Showing posts with label Energy. Show all posts
Showing posts with label Energy. Show all posts

Sep 30, 2020

Energy | Oil Price Report: Oil jumps more than 2% on optimistic inventory data

 

3-4 minutes - Source: CNBC


The silhouette of an oil pump is seen at sunset.

The silhouette of an oil pump is seen at sunset.

Pramote Polyamate | Getty Images

Oil prices erased losses and closed higher on Wednesday following optimistic inventory data. However, worries over rising coronavirus cases heading into the northern winter would lead to further restrictions on activity and curb demand for fuel capped gains.

The U.S. Energy Information Administration said Wednesday that inventory for the week ending Sept. 25 declined by 2 million barrels. According to estimates from FactSet, analysts had expected a 400,000 barrel build. 

West Texas Intermediate settled 93 cents, or 2.37%, higher at $40.22 per barrel. Brent crude fell 8 cents to $40.95 per barrel.

The benchmarks fell more than 3% on Tuesday as global Covid-19 cases passed 1 million, having doubled in three months.

“The resurgence in Covid-19 cases more recently in some regions, is clearly not great for market sentiment,” ING Economics said in a note.

“Whilst demand is an issue for the market, the supply side of the equation is not helping either,” ING said.

Libya’s Sarir oilfield, which was producing more than 300,000 barrels per day last year, restarted output after eastern forces lifted an eight-month blockade on energy facilities.

CEOs of the world’s biggest trading companies are forecasting a weak recovery for oil demand and little movement in prices in the coming months and potentially years.

Weighing heavily on markets is the continued depressed demand for jet fuel, with air travel in the doldrums due to coronavirus restrictions and a general disinclination to travel.

Refineries have been trying to find ways to blend their product but an oversupply remains and some plants will be forced to shut down.

Marathon Petroleum Corp, the largest oil refiner in the United States, started imposing job cuts on Tuesday, according to people familiar with the matter.

To counter the fall in demand, the Organization of the Petroleum Exporting Countries is unlikely to increase oil production as planned from January next year, traders said on Tuesday.

The market looked past data from the American Petroleum Institute on Tuesday showing U.S. crude oil stocks fell against expectations, focusing instead on the rise in gasoline inventories.

Also keeping traders and investors on tenterhooks is the November presidential election, which may remain undetermined on election night, with both candidates contesting the results.

President Donald Trump and Democratic contender Joe Biden ended a chaotic first debate late on Wednesday. Biden, 77, has held a consistent lead over Trump, 74, in national opinion polls, although surveys in the battleground states that will decide the election show a closer contest.

Sep 29, 2020

Energy | Oil Price Report: Oil slides more than 3% as virus cases mount

 

2-3 minutes - Source: CNBC


Oil pumping jacks, also known as "nodding donkeys", operate in an oilfield near Almetyevsk, Tatarstan, Russia, on Wednesday, March 11, 2020.

Oil pumping jacks, also known as “nodding donkeys”, operate in an oilfield near Almetyevsk, Tatarstan, Russia, on Wednesday, March 11, 2020.

Andrey Rudakov | Bloomberg via Getty Images

Oil prices on Tuesday fell more than 3%, although closed off their lowest levels of the day, on worries about the outlook for fuel demand as Europe and the United States grappled with a surge in new coronavirus infections.

Stock and commodities investors remained cautious ahead of the first U.S. presidential debate between Democrat Joe Biden and Republican Donald Trump later on Tuesday.

The energy market was also waiting for weekly updates on U.S. crude stockpiles from the American Petroleum Institute (API) on Tuesday and the Energy Information Administration (EIA) on Wednesday.

Analysts polled by Reuters forecast U.S. crude inventories increased 1.6 million barrels last week.

On its second to last day as the front-month, Brent futures for November delivery fell $1.60, or 3.8%, to $40.83 a barrel, while the more active Brent contract for December fell 3.6% to $41.33.

West Texas Intermediate crude fell $1.31, or 3.2%, to settle at $39.29 per barrel.

More than a million people worldwide have died from COVID-19, according to a Reuters tally, a bleak milestone in a pandemic that has devastated the global economy and demand for fuel.

New York City will impose fines on people who refuse to wear a face covering as the rate of positive coronavirus tests climbed above 3% for the first time in months, Mayor Bill de Blasio said on Tuesday.

“The evolving COVID landscape is a massive downside risk for crude prices,” said Craig Erlam, senior analyst at OANDA.

The heads of the world’s largest trading houses predicted tepid oil demand recovery and flat prices in the coming months and possibly even years.

Clashes between Armenia and Azerbaijan over the Nagorno-Karabakh region have also kept markets on edge. If the conflict escalates, it could affect oil and gas exports from Azerbaijan.

In Libya, meanwhile, the Sarir oilfield has restarted production, the head of the company that operates it said on Tuesday, after eastern forces lifted an eight-month blockade on energy facilities.

Sep 22, 2020

Energy | Oil Price Report: Oil edges higher, but demand fears cap upside

 

3 minutes - Source: CNBC


A view of the Marathon Petroleum Corp's Los Angeles Refinery in Carson, California, April 25, 2020.

A view of the Marathon Petroleum Corp’s Los Angeles Refinery in Carson, California, April 25, 2020.

Robyn Beck | AFP | Getty Images

Oil rose on Tuesday, paring sharp overnight losses, as the latest tropical storm in the Gulf of Mexico lost strength, but worries about fuel demand persisted with flare-ups around the globe in coronavirus cases.

Brent crude futures rose 27 cents, or 0.65%, to $41.71 a barrel.

U.S. West Texas Intermediate crude futures for October, due to expire on Tuesday, rose 29 cents, or 0.74%, to settle at $39.60 a barrel.

Crude prices, which fell about 4% on Monday, steadied as Texas refineries stayed open despite forecasts of heavy flooding, with Tropical Storm Beta expected to keep losing strength, allaying worries about U.S. refinery demand for feedstock.

“The recovery in sentiment after the rout in risk assets seen a fortnight ago was clearly fragile,” said Vandana Hari, energy analyst at Singapore-based Vanda Insights.

“This week, the market is recalibrating to a likely stalling of the economic recovery in Europe as several countries in the region impose fresh restrictions to contain a surge in the coronavirus.”

Monday’s price slump was spurred by concerns that an increase in coronavirus cases in major markets could lead to fresh lockdowns and hurt demand. That raised the possibility that Libyan oil could return when it isn’t needed.

“We had a pretty punchy risk-off session (overnight) ... on fears around the risk that a COVID resurgence starts to have negative impacts on demand again,” said Lachlan Shaw, National Australia Bank’s head of commodity research.

Markets are nervous about demand in places like the United Kingdom, where fresh restrictions are being imposed. U.S. health officials are also warning of a new wave in the coming winter.

“When the virus resurges, governments lock down, impose restrictions, and individuals and businesses start to retreat. It’s all bad for demand,” Shaw said.

Traders will be watching out for the American Petroleum Institute’s data on U.S. oil inventories due later on Tuesday.

U.S. crude oil and gasoline stockpiles likely fell last week, while inventories of distillates, including diesel, were seen climbing, a preliminary Reuters poll showed.

Aug 4, 2020

News | Business | Energy | Companies: BP reports second-quarter loss after major write downs, halves dividend

Sam Meredith




A BP company logo at a gas station in London, U.K.
A BP company logo at a gas station in London, U.K.
Chris Ratcliffe | Bloomberg | Getty Images

Energy giant BP reported a significant loss for the second quarter on Tuesday, after downgrading the value of some of its assets on expectations of lower commodity prices.
Second-quarter underlying replacement cost profit, used as a proxy for net profit, came in at a loss of $6.7 billion, meeting expectations of analysts polled by Refinitiv. That compared with a net profit of $800 million in the first quarter of the year.
BP also announced that it had halved its dividend to 5.25 cents per share for the quarter, compared to 10.5 cents per share for the first three months of the year.
The reported loss for the quarter was $16.8 billion, which includes a post-tax charge of $10.9 billion for non-operating items. It compares to a loss of $4.4 billion over the first three months of 2020.
The breakdown of this figure included $9.2 billion in impairments across the group, largely due to BP’s revised forecast for oil and gas prices over the next 30 years, and $1.7 billion of exploration write-offs.
The U.K.-based oil and gas company said last month that it could incur non-cash impairment charges and write-offs in the second quarter, estimating an aggregate range of $13 billion to $17.5 billion after tax. At the time, BP said the “enduring” impact of the coronavirus pandemic had prompted the firm to lower its oil and price forecasts through to 2050.
“These headline results have been driven by another very challenging quarter, but also by the deliberate steps we have taken as we continue to reimagine energy and reinvent bp,” Bernard Looney, CEO of BP, said in a statement on Tuesday.
“In particular, our reset of long-term price assumptions and the related impairment and exploration write-off charges had a major impact. Beneath these, however, our performance remained resilient, with good cash flow and – most importantly – safe and reliable operations,” he added.
Shares of BP are down more than 40% year-to-date.

‘BP has woken up’

International benchmark Brent crude futures traded at $44.02 a barrel on Tuesday morning, down more than 0.3%, while West Texas Intermediate (WTI) crude futures stood at $40.89, around 0.3% lower.
Analysts had anticipated that “Big Oil” companies, referring to the world’s largest energy majors, were likely to report “horrendous” second-quarter results as coronavirus lockdown measures coincided with an unparalleled demand shock and significantly weaker oil and gas prices.
However, some companies have been able to limit the damage as their trading divisions have capitalized on heightened market volatility.
It is a decision that we wholeheartedly believe is in the long-term interest of our stakeholders.
Alongside BP’s second-quarter earnings, the energy giant announced a new strategy that it says will help the firm shift to clean energy in line with its plan to become a net-zero-carbon company by 2050 or sooner.
The company said that, within 10 years, it plans to raise its annual low carbon investment 10-fold to around $5 billion a year. It also aims to have developed around 50 gigawatts of net renewable generating capacity by 2030 – a 20-fold increase from 2019.
“We believe that what we are setting out today offers a compelling and attractive long-term proposition for all investors — a reset and resilient dividend with a commitment to share buybacks; profitable growth; and the opportunity to invest in the energy transition,” BP’s Looney said in a press release.
“I want to acknowledge the impact the reset dividend will have on many – whether individual retail investors or large holders,” Looney said. “However, it is a decision that we wholeheartedly believe is in the long-term interest of our stakeholders.”
BP also committed to lower oil and gas production by 40% from current levels by the end of the decade “through active portfolio management” and said it would “begin no exploration in new countries.”
In response to BP’s new strategy announcements, Mel Evans, senior climate campaigner for Greenpeace UK, said: “BP has woken up to the immediate need to cut carbon emissions this decade.”
“Slashing oil and gas production and investing in renewable energy is what Shell and the rest of the oil industry needs to do for the world to stand a chance of meeting our global climate targets,” Evans continued. “BP must go further, and needs to account for or ditch its share in Russian oil company, Rosneft. But this is a necessary and encouraging start.”
Shell was not immediately available to comment when contacted by CNBC on Tuesday.

Apr 20, 2020

Oil Futures: Oil futures contract expiring Tuesday dives 40%, touches 34-year low

Eustance Huang,Pippa Stevens


U.S. crude prices plunged to their lowest level in more than 30 years on Monday as traders continue to fret over a slump in demand due to the coronavirus pandemic. The price of the nearest oil futures contract, which expires Tuesday, was the hardest hit, detaching from later month futures contracts with a drop of more than 30%. This suggests that some believe there could be a recovery later in the year.
West Texas Intermediate crude for May delivery tanked 42.2%, or $7.75, to $10.52 per barrel. At the session low WTI traded at $10.01, its lowest level since at least April 1986. Meanwhile, international benchmark Brent crude traded 5.5% lower at $26.53 per barrel. The June WTI contract, which expires on May 19, fell more than 9% to $22.70 per barrel. The July contract was roughly 5% lower at $28 per barrel.
The front part of the oil futures ‘curve,’ which is the May contract that expires on Tuesday, was hit the hardest since it applies to fuel that’s set to be delivered while most of the country remains on lockdown thanks to the coronavirus. There’s little demand for gasoline from refineries, and storage tanks in the U.S. are nearing their limits.
The spread between the May and June contracts — known as the front month and second month — is now the widest in history, according to KKM Financial’s Jeff Kilburg. “This is a phenomenon due to the expiration of the front month contract coupled with the historic plunge in crude,” he said in an email.
“There is still a lot of crude on the water right now that is going to refineries that do not need it,” Helima Croft, global head of commodities strategy at RBC Capital, said Monday on CNBC’s “Squawk Box”. “Right now we don’t see any near-term relief for this oil market … we remain really concerned for the outlook on oil near-term,” she added.
The coronavirus pandemic has dealt a severe blow to economic activity around the globe and sapped demand for oil. While OPEC and its oil-producing allies finalized a historic agreement earlier this month to cut production by 9.7 million barrels per day beginning May 1, many argue that it still won’t be enough to counter the fall-off in demand.
The International Energy Agency, for instance, warned in its closely-watched monthly report, that demand in April could be 29 million barrels per day lower than a year ago, hitting a level last seen in 1995.
“The real problem of the global supply-demand imbalance has started to really manifest itself in prices,” Rystad Energy’s head of oil markets Bjornar Tonhaugen told CNBC in an email. “As production continues relatively unscathed, storages are filling up by the day.”

Contract expiration

ANZ’s Daniel Hynes told CNBC’s “Squawk Box” on Monday that one of the reasons behind the “crater” in U.S. crude prices is the impending expiration of the May futures contract on Tuesday. Front month futures contracts typically converge with spot prices as they near expiry.
“There will be traders in the market who only want to trade the paper, so they will roll over into the next futures contract. That means selling the May contract and buying the June,” Hynes, who is a senior commodity strategist at ANZ, told CNBC in a follow-up email exchange.
“But there are also traders who are buying for clients who trade the physical. So they hold the contract to expiry and deliver the crude,” or accept the crude if they are on the other side of the trade, he said.
This could be why there’s a steeper fall in the May futures contract compared to the June contract. Spot prices are “particularly weak” at the moment, Hynes said, due to a combination of a “collapse in demand and a subsequent lack of storage.”
In a normal market, the spread between the spot price and the one month forward futures contract “may only be around 40-50 cents per (barrel),” he said. “At the moment, it’s been as high as $8-10 (per barrel).”
Hynes said that prices are likely to “remain under pressure” over the next month or so.
With demand at near-paralysis, oil and fuel tanks around the world are close to brimming — a stark evidence of the global glut and a function of the “contango” structure of the futures market, where contracts for later delivery trade at a premium to the front-month.
That’s led to a dash by traders to lease floating or onshore storage in a bid to sell the fuel for a profit when prices rebound.
Global oil storage is “rapidly filling – exceeding 70% and approaching operating max,” Steve Puckett, executive chairman of TRI-ZEN International, an energy consultancy, told CNBC earlier this month.
— CNBC’s Sri Jegarajah contributed to this report.

Dec 16, 2019

Energy | Oil News: Energy Saudi Arabia Insisted Aramco Was Worth $2 Trillion. Now It Is.

By Stanley Reed









On their fourth trading day, shares closed with a value that eluded the oil company before its initial public offering.



Credit...Amr Nabil/Associated Press
Stanley Reed
Saudi Aramco, the world’s biggest oil company, ended trading on Monday with a market value of over $2 trillion, a worth that had eluded it when it took its shares public.
Shares in the company closed at 38 riyals, or about $10.13, giving the company a valuation of $2.03 trillion on the Saudi exchange.
The company made its market debut on Wednesday at a value of $1.88 trillion. Resistance from global investors and Western advisers forced the company’s leadership to settle for a valuation below the target of $2 trillion set by the kingdom’s chief policymaker, Crown Prince Mohammed bin Salman. But in four trading days, strong demand, mostly from Saudi retail and corporate investors, pushed the shares above the prince’s goal.
Aramco, whose roots date back to the discovery of oil in Saudi Arabia in the 1930s by American prospectors, is a rare case of an old-line company that tops technology giants in market value. With a near monopoly on production in the world’s leading oil-exporting nation, Aramco is worth far more than Apple or Microsoft, each valued at about $1.2 trillion. It also far outstrips the combined worth of five of the largest Western companies, Exxon Mobil, Chevron, Total, BP and Royal Dutch Shell.
Analysts attribute Aramco’s high valuation in part to its unmatched profitability. The company reported $68 billion in net income for the first nine months of 2019. Aramco marries very low costs — largely attributable to its matchless oil fields — to far higher output than any other oil company, resulting in a cash-spewing machine.
In these early days, analysts say, the company may also be benefiting from a different trading environment than experienced by its publicly listed Western rivals. The Saudi exchange is relatively small, and only around 1.5 percent of Aramco shares are being traded. With the government and Saudi banks doing whatever they can to encourage and prod investors to buy and hold on to the shares, there is little surprise, analysts say, that their price has been rising.
Local brokers say Saudi investors believe that the national oil company has a bright future, whereas their counterparts in the United States and Europe are becoming increasingly skeptical about the prospects of fossil-fuel companies as concerns about climate change grow.
Even with the $2 trillion mark reached, the prince has not achieved all that he set out to do. For instance, he has fallen short of his goal to bring in international investor funds for schemes like his giant real estate projects and other efforts to diversify the economy away from oil.
“The victory has been somewhat Pyrrhic, with Saudi rather than overseas institutional investors participating in the initial I.P.O.,” analysts from Bernstein, a market research firm, wrote in a note to clients on Thursday.
Analysts say the shares may remain at what some consider elevated levels for some time. Saudi retail investors, for instance, are being offered a bonus share for every 10 shares they buy and hold for six months up to a ceiling of 100 shares — an incentive not to sell. And the government is determined that the I.P.O. be scored a success and that the millions of Saudis who invested do not have cause for regret.
There are signs that traders are using the government’s support of Saudi Aramco’s stock to make almost risk-free bets. For instance, Boubyan Petrochemical, a Kuwaiti company, revealed in a Kuwaiti stock market disclosure on Thursday that it had sold about 3.3 million shares of Saudi Aramco stock, reaping 1.6 million Kuwaiti dinars in profit, or about $5.3 million.
These short-term effects may eventually wear off, though the Saudi government will be reluctant to see local investors burned after they bought into the crown prince’s prize project.
“Aramco could trade in a league of its own for some time, but the stock market is a weighing machine in the long term and the laws of economic gravity will eventually apply,” the Bernstein analysts wrote. 

Dec 4, 2019

Energy | Oil News: Deeper oil cuts and stricter compliance top agenda as OPEC+ gathers in Vienna

Sam Meredith



An upcoming meeting between OPEC and non-OPEC allies could see the group deepen oil production curbs, energy analysts told CNBC, although an extension of existing cuts and an emphasis on stricter compliance is still seen as the more likely outcome.
OPEC members will host a meeting in Vienna, Austria on Thursday to discuss the next phase of their oil production policy. The 14-member group will then hold talks with non-OPEC allies on Friday.
The wider group, sometimes referred to as OPEC+, has reduced output by 1.2 million barrels per day (b/d) since the beginning of the year. The current deal, which runs through to March 2020, replaced a previous round of production cuts that began in January 2017.
“I think there is a possibility that we see around 400,000 barrels per day deeper cuts,” Amrita Sen, chief oil analyst at Energy Aspects, told CNBC’s Dan Murphy in Vienna on Wednesday.
Saudi Arabia is definitely keen to surprise the market to the upside,” Sen said, but cautioned that deeper production cuts had “definitely not been firmed yet.”
International benchmark Brent crude traded at $61.98 on Wednesday afternoon, up more than 1.9%, while U.S. West Texas Intermediate (WTI) stood at $57.04, over 1.6% higher.
Brent crude prices have fallen more than 17% since an April peak, with WTI down around 14% over the same period.
“The physical market is extremely tight. I don’t think OPEC need to deepen cuts, however, the problem is sentiment is very weak,” Sen said, citing persistent concerns about demand amid an ongoing U.S.-China trade war.

Compliance quotas

OPEC kingpin Saudi Arabia is likely to push for a policy that would drive crude futures higher in order to help balance its budget and support pricing for the partial stock listing of state producer Saudi Aramco.
The initial public offering (IPO), which could be the world’s biggest, will be priced on Thursday.
Right here, right now, the oil market is in decent shape. It is not far off balanced.
Martijn Rats
Chief Oil Analyst at Morgan Stanley
On Monday, Reuters reported that Riyadh wanted to deliver a positive surprise to the market before the listing of Aramco, citing two sources familiar with the matter. The report indicated OPEC+ would add at least 400,000 b/d to the current deal.
Iraqi Oil Minister Thamer Ghadhban has also publicly suggested OPEC members were leaning toward approving deeper oil cuts this week.
However, Russia has so far been opposed to deeper cuts — as well as an even longer extension of output curbs.
A key OPEC ally, Moscow has typically adopted a tough stance before every meeting, with Saudi officials once again reportedly working to convince their Russian counterparts to approve a policy designed to prop up prices.
“I think the main focus of this OPEC meeting is actually going to be compliance — even more than whether they deepen cuts or not,” Sen said.
“Even if there are deeper cuts, I think they will be conditional on these laggards actually upping compliance. Now, of course that is very difficult to enforce,” she added, referring to Iraq, the United Arab Emirates and Nigeria.
Saudi Arabia has frequently called on Iraq and Nigeria, both fellow members of OPEC, to improve their respective compliance quotas. It is thought that both countries falling in line with the output curbs could provide an extra reduction of up to 400,000 b/d.
“I do not believe they are going to implement further production cuts, but they are going to make a special point on stricter compliance,” Tamas Varga, senior analyst at PVM Oil Associates, told CNBC via telephone.
The OPEC meeting with non-OPEC ministers on Friday will most likely “just confirm their co-operation. It is in the interests for both to manage the market.”

Downside risks

The actions of OPEC+ has frequently drawn the ire of President Donald Trump, who has often lashed out and demanded Saudi Arabia impose policies to lower oil prices.
In recent months, Trump has remained silent on OPEC.
“Right here, right now, the oil market is in decent shape. It is not far off balanced,” Martijn Rats, chief oil analyst at Morgan Stanley, told CNBC’s “Squawk Box Europe” on Friday.
“But if you look a little further into the future to the first and second quarter of next year, it looks increasingly likely that we will have to deal with quite considerable oversupply — at least if OPEC maintains its current output.”
When asked whether investors should brace for serious downside risks next year, Rats replied: “Well, a lot depends on the OPEC meeting that is coming up.”
“If OPEC were to decide to sort of broadly maintain current levels of output, yes. ... The way it currently looks to us is that the first half of next year looks problematic,” Rats said.

Nov 28, 2019

Energy | Oil | Oil Price Report: Oil falls as US rights bill fuels tensions with China

3-4 minutes - Source: CNBC




GP: US Oil workers Oil Boom in Texas's Permian Basin 1
Workers extracting oil from oil wells in the Permian Basin in Midland, Texas on May 1, 2018.
Benjamin Lowy | Getty Images

Oil prices fell for a second day on Thursday after official data showed U.S. crude and gasoline stocks rose and President Donald Trump signed into law a bill backing protesters in Hong Kong, fueling tensions with China.
Brent crude was down 19 cents, or 0.3%, at $63.87 a barrel by 0854 GMT, having dropped 0.3% on Wednesday.
West Texas Intermediate crude fell 33 cents, or 0.6%, to $57.78, after losing 0.5% in the previous session.
China warned the United States that it would take “firm countermeasures” in response to U.S. legislation backing anti-government protesters in Hong Kong.
Investors are concerned that the move might delay further a preliminary agreement between the United States and China to put an end to their trade war that has slowed global economic growth, and consequently consumption of oil.
“The approval of the Hong Kong legislation backing protesters is likely to put the trade agreement into question as China has reiterated its threat of retaliation,” said Hussein Sayed, chief market strategist at FXTM.
“If investors suspect that the trade agreement is under real danger, expect to see a sharp sell-off in December. For now, investors are taking a wait-and-see approach.”
Crude stockpiles in the United States swelled by 1.6 million barrels last week as production rose to a record 12.9 million barrels per day (bpd) and refinery runs slowed, the Energy Information Administration said. Analysts in a Reuters poll had forecast a drop of 418,000 barrels.
Investors have also been focusing on next week’s meeting of the Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+, which have been withholding production to support prices.
“We expect OPEC+ to roll over its current production-cut deal, which is set to expire at the end of March, by three to six months,” UBS oil analyst Giovanni Staunovo said. “The upshot is that deeper cuts by the entire membership are unlikely.”
Reuters reported that Russia may call on OPEC+ to exclude condensate — a high-premium light oil mainly extracted during gas production — from its crude oil production numbers.
Russian Energy Minister Alexander Novak said on Thursday there was no decision yet on this issue.

“We are holding discussions, making calculations,” Novak told reporters.
In the United States, energy services company Baker Hughes reported that the country’s oil drillers reduced the number of drilling rigs for a record 12th month in a row.

Nov 27, 2019

Energy | Oil | Oil Price Report: Oil snaps 2-day win streak on surprise US inventory build

3-4 minutes - Source: CNBC




GP: Tullow Oil 190812 EU
The Tullow Oil Plc Prof. John Evans Atta Mills Floating Production Storage and Offloading vessel sits docked in Singapore on Jan. 21, 2016.
Nicky Loh | Bloomberg | Getty Images
Oil eased on Wednesday after a report showing U.S. crude inventories grew unexpectedly last week and gasoline stocks surged, but losses were limited by optimism that a U.S.-China trade deal would be reached soon.
Brent crude futures fell 27 cents, or 0.4%, to settle at $64.00 a barrel. U.S. West Texas Intermediate crude fell 30 cents, or 0.5%, to settle at $58.11 a barrel.
WTI trade volumes were also on track to be lower for the week ahead of the U.S. Thanksgiving holiday.
U.S. crude stocks swelled by 1.6 million barrels last week as production hit a record high at 12.9 million barrels per day and refinery runs slowed, the Energy Information Administration said. Analysts in a Reuters poll had forecast a drop of 418,000 barrels.
The more bearish news from the EIA was that U.S. gasoline inventories soared 5.1 million barrels, compared with expectations for a 1.2 million-barrel gain.
U.S. gasoline futures dropped 3.63 cents, or 2.1%, to $1.67 a gallon.
“Overall, the inventories were disappointing, led by a much greater-than-expected increase in gasoline inventories,” said Andy Lipow, president of Lipow Oil Associates in Houston. “That’s definitely leading the way down.”
Oil prices pared losses slightly after a report showing U.S. oil drillers reduced the number of drilling rigs for a record 12 months in a row, despite fresh production highs.
Drillers cut three oil rigs in the week to Nov. 27, bringing the total count down to 668, the lowest since April 2017, energy services firm Baker Hughes Co said in data released two days early due to the U.S. Thanksgiving holiday on Thursday.
Hopes that Beijing and Washington would strike a trade deal limited losses in oil.
Prices had risen for the last two days on expectations that China and the United States, the world’s two biggest crude users, would soon sign a preliminary agreement, signalling an end to their 16-month trade dispute.
“Trade deal optimism persists,” said Tamas Varga of oil broker PVM. “The belief in a positive trade deal continues unabated.”
That was fuelled by comments from U.S. President Donald Trump on Tuesday, who said the United States and China were close to agreement after top negotiators spoke by telephone and agreed to keep working on remaining issues.
Expectations that the Organization of the Petroleum Exporting Countries and allies such as Russia will maintain their deal to restrain supply have supported prices.
The producers, known as OPEC+, hold their next oil policy review meetings on Dec. 5-6 in Vienna. They are expected to extend their supply cut agreement further into 2020.

Nov 26, 2019

Energy | Oil | Oil Price Report: Oil gains nearly 1% as optimism returns on US-China trade talks

3minutos - Source: CNBC




GP: Iran Salman Oil Field 190422
Workers cross walkways between zones aboard an offshore oil platform in the Persian Gulf’s Salman Oil Field, near Lavan island, Iran, on Jan. 5. 2017.
Ali Mohammadi | Bloomberg | Getty Images
Oil prices edged higher after news that U.S. and Chinese officials discussed trade on Tuesday, while predictions for a weekly draw on U.S. crude stockpiles lent some support as well.
Brent crude, the international price benchmark, gained 60 cents, or 0.9%, to settle at $64.25, while West Texas Intermediate crude gained 40 cents, or 0.7%, to settle at $58.41.
Top U.S. and Chinese trade negotiators held a phone call on Tuesday morning, China’s commerce ministry said, as the two sides try to hammer out a so-called Phase 1 deal in a trade war that has dragged on for 16 months.
In the last few months, markets have swung back and forth, rallying on headlines suggesting the barest progress, even as an agreement has still not been nailed down.
The discussions are taking place amid heightened tensions, with China saying it had summoned the U.S. ambassador on Monday to protest against the passage in the U.S. Congress of the Hong Kong Human Rights and Democracy Act.
“The main support for prices is the idea that if we get an easing in the trade war, the fear of slowing conditions and the impact on oil and fuel demand growth will be taken out of the market,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.
On the supply side, the Organization of the Petroleum Exporting Countries (OPEC) meets in Vienna on Dec. 5, followed by talks with the broader OPEC+ group featuring other producers that have agreed to cut output, including Russia.
The head of the International Energy Agency told Reuters that OPEC countries should make the right decision for a “very fragile” global economy.
Predicting strong oil production growth from the non-OPEC countries, especially the United States, Brazil, Norway and Guyana, Fatih Birol said: “There will be lots of oil in the markets. I hope they will make the right decision for themselves and for the global economy.”
U.S. crude stockpiles were expected to have declined 400,000 barrels last week, according to a Reuters poll of analysts, ahead of reports from the American Petroleum Institute (API), an industry group, on Tuesday, and the Energy Information Administration (EIA) on Wednesday.

Nov 18, 2019

Energy | Oil | Oil Price Report: Oil falls more than 1% as trade uncertainty, oversupply concerns weigh

3minutos - Source: CNBC




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An employee holds a control panel as barrels are filled with lubricant oil in Torzhok, Russia, on March 21, 2014.
Andrey Rudakov | Bloomberg | Getty Images
Oil prices fell more than 1% on Monday, erasing last week’s gains and tumbling alongside U.S. stocks on uncertainty over a trade deal between the United States and China.
Brent crude futures fell 95 cents, or 1.5%, to settle at $62.35. West Texas Intermediate (WTI) crude fell 67 cents, or 1.2%, to settle at $57.05.
Wall Street’s three main stock indexes also fell from last week’s record highs following a report that stoked concerns a U.S.-China trade deal might not get through, which pushed oil prices lower, analysts said.
“Crude has become highly reactive to whichever way the wind is blowing in the (U.S.-China) trade talks. When it falters, prices get punished,” said John Kilduff, a partner at Again Capital LLC in New York. “This headwind of slack demand growth keeps holding us back.”
The 16-month trade war between the world’s two biggest economies has slowed global growth, prompting analysts to lower forecasts for oil demand growth and raising concerns that a supply glut could develop in 2020.
China and the United States had “constructive talks” on trade in a high-level call on Saturday, state media Xinhua reported on Sunday, but it gave few other details.
On Monday, CNBC quoted a Chinese government source saying the mood in Beijing about a trade deal was pessimistic due to U.S. President Donald Trumps reluctance to roll back on tariffs.
“The souring trade situation has put a halt to the rally,” said Robert Yawger, director of energy futures at Mizuho in New York, adding crude prices had risen earlier in the session but faded when New York markets opened.
Expectations of lower seasonal demand for gasoline in the United States also weighed on oil prices, said Andy Lipow, president of Lipow Oil Associates in Houston.
Concerns about plentiful crude supplies in 2020 weighed on the market, which expects OPEC to extend production cuts in early December to help avoid a new global glut.
The Organization of the Petroleum Exporting Countries (OPEC) said last week it expected demand for its oil to fall in 2020, supporting a view that there is a case for the group and other producers like Russia - collectively known as OPEC+ - to maintain limits on production.
OPEC+ is due to discuss output policy at a meeting on Dec. 5-6 in Vienna. Their existing production deal runs until March.

Nov 15, 2019

Energy | Oil | Oil Price Report on Friday 15, November 2019: Oil gains 1.7%, shrugging off rising supply concerns

3-4 minutos - Source: CNBC




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Employees pass beneath pipes leading to oil storage tanks in Russia on February 4, 2014.
Andrey Rudakov | Bloomberg | Getty Images

Oil futures gained nearly 2% on Friday as comments from a top U.S. official raised optimism for a U.S.-China trade deal, but worries about increasing crude supplies capped prices.
Benchmark Brent crude gained $1.03, or 1.7%, to settle at $63.31 a barrel, while West Texas Intermediate crude rose 95 cents, or 1.7%, to settle at $57.72 a barrel. Brent and WTI both posted their second straight weekly gain.
U.S. Commerce Secretary Wilbur Ross said in an interview on Fox Business Network on Friday that there was a very high probability the United States would reach a final agreement on a phase one trade deal with China.
“We’re down to the last details now,” Ross said.
U.S.-China trade talks were set to continue with a telephone call on Friday.
A monthly report from the International Energy Agency weighed on prices, after it estimated that non-OPEC supply growth would surge to 2.3 million barrels per day (bpd) next year compared with 1.8 million bpd in 2019, citing production from the United States, Brazil, Norway and Guyana.
“Today’s monthly IEA release offered some bearish aspects in the form of an unexpected upward adjustment in non-OPEC oil supply growth for next year that briefly forced WTI values to below yesterday’s lows,” said Jim Ritterbusch, president of Ritterbusch and Associates.
OPEC Secretary General Mohammad Barkindo had painted a more upbeat picture earlier this week, saying growth in rival U.S. production would slow in 2020, although a report by the group had also said demand for OPEC oil was expected to dip.
OPEC said demand for its crude would average 29.58 million barrels per day (bpd) next year, 1.12 million bpd less than in 2019, pointing to a 2020 surplus of about 70,000 bpd.
The Organization of the Petroleum Exporting Countries and its allies have cut supply to prop up prices and are expected to discuss output policy at a meeting on Dec. 5-6 in Vienna. Their existing production deal runs until March.
U.S. production has continued climbing. The country’s crude oil output hit a record 13 million bpd this month and will grow more than expected in 2019 and 2020, the U.S. Energy Information Administration said in a forecast issued on Wednesday.
However, rising U.S. output and competition from production in Brazil, Norway and Guyana next year has been squeezing profits for U.S. shale producers, which plan another spending freeze in 2020 and a slowdown in production growth.
U.S. energy firms this week reduced the number of oil rigs operating for a fourth week in a row, cutting 10 oil rigs in the week to Nov. 15, energy services firm Baker Hughes Co said on Friday. The total count is now 674, the lowest since April 2017.

Nov 14, 2019

Energy | Oil | Oil Price Report: Oil falls on US crude stocks build, OPEC shale growth comments

3minutos - Source: CNBC




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The Sedco 714 oil platform, operated by Transocean, stands in the Port of Cromarty Firth in Cromarty, United Kingdom, on February 16, 2016.
Matthew Lloyd | Bloomberg | Getty Images
Oil reversed early gains to move lower on Thursday as a build in U.S. crude inventories weighed on prices, while comments from the Organization of the Petroleum Exporting Countries about lower-than-expected U.S. shale production in 2020 limited declines.
Prices were also capped by mixed signs for oil demand in China, the world’s biggest crude importer. Industrial output rose more slowly than expected in October, but oil refinery throughput hit the second-highest level on record.
Brent futures hovered around breakeven at $62.36 per barrel, while West Texas Intermediate crude futures lost 17 cents to trade at $56.95.
U.S. crude stockpiles grew last week by 2.2 million barrels, compared with analysts’ expectations in a Reuters poll for a 1.649 million-barrel rise, the Energy Information Administration said.
The report was delayed a day for the U.S. Veterans Day holiday on Monday.
“U.S. production is still very robust. We might be over-producing a bit and leaving it sitting in the storage tanks,” said Ryan Kaup, a commodities broker at CHS Hedging. “The market is reacting a little bit negatively to the build as it’s not what it expected.”
OPEC Secretary General Mohammad Barkindo said on Wednesday that there would likely be downward revisions of supply going into 2020, especially from U.S. shale.
Barkindo said it was too early to say whether further output cuts would be needed.
OPEC on Thursday pointed to a smaller surplus in the oil market next year although it still expects demand for its crude to drop as rivals pump more.
The drop in demand could press the case for the exporter group and partners like Russia to maintain supply curbs at a meeting on Dec. 5-6.
“The countdown to the meeting of the OPEC countries has started, and the question of whether the group and its allies will further cut supplies is top of mind,” said Norbert Rucker, head of economics at Swiss bank Julius Baer.
“Current market conditions are testing the petro-nations patience and cohesion ... Any major change in policy would come as a surprise.”

Nov 13, 2019

Energy | Oil | Oil Price Report: Oil edges up ahead of U.S. storage data as OPEC, Fed see robust economy

3-4 minutos - Source: CNBC




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Cowboy farmer and oil pumpjack
Getty Images
Oil prices edged up on Wednesday after the Organization of the Petroleum Exporting Countries said it saw no signs of global recession and rival U.S. shale oil production could grow by much less than expected in 2020.
Also supporting prices were comments by Federal Reserve Chair Jerome Powell, who said the U.S. economy would see a “sustained expansion” with the full impact of recent interest rate cuts still to be felt.
“The baseline outlook remains favorable,” Powell said.
Brent crude futures gained 61 cents to trade at $62.67, having fallen by over 1% earlier in the day. U.S. West Texas Intermediate crude was at $57.46 per barrel, gaining 66 cents or 1.2%.
Analysts said WTI was up more than Brent ahead of storage data from the U.S. Energy Information Administration (EIA) on Thursday that is expected to show a supply draw at the Cushing hub in Oklahoma and a smaller than normal increase in total U.S. crude stocks.
“We look for WTI to be better supported than the rest of the complex ahead of tomorrows weekly EIA report,” Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois, said in a report.
OPEC Secretary General Mohammad Barkindo said global economic fundamentals remained strong and that he was still confident the United States and China would reach a trade deal.
“It will almost remove that dark cloud that had engulfed the global economy,” Barkindo said, adding it was too early to discuss the output policy of OPEC’s December meeting.
He also said some U.S. companies were now saying oil production would grow by just 0.3-0.4 million barrels per day next year - or less than half of previous expectations - reducing the risk of an oil glut next year.
U.S. President Donald Trump said on Tuesday Washington and Beijing were close to finalizing a trade deal, but he fell short of providing a date or venue for the signing ceremony.
“The expectations of an inventory build in the U.S. and uncertainty over the OPEC+ strategy on output cuts and U.S./China trade deal are weighing on oil prices,” said analysts at ING, including the head of commodity strategy Warren Patterson.
In the United States, analysts forecast crude oil inventories climbed 1.6 million barrels last week, which would be the third weekly increase in a row, according to a Reuters poll on Tuesday.
That compares with a 10.3 million barrel build during the same week in 2018 and a five-year average increase for the week of 3.7 million barrels.
ANZ analysts said the prospects for U.S. crude exports had turned bleak after shipping rates jumped last month.
The American Petroleum Institute (API) is scheduled to release its data for the latest week at 4:30 p.m. EST on Wednesday, while the weekly report from the U.S. Energy Information Administration (EIA) is due at 11:00 a.m. EST on Thursday. Both reports were delayed by a day for the U.S. Veterans Day holiday on Monday.

Nov 12, 2019

Energy | Oil | Oil Price Report: Oil pares gains on US-China trade doubts

3-4 minutos - Source: CNBC




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Deck hands on a natural gas drilling rig on June 6, 2007, outside of Artesia, in eastern New Mexico.
Robert Nickelsberg | Getty Images News | Getty Images
Oil prices steadied after rising about 1% on Tuesday following a speech from U.S. President Donald Trump that offered few new details about Washington’s trade talks with Beijing.
Concerns about slower economic growth and oil demand due to the fallout from the 16-month trade dispute between the world’s two biggest economies pressured oil.
Brent crude futures, the global benchmark, fell 8 cents to settle at $62.10 a barrel. West Texas Intermediate (WTI) crude shed 8 cents to settle at $56.80 a barrel.
Prices eased from earlier gains after Trump’s remarks to a lunch gathering of The Economic Club of New York included mixed messages about U.S.-China trade talks and excluded specifics about any progress in negotiations.
The U.S. president said on Saturday that talks with China were moving along “very nicely” but the United States would make a deal only if it was the right one. He said there had been incorrect reporting about U.S. willingness to lift tariffs.
Prices received earlier support from U.S. data that showed crude inventories at Cushing, the delivery point for WTI, fell by about 1.2 million barrels in the week to Nov. 8, traders said, citing market intelligence firm Genscape.
Inventories at the hub were expected to draw down after a more than 9,000-barrel leak forced the 590,000-barrel-per-day Keystone crude pipeline to be shut in late October. The line has since been restarted at reduced pressure.
Cushing inventories had grown for five weeks in a row through Nov. 1, according to government data.
However, crude stockpiles nationwide were forecast to have risen last week for a third week in a row, a preliminary poll ahead of government data due on Thursday showed. Weekly energy data has been delayed a day due to the Veterans Holiday on Monday.
Brent has risen 16% in 2019, supported by a supply-limiting pact by the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia. The producers meet on Dec. 5-6 to decide whether to extend the deal.
Oman, one of the outside producers working with OPEC, said on Monday that the alliance would probably extend the agreement but was unlikely to increase the size of the supply cut.
In a further supportive supply-side development, Goldman Sachs cut its 2020 forecast for growth in U.S. oil production, which has surged in recent years and helped keep a lid on prices.
“The market is stuck between a perception of 2020 oversupply and strengthening physical markets for oil globally,” said Scott Shelton, a broker at ICAP in Durham.

Nov 11, 2019

Energy | Oil | Oil Price Report: Oil falls after Trump downplays optimistic China trade reports

3minutos - Source: CNBC




GP: Azerbaijan Oil Industry 191008
Azeri oil workers operate a large field of drilling rigs on October 12, 2003 outside the capital city of Baku.
Oleg Nikishin | Getty Images
Oil prices dipped on Monday after U.S. President Donald Trump appeared to downplay reports of an imminent lifting of tariffs in a protracted U.S.-China trade war.
Brent crude was down 17 cents at $62.34. The contract gained 1.3% last week.
U.S. crude was 26 cents lower at $57.00 a barrel, having risen 1.9% last week.
Trump said on Saturday that trade talks with China were moving along “very nicely” but the United States would only make a deal with Beijing if it was the right one for America.
Trump also said there had been incorrect reporting about U.S. willingness to lift tariffs as part of a “phase one” agreement, news of which had boosted markets.
The 16-month trade war between the world’s two biggest economies has slowed economic growth around the world and prompted analysts to lower forecasts for oil demand, raising concerns that a supply glut could develop in 2020.
“We expect the sideward trading to continue for the time being, with the trade conflict headlines likely to dictate the direction,” Commerzbank said in a note.
Oil futures often trade in tandem with shares. Equities across the globe fell on Monday on the escalating violence in Hong Kong. Asian stocks had their worst day since August.
Underlining the impact of the trade war, data over the weekend showed that China’s producer prices fell the most in more than three years in October.
Auto sales in China fell for a 16th consecutive month in October, data showed on Monday.
Investors are also concerned about excess supplies of crude, analysts said.
The oil market outlook for next year may have upside potential, OPEC Secretary-General Mohammad Barkindo said last week, suggesting there is no need to cut output further.
The Organization of the Petroleum Exporting Countries and its allies led by Russia meet in early December. The so-called OPEC+ alliance has since January cut output by 1.2 million barrels per day under a deal set to last until March 2020.
Lukoil, Russia’s second-biggest oil producer, expects the global oil production cut deal, known as OPEC+, to be extended, its chief said on Monday.
Meanwhile, in North America, TC Energy’s 590,000-barrel-per-day Keystone oil pipeline has returned to service, operating at reduced pressure with a gradual increase of volumes.

Nov 10, 2019

Energy: Saudi Aramco will offer less than 1% of shares to individual investors in IPO

Ted Kemp, Spencer Kimball, Joanna Tan

4-5 minutos - Source: CNBC



RT: Saudi Aramco IPO 191103
Signage of Saudi Aramco’s initial public offering (IPO) is seen during a news conference by the state oil company at the Plaza Conference Center in Dhahran, Saudi Arabia November 3, 2019.
Hamad Mohammed | Reuters

Saudi Aramco will sell up to 0.5% of its shares to individual investors in what could be the largest initial public offering in history.
The world’s biggest oil company released a prospectus Saturday, providing further information but without revealing the precise size of its planned share offering.
Saudi Aramco said the process begins Nov. 17 and closes Dec. 4. A final offer price, as well as the number and percentage of company shares that will be sold, will be determined at the end of that period.
The prospectus says individual investors will have until Nov. 28 to request shares, noting that “up to 0.5%” of the company’s shares will be allocated to individual investors.
Saudi Aramco confirmed plans to pay annual, aggregate cash dividends of at least $75 billion starting in calendar year 2020, in addition to any special dividends.
However, investors can’t yet gauge the value of those dividends’ yield relative to other companies until they can clearly assess the valuation of Saudi Aramco and its shares. Dividend investors are attracted to steady returns, and they try to put their money into stocks with the best yields.
Exxon Mobil shares have a dividend yield of 4.92%, based on their Friday closing price of $70.77 per share. Chevron’s yield stands at 3.94%, and BP comes in at 6.28%.
The Saudi government will face a lockup period of six months on further sales of shares after Aramco’s public offering. The IPO is being underwritten by J.P. Morgan, Goldman Sachs, Citigroup and Morgan Stanley, among others.
Aramco said last week that it plans to float its shares on the Saudi Stock Exchange — known as the Tadawul — in December.
Analysts’ valuations of the company have varied from $1.2 trillion to $2.3 trillion. In comparison, Aramco’s closest U.S. rival, Exxon Mobil, has a market cap of nearly $300 billion and Chevron is valued at about $229 billion.
The much-anticipated IPO was first flagged in 2016 by the government of Saudi Arabia, and has faced multiple delays, reportedly amid concerns its finances would be publicly scrutinized. Drone attacks on its key oil facilities in September also raised worries about security and threatened to jeopardize its planned listing.
Aramco warned that terrorism and armed conflict could materially impact the market price of its shares.
Aramco President and CEO Amin Nasser told CNBC last week that the company’s public debut will help diversify the kingdom’s economy. The move could also strengthen Saudi Arabia’s stock exchange by drawing domestic and international investment.

Dual listing?

There have been reports Aramco may undertake a dual listing. Its chairman, Yasir al-Rumayyan, said at a news conference last week that the international listing would be decided on “going forward.”
Some predicted that between 1% and 2% of the company will be listed domestically, and another part listed on a major international exchange later. Stock exchanges from New York and London to Hong Kong and Tokyo have all been vying for Aramco’s international debut. The prospectus released Saturday did not address any of these issues
The public listing of Aramco — officially known as the Saudi Arabian Oil Co. — is part of the “Saudi Vision 2030,” an economic reform plan spearheaded by Saudi Crown Prince Mohammed bin Salman.
The young ruler has ambitious plans to steer the kingdom’s economy away from its heavy reliance on oil, and develop non-oil sectors like tourism, health care and mining.
Saudi Arabia has huge oil reserves of more than 260 billion barrels. The kingdom is one of the top producers and exporters of petroleum globally, and owns some 18% of the world’s proven petroleum reserves. The oil and gas sector comprises half the country’s gross domestic product and some 70% of its export earnings.

Nov 9, 2019

Energy | Oil | Oil Price Report on Friday 8, November 2019: Oil ends the week higher, shrugging off inventory build and trade uncertainty

3-4 minutos - Source: CNBC




GP: Oil tank North Dakota 190926
A photo taken August 19, 2013 shows a worker checking oil tanks at an oil well near Tioga, North Dakota.
Karen Bleier | AFP | Getty Images
Oil prices pared losses on Friday, ultimately finishing the session higher while also posting a gain for the week. Earlier in the session prices fell more than 1% following comments from U.S. President Donald Trump that he has not agreed to roll back tariffs on China.
Brent crude, the global benchmark, gained 26 cents to settle at $62.56 a barrel, after gaining 0.9% in the previous session. U.S. West Texas Intermediate (WTI) crude gained 9 cents, or 0.2%, to settle at a 6-week high of $57.24.
Prices pared losses in midday trade, after Brent reached a session low of $60.66 a barrel and WTI sank to $55.76 a barrel.
“Given the volatility around the U.S.-China trade saga, it’s hard to be short over the weekend,” said John Kilduff, a partner at Again Capital LLC. “The turn of a phrase could restore the very hopes that were dashed just last night over a deal being struck.”
The 16-month trade war between the world’s two biggest economies has slowed economic growth around the world and prompted analysts to lower forecasts for oil demand, raising concerns that a supply glut could develop in 2020.
Oil prices fell earlier on Friday after Trump told reporters he has not agreed to roll back tariffs on China but that Beijing would like him to do so.
The comments come after officials from both countries on Thursday said China and the United States have agreed to roll back tariffs on each others’ goods in a “phase one” trade deal if it is completed.
Yet Reuters reported on Thursday the plan faced stiff internal opposition in the U.S. administration. U.S. officials have signaled opposing views on the status of talks.
Oil prices have also been under pressure since OPEC Secretary-General Mohammad Barkindo said this week that he was more optimistic about the outlook for 2020, appearing to downplay any need to cut output more deeply.
A deal between the Organization of the Petroleum Exporting Countries and allies, such as Russia, will limit supplies until March next year. The producers meet on Dec. 5-6 in Vienna to review that policy.
“Even if a partial (U.S.-China) agreement is reached, the impetus for demand will not be enough to avoid an oversupply next year, meaning that OPEC will still need to make bigger production cuts,” Commerzbank said in a note.
While customs data showed that China’s crude oil imports in October rose 11.5% from a year earlier to a record high, bearish signals elsewhere tempered the news.
U.S. crude oil stockpiles rose sharply last week as refineries cut output and exports dropped, the Energy Information Administration said on Wednesday.
Meanwhile, U.S. energy firms this week reduced the number of oil rigs operating for a third week in a row. Drillers cut seven rigs in the week to Nov. 8, bringing the total count down to 684, the lowest since April 2017, General Electric Co’s Baker Hughes energy services firm said.

Nov 7, 2019

Energy | Oil | Oil Price Report: Oil rebounds on hopes for US-China trade deal

3minutos - Source: CNBC




GP: Tullow Oil 190812 EU
The Tullow Oil Plc Prof. John Evans Atta Mills Floating Production Storage and Offloading vessel sits docked in Singapore on Jan. 21, 2016.
Nicky Loh | Bloomberg | Getty Images
Brent crude rose above $62 a barrel on Thursday after China hinted at progress towards a trade deal with the United States, raising hopes for an end to a long dispute that has weighed on economic growth and fuel demand.
China and the United States have agreed in the past two weeks to cancel tariffs in different phases, the Chinese commerce ministry said on Thursday without giving a timeline.
The trade dispute has prompted analysts to lower forecasts for oil demand and raised concerns that a supply glut could develop in 2020. Oil fell on Wednesday, partly because of worries that a U.S.-China trade deal might be delayed.
“Today we start with a different set of headlines that they came to some agreement on the framework,” said Olivier Jakob, oil analyst at Petromatrix. “That is definitely what is supporting prices.”
Brent crude, the global benchmark, rose 87 cents to $62.63 after settling down $1.22 on Wednesday. West Texas Intermediate crude climbed $1.30, or 2.3%, to $57.65.
Beijing’s comments boosted market sentiment, which had also been ruffled by Wednesday’s U.S. government supply report showing crude inventories rose last week by 7.9 million barrels, much more than expected by analysts.
Brent has rallied 15% in 2019, supported by a deal between the Organization of the Petroleum Exporting Counties and allies such as Russia to limit supplies until March next year. The producers meet on Dec. 5-6 in Vienna to review the policy.
OPEC Secretary-General Mohammad Barkindo said this week he was more optimistic about the outlook for 2020 because of developments on trade disputes, appearing to downplay any need to cut output more deeply.
Still, doubts about a trade deal could resurface, analysts said. Reuters reported on Wednesday a meeting between U.S. President Donald Trump and Chinese President Xi Jinping to sign the deal could be delayed to December, contributing to oil’s decline.
“Doubts are not yet turning into full-blown concerns,” said Craig Erlam, analyst at brokerage OANDA. “If a date isn’t set in stone soon though, that may come.”

Nov 6, 2019

Energy | Oil | Oil Price Report: Oil prices slide on U.S. crude build, euro zone data

2-3 minutos - Source: CNBC




GP: Oil refinery at Corio silhouetted at sunset 190923
Oil refinery at Corio, Australia silhouetted at sunset.
Richard I’Anson | Lonely Planet Images | Getty Images

Oil prices fell on Wednesday after a larger-than-expected build in U.S. crude inventories and weak euro zone economic figures, reversing some of the gains of the previous three sessions.
Brent crude fell 21 cents, or 0.4%, to trade at $62.75 a barrel. West Texas Intermediate crude lost 44 cents, or 0.78%, to trade at $56.80.
U.S. crude oil inventories increased by 7.9 million barrels from the previous week, according to the U.S. Energy Information Administration. This was higher than the 1.5 million barrels that analysts had been expecting.
“Oil prices are slightly under pressure following API’s larger-than-expected crude build on Tuesday. Market participants will closely monitor if the build is confirmed by the EIA later today, considering that last week API had a crude draw and the EIA a crude build,” said Giovanni Staunovo, oil analyst for UBS.
The United States and China, the world’s two biggest oil consumers, are working to narrow their differences enough to sign a “phase one” trade deal as early as this month to resolve a trade war that has slowed global growth.
Data on Wednesday showed Germany’s services sector barely grew in October, while euro zone business activity expanded slightly faster than expected last month, but remained close to stagnation.
Adding to Middle East tensions, Iran started to inject uranium gas into centrifuges at an underground nuclear facility, further distancing itself from a 2015 nuclear deal between Tehran and world powers that curbed its atomic work.
Last year, U.S. President Donald Trump exited the deal and renewed sanctions on Tehran, slashing Iran’s economically vital crude oil sales by more than 80%.
“Alongside the continued rolling back of its nuclear commitments, the OPEC nation may be tempted to cause further supply disruptions in the Middle East in a bid to drive up prices,” PVM analyst Stephen Brennock said. “Accordingly, conditions are ripe for tensions in the region to escalate and for the geopolitical risk premium to strike back with a vengeance.”

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Bonds | Treasury Yields (Morning Edition): 10 Year Treasury Yield hit 1.6%, after the stimulus of 1.9 passed on Saturday by Vicky McKeever.

  cnbc.com 10-year Treasury yield rises to 1.6% after Senate passes stimulus package Vicky McKeever ...