SINGAPORE: Crude oil prices rose on Monday following a weekend attack on a Saudi oil facility by Yemeni separatists, although price gains were capped by an unusually downbeat OPEC report that stoked concerns about demand growth.
Brent crude was up 45 cents, or 0.8%, at $59.09 a barrel at 0035 GMT, U.S. crude was up 39 cents, or 0.7%, at $55.26 a barrel.
Prices rose after the drone attack by Yemen’s Houthi group on an oilfield in eastern Saudi Arabia on Saturday added to Middle East tensions. The attack caused a fire at a gas plant, but state-run Saudi Aramco said oil production was not affected.
Still, concerns about an economic recession and the impact on oil demand growth weighed on prices.
In a monthly report, the Organization of the Petroleum Exporting Countries (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 will be in slight surplus in 2020.
It is rare for OPEC to give a bearish forward view on the market outlook.
U.S. President Donald Trump and top White House officials dismissed concerns that economic growth may be faltering, saying on Sunday they saw little risk of recession and insisting their trade war with China was doing no damage to the United States.
Trump was less optimistic than his aides on striking a trade deal with China, saying that while he believed China was ready to come to an agreement, “I’m not ready to make a deal yet.”
Also weighing on prices, U.S. energy firms this week increased the number of oil rigs operating for the first time in seven weeks despite plans by most producers to cut spending on new drilling this year.
Companies added six oil rigs in the week to Aug. 16, the biggest increase since April, bringing the total count to 770, General Electric Co’s Baker Hughes energy services firm said on Friday. – Reuters
SINGAPORE: Oil prices slipped on Tuesday, offsetting narrow gains in the previous session, as sluggish demand forecasts countered expectations that major producers would prop up oil prices by limiting crude oil output.
International benchmark Brent crude futures were down 18 cents or 0.3%, from the previous settlement, to $58.39 a barrel by 0310 GMT.
U.S. West Texas Intermediate (WTI) futures were at $54.81 per barrel, down by 12 cents, or 0.2%, from the last close.
“Although the outlook remains bleak, oil prices have remained anchored this week after a rapid response from Saudi Arabia, who is serious about stepping in to defend the oil price,” Stephen Innes, managing partner at VM Markets Pte Ltd said in a note.
Saudi Arabia, the de-facto leader of the Organization of the Petroleum Exporting Countries (OPEC), said late last week it plans to keep its crude oil exports below 7 million barrels per day in August and September to help drain global oil inventories.
Analysts expect the country to support prices ahead of its plans to float Saudi Aramco, in what could be the world’s largest initial public offering (IPO).
Saudi Aramco was ready for its IPO, but the timing for the deal will be decided by its sole shareholder, the Saudi government, a senior executive said on Monday.
Kuwait on Monday also reiterated its commitment to OPEC+ supply curbs after Oil Minister Khaled al-Fadhel said Kuwait had cut its own output by more than required by the accord.
OPEC and its allies, known as OPEC+, have agreed to cut 1.2 million barrels per day (bpd) since Jan. 1.
But booming U.S. shale oil production continues to chip away at efforts to limit the global supply overhang, weighing on prices.
U.S. oil output from seven major shale formations is expected to rise by 85,000 barrels per day (bpd) in September, to a record 8.77 million bpd, the U.S. Energy Information Administration forecast in a report.
Gloomy forecasts for the global economy and oil demand growth have also dragged on oil prices as the trade dispute between the United States and China escalates.
“The swift reaction from Saudi Arabia will likely stabilise oil prices, but the oil price probably won’t move much above $60 per barrel until there is evidence of progress in U.S.-China trade negotiations,” said Innes.
China’s central bank lowered its official yuan midpoint for the ninth straight day to a fresh 11-year low on Tuesday to reflect broad weakness in the local unit.
A lower yuan raises the cost of dollar-denominated oil imports in China, the world’s biggest crude oil importer. – Reuters
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TOKYO: Oil prices rose on Wednesday after steep falls in the previous session, although U.S. crude trailed gains for international benchmark Brent after U.S. crude inventories fell less than expected.
West Texas Intermediate crude futures were up 6 cents at $57.68 by 0327 GMT, having fallen 3.3% on Tuesday.
Brent crude futures were up 25 cents at $64.60, or 0.4%. They ended down 3.2% in the previous session.
Crude inventories fell by 1.4 million barrels in the week to July 12 to 460 million, industry group the American Petroleum Institute (API) said on Tuesday. That compared with analysts’ expectations for a decrease of 2.7 million barrels.
Official data is due out later today from the U.S. government’s Energy Information Administration (EIA). If it confirms the fall it will be the fifth consecutive weekly decline, the longest stretch since the beginning of 2018.
“Market participants are looking ahead to the weekly IEA oil inventory data for the U.S., which is expected to show yet another drawdown,” Abhishek Kumar, head of analytics at Interfax Energy in London.
“Nevertheless, oil production in the Gulf of Mexico returning to normal following Hurricane Barry will limit price gains,” Kumar said.
More than half the daily crude production in the U.S. Gulf of Mexico remained offline on Tuesday in the wake of Hurricane Barry, the U.S. drilling regulator said, as most oil companies were re-staffing facilities to resume production.
The Bureau of Safety and Environmental Enforcement said 1.1 million barrels per day of oil, or 58% of the region’s total, and 1.4 billion cubic feet per day of natural gas output remained shut.
The smaller than expected decline in crude stocks suggested production shut-ins caused by Hurricane Barry late last week had little impact on inventories.
Gasoline stocks also fell, declining by 476,000 barrels, compared with analysts’ expectations in a Reuters poll for a 925,000-barrel decline.
Distillate fuels stockpiles, which include diesel and heating oil, rose by 6.2 million barrels, compared with expectations for a 613,000-barrel gain, the API data showed.
Oil prices fell on Tuesday after U.S. President Donald Trump said progress has been made with Iran, signaling tensions could ease in the Mideast.
However, Iran later denied it was willing to negotiate over its ballistic missile program, contradicting a claim by U.S. Secretary of State Mike Pompeo, and appearing to undercut Trump’s statement.
Tensions between the United States and Iran over Tehran’s nuclear program have lent support to oil futures, given the potential for a price spike should the situation deteriorate.
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PETALING JAYA: Practice Note 17 (PN 17) company Sumatec Resources Bhd’s business partner CaspiOilGas LLP (COG) has successfully defended against claims from creditors at the Supreme Court of the Republic of Kazakhstan.
In a filing with Bursa Malaysia, Sumatec said it received a letter from COG informing it of the Supreme Court’s decision in favour of COG to clear COG’s disputes with a group of creditors.
COG general director Ilyas Madimov said that the Supreme Court’s decision, which denied all legal redress sought by the group of creditors against COG, is final and binding, without further avenue for appeal as it is issued by the highest competent court of the country.
“This favourable court’s decision has paved the way forward for COG to soldier on with bigger strikes for the development of Rakushechnoye Oil & Gas field,” he said in the letter to Sumatec.
Following the court’s decision, Madimov said COG can now move forward to focus on its oil production and finalise the full commercial Field Development Plan (FDP) for Rakushechnoye, including the development of its condensate-rich gas resources.
Madimov said the court’s decision reinforces the stand taken by COG and its ultimate controlling shareholder Tan Sri Halim Saad, not to negotiate or give in to the alleged false debt claims in the creditors’ dispute.
Halim was also a substantial shareholder in Sumatec prior to disposing of 197.3 million shares in January this year.
COG is currently working on well workovers programme which involves eight wells, with a target of resuming production to around 921 barrels per day by end-2019 and further increase to around 1,600 barrels per day by mid-2020.
The well workovers programme is being carried out by COG on its own funding initiative.
“This is done in the spirit and mechanism of the joint investment agreement (JIA), whereby either party can advance money to fund the petroleum operation at the Rakushechnoye field, in this case, COG is funding the JIA on behalf of Sumatec,” said Madimov.
On the full field development and gas utilisation plan for Rakushechnoye, he said COG is in advance stage of developing the investment plan for the proposed gas condensate processing plant (GPU) with China parties.
The estimated investment for Phase 1 is around US$200 million (RM826 million). The GPU plan is aimed at producing LPG and increase oil/condensate production.
SINGAPORE: Oil prices drifted lower on Tuesday, as weak global data raised concerns about future demand for the commodity despite a positive boost from OPEC’s decision to extend supply cuts until next March.
Brent crude futures for September delivery were trading down 15 cents, or 0.2%, at $64.91 a barrel by 0311 GMT after dipping to $64.66 earlier. Brent climbed more than $2 a barrel on Monday before paring gains later in the day.
U.S. crude futures for August were down 25 cents, or 0.4%, at $58.84 a barrel, after touching their highest in over five weeks on Monday.
“After 2-1/2 years of production cuts, the effects of rolling over production cuts is losing steam,” said Edward Moya, senior market analyst at OANDA in New York, adding that markets remained nervous about demand.
“The trade war is not likely to get resolved any time soon and while central banks globally are expected to deliver fresh stimulus in the coming months, economic activity is continuing to trend lower.”
While the U.S. and China agreed at a recent Group of 20 leaders summit to restart trade talks, indications that factory activity shrank across much of Europe and Asia in June while growth in manufacturing cooled in the United States weighed on oil prices.
“The weaker PMI prints killed sentiment overnight, and the market started to factor in the realm of the unknown around shale (oil), so (investors) were worried about the fear of oversupply in the face of weaker demand,” said Stephen Innes, managing partner at Vanguard Markets in Bangkok.
However, the decision to extend production curbs would continue to support oil prices, as OPEC looked to maintain market equilibrium, he said.
The Organization of the Petroleum Exporting Countries (OPEC) agreed on Monday to extend oil supply cuts until March 2020 as the group’s members overcame their differences in order to try to prop up the price of crude.
OPEC is slated to meet with Russia and other producers, an alliance known as OPEC+, later on Tuesday to discuss supply cuts amid surging U.S. output.
Russian President Vladimir Putin said on Saturday he had agreed with Saudi Arabia to extend global output cuts until December 2019 or March 2020.
Russia reduced oil production in June by more than the amount agreed in a global deal to cut output, the energy minister and industry sources said on Monday, as the sector felt the impact of a contaminated crude crisis that crippled exports.
Meanwhile, U.S. producers hit a monthly record of 12.16 million barrels per day (bpd) in April, data showed, though new U.S. shale oil production is expected to slip this year from last year, according to a survey of major forecasters.
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