Showing posts with label Crude oil. Show all posts

Thursday, 14 June 2018

Gloves back on, OPEC and U.S. shale producers to deepen ties in Vienna

Only a few years ago, shale CEOs and the Organization of the Petroleum Exporting Countries were in open conflict.

Now, they realise they’re in the same boat and need to row in tandem to keep global crude supply and demand in balance, according to interviews with analysts, executives and investors.

The recent rise in crude prices LCOc1CLc1 - up more than 40 percent in the past year - has lifted profits for producers across the globe, but also threatens to erode demand for fossil fuels at a time when electrification is becoming commonplace.

Harold Hamm, the billionaire founder of U.S. shale pioneer Continental Resources Inc (CLR.N), is due to address OPEC ministers, along with fellow shale executives Hess Corp (HES.N) CEO John Hess and Pioneer Natural Resource Co (PXD.N) Executive Chairman Scott Sheffield.

Lifting that ban ushered in a sea change in global energy, sending nearly 2 million barrels of U.S. crude to India, China and other markets historically dominated by OPEC and forcing the group and its American rivals to be more conciliatory.

Hamm, who called OPEC a “toothless tiger” in 2014, has begun encouraging fellow shale companies to focus more on profitability and less on profligate production. Last month, Hamm addressed a Saudi Aramco board meeting in Houston.

It was a change in tone for Hamm, who in 2011 erected a granite monument on the windswept plains of North Dakota that boasted of the rising clout of U.S. oil production and the nation’s ability to supply its own energy.

Monday, 4 June 2018

Oil down as U.S. supply grows, OPEC considers higher output

Oil prices fell on Monday as U.S. production hit a record high and OPEC members considered boosting supply.

Benchmark Brent crude oil LCOc1 lost $1.26 a barrel, or 1.6 percent, to a low of $75.53 before recovering to $75.89, down 90 cents, by 1125 GMT.

U.S. light crude CLc1 was 40 cents down at 65.41 a barrel. The U.S. contract lost about 3 percent last week after a decline of nearly 5 percent the previous week.

U.S. crude production climbed in March to 10.47 million barrels per day (bpd), a monthly record, data from the Energy Information Administration showed last week.

U.S. drillers added two oil rigs in the week to June 1, bringing the total to 861, the most since March 2015, energy services company Baker Hughes said on Friday. That was the eighth time drillers have added rigs in the past nine weeks.

Arab oil ministers agreed over the weekend on the need for continued cooperation between members of the Organization of the Petroleum Exporting Countries (OPEC) and other big producers to balance global supply, Kuwait’s state news agency KUNA reported on Sunday.

OPEC ministers from Saudi Arabia, the United Arab Emirates, Kuwait and Algeria, along with their counterpart from non-OPEC Oman, met unofficially in Kuwait on Saturday.

Saudi Arabia, the effective OPEC leader, and Russia have discussed boosting output to compensate for supply losses from Venezuela and to address concerns about the impact of U.S. sanctions on Iranian output.

Friday, 18 May 2018

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.

Friday, 4 May 2018

Oil markets on edge

Oil prices held steady on Friday after shedding earlier gains, as market jitters kicked in over the prospect of geopolitical risks from possible new US sanctions against Iran.

Brent crude oil futures were at $73.64 per barrel, up 2 cents, from their last close after touching a intraday high of $73.80 per barrel earlier in the session.

The fluctuations came as investors sifted through the upcoming Iran sanction decision and an increasing US crude inventory build for clues as to the likely direction of oil prices.

The Asian stockmarkets that were open on Friday traded warily as trade talks continued and ahead of the US jobs data. Hong Kong's Hang Seng Index fell 1 per cent, South Korea's Kospi dropped 0.8 per cent and China's Shanghai Composite index lost 0.2 per cent.

Asia markets were trading without Japanese investors on Friday, with markets in Tokyo closed for a public holiday.

Trade talks aimed at easing tensions that have taken the US and China closer to a trade were ongoing on Friday, with US Treasury Secretary Steven Mnuchin sounding a positive note about progress.

Thursday, 26 April 2018

Royal Dutch Shell profits soar on stronger oil prices

Oil Stock Markets

Royal Dutch Shell on Thursday reported a 42 percent rise in first-quarter profit, its highest in over three years, boosted by higher oil prices and production.

Expectations are high for Shell to continue to generate strong profits and cash flow after the Anglo-Dutch company beat larger rival Exxon Mobil <XOM.N> on both fronts in 2017 thanks to cost cuts and higher efficiencies.

The world's top oil companies are expected to generate more cash in 2018 than at any other time this decade after three years of cuts, but boards remain cautious amid uncertainty over near- and long-term prices.

Shell in the fourth quarter scrapped its scrip dividend in a sign that it is confident of being able to maintain around $15 billion in annual dividend payments without resorting to borrowing after a three-year oil price downturn.

It plans to buy back $25 billion (17.94 billion pounds) of shares by 2020 in order to offset the dilutive effect of the scrip and its $54 billion acquisition of BG Group.

It did not specify a time to start the program on Thursday.

After falling short of expectations in the previous quarter, Shell's cash flow from operations in the first three months of 2018 recovered to $9.43 billion, which was still slightly weaker from $9.5 billion a year earlier.

Free cash flow was little changed from a year earlier at $5.178 billion.

Net income attributable to shareholders, based on a current cost of supplies (CCS) and excluding identified items, rose to $5.322 billion, topping a company-provided analysts' consensus of $5.277 billion.

A year ago, net income was $3.754 billion.

Production grew by 2 percent to 3.839 million barrels of oil equivalent per day. Earnings for the segment almost tripled from a year earlier.

Income from the refining and marketing segment, known as downstream, weakened due to lower refining margins and plant availability.

Gearing, the ratio between debt and Shell's market capitalisation was slightly lower from the end of 2018 at 24.7 percent by the end of March.

Brent crude oil prices in recent months have risen to $75 per barrel, their highest since late 2014.

Prices averaged around $67 a barrel in the first quarter, up nearly 25 percent from a year earlier.

Friday, 13 April 2018

China March exports unexpectedly fall but first-quarter trade surplus with U.S. soars

Asian Stock Markets

China’s exports growth unexpectedly fell in March, the first drop since February last year, raising questions about the health of one of the economy’s key growth drivers even as trade tensions rapidly escalate with the United States.

March import growth beat expectations, however, suggesting its domestic demand may still be solid enough to cushion the blow from any trade shocks. That left China with a rare trade deficit for the month, also the first drop since last February.

The latest readings on the health of China’s trade sector follow weeks of tit-for-tat tariff threats by Washington and Beijing, sparked by U.S. frustration with China’s massive bilateral trade surplus and intellectual property policies, that have fuelled fears of a global trade war.

China’s March exports fell 2.7 percent from a year earlier, lagging analysts’ forecasts for a 10.0 percent increase, and down from a sharper-than-expected 44.5 percent jump in February, which economists believe was heavily distorted by seasonal factors.

For the first quarter as a whole, however, exports still grew a hearty 14.1 percent.

Some analysts had expected a pullback in March exports following an unusually strong start to the year, when firms stepped up shipments before the long Lunar New Year holiday in mid-February.

That scenario did not alter their view that global demand remains robust.

But a stronger currency could also be starting to erode Chinese exporters' competitiveness. The yuan CNY=CFXS appreciated around 3.7 percent against the U.S. dollar in the first quarter this year, on top of a 6.6 percent gain last year.

No hard timeline has been set by either Washington or Beijing for the actual imposition of tariffs, which leaves the door open to negotiations and a possible compromise which could limit the damage to both sides and other trade-reliant economies.

But analysts said the trade threats may already be having an impact on exporters’ activity.
With the threat of tariffs hanging over nearly a third of China’s exports to the United States,
economists at Nomura say its companies may have front-loaded shipments early this year before any measures kick in.

China’s exports to the U.S. rose 14.8 percent in the first quarter from a year earlier, while imports rose 8.9 percent.

That sent its quarterly trade surplus with the U.S. surging 19.4 percent to $58.25 billion (£40.9 billion), though the March reading narrowed to $15.43 billion from $20.96 billion in February.

China’s total aluminium exports in March rose to their highest since June, just as the United States imposed tariffs on imports of the metal and steel on March 23.

China’s overall March imports grew 14.4 percent from a year ago, beating analysts’ forecast for 10.0 percent growth, and compared with 6.3 percent growth in February.

That produced a trade deficit of $4.98 billion for the month, but such shortfalls are not uncommon for China early in the year, likely due to seasonal factors.

For Jan-March, imports rose a strong 18.9 percent on-year.

Analysts expected China would record a trade surplus of $27.21 billion for last month, from February’s surplus of $33.75 billion.

Imports of commodities continued to lead the way in March, with shipments of copper, crude oil, iron ore and soybeans all rising from the previous month.

China’s exports rode a global trade boom last year, expanding at the fastest pace since 2013 and serving as one of the key drivers behind the economy’s forecast-beating expansion.

But the sudden spike in trade tensions with the United States is clouding the outlook for both China’s “old economy” heavy industries and “new economy” tech firms.

Washington says China’s $375 billion trade surplus with the United States is unacceptable, and has demanded Beijing reduce it by $100 billion immediately.

In a move to further force China to lower the billions of goods trade surplus running with the U.S., Trump unveiled tariff representing about $50 billion of technology, transport and medical products early this month, drawing an immediate threat of retaliatory action from Beijing.

China’s tech sector, which is key part of Beijing’s longer-term “Made in China 2025” strategy to move from cheap goods to higher-value manufacturing, may be particularly vulnerable.

Hi-tech products have been among its fastest growing export segments. China exported $137.8 billion worth of high-tech products in the first quarter, up 20.5 percent on-year.

Oil prices edged lower on Friday after U.S. President Donald Trump tempered remarks warning of an imminent missile attack on Syria, but were still set for their biggest weekly gains in more than 8 months. NYMEX crude for May delivery CLc1 was down 21 cents, or 0.3 percent, at $66.86 a barrel at 0329 GMT. For the week, the contract is set to post a gain of nearly 8 percent, following two weeks of declines, Reuters said. Read alsoReuters: Oil dips on rising U.S. supplies, market still tense on conflict in Syria London Brent crude LCOc1 was down 24 cents, or 0.3 percent, at $71.78, and is up about 7 percent for the week. Both benchmarks are set for their biggest weekly gains since last July after surging to a more than three-year high earlier in the week on tensions over Syria and shrinking global oil inventories. "This last jump of $5 or so is because of the geopolitical situation caused by the situation in Syria," said Tony Nunan, senior oil risk manager at Mitsubishi Corp in Tokyo. "It looks like Trump backed off a little bit and wants to build a coalition, sending a signal to the broader market that he is going to be much more careful than people thought." Oil prices hit their highest level since late 2014 on Wednesday after Trump warned that missiles "will be coming" in response to the attack in Syria and Saudi Arabia said it intercepted missiles over Riyadh, both of which raised concerns about possible supply disruptions. Trump tempered his comments on Thursday and even as he consulted allies such as Britain and France, who could join in any U.S.-led strikes on Syria, there were signs of efforts to prevent the crisis from spiraling out of control. Trump tweeted an attack on Syria "could be very soon or not so soon at all" raising the prospect that an attack might not be as imminent as he seemed to suggest the day before. On fundamentals, OPEC said on Thursday a global oil stocks surplus is close to evaporating, citing healthy energy demand and its own supply cuts, while revising up its forecast for production from rivals who have benefited from higher oil prices. OPEC and its oil producer allies are poised to extend their supply-cutting pact into 2019 even as a global glut of crude is set to evaporate by September, OPEC Secretary-General Mohammad Barkindo told Reuters. China's crude oil imports rose to 9.2 million barrels per day in March, the second highest on record, according to Reuters calculations based on official customs data.

Read more on UNIAN: https://economics.unian.info/10079402-reuters-oil-eases-as-trump-backtracks-on-imminent-syria-strike.html

Friday, 6 April 2018

Global stocks slip as Trump proposes more China tariffs, U.S. jobs report awaited

Asian Stock Markets

Stock markets slipped on Friday after U.S. President Donald Trump proposed tariffs on more Chinese products, aggravating trade tensions, while the dollar steadied before the closely watched U.S. non-farm payrolls report.

Spreadbetters expected European stocks to open lower, with Britain’s FTSE falling 0.5 percent, Germany’s DAX shedding 0.85 percent and France’s CAC losing 0.75 percent.

The S&P 500 E-mini futures were down 1 percent , pointing to a lower start for Wall Street later in the session.

Trump said late on Thursday that he had instructed U.S. trade officials to consider $100 billion (£71.3 billion) in additional tariffs on China, fuelling the trade dispute between the world’s two economic superpowers.

China’s Ministry of Commerce said it would take new comprehensive measures to safeguard the country’s interests if the United States stuck to its protectionist behaviour.

“Trump’s order to consider whether $100 billion of additional tariffs would be appropriate, and recent trade actions and rhetoric in recent weeks, is an example of how battles can turn to wars,” said Dan Ivascyn, group chief investment officer at Pacific Investment Management Co (PIMCO).

“This is another reason investors should be reducing risk.”

Asian stocks declined early on Friday in a knee-jerk reaction to Trump’s latest tariff proposal but regained a measure of calm following Wall Street’s strong performance overnight.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.15 percent.

“Away from the political noise, the reality is that the fundamental backdrop for markets hasn’t changed – global economic growth is broadly synchronised and interest rates are slowly normalising,” wrote Kerry Craig, Melbourne-based global market strategist at J.P. Morgan Asset Management.

“Equities are more attractively priced now than they were at the start of the year and the earnings outlook has improved. The noise may be distracting but a solid second quarter U.S. earnings season could see investors refocus on fundamentals and the corporate outlook.”

Australian stocks recovered from an earlier drop to rise 0.1 percent. South Korea’s KOSPI lost 0.6 percent. Japan’s Nikkei nudged down 0.1 percent and Hong Kong’s Hang Seng advanced 0.5 percent.

The Dow and the S&P 500 posted gains for a third day in a row on Thursday amid the back-and-forth of the U.S.-China trade dispute, with some investor focus turning to upcoming earnings. [.N]

Beyond the trade turmoil, financial markets are focused on Friday’s U.S. non-farm payrolls report, which could determine the pace of future Federal Reserve interest rate rises and the dollar’s direction.

The U.S. March employment report is expected to show non-farm payroll growth of 193,000 jobs versus 313,000 the prior month, according to the latest Thomson Reuters poll of economists.

Average hourly earnings are expected to have risen 0.2 percent last month after edging up 0.1 percent in February. The gain would lift the annual increase in average hourly earnings to 2.7 percent from 2.6 percent in February.

The dollar was little changed at 107.385 yen after earlier falling to 106.990 on Trump’s latest tariff proposal.

The dollar had risen to a one-month peak of 107.490 yen overnight, bolstered by Wall Street’s bounce on Thursday when the United States appeared to signal a willingness to resolve the trade dispute.

The euro was steady at $1.2243 .

The dollar index against a basket of six major currencies was nearly unchanged at 90.453 . The index has risen 0.4 percent this week.

Treasury debt prices gained and yields declined as investors sought the safety of government bonds.
The 10-year Treasury note yield fell 1.5 basis points to 2.817 percent, pulling back from Thursday’s nine-day high of 2.838 percent.

Crude oil prices fell after Trump’s latest tariff proposal. [O/R]

U.S. crude slipped 0.7 percent to $63.12 a barrel and Brent was down 0.6 percent at $67.93 a barrel. Oil had gained on Thursday, helped by higher equities and Saudi Arabia’s unexpected hike in crude prices.

Monday, 2 April 2018

Asia stocks start new quarter on front foot, dollar steady

Asian Stock Markets

Asian stocks began the new quarter on Monday with modest gains following a strong performance by global equities last week, while the dollar held steady ahead of key economic indicators.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.15 percent.

South Korea’s KOSPI was flat and Japan’s Nikkei advanced 0.5 percent. Shanghai was up 0.3 percent.
Wall Street surged last Thursday as technology stocks rebounded, ending a tumultuous first quarter on a high note.

Many major financial centers were closed for the Good Friday Easter holiday. Markets in Australia, Hong Kong, Britain and Germany remained shut on Monday while the U.S. market will resume trading.

MSCI’s world equity index ended up 1.2 percent last week. But it lost about 1.5 percent in the first quarter, pushed away from record highs as tensions over global trade escalated, turmoil in the White House deepened and market-leading technology firms wobbled on fears of regulation and other issues.

But they warned that there were looming risks: “Trade protectionism, U.S. economic policy uncertainty, concerns about higher cross-market volatility and risk premium in core rates markets call for a more tactical approach to risk assets.”

While last month’s fears of an all-out global trade war have abated somewhat, tensions between the United States and China over tit-for-tat tariffs kept investors on edge.

China on Monday imposed tariffs on U.S. products including frozen pork, wine and certain fruits and nuts in response to U.S. duties on imports of aluminum and steel.

In currencies, the dollar was steady at 106.350 yen, while the euro was almost unchanged at $1.2317.
The greenback had gained about 0.6 percent against a basket of six major currencies last week helped by a combination of factors including perceived progress on North Korea issues.

The dollar index still lost more than 2 percent last quarter, marking its fifth straight quarter of declines.

U.S. data due this week include Monday’s Institute for Supply Management (ISM) manufacturing index, Wednesday’s ISM non-manufacturing index and the non-farm payrolls report on Friday.

Crude oil prices extended gains, lifted by a drop in U.S. drilling activity as well as by expectations that the United States could re-introduce sanctions against Iran. [O/R]

U.S. drillers cut seven oil rigs in the week to March 29, bringing the total count down to 797. It was the first time in three weeks that the rig-count fell.

U.S. crude futures rose 0.3 percent to $65.14 a barrel and Brent advanced 0.5 percent to $69.67 a barrel.

“But increasing trade friction between China and U.S. is likely to rock global markets and tarnish bullish sentiment in crude oil markets.”

Thursday, 15 March 2018

Global oil demand picks up but still lags rising supply: IEA

Global Stock Markets

Global oil demand is expected to pick up this year but supply is growing at a faster pace, leading to a rise in inventories in the first quarter of 2018, the International Energy Agency (IEA) said on Thursday.

The IEA raised its forecast for oil demand this year to 99.3 million barrels per day (bpd) from 97.8 million bpd in 2017.

Commercial oil inventories in industrialized OECD nations rose in January for the first time in seven months to 2.871 billion barrels, 53 million barrels above their five-year average, the Paris-based IEA said.

The January increase of 18 million barrels over the December inventory level was roughly half the size of rises normally seen at this time of year, according to the agency, which advises Western governments on energy policy.

But it said Venezuela, where an economic crisis has cut oil production by 50 percent in two years to lows not seen in more than a decade, could still trigger a renewed drawdown in stocks.

In a bid to drain inventories, the Organization of the Petroleum Exporting Countries, Russia and several other producers have been implementing a deal to cut output by about 1.8 million bpd from January 2017 until the end of 2018.

Assuming no change in OPEC output for the rest of the year, the IEA said it expected a small increase in OECD inventories in the first quarter of 2018 with declines after that.

The agency said it expected supply from non-OPEC nations to grow by 1.8 million bpd in 2018 to 97.9 million bpd, led by the United States, where crude output was forecast to rise by 1.3 million bpd during 2018 to more than 11 million bpd by the end of the year.

OPEC crude output fell in February to 32.1 million bpd, led by Venezuela and the United Arab Emirates.

The IEA raised its estimate for demand for OPEC oil to 32.4 million bpd for 2018 from last month’s forecast of 32.3 million bpd.

The agency said the decision by U.S. President Donald Trump decision to impose tariffs on imports of steel and aluminum, which has prompted threats of retaliation from major trading partners, posed a risk to global economic growth forecasts.

It said growth in world trade had been strong, accelerating from 2.5 percent in 2016 to 4.7 percent in 2017, citing this as the likely reason behind a sturdy 1.8 percent rise in 2017 in global gasoil demand.

Tuesday, 13 March 2018

Exxon top executive confirms Gulf Coast oil-refining expansion

Global Stock Markets

A top Exxon Mobil Corp (XOM.N) official confirmed a multi-billion dollar plan under consideration to double U.S. light crude oil refining capacity along the U.S. Gulf Coast to take advantage of the nation’s growing shale oil production.

Exxon’s proposed project, which has not received a final investment decision, would be the first major expansion of gasoline and motor fuels production in the nation in six years.

Exxon’s Beaumont, Texas refinery could become the nation’s largest by capacity when the work is complete in the next decade.

Exxon expects to add a crude distillation unit (CDU) at its 362,300 barrel per day (bpd) Beaumont refinery and boost refining capacity at plants in Baytown, Texas and Baton Rouge, Louisiana, Senior Vice President Jack Williams said in a presentation to Wall Street analysts last week.

Sources familiar with Exxon’s plans said that the company was near a final investment decision for a project to expand crude oil processing capacity at the Beaumont refinery to as much as 850,000 bpd.

Williams said the project would increase the integration of Exxon’s Gulf Coast operations by supplying its Baton Rouge and Baytown refineries with products made at Beaumont, reducing third-party purchases.

He called the plan“perhaps my favourite example on integration” because it couples production and refining across business groups.

Exxon plans to invest $9 billion in six refinery projects globally in the next eight years and forecasts returns from its downstream to grow by 20 percent on average, the company said.

The expansion would offer a new outlet for the rising shale oil production from the Permian Basin in west Texas and New Mexico, which is expected to overwhelm U.S. refining capacity in the next few years, said an analyst from energy consultancy IHS Markit.

Monday, 26 February 2018

Oil prices extended gainsin in nearly three weeks

Oil Stock Markets

Oil prices extended gains to hit their highest level in nearly three weeks on Monday, supported by comments from Saudi Arabia that it would continue to curb exports in line with the OPEC-led effort to cut global supplies.

U.S. West Texas Intermediate crude for April delivery CLc1 was up 20 cents, or 0.3 percent, at $63.75 a barrel by 0342 GMT after rising 3 percent last week.

London Brent crude LCOc1 gained 12 cents, or 0.2 percent, to $67.43, after climbing nearly 4 percent last week.

Both benchmarks earlier hit their highest since Feb. 7.

Prices were supported after Saudi Arabian oil minister Khalid al-Falih on Saturday said the country’s crude production in January-March would be well below output caps, with exports averaging below 7 million barrels per day (bpd).

Saudi Arabia hopes OPEC and its allies will be able to relax production curbs next year and create a permanent framework to stabilise oil markets after the current supply cut deal ends this year, Falih added.

U.S. energy companies last week added one oil rig, the fifth weekly increase in a row, bringing the total count up to 799, the highest level since April 2015, Baker Hughes energy services firm said on Friday.

Hedge funds and money managers upped their bullish wagers on U.S. crude oil for the first time in four weeks, data showed on Friday.

A powerful 7.5-magnitude earthquake struck Papua New Guinea’s Southern Highlands province early on Monday, the U.S. Geological Survey (USGS) said, prompting oil and gas companies to immediately suspend operations in the energy-rich interior.

Meanwhile, Libya’s National Oil Corp said on Saturday it had declared force majeure on the 70,000 bpd El Feel oilfield after a protest by guards closed the field.

Friday, 23 February 2018

Oil weighed by U.S. crude exports; lower crude stocks prevent bigger fall

Oil Stock markets

Oil prices dipped on Friday as high U.S. crude exports outweighed lower crude inventories in the world’s biggest consumer of the fuel.

U.S. West Texas Intermediate (WTI) crude futures were at $62.73 a barrel at 0449 GMT, down 4 cents from their last settlement.

Brent crude futures were down 6 cents at $66.33 a barrel.

Traders said crude was weighed down by demand entering seasonal lows as the northern hemisphere comes out of winter and by high U.S. exports.

U.S. crude exports jumped to just above 2 million barrels per day (bpd) last week, data from the Energy Information Administration (EIA) showed on Thursday, close to a record high of 2.1 million hit in October.

That helped pull down net imports to the lowest level on record of below 5 million bpd.

U.S. crude oil production was virtually unchanged last week at 10.27 million bpd, close to levels of top producer Russia and more than OPEC-kingpin Saudi Arabia pumps.

Prices were prevented from falling further by a decline in U.S. crude inventories, traders said.

U.S. crude oil stockpiles fell by 1.6 million barrels in the week to Feb. 16, to 420.48 million barrels, the EIA showed.

The forward price curves for Brent <0#LCO:> and WTI <0#CL:> are in a shape known as backwardation in which prices for immediate delivery are more expensive than those for later sale, making it uneconomical for traders to buy and store oil.

Globally, oil markets remain well supported due to demand-growth coinciding with production restraint led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia.

Thursday, 22 February 2018

Oil prices Down; U.S. crude inventories decrease

Oil Stock Markets

Stronger dollar makes oil more expensive for some buyers

Dollar outweighs API report of lower U.S. crude inventories (Adds ANZ comment on OPEC cuts, updates prices)

Oil prices fell on Thursday, pulled down as a firmer dollar outweighed a report of a decrease in U.S. crude inventories.

U.S. West Texas Intermediate (WTI) crude futures were at $61.15 a barrel at 0640 GMT, down 53 cents, or 0.9 percent, from their last settlement.

Brent crude futures fell 42 cents, or 0.6 percent, from their last close to $65 per barrel.

The dollar rose to a one-week high against a basket of major currencies on Thursday, after minutes of the Federal Reserve's January meeting showed policymakers were more confident of the need to keep raising interest rates.

Since oil trading is conducted in dollars, a rise in the greenback makes fuel imports for countries using other currencies domestically more expensive, potentially curbing demand.

The firm dollar outweighed a reported fall in U.S. crude inventories.

The American Petroleum Institute on Wednesday reported an unexpected drop in U.S. crude oil inventories by 907,000 barrels to 420.3 million barrels for the week to Feb. 16.

Despite Thursday's falls, analysts said oil markets were generally well supported due to demand-growth coinciding with production restraint led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia.

Wednesday, 14 February 2018

Russia's RDIF says to finalize Eurasia Drilling deal with Aramco

Asian Stock Markets

The Russian Direct Investment Fund (RDIF) on Wednesday said it expected to finalize a deal with Saudi Arabia’s Aramco to invest in oilfield services firm Eurasia Drilling.

Sibur, Russia’s largest producer of petrochemicals, is building a petrochemicals facility in the Kingdom. Russia’s Energy Minister Alexander Novak had said in October the deal would be worth $1.1 billion.

An announcement is also expected later on Wednesday on a partnership between Aramco and an LNG project in Russia, Dmitriev said.

Dmitriev said a deal between OPEC and non-OPEC members to cut crude oil supply was stabilizing the oil market.

Russia and Saudi Arabia, the world’s top oil producers, are leading a global oil cut deal between OPEC and some non-OPEC members. The current deal runs through to March 2018.

Oil stable on weaker dollar and healthy economic growth

Oil Stock Markets

Oil prices were stable on Wednesday, supported by healthy economic growth and expectations that a weaker dollar could spur fuel demand.

Despite this, crude prices remain well below recent highs due to signs of lingering oversupply, including rising U.S. inventories and ample physical flows globally.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $59.17 a barrel at 0123 GMT, down 2 cents from their last settlement. WTI was trading above $65 in early February.

Brent crude futures LCOc1 were at $62.77 per barrel, up 5 cents from their last close. Brent was above $70 a barrel earlier this month.

Ongoing weakness in the U.S. dollar, which potentially stokes demand from countries using other currencies at home, as well as healthy economic growth were supporting oil markets, traders said.

The American Petroleum Institute said on Tuesday that U.S. crude inventories rose by 3.9 million barrels in the week to Feb. 9, to 422.4 million.

That was largely due to soaring U.S. crude production C-OUT-T-EIA, which has jumped by over 20 percent since mid-2016 to over 10 million barrels per day (bpd), surpassing output of top exporter Saudi Arabia and coming within reach of Russia, the world’s biggest producer.

U.S. crude is increasingly appearing on global markets.

More is set to come as the Louisiana Offshore Oil Port in the Gulf of Mexico starts testing supertankers for exports.

The surge in U.S. production and exports means oil may be in oversupply again soon, flipping a deficit from 2017 induced by supply restraint led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia.

The International Energy Agency said on Tuesday oil demand would grow by 1.4 million bpd in 2018, but added output growth could outpace demand.

The physical market is already reacting, with prices for regional crudes from the North Sea, Russia, the United States, and Middle East becoming cheaper as producers struggle to remain competitive amid ample supplies.

Despite the warning lights from within oil markets, economic fundamentals remain healthy.

High consumer spending drove Japan’s economy to eight straight quarters of growth in October-December, its longest continuous expansion since the 1980s bubble economy, Cabinet Office data showed on Wednesday.

Tuesday, 6 February 2018

BP's profits surge as it leaves downturn behind

European Stock Markets

BP’s (BP.L) profits more than doubled in 2017 to $6.2 billion (4.43 billion pounds) powered by higher prices and output of oil and gas, allowing the company to resume share buybacks as it recovers from a three-year downturn.

The London-listed company saw one of the strongest production increases in its history last year, lifting output to levels not seen since the deadly 2010 Deepwater Horizon spill. Production is set to continue growing into the end of the decade thanks to more field start-ups this year.

The company will be able to generate profits in 2018 at an oil price of $50 a barrel, Chief Financial Officer Brian Gilvary told Reuters, as years of spending cuts kicked in and as it slowly shakes off a $65 billion bill for penalties and clean up costs of the 2010 spill.

The London-listed company was the first among its European peers to resume share buybacks in the fourth quarter of 2017 after years of resorting to dilutive austerity measures in the face of the industry slump.

With a 20 percent bounce in oil prices in the last quarter of 2017 to $61 a barrel, BP had a surplus of cash that allowed it to buy $343 million worth of shares in the fourth quarter, offsetting the scrip dilution.

BP shares were trading 1.4 percent lower at 0824 GMT, compared with a 2.3 percent decline for the sector .SXEP.

Full-year production rose 12 percent to 2.47 million barrels per day (bpd) after BP launched 7 new oil and gas fields in 2017, a record year.

It is set to inaugurate 5 additional projects this year including in Egypt, Azerbaijan and the UK North Sea that will help it boost its production by 800,000 barrels per day (bpd) by 2020, which will be mostly gas.

BP was also able to add around 1 billion of barrels of oil equivalent to its reserves in 2017, the largest since 2004, thanks to six discoveries, including two in the North Sea. Its reserve replacement ratio was estimated at 143 percent for the year.

BP’s refining and trading segment, known as downstream, saw profits rise to $7 billion in 2017 as earnings for the marketing division rose by more than 10 percent.

BP also took a one-off charge of $900 million to adjust to new U.S. tax rules, though it expects a long-term boost from the lowered corporate tax rates.

BP reported a $2.1 billion fourth-quarter underlying replacement cost profit, the company’s definition of net income, topping forecasts for $1.9 billion, a company-provided survey of analysts showed.

That marked a jump from $400 million a year earlier and topped a third-quarter profit of $1.9 billion.
On an annual basis, BP’s profits soared to $6.2 billion from $2.6 billion in 2016.

Gearing, the ratio between debt and BP’s market value, rose to 27.4 percent at the end of 2017 from 26.8 percent at the end of September. Net debt was $37.8 billion, up from $35.5 billion a year earlier, after the company paid $5.4 billion related to the Deepwater Horizon spill.

BP’s full year capital spending reached $16.5 billion, within the annual range of $15-$17 billion it plans to maintain until 2021.

Monday, 5 February 2018

Oil prices fall on strong dollar, Brent near one-month low

Oil Stock Markets

Oil prices on Monday extended declines from the end of last week amid a wider market sell off and a stronger dollar, with Brent crude falling to its lowest in nearly a month.

Other markets dropped as investors were spooked by Friday’s payrolls report from the United States, which showed wages growing at their fastest pace in more than 8-1/2 years, fuelling inflation expectations USIL5YF5Y=R.

Brent LCOc1 was down 68 cents, or 1 percent, at $67.91 a barrel at 0344 GMT, after falling 1.5 percent on Friday. Brent’s weekly drop was 2.75 percent last week.

U.S. West Texas Intermediate (WTI) crude CLc1 declined 72 cents to $64.73 a barrel, after dropping 0.5 percent in the previous session. WTI fell by 1 percent during the last week.

Asian shares were down the most in more than a year on Monday as fears of resurgent inflation battered bonds.

Wall Street dropped last week from record highs as inflation concerns sparked speculation that central banks globally might be forced to tighten policy more aggressively.

The three major U.S. indexes capped their worst weekly losses in two years, after closing at record highs the previous week.

Rising U.S. oil production has also helped push down oil prices, undermining attempts by the Organization of the Petroleum Exporting Countries to support prices.

Data from the U.S. government last week showed that output climbed above 10 million barrels per day in November for the first time since 1970, as shale drillers expanded operations after gains in oil prices last year.

U.S. energy companies did add oil rigs for a second week in a row last week, energy services company Baker Hughes Inc reported on Friday. Drillers added six oil rigs in the week to Feb. 2, bringing the total to 765. RIG-OL-USA-BHI

Hedge funds and money manager reduced last week their bullish positions on U.S. crude, cutting their net-long positions from a record after three weeks of increases.

The speculator group cut its combined WTI futures and options positions on New York and London exchanges by 18,365 contracts to 531,235 in the week to Jan. 30, the Commodity Futures Trading Commission reported on Friday.

Friday, 2 February 2018

U.S. oil prices extend gains on compliance with output cuts

Oil Stock Markets

Oil rose for a third day on Friday after a survey showed strong compliance with output cuts by OPEC and others including Russia, offsetting concerns about surging U.S. production.

Brent LCOc1 futures, the global benchmark, were up 19 cents, or 0.3 percent, at $69.84 a barrel by 0352 GMT.

U.S. West Texas Intermediate (WTI) crude CLc1 was up 28 cents, or 0.4 percent, at $66.08 a barrel.

Production by the Organization of the Petroleum Exporting Countries (OPEC) rose in January from an eight-month low as higher output from Nigeria and Saudi Arabia offset a further decline in
Venezuela and strong compliance with a supply reduction pact, a Reuters survey showed.

OPEC pumped 32.4 million barrels per day (bpd) in January, the survey found, up 100,000 bpd from December. Last month’s total was revised down by 110,000 bpd to the lowest since April 2017.

Even so, adherence by producers included in the deal to curb supply rose to 138 percent from 137 percent in December, the survey found, suggesting commitment is not wavering even as oil prices hit their highest level since 2014.

U.S. crude output surpassed 10 million bpd in November for the first time since 1970, the Energy Information Administration said this week.

Thursday, 1 February 2018

Oil edges up as OPEC compliance offsets robust U.S. output

Oil Stock Markets

U.S. oil prices extended modest gains on Thursday as OPEC’s strong compliance with a supply reduction pact offset news that U.S. production topped 10 million barrels per day for the first time in nearly half a century.

NYMEX crude for March delivery rose 14 cents, or 0.2 percent, to $64.87 a barrel by 0558 GMT, after ending the last session up 0.4 percent.

London Brent crude for April delivery was up 15 cents, or 0.2 percent, at $69.04, after settling up 3 cents in the previous session.

U.S. crude oil production in November surpassed 10 million barrels per day for the first time since 1970, and neared the all-time output record, the Energy Information Administration said on Wednesday.

Oil output by the Organization of the Petroleum Exporting Countries also rose in January from an eight-month low as higher output from Nigeria and Saudi Arabia offset a further decline in Venezuela and strong compliance with a supply reduction pact, a Reuters survey found.
However, adherence by producers included in the deal to curb supply rose to 138 percent from 137 percent in December, the poll found, suggesting commitment is not wavering even as oil prices hit their highest level since 2014.

Oil prices are unlikely to advance much above $70 a barrel in 2018, with the market caught between the opposing forces of OPEC-led production cuts and surging U.S. output, a Reuters poll showed on Wednesday.

Oil prices initially slipped on Wednesday after U.S. Energy Information Administration data showed that U.S. crude inventories rose by 6.8 million barrels last week, after 10 straight weeks of declines. [EIA/S]

But prices rebounded on the back of a surprise 2 million-barrel drawdown in gasoline stocks, helping push up gasoline futures.

Distillate stockpiles, which include diesel and heating oil, fell by 1.9 million barrels, versus expectations for a 1.5 million-barrel drop, the EIA data also showed.

Kuwait Petroleum Corp expects to spend over $500 billion as it boosts its crude oil production capacity to 4.75 million barrels per day in 2040, the national oil firm said on Wednesday.

Wednesday, 31 January 2018

JPMorgan raises oil price forecast to $70, topping many Wall Street targets, citing strong demand

Global Stock Markets

J. P. Morgan has raised its forecast for Brent crude oil prices to $70 a barrel on its view that growth in economies around the world will boost demand for energy.

To put that oil price call in context, Bank of America Merrill Lynch recently upped its Brent target to $64 a barrel, while Goldman Sachs kept its forecast at $62.

The bank also raised its estimate for U.S. crude by $10.70 to $65.63 a barrel. Merrill’s forecast stands at $60.

To be sure, J. P. Morgan now thinks Brent crude, the international benchmark for oil prices, will average $70 this year, with demand-driven oil price strength in the first half offsetting weakness in the back part of the year as drillers pump more oil.

Stronger-than-anticipated business activity, economic growth and consumer spending convinced Deshpande that oil demand will be better than expected in the first half of 2018. Brent prices will rise toward $78 a barrel in the first or second quarter of the year, he forecast in a research note released late last week.

Support for oil prices should last through the beginning of the summer, with strong prices prevailing through OPEC’s next meeting in June. At the meeting, the 14-member oil cartel is scheduled to discuss its deal with Russia and other producers to limit oil output.

Higher oil prices could influence the producers’ discussions about how to exit the agreement, which has supported oil prices by keeping 1.8 million barrels a day off the market since January 2017.

By the mid-year point, J. P. Morgan expects producers to start pumping more to capture the benefit of higher oil prices. This is particularly true for U.S. shale drillers, which use advanced technology to squeeze oil and gas from rock formations.

At $60 a barrel, J. P. Morgan expects U.S. shale production alone to increase by 1 million barrels a day in 2018. At $70, that growth increases by a multiple of 1.5 times, Deshpande said. Morgan Stanley equity analyst Martijn Rats earlier this month raised his own Brent price forecast, but in the second half of the year. He sees futures reaching $75 in the third quarter.