oil market


Opec’s market share sinks — and no sign of wavering on supply cuts

LONDON, Aug 22 — Opec’s share of the global oil market has sunk to 30%, the lowest in years, as a result of supply restraint and involuntary losses in Iran and Venezuela, and there is little sign yet producers are wavering on their output-cut…

Oil inches higher after U.S. crude stocks drawdown, economic worries weigh

SINGAPORE: Oil prices edged higher on Thursday after a drawdown in U.S. crude inventories, but lingering concerns over the global economy and a build-up in U.S. refined product stocks kept a lid on gains.

Brent crude futures climbed for a fifth consecutive session on Thursday, rising 6 cents, or 0.1%, to $60.36 a barrel by 0242 GMT on Thursday.

West Texas Intermediate (WTI) crude futures rose 10 cents, or 0.2%, to $55.78 per barrel.

U.S. crude inventories fell more than expected last week as refineries hiked production, but gasoline and distillate stockpiles showed bigger-than-expected builds, the Energy Information Administration said on Wednesday.

Crude inventories fell by 2.7 million barrels in the week to Aug. 16, compared with analysts’ expectations for a drop of 1.9 million barrels. However, gasoline stocks rose by 312,000 barrels and distillate supplies grew by 2.6 million barrels.

“Amid mounting market concerns about a slowdown in economic and oil-demand growth, it might come as a surprise that crude oil inventories have actually been plunging,” analysis firm Kayrros said in a note.

Traders were worried on the prospects of global oil demand especially amid lingering trade tensions between U.S and China, the world’s two major economies.

“If trade uncertainties persist it will be difficult for oil to shrug off concerns about the threat to global demand,” said Stephen Innes, a managing partner at Valour Markets.

U.S. President Donald Trump on Wednesday said he was “the chosen one” to address trade imbalances with China, even as congressional researchers warned that his tariffs would reduce U.S. economic output by 0.3% in 2020.

Asian shares edged ahead on Thursday after Wall Street got a boost from strong retail results, but minutes of the Federal Reserve’s July meeting showed policymakers were deeply divided over whether to cut interest rates as sharply as markets were wagering.

Meanwhile, oil markets were also supported by simmering tensions between the United States and Iran, with Iranian President Hassan Rouhani cautioning Washington against tightening pressure on Tehran.

If Iran’s oil exports are cut to zero, international waterways will not have the same security as before, Rouhani said on Wednesday.

Echoing Rouhani’s tone, Iranian Foreign Minister Mohammad Javad Zarif said Tehran might act “unpredictably” in response to U.S. policies under President Donald Trump. – Reuters

Sources: China CNPC suspends Venezuelan oil loading, worried about US sanctions

SINGAPORE, Aug 20 ― China National Petroleum Corp, a leading buyer of Venezuelan oil, has halted August loadings following the latest US sanctions on the South American exporter, three sources with direct knowledge of the matter told Reuters…

Oil prices slip, but supported by hopes trade tensions could ease

SINGAPORE: Crude oil prices slipped on Tuesday, but losses were limited as equity markets rallied and as traders hoped Sino-U.S. trade tensions would ease.

The United States said it would extend a reprieve that permits China’s Huawei Technologies to buy components from U.S. companies, in a sign of a slight softening of the trade war between both countries.

Brent crude had slipped 3 cents, or 0.05%, to $59.71 a barrel by 0147 GMT, after rising 1.88% on Monday.

U.S. crude was down 15 cents, or 0.3%, at $56.06 a barrel, after gaining 2.44% in the previous session.

The extension sets a very “comforting tone” ahead of next month’s U.S.-China trade talks, Stephen Innes, managing partner, VM Markets, said in a note.

“The U.S.-China trade spat has been at the centre of the oil market demise, which has sent the global economy to the brink of recession and negatively impacted oil demand forecasts,” he said.

A rally in equity markets around the world from growing expectations that global economies would take action to counteract slowing growth also supported oil prices, which often follow stocks.

China’s central bank unveiled interest rate reforms which are expected to lower corporate borrowing costs, while Germany’s right-left coalition government said it would be prepared to ditch its balanced budget rule and take on new debt to counter a possible recession.

Meanwhile, a Reuters poll of seven analysts showed that crude oil inventories in the United States fell by 1.9 million barrels in the week to Aug. 16.

The poll was conducted ahead of reports from the American Petroleum Institute (API), an industry group, and the Energy Information Administration (EIA), an agency of the U.S. Department of Energy.

The API is scheduled to release its data on Tuesday.

Still, prices were weighed down by a report from the Organization of the Petroleum Exporting Countries (OPEC) that stoked concerns about growth in oil demand.

OPEC cut its forecast for global oil demand growth in 2019 by 40,000 barrels per day (bpd) to 1.10 million bpd and indicated the market would be in slight surplus in 2020.

Traders were also watching for signs of tension in the Middle East after the U.S. called the release of an Iranian tanker at the centre of an angry confrontation between Iran and Washington unfortunate and warned Greece and Mediterranean ports against helping the vessel. – Reuters

Stocks, oil plunge on growing signs of global slowdown

NEW YORK, Aug 15 — Equity markets tanked and oil prices fell sharply yesterday after a closely watched bond indicator pointed to the growing risk of a US recession that was heightened by data showing Germany’s economy in contraction and…

Oil prices up slightly, but US-China trade tensions drag

LONDON: Oil prices rebounded slightly today from big falls in recent sessions, but Brent crude remained near seven-month lows around US$60 (RM251) a barrel due to escalating trade tensions between China and the United States.

Brent prices have lost more than 9% in the past week, with US President Donald Trump vowing to impose new tariffs on Chinese imports and China making further moves against US agricultural cargoes.

The US also responded to a decline in China’s yuan on Monday by branding the country a currency manipulator.

International benchmark Brent futures were up 18 cents at US$59.99 a barrel by 1005 GMT, having dipped earlier in the session to their lowest since Jan 14 at US$59.07.

West Texas Intermediate crude futures rose 25 cents to US$54.94 per barrel.

“This morning’s slight price recovery is hardly worthy of mention. Concerns about demand and the escalating trade conflict are still keeping the oil market in a strangle-hold,” Commerzbank analyst Carsten Fritsch said in a note.

“As far as the oil market is concerned, there are two key questions: ‘Why should China carry on buying US crude oil?’ and ‘Why should China continue to adhere to the US sanctions when it comes to buying Iranian oil?’”

Global equities hit a two-month low and Brent fell more than 3% on Monday as traders worried the dispute between the world’s two biggest oil buyers would dent demand, helping to prompt yester-day’s short-covering.

“It’s difficult for oil to hold (up) when you have such moves in equities,” Petromatrix analyst Olivier Jakob said.

Oil prices could find some support later today, with a Reuters poll showing US crude oil inventories were expected to have fallen for an eighth consecutive week.

Ringgit closes lower on Fed rate cut

KUALA LUMPUR, Aug 1 — The ringgit, unsurprisingly, closed lower against the US dollar today after the US Federal Reserve (Fed) eased its interest rate by 25 basis-point early today, coupled with the US-China trade talks that ended without any…

Lotte’s profit hit by lower selling prices

PETALING JAYA: Lotte Chemical Titan Holding Bhd’s net profit for the second quarter ended June 30, 2019 fell 66.72% to RM104.85 million from RM315.03 million a year ago due to lower product selling prices, which led to a margin squeeze.

“The lower selling price is mainly due to diversion of polyolefin supply from the US into the Southeast Asia region as a consequence of the US-China trade war as well as softening of global economic growth,” it said in a filing with Bursa Malaysia today.

The group said other factors such as higher distribution expenses, lower foreign exchange gain and share of loss from associates also affected its earnings for the quarter.

“Higher distribution expenses arose from increase in sales volume, higher unit distribution cost and increase in royalty expenses by RM8.9 million. This is partially offset by higher insurance proceed received/receivable of RM45.7 million for furnace damage claim as compared to RM31.2 million for gas turbine claim in the second quarter last year,” it added.

Foreign exchange gain for the quarter was lower by RM38.3 million while share of result from associates reduced by RM19.9 million, due to loss on fair value changes in interest rate swap entered by Lotte Chemical USA Corporation and borrowing costs incurred for project financing.

In addition, effective tax rate rose from 12% to 24% due to the absence of claimable reinvestment allowance.

Revenue for the quarter fell 6.52% to RM2.13 billion from RM2.28 billion a year ago due to lower average product selling price, partially offset by the increase in sales volume which was driven by improvement in production quantity compared with a year ago.

Overall production quantity increased due to commissioning of new PP3 plant in the third quarter last year, while average plant utilisation rate improved from 82% to 89% in the second quarter this year.

For the six months ended June 30, 2019, net profit fell 71.27% to RM160.68 million from RM559.22 million a year ago while revenue fell 4.29% to RM4.30 billion from RM4.49 billion a year ago.

Moving forward, the group expects the petrochemical industry to remain challenging with the economic headwinds arising from unresolved global trade tensions and volatility in the global crude oil market.

“The petrochemical market is a long-term play. The industry as a whole is bracing for a very challenging period amid various global market uncertainties. Nevertheless, our company is expected to ride through current market down-cycle given our healthy financial position,” said its president and CEO Dr Lee Dong Woo.

Lee said the group’s LINE project in Indonesia is progressing with the completion of the front-end engineering design study in the fourth quarter of 2018 and a final feasibility study in the first quarter this year.

He said the configuration and specification of the project has been determined, and the appropriate project structure and funding are currently undergoing final review while work for land preparation on project site has started.

The group expects project tendering and construction to commence by year-end or early 2020. The project will significantly increase the group’s production capacity upon completion by 2023.

“Over the next five years, the advancement of our company’s growth plan will result in capacity expansion, affirming our position as a top-tier petrochemical company in Southeast Asia,” Lee said.

Texas shale pioneers struggle to appease investors, compete with majors

MIDLAND, Texas, July 30 — Seven years ago, Diamondback Energy Inc went public with a modest parcel of drillable land in the Permian Basin of West Texas. Like dozens of other Permian startups, the firm then pursued a classic wildcatter’s strategy…

IEA says ready to act quickly to keep oil market supplied

PARIS, July 23 ― The International Energy Agency (IEA) is closely monitoring developments in the Strait of Hormuz and ready to take swift action if needed to keep the global oil market supplied, it said yesterday. The Paris-based agency said the…