OPEC+ Passes on Oil Output Increase, Weighs the "Trump Effect"
It was likely a fairly easy decision for OPEC+ to once again delay plans to increase oil output.The soft state of global demand is by itself sufficient reason to justify the decision at this week's meeting of the group to defer winding back some of its production cuts until at least April.But weak demand growth may be the least of OPEC+'s worries as the oil market is about to be hit with the return of Donald Trump and all the uncertainty and contradictory policies that may bring.Trump's return to the U.S. presidency is likely to change the market dynamics for crude…
Surge of Coronavirus in India Dents Bullish Crude Case
The problem for crude oil market bulls is that every time they think they have built up steam, something comes along to knock the momentum off track.The coronavirus surge in India and the imposition of states of emergency in populated parts of Japan, including Tokyo and Osaka, to deal with rising infections from the pandemic are the latest cases in point.Given that India and Japan are the world's third- and fourth-largest crude importers, it's likely that fuel demand will take a substantial hit in coming weeks.The situation appears particularly concerning in India…
Global Crude Market Finds Support From China Demand
China, the global oil market's lifeline this year, has stepped up purchases from exporters like Russia, the United States and Angola in recent weeks, while buyers elsewhere pare orders as coronavirus infections surge and fresh lockdowns are put in place.China, the world's largest importer of crude, is the only major buyer expected to see increased oil demand this year as the pandemic destroyed consumption globally.With China's imports expected to reach 12 million barrels per day (bpd) next year, sellers are lining up shipments to retain market share as worldwide oil consumption is expected to fall by nearly 9% in 2020.This week…
Enterprise Offers Crude Shipments From Gulf Coast to Cushing
Enterprise Products Partners LP said it would offer spot shipments of crude on an existing pipeline from the U.S. Gulf coast to Cushing, Oklahoma, the delivery point for benchmark U.S. crude futures, as demand to store oil inland surges.The move marks a sharp reversal from recent pipeline projects that were all built connecting inland markets to the Gulf Coast as U.S. crude exports climbed to record highs after Washington lifted a ban in late 2015.However, the coronavirus pandemic has crushed global oil demand and dented U.S. crude exports, and put a premium on finding places to store oil as a worldwide glut builds.About 54% of total U.S.
COVID-19 Oil Demand Hit Renders OPEC+, Trump Actions Irrelevant
Imagine for a moment that the Organization of the Petroleum Exporting Countries (OPEC) and Russia had agreed at the start of this month to extend and deepen their crude oil output cuts. It wouldn't have made the blindest bit of difference.While it was only three and half weeks ago, though it feels as long as a lifetime, the collapse of the deal between OPEC and allies, including Russia, to limit output is no longer relevant in a world devastated by coronavirus.If OPEC and its allies, known as OPEC+, had agreed to extend the 2.1 million barrels per day (bpd) and add a further 1.5 million bpd…
US Oil Rallies as Exporters Trim Production
U.S. oil prices rose on Friday, gaining for a fourth day on hopes of further supply cuts by major exporters, despite uncertainty about U.S.-China trade talks.U.S. West Texas Intermediate (WTI) crude futures were at $54.79 per barrel at 0038 GMT, up 40 cents, or 0.7 percent, from their last settlement. They rose 51 cents, or 0.95 percent, on Thursday.International Brent crude oil futures had yet to trade, after closing up 1.5 percent in the previous session."The crude oil market shrugged off concerns about the trade talks as signs of further reduction from OPEC+ continue to mount…
Brent Crude Rises but Set for First Yearly Drop Since 2015
Oil prices rose more than 2 percent on the final day of the year, mirroring gains in stock markets, but were on track for their first annual decline in three years as concerns of a persistent supply glut lingered.Hints of progress on a possible U.S.-China trade deal, with U.S. President Donald Trump saying he had a "very good call" with Chinese President Xi Jinping, helped bolster sentiment for oil.Brent crude futures were up 75 cents at $53.96 a barrel by 1357 GMT but rose over $1 to a high of $54.82 in earlier trade.U.S. West Texas Intermediate (WTI) crude futures were at $45.90 a barrel, up 57 cents.
Now you see it, now you don't: oil surplus vanishes ahead of Iran deadline
An overhang of homeless crude in the Atlantic Basin has halved in recent weeks, suggesting oil traders are bracing for a further supply loss from Iran due to U.S. sanctions and a new rally in prices.Iran's oil exports are already dropping fast as refiners scurry to find alternatives ahead of a reimposition of U.S. sanctions in early November, which in turn has helped drain a glut of unsold oil.The millions of unsold barrels of crude that had pooled around northwest Europe, the Mediterranean and West Africa over July and August…
Oil Higher on Lower Iran Exports, Rising U.S. Supply
Oil prices rose on Wednesday, supported by news of a fall in Iranian crude supplies as U.S. sanctions deter buyers, but gains were limited by evidence of a rise in U.S. inventories.Benchmark Brent crude oil was up 45 cents at $76.40 a barrel by 1225 GMT. U.S. light crude was 50 cents higher at $69.03 a barrel.Iran's crude oil and condensate exports in August are set to drop below 70 million barrels for the first time since April 2017, well ahead of the Nov. 4 start date for a second round of U.S. economic sanctions, preliminary trade flows data on Thomson Reuters Eikon show.Bowing to pressure from Washington…
Oil Up as U.S. Sanctions on Iran Kick In
Oil rose on Thursday, recouping some of the previous day's steep price slide, after the first round of U.S. sanctions against Iran came into effect, although confidence in crude demand has been hit by the escalating China-U.S. trade dispute.Brent crude futures were up 19 cents at $72.47 barrel by 1315 GMT, after having lost more than 3 percent on Wednesday. U.S. crude futures rose 6 cents to $67.00 a barrel, having closed down 3.2 percent the day before.The United States on Tuesday reimposed sanctions on Iran, the third-biggest…
What Saudi Arabia Does Now is Key for Global Crude Markets: Russell
If it were possible to boil the crude oil market down to just one determining factor for the coming months, it would be this: What will Saudi Arabia actually do? The Saudis appear to have emerged as the winners from last week's meeting of the Organization of the Petroleum Exporting Countries (OPEC), and the subsequent talks between OPEC and its allies in the deal to restrict output. The outcome of the meetings would seem to indicate that crude oil supply should rise by as much as 1 million barrels per day (bpd). That's based on…
Shanghai Crude Futures off to Cautiously Good Start
The new Shanghai crude oil futures have been trading for just over a month and have so far managed to build up reasonably strong volumes, but this success may only mask some wider concerns. The yuan-denominated contracts were launched on March 26 by the Shanghai International Energy Exchange (INE) and are enjoying trading volumes averaging around 80,000 a day, with the open interest around 16,000. The INE contract offers seven grades of Middle Eastern and domestic crude for delivery to various locations in China, the world's largest oil importer.
Energy Battle is More Than OPEC vs U.S. Shale
The market narrative consuming crude oil markets currently is the interplay between supply cuts by OPEC and its allies and rising U.S. shale output, with a side helping of Chinese imports driving demand. While there are solid reasons for industry participants to focus on these dynamics, there is also the risk of missing out on other factors that help shape the market. Such a factor is India, which has long flown below the radar of the crude oil market, despite becoming the second-biggest importer in the fast-growing Asian market behind China, and the third-biggest in the world after the United States.
Trafigura to Boost Urals Crude Liftings
Oil trader Trafigura will regain its position as the largest buyer of seaborne crude from Russia's Rosneft, trading sources told Reuters on Friday, expanding their partnership as Rosneft reduces its dealings with Vitol and Glencore. Three trading sources told Reuters that Trafigura would increase its dominance in Rosneft’s Urals oil trading from April when Rosneft’s 5-year pre-finance deal with Vitol and Glencore expires. "Trafigura will be the lucky one," a trader in the Russian crude oil market said. Rosneft, Trafigura, Glencore and Vitol all declined to comment. Reporting by Olga Yagova, Gleb Gorodyankin and Dmitry Zhdannikov
Big Gas Exporter Nations Blast Unilateral Sanctions in US Dig
Representatives from a group of major energy-exporting nations on Friday said they oppose the use of unilateral sanctions on any of their members - an apparent dig at the United States for its moves against Russia, Iran and Venezuela. The Gas Exporting Countries Forum, which also includes members like Libya, Equatorial Guinea and Nigeria, expressed their "profound concern" about sanctions affecting the gas sector that are not authorized by the United Nations, according to a communique signed by GECF's 12 members after the group's summit in Bolivia this week. The U.S.
Goodbye Contango? Oil's Long March Towards Backwardation
“The rebalancing of the oil market desired by the leading producers has been a stubborn process,” the International Energy Agency wrote in its latest monthly oil market report. The agency’s evident frustration about the slow and uneven pace of rebalancing, and the conflicting signals about whether it is happening at all, is shared by many traders, analysts and investors. “The medium-term outlook for oil still looks challenging with, if anything, balances for 2018 having deteriorated in recent weeks,” hedge fund manager Andy Hall wrote to investors this month.
Platts Restricts Qatari-loading Crude in Pricing Process
Oil pricing agency S&P Global Platts said it will not automatically include Qatari-loading crude in its Middle East benchmark after Saudi Arabia and some other Arab states cut ties with Doha, a move that disrupted traditional shipping routes. Saudi Arabia, the United Arab Emirates, Egypt and Bahrain said on Monday they would sever all ties including transport links with Qatar, escalating past diplomatic disagreements. Within hours, the UAE barred all vessels coming to or from Qatar using its anchorage point off Fujairah, a popular location for bunkering, where vessels take on fuel of their own.
The data dilemma: Big differences in Saudi Crude Export Numbers
One of the difficulties in constructing a narrative for the crude oil market and the output cuts promised by major exporters is what set of numbers to believe. It's possible to argue that Saudi Arabia, OPEC's biggest exporter and the force behind the cuts, is either doing more than its share, or less, depending on the numbers used. The export data published by the Joint Oil Data Initiative (JODI) on May 18 would support the view that the Saudis have more than met their commitment to the November deal between the Organization of the Petroleum Exporting Countries (OPEC) and allied producers to cut output by a combined 1.8 million barrels per day (bpd).
OPEC 'Cut' Strategy Headed for Failure?
Is it yet time to call the crude oil output cuts by OPEC and its allies a failure? Certainly there is an increasing disconnect between the rhetoric of OPEC and other producers cutting output on the one hand and the reality of a well-supplied crude oil market and mixed signals on the level of global inventories on the other. The Organization of the Petroleum Exporting Countries and other producers, including Russia, have been touting the high compliance with the agreement to reduce output by 1.8 million barrels per day (bpd) from January to June.
Asia Demand, Hedging Boosts Trading in Forward U.S. Oil Contracts
Trading volumes and open interest in U.S. crude futures soared in 2016, particularly among buyers out of Asia and shale companies locking in output, both of whom have shown an affinity for far-dated contracts, the CME Group Inc said on Thursday. NYMEX light sweet crude oil futures average daily volume hit an all-time high of 1.303 million contracts in November 2016, according to exchange data. Demand out of Asia/Pacific was notably stronger, with trading volume rising 93 percent from a year earlier, according to data provided to Reuters by the CME.
