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
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SINGAPORE: Oil prices rose on Monday after Saudi Arabia said producer club OPEC and Russia were likely to keep withholding supplies, and in relief as the United States withdrew its threat to impose import tariffs on Mexico, removing one cloud over the global economy.
Front-month Brent crude futures, the international benchmark for oil prices, were at $63.52 at 0310 GMT, 23 cents, or 0.4%, above Friday’s close.
U.S. West Texas Intermediate (WTI) crude futures were at $54.29 per barrel, 30 cents, or 0.6%, above their last settlement.
Traders said crude prices were rising because of statements by OPEC’s de-facto leader Saudi Arabia on Friday saying that the group was close to agreeing extended supply cuts.
“Brent futures continue rising … after the Saudi Arabian Energy Minister expressed confidence that OPEC+ producers will prolong their output cuts programme through the second half of 2019,” said Han Tan, analyst at futures brokerage FXTM.
The Organization of the Petroleum Exporting Countries (OPEC) and some non-members, including Russia, known collectively as “OPEC+”, have withheld supplies since the start of the year to prop up prices.
Stephen Innes, managing partner at Vanguard Markets, said stronger stock markets also supported oil futures.
“With the Mexican stalemate averted and no harmful shockwaves from this weekend G-20 meeting … oil could trade favourably as WTI and Brent will continue to track the broader risk environment high,” Innes said.
Stock markets rose on Monday after a deal between the United States and Mexico to combat illegal migration from Central America late last week removed the threat of U.S. tariffs on goods imported from Mexico.
But analysts said there were still concerns about the health of the global economy, with the United States and China still locked in a trade war.
“Slowing global demand appears to be featuring prominently on the markets’ collective mind, as the fallout from heightened trade tensions continues to be felt in the global economy,” said FXTM’s Tan.
“The sustainability of oil’s recent climb could be determined by the outlooks of several key industry bodies scheduled this week, whereby more downcast projections for global demand could prompt traders to continue chipping away at oil,” he added.
Oil major BP is to publish its statistical review of global energy markets on Tuesday, while China on Friday is scheduled to publish its monthly commodities output data. – Reuters
SINGAPORE: Oil prices rose on Wednesday as U.S. sanctions against crude exporters Iran and Venezuela as well as ongoing supply cuts by producers have left markets relatively tight just as crude imports to China rose to a record for April.
U.S. West Texas Intermediate (WTI) crude futures were at $61.90 per barrel at 0451 GMT on Wednesday, 80 cents, or 0.8 percent, above their last settlement.
Brent crude oil futures were at $70.29 per barrel, 41 cents, or 0.6 percent, above their last close.
With U.S. sanctions on Iran and Venezuela in place, analysts said global oil markets remained tight.
“The tight and price-supportive fundamental outlook has not gone away,” said Ole Hansen, head of commodity strategy at Denmark’s Saxo Bank.
China’s crude oil imports in April rose a record for the month of 10.64 million barrels per day (bpd), according to data from the Chinese General Administration of Customs released on Wednesday. That is an 11 percent rise from the same month last year. The country is the world’s largest oil importer.
China’s imports during the first four months of the year averaged around 10.03 million bpd, up 8.9 percent from the same period a year earlier, the data showed.
China’s surging oil demand comes as supply is tight.
The United States reimposed sanctions on Iran in November last year, demanding all countries stop importing oil from the country.
Iran has said it will defy the sanctions and continue to export oil.
Most analysts expect its crude export to fall to little more than 500,000 bpd, down from around 1 million bpd in April, as governments largely bow to U.S. pressure.
Washington has also slapped sanctions on Venezuelan oil exports, further disrupting crude supply.
The sanctions come amid already tight supply as the Organization of the Petroleum Exporting Countries (OPEC) has been withholding output since the start of the year in order to prop up prices.
U.S. Energy Secretary Rick Perry said on Tuesday that Saudi Arabia, OPEC’s de-facto leader, would increase its oil production to meet needs arising from sanctions on Iran.
OPEC is due to meet in June at its headquarters in Vienna, Austria, to decide its output policy for the rest of the year.
Wednesday’s firmer prices partly reversed the price declines earlier this week, which were triggered by announcements from Washington that the United States would this Friday further hike import tariffs on Chinese goods.
“Intensifying trade tensions are raising question on … oil demand prospects,” ANZ bank said on Wednesday.
The U.S. Energy Information Administration (EIA) on Tuesday cut its 2019 world oil demand growth forecast by 20,000 bpd to 1.38 million bpd.
A surge in U.S. oil production may also soon ease global supply concerns.
U.S. crude oil production is expected to average 12.45 million bpd this year, up from the current 12.3 million bpd, which is already a record, the EIA said.
For 2020, the EIA forecast U.S. output will average 13.38 million bpd, making the United States the world’s biggest oil producer ahead of Russia and Saudi Arabia. – Reuters
SINGAPORE: Oil prices rose on Friday as markets tightened amid output cuts by producer club OPEC, but surging U.S. supply and a global economic slowdown prevented crude from climbing further.
U.S. West Texas Intermediate (WTI) crude oil futures were at $57.41 per barrel at 0350 GMT, up 19 cents, or 0.3 percent, from their last settlement.
International Brent crude futures were at $66.59 per barrel, up 28 cents, or 0.4 percent.
Traders said oil markets were currently tightening.
In Venezuela, oil exports have plunged by 40 percent to around 920,000 barrels per day (bpd) since the U.S. government slapped sanctions against its petroleum industry on Jan. 28.
This drop comes as the Organization of the Petroleum Exporting Countries (OPEC), of which Venezuela is a founding member, has led efforts since the start of the year to withhold around 1.2 million bpd of supply to prop up prices.
“Global (oil) markets appear tighter than many anticipated for this time of year, but scores of unsold barrels can pile up quickly and saturate regions,“ Canada’s RBC Capital Markets said in a research note on oil markets.
Despite this, there are signs that point to a more amply supplied market heading further into 2019.
The U.S. Energy Department said on Thursday it was offering up to 6 million barrels of crude from national emergency reserves to raise funds to modernize the U.S. strategic oil reserves.
Additionally, U.S. crude output has hit a record of more than 12 million bpd , pushing exports to an unprecedented 3.6 million bpd in February.
Investment bank RBC estimated that oil from the U.S. Gulf of Mexico port of Houston “can economically move anywhere globally when priced at a discount of $1.70 per barrel relative to the waterborne Brent benchmark”.
Crude loading from Houston last traded at $6.60 a barrel over WTI, which still put it at a discount of more than $2.15 per barrel to Brent.
On the demand side, a Reuters poll showed analysts expect global fuel demand to slow this year amid a broad economic slowdown.
China’s February factory activity fell for a third month as the world’s second-largest economy continued to struggle with weak export orders, a private survey showed on Friday.
The weakness is being felt across the region. South Korea’s exports contracted at their steepest pace in nearly three years in February as demand from its major market China cooled further in yet another sign of faltering momentum in Asia’s fourth-largest economy.
Despite this, fuel consumption especially in Asia’s developing economies, which are key drivers of global oil demand, is so far holding up.
India’s diesel consumption, for instance, is expected to rise to a record this year amid a strong expansion of its heavy duty vehicles amid economic growth of around 7 percent.
SINGAPORE, Jan 30 (Reuters): Oil prices rose on Wednesday as concerns about supply disruptions following U.S. sanctions on Venezuela’s oil industry outweighed downward pressure from a darkening outlook for the global economy.
U.S. West Texas Intermediate (WTI) crude futures were at $53.54 per barrel at 0455 GMT, up 23 cents, or 0.4 percent, above their last settlement.
International Brent crude oil futures rose 37 cents, or 0.6 percent, to $61.69 per barrel.
The gains followed a 2 percent price jump in the previous session, when markets first digested the U.S. sanctions on Venezuela’s oil exports.
Washington on Monday announced export sanctions against state-owned oil firm Petroleos de Venezuela SA (PDVSA), limiting transactions between U.S. companies that do business with Venezuela through purchases of crude oil and sales of refined products.
“The sanctions so far have been mostly disruptive for refiners on the U.S. Gulf Coast, who are being forced to seek alternative heavy crude supplies, and have stepped up purchases from Canada,” said Vandana Hari of Vanda Insights, an energy consultancy.
She added, however, that Canadian oil exports would be “constrained by pipeline capacity bottlenecks.
The sanctions aim to freeze sale proceeds from PDVSA’s exports of roughly 500,000 barrels per day (bpd) of crude oil to the United States.
Although the move pushed up oil prices, markets appeared relatively relaxed as the sanctions only affect Venezuelan supply to the United States.
“The (Venezuelan) export volumes will not be eliminated from the market, but rather rerouted to other countries,” said Paola Rodriguez-Masiu, an analyst at consultancy Rystad Energy.
With the United States dropping out as a customer for Venezuelan oil, she added that “China and India … will be able to pick up these oil volumes at great discounts.”
Despite this, some analysts said that non-U.S. oil trading firms with operations in the United States may still avoid dealing with Venezuelan oil.
The Schork Report, a daily oil and gas trading publication, said on Wednesday that many “international oil traders … have significant trading operations in the U.S. … At least in the short-term, these traders will undoubtedly quit buying from Venezuela until such a time that they are assured that they are not running afoul of U.S. sanctions.”
Other analysts also pointed to economic weakness as countering supply-side efforts to tighten the market such as the voluntary supply restraint by the Organization of the Petroleum Exporting Countries (OPEC).
“Pulling in the opposite (oil price) direction are heightened concerns about global growth, particularly that of China,” said Ole Hansen, head of commodity strategy at Denmark’s Saxo Bank.
Global economic growth and fuel consumption are expected to slow this year amid a trade dispute between the United States and China, the world’s two biggest economies.
Officials from Washington and Beijing are set to launch a new round of trade talks on Wednesday aimed at resolving their disputes amid which both sides have slapped hefty import tariffs on each other’s goods.
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