Treasury Yield Hits 3% as Oil Jumps followed by Trump's decision on Iran

Global Stock Markets

Crude rallied as traders digested President Donald Trump’s decision to walk away from a nuclear deal with Iran. Energy producers shored up European stocks, while U.S. futures also rose and the dollar reversed a gain even as 10-yield Treasury yields topped 3 percent ahead of a bond auction.

West Texas oil reversed Tuesday’s slump to trade at about $71 per barrel, while Brent hit $77 as the market came to terms with a U.S. message that buyers of Iranian crude have six months to curb their purchases.

The Stoxx Europe 600 Index advanced a fourth day as energy companies surged, and contracts for the S&P 500, Dow Jones and Nasdaq followed suit. The MSCI Asia Pacific Index fell. Having erased its 2018 losses earlier this week, the greenback gave up an earlier advance to trade slightly lower. Most metals fell.

The threat of increased geopolitical tension in the Middle East is buffeting global sentiment just as concern spreads over the implications of higher Treasury yields and a stronger dollar. Wednesday brings with it a $25 billion auction of 10-year U.S. notes, with investors waiting to see if the new bonds will carry a 3 percent coupon for the first time in almost seven years.

Elsewhere, Indonesia’s rupiah fell to a fresh 29-month low on worries about capital outflows from emerging markets. Turkey’s lira whipped from a loss to a gain as President Recep Tayyip Erdogan was said to be calling a meeting with officials to discuss the exchange rate, fueling speculation that authorities may take measures to stem a market rout. Gold dropped.

The Stoxx Europe 600 Index gained 0.2 percent as of 7:51 a.m. New York time, the highest in almost 14 weeks.

Futures on the S&P 500 Index increased 0.4 percent, reaching the highest in almost three weeks on its fifth consecutive advance.

The MSCI All-Country World Index climbed 0.1 percent to the highest in more than a week.

The U.K.’s FTSE 100 Index rose 0.4 percent to the highest in more than 14 weeks.

Germany’s DAX Index dipped 0.1 percent.

The MSCI Emerging Market Index rose 0.2 percent to the highest in a week.

The MSCI Asia Pacific Index sank 0.3 percent.

The euro increased 0.1 percent to $1.188. The British pound increased 0.3 percent to $1.3588, the strongest in more than a week on the biggest increase in more than three weeks. The Japanese yen declined 0.6 percent to 109.75 per dollar, the weakest in a week on the largest drop in more than two weeks.

The yield on 10-year Treasuries increased two basis points to 3.00 percent, the highest in two weeks.
Germany’s 10-year yield climbed one basis point to 0.58 percent, the highest in a week. Britain’s 10-year yield gained four basis points to 1.444 percent, the highest in almost two weeks.


 West Texas Intermediate crude increased 2.9 percent to $71.03 a barrel, the highest in more than three years on the largest climb in three weeks. Copper climbed less than 0.05 percent to $3.06 a pound. Gold fell 0.3 percent to $1,311.13 an ounce, the weakest in a week on the largest fall in more than a week.

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).

Oil prices fall for third day as inventory build-up weighs

Oil Stock Markets

Oil prices fell for a third day on Wednesday after data from an industry body showed crude stocks rose more than expected last week, while a selloff in other commodities, stocks and bonds added to investors’ bearish mood. 

Brent crude, LCOc1 the global benchmark, was down 0.69 cents, or about 1 percent, at $68.33 a barrel by 0244 GMT, a nearly two-week low.

U.S. West Texas Intermediate (WTI) futures CLc1 were down, 67 cents, or 1 percent, at $63.83, after falling to its weakest level in more than a week.

On Tuesday, U.S. crude fell 1.6 percent to close at $64.50 a barrel, the contract’s decline far outpacing a 0.6 percent drop in the price of Brent.

Prices on both WTI and Brent are still on track for a fifth month of gains.

But the report from the American Petroleum Institute late on Tuesday showing crude stocks rose by 3.2 million barrels last week cast a further bearish pall over the market. [API/S]

It came after data showed that U.S. energy companies added 12 oil rigs last week, the biggest weekly increase since March.

U.S. Energy Department data on Wednesday is likely to show an increase in increase in inventories for the first time 11 weeks.

Oil drops from 2-1/2-yr highs as rising U.S. output drags on market

Oil Stock Markets

Oil prices on Friday dipped away from some of its highest levels since 2015, weighed down by rising U.S. output and the expected January re-opening of the Forties pipeline in the North Sea. 

The drop, though, came as crude future volumes declined rapidly as traders closed positions ahead of the upcoming Christmas and New Year breaks.

U.S. West Texas Intermediate (WTI) crude futures were at $58.18 a barrel at 0544 GMT, down 18 cents, or 0.3 percent, from their last settlement.

Brent crude futures, the international benchmark for oil prices, were at $64.75 a barrel, down 15 cents, or 0.2 percent.

Brent on Thursday ended at $64.90 a barrel, its highest close since June 2015. WTI has also been touching values not seen since mid-2015 over the past two months.

The dip on Friday was due to an outlook for rising supplies that triggered those holding long positions to sell-out ahead of the year-end holidays, traders said.

Also weighing on the market was the expected return of the 450,000 barrels per day (bpd) Forties pipeline system in the North Sea in January.

The pipeline, which delivers crude underpinning Brent futures, was shut earlier this month due to a crack. Operator Ineos said on Thursday it expected to complete repairs around Christmas and to gradually restart the system in early January.

Longer term, analysts said crude production in the United States <C-OUT-T-EIA> that is fast approaching 10 million bpd would also drag on oil prices, and undermine efforts led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia to tighten the market.

Not all analysts expect a return of oversupply, though.

The OPEC-led pact to withhold supplies started in January this year, and the producer group and its allies decided in November to extend the cuts to cover all of 2018, instead of letting them expire next March, as had been planned.

The supply restraint has resulted in significant reductions of oil inventories and helped push up Brent prices by more than 45 percent since June this year.

Surge in U.S. shale hedging to boost drilling in 2018

Global Stock Markets

More than 144 million barrels were added to hedges, after global oil markets LCOc1 rallied by as much as $13 in the quarter. Higher prices help producers lock in profits for future sales. 

That should guarantee that total production exceeds 10 million bpd in 2018, which would be an all-time record for U.S. drilling. Traders say growth next year will likely exceed government forecasts, heralding a record year that could pressure prices in the near term.
For oil traders, hedging data from shale companies serves as a leading indicator of future supplies.

In total, 17 companies increased outstanding oil options, swaps or other derivatives positions by 144 million barrels between the second and third quarter. Another 10 companies decreased their hedging positions by 31 million barrels; three others did not hedge at all.
Together, the companies have nearly one-third more barrels hedged, or the equivalent of 129 million barrels, compared to the previous quarter.

Citigroup analysts said the third-quarter hedge ratio - the percentage of production where shale companies have locked in future sales - for 2018 jumped from 12 percent to 27 percent. For the same period in 2015 and 2016, producers had locked in 15 and 18 percent of the coming year, they said.

Several firms, including Hess Corp (HES.N), Newfield Exploration Co (NFX.N) and Marathon Oil Corp (MRO.N) loaded up their hedges, and more than doubled volumes last quarter. Together, they added 74 million barrels. Among the companies that rolled off the most include Anadarko Petroleum Corp (APC.N) and EP Energy (EPE.N).

Shale firms are said to have continued adding to hedges in the fourth quarter. Swap dealer gross shorts data from the Commodity Futures Trading Commission [3067651SSHT], an indicator of producer hedging activity, touched a record in the most recent week.

Last week, a Texas-based producer was said to have hedged some 30,000 barrels per day (bpd) for 2018 in U.S. crude futures, according to two sources familiar with money flows.

U.S total oil production is expected to rise by 780,000 bpd to 10.02 million bpd next year, which would be a new annual record, according to the U.S. Energy Information Administration (EIA).

Traders estimate that growth could be as high as 1.2 million bpd, with at least 500,000 bpd to 600,000 bpd out of Texas’s prolific Permian basin alone.
That could complicate an extension by OPEC to curb global supplies through 2018 to keep prices low.

Drilled but uncompleted wells rose for a 12th straight month to a record in November, according to EIA data dating to December 2013.

Despite greater levels of hedging, and the rise in production, the U.S. crude forward curve remains in backwardation, a market structure where near-term prices are higher than those in the future.

On Wednesday, WTI for December 2019 was trading around $2.46 a barrel over WTI for December 2018 CLZ8-Z9. That spread, a popular trade, signals the health of the oil market.

U.S. oil dips on increased drilling, but OPEC cuts support global markets

U.S. oil prices dipped on Monday, easing from two-year highs on the prospect of increased U.S. output, although global markets were slightly better supported by expectations an OPEC-led supply cut will be extended.

U.S. West Texas Intermediate (WTI) crude futures were at $58.68 a barrel at 0436 GMT, down 27 cents, or 0.5 percent, from their last settlement. Brent crude futures LCOc1 fell just 4 cents to $63.82 a barrel.

U.S. crude production C-OUT-T-EIA has risen by 15 percent since mid-2016 to 9.66 million barrels per day (bpd), not far from top producers Russia and Saudi Arabia, and increasing drilling activity for new production means output is expected to grow further, traders said.

U.S. energy companies last week added oil rigs, with the monthly rig count rising for the first time since July, to 747 active rigs, as producers are attracted by climbing crude prices. touched a 2015 high on Friday at $59.05 a barrel, partly driven higher by the closure of the 590,000 bpd Keystone pipeline connecting Canada's oil sand fields with the United States following a spill, which reduced stocks.

In global markets, Brent crude oil futures were stronger than WTI due to an effort by the Organization of the Petroleum Exporting Countries (OPEC) and a group of other producers, including Russia, to withhold 1.8 million bpd of output since January.

The deal to cut output expires in March 2018, but OPEC will meet on Nov. 30 to discuss its policy.

Russian Energy Minister Alexander Novak said on Friday that Russia would discuss the details of an extension on Nov. 30, but made no mention of how long this should last beyond its March expiry. uncertainty of how committed Russia is to ongoing cuts, as well as rising production in the United States, mean crude prices are being prevented from rising much further, traders said.
There is plenty of room for disappointment... Should the outcome of the next OPEC meeting fall short of expectations, the large net-long speculative position on oil futures can unwind, sending prices lower and volatility higher, BNP Paribas warned.

Analysts also noted technical chart indicators that implied crude oil futures were in for a downward correction.

U.S. oil prices rise to two-year high on Keystone pipeline outage

Oil Stock Markets

U.S. crude oil rose to a two-year high on Friday, as the shutdown of a major crude pipeline from Canada to the United States tightened North American markets. 

Trading activity is expected to be very low on Friday due to the U.S. Thanksgiving holiday.

U.S. West Texas Intermediate (WTI) crude futures were at $58.44 a barrel at 0550 GMT, up 42 cents, or 0.7 percent from their last settlement. Price rose to as much as $58.58 a barrel early on Friday, the highest since July 1, 2015.

Brent crude futures LCOc1 were at $63.42, down 13 cents.

In a sign of a tightening market, both crude benchmarks are in backwardation, where spot prices are higher than those for future delivery, which makes it unattractive for traders to store oil for later sale

The closure of the 590,000-barrel-per-day (bpd) Keystone pipeline following a spill last week has driven up U.S. crude as stockpiles at the storage hub of Cushing, Oklahoma, have declined

Markets have also been tightening globally due to an effort by the Organization of the Petroleum Exporting Countries (OPEC) and a group of other producers, including Russia, to withhold 1.8 million bpd of production.

The deal to restrict output expires in March 2018, but OPEC will meet on Nov. 30 to discuss its policy, and it is expected to extend the cuts.

Overall, however, analysts said market fundamentals were balanced, supporting prices.

Oil market fundamentals are improving with robust global demand growth of around 1.7 percent this year according to U.S. investment bank Jefferies. Growth in U.S. output of 900,000 bpd this year (and in 2018) should not overwhelm the market.

U.S. oil production C-OUT-T-EIA has jumped by 15 percent since mid-2016 to a record 9.66 million bpd, thanks largely to shale drilling.

The increased production is likely to translate into higher exports, especially to Asia.

China’s Unipec, the trading arm of Asia’s largest oil refiner Sinopec (600028.SS), said on Friday that it would double the volume of crude oil it imports from the U.S. to around 12 million tonnes next year.

But Richard Robinson, manager of the Ashburton Global Energy Fund, warned U.S. output growth could slow as operators struggle to get enough sand and water, both of which are needed in the shale production process, known as fracking.

Oil prices firm on expected OPEC cut extension, U.S. crude stock draw

Oil Stock Markets

Oil prices climbed on Wednesday after a reported fall in U.S. crude inventories and on expectations that an OPEC-led production cut aimed at tightening the market will be extended beyond next March. 

Brent crude futures, the international benchmark for oil prices, were at $63.07 per barrel at 0257 GMT, up 50 cents, or 0.8 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $57.74 a barrel, up 92 cents, or 1.6 percent.

Traders said markets have been supported by an effort led by the Organization of the Petroleum Exporting Countries (OPEC) to restrain output in a bid to end a global supply overhang.

The deal to curb production is due to expire in March, but OPEC will meet on Nov. 30 in Vienna to discuss the outlook for the policy.

J.P. Morgan said in its 2018 commodities outlook, released late on Tuesday, that oil markets in 2018 will be balanced on the back of extended  production cuts but added that without extended cuts, markets would be in surplus.

Brent to trade at the top of the $40 to $60 per barrel range, with Brent averaging $58 per barrel in 2018, according to U.S. bank and WTI is expected to average $54.6 per barrel.

Traders said there was also some price support from a weekly report on Tuesday by the American Petroleum Institute which said U.S. crude inventories fell by 6.4 million barrels in the week to Nov. 17.

Despite this, traders said crude markets were being weighed down by rising production in the United States, which has jumped by almost 15 percent since mid-2016 to 9.65 million barrels per day.

The latest official U.S. production and inventory data is due on Wednesday.

Oil prices steady as rising U.S. output undermines OPEC cuts

Oil Stock Markets

Oil prices were little changed on Tuesday as the impact from expectations of an extended OPEC-led production cut was canceled out by rising output in the United States.

Brent crude futures, the international benchmark for oil prices, were at $62.20 per barrel at 0301 GMT, 8 cents above their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $56.50 a barrel, also up 8 cent from their last settlement.

Traders said they were avoiding taking on large new positions due to uncertainty in markets.

The Organization of the Petroleum Exporting Countries (OPEC), together with a group of non-OPEC producers led by Russia, has been restraining output since the start of this year in a bid to end a global supply overhang and buoy prices. The deal to curb output is due to expire in March 2018, but OPEC will meet on Nov. 30 to discuss the outlook for the policy.

OPEC is expected to agree to extend cuts as storage levels remain high despite recent drawdowns, although there are doubts about the willingness of some participants to continue to restrict their production.

Outside the group of producers voluntarily withholding output, the biggest headaches for OPEC has been rising U.S. drilling activity, led by shale oil producers.

Energy consultancy Westwood Global Energy Group said U.S. output would climb even faster than implied by the rising rig count, which has jumped from 316 rigs in mid-2016 to 738 last week, as producers get more productive per well.

For 2018, FGE warned potential supply disruptions during an already tighter market could trigger oil price spikes, but it added that the market could slump again towards 2019 as U.S. output continues to soar and OPEC and its allies at some point will stop withholding output.

Oil stable as OPEC cuts counter rising U.S. supplies

Oil Stock Markets

Oil markets were stable on Thursday as rising U.S. crude production and inventories were countered by expectations that OPEC will extend an ongoing production cut during a meeting at the end of this month.

Brent crude futures LCOc1, the international benchmark for oil prices, were at $61.98 per barrel at 0438 GMT, 11 cents above their last close. 

U.S. West Texas Intermediate (WTI) crude futures were at $55.37 a barrel, 4 cents up from their last settlement.

Despite these slight gains, Brent and WTI have lost around 4 percent in value since hitting 2015 highs last week, pulled down in part by rising crude availability in the United States.

U.S. crude inventories C-STK-T-EIA rose for a second week in a row, building by 1.9 million barrels in the week to Nov. 10 to 459 million barrels, the government’s Energy Information Administration (EIA) said on Wednesday.

That compared to analyst expectations in a Reuters poll for a decrease of 2.2 million barrels.

U.S. crude oil production C-OUT-T-EIA hit a record of 9.65 million barrels per day (bpd), meaning output has risen by almost 15 percent since their most recent low in mid-2016.

Despite this, analysts said prices were relatively well supported due to efforts led by the Organization of the Petroleum Exporting Countries (OPEC) to withhold oil production in order to tighten the market and prop up prices.

The deal is due to expire in March 2018, but OPEC will meet on Nov. 30 to discuss policy, and it is expected to agree an extension of the cuts.

Oil markets cautious as rising U.S. output undermines OPEC supply cuts

Oil Stock Markets

Oil prices fell on Tuesday as the prospect of further rises in U.S. output undermined ongoing OPEC-led production cuts aimed at tightening the market. 

Brent crude futures LCOc1 were at $62.94 per barrel at 0415 GMT, down 22 cents, or 0.35 percent, from their last close. U.S. West Texas Intermediate (WTI) crude CLc1 was at $56.62 per barrel, down 14 cents, or 0.25 percent.

The falls came after both crude benchmarks early last week hit highs last seen in 2015, but traders said the market had lost some momentum since then.

Traders said they were cautious on betting on further price rises.

The U.S. government said on Monday U.S. shale production for December would rise for a 12th consecutive month, increasing by 80,000 bpd.

Fitch Ratings said in its 2018 oil outlook that it assumed 2018 “average oil prices will be broadly unchanged year-on-year and that the recent price recovery with Brent exceeding $60 per barrel may not be sustained”. So far in 2017, Brent has averaged at $54.5 per barrel. 

Despite the cautious sentiment, traders said oil prices would unlikely fall very far, largely due to ongoing supply restrictions led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia, which have contributed to a reduction in excess supplies.

OPEC also raised its oil demand forecast, saying the world would need 33.42 million barrels per day (bpd) of OPEC crude next year, up 360,000 bpd from its previous forecast and marking the fourth consecutive monthly increase in the outlook since July.

In China, refiners raised crude oil processing runs to near record monthly levels in October, with operations increasing by 7.4 percent to 50.51 million tonnes, or 11.89 million bpd, China’s statistics bureau said on Tuesday.

OPEC is due to meet on Nov. 30 to discuss further output policy. The group is expected to agree an extension of the cuts beyond their current expiry date in March 2018.

Looking further out, the International Energy Agency said on Tuesday there will be 50 million electric vehicles (EVs) on the road by 2025 and 300 million by 2040, from around 2 million now.

This is expected to cut 2.5 million bpd, or about 2 percent, off global oil demand by that time.
Still, the IEA’s “New Policies Scenario”, based on existing legislation and policy intentions, expects oil prices to rise towards $83 a barrel by the mid-2020s.

Oil prices fall on oversupply concern as Libyan output seesaws

Oil prices fell on Wednesday, weighed down by concerns about rising production from Libya feeding into an oversupplied market and a surprise increase in U.S. gasoline inventories.

Benchmark Brent crude futures LCOc1 were down 27 cents at $51.60 a barrel at 0950 GMT. 

U.S. West Texas Intermediate crude futures CLc1 were trading at $47.67, down 16 cents. 

Production from Libya's Sharara oilfield, the conflict-riven country's largest, has been seesawing. The field remained shut on Wednesday, two Libyan oil sources told Reuters. The field had restarted at least once on Tuesday amid conflicting reports about whether it had reopened.

Sharara recently reached output of 280,000 barrels per day (bpd), but closed this week due to a pipeline blockade. Its production is key to Libya's oil output, which surged above 1 million bpd in late June, about four times its level last summer. 

Libya's rising output is a headache for the Organisation of the Petroleum Exporting Countries, which together with non-OPEC producers including Russia has pledged to cut around 1.8 million bpd of supplies between January this year and March 2018 in an attempt to remove a global glut. 

Additionally, industry data released by the American Petroleum Institute showed on Tuesday that U.S. gasoline stocks rose by 1.4 million barrels in the week to Aug. 18, compared with analysts' expectations of a 3.5-million-barrel drop.

Official inventory data from the U.S. Energy Information Administration is due later on Wednesday.

Oil up for fourth day on short-covering, supply glut caps gains

Oil prices rose for a fourth consecutive session on Tuesday as investors covered short positions, although worries over a persistent global supply glut still lingered.

Brent crude futures LCOc1, the international benchmark for oil prices, gained 35 cents, or 0.7 percent, to $46.18 per barrel by 0815 BST.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 30 cents, or 0.7 percent, at $43.68 per barrel.

The gains mean the market is up slightly so far this week, after spending much of the last month in negative territory.

The Organization of the Petroleum Exporting Countries (OPEC) and its partners have been trying to reduce a global crude glut with production cuts. OPEC nations and 11 other exporters agreed in May to extend cuts of 1.8 million barrels per day (bpd) until March 2018.

Despite the cuts, which started in January, markets remain well supplied due to rising output elsewhere.

OPEC members Nigeria and Libya are exempt from the cuts and have raised production. OPEC member Iran was also allowed a small increase to recover market share lost under Western sanctions over its nuclear programme.

U.S. shale oil output has risen about 10 percent since last year to 9.4 million bpd C-OUT-T-EIA, with the number of U.S. oil rigs in operation at the highest in more than three years.

Analysts at Bank of America-Merrill Lynch said demand was not growing quickly enough to absorb output, especially since imports in Asia are stuttering.

A fuel glut in China, a hangover from demonetisation in India, and an ageing, declining population in Japan are holding back crude oil demand growth in three of the world's top four oil buyers.

Oil prices claw back ground after sharp drop, buoyed by U.S. crude stock dip

Oil prices regained some ground on Thursday after steep losses the previous day, with a slight drop in U.S. crude inventories stoking hopes that a push to rein in global oversupply could be gathering at least some momentum.

Brent crude futures were at $53.31 per barrel at 0108 GMT, up 38 cents, or 0.72 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures had risen 31 cents, or 0.61 percent, to $50.75 a barrel.

Traders said that the gains came on the back of a reduction in commercial U.S. crude stocks, which fell by 1 million barrels last week to 532.34 million barrels, according to the U.S. Energy Information Administration (EIA). However, that level was still near a record high.

Price increases came after both crude benchmarks fell over 3.5 percent the previous day following a report of surging gasoline inventories as well as another rise in U.S. crude oil production to 9.25 million barrels per day (bpd), up almost 10 percent since mid-2016.

U.S. gasoline stocks posted a counter-seasonal build of 1.5 million barrels, despite heavier refining activity.

Oil drops on rising U.S. drilling, steady OPEC supply

Oil prices fell on Monday, with already-bloated markets pressured by rising U.S. drilling activity and steady supplies from OPEC countries despite touted production cuts.

Prices for benchmark Brent crude futures were 35 cents, or 0.68 percent, below their last settlement at 0646 GMT, at $51.41 per barrel.

U.S. West Texas Intermediate (WTI) crude futures were down 46 cents, or 0.94 percent, at $48.32 a barrel.

Traders said that prices came under pressure from rising U.S. drilling and ongoing high supplies by the Organization of the Petroleum Exporting Countries (OPEC) despite its pledge to cut output by almost 1.8 million barrels per day (bpd) together with some other producers like Russia.

U.S. drillers added 14 oil rigs in the week to March 17, bringing the total count up to 631, the most since September 2015, energy services firm Baker Hughes Inc said on Friday, extending a recovery that is expected to boost shale production by the most in six-months in April.

Sukrit Vijayakar of energy consultancy Trifecta said the rising drilling activity was "reinforcing the expectation of higher U.S. production offsetting (OPEC's) supply cuts".

U.S. oil output has risen to over 9.1 million bpd from below 8.5 million bpd in June last year.

Reacting to the ongoing glut in markets, financial oil traders cut their net long U.S. crude futures and options positions in the week to March 14, the third consecutive reduction, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.