Oil prices fall 1% as supply strains storage

Oil prices fall 1% as supply strains storage



Oil prices fall 1% as supply strains storage

Oil prices fall 1% as supply strains storage

Oil prices fall on Friday, ending a two-day rally, as a glut of crude and refined products weighed on markets and investors eyed a possible stutter in China’s imports.

Futures held their losses after the dollar index spiked following abetter-than-expected U.S. jobs report that showed the country added 255,000 positions in July. A stronger greenback makes dollar-denominated crude more expensive to holders of other currencies.

U.S. West Texas Intermediate (WTI) crude crude futures fell 67 cents, or 1.6 percent, to $41.26 per barrel at 9:46 a.m. ET (1346 GMT).

“Signs of fatigue are already apparent and include a notable dip in Chinese crude oil imports,” PVM’s Stephen Brennock wrote, adding that spare capacity in the country’s strategic storage space is less than 100 million barrels.

“A major pillar of oil demand is therefore on course to ease considerably over the coming months,” Brennock said.

Still, China surpassed South Korea as the top Asian buyer of North Sea Forties crude this year, while trading house Trafigura was aggressively targeting China’s newest buyers by extending credit to two of the country’s independent refiners.

Investors added the equivalent of 56 million barrels of short positions in the three main Brent and WTI futures and options contracts in the week to July 26.

“Since there was no news yesterday that might have triggered the price rise, this points to short-covering,” Commerzbank analyst Carsten Fritsch said.

“Clearly many market participants were caught on the hop by the increase in prices following the publication of U.S. inventory data on Wednesday,” he said.

Oil prices give up early gains as oversupply weighs

Oil prices give up early gains as oversupply weighs

Oil prices give up early gains as oversupply weighs

Oil prices give up early gains as oversupply weighs

Oil prices slipped after gains made earlier on Thursday and the previous day as overproduction and large volumes of unsold crude and ample refined products around the world weighed on markets.

Brent crude futures were trading at $42.72 a barrel at 1203 GMT, down 38 cents from their last close and down from an intra-day high of $43.65 a barrel.

U.S. West Texas Intermediate (WTI) crude futures were trading at $40.62 per barrel, down 21 cents, and after hitting an intra-day high of $41.41 per barrel and rising 3.3 per cent in the previous session.

“Prices began to recover following the publication of the U.S. inventory data [on Wednesday], and continued to do so into the morning,” Commerzbank said in a note.



“Maybe the surprise drawdown in gasoline inventories helped future prices remain stable but that does not change the fact: the U.S. is flooded with oil,” said Tamas Varga, lead oil analyst at London brokerage PVM Oil Associates.

Elsewhere, Iraq’s crude oil production in July rose to the highest level since January, to 4.632 million barrels-per-day compared with 4.559 million bpd in June, state-run oil marketer SOMO said on Thursday.

U.S.-based Schork Report said that the earlier price gains were a result of profit-taking from previous short positions that benefited from falling prices along with a fall in the U.S.-dollar since July.

Beware oil inventory data, experts warn it's misleading markets

Beware oil inventory data, experts warn it’s misleading markets

Beware oil inventory data, experts warn it’s misleading markets

Oil prices remained subdued on Wednesday

oil inventory data Oil markets are once again in the doldrums amid fears of a persistent oversupply and concerns over the slow drawdown in U.S. inventories, but oil experts say those concerns are overdone.

“We are at the start of the rebalancing, we haven’t finished it yet, whereas the market almost priced in that everything was done but now it’s gone almost the other way, saying that no rebalancing has been done whatsoever,” Amrita Sen, the co-founder and chief oil analyst at Energy Aspects,

Oil prices remained subdued on Wednesday with U.S. crude below $40 per barrel and Brent under $42 a barrel amid continued concerns over an oversupply of oil, although prices did receive some support from a weaker dollar, Reuters reported.
 oil inventory data

 

Oil markets on Wednesday are focused on the U.S. Energy Information Administration’s usual weekly look at oil inventories with the data due at 10:30 a.m. ET. Figures from industry group API late Tuesday showed an in-line stockpile reduction of 1.3 million barrels.

Markets have become somewhat obsessed with analyzing the figures for signs of a rebalancing in supply and demand.

Last week, U.S. crude futures fell more than 2 percent after the EIA reported an unexpected rise in crude and gasoline inventories. It said last Wednesday that U.S. commercial crude in storage rose by 1.7 million barrels to a total of 521.1 million barrels in the week through July 22. Analysts had expected a draw of 2.3 million barrels.

Oil prices

US stocks slip as falling oil prices punish energy companies

US stocks slip as falling oil prices punish energy companies

US stocks slip as falling oil prices punish energy companies

US stocks slip as falling oil prices punish energy companies

US stocks wobbled and finished mostly lower Monday as the price of oil continued to nosedive thanks to the strong dollar. Energy companies took the biggest losses as U.S. crude hovered around $40 US a barrel, its lowest price in almost four months, and materials companies also traded lower.

Every oil, gas and pipeline company on the Standard & Poor’s 500 finished lower as a slump in the price of oil and other fuels extended into a third week. The losses for energy and mining, chemical and building companies canceled out gains for technology and health care companies. A survey showed U.S. manufacturing continued to grow in July, but did so at a slower pace than the month before. That, too, is linked to strength in the dollar.

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Benchmark U.S. crude lost $1.54 US, or 3.7 per cent, to $40.06 a barrel in New York, while Brent crude, which is used to price international oils, gave up $1.39, or 3.2 per cent, to $42.14 a barrel in London. The price of oil has fallen 13 per cent in a little more than two weeks and during the day it traded below $40 a barrel for the first time since April 8. Exxon Mobil fell $3.09, or 3.5 per cent, to $86.85, its biggest loss since January. Chevron shed $3.37, or 3.3 per cent, to $99.11.

Ionis Pharmaceuticals rose after it said a drug designed to treat spinal muscular atrophy in infants worked in a late-stage clinical study. It also said drugmaker Biogen exercised an option to develop the drug globally and will pay Ionis $75 million. Biogen plans to start seeking marketing approval for the drug, nusinersen, in the next few months. Ionis surged $8.82, or 30.2 per cent, to $38.01 and Biogen gained $11.90, or 4.1 per cent, to $301.83, more than any other S&P 500 stock.

Those moves helped pull health care stocks higher. Technology and consumer stocks also gained ground, and the S&P 500 consumer company and tech indexes reached annual highs. Netflix rose $3.12, or 3.4 per cent, to $94.37 and Apple added $1.84, or 1.8 per cent, to $106.05.

WTI Crude Oil dips under $40 – USD/CAD hardly rises

WTI Crude Oil dips under $40 – USDCAD hardly rises

WTI Crude Oil dips under $40 – USDCAD hardly rises

WTI Crude Oil dips under $40 – USD/CAD hardly rises

USDCAD hardly rises The Canadian dollar is losing ground, but showing a lot of resilience. USDCAD cannot rise too much due to weak US indicators. USDCAD is trading around 1.31. It is a rise of 60 pips that certainly fails to reflect the magnitude in the dive in oil. The loonie remains resilient. Resistance is at 1.3140 and 1.3240. Support is at the round number of 1.30.

The ISM Manufacturing PMI missed and this added to the poor GDP report from the so-called “global locomotive” which is the US economy.

Here is the WTI hourly chart. Further support awaits at $37.87 a line that dates back to August 2015. Last year, the crash of the Chinese stock market led to a downfall in oil (among other assets). Further support is at $35. Resistance caps at $42.40.

US oil posts worst settlement since April 20, closes 3.7 pct lower, at $40.06

US oil posts worst settlement since April 20, closes 3.7 pct lower, at $40.06

US oil posts worst settlement since April 20, closes 3.7 pct lower, at $40.06


U.S. crude prices on Monday settled sharply lower after briefly breaking below $40 a barrel for the first time since April, weighed by a survey showing output in OPEC reached record highs last month amid the biggest addition of U.S. oil rigs in two years.

U.S. West Texas intermediate (WTI) ended 3.7 percent lower, or $1.54, at $40.06 — its lowest settlement since April 20 — after sliding as low as $39.86 just after midday.

Brent crude was down $1.34, or 3.1 percent, at $42.19 a barrel, after reaching an intraday low of $41.87.

Both benchmarks fell around 15 percent in July, with the decline being WTI’s largest monthly drop in a year.

John Kilduff, founding partner at energy hedge fund Again Capital, said sentiment has turned decidedly negative, as evidenced by a rise in short positions in WTI futures and a “complete abandonment” of speculative long positions, said .
US oil
Top OPEC exporter Saudi Arabia also kept output close to a record high, the survey found, as it met seasonally higher domestic demand and focused on maintaining market share instead of trimming supply to boost prices.

There are also signs Saudi Arabia is once again chasing market share. Saudi Aramco, the state-controlled oil company, cut its official selling price (OSP) for its benchmark Arab Light grade for September-loading cargoes by $1.30 a barrel to a discount of $1.10 to the regional marker Oman-Dubai.

U.S. oil drillers, meanwhile, added 44 rigs in July, the most in a month since April 2014, data from oil services company Baker Hughes showed.

Why oil will drop to $35 by end of summer

Why oil will drop to $35 by end of summer

Why oil will drop to $35 by end of summer


The state of the oil market these days can be summed up in a four-letter word—no, not one those salty terms, by a powerful, unoffending term: glut.

After peaking in early June, near $52, WTI oil prices have fallen upwards of twenty percent, getting under $41 per barrel, for a time, on Friday.

There were several supply issues that ranged from the Canadian wild fires to renewed unrest in the Niger Delta that combined to reduce global oil output, or so it seemed.
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OPEC production has risen steadily, with Iran, Iraq and Saudi Arabia leading the way.

In fact, Iran claims to need only two more months to return to full pre-sanction production levels, having already reached 80 percent mark. Their aggressive marketing efforts are bearing fruit, as sales to their historical customers in Asia have risen nearly 50 percent in June, from year ago levels.

The glut is a global phenomenon, with record gasoline inventories at the main European trading hub in the Amsterdam region, and an over-supplied diesel fuel market in Asia, coupled with brimming supplies in storage of all things petroleum in the United States.

There was a rush to judgement by many in the market that supply-demand dynamic was coming to balance. Some observers actually declared it balanced already.

Meanwhile, the price curve, especially for diesel fuel, is steepening (longer-dated futures contract prices are appreciably higher than that for near-term contracts), encouraging more and more stockpiling of the fuel, including a surge in the use of floating storage.

Saudi Arabia Oil Demand Growth at 6-Year Low as Economy Sputters

Saudi Arabia Oil Demand Growth at 6-Year Low as Economy Sputters

Saudi Arabia Oil Demand Growth at 6-Year Low as Economy Sputters

Saudi Arabia Oil Demand Growth at 6-Year Low as Economy Sputters

Oil consumption in Saudi Arabia, the world’s biggest crude exporter, is expanding at the slowest pace in at least six years as low energy prices hurt economic growth. The kingdom’s demand for oil increased by an average of 24,000 barrels a day in the first five months of 2016, the slowest growth rate for that period since at least 2010, the first year for which data are available from the Joint Organisations Data Initiative in Riyadh. The International Energy Agency is now looking for a drop in demand in Saudi Arabia for all of 2016, after forecasting an increase earlier this year. Consumption of gasoline, kerosene and other
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“If the oil slump continues into next year and governments are not in the position to use counter-cyclical fiscal measures to support the economy, we aren’t going to see a huge contribution to oil-consumption growth from the region,” Edward Bell, a commodities analyst at Dubai-based lender Emirates NBD PJSC, said in an interview.

Saudi Arabia has boosted output for years to sustain export income while also satisfying domestic demand. The kingdom’s consumption spikes between June and September when air-conditioning use peaks. Demand for refined fuels such as gasoline has doubled since 2003, according to JODI. Saudi Arabia, the United Arab Emirates, Qatar, Oman and Bahrain have reduced or eliminated fuel subsidies over the past year to limit government spending because of low oil prices. Brent crude, an international benchmark, has dropped 20 percent in the past year and traded at $42.46 a barrel on Friday compared with over $100 a barrel as recently as in 2014.

Gasoline demand in Oman grew 1 percent during the first four months of this year, far below the annual average growth rate of 9.6 percent over the past decade, according to BMI. “The slowing consumption in Oman causes concern that other countries that have enacted or plan to roll out subsidy reforms might see a greater impact than first anticipated,” it said in the report last week.

… (full story)

Oil and gas are trading in a ‘bizarro world’: Tom Kloza

Oil and gas are trading in a ‘bizarro world’: Tom Kloza

Oil and gas are trading in a ‘bizarro world’: Tom Kloza


After a strong first half of the year, oil just posted its worst month since July 2015. Despite fears that the commodity could retest the mid-$30 range, one closely-followed oil watcher is especially bullish on where energy is heading in the coming months and years—and investors should not get comfortable with currently low prices. “It may get a little uglier with some European refinery shutdowns,” admitted Tom Kloza recently on CNBC’s “Futures Now” when discussing the potential for a near-term slowdown in the U.S. “But this is very seasonal.” The global head of energy analysis for the Oil Price
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Despite fears that the commodity could retest the mid-$30 range, one closely-followed oil watcher is especially bullish on where energy is heading in the coming months and years—and investors should not get comfortable with currently low prices.

“It may get a little uglier with some European refinery shutdowns,” admitted Tom Kloza recently on CNBC’s “Futures Now” when discussing the potential for a near-term slowdown in the U.S. “But this is very seasonal.”

The global head of energy analysis for the Oil Price Information Service (OPIS) explained that, while he expects to see a $39 handle for oil in the coming weeks, prices will see significant gains in the long-term.

… (full story)