Search This Blog


Search Tool

Apr 24, 2019

Crude Oil Price Report on Wednesday 24, April 2019 | Oil hovers near 6-month peak as rising US crude stockpiles offset supply fears

Tom DiChristopher

RT: india oil tankers man crossing rail cars Kolkata
A worker walks atop a tanker wagon to check the freight level at an oil terminal on the outskirts of Kolkata.
Rupak De Chowdhuri | Reuters
Oil prices steadied on Wednesday near six-month highs after data that showed U.S. stockpiles rose to their highest since October 2017, countering fears of tight supply resulting from OPEC output cuts and U.S. sanctions on Venezuela and Iran.
Brent crude futures fell 8 cents to $74.43 per barrel around 12:50 p.m. ET (1650 GMT). The international benchmark reached $74.73 a barrel on Tuesday, highest since Nov. 1.
U.S. West Texas Intermediate crude futures were down 48 cents at $65.82 per barrel. The contract hit $66.60 a barrel on Tuesday, highest since Oct. 31.
U.S. crude inventories rose 5.5 million barrels last week, the Energy Information Administration said, far more than analysts’ forecast of an increase of 1.3 million barrels.
U.S. crude stocks jumped last week as imports increased. The nation imported an average 7.1 million barrels per day last week, up more than 1.1 million bpd from the previous week.
However, gasoline stocks fell by 2.1 million barrels, a larger-than-anticipated drop.
“What we’re looking at is a headline number bearish on crude but supported somewhat by the gasoline number,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “Because of the sanctions that are coming down on Iran and the fact that there’s going to be no waivers, it makes this number look more bullish.”
Crude futures and prices for spot delivery rallied after the United States said on Monday it would end all exemptions for sanctions against Iran, demanding countries halt oil imports from Tehran from May or face punitive action. The move raised worries about tighter global oil supplies.
The United States must be prepared for consequences if it tries to stop Iran from selling oil and using the Strait of Hormuz, Iran’s Foreign Minister Mohammad Javad Zarif warned on Wednesday.
China, Iran’s biggest oil customer, has formally complained about the move.
The spot price surge put the Brent forward curve into steep backwardation, in which prices for later delivery are cheaper than for prompt dispatch.
The United States has said it saw Saudi Arabia as a partner to balance oil markets. But some analysts said the market remained fundamentally bullish.
“The factors that could lead to higher prices are overwhelming,” said Carsten Fritsch at Commerzbank, adding a push towards $80 a barrel was more likely than a fall below $70.
Signaling no immediate action to counteract missing Iranian barrels, Saudi Energy Minister Khalid al-Falih said on Wednesday that his country’s production in May would not vary greatly from previous months.
“Inventories are actually continuing to rise despite what is happening in Venezuela and despite the tightening of sanctions on Iran. I don’t see the need to do anything immediately,” Falih said.
He added that Saudi Arabia aimed to stick to its output quota fixed in a deal by the Organization of the Petroleum Exporting Countries, Russia and others, but that June numbers would be determined depending on customers’ needs.
The International Energy Agency, a watchdog for oil-consuming countries, said on Tuesday markets are “adequately supplied” and that “global spare production capacity remains at comfortable levels.”
— CNBC’s Tom DiChristopher contributed to this report.

Source: CNBC

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.