”

It said the economic outlook was also “firmly bearish” as “short-term credit conditions have worsened which ... hasn’t been priced correctly by the market”.

The brokerage also said that U.S. energy intensity “continues to decrease which is never good news for the future consumption of oil”.

Oil price drops despite OPEC cuts & Iran sanctions

Oil Stock Markets

Oil prices fell on Wednesday, weighed down by ample supplies despite ongoing output cuts by producer cartel OPEC and looming U.S. sanctions against major crude exporter Iran. 

Brent crude futures LCOc1 were at $78.23 per barrel at 0445 GMT, down 20 cents, or 0.3 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $71.08 a barrel, down 23 cents, or 0.3 percent, from their last settlement.

Despite the dips, both financial oil benchmarks remained close to their November 2014 highs of $79.47 and $71.92 a barrel respectively, reached the previous day.

But there are signs in physical crude markets that may give pause to financial investors.

There are also signs that oil production will rise, especially at majors like ExxonMobil (XOM), Royal Dutch Shell (RDSa.L), Chevron (CVX.N), BP (BP.L) and Total (TOTF.PA).


Spot crude oil cargo prices are at their steepest discounts to futures prices in years as sellers are struggling to find buyers for West African, Russian and Kazakh cargoes, while pipeline bottlenecks trap supply in west Texas and Canada.

The bottleneck in North America likely contributed to a 4.9 million barrel rise in U.S. crude oil inventories, to 435.6 million barrels, that the private American Petroleum Institute reported on Tuesday.

Official U.S. government fuel storage data is due for release by the Energy Information Administration (EIA) later on Wednesday.

Despite Wednesday’s dips and some indicators implying the financial oil has overshot physical oil, overall crude market conditions have tightened since 2017 when the Organization of the Petroleum Exporting Countries (OPEC) started to withhold supplies to push up oil prices.

With renewed U.S. sanctions looming against OPEC-member Iran and oil demand strong, analysts said crude markets will likely remain tight for much of the year.

Stronger oil prices are also spilling into other markets.

Oil touches multi-year high with tight supply and Iran sanctions

Global Stock Markets

Oil prices hit a 3-1/2-year high on Tuesday, supported by tight supply and planned U.S. sanctions against Iran that are likely to restrict crude oil exports from one of the biggest producers in the Middle East. 

Brent crude oil LCOc1 reached $79.22 a barrel, up 99 cents and its highest since November 2014. By 1100 GMT, Brent was up 90 cents at $79.13. U.S. light crude was 60 cents higher at $71.56 a barrel, also close to its highest since November 2014.

World oil prices have surged by more than 70 percent over the last year as demand has risen sharply but production has been restricted by the Organization of the Petroleum Exporting Countries, led by Saudi Arabia, and other producers including Russia.

Now the United States has announced it will impose sanctions on Iran over its nuclear programme, raising fears that markets will face shortages later this year when trade restrictions come into effect.

In China, the world’s biggest oil importer, refinery runs rose nearly 12 percent in April compared with the same month a year ago, to around 12.06 million barrels per day (bpd), marking the second-highest level on record on a daily basis, data showed on Tuesday.

The tightening market has all but eliminated a global supply overhang which depressed crude prices between late 2014 and early 2017.

OPEC figures published on Monday showed that oil inventories in OECD industrialised nations in March fell to 9 million barrels above the five-year average, down from 340 million barrels above the average in January 2017.

U.S. crude is trading at a hefty discount to Brent, the international marker, thanks to sharp rises in

U.S. production to 10.7 million barrels per day, which has left the American domestic oil market well supplied.

U.S. shale oil production is expected to rise by about 145,000 bpd to a record 7.18 million bpd in June, the U.S. Energy Information Administration said on Monday.

The Permian basin in Texas, the biggest U.S. oil patch, is expected to see output climb 78,000 bpd to a fresh record of 3.28 million bpd.

Oil prices firm amid Iran sanctions and OPEC cuts

Oil Stock Markets

Oil prices held firm on Tuesday as ongoing production cuts by OPEC and looming U.S. sanctions against Iran tightened the market amid strong demand. 

Brent crude futures LCOc1, the international benchmark for oil prices, were at $78.37 per barrel at 0028 GMT, up 14 cents from their last close and not far off a three-and-a-half year high of $78.53 a barrel reached the previous session.

U.S. West Texas Intermediate (WTI) crude futures were at $71.09 a barrel, up 13 cents and also not far off their Nov. 2014 high of $71.89 a barrel reached last week.

Markets have generally tightened as the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, have been withholding supplies since 2017 in order to push up oil prices.

With renewed U.S. sanctions looming against OPEC-member Iran and oil demand strong, analysts said crude prices were well supported.

The tightening market has all but eliminated a global supply overhang which depressed crude prices between late 2014 and early 2017.

OPEC figures published on Monday showed that oil inventories in OECD industrialized nations in March fell to 9 million barrels above the five-year average, down from 340 million barrels above the average in January 2017.

Oil prices slid down amid oil market tightening due to strong demand

Oil Stock Markets

Oil prices dipped on Friday, easing from multi-year highs in the previous session on hopes that alternative supplies could replace a looming drop in Iranian exports from U.S. sanctions. 

The United States plans to re-introduce sanctions against Iran, which produces around 4 percent of global oil supplies, after abandoning an agreement reached in late 2015 that limited Tehran’s nuclear ambitions in exchange for removing U.S.-Europe sanctions.

The sanctions come amid an oil market that has been tightening due to strong demand, especially in Asia, and as top exporter Saudi Arabia and No.1 producer Russia have led efforts since 2017 to withhold oil supplies to prop up prices.

Brent crude futures were at $77.34 per barrel at 0451 GMT, down 13 cents, or 0.2 percent, from their last close. Brent the previous day hit its highest since November 2014 at $78 a barrel.

U.S. West Texas Intermediate (WTI) crude futures were down 7 cents at $71.29 a barrel, still not far off Thursday’s November 2014 high of $71.89 per barrel.

Many analysts expect oil prices to rise significantly, as the market adjusts to looming U.S. sanctions and Iran’s exports sink amid strong demand.

There are, however, signs that other suppliers from within the Organization of the Petroleum

Exporting Countries (OPEC) will step up output to counter the Iran disruption.

Outside OPEC, soaring U.S. crude oil production may help fill Iran’s supply gap, hitting another record last week by climbing to 10.7 million barrels per day (bpd).

That’s up 27 percent since mid-2016 and means U.S. output is creeping ever closer to that of top producer Russia, which pumps around 11 million bpd.

ASX shares that stormed higher today

The benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is on course to finish higher again on Thursday. In afternoon trade the index is up almost 0.3% to 6,124 points.

Four shares that have climbed more than most today are listed below. Here’s why they are storming higher:

The Blue Sky Alternative Investments Ltd (ASX: BLA) share price has jumped 15% to $2.89 despite there being no news out of the embattled asset manager.

Today’s rise could either be a case of bargain hunters bravely swopping in or short sellers buying shares in order to close their positions.

Would suggest investors stay well clear of Blue Sky no matter how cheap it appears.

The Mitula Group Ltd (ASX: MUA) share price has rocketed 64.5% higher to 74 cents after the classifieds company announced that it has signed a scheme of implementation with Japan-based LIFULL Co. Ltd.

The agreement will see LIFULL acquire 100% of Mitula’s shares through a scheme of arrangement that will see shareholders receive 0.0753 LIFULL shares for each Mitula Group share they own.

This works out to be 85 cents per share. Shareholders also have the option to receive a cash consideration of 80 cents per Mitula share for the first 20,000 shares they own.

 The Pendal Group Limited (ASX: PDL) share price has jumped 8% to $9.93 following the release of its half-year results. Pendal, formerly known as BT Investment Management, reported a 30% increase in its cash net profit to $114.5 million for the six months ending March 2018.

The solid performance was driven by a 9% rise in its Funds Under Management to $99 billion.

The Woodside Petroleum Limited (ASX: WPL) share price has pushed 5% higher to $33.97 after oil prices surged higher.

WTI crude oil rose 3.2% to US$71.30 a barrel and Brent crude oil leapt 3.4% higher to US$77.40 a barrel.

This was driven by President Trump’s decision to withdraw the U.S. from the Iran nuclear agreement and reimpose sanctions on Tehran.

Oil prices slides lowe amongst concerns about Iran supplies

Oil Stock Markets

Oil prices edged lower on Friday, but Brent largely held its gains from the previous session amid concerns that Iran may face renewed sanctions, choking off supply.

Global benchmark Brent crude futures LCOc1 were down 29 cents, or 0.4 percent, at $74.45 a barrel by 0302 GMT, after rising 1 percent on Thursday

U.S. West Texas Intermediate (WTI) crude CLc1 fell 28 cents, or 0.5 percent, to $67.91 a barrel. The contract gained 0.2 percent the previous session.

Brent is heading for a third week of gains, up by 0.5 percent, while WTI is set to drop 0.7 percent for the week.


U.S. President Donald Trump will decide by May 12 whether to re-impose sanctions on Iran that were lifted after an agreement over its disputed nuclear program, which would probably result in a reduction of Iranian oil exports.

Brent has gained 5.9 percent this month on expectations the United States will renew sanctions.
Concerns about market tightness have also been fueled by the deteriorating political and economic situation in Venezuela that has led to a 40 percent decline in crude output in the past two years.

Nonetheless, further gains have been capped by rising U.S. production as shale drillers ramp up activity in tandem with the rise in oil prices.

Surging U.S. production, which rose to 10.59 million bpd last week, has encouraged record-high U.S. exports.

Oil prices stable but rising US supply drags on bull-run

Oil Stock Markets

Oil prices were stable on Wednesday, but were below the more than three-year highs reached the previous session as rising U.S. fuel inventories and production weighed on an otherwise bullish market.

Brent crude oil futures LCOc1 were at $73.89 per barrel at 0455 GMT, up 3 cents from their last close but around $1.60 below the November-2014 high of $75.47 a barrel reached the previous day.
U.S. West Texas Intermediate (WTI) futures were flat at $67.7 63 per barrel, but off the late-2014 highs of $69.56 a barrel marked earlier in April.

Despite Wednesday’s dips, which traders said were also a result of profit-taking after Tuesday’s highs, many analysts say the period of oversupply that started in 2014 has now ended due to supply disruptions and also strong demand.

That has been driven by production cuts led by the Organization of the Petroleum Exporting Countries (OPEC) which were introduced in 2017 with the aim of propping up the market, but also because of political risk to supplies in the Middle East, Venezuela and Africa.

Because of the tighter market, the forward curve for Brent <0#LCO:> is now above $70 per barrel until the end of 2018, and prices are above $60 per barrel through 2020.


With most U.S. producers now profitable at prices under $40 per barrel and the forward curve significantly higher than that for years to come, American drillers will likely continue to increase output as they are able to hedge themselves profitably for the foreseeable future.

U.S. crude oil production C-OUT-T-EIA has already shot up by more than a quarter since mid-2016 to over 10.54 million barrels per day (bpd), taking it past Saudi Arabia’s output of around 10 million bpd. Only Russia currently produces more, at almost 11 million bpd.

U.S. crude inventories rose by 1.1 million barrels in the week to April 20 to 429.1 million, according to a report by the American Petroleum Institute on Tuesday.

Official weekly U.S. fuel inventory and crude production data will be published on Wednesday by the Energy Information Administration (EIA).

World stocks near four-week highs, Morgan Stanley shines

Global Stock Markets

Global stocks climbed to a near four-week high and Wall Street geared up for a strong open on Wednesday as powerful U.S. first-quarter earnings, notably from Morgan Stanley, helped revive risk appetite. 

MSCI’s index of world stocks was up 0.3 percent at 1203 GMT, while the top index of euro zone stocks rose 0.3 percent, having touched its highest since Feb. 5, when a spike in volatility amplified a sell-off in global equity markets.

S&P 500 futures sparked higher, rising 0.4 percent by 1203 GMT as investors digested the latest batch of U.S. results with Morgan Stanley shining.

The bank’s shares climbed in pre-market trading after a record jump in quarterly profits, up 40 percent thanks to a strong trading boost..

It kept the pace set by Goldman Sachs which reported a surge in profits on Tuesday, also driven by a sharp increase in trading as market volatility rose.

Analysts have downgraded their European earnings estimates ahead of the first-quarter results season, while U.S. companies are expected to deliver stellar results.

Investors were watching Europe’s earnings season for signs of strain from a stronger euro, with Continental providing an early indication the currency’s rise was hurting exporters.

The tyre maker fell 4.3 percent, driving a pullback in Germany’s DAX, after a negative hit to earnings from exchange rates forced it to lower its outlook.

But a fall in the S&P 500 volatility gauge reflected investors’ renewed confidence in the resilience of equity markets. The VIX edged down, near a six-week low.

Britain’s FTSE 100 stood out with much stronger gains. It was up 0.9 percent after an unexpected fall in British inflation to a one-year low dented the pound — good news for its high percentage of overseas revenue earners.

While investors were refocusing on fundamentals after weeks dominated by geopolitical tensions, the latest Bank of America Merrill Lynch (BAML) survey of fund managers showed signs of caution.
Investors cut their equity allocation to an 18-month low and increased their cash balances.

Fund managers named the threat of trade war as the biggest “tail risk” in BAML’s survey, while they were less concerned about inflation causing convulsions in bond markets.

Monetary tightening, proceeding at a different pace on either side of the Atlantic, was making its mark on bond markets.

The gap between U.S. and German two-year bonds reached its widest in nearly 30 years, reflecting the diverging monetary policy outlook.

The U.S. yield curve - the gap between U.S. 2-year and 10-year government bond yields — flattened back slightly, having fallen to a low of 41.8 basis points overnight.

The rise in short-dated yields has pushed the real yield on U.S. two-year Treasuries above the S&P 500 dividend yield for the first time in 10 years.

Currency market movements, outside of a sliding sterling, were restrained.

The euro was stuck at $1.2362, after topping out at $1.2413 overnight, while the dollar index hovered at 89.5.

The yen pulled back to 107.23 against the dollar, pushed down by signs of progress in talks between South and North Korea.

Strong metals prices, boosted by supply concerns after U.S. sanctions on Russian aluminum giant Rusal, helped send Europe’s basic resources stocks surging 2.1 percent.

Oil prices also continued their relentless rise.

Brent crude futures were up 86 cents at $72.44 a barrel, while U.S. crude rose 95 cents to $67.48 a barrel

Market watch

SPI futures down 6 points or 0.1% to 5810

AUD flat at 77.66 US cents

On Wall St: Dow -0.5%, S&P 500 -0.3%, Nasdaq -0.5%

In New York, BHP +1.3% Rio +0.8%

In Europe: Stoxx 50 +0.1%, FTSE +0.1%, CAC +0.1%, DAX +0.2%

Spot gold +0.8% to $US1346.20 an ounce

Brent crude +0.8% to $US72.58 a barrel

US oil +0.5% to $US67.39 a barrel

Iron ore +0.8% to $US64.96 a tonne

Dalian iron ore flat at 450 yuan

LME aluminium -1.7% to $US2285 a tonne

Aluminium touched six-year high on Friday

LME copper +0.1% to $US6830 a tonne

10-year bond yield: US 2.83%, Germany 0.51%, Australia 2.73%