OIL Price Report (morning Edition): Oil Prices Climb on Monday.

 cnbc.com

Oil prices climb after progress on huge U.S. stimulus bill

Reuters

2-3 minutes

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Oil prices rose more than $1 on Monday on optimism in the global economy thanks to progress in a huge U.S. stimulus package and on hopes for improving oil demand as vaccines are rolled out.

Brent crude futures for May rose 63 cents, or 0.98%, to $65.05 per barrel. U.S. West Texas Intermediate (WTI) crude futures jumped 58 cents, or 0.94%, to $62.08 per barrel.

"Oil prices are recovering this morning in line with most risk assets on the back of the U.S. stimulus bill passing the House and as central banks continue to sabre rattle to ward off market-implied financial tightening," Stephen Innes, chief global markets strategist at Axi, wrote in a note on Monday.

U.S. House of Representatives passed a $1.9 trillion coronavirus relief package early Saturday. Democrats who control the chamber approved the sweeping measure by a mostly party-line vote of 219 to 212 and sent it to the Senate, where Democrats planned a legislative maneuver to allow them to pass it without the support of Republicans.

More positive news on the coronavirus vaccination front and signs of an improving Asian economy also boosted prices.

A U.S. Centers for Disease Control and Prevention advisory panel voted unanimously on Sunday to recommend Johnson & Johnson's COVID-19 shot for widespread use, and U.S. officials said initial shipments would start on Sunday.

J&J expects to ship more than 20 million doses by the end of March and 100 million by midyear, enough to vaccinate nearly a third of Americans.

Over in Japan, a private survey showed factory activity expanding at the fastest pace in over two years in February, adding to signs of a rebound in Asian growth.

On the flip side, investors are betting that this week's meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies, a group known as OPEC+, will result in more supply returning to the market.

"More supply needs to come onto the market to ensure OPEC+ meets incremental demand and keeps internal discipline ducks in a row," Innes added.

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Oil

 cnbc.com

Oil jumps more than 2% as supply cuts take effect

Reuters

3 minutes

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Flames burn off at an oil processing facility in Saudi Aramco's oilfield in the Rub' Al-Khali desert in Shaybah, Saudi Arabia, in October 2018.

Simon Dawson | Bloomberg | Getty Images

Oil prices rose more than 2% on Monday, buoyed by falling U.S. crude inventories and rising winter fuel demand as a one of the worst snowstorms in years hits the U.S. Northeast.

Brent crude was up $1.22 cents, or 2.2%, at $56.26 a barrel. U.S. crude settled 2.59% higher at $53.55 per barrel. Both benchmarks gained nearly 8% in January.

U.S. government data last week showed a 2.3 million-barrel drawdown in stocks at the Cushing, Oklahoma, delivery hub for crude futures. Another 2.3 million-barrel weekly decline is expected since then, analysts and traders said citing a Wood Mackenzie report.

"Crude is being supported by many small factors this week - expected drawdowns in Cushing, a sudden rise in winter fuel demand amid colder weather, and further talks on Capitol Hill about stimulus checks," said John Kilduff, partner at Again Capital LLC in New York.

The U.S. Northeast has been hit by a powerful winter snow storm, pummeling a vast swath stretching from Pennsylvania through New England, causing widespread disruption in New York City and other major urban centers in the region.

Goldman Sachs said prices could rise to $65 by July, forecasting an oil market deficit of 900,000 barrels per day (bpd) in the first half of 2021, a higher level than its previous prediction of 500,000 bpd.

OPEC oil output rose for a seventh month in January, a Reuters survey found, after the group and its allies agreed to ease supply curbs further, although the production growth was smaller than expected.

Russian oil and gas condensate production also increased in January, two sources told Reuters on Monday, but the increase was in line with expectations, following Moscow's deal with OPEC on output cuts.

U.S. oil and gas drillers are gearing up for a pick-up in demand. As higher prices make new wells profitable again, they added rigs for a sixth month in a row in January.

U.S. production data from the Energy Information Administration showed output rose above 11 million bpd in November, the first time it has exceeded that figure since April.

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News | Business | Oil | OPEC: OPEC cuts 2020 oil demand forecast, trims 2021 outlook on pandemic fallout

Sam Meredith

4 minutes - Source: CNBC

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A oil tanker goods train passes towards Nizamuddin Railway Station near Ashram in New Delhi on July 30, 2020.
Mayank Makhija | NurPhoto via Getty Images

LONDON — OPEC has cut its forecast for oil demand growth this year, citing a weaker-than-expected recovery in India and other Asian countries, and warned risks remain “elevated and skewed to the downside” for the first half of next year.
In a closely-watched monthly report published Monday, the group of oil-producing nations downwardly revised its outlook for global oil demand to an average of 90.2 million barrels per day in 2020. That’s down 400,000 bpd from the previous month’s estimate and reflects a contraction of 9.5 million bpd year-on-year.
The report comes as energy market participants become increasingly concerned about a faltering economic recovery and stumbling fuel demand in the wake of the coronavirus pandemic.
The Middle East-dominated group, which consists of some of the world’s largest oil producers, said on Monday it had revised oil demand in OECD countries up by around 100,000 bpd due to less-than-expected declines in all sub-regions during the second quarter.
However, oil demand was revised down by 500,000 bpd in the non-OECD region due to weaker oil demand performance in Asia, particularly in India.
Looking ahead, OPEC said the negative impact on oil demand in Asia was expected to persist through the first six months of 2021.
“Additionally, risks remain elevated and skewed to the downside, particularly in relation to the development of Covid-19 infection cases and potential vaccines,” the group said in the report.
“Furthermore, the speed of recovery in economic activities and oil demand growth potential in Other Asian countries, including India, remain uncertain,” it added.
As such, OPEC now expects global oil demand to grow by 6.6 million bpd to an average of 96.9 million bpd next year. This updated forecast was also 400,000 bpd lower than its previous estimate.

International benchmark Brent crude traded at $39.76 a barrel on Monday, down around 0.2%, while U.S. West Texas Intermediate (WTI) stood at $37.26, roughly 0.1% lower.
Oil prices have dropped around 40% since the start of the year.

‘Dismal’ oil demand growth

Marking the group’s 60th anniversary, OPEC Secretary-General Mohammad Barkindo said on Monday that the coronavirus pandemic was “one of the greatest global challenges of modern times.”
“Beyond the terrible human suffering it has caused, it has triggered one of the worst global economic recessions and oil market downturns in OPEC’s history,” he added.
OPEC, alongside non-OPEC allies, a grouping known collectively as OPEC+, will meet on Sept. 17 to discuss oil production policy. The energy alliance has agreed to cut output by 7.7 million bpd until December.
“Infection rates are on the rise again, there are localized lockdowns introduced in a growing number of countries hindering regional economic growth and the number of unemployed is failing to fall significantly,” Tamas Varga, senior analyst at PVM Oil Associates, said in a research note published Monday.
“This leads to dismal oil demand growth as reflected in last week’s weekly and monthly EIA report.”
Earlier this month, the U.S. Energy Information Administration cut its outlook for 2021 global demand growth by 500,000 bpd on lower predicted consumption growth in China.

News | Oil | World Output: Oil producers expected to increase crude output

3minutes - Source: BBC

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Image copyright Getty Images

The world's leading oil producers are expected to announce an increase in output this week amid signs that demand is rising.
Oil cartel Opec is due to hold a meeting on Tuesday and Wednesday to discuss its next move.
Analysts predict major producers will agree to ease supply cuts that were imposed in April to prop up prices.
Opec and its allies, known as Opec+, cut daily oil output by 9.7m barrels as the pandemic saw demand collapse.
That agreement was made to help ease the effects of an oil glut caused by the lockdowns and to stabilise prices.
Brent crude, which is the global benchmark for oil, is down around 30% this year, while US-traded West Texas Intermediate (WTI) fell below zero at one point in April.
Expectations are growing that from next month those curbs will be reduced to 7.7m a day, meaning that output will increase by 2m barrels a day.
The more optimistic outlook comes after the International Energy Agency (IEA) last week suggested that the worst of the impact caused by coronavirus lockdowns may now be over.
In its monthly global energy report the IEA predicted a slight improvement in global demand for crude oil this year.
However, it also cautioned that much still depends on how the pandemic develops.
The report also noted that the resurgence of cases in some parts of the world, including the US and Latin America, was “casting a shadow” over the outlook and threatened to derail a recovery in demand.
"The recent increase in Covid-19 cases and the introduction of partial lockdowns introduces more uncertainty to the forecast," it said.
Singapore-based oil expert Vandana Hari cautioned about a swift recovery for the commodity. "Global oil demand is currently expected to come close to pre-coronavirus levels only in the second half of 2021.
It may not reach the exact levels until much later, as international air travel and jet fuel demand is not seen normalizing for the next 2-3 years," she said.
In the US, Florida has registered a state record of 15,299 new coronavirus cases in 24 hours - around a quarter of all of the United States' daily infections.
The US as a whole has been exceeding new daily totals of 60,000 cases for the past few days. Other states including Arizona, California and Texas continue to see a rising cases.

Oil: A historic production cut from global oil powers this week 'won't necessarily help all that much'

Sam Meredith

5-6 minutes - Source: CNBC

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Some of the world’s largest oil producers will meet to discuss a historic production cut later this week, with energy analysts split over the prospect of non-allied partners, including the U.S., signing up to a deal immediately thereafter.
An emergency meeting of OPEC and non-OPEC partners, sometimes referred to as OPEC+, will be held on Thursday, as the coronavirus pandemic continues to ravage global oil demand.
OPEC kingpin Saudi Arabia and non-OPEC leader Russia are seen as likely to agree to cut production in an effort to arrest an oversupplied market, but only on the condition that the U.S. joins a global pact, Reuters reported, citing unnamed sources.
President Donald Trump said Monday that OPEC hadn’t asked “that question” yet, but suggested U.S. oil production had already fallen anyway.
Crucially, G-20 energy ministers will convene for their own extraordinary meeting one day after OPEC+ producers sit down for talks.
International benchmark Brent crude traded at $33.87 a barrel Tuesday morning, up around 2.5%, while U.S. West Texas Intermediate (WTI) stood at $27.04, more than 3.7% higher.
Brent fell over 3% in the previous session, with WTI down more than 7% amid fading hopes of an unprecedented supply cut. Both benchmarks have fallen more than 50% from their January peak.

Martin Divisek | Bloomberg | Getty Images

Fatih Birol, executive director of the International Energy Agency, told CNBC’s “Street Signs” on Tuesday that he welcomed the prospect of G-20 oil producers meeting on Friday.
The G-20 meeting is “very important” for two reasons, Birol said. “One, even if this Saudi-Russia agreement would take place, and people talk about the 10 million barrels per day production cut, this will not be enough to address the big problem we are facing.”
The IEA chief warned that the energy agency expected stocks to build by about 15 million barrels per day this quarter, so a deal might put an “upbeat mood in the markets for a couple of days (or) couple of weeks, but people will realize there is still a huge amount of oil in the market.”
“The second (reason) … I think the world needs a global political response,” Birol said, before urging all of the world’s oil producers to make a “positive contribution” this week.

Saudi Arabia could let weaker competitors ‘wither’

The coronavirus pandemic has meant countries around the world have effectively had to shut down, with many governments imposing draconian measures on the daily lives of billions of people.
The restrictions have created an unprecedented demand shock in energy markets, just as a price war broke out between powerhouse producers Saudi Arabia and Russia.

Russian Energy Minister Alexander Novak and Saudi Energy Minister Abdulaziz Bin Salman sign documents during a ceremony following a meeting of Russian President Vladimir Putin with Saudi Arabia’s King Salman in Riyadh, Saudi Arabia, on October 14, 2019.
ALEXEY NIKOLSKY | SPUTNIK | AFP via Getty Images

Bjarne Schieldrop, chief commodities analyst at SEB, told CNBC via email that he was not optimistic about a deal to cut production this week, and even if there was one, “it won’t necessarily help all that much.”
Saudi Arabia will most likely look to keep production running between 12 million barrels per day and 13 million barrels per day, Schieldrop said, “letting weaker competitors wither or die” in the current market trough.
But, if there is a deal, a widely-based agreement involving both OPEC and G-20 members would probably cut roughly 10 million barrels per day when compared to first-quarter 2020 production levels.
“That will still leave the oil market with a very substantial production surplus, and even that will be of a magnitude the oil market has hardly ever seen before,” Schieldrop said.

‘Long list’ of possible complications

Energy analysts at Eurasia Group said some form of output cut was likely, despite a “long list” of possible complications that could still lead to a breakdown in talks.
“The most significant obstacle to an OPEC++ deal remains around U.S. policy and lack of clarity over Trump’s priorities … One of the key issues is reconciling Trump’s longstanding rejection of OPEC with his desire to stabilize the US oil industry.”
“The G-20 forum could provide space for a looser arrangement where explicit U.S. cuts are not necessarily required and market-led decreases in U.S. production can potentially be repackaged as a U.S. contribution,” Eurasia Group said.

Oil: OPEC and IEA warn developing countries could lose up to 85% of oil and gas income this year

Sam Meredith

3-4 minutes - Source: CNBC

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An employee stands at the Hammar Mushrif new Degassing Station Facilities site inside the Zubair oil and gas field, north of the southern Iraqi province of Basra on May 9, 2018.
Haidar Mohammed Ali | AFP | Getty Images

Developing countries’ oil and gas income could fall to their lowest levels in more than two decades if current energy market conditions persist, the IEA and OPEC have warned in a rare joint statement.
IEA Executive Director Fatih Birol and OPEC Secretary General Mohammed Barkindo expressed “deep concerns” about the coronavirus pandemic on Monday, warning it could have “potentially far-reaching economic and social consequences.”
Birol and Barkindo said they expect developing countries to see their oil and gas income fall by 50% to 85% in 2020.
They singled out public sector spending in vital areas such as health care and education as being especially vulnerable.
International benchmark Brent crude traded at $29.91 Tuesday morning, down around 0.7%, while U.S. West Texas Intermediate (WTI) stood at $28.98, more than 1% higher.
Oil prices slid 10% in the previous session, as the coronavirus continues to spread worldwide and amid an ongoing price war between OPEC kingpin Saudi Arabia and non-OPEC leader Russia.
Crude futures have more than halved since climbing to a peak in January.

‘Market stability’

On Monday, Saudi Arabia’s state-owned oil giant Saudi Aramco said it would likely continue with a planned oil production hike from April into May, reportedly suggesting it was “very comfortable” with an oil price of $30 a barrel.
Russia, which refused to sign up to OPEC’s proposal of deeper production cuts earlier this month, has claimed it can withstand lower oil prices for as long as a decade.
OPEC’s Barkindo and the IEA’s Birol did not address Russia specifically in their joint statement, but both “underscored the importance of market stability, as the impacts of extreme volatility are felt by producers.”
They agreed to “remain in close contact on the matter” and continue their regular consultations on oil market developments.

The IEA, which advises industrialized nations on energy issues, has previously warned long-time allies of de facto OPEC leader Saudi Arabia could be the worst hit from a sharp drop in oil prices.
Last week, Birol told CNBC that countries like Iraq, Algeria and Nigeria — all OPEC producers — were in a “very, very difficult situation” and would require support from the rest of the world.
Iraq, OPEC’s second-largest producer, is thought to be particularly exposed to an all-out price war because it has one of the least diversified economies of the producer group — despite relatively low production costs.

Oil: OPEC reportedly agrees on massive oil supply cut to offset virus impact; awaits Russia's approval

Sam Meredith, Holly Ellyatt

3-4 minutes - Source: CNBC

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OPEC has reportedly agreed to impose a deeper round of production cuts in order to support oil prices, paving the way for crunch talks with non-OPEC leader Russia, who has to agree to the plan.
The 14-member group, led by Saudi Arabia, decided Thursday to cut production by 1.5 million barrels per day (bpd), two unnamed sources told Reuters.
The deal — which was at the top end of analyst expectations — is believed to be conditional on approval from Russia.
A meeting of both OPEC and non-OPEC members, sometimes referred to as OPEC+, will take place on Friday.
Ahead of Thursday’s meeting, Russia’s appetite for deeper production cuts had been far from certain, with Moscow reportedly in favor of an extension to the current level of cuts rather than a further reduction.
International benchmark Brent crude traded at $51.49 Thursday morning, up around 0.7%, while U.S. West Texas Intermediate (WTI) stood at $47.11, around 0.6% higher.
The gathering of some of the world’s most powerful oil-producing nations comes with oil prices under pressure from weaker demand amid the coronavirus outbreak.

OPEC focused on doing something ‘very dramatic’

Speaking to CNBC’s Dan Murphy ahead of the meeting, Iranian Oil Minister Bijan Zanganeh said the group would “find a way” to help balance the market.
He did not comment when asked specifically about the extent of further production cuts.
United Arab Emirates’ Minister of Energy and Industry Suhail al-Mazrouei also refused to speculate when asked whether OPEC+ would look to impose an additional cut of more than 1 million bpd.

Minister of Energy of Russia, Alexander Novak (R) shakes hands with Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman (L).
Anadolu Agency

Amrita Sen, co-founder and chief oil analyst of Energy Aspects, told CNBC Thursday that she was “100%” certain that markets would sell-off if a smaller output cut than expected is announced.
“We’ve already seen Brent test $50 (per barrel) last week and I think people are expecting an OPEC action. I would say a million (bpd cut) is probably priced-in right now. Anything less, or even around that, will sell off,” she said. “If they fail to deliver, I think we’ll test thirties (oil at $30 a barrel).”
Sen said OPEC was focused on “doing something very dramatic right now,” safe in the knowledge that it can always reverse the cuts in the second half of the year.

How did we get here?

OPEC and non-OPEC producers first committed to curtailing their collective oil production policy back in 2016 in an effort to bolster prices, with the deal coming into force in January 2017.
In December 2019, it was extended and the alliance agreed to curb oil output by approximately 1.7 million barrels per day. Saudi Arabia then opted to cut its own production voluntarily by an additional 400,000 b/d for three months, should fellow members stick to their commitments.
In February, OPEC’s joint technical committee (JTC) reportedly recommended a 600,000 bpd reduction in oil production, and an extension of the cuts to end-2020, to alleviate downward pressure on oil prices.
Russia said at the time that it had not yet decided whether to sign up to the additional cuts, however, and that position appears to have continued.

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

3-4 minutes - Source: CNBC

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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.

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

3-4 minutes - Source: CNBC

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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.

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

3minutos - Source: CNBC

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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.

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.

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.

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

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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.”

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.

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

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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.

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

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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.

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

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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.

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

3minutos - Source: CNBC

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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.”

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

2-3 minutos - Source: CNBC

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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.”

Energy | Oil | Oil Price Report: Oil gains 1% as China pushes Trump for more tariff roll-backs

3-4 minutos - Source: CNBC

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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 rose more than 1% on Tuesday on hopes for a U.S.-China trade agreement and optimism that Washington could roll back some of the tariffs it has imposed on Chinese imports.
Brent crude futures were up 82 cents at $62.94 a barrel after gaining 0.7% in the previous session.
U.S. crude futures were up 78 cents, or 1.3%, at $57.30 a barrel. They gained 0.6% on Monday.
China is pushing U.S. President Donald Trump to remove more tariffs imposed in September as part of a so-called Phase 1 deal, which would help to ease the broad economic damage inflicted by the trade dispute between the world’s two biggest oil consumers.
“If some of the existing tariffs were to be dismantled, that should restore some measure of global demand for oil as economic and trade conditions recover,” said Han Tan, market analyst at FXTM.
OPEC Secretary-General Mohammad Barkindo said the oil market outlook for 2020 may be brighter than previously forecast, appearing to downplay any need for deeper production cuts.
“Based on the preliminary numbers, 2020 looks like it will have upside potential,” Barkindo told a briefing.
The Organization of the Petroleum Exporting Countries (OPEC) also said it would supply a diminishing amount of oil in the next five years as output increases from U.S. shale deposits and elsewhere.
OPEC’s production of crude oil and other liquids is expected to decline to 32.8 million barrels per day (bpd) by 2024, the group said in its 2019 World Oil Outlook.
Investors are also awaiting U.S. inventory data due later on Tuesday.
U.S. crude oil inventories were forecast to have risen last week, while refined products stocks are likely to have declined, a preliminary Reuters poll showed on Monday.
The U.S. Federal Reserve’s interest rate cut last week, recent weakness in the dollar and improved U.S. jobs growth in October also provided support, analysts said.
“We believe that the strength in oil prices will be short-lived, given the scale of the surplus that is expected over the 1H20,” ING analyst Warren Patterson said, referring to the first half of 2020.
“The risk to this view is if OPEC+ surprises the market in December by announcing even deeper than expected cuts for 2020.”
OPEC, Russia and other producers, a group known as OPEC+, have implemented a deal to cut oil output by 1.2 million barrels per day from the start of this year.
Iranian Oil Minister Bijan Zanganeh on Monday said he expects further production cuts to be agreed at the next meeting of the group in December.