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685f8a00d4a097e94e28b2af20dd4739 | https://www.reuters.com/article/global-metals/metals-nickel-prices-drop-on-worries-china-steel-demand-is-losing-its-shine-idINL3N1NN2A9?edition-redirect=in | METALS-Nickel prices drop on worries China steel demand is losing its shine | METALS-Nickel prices drop on worries China steel demand is losing its shine
By James Regan2 Min Read
(Updates prices)
SYDNEY, Nov 17 (Reuters) - Shanghai nickel prices fell on Friday on worries about growth in Chinese steel markets, with the sector heading into a low consumption period over winter.
The base metal, used widely to help make stainless steel, closed the week down 7 percent on the Shanghai Futures Exchange.
* SHFE NICKEL: The most-traded ShFE nickel contract ended Friday 1.73-percent lower at 92,750 yuan ($13,989.23). The contract closed the previous day down 2.6 percent.
* LME NICKEL: London Metal Exchange nickel had edged slightly higher by 0710 GMT, to $11,445 a tonne, only partially reversing a 2.7-percent fall overnight.
* OTHER SHFE METALS: The sell-off in nickel came amid a mixed finish in Chinese metals futures. Active ShFE copper gained 0.06 percent, while zinc was up 0.28 percent and aluminium dipped 0.81 percent.
* CHINA ECONOMY: China’s economy cooled further last month, with industrial output, fixed-asset investment and retail sales missing expectations.
* DOLLAR STEADY: The dollar steadied on Friday after coming off the week’s lows against its peers as earlier risk aversion in global financial markets receded, pushing up U.S. yields.
* FREEPORT FIRE: A fire broke out at the main port used by copper miner Freeport-McMoRan Inc in Papua, Indonesia, on Thursday night, company sources said.
* BHP Billiton, hopes to fully divest its troubled U.S. onshore shale business in around two years and is also seeking a buyer for its nickel business in Australia.
* VW: Volkswagen is not looking to secure long-term supplies of cobalt, a key ingredient of electric-car batteries, by investing in mines, a senior official at the automaker said.
PRICES
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Most active ShFE nickel
Three month LME tin
Most active ShFE tin
ARBS ($1 = 6.6301 Chinese yuan renminbi)
Reporting by James Regan; Editing by Joseph RadfordOur Standards: The Thomson Reuters Trust Principles.
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24bd974ad6fd7dcb80dc94d9df02edf6 | https://www.reuters.com/article/global-metals/metals-shanghai-aluminium-hits-3-month-peak-on-demand-optimism-idUKL4N28S0UQ?edition-redirect=uk | METALS-Shanghai aluminium hits 3-month peak on demand optimism | METALS-Shanghai aluminium hits 3-month peak on demand optimism
By Reuters Staff4 Min Read
SINGAPORE, Dec 18 (Reuters) - Shanghai aluminium scaled a three-month high on Wednesday, as the expected finalization of an initial U.S.-China trade deal fuelled optimism about demand for the metal used in transportation, construction and packaging.
Aluminium demand has turned “extremely good” in China, said a source with a major smelter. “Real estate is quite good and expectations are not bad either”
“Everyone has become optimistic,” after news about the interim U.S.-China trade deal, the source added.
Global investor confidence has improved since the United States and China last week said they reached a “phase one” trade pact to cool their 17-month-long trade war that has hurt global economic growth and the demand for most base metals, including aluminium.
The most traded aluminium contract on the Shanghai Futures Exchange (ShFE) climbed as much as 1% to 14,115 yuan ($2,005.28) a tonne, a level not seen since Sept. 18.
Benchmark three-month aluminium on the London Metal Exchange (LME) was 0.4% higher at $1,771 a tonne by 0315 GMT.
FUNDAMENTALS
* ALUMINA: China's average price of alumina SMM-ALM-AVEG, the substance used to make aluminium, fell to 2,429 yuan a tonne, its lowest since May 2017, lowering production costs for aluminium smelters.
* LEAD: China’s lead production hit a record high of 572,000 tonnes in November, up 15.1% year-on-year, sparking oversupply concern and pushing ShFE lead to 14,740 yuan a tonne, its lowest since April 2018.
* BALANCE: But the global lead market recorded a deficit of 81,000 tonnes in the first 10 months of this year, compared with a shortage of 53,000 tonnes in the same period of 2018, the International Lead and Zinc Study Group (ILZSG) said.
* ZINC: The global zinc market moved to a surplus of 7,300 tonnes in October from a deficit of 21,100 tonnes in September. It recorded a global deficit of 152,000 tonnes in Jan-Oct, ILZSG said.
* OTHER PRICES: LME copper fell 0.5% to $6,168 a tonne, nickel rose 0.5% to $14,025 a tonne, while zinc advanced 0.4% to $2,290 a tonne. ShFE copper fell 0.3% to 49,110 yuan a tonne, while nickel dropped 1.2% to 110,170 yuan a tonne.
* MORGAN STANLEY: U.S. investment bank Morgan Stanley is building up its base metals trading business after abandoning it four years ago, sources told Reuters.
* For the top stories in metals and other news, click or
MARKETS NEWS
* Asian stocks camped out at 18-month peaks, having climbed for five straight sessions, while the British pound was licking fresh wounds as revived Brexit fears came back to bite it.
DATA/EVENTS (GMT)
0900 Germany Ifo Business Climate New Dec
0900 Germany Ifo Curr Conditions New Dec
0900 Germany Ifo Expectations New Dec
0930 UK CPI YY Nov
1000 EU HICP Final MM, YY Nov
PRICES
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Most active ShFE nickel
Three month LME tin
Most active ShFE tin
ARBS ($1 = 7.0389 Chinese yuan) (Reporting by Mai Nguyen in Singapore and Tom Daly in Beijing; Editing by Aditya Soni)
Our Standards: The Thomson Reuters Trust Principles.
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ef797cb93e691338be3d77441b535270 | https://www.reuters.com/article/global-metals/metals-shanghai-aluminium-scales-3-month-high-on-demand-hopes-idINL4N28S106?edition-redirect=in | METALS-Shanghai aluminium scales 3-month high on demand hopes | METALS-Shanghai aluminium scales 3-month high on demand hopes
By Mai Nguyen, Tom Daly3 Min Read
(Updates prices)
SINGAPORE/BEIJING, Dec 18 (Reuters) - Shanghai aluminium hit its highest level in three months on Wednesday, as easing U.S.-China trade conflict fuelled demand optimism.
“Demand is good and China’s output has not increased, so the price is relatively high. It is expected that demand will be better next year,” said a source with a major aluminium smelter in China, the world’s biggest user and producer of the metal.
Global investor confidence has improved since the United States and China last week said they reached a “phase-one” trade pact to cool their trade war that has hurt global economic growth and the demand for most base metals, including aluminium.
Aluminium, used in construction, packaging and transportation, is one of the metals most heavily targeted with U.S. tariffs in the 17-month-long trade war.
“Everyone has become optimistic,” after news about the interim U.S.-China trade deal, the source added.
The most traded aluminium contract on the Shanghai Futures Exchange (ShFE) climbed as much as 1.2% to 14,130 yuan ($2,007.42) a tonne, a level not seen since Sept. 18. It closed up 0.9% at 14,100 yuan a tonne.
Benchmark three-month aluminium on the London Metal Exchange (LME) was 0.5% higher at $1,772.50 a tonne by 0706 GMT.
FUNDAMENTALS
* ALUMINIUM STOCKS: Inventories in warehouses tracked by ShFE AL-STX-SGH fell to their lowest since March 2017 at 218,367 tonnes. In contrast, stocks in LME-approved warehouses MALSTX-TOTAL rose to a 2-1/2-year high of 1.44 million tonnes.
* ALUMINA: China's average price of alumina SMM-ALM-AVEG, the substance used to make aluminium, fell to 2,429 yuan a tonne, its lowest since May 2017, lowering production costs for aluminium smelters.
* LEAD: China’s lead production hit a record high of 572,000 tonnes in November, up 15.1% year-on-year, sparking oversupply concern and pushing ShFE lead to as low as 14,750 yuan a tonne, its lowest since April 2018.
* BALANCE: But the global lead market recorded a deficit of 81,000 tonnes in the first 10 months of this year, compared with a shortage of 53,000 tonnes in the same period of 2018, the International Lead and Zinc Study Group said.
* CHINA COPPER: China’s refined copper output rose by 19.6% year-on-year to a record monthly high of 909,000 tonnes in November, official data showed.
* OTHER PRICES: LME copper fell 0.5% to $6,167.50 a tonne, nickel declined 0.6% to $13,870 a tonne, while zinc advanced 0.6% to $2,295.50 a tonne. ShFE copper fell 0.4% to 49,070 yuan a tonne, while nickel dropped 2.5% to 108,760 yuan a tonne.
* For the top stories in metals and other news, click or
PRICES
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Most active ShFE nickel
Three month LME tin
Most active ShFE tin
ARBS ($1 = 7.0389 Chinese yuan renminbi)
Reporting by Mai Nguyen in Singapore and Tom Daly in Beijing; Editing by Sherry Jacob-Phillips and Rashmi AichOur Standards: The Thomson Reuters Trust Principles.
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69537a4d7315678f92e2b3fc7ed4c80d | https://www.reuters.com/article/global-metals/metals-shanghai-aluminium-slips-to-2-week-low-as-china-stocks-climb-idUKL4N298090?edition-redirect=uk | METALS-Shanghai aluminium slips to 2-week low as China stocks climb | METALS-Shanghai aluminium slips to 2-week low as China stocks climb
By Reuters Staff0 Min Read
BEIJING, Jan 3 (Reuters) - Shanghai aluminium prices fell in early trade on Friday, having hit a more than two-week low under 14,000 yuan ($2,009.96) a tonne overnight on signs that stocks in top consumer China were rising again after a protracted drop over 2019. Chinese aluminium inventories <0#SMM-ALINV> climbed by 18,000 tonnes, or 3%, to 610,000 tonnes between Dec. 26 and Jan. 2, according to industry data provider SMM. The Shanghai Futures Exchange (ShFE) is due to report its own stocks data later on Friday. ShFE aluminium stocks AL-STX-SGH were at 185,127 tonnes on Dec. 27 and fell more than 70% last year. Stocks tend to rise in the run-up to China's Lunar New Year holiday, which this year falls in late-January, as construction activity slows. FUNDAMENTALS * ALUMINIUM: The most-traded February aluminium contract on the ShFE fell as much as 1.1% in night-time trading to 13,960 yuan a tonne, its lowest since Dec. 17, and stood at 14,000 yuan, as of 0215 GMT. Three-month aluminium on the London Metal Exchange was down 0.3% at $1,800 a tonne. * ALUMINIUM: Chinese supply, meanwhile, continues to rise, with Henan Shenhuo Group putting its new smelter in Yunnan into production on Dec. 31. * ALCOA: U.S. aluminium producer Alcoa said it had agreed to sell its Gum Springs waste treatment facility in Arkansas to Veolia ES Technical Solutions for $250 million. The plant has traditionally processed spent potlining for the North American smelter industry. * OTHER METALS: London copper eked out a 0.1% rise to $6,196 a tonne, but the LME complex was broadly lower, with nickel losing 0.6%, lead down 0.5% and zinc falling 0.4%. ShFE copper slipped 0.4% to 49,030 yuan a tonne. * For the top stories in metals and other news, click or DATA/EVENTS AHEAD (GMT) 0700 UK Nationwide House Price MM, YY Dec 0745 France CPI (EU Norm) Prelim YY Dec 0855 Germany Unemployment Chg, Rate SA Dec 1300 Germany CPI Prelim YY Dec 1300 Germany HICP Prelim YY Dec 1500 US ISM Manufacturing PMI Dec 1900 US Federal Open Market Committee issues minutes from its meeting of December 10-11 PRICES BASE METALS PRICES 0215 GMT Three month LME copper 6194.5 Most active ShFE copper 49030 Three month LME aluminium 1800 Most active ShFE aluminium 14000 Three month LME zinc 2298 Most active ShFE zinc 17890 Three month LME lead 1910 Most active ShFE lead 14855 Three month LME nickel 14165 Most active ShFE nickel 110880 Three month LME tin 17150 Most active ShFE tin 135150 BASE METALS ARBITRAGE LME/SHFE COPPER LMESHFCUc 450.2 3 LME/SHFE ALUMINIUM LMESHFALc -334.55 3 LME/SHFE ZINC LMESHFZNc -372.14 3 LME/SHFE LEAD LMESHFPBc -591.87 3 LME/SHFE NICKEL LMESHFNIc -2942.8 3 ($1 = 6.9653 Chinese yuan) (Reporting by Tom Daly, Editing by Sherry Jacob-Phillips)
Our Standards: The Thomson Reuters Trust Principles.
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09336af50d85596dc1559f5bf5eb8cfb | https://www.reuters.com/article/global-metals/metals-shanghai-copper-slips-for-2nd-day-on-lukewarm-trade-idUKL3N1WX07E?edition-redirect=uk | METALS-Shanghai copper slips for 2nd day on lukewarm trade | METALS-Shanghai copper slips for 2nd day on lukewarm trade
By Reuters Staff3 Min Read
BEIJING, Oct 17 (Reuters) - Shanghai copper extended losses for a second day on Wednesday, curbed by tepid spot trading amid increasing stockpiles at the futures exchange.
FUNDAMENTALS
* Three-month copper on the London Metal Exchange edged up 0.1 percent to $6,221 a tonne by 0109 GMT, and the most-traded copper contract for November delivery on the Shanghai Futures Exchange dipped 0.5 percent to 50,270 yuan ($7,274.75) a tonne.
* TRADE: Chinese exporters are mostly confident they can weather a trade war with the United States, but worry about collateral damage it might cause throughout the global economy, according to a Reuters poll of participants at China’s largest trade fair.
* CHINA DEBT: Off-balance-sheet borrowings by Chinese local governments could be as high as 40 trillion yuan ($5.78 trillion) and amount to “a debt iceberg with titanic credit risks”, S&P Global Ratings said in a report on Tuesday.
* BHP: The world’s biggest miner, BHP, said on Wednesday its first-quarter iron ore production rose 8 percent on strong Chinese demand for high-grade ore, but cut its fiscal 2019 guidance for copper production, citing outages at key mines.
* COPPER PROJECT: Chile’s state copper miner, Codelco, has submitted an environmental impact assessment of its plans to overhaul its aging Salvador deposit that would sharply increase its production and extend its life by 40 years.
* COPPER TAX: Zambia’s proposed mining tax increases will hit mineral exploration and production in Africa’s second biggest copper producer, said companies involved in exploration
* For the top stories in metals and other news, click or
MARKETS NEWS:
* Asian equities got some much needed relief on Wednesday after upbeat U.S. earnings reports drove a rebound on Wall Street and helped restore a little confidence in emerging market stocks and currencies.
DATA/EVENTS
0830 UK Consumer prices Sep
0900 Euro Zone Construction output Aug
1230 U.S. Housing starts Sep
1230 U.S. Building permits Sep
1800 U.S. Federal Reserve releases minutes from its Sept. 25-26 policy meeting
PRICES
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Most active ShFE nickel
Three month LME tin
Most active ShFE tin
ARBS ($1 = 6.9102 Chinese yuan renminbi) (Reporting by Muyu Xu and Dominique Patton; editing by Richard Pullin)
Our Standards: The Thomson Reuters Trust Principles.
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5f5a48855d99be3f1fa9ba1d765d8b29 | https://www.reuters.com/article/global-metals/metals-shanghai-nickel-hits-10-1-2-month-high-on-indonesian-supply-concerns-idUKL4N24G09J?edition-redirect=uk | METALS-Shanghai nickel hits 10-1/2-month high on Indonesian supply concerns | METALS-Shanghai nickel hits 10-1/2-month high on Indonesian supply concerns
By Reuters Staff4 Min Read
SINGAPORE, July 15 (Reuters) - Shanghai nickel prices on Monday surged to their highest in more than 10 months, tracking an overnight rally in London, on concerns that top producer Indonesia will resume an export ban on ore in 2022.
Indonesia, which has large nickel laterite ore reserves used to make nickel pig iron for the stainless steel industry, relaxed a ban to export nickel ore in 2017, but said at the time exports of unprocessed ore will be restricted again in 2022.
Many people had been sceptical that the full ban would be re-imposed, but a media report about sticking to the ban in 2022 created jitters in the market, pushing nickel on the London Metal Exchange to near a four-month high on Friday.
“Indonesian nickel ore export ban stoked fears of supply tightness, though the ban is for 2022 and will not impact immediate availability of the metal ore,” said ANZ in a note.
Shanghai nickel surged as much as 3.1% to 106,620 yuan ($15,508.81) a tonne, its highest since Sept. 3, 2018, while London nickel advanced 0.5%, as of 0134 GMT.
FUNDAMENTALS
* COPPER: Three-month copper on the London Metal Exchange edged up 0.1% to $5,939 a tonne, while the most-traded copper contract on the Shanghai Futures Exchange eased 0.1% to 46,620 yuan a tonne.
* PRICES: Other metals were traded in tight range as investors eyed a set of key data from China, including the economic growth by June that are due to be released by 0200 GMT.
* CHINA: China’s economic growth in the second quarter is expected to slow to its weakest pace in at least 27 years, reinforcing the case for more stimulus as a bruising trade war with the United States drags on, a Reuters poll showed.
* RARE EARTHS: The Pentagon is rapidly assessing the United States’ rare earths capability in a race to secure stable supply of the specialized material amid the country’s trade conflict with China, according to a government document seen by Reuters.
* TRADE TALKS: U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will travel to Beijing “in the very near future,” White House adviser Peter Navarro said in an interview on CNBC on Friday.
* CHINA DATA: China's June unwrought copper imports fell 27.2% from a year earlier to 326,000 tonnes, while copper concentrate CNC-COPORE-IMP imports in June dropped to a six-month low at 1.47 million tonnes, official data showed.
* LITHIUM: Chile’s Molymet has dropped a project to build battery parts in Chile, the second of three companies to pass on the deal little more than a year after winning guaranteed access to cheap Chilean lithium from top producer Albemarle.
* For the top stories in metals and other news, click or
MARKETS NEWS
* Asian shares started the week on a softer note after posting their first weekly decline since early June, while the dollar was on the defensive ahead of key economic data from China.
DATA/EVENTS (GMT)
0200 China Urban Investment YTD June
0200 China Industrial Output YY June
0200 China Retail Sales YY June
0200 China GDP YY Q2
0400 Indonesia Trade Balance June
0630 India WPI Inflation YY June
1000 EU Reserve Assets Total June
1300 Russia Industrial Output June
PRICES
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Most active ShFE nickel
Three month LME tin
Most active ShFE tin
ARBS ($1 = 6.8748 Chinese yuan)
Reporting by Mai Nguyen, Editing by Sherry Jacob-PhillipsOur Standards: The Thomson Reuters Trust Principles.
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6f46cb7971c4dba6cd5c6810a98da135 | https://www.reuters.com/article/global-metals/metals-strengthening-dollar-curbs-copper-rebound-idUKL8N29F2V1?edition-redirect=uk | METALS-Strengthening dollar curbs copper rebound | METALS-Strengthening dollar curbs copper rebound
By Peter Hobson4 Min Read
(Updates with closing prices)
LONDON, Jan 10 (Reuters) - Copper was up by more than 1% for the week on Friday as fears of conflict in the Middle East diminished and exchange inventories continued to dwindle, though prices were kept in check by a stronger dollar.
Benchmark copper on the London Metal Exchange (LME) rose 0.3% to $6,198 a tonne in final open-outcry trading and had gained 1.1% this week. It had dropped 1.4% the previous week after a U.S. air strike killed an Iranian commander and Tehran threatened revenge.
“After the Iran issue calmed down, investors’ risk appetite returned to copper,” said ING analyst Wenyu Yao. “Inventory has been drawn down, supporting prices, but the upside momentum is weakened by a strengthening dollar.”
The dollar was up 0.6% this week against a basket of major currencies, making metals priced in the greenback more expensive for buyers with other currencies and potentially weakening demand.
EQUITIES MARKETS: Global shares set record highs on Friday as investors cheered an apparent de-escalation in U.S.-Iran tensions and looked instead to prospects of improved economic growth.
DOLLAR: The U.S. dollar is likely to remain strong this year, Reuters polling of FX strategists found.
TRADE: U.S. President Donald Trump said on Thursday a phase one trade deal with China could be signed shortly after Jan. 15.
PAYROLLS: U.S. job growth slowed more than expected in December, but the pace of hiring remains more than enough to keep the longest economic expansion in history on track despite a deepening downturn in manufacturing.
FEDERAL RESERVE: The jobs data will probably not change the Federal Reserve’s assessment that both the economy and monetary policy are in a “good place.” Fed officials had said the economy may have weathered the worst.
JAPAN: Core machinery orders in Japan are likely to have risen in November after four months of decline, a Reuters poll showed.
COPPER STOCKS: Headline inventories in LME-registered warehouses fell by 3,100 tonnes to 132,725 tonnes, down from nearly 340,000 tonnes in August. MCUSTX-TOTAL
Stocks in warehouses monitored by the Shanghai Futures Exchange fell 5.4% from last Friday to 133,745 tonnes. CU-STX-SGH
POSITIONING: Speculators reduced their bets on lower prices. Their net short in LME copper had fallen to 6.5% of open contracts by Tuesday, from 17% late last month, broker Marex Spectron said.
TIN: Indonesia’s December exports of refined tin rose 23% year-on-year to 6,447 tonnes, data showed.
NORSK: Metals maker Norsk Hydro said it expected its sales of low-carbon aluminium made from recycled drink cans and other scrap to more than double this year and to increase further in 2021 and beyond.
OTHER METALS: LME aluminium rose 0.1% in closing rings to $1,806 a tonne; zinc eased 0.1% to $2,375; lead added 0.1% to $1,931; nickel advanced 0.8% to $14,190; and tin, untraded in rings, was bid down 0.2% at $17,225.
All but aluminium were up over the week. (Reporting by Peter Hobson; Additional reporting by Tom Daly; Editing by David Goodman, Mark Potter and Pravin Char)
BreakingviewsReuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.
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5fad1b14cdb29e8d61d4747a01858bd3 | https://www.reuters.com/article/global-metals/metals-us-china-trade-deal-boosts-copper-prices-even-as-doubts-linger-idUKL4N29L2HP?edition-redirect=uk | METALS-U.S.-China trade deal boosts copper prices even as doubts linger | METALS-U.S.-China trade deal boosts copper prices even as doubts linger
By Zandi Shabalala3 Min Read
* Key issues linger in U.S.-China trade row
* Copper prices hit highest since May
* Zinc and lead rise to two-month high (Updates with official prices)
LONDON, Jan 16 (Reuters) - Copper climbed to an eight-month high on Thursday after the United States and China inked an initial deal in a prolonged trade dispute, boosting hopes for a revival in metals demand.
“Fundamentally, the picture for copper is a lot better than it was last year, and from a macro point of view everything looks better in terms of the trade deal,” BMO Capital Markets analyst Timothy Wood-Dow said.
“We can’t see the Phase One trade deal having a huge effect on base metal prices, (but) the resultant stability will be an incremental positive.”
Key issues lingered between the world’s two largest economies because some tariffs remained in place even as China pledged to boost purchases of U.S. goods and services by $200 billion.
Benchmark copper on the London Metal Exchange (LME) was bid up 0.7% at $6,325 a tonne after failing to trade in official rings. The metal used in power and construction earlier touched its highest since May 1 at $6,340.
CHINA DATA: The negative impact of the trade dispute was laid bare in data from top metals consumer China on Thursday.
China’s new home prices grew at their weakest pace in 17 months in December, while new bank lending fell more than expected last month even as lending for 2019 as a whole hit a record.
More monetary easing and fiscal stimulus is expected this year to spur growth in China, analysts say, which bodes well for metals demand.
INVENTORIES: Supporting prices were declining stocks of copper in LME-approved warehouses, which shed 1,275 tonnes to 126,775 tonnes. This was their lowest level since March, and they have declined over 60% since August. MCUSTX-TOTAL
COPPER SPREAD: The widening of the discount of LME copper cash over the three-month contract CMCU0-3 pointed to a well-supplied market, however. It hit $34.50 a tonne, its highest in over three months.
TECHNICALS: Copper’s next technical target is $6,433 a tonne, the 50% Fibonacci retracement level, according to broker Marex Spectron.
SUPPLY: Diversified miner South32 Ltd said its manganese ore production slipped in the second quarter, but that it had cut its South African trucking costs.
OTHER PRICES: Aluminium prices were up 0.7% at $1,814 a tonne, after touching a one-week high. Zinc and lead rose to their highest in two months, with zinc adding 1.3% to $2,416.50 and lead gaining 1.4% to $2,026.
Tin firmed 1% to $17,625 and nickel inched 0.9% higher to $14,360. (Additional reporting by Mai Nguyen in Singapore; Editing by Jan Harvey)
BreakingviewsReuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.
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bee673f4c709af095d6cae43681733c2 | https://www.reuters.com/article/global-metals/metals-zinc-drops-as-rising-chinese-inventories-stoke-demand-fears-idINL4N28Y0LD?edition-redirect=in | METALS-Zinc drops as rising Chinese inventories stoke demand fears | METALS-Zinc drops as rising Chinese inventories stoke demand fears
By Reuters Staff0 Min Read
BEIJING, Dec 24 (Reuters) - Zinc prices fell in London and Shanghai in early Asian trade on Tuesday, as a rise in Chinese inventories stoked demand concerns and led investors to take up short positions on the metal used to galvanise steel. Social, or non-exchange, zinc stocks in China rose by more than 5,000 tonnes as of Dec. 23, Chinese brokerage Jinrui Futures said in a note, relieving some of the pressure on supply from low exchange inventories. FUNDAMENTALS * ZINC: Three-month zinc on the London Metal Exchange fell 0.2% to $2,285.50 as of 0233 GMT, after ending down 2.1% in the previous session. The most traded February zinc contract on the Shanghai Futures Exchange slumped 1.5% to 17,850 yuan ($2,545.20) a tonne. * TCs: Treatment charges for zinc concentrate in China AM-TC50-ZNCON have hit as high as $310 a tonne this month, the highest since June 2008 amid plentiful ore supply, incentivising smelters to keep producing metal. * COPPER: LME copper edged down 0.2% to $6,177.50 a tonne in quiet pre-holiday trade, while Shanghai copper inched up 0.1% to 49,080 yuan a tonne. * SCRAP: China's environment ministry has issued import quotas for 270,885 tonnes of high-grade copper scrap and 275,465 tonnes of aluminium scrap, the first batch for use in 2020. China's scrap metal imports in November rose by 6.3% from the previous month to 170,000 tonnes. [ * RARE EARTHS: Rare earths miner UCore Rare Metals Inc and manufacturer Materion Corp said on Monday they will form a consortium to jointly apply for U.S. military funding of a rare earths processing plant. * HOLIDAY: The London Metal Exchange will be closed on Wednesday and Thursday for the Christmas holiday. * For the top stories in metals and other news, click or MARKETS NEWS * The dollar traded little changed while equity markets added to a year-end rally, with both a gauge of stock performance worldwide and Wall Street hitting new highs amid renewed optimism over U.S.-China trade and growth prospects. DATA/EVENTS AHEAD (GMT) 1330 U.S. Federal Reserve Bank of Philadelphia issues nonmanufacturing business outlook survey for December PRICES BASE METALS PRICES 0236 GMT Three month LME copper 6180 Most active ShFE copper 49100 Three month LME aluminium 1805 Most active ShFE aluminium 14180 Three month LME zinc 2287 Most active ShFE zinc 17865 Three month LME lead 1928 Most active ShFE lead 14810 Three month LME nickel 14270 Most active ShFE nickel 112440 Three month LME tin 17160 Most active ShFE tin 138980 BASE METALS ARBITRAGE LME/SHFE COPPER LMESHFCUc 275.51 3 LME/SHFE ALUMINIUM LMESHFALc -239.92 3 LME/SHFE ZINC LMESHFZNc -502.96 3 LME/SHFE LEAD LMESHFPBc -938.27 3 LME/SHFE NICKEL LMESHFNIc -3164.36 3 ($1 = 7.0132 Chinese yuan renminbi) (Reporting by Tom Daly; Editing by Rashmi Aich)
Our Standards: The Thomson Reuters Trust Principles.
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3f6963cf6597f037a87648d33a8b3076 | https://www.reuters.com/article/global-metals/metals-zinc-hits-3-month-low-on-scepticism-over-china-buoyancy-idUKL4N28C25J?edition-redirect=uk | METALS-Zinc hits 3-month low on scepticism over China buoyancy | METALS-Zinc hits 3-month low on scepticism over China buoyancy
By Eric Onstad4 Min Read
* Nickel falls to lowest since mid-July, rebounds
* GRAPHIC-2019 asset returns: tmsnrt.rs/2jvdmXl (Updates with closing prices)
LONDON, Dec 2 (Reuters) - Zinc sank to its lowest in nearly three months on Monday and other industrial metals also posted losses as investors doubted that upbeat manufacturing data in China pointed to an economic recovery.
Factory activity in top metals consumer China expanded at the fastest rate in three years, a private sector survey showed on Monday, reinforcing strong government data released on Saturday.
But some analysts said the buoyant showing, especially for the Caixin/Markit manufacturing Purchasing Managers’ Index, may be influenced by one-off factors.
“A lot of people are doubting the veracity of the Caixin one. That’s a pretty dramatic turnaround, so there’s a degree of scepticism,” said Colin Hamilton, director of commodities research at BMO Capital in London.
“Normally the official numbers are above the Caixin one and for two or three months we’ve had it the other way around.”
There was also worry that the good data might undermine a U.S.-China trade deal.
“The problem America now faces is that China looks to be returning to growth despite the tariffs, which gives the upper hand to China,” Malcolm Freeman at Kingdom Futures said in a note.
“This may mean no trade deals are signed this year, which will be perceived as bearish.”
Benchmark zinc prices on the London Metal Exchange fell 1.3% to $2,243 a tonne in final open-outcry trading after touching $2,237, the lowest since Sept. 4.
* ZINC POSITION: The net speculative short position of LME zinc has risen to 14.7% of open interest, a level not seen since late September, Alastair Munro at broker Marex Spectron said in a note.
* NORSK HYDRO CUT: Norsk Hydro, one of the world’s biggest aluminium producers, plans to cut production by 20% at its majority-owned Slovalco plant in Slovakia, citing a weakening market.
“With a demand rebound unlikely near-term, supply cuts in excess of 1 million tonnes per annum are needed to prevent a drop to our bear case of $1,657/t in early 2020,” said Morgan Stanley analysts in a note.
LME aluminium rose 1.1% to close at $1,790 a tonne.
* ALUMINIUM STOCKS: The weak aluminium market has led to rising inventories. On-warrant LME stocks MALSTX-TOTAL, material not earmarked for delivery, reached 1,114,650 tonnes, the highest since Feb. 22, data showed on Monday.
They have shot up 42% over the past three weeks.
* COPPER CONTRACT: China’s Shanghai International Energy Exchange (INE) is preparing to launch a copper futures contract within the next year that will be open to domestic and foreign investors, according to two sources familiar with the plans.
* PRICES: LME three-month copper edged up 0.3% to end at $5,883 a tonne, lead dropped 1.6% to $1,906, the weakest since July 9, and tin slipped 0.03% to $16,490.
Nickel gained 0.4% to finish at $13,720, rebounding after touching $13,610, the weakest since July 16. (Reporting by Eric Onstad Editing by Christina Fincher and Jan Harvey)
BreakingviewsReuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.
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305fbdd266115ed6e761de29bd8830b6 | https://www.reuters.com/article/global-oceans-fish-idINL4N27V3U9?edition-redirect=in | FEATURE-Fish in fashion: Scientists and designers create products to soothe stressed oceans | FEATURE-Fish in fashion: Scientists and designers create products to soothe stressed oceans
By Thin Lei Win, Thomson Reuters Foundation6 Min Read
ROME, Nov 21 (Thomson Reuters Foundation) - With a third of the world’s oceans over-fished and global consumption at an all-time high, the time seems ripe for forward-thinking ventures like U.S.-based Good Catch, which aims to provide “seafood without sacrifice”.
The company’s first products were launched in February and recreate the texture and flavour of tuna, the world’s most popular fin fish, by blending six legumes with algae oil.
Such plant-based offerings could spell big changes, both for consumers in rich countries and in parts of the developing world where people many struggle to get enough nutritious food.
Besides pressures from growing populations and degrading ecosystems, climate change is expected to hit fisheries hard, said Vera Agostini, deputy director of fisheries and aquaculture at the United Nations’ Food and Agriculture Organization (FAO).
“Overall (climate) projections for fisheries show decreased catch potential in the tropical regions and increases in northern latitudes,” she told the Thomson Reuters Foundation.
“Sadly the areas that rely the most on fish, which is developing countries, are projected to see decreases.”
There will also be shifts in the distribution of fish, including their appearance in places where they have not been seen before, she added.
Consumption of fish is at record levels, according to the FAO, at 20.2 kg (44.5 lb) per person compared to 9 kg in 1961.
But the world’s craving for fish also offers opportunities, said Good Catch CEO Chris Kerr.
“We eat between 200-300 different types of sea creatures, compared to about 30 types of land animals,” he said.
“In this, we have an enormous ability to be creative – both technologically and in employing the best culinary arts.”
Good Catch, founded by chef brothers Chad and Derek Sarno, is planning to expand to Britain early next year and launch new frozen appetisers including plant-based crab, fish burgers and white fish.
LAB-GROWN SEAFOOD
Other startups like California-based BlueNalu are growing mercury-free seafood cells in labs to ensure a stable supply chain in the face of over-fishing, illegal fishing and the effects of warming oceans.
BlueNalu’s president and CEO Lou Cooperhouse said it had developed a natural process to grow the muscle cells that are a major component of fish without genetic modification.
“We’re focused on fin fish as a first broad category, and it’s our next objective to go on to crustaceans like lobster and crab and, ultimately, molluscs,” he said.
The company expects to test its products on the market within two to three years and start large-scale production in five years.
Until cell-based seafood reaches supermarket shelves, retailers and consumers will have to rely on farmed fish, which already accounts for half of global consumption, the FAO says.
Levels of omega-3 fatty acids, essential for human health, have fallen in farmed fish since over-fishing concerns spawned a switch from feed rich in oily fish to soy and other alternatives.
In response, Johnathan Napier and his team at Britain’s Rothamsted Research, an agricultural science centre, have genetically modified plants whose seeds produce the two key acids that make up omega-3.
“If we can use a land-based source of fish oils as a way of augmenting or adding to the stuff from the oceans, then we can relieve the pressure on the oceans,” he said, adding that the end result would also be far more affordable.
After 20 years of research and five years of field trials, Napier plans to apply for regulatory approval in North America.
In Europe, GMO crops remain controversial, with very few varieties authorised for growing and some countries like France banning their cultivation, citing environmental risks.
WASTE NOT, WANT NOT
The FAO says innovation is crucial to maintaining fish stocks and can also help struggling fishing communities increase their incomes.
An FAO symposium in Rome that coincides with World Fisheries Day on Thursday is showcasing how fish parts that would otherwise be discarded could be transformed into high fashion.
Brazilian-Italian designer Barbara della Rovere has worked since 2016 with fishermen’s wives in Kenya and southern Brazil to transform fish skin into luxurious leather bags and cuffs.
“They treat the skins, and all the remains - bones, flesh and scales - become fertiliser for the local farmers,” she said.
“So the entire byproducts that would (normally) be thrown away are used. It’s 100% sustainable.”
Fish skin is tougher than cow leather because the fibres run in multiple directions, creating a more solid and durable product.
Some of the women involved in the project were previously illiterate but can now read and have their own source of income, she said.
“I’m not an NGO - I still want to sell my bags. But nowadays, you have to think of sustainability.” (Reporting By Thin Lei Win @thinink, Editing by Megan Rowling and Chris Michaud. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, climate change, women’s and LGBT+ rights, human trafficking, and property rights. Visit www.trust.org)
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02cfae4f1246f6da37f2c4977daf576c | https://www.reuters.com/article/global-oil-analysts-idUKL4N2BR2FK?edition-redirect=uk | ANALYSTS' VIEW-Oil analysts sceptical about Saudi-Russian 'deal' | ANALYSTS' VIEW-Oil analysts sceptical about Saudi-Russian 'deal'
By Reuters Staff5 Min Read
April 3 (Reuters) - U.S. President Donald Trump is stoking the possibility of Saudi Arabia and Russia negotiating oil output cuts as the coronavirus outbreak hammers demand.
Trump said on Thursday he had brokered a deal between the two, but made no offer to reduce U.S. output, and Brent oil futures surged 21% in a record one-day rise.
Both Brent and WTI crude contracts ended the week with the biggest gains ever.
Below are analysts’ views (in alphabetical order):
ABN AMRO, HANS VAN CLEEF, SENIOR ENERGY ECONOMIST
* “We think that the high stake political poker games will continue and that it will also be hard to come to an agreement this time.”
* “It would be impossible for Russia and Saudi Arabia to balance a drop in demand of this magnitude by themselves and they may want to wait for a better momentum. This means that they may want to see other producers act too or to see global demand to pick up again.”
* “Even if there is a new production cut agreement possible next week, it will probably fall short of the expectations build by Trump and will not come close to the number of demand fallout expected for April.”
COMMERZBANK
* “Saudi Arabia will probably demand big cuts in production from both Russia and the U.S. (whose oil industry currently appears hardest hit by the crisis)
* Any (voluntary) cut of 10 million bpd or more will be difficult to implement, and as such is illusory.”
* “In the U.S., it may only be the state of Texas that would have a legal basis for reducing output to order.”
* “Although the discussions about possible cooperation between the oil-producing countries may be able to support the oil price at the moment, we believe that the reality on the oil market is much more gloomy.”
GOLDMAN SACHS
* “Given the size of the current demand hit of 26 million barrels per day (bpd) and growing signs that isolation policies are being extended globally, such output cuts are in our view necessary rather than voluntary.”
* A deal is “still a long way off and even if it is reached, its implementation would be “delayed and gradual” and “the impact of the cut wouldn’t be material for a number of weeks at least.”
* Even cuts of 5 million bpd from levels in the first quarter of 2020 by core OPEC members and 2 million bpd from the U.S. lower-48 region and “accelerated declines elsewhere” would not change a likely global oil surplus of 9 million bpd this quarter.
JBC ENERGY
* “It will take time to convene the meeting and there is no guarantee that it will bring any success, at any rate not to the extent that Trump claims.”
* “A 10 million-bpd cut would require substantial non-OPEC participation.”
* Fully addressing the demand fall “is a Herculean task that has very little chance of working unless Saudi Arabia and Russia shut in their entire crude production — an extremely unlikely scenario.”
MORGAN STANLEY
* “While headlines indicate new coordinated supply cuts are possible (potentially including the U.S.), this is unlikely to ‘fix’ near-term oversupply.”
* “Moreover, a near-term return to production cuts still seems unlikely, and we are sceptical that such a large coalition could be put together.”
* “The demand decline will be 5x the loss during the financial crisis.”
RYSTAD ENERGY, BJORNAR TONHAUGEN, HEAD OF OIL MARKETS
* Markets are right to treat the U.S. President’s tweets and statements regarding 10 or 15 million bpd in production cuts “with scepticism”.
* “The question for the oil market right now is whether we will have 10 million bpd of voluntary production cuts in the second quarter or forced production cuts. That could be due to full supply chains of oil, where shut-ins are forced, as there will be nowhere to physically put the oil after it leaves the ground.”
STANDARD CHARTERED, PAUL HORSNELL AND EMILY ASHFORD, ANALYSTS
* “We do not believe an end to the oil price war is imminent; the road to agreement may be a long one ...Even if a deal could be done today, our forecasts imply that storage will still fill to maximum in May.”
* “Our estimate of global excess supply in April is 21.8 million bpd and we expect the May excess to be 19.5 million bpd.
* Even if Trump’s putative deal could be done today, and came in at a 15 million bpd in May, the inventory build from March to end-May in our model would be 1.15 billion barrels, enough to take spare storage close to maximum.”
UBS
* “We remain sceptical that producers can credibly commit to such large cuts, and expect prices to come under pressure again.”
* “The challenge in cutting is that Saudi Arabia refuses to carry the cut burden alone; it expects OPEC and its allies (OPEC+) to help, as well as other countries like the U.S. and Canada.”
* “We see oil demand now down by about 20 million bpd y/y in Q2.” (Reporting by Arpan Varghese and Swati Verma in Bengaluru; editing by Jason Neely and Marguerita Choy)
Our Standards: The Thomson Reuters Trust Principles.
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af3a24633bedea689591b52fd034e1d0 | https://www.reuters.com/article/global-oil-canada-idCAO8N2CM004?edition-redirect=ca | Canada's oil producers need climate targets to draw investment, Trudeau says | Canada's oil producers need climate targets to draw investment, Trudeau says
By Reuters Staff1 Min Read
May 13 (Reuters) - Oil producers need to set clear targets to fight climate change to draw global capital, Canadian Prime Minister Justin Trudeau said on Wednesday, as major investors stepped up restrictions on transactions involving the Canada’s carbon-instensive oil sands.
“We’ve seen investors around the world looking at the risks associated with climate change as an integral part of investment decisions they make,” Trudeau told reporters, adding that many companies in the energy sector understood the investment climate is shifting.
“There is a need for clear leadership and clear targets to reach on fighting climate change to draw on global capital.” (Reporting by Jeff Lewis Editing by Chizu Nomiyama)
Our Standards: The Thomson Reuters Trust Principles.
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33e30e51d267edae3dd26afa5be1d38f | https://www.reuters.com/article/global-oil-canada-idINKBN27H1GW?edition-redirect=in | Canada turns on oil taps as prices rise, curbs lift | Canada turns on oil taps as prices rise, curbs lift
By Rod Nickel3 Min Read
WINNIPEG, Manitoba (Reuters) - Canadian crude producers are churning out extra barrels to finish their hardest year in decades on a higher note, after Alberta’s government lifted restrictions and as demand for heavy oil surged.
FILE PHOTO: Pipelines run at the McKay River Suncor oil sands in-situ operations near Fort McMurray, Alberta, September 17, 2014. REUTERS/Todd Korol/File Photo
Some companies in Canada, the world’s fourth-largest producer, continued to post big losses in the third quarter, swelled by impairment charges related to pandemic travel restrictions that have depressed fuel demand.
Producers cut 972,000 barrels per day (bpd) in spring when prices set new lows, dropping production to about 4 million bpd. They have since restored all but 270,000 bpd, according to the Canada Energy Regulator.
Cenovus Energy Inc is likely to raise production in December, with volume depending on prices, and expects rivals to re-start their curtailed capacity, Chief Executive Alex Pourbaix said last week.
“We’re going to see a significant amount of that come back over the next few months,” Pourbaix said in an interview.
Suncor Energy Inc said last week it would raise production at its Fort Hills mine in 2021 and is making improvements at its Firebag site to squeeze out more capacity.
“We’re really looking forward to this being a fully unencumbered market,” Chief Executive Mark Little said on Thursday.
Suncor’s output looks to rise 10% in 2021, Little said, from expected total 2020 production of 680,000 to 710,000 barrels of oil equivalent per day.
Even though benchmark U.S. crude prices are down 42% since the start of the year, they have rebounded sharply since April.
But at around $35 per barrel, any profits are slim. The cost of adding incremental barrels can be modest, however, when facilities reach higher output levels, Little said.
Alberta last month lifted output restrictions that it imposed in 2019 to alleviate congested pipelines, now that they are running fluidly and storage levels are low.
More production may slow the industry’s bleeding. It is cutting some 32,000 production and service jobs, according to government data and announcements this month by Suncor, Cenovus and Husky Energy Inc.
Heavy oil supplies have tightened due to U.S. sanctions against Venezuela, helping Canada land sales to unusual destinations such as India.
MEG Energy Corp also plans to produce more oil, and boosted its 2020 output guidance last week by 3%.
Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Marguerita ChoyOur Standards: The Thomson Reuters Trust Principles.
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9fc36717eea9d0c08e852398b7423c86 | https://www.reuters.com/article/global-oil-cuts-idUKL8N2BA2EF?edition-redirect=uk | FACTBOX-Global oil, gas producers slash spending after price rout | FACTBOX-Global oil, gas producers slash spending after price rout
By Reuters Staff2 Min Read
(Adds Exxon, Kosmos)
March 17 (Reuters) - Oil and gas companies around the world are planning to slash spending in the face of a plunge in oil prices caused by the spread of the coronavirus and a push by Saudi Arabia and Russia to flood the market with supply.
Below are plans announced by top energy companies (in alphabetical order):
BP
BP said it planned to reduce capital and operational spending. BP’s capital spending last year reached around $15 billion.
CHEVRON CORP
Chevron Corp said it was looking at ways to trim spending that could lead to lower near-term oil production. The company, however, did not provide details. The oil major’s 2020 organic capex guidance was $20 billion.
North American oil and gas producers have slashed their capital spending by about 30% on average, according to data compiled by Reuters.
EXXON MOBIL
Exxon Mobil said it would make “significant” cuts to spending, without giving any details. The company earlier budgeted $30-33 billion for projects this year.
GULF KEYSTONE
Kurdistan-focused producer Gulf Keystone has also suspended some of its drilling activities in the northern Iraqi region.
KOSMOS ENERGY
Kosmos Energy aims to reduce its 2020 capital budget by around 30% to $250 million while keeping production flat.
SANTOS
Santos Ltd, Australia’s No. 2 independent gas producer, said it is reviewing all its capital spending plans in light of the collapse in oil prices and would stop all new hiring.
SAUDI ARAMCO
Saudi Arabia’s national oil company Aramco said it planned to cut capital spending for 2020 to between $25 billion and $30 billion, compared with $32.8 billion in 2019. (Reporting by Ron Bousso and Sonali Paul; editing by Jason Neely)
Our Standards: The Thomson Reuters Trust Principles.
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3d3bdd623dfb48f14b1533df631e8e7b | https://www.reuters.com/article/global-oil-funds-analysis/analysis-oil-investors-still-on-edge-waiting-on-opecs-word-idINKCN1NW2C6?edition-redirect=in | Analysis: Oil investors still on edge, waiting on OPEC's word | Analysis: Oil investors still on edge, waiting on OPEC's word
By Devika Krishna Kumar5 Min Read
NEW YORK (Reuters) - Global oil markets are nervously eyeing OPEC’s upcoming meeting for clarity on future supply as the dust settles after a full-fledged rout in crude markets over the last several weeks.
FILE PHOTO: An Aramco oil tank is seen at the Production facility at Saudi Aramco's Shaybah oilfield in the Empty Quarter, Saudi Arabia May 22, 2018. REUTERS/Ahmed Jadallah/File Photo
So far, there is no clear view if production will be cut or remain steady, and that uncertainty raises the risk of more volatile trading after mass selling caused oil to drop by more than 30 percent in little over a month.
Participants generally expect OPEC will trim production at its Dec. 6 meeting by about 1.4 million barrels per day (bpd), but there is enough uncertainty to make traders defensive.
Speculators, once betting on $100-a-barrel oil, are now going the other direction, having boosted short positions in oil to their biggest in more than a year. The options market currently shows a record number of open positions in U.S. oil falling to $45 or $40 a barrel by the end of 2019, though bullish bets have also edged higher.
“Getting some resolution around the intent of the Saudis and OPEC ... would go a long way to helping the market feel better,” said Greg Sharenow, portfolio manager at PIMCO, who co-manages more than $15 billion in commodity assets.
He added that if OPEC does not reduce production, prices could tumble to $40 a barrel.
The signals from the Organisation of the Petroleum Exporting Countries and its leader, Saudi Arabia, have been mixed. Officials familiar with Saudi plans told Reuters they expect it to trim production, but an industry source also said Saudi oil output exceeded 11 mln bpd for the first time in November.
Slideshow ( 2 images )
The cartel’s deliberations have been compounded by the growing influence of Russia, whose production has climbed to a post-Soviet era high, and by the United States, which is now producing at a record 11.7 million bpd. Russian oil executives and officials have been skeptical of the need to cut output.
Meanwhile, the U.S. decision to reimpose sanctions on Iran, only to grant waivers to major importers of that nation’s oil, threw the market for a loop.
Macro-focused and commodity trading advisory funds (CTAs) had bet on a further rally ahead of renewed U.S. sanctions on Iran, but instead were caught wrong-footed after waivers were announced and U.S. production surged faster than expected. Wall Street banks looking to protect against exposure from selling options to oil producers intensified that selling, market sources said.
Implied volatility, a gauge of options demand, soared, with U.S. crude CLATMIV implied volatility hitting its highest level since February 2016 last week.
The price swings hit funds hard. Among renowned oil bulls, the Andurand Capital Commodities Fund lost 4.1 percent for the month through Nov. 16, putting it down 15.7 percent for the year, according to HSBC data.
Open interest in bearish bets on U.S. crude falling to $45 or $40 a barrel by the end of 2019 are at record levels CL450X9CL400X9 but bets on U.S. oil rising to $80 a barrel by end-2019 are also high CL800L9, as some see the sell-off as having gone too far, too fast.
“As sharp as the falloff has been, I think the market is poised to have as sharp a comeback,” said Shawn Reynolds, portfolio manager of the VanEck Global Hard Assets Fund in New York.
In recent weeks, both OPEC and the International Energy Agency cut their demand forecasts due to sagging fortunes in developing economies. The forward Brent futures LCOc1 curve - the market's primary indicator of expectations for supply and demand - now signals a potential glut through mid-2019.
CME Group’s OPEC Watch Tool, which uses option-market activity to predict the probability of OPEC’s decision, currently puts a 70 percent chance on a small OPEC production cut and a 30 percent chance of little to no change in output.
This uncertainty is in part due to U.S. President Donald Trump, whose decision not to punish the Saudis for the killing of journalist Jamal Khashoggi has raised the possibility that the kingdom will be less inclined to cross Trump by cutting output dramatically.
“President Trump’s tacit support of Crown Prince Mohammed bin Salman (known as MbS) in the wake of the Khashoggi murder seems to have provided him with significant leverage over the Saudi leadership,” Capital Economics analysts said in a note.
Reporting by Devika Krishna Kumar in New York; Additional reporting by Lawrence Delevingne; Editing by Tom BrownOur Standards: The Thomson Reuters Trust Principles.
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04848e349e133d6644ba0b60b40e45b6 | https://www.reuters.com/article/global-oil-idINKBN21A07V?edition-redirect=in | Crude edges higher, U.S. gasoline slumps over 30% on sinking demand | Crude edges higher, U.S. gasoline slumps over 30% on sinking demand
By Devika Krishna Kumar4 Min Read
NEW YORK (Reuters) - Oil prices inched higher on Monday, while U.S. gasoline prices plunged more than 30% to a record low as global restrictions on travel to slow the spread of coronavirus destroyed demand for fuel.
FILE PHOTO: Pump jacks operate at sunset in Midland, Texas, U.S., February 11, 2019. REUTERS/Nick Oxford
Brent crude LCOc1 futures ended the session up 5 cents at $27.03 a barrel while West Texas Intermediate (WTI) crude CLc1 futures for May delivery rose 73 cents, or 3.2%, to $23.36 a barrel. Both benchmarks traded in negative territory until late in the session.
Gasoline futures RBc1 in the United States, the world's top consumer of the motor fuel, tumbled 32% to settle at about 41.18 cents a gallon, their lowest on record. That was the biggest daily percentage drop ever, and also sent the profit margin RBc1-CLc1 to produce gasoline into negative territory.
“There’s nobody driving, there’s no business, there’s nobody that needs gasoline, and not only that, it could get a lot worse,” said Bob Yawger, director of energy futures at Mizuho in New York.
The United States consumes more than 9 million barrels per day of motor gasoline, nearly half the nation’s daily oil consumption, and with residents confining themselves and businesses shut, demand is falling precipitously.
Analysts also attributed the fall in gasoline prices to the U.S. Senate’s failure to pass an estimated $2 trillion package to boost the economy, as fuel demand is tied to economic output.
Crude futures were slightly stronger on hopes that government and central bank stimulus might boost world economies, and that Saudi Arabia and Russia might reconcile after their deal to cut oil production fell apart more than two weeks ago.
Both crude benchmarks have dropped for four straight weeks, with WTI slumping 29% last week, its steepest slide since the outset of the U.S.-Iraq Gulf War in 1991.
Oil prices have lost about half their value since Saudi Arabia and Russia scuttled an agreement between them and other major oil producers to curb supply. Now, those nations are pumping full-bore and ramping up exports.
Oversupply is so extreme that the United States plans to send a special energy envoy to Saudi Arabia to work with the kingdom on stabilizing the global oil market, U.S. officials said on Friday.
Bankers, analysts and producers are downgrading demand forecasts by the day, with numbers fluctuating around a loss of around 10 million bpd.
Oil demand this year will fall 2.8 million bpd, the largest single-year drop in nearly 40 years, Morningstar analysts projected.
Refining margins for gasoline and jet fuel have tanked because of decreased demand for transportation fuels, as the pandemic has forced businesses to close and governments to push residents to avoid travel and public places.
Many oil companies have rushed to cut spending and shareholder payouts while refiners worldwide are slashing production or considering cuts as demand for fuel evaporates.
The physical market at Cushing, Oklahoma, the delivery point for WTI futures signaled heavy oversupply with prices to roll positions forward to the next month sinking to the weakest in nearly a decade.
The six-month spread of Brent futures LCOc1-LCOc7 hit its steepest since 2009 at a discount of around $9, a contango structure which reflects the current oversupply.
Oil prices have dropped more than 60% since the start of the year, while everything from coal to copper have also been hit by the coronavirus crisis, and bond and stock markets are in rarely charted territory. [MKTS/GLOB]
“Set against this dismal outlook, the downward spiral in oil prices is poised to continue and may well reach the mid-teens. Put simply, the search for a price floor is by no means over,” PVM analysts said in a note.
For a graphic on Brent six-month contango:
Additional reporting by Shadia Nasralla in London, Aaron Sheldrick in Tokyo; Editing by Marguerita Choy and Louise HeavensOur Standards: The Thomson Reuters Trust Principles.
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3335bec6963c7d6f646fe91b32357f8e | https://www.reuters.com/article/global-oil-idINKBN27Y05C?edition-redirect=in | Oil falls as big build in U.S. crude stockpiles raises spectre of supply glut | Oil falls as big build in U.S. crude stockpiles raises spectre of supply glut
By Yuka Obayashi3 Min Read
The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019. REUTERS/Angus Mordant/File Photo
TOKYO (Reuters) - Oil prices fell on Wednesday after a bigger-than-expected build in U.S. crude stockpiles stoked fears for weak fuel demand and a potential supply glut, but hopes that OPEC and its allies will postpone a planned January increase to oil output braked losses.
Brent crude futures for January dropped 14 cents, or 0.3%, to $43.61 a barrel by 0142 GMT having lost 0.2% on Tuesday. U.S. West Texas Intermediate crude for December slid 25 cents, or 0.6%, to $41.18 a barrel, reversing a 0.2% gain on Tuesday.
The American Petroleum Institute (API) said on Tuesday that U.S. crude inventories rose by 4.2 million barrels last week, well above analysts’ expectations in a Reuters poll for a build of 1.7 million barrels.
“A higher build in U.S. crude stockpiles prompted selling as it fanned fears of slow recovery in fuel demand,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
“Still, hopes that OPEC+ will keep existing cuts further into 2021, or even increase the cuts, underpinned prices,” he said. Kikukawa predicted WTI will stay boxed into a range of $39 and $44 a barrel until a full meeting of the Organization of the Petroleum Exporting Countries (OPEC) on Nov. 30.
To tackle weaker energy demand amid a new wave of the COVID-19 pandemic, Saudi Arabia called on fellow members of the OPEC+ grouping - OPEC and other producers including Russia - to be flexible in responding to oil market needs as it builds the case for a tighter production policy in 2021.
OPEC+ held a ministerial committee meeting on Tuesday that made no formal recommendation.
OPEC+ members are leaning towards delaying a previously agreed plan to boost output by 2 million barrels per day (bpd), or 2% of global demand, in January in an effort to support the market, sources told Reuters early this week.
Supporting the case for a tighter supply policy next year, OPEC and its allies have revised oil demand scenarios for 2021 with demand seen weaker than previously anticipated, a confidential document seen by Reuters shows.
Reporting by Yuka Obayashi; Editing by Kenneth MaxwellOur Standards: The Thomson Reuters Trust Principles.
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59248d0a44dcaf45ba5677dbb8971359 | https://www.reuters.com/article/global-oil-idINKCN0XQ02T?edition-redirect=in | Oil ends steady near $50; best monthly gain in Brent in seven years | Oil ends steady near $50; best monthly gain in Brent in seven years
By Barani Krishnan3 Min Read
NEW YORK (Reuters) - Oil prices ended steady on Friday after hitting 2016 highs but finished April trading about 20 percent higher, with Brent crude having its best monthly gain in seven years.
A pump jack is seen near sunflowers in Guthrie, Oklahoma in a September 15, 2015 file photo. REUTERS/Nick Oxford/Files
A weaker dollar and optimism that a global oil glut will ease have lifted crude futures by more than $20 a barrel since they plumbed 12-year lows below $30 in the first quarter.
Brent futures settled just a penny lower at $48.13 a barrel, after reaching a 2016 peak at $48.50. It rose 21.5 percent in April, its largest monthly advance since May 2009.
U.S. crude futures closed 11 cents lower at $45.92 a barrel, after hitting a year-to-date high at $46.78. It gained 20 percent in April, the biggest monthly gain in a year.
With prices less than $5 away from $50 a barrel, investment bank Jefferies said the market “is coming into better balance” and would flip into undersupply in the second half of the year.
But others warned that the rally was driven by investors holding large speculative positions, while oil stockpiles were still high, with a Reuters survey showing OPEC output in April rising to its most in recent history.
“The issue is that we haven’t seen price rallies ... correlate with fundamentals,” said Hamza Khan, senior commodity strategist at ING. “The fundamentals - high stocks, high production - haven’t changed.”
Technical analysts said crude could cruise to $50 a barrel but stiffer resistance before $55 could spark profit-taking on the market’s biggest rebound in two years.
Analysts polled by Reuters raised their average forecast for Brent in 2016 to $42.30 per barrel, the second consecutive month of increases.
Bank of America Merrill Lynch said in a note that “non-OPEC oil supply is indeed hanging off a cliff”, and estimated that global output would contract year-on-year in April or May for the first time since 2013.
The OPEC survey aside, Saudi oil output was expected to edge up by 350,000 barrels per day to around 10.5 million bpd, sources told Reuters, as tankers filled with unsold oil floated at sea seeking buyers.
The discount in spot U.S. crude to the next trading month meanwhile whittled to its smallest since January, reducing the advantages of storing oil in the United States for later delivery.
Additional reporting by Libby George and Karolin Schaps in LONDON and Henning Gloystein in SINGAPORE; editing by David Gregorio and Marguerita ChoyOur Standards: The Thomson Reuters Trust Principles.
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333b922292460c12b4f1d074c0cbe439 | https://www.reuters.com/article/global-oil-idINL3N2ET0DV?edition-redirect=in | Oil prices fall on U.S. inventory build, increasing pandemic fears | Oil prices fall on U.S. inventory build, increasing pandemic fears
By Jessica Jaganathan3 Min Read
* U.S. crude stockpile rise sharply in latest week - API
* Trump shifts rhetoric, warns virus is getting worse
* Iraq’s oil exports rise in July
* Coming up: EIA inventory data at 1430GMT
SINGAPORE, July 22 (Reuters) - Oil prices fell on Wednesday as industry data showed a bigger- than-expected inventory build in the United States where coronavirus cases continue to climb, potentially further denting demand in the world’s biggest oil consumer.
In his first briefing in months focused on the pandemic, U.S. President Donald Trump said that the outbreak would probably get worse before it gets better, one of his first recent acknowledgements of the spread of the problem.
Industry group American Petroleum Institute (API) reported U.S. crude inventories rose last week by 7.5 million barrels compared with expectations for a draw of 2.1 million.
Brent crude fell 32 cents, or 0.7%, to $44 a barrel by 0156 GMT, and U.S. West Texas Intermediate (WTI) crude dropped 33 cents, or 0.8%, to $41.59.
Oil prices climbed about $1 the previous day, reaching their highest since March 6.
“Crude’s rally hit a brick wall after the API report showed a sharp rise in stockpiles and on President Trump’s warning that the coronavirus pandemic in the U.S. is likely to worsen,” said Edward Moya, senior market analyst at OANDA in New York.
“The crude demand outlook just got a double whammy with what could be the biggest rise in stockpiles since late May if confirmed by the EIA report tomorrow and on Trump’s downbeat virus briefing.”
The U.S. Energy Information Administration (EIA) will release official oil inventory data later on Wednesday.
Economic data from Japan, the world’s fourth-largest oil consumer, also weighed on prices. Factory activity contracted for a 15th straight month in July, indicating lower economic activity because of the pandemic is extending into the third quarter.
Oil prices rose on Tuesday on optimism for a COVID-19 vaccine and after European Union lenders agreed on a 750 billion-euro ($859 billion) fund to prop up coronavirus-hit economies.
Still, the effect of those funds on prompt oil prices will be mute as it may take months to start flowing and the impact may take years to show, Stephen Innes, chief global markets strategist at AxiCorp said in a note on Wednesday.
There are also signs that Iraq, the second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), is still not meeting its target under an OPEC-led supply cut deal.
Southern Iraqi exports in the first 20 days of July averaged 2.70 million bpd, according to data from Refinitiv Eikon and two industry sources, equal to official data for exports in all of June. (Reporting by Jessica Jaganathan; Editing by Christian Schmollinger)
Our Standards: The Thomson Reuters Trust Principles.
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178caeba5be74e2d9e2a706192606468 | https://www.reuters.com/article/global-oil-idINL3N2F008P?edition-redirect=in | CORRECTED-Oil rises after surprise drop in U.S. inventories offsets demand concerns | CORRECTED-Oil rises after surprise drop in U.S. inventories offsets demand concerns
By Reuters Staff2 Min Read
(Corrects first paragraph to say inventories decreased, not increased)
TOKYO, July 29 (Reuters) - Oil prices rose on Wednesday after an industry report showed that crude inventories in the United States decreased against expectations, giving the market a boost amid record increases of coronavirus infections in the U.S. and elsewhere.
Brent crude was up by 24 cents, or 0.6%, at $43.46 a barrel by 0041 GMT, after dropping 0.4% on Tuesday.
U.S. oil gained 14 cents, or 0.3%, to $41.18 a barrel, having dropped 1.4% in the previous session.
Inventories of crude oil in the U.S. dropped by 6.8 million barrels last week to 531 million barrels, data from industry group the American Petroleum Institute showed on Tuesday.
Analysts’ expectations were for an increase of 357,000 barrels. U.S. government data is due Wednesday.
“This should temporarily alleviate some concerns about ongoing demand distress,” Stephen Innes, chief global markets strategist at AxiCorp said in a note.
The raging COVID-19 pandemic is keeping alive concerns about falling fuel demand causing an oversupplied market as record numbers of infections are reported globally, including the U.S., the world’s biggest consumer of oil.
Four U.S. states reported one-day records for coronavirus deaths on Tuesday and cases in Texas passed the 400,000 mark.
Attempts to provide relief amid the outbreak were in disarray as Republicans in the U.S. disagreed over their own plan for providing $1 trillion in new coronavirus aid on Tuesday.
In Hong Kong, the government on Wednesday warned the city is on the edge of a large-scale coronavirus outbreak and urged people to stay indoors as much as possible.
Reporting by Aaron Sheldrick; Editing by Christian SchmollingerOur Standards: The Thomson Reuters Trust Principles.
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76566c2f2467b62ade3209dcd79fcd2e | https://www.reuters.com/article/global-oil-idINL4N2BJ0Y6?edition-redirect=in | UPDATE 1-Oil prices slip as demand shrinks, but stimulus supports | UPDATE 1-Oil prices slip as demand shrinks, but stimulus supports
By Roslan Khasawneh3 Min Read
* Swelling supplies and inventories weigh
* Losses capped as U.S. Senate passes $2 trln stimulus
* Demand loss in Q2 estimated around 15 mln bpd - analysts
* Oil prices may fall to $10/bbl as inventories fill - analyst (Adds bullets, analyst quotes and detail, updates prices)
SINGAPORE, March 26 (Reuters) - Oil prices slipped on Thursday following three days of gains, with the prospect of rapidly dwindling demand due to coronavirus travel bans and lockdowns offsetting hopes a U.S. $2 trillion emergency stimulus will shore up economic activity.
Brent crude futures fell 19 cents, or 0.7%, to $27.20 a barrel by 0441 GMT. West Texas Intermediate (WTI) crude futures fell 37 cents, or 1.5%, to $24.12 a barrel. Both contracts are down about 60% this year.
“Oil markets received a lift from the U.S. stimulus chatter, but for the most part activity remains rudderless, awash in a sea of oil,” said Stephen Innes, market strategist at AxiTrader.
The U.S. Senate on Wednesday overwhelmingly backed a $2 trillion bill aimed at helping unemployed workers and industries hurt by the coronavirus epidemic.
But with demand fast contracting and output rising, the outlook for oil remains dim.
IHS Markit estimated global oil demand will contract by more than 14 million barrels per day (bpd) in the second quarter, leading to unprecedented inventory builds.
“Expect fundamental pressure concentrated over March and April, an eight-week blitz period over which stocks currently stand to build north of 1 billion barrels cumulatively,” said Roger Diwan, vice president of financial services at IHS Markit.
At the same time, the collapse of a supply-cut pact between the Organization of the Petroleum Exporting Countries and other producers led by Russia, known as OPEC+, is set to boost oil supply, with Saudi Arabia planning to ship more than 10 million bpd from May.
Oil stocks are already rising with tanks around the world filling fast despite a 50%-100% jump in lease costs, as oil companies and traders scramble to park unwanted crude and refined products.
“At that tipping point, the producer surplus will become a massive logistical headache for oil storage consideration, which then opens up the trap door for oil prices to plummet below cash costs,” said Innes.
Vienna-based JBC Energy said it expected world oil demand to fall by an even larger 15.3 million bpd in the second quarter, likely pushing benchmark prices, at least temporarily, to around $10 per barrel.
“OPEC+ as an organisation is of pretty limited relevance in this context, as they are neither likely to be willing nor able to stem the current demand shock,” said Johannes Benigni, chairman at JBC Energy in a note on Wednesday.
U.S. crude inventories rose by 1.6 million barrels in the most recent week, the U.S. Energy Information Administration said on Wednesday, marking the ninth straight week of increases.
Products supplied, a proxy for U.S. demand, dropped nearly 10% to 19.4 million bpd, EIA data showed.
Reporting by Roslan Khasawneh in SINGAPORE and Sonali Paul in MELBOURNE; editing by Richard PullinOur Standards: The Thomson Reuters Trust Principles.
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825ea8ebc7fa7ad1730b94f53e51954c | https://www.reuters.com/article/global-oil-idINL4N2HP427?edition-redirect=in | Oil jumps as inventory falls, market awaits U.S. vote results | Oil jumps as inventory falls, market awaits U.S. vote results
By Reuters Staff3 Min Read
TOKYO, Nov 4 (Reuters) - U.S. oil prices jumped more than 2% on Wednesday after industry data showed crude inventories in the United States dropped sharply and as investors awaited results from the tumultuous presidential election.
West Texas Intermediate was up $1.01, or 2.7%, at $38.67 a barrel by 1138 GMT Tuesday, after gaining more than 2% in the previous session. Brent crude was yet to trade, having gained 3% on Tuesday.
Oil prices dropped more than 10% last week with rising coronavirus cases around the world and more restrictions on movement hitting demand prospects. U.S. oil has nearly recouped those losses in three days of gains this week in the run-up to the election.
Still, “the market is ... cautious heading into the U.S. presidential election,” ANZ Research said in a note.
“The two contenders have significantly different energy policy platforms, which could impact the crude oil demand,” ANZ said. “We expect a Biden victory to weigh on crude prices in the medium term,” referring to U.S. Democratic challenger Joe Biden.
U.S. crude oil stocks fell sharply last week while gasoline inventories rose, data from industry group the American Petroleum Institute showed on Tuesday.
Crude stockpiles fell by 8 million barrels last week to about 487 million barrels, the American Petroleum Institute showed on Tuesday.
That contrasted with analysts’ expectations in a Reuters poll for an increase of 890,000 barrels.
More lockdowns could put a cap on oil price gains as Italy, Norway and Hungary tightened COVID-19 restrictions, following the UK, France and other countries.
Supporting prices, OPEC member Algeria backed deferring a planned increase in OPEC+ oil output from January and Russia’s energy minister raised the prospect with the country’s oil producers.
The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, a grouping known as OPEC+, are set to reduce cuts of 7.7 million barrels per day (bpd) by around 2 million bpd from January.
Sources said OPEC and Russia are considering bigger production reductions next year to support prices. (Reporting by Aaron Sheldrick; Editing by Sam Holmes)
Our Standards: The Thomson Reuters Trust Principles.
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e96598bbf71ac860b25908a638a86fa7 | https://www.reuters.com/article/global-oil-idUKL1N2I302G?edition-redirect=uk | Oil prices edge higher ahead of OPEC+ meeting, vaccine hopes | Oil prices edge higher ahead of OPEC+ meeting, vaccine hopes
By Jessica Jaganathan3 Min Read
* OPEC+ weighs oil cuts extension, sees weaker compliance
* Moderna says vaccine 94.5% effective in preventing COVID-19
* China crude throughput hits record high in October
SINGAPORE, Nov 17 (Reuters) - Oil prices edged higher on Tuesday on expectations OPEC and its allies will extend oil production cuts for at least three months, while sentiment was bolstered by news of another promising coronavirus vaccine.
Brent crude futures for January rose 16 cents, or 0.4%, to $43.98 a barrel by 0104 GMT and U.S. West Texas Intermediate crude for December added 13 cents, or 0.3%, to $41.47 a barrel.
Equity markets rose on hopes of a quicker economic recovery after Moderna Inc said its experimental COVID-19 vaccine was 94.5% effective in preventing infection based on interim late-state data.
This comes after Pfizer Inc reported last week that its vaccine was more than 90% effective.
“If we judge economic recovery, particularly through the lens of oil markets... with multiple high efficacy vaccines in the pipeline, there is good chance mobility will return close to pre-pandemic levels later in 2021,” said Stephen Innes, chief global markets strategist at axi in a note.
OPEC+, which groups the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, is set to hold a ministerial committee meeting on Tuesday that could recommend changes to production quotas when all the ministers meet on Nov. 30 and Dec. 1.
The group is leaning towards postponement of a planned January increase in oil output for at least three months to support prices as the COVID-19 pandemic continues its second wave, sources told Reuters on Monday.
China’s crude oil throughput in October rose to its highest-ever level, underpinning a fast demand recovery in the world’s second largest oil consumer.
“Oil demand in China is exceeding pre-COVID-19 levels which suggests oil demand is not permanently impaired,” analysts from Bernstein Energy said.
“This is in line with mobility data and supports the view that oil demand has not been structurally damaged by changes in behaviour post COVID-19 for countries which emerged successfully from COVID-19.” (Reporting by Jessica Jaganathan; editing by Richard Pullin)
BreakingviewsReuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.
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8981e0e1f92d1a49b705fe7a4a5007b8 | https://www.reuters.com/article/global-oil-idUKL3N1BL081?edition-redirect=uk | RPT-Oil pulls back after big jump on U.S. crude stock draw | RPT-Oil pulls back after big jump on U.S. crude stock draw
By Reuters Staff2 Min Read
(Repeats to additional subscribers)
TOKYO, Sept 9 (Reuters) - Oil prices pulled back on profit-taking on Friday after settling more than 4 percent higher a day earlier after government data confirmed a surprisingly huge drawdown in U.S. crude inventories.
London Brent crude for November delivery was down 36 cents at $49.63 a barrel by 0023 GMT. It settled up $2.01, or 4.2 percent, at $49.99 on Thursday after touching a near two-week high of $50.14 earlier.
NYMEX crude for October delivery was down 35 cents at $47.27, after settling up $2.12, or 4.7 percent, on Thursday.
U.S. crude stocks dropped 14.5 million barrels last week to 511.4 million barrels, the biggest weekly drop in stockpiles since January 1999, according to government data.
Imports into the U.S. Gulf Coast fell to 2.5 million barrels per day, the lowest since data collection began in 1990.
Traders said the imports fell as ships delayed offloading cargoes in Texas and Louisiana due to Tropical Storm Hermine.
Gasoline futures fell nearly 1 percent on Friday after jumping over 5 percent on Thursday after the data release, on higher than expected draws and rising refinery utilization in the Midwest.
Russian average oil production rose close to 11 million bpd during Sept. 1-7, industry sources told Reuters, from 10.71 million bpd in August. (Reporting by Osamu Tsukimori; Editing by Joseph Radford)
Our Standards: The Thomson Reuters Trust Principles.
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0c0f0579b67d167c9222b1bb6b5b357e | https://www.reuters.com/article/global-oil-idUKL4N1AF18Q?edition-redirect=uk | Oil prices remain near April lows on ongoing oversupply | Oil prices remain near April lows on ongoing oversupply
By Henning Gloystein2 Min Read
SINGAPORE, July 29 (Reuters) - Oil prices on Friday remained around April lows as slowing economic growth threatened to worsen ongoing oversupply of crude and refined products.
International Brent crude oil futures were trading at $42.78 at 0127 GMT, up 8 cents from their previous close. U.S. West Texas Intermediate (WTI) crude was at $41.16, up 2 cents.
Brent hit its lowest since April in the previous session, at $42.56, while WTI hit a fresh low of $40.95 per barrel early on Friday, and both crude benchmarks are now down around 20 percent since their last peak in June.
Because of ongoing oversupply, U.S. bank Goldman Sachs said this week that it did not expect a big recovery in prices any time soon.
“We continue to expect that oil prices will remain in a $45 per barrel to $50 per barrel trading range through mid-2017 with near-term risks skewed to the downside,” the bank said.
Despite this, some analysts said recent price falls in oil had been overdone, especially as demand remains strong despite concerns over future economic growth.
“Investors have become overly bearish on oil as U.S. production and gasoline inventories continue to rise. We think those concerns are unwarranted. Underlying demand in the U.S. remains robust,” ANZ bank said. (Reporting by Henning Gloystein; Editing by Richard Pullin)
Our Standards: The Thomson Reuters Trust Principles.
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eb9ca58fade205747142ec0baef72ff6 | https://www.reuters.com/article/global-oil-idUKL4N2860BF?edition-redirect=uk | Oil prices steady amid hopes for U.S.-China trade deal | Oil prices steady amid hopes for U.S.-China trade deal
By Reuters Staff2 Min Read
TOKYO, Nov 26 (Reuters) - Oil prices were steady on Tuesday, holding onto gains from the previous session, after positive comments from the United States and China kept alive hopes that the world’s two largest economies are soon to agree an end their trade war.
Brent crude futures were down 1 cent at $63.64 at 0121 GMT, after rising 0.4% in the previous session.
West Texas Intermediate crude was down 3 cents at $57.98, having risen 0.4% on Monday.
China and the United States are “moving closer to agreeing” on a “phase one” trade deal, the Global Times - a tabloid run by the Chinese Communist Party’s official People’s Daily - reported.
“While a phase one agreement has yet to be signed, and the terms still unclear, the path towards de-escalation and cancellation of tariff hikes ... is nevertheless positive for markets,” J.P. Morgan said in a note.
Still, the Global Times report noted that Washington and Beijing had not agreed on specifics or the size of rollbacks of tariffs on Chinese goods. Beijing’s insistence that Washington roll back the Trump administration’s tariffs has been a major sticking point.
On the supply side, the Organization of the Petroleum Exporting Countries (OPEC) meets on Dec. 5 at its headquarters in Vienna, followed by talks with other oil producers, including Russia, that combined with the cartel make up the OPEC+ group.
The broader producer group is widely expected to extend a supply cut to mid-2020.
“We assume OPEC+ extends output cuts to the end of 2020,” J.P.Morgan said. (Reporting by Aaron Sheldrick; Editing by Tom Hogue)
Our Standards: The Thomson Reuters Trust Principles.
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ec2f33bd8882085aacdea37354a12b7d | https://www.reuters.com/article/global-oil-idUKL4N29E0AF?edition-redirect=uk | Oil edges up after plunge, as market recovers poise | Oil edges up after plunge, as market recovers poise
By Reuters Staff2 Min Read
TOKYO, Jan 9 (Reuters) - Oil prices rose on Thursday, recouping some of the heavy losses from the previous session as the market rebalanced after Washington and Tehran looked to defuse a potential Middle East crisis.
Prices had soared in response to the killing of an Iranian general in an American air strike last week and Iran’s retaliatory attack on U.S. forces in Iraq on Wednesday, before diving more than 4% when two countries quickly ratcheted back tensions, hitting a three-week low.
Brent crude futures rose 55 cents, or 0.8%, to $65.99 a barrel by 0109 GMT after tumbling 4.1% on Wednesday. They are now a little down on prices before the killing of Iranian military commander Qassem Soleimani that sparked the crisis.
U.S. oil added 61 cents, or 1%, to $60.22 after falling nearly 5% in the previous session.
President Donald Trump on Wednesday dialled back on days of threatening commentary and said Iran was “standing down” after the missile attacks that left no casualties, with Tehran say the strikes “concluded” its response to the Soleimani killing.
Oil prices also came under pressure on Wednesday after a surprise build in U.S. crude stockpiles.
J.P.Morgan bank maintained its forecast for Brent to average $64.50 a barrel this year.
“The impact on oil prices will depend on (the) extent of supply disruption versus available spare capacity, global oil inventories and reaction to oil price from U.S. producers,” the bank said in a commodities research note. (Reporting by Aaron Sheldrick; editing by Richard Pullin)
Our Standards: The Thomson Reuters Trust Principles.
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151b6a928e079281318cfd2085d4eb8e | https://www.reuters.com/article/global-oil-idUKL4N2E50JI?edition-redirect=uk | Oil falls in second straight session as virus cools demand | Oil falls in second straight session as virus cools demand
By Florence Tan2 Min Read
SINGAPORE, June 29 (Reuters) - Oil prices fell for a second straight session on Monday as coronavirus cases rose in the United States and other places, leading countries to resume partial lockdowns that could hurt fuel demand.
Brent crude dropped 66 cents, or 1.6%, to $40.36 a barrel by 1150 GMT while U.S. crude was at $37.86, down 63 cents, or 1.6%.
Brent crude is set to end June with three consecutive monthly gains as OPEC+ supply cuts and as oil demand improved after countries across the globe eased lockdown measures.
However, global coronavirus cases exceeded 10 million on Sunday as India and Brazil battled outbreaks of over 10,000 cases daily. New outbreaks are reported in countries including China, New Zealand and Australia, prompting governments to impose restrictions again.
“The market continues to fret about the recovery in demand as authorities reviewed reopening strategies,” ANZ analysts said, referring to the three most populous U.S. states - Texas, Florida and California.
Despite efforts by the Organization of the Petroleum Exporting Countries and their allies including Russia to reduce supplies, crude inventories in the United States, the world’s largest oil producer and consumer, have hit all-time highs.
“There is also a risk that gains in prices recently could see some U.S. shale producers restart wells,” ANZ said.
Even as higher oil prices prompt some producers to resume drilling, the number of operating oil and natural gas rigs dropped to a record low last week.
U.S. shale oil pioneer Chesapeake Energy Corp filed for bankruptcy protection on Sunday as it bowed to heavy debts and the impact of coronavirus outbreak on energy markets. (Reporting by Florence Tan; Editing by Sam Holmes)
Our Standards: The Thomson Reuters Trust Principles.
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b49d4f320d3d79ede7a4e4fcab6b6a32 | https://www.reuters.com/article/global-oil-idUKL4N2ED06O?edition-redirect=uk | Oil prices mixed as coronavirus spike casts shadow over U.S. demand | Oil prices mixed as coronavirus spike casts shadow over U.S. demand
By Florence Tan2 Min Read
* Brent up 0.3%, extending jump last week on tighter supply
* But WTI off 0.7%; no settlement on Friday with market closed
* U.S. oil rigs at record low for 9th week - Baker Hughes
SINGAPORE, July 6 (Reuters) - Oil prices offered up a mixed market snapshot on Monday, with Brent crude edging higher, supported by tighter supplies, while U.S. benchmark WTI futures dropped on concern that a spike in coronavirus cases could curb oil demand in the United States.
Brent crude rose 11 cents, or 0.3%, to $42.91 a barrel by 0109 GMT after a 4.3% gain last week, while U.S. West Texas Intermediate crude was at $40.35, down 30 cents, or 0.7%, from its previous settlement on Thursday. U.S. markets were closed on Friday to mark July 4 holiday celebrations.
Amid rising numbers of coronavirus cases in 39 U.S. states, a Reuters tally showed that in the first four days of July alone, 15 states reported record increases in new COVID-19 infections with parties over the holiday weekend possibly leading to another spike.
“Rising case numbers in some U.S. states are still looming over energy demand prospects,” ANZ analysts said in a note.
Still, some in the market remain focused on tightening supplies as production by the Organization of the Petroleum Exporting Countries (OPEC) fell to its lowest in decades with Russian output dropped to near targeted cuts.
OPEC and allies including Russia, collectively known as OPEC+, have pledged to slash production by a record 9.7 million barrels per day (bpd) for a third month in July. After July, the cuts are due to taper to 7.7 million bpd until December.
U.S. production, the world’s largest, is also falling. The number of operating U.S. oil and natural gas rigs fell to an all-time low for a ninth week, although the reductions have slowed as higher oil prices prompt some producers to start drilling again. (Reporting by Florence Tan; Editing by Kenneth Maxwell)
Our Standards: The Thomson Reuters Trust Principles.
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d6d506a311370e31065db27904b8b1e8 | https://www.reuters.com/article/global-oil-idUKL4N2HI59K?edition-redirect=uk | Oil falls on oversupply fears after build in U.S. crude stocks | Oil falls on oversupply fears after build in U.S. crude stocks
By Reuters Staff2 Min Read
TOKYO, Oct 28 (Reuters) - Oil prices slid more than 1 percent on Wednesday, paring the previous day’s gains, as a jump in U.S. crude inventories and surging COVID-19 cases raised fears of an oversupply of oil and weak fuel demand.
In early Asia, Brent crude was down 61 cents, or 1.5%, at $40.59 a barrel by 0033 GMT, having climbed nearly 2% the previous day. U.S. oil was down 66 cents, or 1.7%, at $38.91 a barrel, after gaining 2.6% on Tuesday.
U.S. crude oil and gasoline stocks rose last week, data from industry group the American Petroleum Institute showed, with crude inventories rising by 4.6 million barrels to about 495.2 million barrels, against analysts’ expectations in a Reuters poll for a build of 1.2 million barrels.
“The higher-than-expected build in U.S. crude stocks prompted fresh selling while concerns over supply disruption from Hurricane Zeta have receded,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
Energy firms and ports along the U.S. Gulf Coast prepared on Tuesday for another test as Zeta, the 11th hurricane of the season, entered the Gulf of Mexico.
“Rising COVID-19 cases with the lack of a U.S. coronavirus fiscal relief package also dented investors’ risk appetite,” Kikukawa said, predicting that the gloomy sentiment will keep prices under pressure over the coming day.
Infections are surging again in the United States, with nearly half a million people having contracted the coronavirus in the last seven days. European governments, meanwhile, prepared to introduce new restrictions to keep cases under control.
President Donald Trump acknowledged on Tuesday that a coronavirus economic relief deal would likely come after the Nov. 3 election, with the White House unable to bridge differences with fellow Republicans in the U.S. Senate as well as congressional Democrats.
Adding to pressure, Libya’s production should rebound to 1 million bpd in coming weeks, complicating efforts by other OPEC members and allies to restrict output.
Reporting by Yuka Obayashi; editing by Richard PullinOur Standards: The Thomson Reuters Trust Principles.
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73c0196b9e8b8ed204c2da7c5da8963b | https://www.reuters.com/article/global-oil-idUKL4N2HR021?edition-redirect=uk | Oil slips on rising U.S. dollar on bets of no big fiscal package | Oil slips on rising U.S. dollar on bets of no big fiscal package
By Sonali Paul3 Min Read
MELBOURNE, Nov 5 (Reuters) - U.S. oil prices fell in early trade on Thursday as the dollar strengthened on expectations the Republican Party would keep control of the Senate following the U.S. election, holding back any huge COVID-19 relief package.
U.S. West Texas Intermediate (WTI) crude futures dropped 29 cents, or 0.7%, to $38.86 a barrel at 0042 GMT.
Brent crude futures had yet to start trading. Both benchmark contracts jumped around 4% on Wednesday.
“The volatility in oil will remain because of its sensitivity to the U.S. dollar. And the U.S. dollar will remain volatile for at least the next few days as the U.S. election still has to be worked out,” said Commonwealth Bank commodities analyst Vivek Dhar.
Oil prices generally fall as the U.S. dollar rises as crude priced in dollars becomes more pricey for foreign buyers.
Democrat Joe Biden said on Wednesday he was headed toward victory over President Donald Trump after claiming the crucial Midwestern states of Wisconsin and Michigan, while Trump’s side opened a multi-pronged attack on vote counts through the courts.
However, even if Biden wins the U.S. presidency, current vote counting suggests the Republicans will retain control of the Senate. That would result in a divided Congress that would likely prevent Biden from enacting major priorities like expanding healthcare, fighting climate change and providing aid to millions whose lives have been upended by the coronavirus.
Oil prices surged on Wednesday on growing expectations that the Organization of the Petroleum Exporting Countries and its allies, together called OPEC+, would hold off on bringing back 2 million barrels per day of supply in January with demand sapped by new COVID-19 lockdowns.
The market also was buoyed on Wednesday by a larger than expected drop in U.S crude stockpiles, although that was partly due to short-lived production halts in the U.S. Gulf of Mexico ahead of Hurricane Zeta.
Analysts said U.S. inventory data was not all positive, with gasoline inventories having risen by 1.5 million barrels, against analysts’ expectations for a drawdown.
At the same time, average highway use in France, Italy and Spain has dropped to its lowest level since late June, “which doesn’t bode well for gasoline demand,” ANZ Research said.
“This is likely to put pressure on the OPEC+ alliance to delay its planned rise in output in January,” ANZ Research said.
Reporting by Sonali Paul; editing by Jane WardellOur Standards: The Thomson Reuters Trust Principles.
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766d26fcced2d06c69ff673d309f8257 | https://www.reuters.com/article/global-oil-idUSKBN26J0LF?edition-redirect=uk | Oil up 1% on economic hope; virus fears check price gains | Oil up 1% on economic hope; virus fears check price gains
By Laila Kearney3 Min Read
NEW YORK (Reuters) - Oil prices rose 1% on Monday as global equities rallied on hopes for another U.S. stimulus package, but rising virus cases fed concerns about fuel demand and kept oil futures from moving higher.
FILE PHOTO: the sun sets behind a crude oil pump jack on a drill pad in the Permian Basin in Loving County, Texas, U.S. November 24, 2019. Picture taken November 24, 2019. REUTERS/Angus Mordant
Brent crude LCOc1 settled at $42.43 a barrel, up 51 cents, or 1.22%. U.S. West Texas Intermediate CLc1 settled at $40.60 a barrel, rising 35 cents, or 0.87%.
“In my opinion, the most likely event capable of moving the crude oil market to the next level would be the passing of a coronavirus stimulus package,” said Bob Yawger, director of energy futures at Mizuho.
Oil followed Wall Street higher as American political talks continued for another COVID-19 relief bill after U.S. House Speaker Nancy Pelosi on Sunday said she thought a deal could be reached with the White House.
A weaker U.S. dollar, which moves inversely with oil prices, also helped crude futures. .DXY
Still, the global health crisis, which has slashed global fuel consumption, kept oil prices from pushing much higher.
“The speed with which the virus is spreading is the main concern for both health officials and financial investors,” said PVM analyst Tamas Varga.
Some Midwest U.S. states have seen a 25% jump in positive COVID-19 test rates, and the number of new infections nationwide has grown to 46,000 on average each day compared with 35,000 daily two weeks ago.
Russian Energy Minister Alexander Novak said the global oil market had been stable for the past few months, but warned of the risks of a second wave of COVID-19 cases.
Despite efforts by the Organization of the Petroleum Exporting Countries and its allies to limit output, more crude is being exported from OPEC producers Iran and Libya.
OPEC Secretary General Mohammad Barkindo said on Sunday that commercial oil inventories in OECD countries should stand only slightly above the five-year average in the first quarter of 2021, then fall for the rest of the year.
Meanwhile, one of the heaviest clashes between Armenia and Azerbaijan since 2016 broke out over the weekend, reigniting concern about stability in the South Caucasus, a corridor for pipelines carrying oil and gas to world markets.
Additional reporting by Noah Browning and Florence Tan; editing by David Gregorio and Mark PotterOur Standards: The Thomson Reuters Trust Principles.
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a2266fa575d7bf58a347c886f1a13194 | https://www.reuters.com/article/global-oil-idUSKBN26S063 | Oil falls 2% on U.S. stimulus impasse, stockpile rise | Oil falls 2% on U.S. stimulus impasse, stockpile rise
By Stephanie Kelly3 Min Read
NEW YORK (Reuters) - Oil prices fell nearly 2% on Wednesday after U.S. President Donald Trump dashed hopes for another stimulus package to boost the coronavirus-hit economy and after U.S. crude inventories rose in the most recent week.
A long exposure image shows the movement of a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 23, 2019. REUTERS/Angus Mordant/Files
Brent crude futures LCOc1 fell 66 cents, or 1.6%, to settle at $41.99 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 fell 72 cents, or 1.8%, to settle at $39.95 a barrel.
White House Chief of Staff Mark Meadows said he was not optimistic that a comprehensive deal could be reached on further COVID-19 financial aid and that the Trump administration backed a more piecemeal approach.
“Trump pulling out of relief negotiations generates a lot of uncertainty about the economy,” said Harry Tchilinguirian, head of commodities research at BNP Paribas.
Oil prices were also hit by a slightly larger-than-expected build in U.S. crude inventories. Crude inventories USOILC=ECI rose 501,000 barrels last week, government data showed, compared with analysts' expectations in a Reuters poll for a 294,000-barrel rise.
Meanwhile, gasoline stocks USOILG=ECI fell by 1.4 million barrels in the week to 226.8 million barrels, their lowest since November, compared with expectations for a 471,000-barrel drop. Distillate stockpiles USOILD=ECI fell by 962,000 barrels, in line with expectations.
“We are seeing solid improvement in the refined product demand front,” said John Kilduff, partner at Again Capital LLC in New York.
Energy companies secured offshore platforms and evacuated workers on Tuesday, some for the sixth time this year, as Hurricane Delta threatened U.S. oil output in the Gulf of Mexico.
The storm has shut 29% of offshore oil production in the Gulf, which accounts for 17% of total U.S. crude output.
In Norway, the Lederne labour union said on Tuesday that it will expand oil strike from Oct. 10 unless a wage deal can be reached. Six offshore oil and gas fields shut down on Monday because of the strike, cutting Norway’s output capacity by 8%.
Norway's Johan Sverdrup oilfield, the North Sea's largest with an output capacity of up to 470,000 barrels of oil per day, will likely have to shut production unless the strike ends by Oct. 14, operator Equinor EQNR.OL said on Wednesday.
Reporting by Stephanie Kelly in New York; additional reporting by Julia Payne in London and Jessica Jaganathan in Singapore; Editing by David Goodman and David GregorioOur Standards: The Thomson Reuters Trust Principles.
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cf4df283d23decad12acb18331f52bea | https://www.reuters.com/article/global-oil-idUSL3N1S005L | Oil prices dip on rising US rig count, but overall sentiment remains bullish | Oil prices dip on rising US rig count, but overall sentiment remains bullish
By Henning Gloystein2 Min Read
* U.S. rig count rises to 820, highest since March, 2015
* But strong demand, OPEC cuts still support prices overall
SINGAPORE, April 23 (Reuters) - Oil prices dipped early on Monday as a rising U.S. rig count pointed to further increases in the country’s output, underlining one of only a few factors holding back crude markets in an otherwise bullish environment.
Brent crude oil futures were at $73.87 per barrel at 0031 GMT, down 19 cents, or 0.3 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were down 23 cents, or 0.30 percent, at $68.17 a barrel.
U.S. drillers added five oil rigs drilling for new production in the week ending April 20, bringing the total count to 820, the highest since March, 2015, according to General Electric's Baker Hughes energy services firm. The rising rig count points to further increases in U.S. crude production C-OUT-T-EIA, which has already climbed by a quarter since mid-2016 to a record 10.54 million barrels per day (bpd).
Only Russia currently produces more, at almost 11 million bpd.
Despite the dips in crude oil prices on Monday, overall markets remain well supported by strong demand, especially in Asia, and Brent prices are up by 20 percent from their 2018 lows in February.
Providing further support have been supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) introduced in 2017 with the aim of propping up prices, as well as by the potential of renewed U.S. sanctions against Tehran.
The United States has until May 12 to decide whether it will leave the Iran nuclear deal, which would further tighten global supplies.
“Stay long oil,” U.S. bank J.P. Morgan said in a note to clients.
Reporting by Henning Gloystein Editing by Joseph RadfordOur Standards: The Thomson Reuters Trust Principles.
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022d88bfcfbbff91cb0def93e55f184d | https://www.reuters.com/article/global-oil-imo-factbox/global-refiners-raise-cleaner-shipping-fuel-output-ahead-of-imo-2020-idINKBN1YZ0BO?edition-redirect=in | Global refiners raise cleaner shipping fuel output ahead of IMO 2020 | Global refiners raise cleaner shipping fuel output ahead of IMO 2020
By Reuters Staff5 Min Read
(Reuters) - Global oil refiners have upgraded processing units and adjusted operations to raise output of low-sulphur residual fuels and marine gasoil (MGO) to prepare for stricter shipping fuel standards that kick in on Jan. 1.
The new International Maritime Organization (IMO) rules prohibit ships from using fuels containing more than 0.5% sulphur, compared with 3.5% through the end of December, unless they are equipped with exhaust-cleaning “scrubbers”.
The shipping industry consumes about 4 million barrels per day (bpd) of marine bunker fuels, and the rule changes will impact more than 50,000 merchant ships globally, opening a significant new market for fuel producers.
Below is a summary of how top refiners have prepared.
CHINA
Chinese marine fuel suppliers have signed up short-term deals to buy very low-sulphur fuel oil (VLSFO) from companies like oil major Shell, Germany’s Uniper and U.S. commodities trader Freepoint.
While China’s state refiners have pledged to produce a combined 14 million tonnes of the fuel for 2020 that complies with the tighter rules set by the International Maritime Organization (IMO), Beijing has not yet rolled out much-anticipated tax breaks that will encourage refiners such as Sinopec and PetroChina to ramp up domestic output of VLSFO.
NORTH ASIA
SK Chemicals has started tests on blending its biodiesel with petroleum-based fuels to create low-sulphur marine oil.
At SK Energy’s largest refinery in South Korea, engineers are rushing to complete a new processing unit ahead of schedule.
The unit of SK Innovation started supplying MGO from October and is building a vacuum residue desulphurisation (VRDS) unit that can produce 40,000 bpd of LSFO due online in March or April. Japan’s Idemitsu Kosan Co is increasing production of LSFO and is also blending to produce IMO2020 compliant bunker fuel.
Hyundai Oilbank has said it will sell VLSFO from November.
SINGAPORE/SOUTHEAST ASIA
Sales of low-sulphur marine fuel in the Singapore bunkering hub soared to an all-time high of 2.076 million tonnes in November, more than double the previous record, government data showed.
Shell loaded its first LSFO cargo from its Pulau Bukom refinery in September, and Singapore Refining Company (SRC) supplied its first VLSFO cargo in October.
Chevron, which partly owns SRC, said its VLSFO and MGO supply capacity in Asia could double in the next one to two years.
Indonesia’s Pertamina said in December it would soon send its first marine fuel shipment from its Plaju refinery to its Balikpapan supply point.
Vitol is building a 30,000 bpd crude distillation unit (CDU) in Malaysia to supply LSFO starting in May 2020, and IRPC Pcl said it will produce 52,000 tonnes of VLSFO in November.
Indian Oil Corporation Ltd has started supplying IMO-compliant fuel in India.
MIDDLE EAST
Uniper Energy DMCC operates two CDUs in Fujairah that annually produce 3.6 million tonnes of VLSFO, including 0.1% sulphur fuel used in regional Emission Control Areas.
Brooge Petroleum and Gas Investment Co said it plans a 250,000-bpd refinery in Fujairah to produce low-sulphur fuel.
EUROPE
Marine fuel supplier Peninsula Petroleum plans to double VLSFO deliveries to 600,000 tonnes by year-end in Europe and the Americas.
Gunvor Group will overhaul its refinery in Rotterdam in March to produce LSFO.
UNITED STATES
Most U.S. Gulf Coast refiners are able to process heavy crudes used to make IMO-compliant marine fuels, and have spent heavily this year refurbishing distillation units and cokers to process cheaper, heavy grades.
For example, Motiva Enterprises overhauled its Port Arthur, Texas, refinery, the nation’s largest, this year.
*LSFO stands for fuel oil with sulphur content of between 0.5% and 1.0%; VLSFO for fuel oil with a sulphur content of less than or equal to 0.5%; and ultra low-sulphur fuel oil (ULSFO) for fuel oil with sulphur content of less than or equal to 0.1%. Refineries that lack the technology to product VLSFO outright, may produce LSFO and blend it down to IMO-compliant levels. See the table at for more information.
(1 tonne of fuel oil is about 6.31-6.9 barrels, depending on the fuel’s relative density)
Reporting by Chen Aizhu, Koustav Samanta and Roslan Khasawneh in Singapore, Yuka Obayashi in Tokyo, Jane Chung in Seoul, Chayut Setboonsarng in Bangkok and Erwin Seba in Houston; Editing by Florence Tan, Tom Hogue, Sriraj Kalluvila and Subhranshu SahuOur Standards: The Thomson Reuters Trust Principles.
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80a3107aaee2315d2a3ef54b4b5ddad4 | https://www.reuters.com/article/global-oil-imo-idUKL4N27T132?edition-redirect=uk | FACTBOX-Global refiners raise cleaner shipping fuel output ahead of IMO 2020 | FACTBOX-Global refiners raise cleaner shipping fuel output ahead of IMO 2020
By Reuters Staff5 Min Read
Nov 20 (Reuters) - Global oil refiners have upgraded processing units and adjusted operations to raise output of low-sulphur residual fuels and marine gasoil (MGO) to prepare for stricter shipping fuel standards that kick in on Jan. 1, 2020.
The new International Maritime Organization (IMO) rules prohibit ships from using fuels containing more than 0.5% sulphur, compared with 3.5% through the end of December, unless they are equipped with exhaust-cleaning “scrubbers”.
The shipping industry consumes about 4 million barrels per day (bpd) of marine bunker fuels, and the rule changes will impact more than 50,000 merchant ships globally, opening a significant new market for fuel producers.
Below is a summary of how top refiners have prepared.
CHINA
The world’s largest refiner, Sinopec Corp , has started very low-sulphur fuel oil (VLSFO) output at 10 refineries in China, including Zhenhai Refining and Chemicals Co, Jinling Petrochemical Co and Hainan Petrochemical Co.
The company plans total VLSFO capacity of 10 million tonnes a year (about 180,000 bpd) by 2020.
It also plans to build a fleet of 100 barges over the next three years to supply cleaner fuels to ships.
PetroChina has pledged 4 million tonnes of VLSFO in 2020, likely from its Jinzhou, Jinxi and Dalian refineries in China’s northeast, and Guangxi refinery in the south.
PetroChina Fuel Oil Co Ltd has a license to supply ship fuel in Zhoushan on China’s east coast. Total plans to supply marine fuel in Zhoushan in a joint venture with China’s Zhejiang Energy.
China Marine Bunker, known as Chimbusco, secured at least 4 million tonnes of VLSFO for the fourth quarter of 2019 and the first two quarters of 2020, and has started to supply all major Chinese ports from bonded storage.
NORTH ASIA
Top South Korean refiner SK Energy, a unit of SK Innovation , started supplying MGO from October. It can produce up to 27,000 bpd of marine gasoil, about 8% of its total gasoil output.
SK is also building a vacuum residue desulphurisation (VRDS) unit that can produce 40,000 bpd of LSFO* due online in March or April 2020.
Its affiliate SK Trading International has signed six-month contracts with some shippers to supply VLSFO from the fourth quarter.
Hyundai Oilbank has said it will sell VLSFO from November.
In Japan, Fuji Oil Co Ltd, Cosmo Energy Holdings Co Ltd and Idemitsu Kosan Co Ltd began shipping IMO-compliant fuels in October.
Idemitsu is shipping IMO-compliant fuel from five locations and plans another site from December, its spokesman said.
SINGAPORE/SOUTHEAST ASIA
In the world’s largest marine fuels market, Royal Dutch Shell loaded its first LSFO cargo from its Pulau Bukom refinery in September, and Singapore Refining Company (SRC), a joint venture of Chevron Corp and Singapore Petroleum Co , supplied its first VLSFO cargo in October.
Chevron said its VLSFO and MGO supply capacity in Asia could double in the next one to two years.
Elsewhere in Asia, Vitol is building a 30,000 bpd crude processing unit in Malaysia to supply LSFO starting in May 2020, and IRPC Pcl said it will produce 52,000 tonnes of VLSFO in November, making it Thailand’s first refinery to produce IMO-compliant fuel.
Indian Oil Corporation Ltd has started supplying IMO-compliant fuel in India.
MIDDLE EAST
Uniper Energy DMCC operates two crude processing units in Fujairah that annually produce 3.6 million tonnes of VLSFO, including 0.1% sulphur fuel used in regional Emission Control Areas.
Brooge Petroleum and Gas Investment Co (BPGIC) said it plans a 250,000-bpd refinery in Fujairah to produce low-sulphur fuel.
Qatar Petroleum said in October it has started supplying VLSFO at its ports.
EUROPE
Marine fuel supplier Peninsula Petroleum plans to double VLSFO deliveries to 600,000 tonnes by year-end in Europe and the Americas.
Gunvor Group will overhaul its refinery in Rotterdam in March to produce LSFO.
UNITED STATES
Most U.S. Gulf Coast refiners are able to process heavy crudes used to make IMO-compliant marine fuels, and have spent heavily this year refurbishing distillation units and cokers to process cheaper, heavy grades.
Motiva Enterprises overhauled its Port Arthur, Texas, refinery, the nation’s largest, this year so it can produce compliant fuels. This month, PBF Energy, restarted a coker at its Chalmette, Louisiana, refinery that had been idled nine years.
Some U.S. refiners have also been importing high-sulphur fuel oil to turn into cleaner refined products for sale worldwide, as fuel oil hit a three-year seasonal low.
*LSFO stands for fuel oil with sulphur content of between 0.5% and 1.0%; VLSFO for fuel oil with a sulphur content of less than or equal to 0.5%; and ultra low-sulphur fuel oil (ULSFO) for fuel oil with sulphur content of less than or equal to 0.1%. Refineries that lack the technology to product VLSFO outright, may produce LSFO and blend it down to IMO-compliant levels. See the table at for more information.
(1 tonne of fuel oil is about 6.31-6.9 barrels, depending on the fuel’s relative density)
Reporting by Chen Aizhu, Koustav Samanta and Roslan Khasawneh in Singapore, Yuka Obayashi in Tokyo, Jane Chung in Seoul, Chayut Setboonsarng in Bangkok and Erwin Seba in Houston; Editing by Florence Tan and Tom HogueOur Standards: The Thomson Reuters Trust Principles.
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547668871d5b20de04cc9e5355c9728e | https://www.reuters.com/article/global-oil-int-idUSKBN28003E | Oil rises about 1%, posts third week of gains on vaccine hopes | Oil rises about 1%, posts third week of gains on vaccine hopes
By Stephanie Kelly3 Min Read
NEW YORK (Reuters) - Oil prices rose about 1% higher on Friday and posted a third consecutive weekly rise, buoyed by successful COVID-19 vaccine trials, while renewed lockdowns in several countries to limit the spread of the coronavirus capped gains.
FILE PHOTO: The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019. REUTERS/Angus Mordant
Brent crude LCOc1 futures rose 76 cents, or 1.7%, to settle at $44.96 a barrel.
The more active U.S. West Texas Intermediate (WTI) January crude contract CLc2 gained 52 cents, or 1.2% to $42.42 a barrel. The WTI contract for December CLc1, which expired on Friday, rose 41 cents, or 1%, to settle at $42.15 a barrel.
Both benchmarks gained about 5% this week.
Prospects for effective COVID-19 vaccines have bolstered oil markets this week. Pfizer Inc said it will apply to U.S. health regulators on Friday for emergency use authoritization of its vaccine, the first such application in a major step toward providing protection against the new coronavirus.
“Despite the fact that in reality it will take time for a global vaccine campaign to be implemented, time during which oil demand will suffer, positive news are breaking daily about the vaccine deliveries,” said Bjornar Tonhaugen, Rystad Energy’s head of oil markets.
Also boosting sentiment was hope that the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers will keep crude output in check. The group, known as OPEC+, were expected to delay a planned production increase.
OPEC+, which meets on Nov. 30 and Dec. 1, is looking at options to delay by at least three months from January the tapering of their 7.7 million barrel per day (bpd) cuts by around 2 million bpd.
“An assumed roll-over of current cuts by OPEC+ to Q1 2021 is probably in today’s price of $44 per barrel,” Nordic bank SEB said.
Still, smaller Russian oil companies are planning to pump more crude this year despite the output deal as they have little leeway in managing the production of start-up fields, a group representing the producers said.
Oil prices were getting some support from signs of movement on a stimulus deal in Washington after U.S. Senate Republican Majority Leader Mitch McConnell agreed to resume discussions on providing more COVID-19 relief as cases surge across the United States.
Oversupply concerns, however, continue to weigh as Libya has raised production to pre-blockade levels of 1.25 million bpd.
U.S. energy firms this week cut the number of oil and natural gas rigs operating for the first time in 10 weeks, according to energy services firm Baker Hughes Co BKR.N. The oil and gas rig count, an early indicator of future output, fell by two to 310 this week, with oil rigs alone dropping by five to 231, after hitting their highest since May last week.
Money managers raised their net long U.S. crude futures and options positions in the week to Nov. 17 by 3,100 contracts to 277,080, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
Reporting by Stephanie Kelly in New York; additional reporting by Ahmad Ghaddar in London, Aaron Sheldrick in Tokyo and Koustav Samanta in Singapore; Editing by Marguerita Choy and Kirsten DonovanOur Standards: The Thomson Reuters Trust Principles.
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5f248dbae1d078ef35ce4b8a508a820d | https://www.reuters.com/article/global-oil-int/oil-ends-higher-boosted-by-u-s-stimulus-hopes-idUSKBN27703S | Oil ends higher, boosted by U.S. stimulus hopes | Oil ends higher, boosted by U.S. stimulus hopes
By Jessica Resnick-Ault3 Min Read
NEW YORK (Reuters) - Oil prices ticked up on Thursday, boosted by the possibility of an economic stimulus package in the United States, but struggled to recover fully from the previous session’s losses when higher U.S. gasoline inventories signalled a deteriorating demand outlook as coronavirus cases soar.
FILE PHOTO: A pump jack operates in front of a drilling rig at sunset in an oil field in Midland, Texas U.S. August 22, 2018. REUTERS/Nick Oxford/File Photo
Brent crude futures settled 73 cents higher at $42.46 a barrel and U.S. West Texas Intermediate (WTI) crude futures gained 61 cents to $40.64.
Both crude contracts shed more than 3% on Wednesday in their steepest daily falls in three weeks.
Futures gained momentum early Thursday as U.S. House Speaker Nancy Pelosi said the two sides were nearing an economic stimulus package, boosting expectations that demand could improve, said Bob Yawger, director of Energy Futures at Mizuho in New York.
Shares on Wall Street also gained on Thursday in choppy trading, as investors cheered the prospect of more fiscal stimulus to support a pandemic-damaged U.S. economy, with more data pointing to a slowing labor market recovery.
U.S. gasoline stocks rose by 1.9 million barrels last week, the Energy Information Administration (EIA) said on Wednesday, compared with expectations for a drop of 1.8 million barrels.[EIA/S]
Overall product supplied - a proxy for demand - averaged 18.3 million barrels per day (bpd) in the four weeks to Oct. 16, the EIA said, down 13% from the same period a year earlier.
Record new daily COVID-19 infection numbers in several U.S. states and in Europe, along with further coronavirus lockdowns and China’s crackdown on outbound travel, all bode ill for fuel demand.
Worsening the outlook, hopes that U.S. lawmakers would reach agreement with the White House on an economic stimulus package dimmed late on Wednesday after President Donald Trump accused Democrats of holding up a compromise deal.
“(A deal) might improve the demand tone for a week or two,” said Lachlan Shaw, head of commodity research at National Australia Bank.
Adding to the supply concerns, Libyan oil exports are quickly accelerating into October as loading restarts after the easing of a blockade by eastern forces.
Libyan production has recovered to about 500,000 bpd and the government in Tripoli expects that to double by the end of the year.
Goldman Sachs said it expects average Brent prices to rise to $59.40 next year from $43.90 this year, and WTI to increase to $55.90 from $40.10.
Reporting by Jessica Resnick-Ault in New York and Shadia Nasralla in London; Additional reporting by Sonali Paul in Melbourne and Roslan Khasawneh in Singapore; Editing by Marguerita Choy and Matthew LewisOur Standards: The Thomson Reuters Trust Principles.
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b27f1cd06e1084b25b7c5e6ce4936cc7 | https://www.reuters.com/article/global-oil-int/oil-falls-on-weaker-economic-growth-forecasts-and-swelling-us-crude-stocks-idINKBN1WU05S?edition-redirect=in | Oil falls on weaker economic growth forecasts and swelling US crude stocks | Oil falls on weaker economic growth forecasts and swelling US crude stocks
By Scott DiSavino3 Min Read
NEW YORK (Reuters) - Oil prices fell on Tuesday, as investors worried that the unrelenting U.S.-China trade war would keep squeezing the global economy, and that swelling U.S. crude inventories would further pressure prices.
FILE PHOTO: The sun sets behind an oil pump outside Saint-Fiacre, near Paris, France March 28, 2019. REUTERS/Christian Hartmann/File Photo
Losses were limited by optimism about a potential Brexit deal and signals from OPEC that further supply curbs are possible.
Global benchmark Brent LCOc1 futures lost 61 cents, or 1.0%, to settle at $58.74 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 fell 78 cents, or 1.5%, to settle at $52.81.
Earlier in the session, both Brent and WTI fell by more than $1 a barrel following a report overnight that China’s factory gate prices in September declined at the fastest pace in more than three years. Also, customs data on Monday showed Chinese imports contracted for a fifth straight month.
The U.S.-China trade war will cut 2019 global growth to its slowest pace since the 2008-2009 financial crisis, the International Monetary Fund warned, but it said output would rebound if duelling tariffs were removed.
“The market continues to focus on a weakening global economic growth path that appeared little disturbed by last week’s apparent lack of significant progress at the US-China trade talks,” Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois, said in a report.
On Friday, Trump said China had agreed to purchase $40 to $50 billion worth of American agricultural goods in a first phase of an agreement to end the trade war.
Chinese firms have purchased 700,000 tonnes of pork and 700,000 tonnes of sorghum from the United States this year to meet market demand, a foreign ministry spokesman said on Tuesday. U.S. government data pointed to smaller pork sales.
The oil market retraced early losses after reports Britain and the EU made headway in eleventh-hour talks to reach a Brexit deal.
“Britain seems they are getting closer to a Brexit deal with the EU, but it will probably be highly unlikely for enough progress to be made before the EU summit on Thursday,” Edward Moya, senior market analyst at OANDA in New York, said in a report.
Analysts said any deal that avoids a “hard” or no deal Brexit should boost economic growth.
Providing more support, OPEC Secretary-General Mohammad Barkindo said the Organization of the Petroleum Exporting Countries and allied producers “will do whatever (is) in its power” to sustain oil market stability beyond 2020.
OPEC, Russia and other producers have cut oil output by 1.2 million barrels per day to support the market. Yet an expected rise in U.S. crude inventories this week kept prices under pressure. [EIA/S]
U.S. crude stocks probably grew for the fifth straight week, a preliminary Reuters poll showed.
U.S. oil inventory reports are due out from industry group the American Petroleum Institute on Wednesday and the U.S. Energy Information Administration on Thursday. The reports are delayed one day due to a U.S. government holiday.
Additional reporting by Seng Li Peng in Singapore and Noah Browning in London; Editing by David GregorioOur Standards: The Thomson Reuters Trust Principles.
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b84e2b52a8658643a35048eef3b3436e | https://www.reuters.com/article/global-oil-int/oil-rises-2-after-reports-of-iranian-tanker-attack-idINKBN1WQ02N?edition-redirect=in | Oil rises 2% after reports of Iranian tanker attack | Oil rises 2% after reports of Iranian tanker attack
By Stephanie Kelly4 Min Read
NEW YORK (Reuters) - Oil prices rose more than 2% on Friday after Iranian media said a state-owned oil tanker was attacked in the Red Sea near Saudi Arabia, while optimism surrounding the U.S.-China trade war lifted sentiment.
FILE PHOTO: The sun sets behind an oil pump outside Saint-Fiacre, near Paris, France September 17, 2019. REUTERS/Christian Hartmann
Brent crude futures LCOc1 gained $1.41, or 2.4%, to settle at $60.51 a barrel.
West Texas Intermediate (WTI) crude CLc1 futures rose $1.15, or 2.2%, to settle at $54.70 a barrel.
The gains were tempered by the International Energy Agency’s forecast for weakened demand in 2020. Still, Brent and WTI were headed for their first weekly increases in three weeks. Brent rose 3.7% for the week, while WTI gained 3.6%.
The Iranian Suezmax crude tanker was struck in the Red Sea off Saudi Arabia’s coast on Friday, Iranian media said, with various reports differing on the level of damage caused.
The National Iranian Tanker Company (NITC) said the ship was damaged but stable and denied reports it had been set ablaze.
“We estimate that the tanker event is worth about $1/bbl of risk premium that could easily be erased within a couple of sessions if no blame is assessed and no follow up incidents develop,” Jim Ritterbusch, president of oil trading advisory firm Ritterbusch and Associates, said in a note.
Iranian oil exports are under U.S. sanctions that have diminished Iran’s impact on the global supply picture.
Tensions in the Middle East have escalated in the wake of attacks on tankers and U.S. drones in the Strait of Hormuz, a key shipping artery for the global oil trade.
The United States is sending more troops - potentially thousands - to Saudi Arabia in the wake of the attacks on Saudi Aramco facilities. It did not specify how those troops would be used.
Both benchmarks recorded their biggest daily rise since Sept. 16, the first trading day after attacks on Saudi installations knocked out more than half of the kingdom’s crude output and temporarily pushed oil prices up by about 20%.
Meanwhile, Gabon has told OPEC it will comply fully with its pledge to cut oil output under a 2019 supply deal between the exporter group and rivals such as Russia, in the latest sign of an OPEC push to improve compliance before its next meeting in December.
The International Energy Agency (IEA) on Friday said global oil markets had recovered quickly from the Saudi attacks and even face oversupply next year as demand slows.
Troubled economic prospects for 2020 prompted the IEA to reduce its forecast for oil demand growth by 100,000 barrels per day (bpd) to 1.2 million bpd.
Investors are also watching developments in the U.S.-China trade war, which has stoked fears of a global recession and raised concerns about global oil demand. President Donald Trump and other U.S. officials on Friday signaled good news was coming in trade talks with China, while Beijing indicated it was open to a “partial” deal that would avoid a planned hike in tariffs on its goods.
In a sign of future production, U.S. energy firms this week increased the number of oil rigs operating for the first time in eight weeks. Companies added two oil rigs in the week to Oct. 11, bringing the total count to 712, General Electric Co's GE.N Baker Hughes energy services firm said on Friday. RIG-OL-USA-BHI
Money managers cut their net long U.S. crude futures and options positions in the week to Oct. 8 by 33,738 contracts to 114,352, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
Reporting by Stephanie Kelly in New York; Additional reporting by Shadia Nasralla in London and Jane Chung in Seoul; Editing by Matthew Lewis and Alistair BellOur Standards: The Thomson Reuters Trust Principles.
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42790a641a69eadcb7ede2e20b95105a | https://www.reuters.com/article/global-oil-int/oil-settles-up-near-57-on-tight-supply-expectations-idUSKBN29H06E | Oil settles up, near $57 on tight supply expectations | Oil settles up, near $57 on tight supply expectations
By Laura Sanicola3 Min Read
NEW YORK (Reuters) - Oil hit an 11-month high just below $57 a barrel on Tuesday, bolstered by Saudi Arabia’s plans to limit supply, offsetting worries that rising coronavirus cases globally would curtail fuel demand.
FILE PHOTO: Crude oil storage tanks are seen in an aerial photograph at the Cushing oil hub in Cushing, Oklahoma, U.S. April 21, 2020. REUTERS/Drone Base
Brent crude settled up 92 cents, or 1.7%, at $56.58 a barrel by after touching its highest level since last February at $56.75. U.S. West Texas Intermediate (WTI) gained 96 cents, or 1.8%, to $53.28.
Saudi Arabia plans to cut output by an extra 1 million barrels per day (bpd) in February and March to keep inventories in check.
The Saudi cut is part of an OPEC-led deal in which most producers will hold output steady in February. Last year’s record cuts from OPEC and its allies helped oil recover from historic lows reached in April.
But OPEC+ compliance with pledged oil output curbs fell to 75% in December, among the lowest levels since the supply pact started in May 2020, tanker tracker Petro-Logistics said on Tuesday, which could weigh on oil prices.
U.S. crude oil production was also expected to fall by 190,000 barrels per day (bpd) in 2021 to 11.1 million bpd, according to an Energy Information Administration report released on Tuesday, a smaller decline than its previous forecast for a drop of 240,000 bpd.
“Storage at Cushing is only 10.2 million barrels below the all-time record high, so there is no problem with supply here in the U.S., but the complex is responding positively to this chatter about undersupply,” said Bob Yawger, director of energy futures at Mizuho.
Oil also gained on expectations for a drop in U.S. crude stockpiles. Analysts expect crude inventories to fall by 2.7 million barrels for a fifth straight week of declines. [EIA/S]
The first of this week’s two supply reports, from the American Petroleum Institute, is due at 4:30 p.m. EST (2130 GMT).
The market is also being supported by the prospect of increased economic stimulus in the United States. President-elect Joe Biden, who takes office on Jan. 20, has promised “trillions” in extra pandemic-relief spending.
However, oil price gains were capped by demand concerns as coronavirus cases rise around the world.
Chinese authorities introduced new curbs in areas surrounding Beijing on Tuesday and Japan is to widen a state of emergency beyond Tokyo.
Reporting by Laura Sanicola in New York; Additional reporting by Alex Lawler and Jessica Jaganathan; Editing by David Gregorio and Matthew LewisOur Standards: The Thomson Reuters Trust Principles.
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72063030872cc2b8b0d4e6c8ce07a086 | https://www.reuters.com/article/global-oil-iraq/update-1-iraq-proposes-budget-cuts-to-foreign-oil-firms-after-oil-price-crash-idUKL8N2BK20F?edition-redirect=uk | UPDATE 1-Iraq proposes budget cuts to foreign oil firms after oil price crash | UPDATE 1-Iraq proposes budget cuts to foreign oil firms after oil price crash
By Aref Mohammed, Hadeel Al Sayegh, Vladimir Soldatkin4 Min Read
(Adds quotes, details)
BASRA, Iraq/ DUBAI, March 27 (Reuters) - Iraq has sent a proposal to all international oil companies asking them to reduce the budgets of developing oilfields by 30% as the slump in oil prices has hit government revenues, but said the proposed cuts should not affect crude output, Iraqi oil officials and industry sources told Reuters.
International firms operate in Iraq’s southern oilfields under service contracts. Under the contracts, they are paid a fixed dollar fee for volumes produced and Baghdad repays companies for the cost of building projects and approve oilfields development plans.
Energy companies around the world are slashing spending after the benchmark Brent oil price more than halved since the start of the year, to trade around $26 a barrel on Friday.
Iraqi officials said low oil prices have forced the oil ministry to review its plans on how to repay international oil companies (IOCs) their dues during the first six months of the year. The ministry is still waiting for an answer from the oil companies on this proposal.
A senior official at state-run Basra Oil Company told Reuters that Iraq had proposed that the IOCs cut their expenses by 30% on condition that such cuts would not affect the country’s oil production levels.
Iraq, OPEC’s second-biggest oil producer, pumps around 4.6 million barrels per day.
“We still have no 2020 budget allocations and the declining oil prices have worsened the situation. This is why we need foreign contractors to do their best and cut expenses and also defer their dues,” said the senior BOC official.
A source at one of the foreign oil companies said: “We have received the letter on 30% budget cuts, no decision yet.”
Iraq’s oil ministry spokesman Asim Jihad said there had been discussions with the oil companies on cost cuts but a decision on that should be taken when there is more clarity on the impact of the coronavirus crisis on the oil market.
Meanwhile, ExxonMobil, which is the main developer of the West Qurna 1 oilfield in southern Iraq, has also asked all its suppliers in Iraq to reduce costs, according to a letter seen by Reuters.
“The oil and gas industry has been significantly impacted by the lowering trend of the crude oil prices which have reached the lowest point in the last 20 years,” Exxon wrote in the letter to suppliers.
“Therefore ExxonMobil Iraq... is expecting your company to explore opportunities to reduce cost as a matter of urgency.”
Exxon Mobil Corp has said it was notifying contractors and vendors of planned near-term cuts in capital and operating expenses due to the coronavirus pandemic.
Other Arab oil producers are also reviewing their spending plans. Kuwait Petroleum Corp. has instructed all subsidiaries to cut spending this year due to an “unprecedented” decline in oil prices caused by the collapse of a global oil supply cut pact and the spread of the coronavirus which has hit demand.
Abu Dhabi National Oil Company (ADNOC) has also notified contractors and suppliers that it will review existing deals to find ways to cut costs.
Saudi Aramco, the world’s top oil producing firm, said this month it planned to cut capital spending for 2020 to between $25 billion and $30 billion, from $32.8 billion in 2019. (Reporting by Aref Mohammed in Basra, Hadeel Al Sayegh in Dubai, Vladimir Soldatkin in Moscow; Additional reporting by Ahmed Rasheed in Baghdad and Rania El Gamal in Dubai; Editing by Edmund Blair and Susan Fenton)
Our Standards: The Thomson Reuters Trust Principles.
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74a34c2ba0358ba26cbabaea66b93587 | https://www.reuters.com/article/global-oil-irving-layoffs-idUKL1N2EF1W9?edition-redirect=uk | Irving Oil to lay off 6% of global workforce, citing coronavirus | Irving Oil to lay off 6% of global workforce, citing coronavirus
By Reuters Staff1 Min Read
July 8 (Reuters) - Refiner Irving Oil will lay off 6% of its global workforce due to economic challenges presented by the coronavirus pandemic, the company said on Wednesday.
The layoffs will affect 250 workers across its operations in Canada, the United States, Ireland and the UK.
“The challenges that we face in our business and our industry are unlike any we have ever experienced,” Irving Oil president Ian Whitcomb and chief brand officer Sarah Irving said in a joint statement. (Reporting by Laura Sanicola Editing by Chris Reese)
Our Standards: The Thomson Reuters Trust Principles.
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a60644839723fbbef16ec04d5c04b9e3 | https://www.reuters.com/article/global-oil-jet-fuel/jet-fuel-demand-to-remain-low-for-years-as-airlines-buckle-up-for-tough-ride-idUSL5N2C26EJ | Jet fuel demand to remain low for years as airlines buckle up for tough ride | Jet fuel demand to remain low for years as airlines buckle up for tough ride
By Bozorgmehr Sharafedin, Tim Hepher, Koustav Samanta5 Min Read
* Jet fuel has been hardest hit, down 60% in last two months
* Changes in business and leisure travel could linger
* IATA has warned of slow recovery
* Growth in economies should spur recovery longer term
By Bozorgmehr Sharafedin, Tim Hepher and Koustav Samanta
LONDON/PARIS/SINGAPORE, April 15 (Reuters) - Demand for flights and jet fuel could take years to recover from the coronavirus crisis as airlines struggle to survive their worst downturn, haunted by possible changes in the habits of tourists and business travellers.
Among the various fuels, jet has been hit hardest and industry leaders warn it will take years for all-important airline industry demand to return to 2019 levels.
“Jet fuel consumption will be impacted for a longer time and maybe not recover fully even next year, as travellers remain concerned about long-haul vacations, and businesses get used to online meetings,” said Per Magnus Nysveen, head of analysis at Rystad Energy, a consultancy.
Exemptions for agriculture and freight transport from widespread lockdowns have offered some support to diesel and fuel oil, but jet demand remains weak as a significant slice of the world’s 23,000-strong commercial plane fleet is in storage.
Jet fuel prices in Singapore JET-SIN have slumped 61% over the last two months. Refining margins or cracks for jet fuel in Singapore are currently lingering at narrow premiums over Dubai crude after hitting minus $3.35 per barrel earlier this month, their lowest on record.
The International Air Transport Association, representing airlines, has already warned of a slower recovery than in past crises. On Tuesday, it raised its forecast for 2020 revenue losses by 25% to $314 billion.
Director General Alexandre de Juniac told Reuters he sees a staggered lifting of restrictions starting with domestic, then regional and finally intercontinental routes being reopened where fuel consumption plays a critical role.
IATA has warned any recovery would not start before the last quarter of the year and could be short-lived if there is a new winter wave of coronavirus.
Planemakers Airbus and Boeing have also warned of an extended crisis, with few analysts predicting a return to previous conditions until 2023 or 2024.
According to Robert Stallard of Vertical Research Partners, it could be almost five years before the active aircraft fleet returns to where it was at the end of 2019.
Just as important for fuel demand, many airlines expect to use the crisis to speed up retirements of their oldest and thirstiest jets. That said, low oil prices mean the incentive to invest in costly new equipment is tempered for now.
Jet fuel demand averages about 8 million barrels per day (bpd). IEA said on Wednesday it expected demand for jet fuel and kerosene to fall by 2.1 million bpd on average in 2020, or 26%.
Rystad expected jet fuel demand to fall at least 1.9 million bpd in 2020, and JBC Energy consultancy estimated jet fuel demand over the next few months to fall to below 2 million bpd and to 5.2 million bpd on average in 2020.
“We see some normalisation only in 2021,” said JBC Energy Asia’s managing director Richard Gorry, who sees a drop of 70% in jet demand in the second quarter of 2020.
Some analysts believe the shift of businesses to a virtual arena during mandatory lockdowns might not disappear entirely once the coronavirus goes away. For finance directors, the crisis could be a tempting chance to reduce office, event and travel costs until economies grow and pressure to do business face-to-face resumes. Air travel and GDP growth have traditionally been closely tied.
Homayoun Falakshahi, senior analyst at Kepler, said leisure trips could recover in the next couple of years, but business travel may take longer.
“Technology improvement is a key reason why we don’t think business travel will resume sharply any time soon,” he said.
Airport health checks, while helping to restore confidence through visible safety measures, could also discourage people from travelling by air.
“Rather like what happened in the United States after 9/11, we could see the imposition of health checks, more paperwork, and basically more hassle and time getting through airports,” said Stallard.
Under lockdowns people are adapting to a more local existence and consuming less globally produced fresh food, which may have a lasting impact on fuel demand, analysts at Goldman Sachs said.
“Commuters and airlines account for 16 million bpd of global oil demand and may never return to their prior levels.”
But IATA’s de Juniac said economic integration would continue and that has supported consistent growth in air transport.
“Yes there will be a slowdown - there is already - but after a while people will recognise all the benefits coming from globalisation,” he said in a video interview.
Reporting by Bozorgmehr Sharafedin, Tim Hepher and Koustav Samanta; Editing by Elaine HardcastleOur Standards: The Thomson Reuters Trust Principles.
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e0ce10bdc9c5ca98fa80aa865d56c123 | https://www.reuters.com/article/global-oil-layoffs-idCAL1N2BV0U3?edition-redirect=ca | STEP Energy Services, NCS Multistage cut jobs as oil collapses | STEP Energy Services, NCS Multistage cut jobs as oil collapses
By Liz Hampton2 Min Read
April 7 (Reuters) - More oilfield service companies dismissed workers this week after oil prices collapsed to near two-decade lows amid a price war among top producers and falling demand from the spread of the novel coronavirus.
Houston, Texas-based NCS Multistage Holdings is cutting about 80 employees, or 20% of its workforce, according to a filing. The company provides services for fracking shale oil wells.
Canadian firm STEP Energy Services also is shedding workers in Texas and Oklahoma oilfields due to the “drastic downturn in oil,” the company said in a workforce filing.
The layoffs will impact 151 people at two Texas facilities and a handful of people in Oklahoma, it said.
Firms that provide oilfield services and equipment had barely recovered from the 2014-2016 downturn before oil last month crashed to about $20 a barrel. Many were already operating on thin margins, and now face customers pushing for price cuts.
French drilling pipe manufacturer Vallourec this week said it was cutting 900 jobs, or one third of its North American workforce, after activity collapsed in the oil and gas industry.
The decision was “necessary in a quickly deteriorating environment,” Chairman Edouard Guinotte said in a statement on Monday.
Halliburton, the largest hydraulic fracturing operator in the United States, on Monday said it was “significantly reducing” its workforce, and its executives agreed to take a pay cut. (Reporting by Liz Hampton Editing by Paul Simao)
Our Standards: The Thomson Reuters Trust Principles.
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10bc64debc6fa7e41229bc3b44471905 | https://www.reuters.com/article/global-oil-prices-idINKBN21N0HI?edition-redirect=in | Oil prices set to open lower due to Saudi-Russia row | Oil prices set to open lower due to Saudi-Russia row
By Ahmad Ghaddar, Julia Payne3 Min Read
LONDON (Reuters) - Global benchmark oil prices are expected to open lower on Monday as a dispute between top crude exporters Russia and Saudi Arabia raises concerns of another collapse in talks to curb production at a meeting this week.
FILE PHOTO: The sun sets behind a crude oil pump jack on a drill pad in the Permian Basin in Loving County, Texas, U.S. November 24, 2019. Picture taken November 24, 2019. REUTERS/Angus Mordant/File Photo
Russian President Vladimir Putin put the blame for the crash in prices on Saudi Arabia on Friday - prompting a firm response from Riyadh the following day, disputing Putin’s claims.
Crude futures surged for a second day on Friday, with both U.S. and Brent contracts posting their largest weekly percentage gains on record due to hopes that a global deal to cut crude supply worldwide would be struck at talks, which are now set for April 9.
The sharp rebound from weeks of losses came after U.S. President Donald Trump said Moscow and Riyadh would negotiate to end a price war that slashed prices by more than half last month.
“Given the slimmer chances of a deal, prices are likely to give up the gains made last week that were a short-covering rally induced by Trump’s comments,” said Amrita Sen, co-founder of the Energy Aspects consultancy.
OPEC and its allies are working on a global agreement for an unprecedented oil production cut equivalent to around 10% of worldwide supply in what they expect to be a global effort including countries that do not exert state control over output, such as the United States.
Trump has, however, made no commitment to take the extraordinary step of persuading U.S. companies to cut output.
Per Magnus Nysveen, head of analysis at Rystad Energy, said the decline in global demand due to the coronavirus pandemic and the global lockdowns was larger than the proposed cuts by the OPEC+ alliance.
“It is not strange for the market to hike prices by enthusiasm such as Friday’s, but for the levels to stay stable for more than a day or two, it takes concrete developments and deals on the ground,” he said.
On Friday, Brent crude futures rose 13.9%, or $4.17 a barrel, to settle at $34.11. U.S. West Texas Intermediate (WTI) crude CLc1 rose $3.02, or 11.93% to settle at $28.34.
OPEC and its allies postponed an emergency meeting, led by Saudi Arabia, where the oil cuts could be agreed upon. A senior Saudi source told Reuters on Sunday, that the kingdom would host the meeting via video conference on April 9 and the delay was to allow more time to bring other producers on board.
Saudi Aramco will delay the release of its crude official selling prices (OSP) for May until April 10 to wait for the outcome of a meeting between OPEC and its allies regarding possible output cuts, the Saudi source said.
“As Aramco seems to have postponed the release of their official selling prices for May, it seems the kingdom still believes an oil production cut deal is possible,” said UBS commodities analyst Giovanni Staunovo.
“The biggest challenge remains how to split up those cuts among producers, particularly if U.S. oil producers will not join with voluntary cuts.”
Writing by Rania El Gamal; Editing by Pravin CharOur Standards: The Thomson Reuters Trust Principles.
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fd7f41b0fb1552248f78f3357c001960 | https://www.reuters.com/article/global-oil-prices/rpt-oil-price-rise-muted-in-2019-despite-sanctions-supply-cuts-attack-in-saudi-arabia-idINL1N2910M7?edition-redirect=in | RPT-Oil price rise muted in 2019 despite sanctions, supply cuts, attack in Saudi Arabia | RPT-Oil price rise muted in 2019 despite sanctions, supply cuts, attack in Saudi Arabia
By Devika Krishna Kumar, Florence Tan4 Min Read
(Repeats story published earlier on Dec 30, no changes)
NEW YORK/SINGAPORE, Dec 30 (Reuters) - Oil prices rose more than 20% this year but there were no sharp spikes and crude futures barely sniffed $70 a barrel despite attacks on the world’s biggest oil producer, sanctions that crippled crude exports of two OPEC members and gigantic supply cuts from big oil producing countries.
The price gains in crude oil benchmarks were all in the first quarter of 2019, even as the next several months featured supply shocks that in the past would probably have propelled crude past the $100 mark.
Prices are likely to remain rangebound in 2020 as swelling supplies, particularly from the United States, offset cuts from the Organization of the Petroleum Exporting Countries and weakening worldwide demand, brokers and analysts said.
U.S. crude oil is on track to end 2019 roughly 35% higher. Since the end of March, it is up just 3%, after rallying early in the year after the United States introduced sanctions on Venezuela. Brent has gained 26%, but is off by 1% since the first quarter. (GRAPHIC: tmsnrt.rs/361XDnj)
Investors and analysts say U.S. production and weak demand kept prices under control. The United States is on track to be a net petroleum exporter on an annual basis for the first time in 2020. Output is expected to average 13.2 million bpd, an increase of nearly a million bpd from 2019.
“Demand growth cratered while U.S. production continued to barrel along at high rates and geopolitical risk eased,” Bob McNally, president of Rapidan Energy Group.
“And now, at the end of the year, weary investors are looking to next year and seeing a tsunami of oil.”
Investor concern over peak oil demand is expected to weigh on prices next year, particularly as the urgency around action against climate change has increased. Also, a long-term resolution of the U.S.-China trade war seems elusive, keeping market watchers wary of predicting energy demand growth in the world’s two largest economies.
“There is growing concern around the long-term sustainability of U.S. oil and gas companies for investors in an ESG (environmental, social and governance) driven world,” said Greg Sharenow, portfolio manager at PIMCO, who co-manages more than $15 billion in commodity assets.
The U.S. Energy Information Administration expects average crude oil prices will be lower in 2020 than in 2019 because of rising inventories. Outside the United States, production is expected to continue to grow in Brazil, Norway, and Guyana.
Prices did spike, but only briefly after drone attacks on Saudi Arabia’s biggest oil facility and U.S. sanctions on Venezuela and Iran. September attacks on Aramco facilities briefly pushed Brent above $72 a barrel, but within 10 days, oil prices sank back as Aramco brought production back online.
Notably, the market barely wavered in its view of where prices would end up. Implied volatility, a sign of how the market prices future gyrations in WTI and Brent futures, was largely muted in 2019 after a see-saw 2018, a sign that investors focused on broader supply trends.
Both Brent and U.S. West Texas Intermediate (WTI) futures were locked in a $22-$23 a barrel range during the year, well below last year’s levels.
While the rate of annual U.S. production growth is expected to slow, the country should still account for about 85% of the increase in global oil production to 2030, according to the International Energy Agency. PIMCO’s Sharenow said U.S. crude supply would need to slow for the price outlook to brighten.
“If we can move down to supply growth in a much more sustainable way of about 500,000-600,000 bpd, then all of a sudden the world is much better in 12 months,” Sharenow said.
Reporting by Devika Krishna Kumar in New York and Florence Tan in Singapore, additional reporting by Jessica Resnick-Ault in New York; Editing by David GregorioOur Standards: The Thomson Reuters Trust Principles.
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351c16abf9dbe5c7056d70107f5684a1 | https://www.reuters.com/article/global-oil-refinery-shutdowns-idINFWN2HY09Q?edition-redirect=in | FACTBOX-Oil refiners shut plants as demand losses may never return | FACTBOX-Oil refiners shut plants as demand losses may never return
By Reuters Staff0 Min Read
(Adds Petron Corp's Bataan under planned, moves Royal Dutch Shell's Convent under completed) Dec 15 (Reuters) - Oil refiners are permanently closing processing plants in Asia and North America and facilities in Europe could be next because of uncertain prospects for a recovery in fuel demand after the coronavirus pandemic cut consumption. The pandemic initially cut global fuel demand 30% and refiners temporarily idled plants. But consumption has not returned to pre-pandemic levels and lower travel may be here to stay, leading to the possibility of plants shutting down permanently. Here are some of the companies/refineries involved: PLANNED PLANT SHUTDOWNS Operator Refinery Country Total Capacity Capacity Impact Date of shutdown USN (in barrels per day) (in barrels per day) Petron Corp Bataan Philippines 180,000 180,000 Temporary suspension to start by second half of January Marathon Petroleum Martinez, California U.S. 161,000 161,000 NA BP plc Kwinana Australia 146,000 146,000 Over next six months Gunvor Group Antwerp Belgium 110,000 110,000 NA Total SA Grandpuits, Paris France 102,000 102,000 First quarter of 2021 Marathon Petroleum Gallup, New Mexico U.S. 27,000 27,000 NA Total 726,000 COMPLETED PLANT SHUTDOWNS Royal Dutch Shell Convent, Louisiana U.S. 211,146 211,146 Dec. 13 Eneos Corp Osaka Japan 115,000 115,000 Sept. 30 Pilipinas Shell Tabangao, Batangas Philippines 110,000 110,000 August Petroleum Corp Total 436,146 CAPACITY REDUCTIONS Royal Dutch Shell Pulau Bukom Singapore 500,000 250,000 NA Petroineos Grangemouth Scotland 200,000 90,000 NA total 340,000 (Complied by Bengaluru Commodities Desk; Editing by David Gregorio)
Our Standards: The Thomson Reuters Trust Principles.
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a220a3abb34e7f33ae08b2490890fbdd | https://www.reuters.com/article/global-oil-refining-idCAL8N2BN74A?edition-redirect=ca | Facing huge demand loss, global oil refineries cut output | Facing huge demand loss, global oil refineries cut output
By Olga Yagova, Ahmad Ghaddar3 Min Read
LONDON/MOSCOW, March 30 (Reuters) - The list of oil refiners that have reduced their production in the wake of unprecedented fall in fuel demand from the coronavirus pandemic is growing with European refineries slashing output by at least 1.3 million barrels per day (bpd), sources told Reuters on Monday.
With the global lockdown of 3 billion people - roughly 40% of the world’s population - demand for fuel is in free fall.
Goldman Sachs said that oil demand this week was down 26 million bpd, more than a quarter than levels for 2019.
Two trading source told Reuters that in Europe, which is facing expansive population lockdowns, refiners have cut their production by at least 1.3 million bpd so far for April and are expected to reduce output even further.
These cuts are in addition to around 700,000 - 750,000 bpd of planned refinery turnarounds in the region.
In Turkey, a major consumer of refined products like jet fuel and diesel, refiner Tupras has cut runs by 20-50% at its oil refineries in Turkey as demand for fuel deteriorates, sources said.
Britain’s 200,000 bpd Grangemouth oil refinery has shut two of its three crude units in the past two weeks, according to industry monitor Genscape.
A spokesman for the refinery said the site was “open and operational” but declined to comment further. A source familiar with the plant’s operations, however, said the two shutdown were an output reduction due to falling demand.
Refineries in Italy, Germany and Spain have also trimmed their output or fully shut down.
In India, Asia’s third largest economy, Indian Oil Corp (IOC) and Mangalore Refineries and Petrochemicals Ltd have slashed their crude processing by around one third and declared force majeure on their crude purchases.
The country’s 1.3 billion people are under a three-week lockdown, the biggest in the world.
And in Canada, North Atlantic Refining Ltd’s told stakeholders on Monday that it was stopping production at its 130,000 bpd Come-by-Chance refinery because of concerns over worker’s safety, becoming the first plant to close in North America due to pandemic. (Additional reporing by Julia Payne and Ron Bousso in London and Gleb Gorodyankin in Moscow Editing by Marguerita Choy)
Our Standards: The Thomson Reuters Trust Principles.
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e19c702c2ec1d98f786dfb7e4fdabbf2 | https://www.reuters.com/article/global-oil-shale-idCAL4N2B53UV?edition-redirect=ca | WRAPUP 1-More U.S. oil producers slash budgets amid price rout | WRAPUP 1-More U.S. oil producers slash budgets amid price rout
By Arathy S Nair3 Min Read
March 12 (Reuters) - Devon Energy, Apache Corp and Murphy Oil Corp on Thursday became the latest in a string of North American oil producers to slash their capital spending and drilling plans as crude prices tumble.
Oil producers have been scaling back spending since the last price crash in 2014, and the latest cuts come as the coronavirus outbreak crimps demand and a price war between top producers Saudi Arabia and Russia threatens to flood the oil markets, pushing U.S. crude to about $30 a barrel.
Apache on Thursday slashed its dividend by about 90%, cut 2020 capital investment plan by more than 37%, and said it would stop producing in Texas’ Permian basin and reduce drilling activity in Egypt and the UK North Sea.
Devon said it would cut its spending by about 30% from its earlier forecast, while Murphy Oil slashed its budget by 35% at the midpoint and said it would delay some U.S. Gulf of Mexico projects and development wells.
Crude fell about 6% to $33.67 on Thursday following surprise travel curbs imposed by U.S. President Donald Trump in an attempt to halt the spread of coronavirus and after the United Arab Emirates followed Saudi Arabia in promising to raise oil output to a record high in April.
U.S crude was trading down more than 6% at $30.99 a barrel, well below the low $40s that shale players need to cover their costs.
Earlier this week, Occidental Petroleum Corp announced it would slash its dividend and capital expenditure, while Chevron Corp became the first oil major to say it was looking at ways to cut spending that could lead to lower near-term oil production.
U.S. independent producer Marathon Oil Corp and Canadian oil-sands company Cenovus Energy Inc have also promised to cut spending by about 30% from a year earlier.
Shale firms Diamondback Energy Inc, Parsley Energy Inc, Matador Resources Co, Canada’s Meg Energy and offshore driller Talos Energy all unveiled plans to cut spending.
EOG Resources Inc said it was evaluating its drilling activity and that it was in the process of finalizing specific plans.
Analysts at Evercore said this week that they expect global exploration and production budgets to fall nearly 16% year over year, compared to their original forecast which called for a modest growth of 2%.
They expect spending to fall about 30% in North America, with rig counts declining more than 25%. (Reporting by Shariq Khan, Shanti S Nair and Arundhati Sarkar in Bengaluru; Writing by Arathy S Nair; Editing by Sriraj Kalluvila)
Our Standards: The Thomson Reuters Trust Principles.
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ca06f8bdaf2162768c13b25a804e210a | https://www.reuters.com/article/global-oil-shale-idCAL4N2B54O9?edition-redirect=ca | WRAPUP 2-More U.S. oil producers slash budgets amid price rout | WRAPUP 2-More U.S. oil producers slash budgets amid price rout
By Arathy S Nair, Arunima Kumar4 Min Read
(Adds related content, graphic)
March 12 (Reuters) - Devon Energy, Apache Corp and Murphy Oil Corp on Thursday became the latest North American oil producers to slash capital spending and drilling plans as crude prices tumble and pressure on businesses intensifies.
Oil producers have been scaling back spending since the last crash in 2014, but the coronavirus outbreak and the launch this week of a price war between Saudi Arabia and Russia threatens to push U.S. crude to $30 a barrel and cripple U.S. players.
Apache on Thursday slashed its dividend by about 90%, cut its 2020 capital investment plan by more than 37% and reduced drilling activity in Egypt and the UK North Sea.
In a telling move, the company also plans to stop drilling in the Permian, America’s largest shale field that also has one of the lowest production costs.
Devon cut its spending by about 30% from its earlier forecast, while Murphy Oil slashed its budget by 35% at the midpoint and said it would delay some U.S. Gulf of Mexico projects and development wells.
Brent crude fell about 6% to $33.67 on Thursday following the imposition of surprise travel curbs by U.S. President Donald Trump to halt the spread of the virus. The United Arab Emirates also followed Saudi Arabia in promising to raise oil output to a record high in April.
U.S. crude fell to as low as $30.99 a barrel, far below the low $40s that shale players need to cover their costs.
GLOBAL CUTS
Analysts at Evercore said this week that they expect global exploration and production budgets to fall nearly 16% this year, compared to an earlier forecast for a 2% growth. They expect spending to fall about 30% in North America, with rig counts declining more than 25%.
Producers may face more pain this time than in the 2014 downturn when the industry benefited from an expanding global economy. The retrenchment then cut more than 50% from North America exploration and production budgets and 25% abroad.
Thursday’s moves follow reductions by Occidental Petroleum Corp, and oil major Chevron Corp saying it was exploring ways to cut spending.
U.S. independent producer Marathon Oil Corp and Canadian oil-sands company Cenovus Energy Inc have also promised to cut spending by about 30%.
Encana, now Ovintiv Inc, cut second-quarter spending by $300 mln and said it was prepared to further reduce capital investments throughout the year.
“U.S. E&Ps are being tested existentially, fundamentally, pandemically, financially, politically,” analysts from brokerage Cowen said in a note, adding they expected U.S. oil output to be down by an average of 530,000 barrels per day by the fourth quarter.
Shale firms Diamondback Energy Inc, Parsley Energy Inc, Matador Resources Co, offshore driller Talos Energy and Canada’s Meg Energy this week unveiled plans to rein in spending.
EOG Resources Inc is evaluating its drilling activity and said it was in the process of finalizing specific goals.
With debt payments looming for many producers, David Smith, senior vice president at financial advisory firm Mercer Capital, said the current price environment may lead to the next round of oilfield service bankruptcies.
Reporting by Arunima Kumar, Shariq Khan, Shanti S Nair and Arundhati Sarkar in Bengaluru; Additional reporting by Aishwarya Venugopal; Writing by Arathy S Nair; Editing by Sriraj KalluvilaOur Standards: The Thomson Reuters Trust Principles.
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e6681200263e151191a823b9e376cdf9 | https://www.reuters.com/article/global-oil-spr-funds-idUKL1N2BJ28D?edition-redirect=uk | U.S. Energy Dept has funds for oil purchase for petroleum reserve-official | U.S. Energy Dept has funds for oil purchase for petroleum reserve-official
By Reuters Staff1 Min Read
WASHINGTON, March 26 (Reuters) - The U.S. Energy Department has enough money set aside for a potential purchase of oil for Strategic Petroleum Reserve, a senior official said on Thursday, after the department withdrew a tender due to lack of funding in the congressional stimulus package.
“The funds exist for a potential purchase and the Energy Department is working with Congress on the details,” the official said. It was not immediately clear how much money was available.
Sources said on Wednesday that some money could come from the department’s strategic petroleum modernization fund raised by previous sales from the reserve. (Reporting by Timothy Gardner, Editing by Franklin Paul)
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b1eb62937dc13dd1967b6af998217545 | https://www.reuters.com/article/global-oil-storage-idUKL8N2BH3AM?edition-redirect=uk | Global oil storage fills to the brim despite leap in costs | Global oil storage fills to the brim despite leap in costs
By Bozorgmehr Sharafedin, Shadia Nasralla, Devika Krishna Kumar5 Min Read
* Demand destruction drives hunt for storage
* Storage capacity not evenly spread across globe
* Storage often rented out long term
* Lease prices double in major hubs
By Bozorgmehr Sharafedin, Shadia Nasralla and Devika Krishna Kumar
LONDON/NEW YORK, March 24 (Reuters) - From Canada and the Caribbean to the Baltic and Singapore, oil tanks around the world are filling fast, despite a 50%-100% jump in lease costs, as oil companies and traders scramble to park unwanted crude and refined products.
Millions of barrels are struggling to find buyers among industrial users and refiners, which have cut operations as the impact of the coronavirus has destroyed demand and a Saudi-Russia market share battle has led to a flood of supply.
Fuel storage rates doubled this month in some onshore European and U.S. hubs as traders rushed to secure tanks in the hope of selling their products at a higher price when the coronavirus outbreak eases and demand recovers.
Europe’s Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub saw the cost of storing diesel and jet kerosene rise by between 50% and 100%, traders and industry watchers said.
“Storage prices for gasoil doubled in the last three weeks from 2 euros ($2.16) per cubic metre per month to 4 euros,” said Patrick Kulsen from Insights Global, a firm that tracks oil product storage and exports in the ARA region.
As most airliners ground their fleet because of the virus, jet fuel storage rates have increased by 50% since before the coronavirus crisis to 3 euros per cubic metre per month, a source with a storage firm in the ARA region said on condition of anonymity.
The picture in the Mediterranean is similar. In the last three weeks, Barcelona storage prices rose to $3.5 per cubic metre per month from $2.85 for storage for as far out as the end of 2021, a Mediterranean jet fuel trading source said.
In Cushing, Oklahoma, the delivery point for benchmark U.S. crude, traders said rates more than doubled to 50 cents per barrel per month from about 20 cents a month ago.
Highlighting the current premium for storage, shares in Dutch storage company Vopak were trading close to their 2015 highs despite a global market rout in recent weeks.
Vopak declined to comment and unlisted German storage firm Oiltanking did not respond to a request for comment.
DIFFICULT LOGISTICS
The world is estimated to have 0.9-1.8 billion barrels of spare storage capacity - equal to 9-18 days of global supply of 100 million barrels per day (bpd) or 90-180 days to accommodate supply exceeding demand by 10% or 10 million bpd.
Commodity data firm Kpler estimates the industry is using around 71% of its global storage capacity and has 1.8 billion barrels of free space. UBS estimates on-land free space at 0.9 billion while Bernstein puts it at 1.6 billion barrels.
But even if traders in their search for storage are willing to pay high prices, technical restrictions limit the amount available.
“Every installation will eventually have a working maximum,” Alexander Booth, head of market analysis at Kpler, said.
Operational limitations can prevent full utilisation. Also, light crude cannot be stored with heavy crude, and the quality of jet and gasoline can deteriorate when they are stored.
Not all storage is conveniently located and can involve the additional costs of longer shipping routes.
ALMOST FULL
Storage at Cushing in the United States will reach maximum capacity as early as May or at the latest by June, traders said as they already see heavy oversupply at the hub.
Caribbean storage for oil is also nearing capacity, storage brokers said. The Limetree Bay refinery and terminal in St. Croix as well as the Bullenbay oil terminal in Curacao have seen an increase in demand, sources said.
“We have requests from people wanting to store,” said Marcelino de Lannoy, interim managing director at Refineria di Korsou, the state-owned refiner in Curacao.
In Western Canada, oil output could from April fall by some 11%, or 440,000 bpd, Rystad Energy estimates, as the country is days away from running out of storage.
Baltic oil product terminals in Estonia, Latvia and Lithuania are also brimming, industry sources said.
The terminals were half idle after Russia switched to shipping oil and products to its own ports around a decade ago.
Now trading houses such as Vitol and Trafigura, which co-own or have long-term leases for terminals, are using them at capacity.
South Korea’s crude storage and products storage in Singapore are also all leased out, according to traders.
“Land tanks are all taken. I don’t think there is any spare anywhere,” said an oil trader in Singapore, referring to storage space across Asia. ($1 = 0.9249 euros)
Reporting by Bozorgmehr Sharafedin, Shadia Nasralla, and Devika Krishna Kumar, additional reporting by Dmitry Zhdannikov, Ahmad Ghaddar, Florence Tan, Gary McWilliams, Gleb Gorodyankin and Natalia Chumakova; Editing by Dmitry Zhdannikov and Barbara LewisOur Standards: The Thomson Reuters Trust Principles.
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10343477e4985b913c66f00ffc237ac4 | https://www.reuters.com/article/global-oil-texas-idCAL3N2CG4K4?edition-redirect=ca | UPDATE 1-Texas energy regulators to vote on production curtailments in May 5 meeting | UPDATE 1-Texas energy regulators to vote on production curtailments in May 5 meeting
By Reuters Staff2 Min Read
(Adds background)
April 28 (Reuters) - Texas energy regulators will next week vote on a controversial proposal to reduce the state’s oil output after delaying it on concerns of legal challenges.
The vote follows a motion submitted by Texas Railroad Commissioner Ryan Sitton, who has already been vocal about the need for curtailments to address historically low oil prices.
Oil and gas companies have been gushing red ink and cutting tens of thousands of workers as prices tumble, prompting regulators in the largest U.S. oil-producing state to wade into global oil politics and consider some producers’ calls for cuts.
Sitton's motion calls here for curtailments of 20% of the state's output and if agreed, curbs would remain in place until the Railroad Commission of Texas (RRC) determines that global demand has crossed 85 million barrels of oil per day.
At a meeting last Tuesday, the day after U.S. crude prices crashed into negative territory for the first time, two of three RRC commissioners opted not to make a decision but agreed to talk about output curbs again on May 5.
Sitton had already said at that meeting he would vote in favor of cutting output by 1 million barrels per day, or 20%. “Taking weeks or even days right now to act is in itself a choice,” Sitton had said.
However the vote was delayed because the other two commissioners, Chairman Wayne Christian and Christi Craddick, said they wanted the state attorney general to weigh in on the legality of production curbs.
Companies and other industry group have been divided on the issue, with Parsley Energy and Pioneer Natural Resources Co supporting curtailments while majors Exxon Mobil Corp and Chevron Corp opposing the idea.
Sitton and the other commissioners, Parsley and Pioneer could not be reached for comment immediately.
Reporting by Shariq Khan in Bengaluru and Jennifer Hiller in Houston; Editing by Maju SamuelOur Standards: The Thomson Reuters Trust Principles.
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b8b709b8f35949930f300c2b9fe17ffb | https://www.reuters.com/article/global-oil-turkey-idUKL1N1A11WP?edition-redirect=uk | Oil prices rally in late trading after Turkish military takes over | Oil prices rally in late trading after Turkish military takes over
By Reuters Staff1 Min Read
NEW YORK, July 15 (Reuters) - Oil prices extended gains in post-settlement trading on Friday after Turkey’s armed forces said they had taken power in the country to protect the democratic order and to maintain human rights.
Supply outages across the world have led to crude prices rallying from 12-year lows touched earlier in the year.
For the oil market, a military coup raises concerns of an impact to the Kirkuk-Ceyhan pipeline, which runs from Iraq’s Kirkuk oil fields to the Mediterranean port of Ceyhan in Turkey. (Reporting by Devika Krishna Kumar in New York; Editing by Chizu Nomiyama)
Our Standards: The Thomson Reuters Trust Principles.
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bb51aecbe1e900246d62e490ecd92ffa | https://www.reuters.com/article/global-oil-usa-reserves-idINKCN2251X9?edition-redirect=in | Drowning in crude, U.S. drillers say Trump strategic reserve plan is no lifeline | Drowning in crude, U.S. drillers say Trump strategic reserve plan is no lifeline
By Devika Krishna Kumar6 Min Read
NEW YORK (Reuters) - President Donald Trump’s plan to fill the U.S. emergency crude oil stockpile has become the centerpiece of his administration’s strategy to shield drillers from a meltdown in energy demand - but company officials and industry groups say the program has been too slow and won’t be enough to save them.
FILE PHOTO: A maze of crude oil pipes and valves is pictured during a tour by the Department of Energy at the Strategic Petroleum Reserve in Freeport, Texas, U.S. June 9, 2016. REUTERS/Richard Carson/File Photo
Trump announced his intention to fill the U.S. Strategic Petroleum Reserve “to the top” on March 13 as global oil prices went into freefall amid the coronavirus outbreak as governments issued stay-at-home orders that have obliterated fuel demand.
But by the time crude oil prices hit negative territory for the first time in history this week because of a lack of commercial storage space, the SPR’s sprawling salt caverns had yet to take delivery of a single barrel due to logistical constraints and a lack of funding.
Drillers, meanwhile, say they are balking at the government’s offer to take their oil because it is hard for them to move it from inland fields to the SPR delivery sites on the Gulf Coast, and because they worry placing it in the reserve could compromise the oil’s quality.
Global oil demand generally averages about 100 million barrels per day, but the pandemic is estimated to have cut that by around 30%. While major oil-producing nations led by Saudi Arabia have cut output and companies are closing wells, the oversupply is projected to linger for months or years leading to waves of bankruptcies in the U.S. energy industry.
“I don’t see (the SPR program) providing a significant benefit to the masses in Texas,” Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association.
The administration’s initial idea for the SPR was to purchase 77 million barrels of oil – the amount required to fill all available space in the reserve - directly from small U.S. producers most at risk from the market slump.
But after Democratic lawmakers blocked funding for the program in last month’s stimulus package, the administration shifted strategies by offering the initial 30 million barrels of space for lease instead.
The Department of Energy said this week it has awarded contracts to store a total of 23 of the 30 million barrels initially offered in the reserve, with deliveries to start as early as this month. A DOE official said it was “not surprising” that some of the offered space was not taken, because the leasing offer required different crude types to be delivered to specific locations on a deadline.
The DOE said it plans to fill the remaining available capacity in the SPR over the coming months.
The Independent Petroleum Association of America did not immediately provide a comment on the SPR program, but said it was hoping for more sweeping aid, including “royalty relief, lease extensions, and access to federal loan programs.”
The Trump administration has said it is also looking at ways to ease a cash crunch in the ailing industry to stave off bankruptcies, including by possibly increasing loan limits under the recently passed CARES Act economic stimulus package.
LOGISTICAL CONSTRAINTS
The DOE’s SPR loan proposal asked companies to deliver sweet crude oil to its sites either in Bayou Choctaw, Louisiana, or Big Hill or Bryan Mound in Texas. It is taking sour crude at the West Hackberry site in Louisiana.
Many small producers find it challenging to access those salt caverns dotting the U.S. Gulf Coast.
While several pipelines connect inland shale fields to the Gulf Coast region, space on the lines is either locked up by large oil companies or not worth the expense now as oil prices have crashed, traders said.
The DOE said the initial companies awarded storage contracts were delivering oil sourced from “several hundred small, medium, and large producers,” and added that the department was evaluating “an added opportunity for small producers in one of the upcoming solicitations.”
Companies were instead mainly opting to cut production, according to traders and officials with drilling companies. U.S. output surged to a record near-13 million barrels per day in late 2019 but has dropped off sharply in recent weeks.
Companies are concerned about what storing their oil in the SPR would do to its quality, some traders said. Much of the oil stored in the SPR is blended together, meaning producers of high-quality oil could be degrading their product.
The traders also cited a looming possible health concern. Three firms that bought crude oil in 2017 from U.S. emergency stockpiles raised concerns about dangerous levels of a poisonous chemical called hydrogen sulfide in the cargoes.
The DOE said it would seek to compensate for any significant quality issues during storage by providing a so-called quality adjustment payment.
As oil prices hit negative territory this week for the first time ever, Trump again told reporters he intended to help the industry by filling the SPR. His administration is still urging Congress to come up with funds for outright purchases.
But for some drillers, the writing is on the wall.
“The price action will cause producers to cut (production) harder, period. Everything else is background noise,” said one source at a publicly traded Permian producer.
Reporting by Devika Krishna Kumar in New York; Editing by Richard Valdmanis, David Gregorio, Bernadette Baum and Andrea RicciOur Standards: The Thomson Reuters Trust Principles.
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1a91b9ef01f0865d813da79fb5621da9 | https://www.reuters.com/article/global-oil/oil-climbs-on-us-china-trade-optimism-middle-east-tensions-idINL4N29708F?edition-redirect=in | Oil climbs on U.S.-China trade optimism, Middle East tensions | Oil climbs on U.S.-China trade optimism, Middle East tensions
By Jane Chung3 Min Read
* Brent, WTI futures both up 0.3%
* Brent to hold near $63 in 2020, WTI around $57 - poll
* U.S. crude stocks fell by 7.8 mln bbls last week - API
SEOUL, Jan 2 (Reuters) - Oil prices rose on the first trading day of 2020 as warming trade relations between the United States and China eased demand concerns, and rising tensions in the Middle East raised worries about supply.
Global benchmark Brent crude futures, were up 21 cents, or 0.3%, to 66.21 a barrel by 0130 GMT. U.S. West Texas Intermediate (WTI) crude was up 21 cents, or 0.3%, at $61.27 per barrel.
Oil markets were closed on Wednesday for New Year’s Day.
Both benchmarks ended higher in 2019, posting their biggest annual gains since 2016, buoyed at the end of the year by a thaw in the prolonged trade dispute between the United States and China - the world’s two largest economies - and a deeper output cut pledged by the Organization of Petroleum Exporting Countries (OPEC) and its allies.
“Oil remains supported by the back-burner trade truce and the uptick in political unrest in Iraq,” said Stephen Innes, chief Asia market strategist at AxiTrader.
Geopolitical risks remain in the Middle East after U.S air strikes against the Iran-backed Katib Hezbollah militia group over the weekend. Protesters, angry at the air strikes, stormed the U.S. Embassy in Baghdad on Wednesday, although they withdrew after U.S. deployed extra troops.
In 2020, Brent is forecast to average $63.07 a barrel, up from December’s estimate of $62.50, while WTI is forecast to average $57.70 a barrel, up from December’s estimate of $57.30, as the OPEC-led supply cuts and the expectations of a U.S.-China trade deal boosted analysts’ views on the prospects for the year, a Reuters poll showed.
U.S. President Donald Trump said on Tuesday the U.S.-China Phase 1 trade deal would be signed on Jan. 15 at the White House.
January also marks the start of the deeper output cuts by OPEC and its partners, including Russia. OPEC and its allies have agreed to cut a further of 500,000 barrels per day (bpd) from Jan. 1, on top of their previous cut of 1.2 million bpd that started on Jan. 1 a year ago.
A fall in U.S. crude inventories last week also supported prices. U.S. crude inventories fell by 7.8 million barrels in the week ended Dec. 27, compared with analysts’ expectations for a decrease of 3.2 million barrels, according to data from the American Petroleum Institute (API) released on Tuesday.
Official data from the Energy Information Administration (EIA) is due on Friday as the release has been delayed by two days by the New Year’s holiday. (Reporting By Jane Chung; Editing by Tom Hogue)
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514a85b260ff87982a783eb7d357ce31 | https://www.reuters.com/article/global-oil/oil-dips-after-u-s-stock-build-u-s-china-deal-hopes-support-idUKL4N28706E?edition-redirect=uk | Oil dips after U.S. stock build; U.S.-China deal hopes support | Oil dips after U.S. stock build; U.S.-China deal hopes support
By Koustav Samanta3 Min Read
SINGAPORE, Nov 27 (Reuters) - Oil fell on Wednesday after an industry report showed an unexpected build in U.S. crude inventories, but optimism around the signing of the first phase of a U.S.-China trade deal capped a deeper slide in prices.
International benchmark Brent crude futures dropped 19 cents, or 0.3%, to $64.08 a barrel by 0145 GMT on Wednesday. Brent rose about 1% on Tuesday.
West Texas Intermediate (WTI) crude futures fell 17 cents, or 0.29%, to $58.24 per barrel.
Wednesday’s decline reversed two days of gains with WTI climbing 1.1% through Tuesday and Brent gaining 1.4% during the period on the expectation that China and the United States, the world’s two biggest crude users, would sign a preliminary agreement that would begin to end their 16-month trade war.
U.S. crude stocks rose by 3.6 million barrels in the week to Nov. 22 to 449.6 million, compared with analysts’ expectations for a decrease of 418,000 barrels, data from industry group the American Petroleum Institute showed.
Official inventory data from the U.S. Energy Information Administration (EIA) is due later on Wednesday.
“The surprise crude build disappointed the oil bulls and likely encouraged some end of day position squaring,” said Stephen Innes, market strategist at AxiTrader.
“But oil prices continue to be driven mainly by U.S.-China trade news flow, which remains hugely encouraging even more so after President Trump sounded extremely optimistic, hinting that a deal was just around the corner.”
The United States and China are close to agreement on the first phase of a trade deal, U.S. President Donald Trump said on Tuesday, after top negotiators from the two countries spoke by telephone and agreed to keep working on remaining issues.
The trade dispute between Washington and Beijing, the world’s two biggest economies, has clouded the outlook for future oil demand and even as a deal is yet to be finalized, any positive headline tends to support the market.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies in a production cutting pact, a group known as OPEC+, will begin holding meetings on Dec. 4 in Vienna to examine its output policy.
OPEC plans to meet on Dec. 5 and then a meeting of the OPEC+ group on Dec. 6 will make a final announcement on the future policy.
The OPEC+ group agreed to cut oil output by 1.2 million barrels per day until March 2020 to boost prices. They are expected to extend the policy, possibly until June.
Reporting by Koustav Samanta; Editing by Christian SchmollingerOur Standards: The Thomson Reuters Trust Principles.
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e065c2b0404f1996afd1c5394528b00c | https://www.reuters.com/article/global-oil/oil-dips-after-us-stock-build-but-demand-hopes-support-idUKL4N28S0CB?edition-redirect=uk | Oil dips after U.S. stock build, but demand hopes support | Oil dips after U.S. stock build, but demand hopes support
By Koustav Samanta2 Min Read
SINGAPORE, Dec 18 (Reuters) - Oil retreated on Wednesday after rising more than 1% in the previous session as U.S. industry data showed a surprise build in crude stocks, but hopes for firmer demand next year checked a deeper fall in prices.
A “phase one” U.S.-China trade deal announced last week has helped ward off some pressure from the oil market, dampened by worries over the economic impact of a prolonged dispute between the world’s two biggest oil consumers.
Brent crude futures dropped 21 cents, or 0.32%, to $65.89 a barrel by 0110 GMT on Wednesday. The international benchmark rose 1.2% to $66.10 a barrel on Tuesday.
West Texas Intermediate (WTI) crude futures fell 31 cents, or 0.51%, to $60.63 per barrel.
“The sizzling oil market rally came to a grinding halt after an unexpected climb in the weekly U.S. crude inventory report,” said Stephen Innes, market strategist at AxiTrader. However, he added “it’s unlikely to be a game-changer.”
“Investors have transcended the trade deal inspired relief rally euphoria and are now banking on a fundamental demand-driven shift that could quicken the pace of the oil market rebalancing in the first quarter of 2020.”
U.S. crude inventories climbed 4.7 million barrels in the week to Dec. 13 to 452 million, compared with analysts’ expectations for a draw of 1.3 million barrels, data from industry group the American Petroleum Institute showed.
Inventory data from the U.S. Energy Information Administration (EIA) is due later on Wednesday.
Meanwhile, deeper production cuts coming from the Organization of the Petroleum Exporting Countries and allies such as Russia - a group known as OPEC+ - continued to support market sentiment and prevented a bigger slide in prices on Wednesday.
The OPEC+, which has cut production by 1.2 million barrels per day (bpd) since Jan. 1 this year, will make a further oil supply cut of 500,000 bpd from Jan. 1, 2020 to support the market. (Reporting by Koustav Samanta; Editing by Jacqueline Wong)
Our Standards: The Thomson Reuters Trust Principles.
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40da85d5e47f9e3c0c80a6d018e6e13a | https://www.reuters.com/article/global-oil/oil-dips-as-markets-await-iran-response-to-us-killing-of-military-commander-idUKL4N29C0EI?edition-redirect=uk | Oil dips as markets await Iran response to U.S. killing of military commander | Oil dips as markets await Iran response to U.S. killing of military commander
By Florence Tan3 Min Read
* Iran more likely to focus on U.S. military targets - Eurasia
* Dec OPEC output falls by 50,000 bpd - survey
* U.S. crude stocks likely to drop 4th week in a row - poll
SINGAPORE, Jan 7 (Reuters) - Oil prices edged lower on Tuesday, coming off their highest levels in months as the market calmed while the world braces for Iran’s response to the killing of its top military commander by the United States.
Brent crude fell 44 cents to $68.47 a barrel by 0200 GMT while U.S. West Texas Intermediate (WTI) crude was at $62.86 a barrel, down 41 cents.
Prices surged for the previous two sesssions on fears of escalating conflict and supply disruption in the Middle East after the Jan. 3 drone strike in Baghdad that killed Iran’s Qassem Soleimani. But some analysts have tempered expectations for a widespread conflict.
“Over the past three days, the scope for Iranian retaliation has shifted in two important ways,” consultancy Eurasia Group said in a note.
“Iran is likely to focus more narrowly on U.S. military targets,” Eurasia said. “That’s not to say it won’t continue low-level harassment of commercial shipping or regional energy infrastructure but these activities will not be severe.”
Meanwhile prices are also likely to gain support from higher compliance among the Organization of the Petroleum Exporting Countries (OPEC) on meeting production quota curbs aimed at reducing supply.
On average, OPEC members pumped 29.50 million barrels per day (bpd) last month, down 50,000 bpd from November’s revised figure, according to a Reuters survey.
In the United States, crude oil stockpiles likely dropped last week for a fourth week in a row as exports ramped up, a preliminary Reuters poll showed on Monday.
Six analysts polled by Reuters estimated, on average, that crude stocks fell by about 4.1 million barrels in the week to Jan 3.
Inventories for refined products were expected to rise with gasoline stocks set to gain for the ninth straight week, according to the poll. (Reporting by Florence Tan; Editing by Kenneth Maxwell)
Our Standards: The Thomson Reuters Trust Principles.
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ce65fec3ff76d97a9e18523530cc5502 | https://www.reuters.com/article/global-oil/oil-dips-on-easing-us-iran-tensions-eyes-on-china-trade-deal-idUKL4N29I01C?edition-redirect=uk | Oil dips on easing U.S.-Iran tensions, eyes on China trade deal | Oil dips on easing U.S.-Iran tensions, eyes on China trade deal
By Reuters Staff2 Min Read
SEOUL, Jan 13 (Reuters) - Oil prices edged down on Monday as fears of conflict between the United States and Iran eased, although the decline was checked by the planned signing of an initial U.S.-China trade deal this week, which could boost demand.
Brent crude was down 13 cents, or 0.2%, at $64.85 per barrel at 0120 GMT. WTI was also down 9 cents, or 0.2%, at $58.95 a barrel.
Oil prices had surged after the killing of an Iranian commander by a U.S. drone strike and the launch of Iranian missiles in retaliation, but then slumped as the United States and Iran stepped back from the brink of direct conflict.
Global benchmark Brent touched a near four-month high above $70 before ending last week below $65, although the situation in the Middle East remains tense.
Four Iraqi soldiers were wounded on Sunday in an attack on an Iraqi air base where U.S. troops have been based, the Iraqi military said.
“Geopolitical tension will be the focus for investors this week,” ANZ Research said in a note.
Meanwhile, expectations of thawing trade tensions between the United States and China, the world’s two biggest oil consumers, have offered support for prices.
A U.S.-China trade deal is due to be signed in Washington on Wednesday.
Reporting By Jane Chung; editing by Richard PullinOur Standards: The Thomson Reuters Trust Principles.
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6629b3c7e86ec72c57a8b5323d21f675 | https://www.reuters.com/article/global-oil/oil-down-nearly-4-as-virus-surge-weighs-on-demand-outlook-idINKCN24V08X?edition-redirect=in | Oil down nearly 4% as virus surge weighs on demand outlook | Oil down nearly 4% as virus surge weighs on demand outlook
By Ahmad Ghaddar3 Min Read
LONDON (Reuters) - Oil prices fell by around 4% on Thursday, as surging coronavirus infections around the world threatened to jeopardise a recovery in fuel demand just as major oil producers are set to raise output.
Pumpjacks are seen against the setting sun at the Daqing oil field in Heilongjiang province, China December 7, 2018. Picture taken December 7, 2018. REUTERS/Stringer/Files
U.S. West Texas Intermediate (WTI) crude futures were down $1.52, or 3.7%, at $39.75 a barrel at 1401 GMT.
The most-active Brent crude contract for October fell $1.35, or 3.1%, to $42.74 a barrel, while September Brent, which expires on Friday, fell $1.34 to $42.41 a barrel.
Both benchmark contracts had risen on Wednesday after the U.S. Energy Information Administration (EIA) reported the largest one-week fall in crude stocks since December.
In a sign of the devastating impact of the coronavirus on the United States, the world’s biggest oil consumer, the country’s economy contracted at its steepest pace since the Great Depression in the second quarter.
U.S. gross domestic product collapsed at a 32.9% annualised rate, the deepest decline in output since the government started keeping records in 1947, the Commerce Department said on Thursday.
Deaths from COVID-19 have now topped 150,000 in the United States, while Brazil, with the world’s second-worst outbreak, set daily records of confirmed cases and deaths. New infections in Australia hit a record on Thursday.
“The recent resurgence of the coronavirus is an ominous sign that the upside is limited in the immediate future,” Tamas Varga of oil brokerage PVM said.
The potential threat to a recovery in oil demand comes as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, together known as OPEC+, are set to step up output in August, adding about 1.5 million barrels per day to global supply.
“The easing OPEC+ supply restrictions combined with the return of some U.S. production may test the resilience of market sentiment in the coming weeks,” Stephen Innes, chief global market strategist at AxiCorp said.
Total TOTF.PA and Royal Dutch Shell RDSa.L reported small profits in the second quarter as their oil trading businesses shielded them from the full force of the pandemic-induced demand loss.
Additional reporting by Sonali Paul in Melbourne and Koustav Samanta in Singapore. Editing by Jane Merriman and Edmund BlairOur Standards: The Thomson Reuters Trust Principles.
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2163cff9da89480e00ae5ca936eff6bf | https://www.reuters.com/article/global-oil/oil-extends-gains-on-rising-mideast-tensions-idINL4N29B03M?edition-redirect=in | Oil extends gains on rising Mideast tensions | Oil extends gains on rising Mideast tensions
By Florence Tan2 Min Read
SINGAPORE, Jan 6 (Reuters) - Oil prices added to recent gains on Monday, with Brent nearly at $70 a barrel as escalating tensions in the Middle East fanned worries about disruptions to supplies.
Brent crude futures rose to a high of $69.95 a barrel and were at $69.65 a barrel at 0016 GMT, up $1.05, or 1.5%, from Friday’s settlement.
U.S. West Texas Intermediate crude was at $63.86 a barrel, up 81 cents, or 1.3%, after touching an intraday high of $64.27.
Oil prices jumped more than 3% on Friday after the United States killed a top Iranian commander in an air strike on Baghdad airport.
The Iraqi government on Sunday called on American and other foreign troops to leave Iraq, heightening concerns of a widening Middle East conflict that may disrupt oil supplies from the region.
U.S. President Donald Trump on Sunday threatened “major retaliation” against Iran if Tehran were to retaliate for the killing.
“The assassination of Iranian General Qassem Soleimani will trigger a long cycle of regional escalation with significant risks to U.S. assets and Mideast energy infrastructure that nevertheless stop short of war,” Eurasia Group analyst Ayham Kamel said in a note.
“But the risk of limited conflict is real. It would include substantial Iranian attacks on Gulf energy targets and direct naval clashes between the U.S. and Iran.”
The Middle East accounts for nearly half of the world’s oil production, while Iraq is the second largest producer among the Organization of the Petroleum Exporting Countries (OPEC). (Reporting by Florence Tan; Editing by Richard Pullin)
Our Standards: The Thomson Reuters Trust Principles.
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18d9b16ee48830ef27958af650ce7b5e | https://www.reuters.com/article/global-oil/oil-falls-1-as-russia-needs-time-to-mull-more-opec-supply-cuts-idINKBN20106C?edition-redirect=in | Oil falls 1% as Russia needs time to mull more OPEC+ supply cuts | Oil falls 1% as Russia needs time to mull more OPEC+ supply cuts
By Stephanie Kelly3 Min Read
NEW YORK (Reuters) - Oil prices fell 1% on Friday as Russia said it needed more time before committing to output cuts sought by other large producers while the coronavirus outbreak fanned worries about global crude demand.
FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas U.S. August 22, 2018. REUTERS/Nick Oxford
Oil prices posted their fifth straight weekly decline, as speculators have backed away due to weaker consumption figures and expectations that the coronavirus, which has killed more than 600 people, will remain a drag on demand.
Brent crude LCOc1 futures lost 46 cents, or 0.8%, to settle at $54.47 a barrel. Brent sank 6.3% for the week.
U.S. West Texas Intermediate (WTI) crude futures CLc1 fell 63 cents, or 1.2%, to settle at $50.32 a barrel. The contract lost 2.4% for the week.
This week, a panel advising OPEC+, the Organization of the Petroleum Exporting Countries and allies led by Russia, suggested provisionally cutting output by 600,000 barrels per day (bpd).
On Friday, Russia Energy Minister Alexander Novak said Moscow needed more time to assess the situation.
“Russia’s lack of commitment thus far to such a deal is providing one additional bearish element that is currently precluding the complex from sustaining price advances,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
Prices have fallen about a fifth since the outbreak of the virus in the Chinese city of Wuhan. China is the world’s biggest importer of crude, taking in roughly 10 million bpd in 2019.
Novak predicted global oil demand may fall by 150,000 to 200,000 barrels per day (bpd) in 2020 in part because of the virus.
The OPEC+ group this year deepened existing cuts to roughly 1.7 million bpd, nearly 2% of global demand, yet prices have remained in a narrow band. Producers in OPEC+ are scheduled to meet in Vienna on March 5-6, although the meeting could be brought forward because of concerns surrounding the virus.
Forecaster Eurasia Group said it estimates a contraction in oil demand in China of as much 3 million bpd in the first quarter from 2019 levels.
U.S. Energy Secretary Dan Brouillette said on Friday that the impact of the coronavirus outbreak on global energy markets is currently marginal, though it could worsen if the virus spreads.
Sources have told Reuters that Chinese policymakers are preparing measures, including more fiscal spending and interest rate cuts, amid expectations that the outbreak will have a devastating impact on first-quarter growth.
GRAPHIC: Change in Brent crude oil prices since Jan. 20,
U.S. energy firms added oil rigs for the third time in four weeks even though producers planned to continue reducing spending on new drilling for a second consecutive year in 2020. Companies added 1 oil rig in the week to Feb. 7, bringing the total count to 676, energy services firm Baker Hughes Co BRK.N said on Friday. RIG-OL-USA-BHI
Money managers cut their net long U.S. crude futures and options positions in the week to Feb. 4 by 55,512 contracts to 162,518, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
Additional reporting by Noah Browning in London and Aaron Sheldrick in Tokyo; Editing by Will Dunham, David Evans, Louise Heavens and David GregorioOur Standards: The Thomson Reuters Trust Principles.
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f1074afec1291b4b6f39c7fa8c096e64 | https://www.reuters.com/article/global-oil/oil-falls-about-2-5-as-u-s-gulf-production-returns-idINKCN1UD03P?edition-redirect=in | Oil falls about 2.5% as U.S. Gulf production returns | Oil falls about 2.5% as U.S. Gulf production returns
By Jessica Resnick-Ault4 Min Read
NEW YORK (Reuters) - Oil fell about 2.5% a barrel on Thursday, weighed down by weakness in U.S. equities markets and an expectation that crude output would rise in the Gulf of Mexico following last week’s hurricane in the region.
FILE PHOTO: A pump jack operates in the Permian Basin oil production area near Wink, Texas U.S. August 22, 2018. REUTERS/Nick Oxford/File Photo
Prices were further weighed down by economic concerns as U.S. equities were on track for a third consecutive decline. [.N]
Brent crude LCOc1 futures settled down $1.73, or 2.7% at $61.93 a barrel.
West Texas Intermediate crude CLc1 futures were down $1.48 a barrel, or 2.6% at $55.30.
The longer-term outlook for oil has also grown increasingly bearish, market participants said on Thursday. Speculators have exited options positions that could have provided exposure to higher prices in the next several years, they said.
U.S. offshore oil and gas production has continued to return to service since Hurricane Barry passed through the Gulf of Mexico last week, triggering platform evacuations and output cuts. Royal Dutch Shell RDSa.L, a top Gulf producer, said Wednesday it had resumed about 80% of its average daily production in the region.
“You have people that were trying to ride the whole storm and a 9 million(-barrel) draw (in U.S. crude inventories) that went with it last week,” said Bob Yawger, director of energy at Mizuho in New York. “This week the situation has totally changed and everyone is trying to get out of the market.”
The retreat from early session highs accelerated after each benchmark fell below yesterday’s low, which had provided technical support, Yawger said.
Oil had fallen on Wednesday in response to a sharp rise in U.S. stockpiles of products such as gasoline that pointed to weak demand during the U.S. driving season.
Data from the U.S. Energy Information Administration showed a larger-than-expected drawdown in crude stockpiles last week.
The summer driving season normally entails increased consumption of gasoline.
(GRAPHIC: U.S. crude inventories, weekly changes since 2017 - tmsnrt.rs/2XlX17b)
In addition to the U.S. storm, Middle East tensions have dictated market moves in recent weeks.
Crude rose early in the session after Iran said it had seized a foreign tanker in the Gulf. Prices pulled back after it emerged that the vessel had only a small cargo and was detained on Sunday for fuel smuggling.
“The oil price reaction on Thursday shows once again that the conflict in the Middle East is far from solved and tensions could flare up at any time,” UBS analyst Giovanni Staunovo said.
“As oil keeps flowing, prices are likely to rise only temporarily,” Staunovo added.
Britain pledged to defend its shipping interests in the region, and U.S. Central Command chief General Kenneth McKenzie said the United States would work “aggressively” to enable free passage after recent attacks on oil tankers in the Gulf.
Iran said the vessel impounded was the one it towed on Sunday after the ship had sent a distress call. U.S. officials said on Wednesday they were unsure whether an oil tanker towed into Iranian waters had been seized or rescued.
Reuters reported on Wednesday that shipping companies were hiring unarmed security guards for voyages through the Gulf.
(GRAPHIC: Iran's guards say it seized a foreign oil tanker in the Gulf - tmsnrt.rs/32tzK6J)
Additional reporting by Aaron Sheldrick in Tokyo and Bozorgmehr Sharafedin in London; Editing by Marguerita Choy, Jason Neely and Richard ChangOur Standards: The Thomson Reuters Trust Principles.
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a762f1e87e1c2348662bfc1b73b74fc4 | https://www.reuters.com/article/global-oil/oil-futures-edge-up-on-talk-of-further-opec-supply-curbs-idINKBN1Y60EL?edition-redirect=in | Oil futures edge up on talk of further OPEC+ supply curbs | Oil futures edge up on talk of further OPEC+ supply curbs
By Scott DiSavino3 Min Read
NEW YORK (Reuters) - Oil futures gained about 1% on Monday on hints the Organization of the Petroleum Exporting Countries (OPEC) and its allies may agree to deepen output cuts at a meeting this week and as rising manufacturing activity in China suggested stronger demand.
FILE PHOTO: Oil pump jacks at sunset near Midland, Texas, U.S., August 21, 2019. REUTERS/Jessica Lutz
Brent LCOv1 futures for the most active contract for February delivery rose 43 cents, or 0.7%, to $60.92 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 gained 79 cents, or 1.4%, to $55.96.
Oil eased off session highs earlier in the day as Wall Street dropped after data showed U.S. factory activity contracted in November and after U.S. President Donald Trump unexpectedly announced plans to reimpose tariffs on steel and aluminium from Argentina and Brazil.[.N]
Trump “accused both countries of manipulating their currencies to the detriment of U.S. farmers, once again employing the one-size-fits-all approach to trade matters,” Craig Erlam, senior market analyst at OANDA Europe, said in a report.
OPEC and allied producers including Russia are expected to extend output cuts this week and could trim an additional 400,000 barrels per day (bpd) or more, two sources said. OPEC’s ministers will meet in Vienna on Thursday and the wider OPEC+ group will gather on Friday.
“There is a discussion about a deeper cut taking place,” an OPEC source said, citing forecasts for “a big stock build in the first half of the year - we need to keep an eye on that.”
The OPEC+ group’s deal to cut supply by 1.2 million bpd started in January and expires at the end of March. It is not certain OPEC+ will agree to deepen its curbs. Some in the group are wary measures to support prices will encourage more U.S. production.
The “Saudis appear intent on maintaining extant output reductions while extending agreement through the middle of next year,” Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois, said in a report.
“Any sign of discontent between the producers will send out negative signals and will put significant downward pressure on the oil price,” said Tamas Varga of oil broker PVM. “We believe this is unlikely to happen.”
U.S. output in September increased to a record 12.46 million bpd, according to a government report on Friday.
“A deeper cut could boost prices, which would bring on more shale output and not help,” the OPEC source said.
Supporting oil prices was an unexpected return to growth in Chinese factory activity in November as domestic demand picked up on Beijing’s accelerated stimulus measures.
For a graphic on U.S., Russian, Saudi crude oil production:
Additional reporting by Alex Lawler in London and Aaron Sheldrick in Tokyo; Editing by Marguerita Choy and Lisa ShumakerOur Standards: The Thomson Reuters Trust Principles.
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008efd9b6dab359d567d1ab2053011c1 | https://www.reuters.com/article/global-oil/oil-gets-boost-as-new-saudi-minister-commits-to-output-cuts-idINKCN1VU1PN?edition-redirect=in | Oil gets boost as new Saudi minister commits to output cuts | Oil gets boost as new Saudi minister commits to output cuts
By Stephanie Kelly3 Min Read
NEW YORK (Reuters) - Oil prices rose about 2% on Monday after the new Saudi energy minister, Prince Abdulaziz bin Salman, confirmed expectations that he would stick with his country’s policy of limiting crude output to support prices.
FILE PHOTO: Drilling rigs operate at sunset in Midland, Texas, U.S., February 13, 2019. REUTERS/Nick Oxford/File Photo
Prince Abdulaziz, son of Saudi King Salman and a long-time member of the Saudi delegation to the Organization of the Petroleum Exporting Countries (OPEC), replaced Khalid al-Falih on Sunday.
“The weekend announcement of a change in leadership within the Saudi oil ministry was accompanied by strong suggestions that production restraint would continue until the market achieves a better balance,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
Brent crude LCOc1 futures gained $1.05, or 1.7%, to settle at $62.59 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 futures rose $1.33, or 2.4%, to settle at $57.85 a barrel.
Prince Abdulaziz said the pillars of Saudi Arabia’s policy would not change and a global deal to cut oil production by 1.2 million barrels per day would survive.
He added that the so-called OPEC+ alliance between OPEC and non-member countries including Russia was staying for the long term.
Russia’s oil output in August exceeded its quota under the OPEC+ agreements.
OPEC oil output in August rose for the first month this year as higher supply from Iraq and Nigeria outweighed restraint by Saudi Arabia and losses caused by U.S. sanctions on Iran.
On Sunday, the United Arab Emirates’ energy minister Suhail al-Mazrouei said OPEC and non-OPEC producers were “committed” to achieving oil market balance.
The OPEC+ deal’s joint ministerial monitoring committee meets on Thursday in Abu Dhabi.
Trade and geopolitical tensions are affecting the market, Mazrouei said.
Executives at the annual Asia Pacific Petroleum Conference said on Monday they expect oil prices this year to be pressured by uncertainties surrounding the global economy, the U.S.-China trade war and increasing U.S. supplies.
Elsewhere, China’s crude oil imports gained about 3% in August from a month earlier, customs data showed on Sunday, buoyed by a recovery in refining margins despite a persistent surplus of oil products and tepid demand.
The United States is “very concerned” about China’s purchases of Iranian oil, Dan Brouillette, deputy secretary of the U.S. Department of Energy, said on Monday.
The United States last year withdrew from a nuclear deal that world powers had done with Iran in 2015, and reimposed sanctions to strangle Iran’s vital oil trade.
U.S. President Donald Trump said on Monday he could meet with Iranian President Hassan Rouhani and that he had no problem with such an encounter.
(GRAPHIC - U.S. Rig count: tmsnrt.rs/2X8Myf7)
Additional reporting by Shadia Nasralla in London and Aaron Sheldrick in Tokyo; Editing by Dale Hudson, Mark Heinrich and David GregorioOur Standards: The Thomson Reuters Trust Principles.
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203f95da5a1a83b67e787e53ce602393 | https://www.reuters.com/article/global-oil/oil-hits-3-month-highs-as-strong-us-consumer-spending-underpins-growth-hopes-idINL4N2902DX?edition-redirect=in | Oil hits 3-month highs as strong U.S. consumer spending underpins growth hopes | Oil hits 3-month highs as strong U.S. consumer spending underpins growth hopes
By Reuters Staff2 Min Read
TOKYO, Dec 27 (Reuters) - Oil prices rose on Friday, hitting three-month highs after data showed record online spending by U.S. consumers, stoking faith in the world’s no. 1 economy even before the hoped-for end to the trade war between Washington and Beijing.
Brent crude futures were up 13 cents, or 0.2%, at $68.05 a barrel at 0150 GMT, while the West Texas Intermediate contract was up 13 cents, or 0.2%, at $61.81 a barrel.
A survey on Thursday showed that online holiday purchases by U.S. consumers reached a record, beating analysts’ expectations and sending U.S. stocks to fresh.
U.S. consumers are “showing few signs of tightening their purse strings, which is positive for oil also,” said Stephen Innes chief Asia market strategist at AxiTrader.
Oil prices have also been buoyed by robust hopes that the New Year will usher in an end to the long-running U.S.-China trade tariff war, a dispute that has overshadowed global economic growth prospects and left questionmarks over future demand for crude.
The lingering ripple effect of the trade row showed up again in data from Japan, the world’s third-biggest economy, on Friday showing that industrial output shrank for a second month in November.
Still, the price Brent has jumped more than a quarter in 2019, while WTI is up around 35%, boosted by moves by the Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, to curb production. Earlier this month OPEC and its allies agreed to extend and deepen those cuts. (Reporting by Aaron Sheldrick; Editing by Kenneth Maxwell)
Our Standards: The Thomson Reuters Trust Principles.
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f53724542455f2522a8031bb2ddc5de1 | https://www.reuters.com/article/global-oil/oil-hovers-near-3-month-high-on-trade-optimism-supply-cuts-idUKL4N28R0HB?edition-redirect=uk | Oil hovers near 3-month high on trade optimism, supply cuts | Oil hovers near 3-month high on trade optimism, supply cuts
By Jessica Jaganathan3 Min Read
* U.S.-China ‘Phase One’ deal done - White House adviser Kudlow
* JP Morgan and Goldman Sachs revise oil price forecasts upwards
* U.S. crude stocks likely dipped last week - Reuters poll
* Coming up: API inventory data at 2130 GMT
SINGAPORE, Dec 17 (Reuters) - Oil prices trickled a fraction lower on Tuesday but remained near a three-month high as investors kept the faith with hopes that a fully fledged U.S.-China trade deal is in the pipeline and set to stoke oil demand in the world’s biggest economies.
Brent crude oil futures had slipped by three cents to $65.31 a barrel by 0122 GMT, while West Texas Intermediate crude was down 4 cents to $60.17 a barrel.
Under a partial trade agreement announced last week, Washington will reduce some tariffs on Chinese imports in exchange for Chinese purchases of agricultural, manufactured and energy products increasing by about $200 billion over the next two years.
“While the partial trade deal leaves most of the tariffs in place, it marks a turning point in the dispute which will eventually lead to fully fledged agreement,” analysts from ANZ Bank said in a note on Tuesday.
The so-called ‘Phase One’ trade deal between both countries has been “absolutely completed”, Larry Kudlow, a top White House adviser said on Monday, adding that U.S. exports to China will double under the agreement.
The agreement is yet to be signed and several Chinese officials told Reuters the wording of the agreement remained a delicate issue, with care was needed to ensure expressions used in text did not re-escalate tensions and deepen differences.
JP Morgan and Goldman Sachs have revised their oil price forecasts for the next year upwards, with an OPEC-led agreement to curb output further dovetailing with the improving trade outlook between the U.S. and China.
Lower supply next year due to a planned cut by the Organization of the Petroleum of Exporting Countries (OPEC) and associated producers like Russia - a grouping known as ‘OPEC+’ - and stronger economic growth expected because of the improved trade outlook between United States and China will combine to tighten the oil supply-demand balance next year, analysts from JP Morgan said.
Also supporting prices, a preliminary Reuters poll ahead of reports from the American Petroleum Institute (API) and the Energy Information Administration (EIA) showed expectations that U.S. crude oil inventories likely fell last week.
Still, U.S. oil output from seven major shale formations is expected to rise about 29,000 barrels per day (bpd) in January to a record 9.14 million bpd, the EIA said in a monthly forecast on Monday. (Reporting by Jessica Jaganathan Editing by Kenneth Maxwell)
Our Standards: The Thomson Reuters Trust Principles.
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bbf4b9e63c269bae2f8a58d00d9c0367 | https://www.reuters.com/article/global-oil/oil-posts-biggest-yearly-rise-since-2016-idINKBN1YZ03G?edition-redirect=in | Oil posts biggest yearly rise since 2016 | Oil posts biggest yearly rise since 2016
By Stephanie Kelly4 Min Read
NEW YORK (Reuters) - Oil prices fell 1% on Tuesday, the last trading day of the decade, but notched the biggest annual gain in three years, supported by a thaw in the prolonged U.S.-China trade war and ongoing supply cuts from major oil producers.
FILE PHOTO: The sun sets behind an oil pump outside Saint-Fiacre, near Paris, France September 17, 2019. REUTERS/Christian Hartmann/File Photo
Brent gained about 23% in 2019 and WTI rose 34%, their biggest yearly gains in three years, backed by the recent breakthrough in the trade talks and output cuts pledged by the Organization of the Petroleum Exporting Countries (OPEC) and its allies.
Forecasters do not expect oil prices to move sharply in either direction next year. Brent crude is expected to hover around $63 a barrel, a Reuters poll showed on Tuesday, down modestly from current levels, as OPEC production cuts offset weaker demand.
Over the past year, increased U.S. oil output offset the supply reductions undertaken by OPEC, led by Saudi Arabia and stemming from U.S. sanctions on Venezuela and Iran. Lackluster demand, including in developed economies, remains a primary concern headed into 2020.
“Oil prices, though largely expected to trade positive, will face headwinds from subdued global growth momentum and robust U.S. shale output levels in the first quarter (of 2020),” said Benjamin Lu, an analyst at Phillip Futures.
U.S. crude oil production in October rose to a record of 12.66 million barrels per day (bpd) from a revised 12.48 million bpd in September, the U.S. government said in a monthly report. The pace of growth is expected to slow in 2020.
Brent crude LCOc1 fell 67 cents, or 1%, to settle at $66.00 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 fell 62 cents, or 1%, to settle at $61.06 a barrel.
On Tuesday, trade volumes were low with many market participants away for year-end holidays, amplifying the market’s moves.
Graphic: Oil holds steady in 2019 despite supply shocks,
U.S. President Donald Trump said the Phase 1 trade deal with China would be signed on Jan. 15 at the White House. Signs of progress on the deal had boosted China’s factory output and manufacturing activity in the country expanded for a second straight month.
China’s Purchasing Managers’ Index (PMI), which tracks economic trends in the manufacturing and service sectors, was unchanged at 50.2 in December from November, just above the 50-point mark separating growth from contraction.
Investors were nervous about the Middle East, where thousands of protesters and militia fighters gathered outside the U.S. embassy in Baghdad to condemn U.S. air strikes against Iraqi militias.
Security guards inside the U.S. embassy fired stun grenades at protesters. The U.S. ambassador and staff were evacuated due to security concerns.
“Considering that Iraq is the second-largest OPEC producer with production around 4.6 million barrels per day, market participants may add a risk premium to oil tension if tensions last for longer,” UBS oil analyst Giovanni Staunovo said.
“That said, we need to see if the latest protests spread also in the south of the country, where most of the crude is exported.”
Graphic: OPEC Production,
On Tuesday, data from industry group the American Petroleum Institute showed U.S. crude oil stocks fell by 7.8 million barrels in the week to Dec. 27, compared with analysts’ expectations for a draw of 3.2 million barrels.
Additional reporting by Bozorgmehr Sharafedin in London and Jane Chung in Seoul, editing by David Gregorio/David Evans/Louise Heavens/Nick Macfie/Richard ChangOur Standards: The Thomson Reuters Trust Principles.
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40ca08fd86d9469adea79f9e464c2ca8 | https://www.reuters.com/article/global-oil/oil-prices-dip-as-mideast-tensions-ease-market-eyes-trade-deal-idINL4N29J0B7?edition-redirect=in | Oil prices dip as Mideast tensions ease; market eyes trade deal | Oil prices dip as Mideast tensions ease; market eyes trade deal
By Jessica Jaganathan3 Min Read
* U.S.-China trade deal to be signed Wednesday at White House
* U.S. crude oil inventories likely fell last week - poll
* Coming up: API inventory data at 2130 GMT
SINGAPORE, Jan 14 (Reuters) - Oil prices edged lower on Tuesday as receding Middle East tensions took some heat out of the market, with both Tehran and Washington desisting from any further escalation after this month’s clashes.
However, the declines were limited by expectations of a drawdown in U.S. crude oil inventories and optimism about the signing of a preliminary trade deal between the U.S. and China, the world’s top oil consumers.
Brent crude was down 8 cents, or 0.1%, at $64.12 per barrel by 0124 GMT. U.S. West Texas Intermediate crude futures were down 4 cents, or 0.1%, at $58.04 a barrel.
U.S. crude oil inventories were expected to have fallen last week, while stocks of refined products likely continued to rise, with gasoline stockpiles seen gaining for a tenth straight week, a preliminary Reuters poll showed on Monday.
Four analysts polled by Reuters estimated, on average, that crude stocks declined by about 800,000 barrels in the week to Jan. 10.
The poll was conducted ahead of reports from the American Petroleum Institute (API), an industry group, and the Energy Information Administration (EIA), an agency of the U.S. Department of Energy.
The API is scheduled to release its data for the latest week at 2130 GMT on Tuesday, and the weekly EIA report is due on Wednesday.
Oil prices were supported ahead of the signing at the White House on Wednesday of a Phase 1 trade deal, which marks a major step in ending a dispute that has cut global growth and dented demand for oil.
Elsewhere, Saudi Arabia’s energy minister Prince Abdulaziz bin Salman said his country will work for oil market stability at a time of heightened U.S.-Iranian tension and wants to see sustainable prices and demand growth.
Oil prices surged to their highest in almost four months after a U.S. drone strike killed an Iranian commander on Jan. 3 and Iran retaliated with missiles launched against U.S. bases in Iraq. But they slumped again as Washington and Tehran retreated from the brink of direct conflict last week.
Prince Abdulaziz said it was too early to talk about whether the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, would continue with production curbs set to expire in March.
The OPEC+ group of oil-producing countries last month agreed to rein in output by an extra 500,000 bpd in the first quarter of 2020, on top of a previously agreed reduction of 1.2 million bpd. (Reporting By Jessica Jaganathan; editing by Richard Pullin)
Our Standards: The Thomson Reuters Trust Principles.
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aea48673db19d0e88d6823ecae44cd2a | https://www.reuters.com/article/global-oil/oil-prices-drop-as-china-u-s-tensions-grow-beijing-fails-to-set-economic-growth-target-idINKBN22Y0GF?edition-redirect=in | Oil falls on China-U.S. tensions, energy demand doubts | Oil falls on China-U.S. tensions, energy demand doubts
By Stephanie Kelly3 Min Read
NEW YORK (Reuters) - Oil prices tumbled about 2% on Friday on rising U.S.-China tensions and doubts about how quickly fuel demand would recover from the coronavirus crisis.
FILE PHOTO: A general view shows the French oil giant Total Refinery in Donges, France, December 20, 2019. REUTERS/Stephane Mahe/File Photo
Fuel demand plummeted in recent months as the pandemic caused governments to impose restrictions on movement and businesses closed their doors. Oil has rallied in recent days as activity started to resume.
But prices dropped after China said on Friday it would not publish an annual growth target for the first time. Beijing also pledged more government spending as the pandemic kept hammering the economy.
“The coronavirus has nullified a decade of global oil demand growth and the recovery will be slow,” said Stephen Brennock of broker PVM.
Brent crude futures LCOc1 fell 93 cents, or 2.6%, to settle at $35.13 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 ended 67 cents, or 2%, lower at $33.25 a barrel.
China is set to impose new national security legislation on Hong Kong after last year’s pro-democracy unrest, a Chinese official said on Thursday, drawing a warning from President Donald Trump that Washington would react “very strongly.”
For the week, Brent and WTI gained 8% and 13%, respectively, but some said they may have come too far, too fast.
“A second wave (of the coronavirus) is not such a remote possibility and a new round of lockdowns could send prices back to much lower levels very quickly, and the market knows it,” said Rystad Energy senior oil markets analyst Paola Rodriguez Masiu.
Oil prices have plummeted more than 40% so far in 2020. The recent rebound was due in part to efforts by the Organization of the Petroleum Exporting Countries and allies to reduce supply. OPEC+ is reducing supply by a record 9.7 million barrels per day from May 1.
The U.S. rig count, an indicator of future output, fell by 21 to a record low 318 this week, according to energy services firm Baker Hughes Co's BKR.N data going back to 1940. RIG-OL-USA-BHI, RIG-GS-USA-BHI
In a sign of the glut easing, U.S. crude inventories fell last week.
Money managers raised their net long U.S. crude futures and options positions in the week to May 19 by 23,229 contracts to 380,211, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
Graphic: Weekly changes in petroleum stocks in the U.S.
Reporting by Stephanie Kelly in New York, additional reporting by Alex Lawler in London and Aaron Sheldrick in Tokyo; Editing by Marguerita Choy, Tom Brown and David GregorioOur Standards: The Thomson Reuters Trust Principles.
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aa3adb7ed07fde93851598172c673594 | https://www.reuters.com/article/global-oil/oil-prices-ease-as-rising-covid-19-cases-outweigh-vaccine-optimism-idINKBN27Z0EG?edition-redirect=in | Oil prices slip as surge in virus cases raises concerns about demand | Oil prices slip as surge in virus cases raises concerns about demand
By Jessica Resnick-Ault3 Min Read
NEW YORK (Reuters) - Oil prices slipped on Thursday as hopes for a vaccine were overshadowed by a surge in new cases of the coronavirus around the world, which raised concerns about the outlook for crude demand.
The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019. REUTERS/Angus Mordant/File Photo
Brent crude LCOc1 settled down 14 cents to $44.20 a barrel. U.S. West Texas Intermediate crude CLc1 slipped 8 cents to settle at $41.74 a barrel.
The Brent price contango LCOc1-LCOc7, a market structure in which near-month barrels are cheaper than those in later months, implying current oversupply, was at its shallowest in more than four months. This suggests concerns about a glut are easing.
“COVID is definitely weighing on the market,” said Bob Yawger, director of energy futures at Mizuho in New York. For crude oil, specifically, though, there’s a risk that a new OPEC price war could emerge, Yawger said. “I think they will come to an agreement, but 24 hours ago, it seemed like a done deal,” he said.
While official data on Wednesday showed U.S. crude inventories USOILC=ECI rose 768,000 barrels last week, crucially the rise was smaller than the 1.7 million barrels analysts had expected in a Reuters poll.
Stocks of distillates, which include diesel and heating oil, fell by 5.2 million barrels, far more than expectations.
But concerns about the demand outlook persist. The U.S. death toll from COVID-19 surpassed 250,000, while daily cases in Japan and Russia surged. Among tougher curbs to prevent the virus spreading, New York City shut public schools.
Concerns about oversupply remain. Libya's National Oil Corporation (NOC) and France's Total TOTF.PA discussed NOC's efforts to raise capacity and increase production.
OPEC+, comprising the Organization of the Petroleum Exporting Countries, Russia and other producers, will discuss policy at a meeting on Nov. 30 and Dec. 1.
Sources says OPEC+ members are leaning towards delaying a plan to boost output in January by 2 million barrels per day (bpd).
UAE Energy Minister Suhail al-Mazrouei said his country has always been a committed member of OPEC and that it has demonstrated this commitment through its compliance to the current OPEC+ oil supply reduction agreement.
The minister’s comments were in response to media reports that the UAE has been questioning the benefits of being in OPEC and even considering whether to leave the oil producing group.
Additional reporting by Yuka Obayashi in Tokyo and Shadia Nasralla in London; Editing by Marguerita Choy and Susan FentonOur Standards: The Thomson Reuters Trust Principles.
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e53ef667d4bbc4bf74c1c24ee5fe58f8 | https://www.reuters.com/article/global-oil/oil-prices-ease-but-middle-east-tanker-attacks-support-idINKCN1TF03X?edition-redirect=in | Oil rises but ends week lower on demand fears despite Mideast tensions | Oil rises but ends week lower on demand fears despite Mideast tensions
By Scott DiSavino4 Min Read
NEW YORK (Reuters) - Oil rose about 1% on Friday after attacks on two oil tankers in the Gulf of Oman this week raised concerns about potential supply disruptions, but prices remained on track for a weekly loss on fears that trade disputes will dent global oil demand.
FILE PHOTO: The sun sets behind an oil pump outside Saint-Fiacre, near Paris, France March 28, 2019. REUTERS/Christian Hartmann/File Photo
Brent futures settled 70 cents, or 1.1%, higher at $62.01 a barrel, while U.S. West Texas Intermediate (WTI) crude futures rose 23 cents, or 0.4%, to close at $52.51.
The attacks on oil tankers near Iran and the Strait of Hormuz pushed up oil prices by as much as 4.5% on Thursday.
It was the second time in a month tankers have been attacked in the world’s most important zone for oil supplies as tensions increase between the United States and Iran. Washington blamed Iran for Thursday’s attacks, prompting a denial and criticism from Tehran.
On Friday, a U.S. official said Iranian military fast-boats in the Gulf of Oman were preventing two privately-owned tug boats from towing away one of the damaged tankers.
“The possibility of what we’ve seen (in the Middle East) over the past few days could intensify into the weekend and traders are reluctant to be short in front of that,” said Anthony Headrick, energy market analyst at CHS Hedging LLC in Inver Grove Heights, Minnesota, noting “The recent headline of restricting those tug boats got some traders off the fence to cover shorts.”
Still, Brent registered a weekly decline of around 2%, putting it down for a fourth week in a row, while U.S. crude lost almost 3%.
“The deteriorating demand outlook is holding back prices, despite these tensions,” said John Kilduff, a partner at Again Capital LLC in New York.
Slowing economic conditions have eaten into demand growth, overshadowing ongoing tensions between the U.S. and Iran, Kilduff said. As a result, prices may be stuck in a holding pattern. “We are stalemated here.”
The International Energy Agency cut its demand growth forecast for 2019 by 100,000 barrels per day (bpd) to 1.2 million bpd, citing worsening prospects for world trade.
However, the Paris-based agency said it expects demand growth to climb to 1.4 million bpd in 2020.
On Thursday, the Organization of the Petroleum Exporting Countries (OPEC) cut its 2019 forecast for growth in global oil demand even lower than the IEA, to 1.14 million bpd.
On the supply side, U.S. sanctions on Iran and Venezuela, an output cut pact by OPEC plus its allies, fighting in Libya and attacks on tankers in the Gulf of Oman added only limited uncertainty to supply, the IEA said.
Surging U.S. supply, as well as gains from Brazil, Canada and Norway, would contribute to an increase in non-OPEC supply of 1.9 million bpd this year and 2.3 million bpd in 2020.
U.S. energy firms reduced the number of oil rigs operating for a second week in a row, General Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday.
(Graphic - Position of evacuated tankers in Gulf of Oman, tmsnrt.rs/2X6nIQF)
Tensions in the Middle East have escalated since U.S. President Donald Trump withdrew from a 2015 multinational nuclear pact with Iran and reimposed sanctions, especially targeting Tehran’s oil exports.
Iran, which has distanced itself from the previous attacks, has said it will not be cowed by what it describes as psychological warfare.
U.S. Secretary of State Mike Pompeo said the United States has assessed that Iran was behind the attacks on Thursday.
The U.S. military later released a video that it said showed Iran’s Revolutionary Guard removing an unexploded mine from the side of a Japanese-owned oil tanker.
(Graphic - Global oil demand growth, year-on-year, tmsnrt.rs/2Ie9rco)
Additional reporting by Jessica Resnick-Ault in New York, Aaron Sheldrick in Tokyo and Ahmad Ghaddar in London; Editing by Marguerita Choy and David EvansOur Standards: The Thomson Reuters Trust Principles.
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9a70605b9d814be223628912b925e10a | https://www.reuters.com/article/global-oil/oil-prices-edge-down-but-set-for-biggest-yearly-rise-since-2016-idINL4N29504N?edition-redirect=in | Oil prices edge down but set for biggest yearly rise since 2016 | Oil prices edge down but set for biggest yearly rise since 2016
By Jane Chung3 Min Read
* Brent, WTI futures each down 0.2%
* Benchmarks on track for biggest annual gain in 3 years
* U.S. crude stocks fell about 3.2 mln bbls last week -poll
SEOUL, Dec 31 (Reuters) - Oil prices edged lower on the final day of the year on Tuesday, but were on track for their biggest annual rise since 2016, supported by a thaw in U.S.-China trade dispute and ongoing supply cuts.
Brent crude futures for March delivery, the new front month contract, were down 11 cents, or 0.2%, to 66.56 a barrel by 0158 GMT, while U.S. West Texas Intermediate (WTI) crude for February was down 11 cents, or 0.2%, at $61.57 per barrel. Brent for February delivery closed on Monday at $68.44.
Brent has gained about 24% in 2019 and WTI has risen roughly 36% for the year. Both benchmarks are set for the biggest yearly gain in three years, backed by a breakthrough in U.S.-China trade talks and output cuts pledged by the Organization of Petroleum Exporting Countries (OPEC) and its allies.
The White House’s trade adviser said on Monday that the U.S.-China Phase 1 trade deal would likely be signed in the next week.
“Oil prices have followed the general de-risking drift into year-end despite a rise in Middle East tensions and last week’s bullish-for-oil-price inventory draws as the broader markets appear to be losing some of that holiday cheer,” said Stephen Innes, chief Asia market strategist at AxiTrader.
Tensions remain high in the Middle East after U.S. air strikes on Sunday against the Katib Hezbollah militia group in Iraq and Syria. Operations resumed at Iraq’s Nassiriya oilfield resumed on Monday after protesters briefly halted production.
Looking ahead, U.S. crude inventories are expected to fall by about 3.2 million barrels in the week to Dec.27, heading for a third consecutive weekly fall, a preliminary Reuters poll showed on Monday. U.S. stockpiles fell by 5.5 million barrels in the week to Dec. 20. The figures will be released on Friday.
Innes said traders would also closely watch the EIA’s U.S. October crude production figures, set to come out later on Tuesday.
“It’s expected to show robust continuous growth in the agency’s short-term outlook,” he said.
The United States is on track to become a net petroleum exporter on an annual basis for the first time in 2020, with its oil output expected to rise by 930,000 barrels per day (bpd) to a record 13.18 million bpd next year, the EIA said earlier this month.
Brokers and analysts expect the growing U.S. supplies to offset cuts from OPEC in 2020 amid weakening worldwide demand, keeping oil prices rangebound. (Reporting By Jane Chung; editing by Richard Pullin)
Our Standards: The Thomson Reuters Trust Principles.
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cd01a70be377f1a19aa1148418415179 | https://www.reuters.com/article/global-oil/oil-prices-extend-gains-on-covid-vaccine-hopes-opec-idINKBN2830BL?edition-redirect=in | Oil prices settle up over 2% on COVID-19 vaccine news | Oil prices settle up over 2% on COVID-19 vaccine news
By Laura Sanicola3 Min Read
NEW YORK (Reuters) - Oil prices settled up more than 2% on Monday, extending last week’s gains as the latest report of encouraging coronavirus vaccine trials had traders anticipating a recovery in demand.
FILE PHOTO: A crude oil tanker is seen at Qingdao Port, Shandong province, China, April 21, 2019. REUTERS/Jason Lee/File Photo
Brent crude settled up $1.10, or 2.45 % to $46.06 a barrel while U.S. West Texas Intermediate crude gained 64 cents to $43.06 a barrel, a 1.51% gain. Both benchmarks jumped 5% last week.
British drugmaker AstraZeneca said on Monday its vaccine, developed along with the University of Oxford, could be around 90% effective.
“Another dose of favorable coronavirus vaccine news today has prompted a renewed upswing in the equities that has easily spilled into the oil space,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.
The contango structure in the market, whereby the prices of front-month delivery contracts are lower than those for delivery six months later, narrowed to as little as 31 U.S. cents, its smallest since mid June, reflecting traders’ views a sustained glut is receding.
Graphic: Brent 6-month contango shallowest since June,
Outlook for demand has improved with news indicating progress towards developing COVID-19 vaccines. A U.S. official said the first inoculations in the United States could start a day or two after regulatory approval was secured.
“The oil complex is benefiting from vaccine news and preliminary data is showing some decent jet fuel demand for the first time since this whole pandemic started,” said John Kilduff, partner at Again Capital LLC in New York.
Sentiment was also bolstered by expectations that the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers, a group known as OPEC+, would extend a deal to restrain output.
On the supply side, OPEC+, which meets on Nov. 30 and Dec. 1., will look at options to extend its deal on output cuts by at least three months from January.
Smaller Russian oil companies are still planning to pump more crude this year, a group representing the producers said.
Additional reporting by Shadia Nasralla in London, Jessica Jaganathan in Singapore; Editing by Edmund Blair, Barbara Lewis and David GregorioOur Standards: The Thomson Reuters Trust Principles.
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e7f675a0c9c82d6d4e505007f147ed64 | https://www.reuters.com/article/global-oil/oil-prices-fall-further-as-threat-of-middle-east-war-recedes-idINL4N29F08F?edition-redirect=in | Oil prices fall further as threat of Middle East war recedes | Oil prices fall further as threat of Middle East war recedes
By Reuters Staff1 Min Read
TOKYO, Jan 10 (Reuters) - Oil prices dropped on Friday extending days of losses as the threat of war in the Middle East, a major oil producing region, receded and investors switched their attention to economic growth prospects and demand for crude.
Brent crude was down 14 cents, or 0.2%, at $65.23 at 0119 GMT, after falling more than 4% over the last two days. WTI was also down 14 cents, or 0.2%, at $59.42, after dropping slightly on Thursday and plunging around 5% on Wednesday.
“The U.S. and Iran both appear to be trying to de-escalate ... bringing the region back from the brink of war and reducing the risk of a major supply disruption to oil markets,” Eurasia Group said in a note.
Oil prices are below where they were before a U.S. drone strike killed a top Iranian general on Jan. 3, with Iran responding with a ballistic missile attack on Iraqi air bases hosting U.S. forces this week that left no casualties. (Reporting by Aaron Sheldrick; Editing by Christopher Cushing)
Our Standards: The Thomson Reuters Trust Principles.
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4e69c7d4e2b0e7554fefade2d31c2425 | https://www.reuters.com/article/global-oil/oil-prices-hold-ground-but-set-for-4-percent-weekly-fall-idINKCN1MM02M?edition-redirect=in | Oil steadies, settling up slightly after volatile session | Oil steadies, settling up slightly after volatile session
By Jessica Resnick-Ault4 Min Read
NEW YORK (Reuters) - Crude futures steadied late in the session on Friday, following the stock market slightly higher after earlier swinging lower on a weakening oil demand outlook.
FILE PHOTO: Pump jacks operate at sunset in an oilfield in Midland, Texas U.S. August 22, 2018. REUTERS/Nick Oxford/File Photo
Stock markets worldwide bounced back on Friday after a multi-day sell-off but remained on track for their biggest weekly losses in months, while U.S. Treasury yields inched higher and the dollar held its gains.
The move prompted oil futures to tick slightly higher late in the day after coming under pressure from a bearish demand forecast.
The International Energy Agency, the West’s energy watchdog said in its monthly report that the market looked “adequately supplied for now” and trimmed its forecasts for world oil demand growth this year and next. [IEA/M]
“This is due to a weaker economic outlook, trade concerns, higher oil prices and a revision to Chinese data,” said the IEA, which advises industrialized countries on energy policy.
Brent crude settled up 17 cents a barrel at $80.43, after dropping 3.4 percent on Thursday. U.S. crude futures rose 37 cents to $71.34 a barrel.
“The weaker outlook has gotten a raised profile in the market, but there’s potential for a real supply crunch toward the end of this year,” said John Kilduff, a partner at Again Capital Management in New York. “The demand outlook is hurt right now because of the situation with the U.S. and China in particular.”
Both benchmarks fell for the first time in five weeks, pressured by a big rise in U.S. inventories and fading concerns about shrinking global supplies due to looming U.S. sanctions on Iran’s oil exports. [EIA/S] U.S. crude was down 3.6 percent on the week, while Brent crude fell 4.1 percent.
The IEA report is the latest official forecaster to predict weaker demand ahead and conclude that supply is adequate. The Organization of the Petroleum Exporting Countries (OPEC) made a similar move on Thursday. [OPEC/M]
“The bearish alarm bells are ringing for next year’s oil balance as market players brace for the return of a supply surplus,” said Stephen Brennock of oil broker PVM.
Additionally, the U.S. oil drilling rig count rose this week for the first time in four weeks, an indication that production is rising. [RIG/U]
Drillers added eight oil rigs in the week to Oct. 12, bringing the total count to 869, General Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday.
The increase is the biggest weekly gain since mid-August.
Money managers cut their net long U.S. crude futures and options positions in the week to Oct. 9, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. The speculator group cut its combined futures and options position in New York and London by 36,652 contracts to 296,456 during the period.
A drop in U.S. oil production this week supported prices. U.S. Gulf of Mexico producers have cut oil output by 32 percent and natural gas production by 13 percent as a result of the lingering effects of Hurricane Michael, the Bureau of Safety and Environmental Enforcement (BSEE) said on Friday, citing reports from 27 companies.
The reductions continued as oil and gas companies moved more workers back to production platforms that were evacuated earlier in the week. As of Friday morning, nine platforms were still unoccupied, BSEE said in a daily update, down from 89 platforms on Wednesday.
Additional reporting by Aaron Sheldrick and Alex Lawler; editing by Rosalba O’Brien and Diane CraftOur Standards: The Thomson Reuters Trust Principles.
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0cef345561634f49d3129a1ac862cfdd | https://www.reuters.com/article/global-oil/oil-prices-hold-near-3-month-highs-on-us-china-trade-deal-progress-idINL4N28U0AQ?edition-redirect=in | Oil prices hold near 3-month highs on U.S.-China trade deal progress | Oil prices hold near 3-month highs on U.S.-China trade deal progress
By Jane Chung3 Min Read
* Brent, WTI hover near highest levels since mid-September
* Both benchmarks heading for third consecutive weekly rise
* Thaw in U.S.-China trade tensions boosts oil demand prospects
* U.S. crude inventories fell 1.1 mln bbls last week - EIA
SEOUL, Dec 20 (Reuters) - Oil prices held steady near three-month highs on Friday on the back of easing Sino-U.S. trade tensions that have weighed on demand as well as the global economic growth outlook.
Brent futures rose 2 cents, or 0.03%, to 66.56 a barrel by 0145 GMT, while U.S. West Texas Intermediate crude was down 9 cents, or 0.15%, at $61.09 per barrel.
Both benchmarks were still on track for a third consecutive weekly rise.
Progress in a long-running trade dispute between the United States and China, the world’s two biggest oil consumers, has boosted expectations for higher energy demand next year.
China on Thursday announced a list of import tariff exemptions for six oil and chemical products from the United States, days after the world’s two largest economies announced an interim trade deal.
“A world with less uncertainty (following last week’s proposed U.S.-China trade agreement) was the real driver of the market optimism on the 2020 outlook,” ANZ Research said in a note.
JP Morgan and Goldman Sachs raised its 2020 oil price outlook earlier this week amid OPEC-led output cuts and an improved global trade outlook.
The Organization of Petroleum Exporting Countries (OPEC) and its allies including Russia agreed in early December to make a further cut of 500,000 barrels per day (bpd) from Jan. 1 on top of previous reductions of 1.2 million bpd.
The trade deal progress aside, a drop in U.S. crude inventories also supported oil prices to hold near three-month highs.
U.S. crude oil stockpiles fell by 1.1 million barrels to 446.8 million barrels in the week to Dec. 13, the Energy Information Administration (EIA) said on Wednesday.
ANZ Research also said “an expected fall in U.S. drilling activity should support oil prices.”
A U.S. weekly drilling report by energy services firm Baker Hughes Co is due to be released on Friday. U.S. drilling firms added 4 oil rigs in the week to Dec. 13, bringing the total count to 667.
Reporting by Jane Chung; Editing by Christopher CushingOur Standards: The Thomson Reuters Trust Principles.
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f5406feb12d79a9a515cfa5e75453bfd | https://www.reuters.com/article/global-oil/oil-prices-jump-1-after-us-air-strike-kills-iran-iraq-military-personnel-idUKL4N2971PK?edition-redirect=uk | Oil prices jump $1 after U.S air strike kills Iran, Iraq military personnel | Oil prices jump $1 after U.S air strike kills Iran, Iraq military personnel
By Seng Li Peng1 Min Read
SINGAPORE, Jan 3 (Reuters) - Oil prices jumped more than $1 on Friday after a U.S. air strike killed key Iranian and Iraqi military personnel, raising concerns that escalating Middle East tensions may disrupt oil supplies.
Brent crude futures were at $67.48 a barrel, up $1.23, or 1.86%, by 0202 GMT, and West Texas Intermediate (WTI) crude futures rose $1.03, or 1.68%, to $62.21 a barrel.
“The supply side risks remain elevated in the Middle East and we could see tensions continue to elevate between the U.S. and Iran-backed militia in Iraq,” Edward Moya, analyst at brokerage OANDA, spoke to Reuters via email.
An air strike at the Baghdad International Airport early on Friday killed Iranian Major-General Qassem Soleimani, head of the elite Quds Force, and Iraqi militia commander Abu Mahdi al-Muhandis, an Iraqi militia spokesman told Reuters.
Reporting by Seng Li Peng and Florence Tan; Editing by Tom HogueOur Standards: The Thomson Reuters Trust Principles.
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1331595758dd4355d8bf2224c0ad271c | https://www.reuters.com/article/global-oil/oil-prices-slip-on-concerns-us-china-trade-deal-may-not-boost-demand-idINL4N29K04T?edition-redirect=in | Oil prices slip on concerns U.S.-China trade deal may not boost demand | Oil prices slip on concerns U.S.-China trade deal may not boost demand
By Jessica Jaganathan3 Min Read
* U.S. to keep tariffs on Chinese goods until Phase 2 deal-Mnuchin
* Signing of U.S.-China phase 1 deal expected at 1630 GMT
* U.S. output to rise in 2020 more than previously expected -EIA
* Coming up: EIA inventory data at 1530 GMT
SINGAPORE, Jan 15 (Reuters) - Oil prices slipped on Wednesday on concerns that the pending Phase 1 trade deal between the United States and China, the world’s biggest crude users, may not lead to more fuel demand as the U.S. intends to keep tariffs on Chinese goods in place.
U.S. Treasury Secretary Steven Mnuchin said late on Tuesday that the tariffs would remain even as a trade deal is set to be signed on Wednesday. That could temper China’s oil demand growth by limiting its access to its second-largest trading partner. Chinese demand has been the main driver of global fuel consumption growth.
Concerns about increasing supply also pressured prices after a government report on Tuesday said that output from the U.S., currently the world’s largest producer, will increase in 2020 by more than previously forecast. Additionally an industry report late on Tuesday said U.S. crude inventories increased last week.
Brent crude was down 21 cents, or 0.3%, at $64.28 per barrel by 0206 GMT. U.S. West Texas Intermediate crude futures were down 23 cents, or 0.4%, at $58.00 a barrel.
“Investors are incredibly concerned about the well documented non-OPEC supplies coming to market in 2020, and those worries came to the fore as oil prices headed lower after a bearish to consensus inventory build was reported,” Stephen Innes, chief Asia market strategist at AxiTrader said in a note.
U.S. President Donald Trump is slated to sign the Phase 1 agreement with Chinese Vice Premier Liu He at the White House on Wednesday. That agreement is expected to include provisions for China to buy up to $50 billion more in U.S. energy supplies.
However, the Treasury Secretary Mnuchin said in a television interview that the U.S. will keep the tariffs until the completion of a second phase of the agreement.
U.S. crude inventories rose by 1.1 million barrels, data from the American Petroleum Institute showed, countering expectations for a draw. Gasoline and distillate inventories also climbed.
U.S. oil production is expected to rise to a record of 13.30 million barrels per day in 2020 mainly driven by higher output in the Permian region of Texas and New Mexico, the U.S. Energy Information Administration (EIA) said. (Reporting By Jessica Jaganathan, additional reporting by Florence Tan; Editing by Christian Schmollinger)
Our Standards: The Thomson Reuters Trust Principles.
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d4101a2970190ee29419a3f4557c8d6c | https://www.reuters.com/article/global-oil/oil-rises-1-as-markets-await-trump-to-shed-light-on-trade-talks-idINKBN1XM1HC?edition-redirect=in | Oil rises 1% as markets await Trump to shed light on trade talks | Oil rises 1% as markets await Trump to shed light on trade talks
By Devika Krishna Kumar3 Min Read
NEW YORK (Reuters) - Oil rose about 1% on Tuesday as markets from stocks to bonds to commodities were supported by hopes that U.S. President Donald Trump may signal progress on trade talks with China.
FILE PHOTO: A crude oil tanker is seen at Qingdao Port, Shandong province, China, April 21, 2019. REUTERS/Jason Lee/File Photo
Ahead of Trump’s speech to discuss the country’s trade policy at the Economic Club of New York at noon (1700 GMT), the benchmark Standard & Poor’s 500 Index was trading in record territory, a fact the president often points to as a validation of his economic and trade policies. [MKTS/GLOB]
Concern about slower economic growth and oil demand due to the fallout from the 16-month U.S.-China trade dispute sent prices lower on Monday.
Brent crude, the global benchmark, was up 67 cents, or 1.1%, at $62.85 a barrel by 10:41 a.m. ET (1541 GMT), after falling as low as $61.90. West Texas Intermediate (WTI) crude rose 68 cents, or 1.2%, to $57.54.
“We continue to view U.S.-China trade negotiations as a key price influencer and since we don’t expect any breakdown in talks anytime soon, we still see the energy complex slowly edging higher in maintaining an upward price channel that has been intact for more than a month,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
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.
“He is widely expected to delay his decision to impose tariffs on European car and auto part imports and will also shed further light on the status of the trade negotiations with China,” said Tamas Varga of oil broker PVM, referring to Trump’s speech.
Adding further support, U.S. data showed that 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.
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.
Additional reporting by Alex Lawler in London, Aaron Sheldrick; Editing by Dale Hudson, Louise Heavens and Alex RichardsonOur Standards: The Thomson Reuters Trust Principles.
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a1417f60f450f5dfb494045271b7e4ac | https://www.reuters.com/article/global-oil/oil-rises-on-declining-u-s-crude-stocks-hopes-for-covid-19-vaccine-idINKBN27R0A3?edition-redirect=in | Brent touches $45/bbl on vaccine hopes and U.S. crude drawdown | Brent touches $45/bbl on vaccine hopes and U.S. crude drawdown
By Jessica Resnick-Ault3 Min Read
NEW YORK (Reuters) - Global oil benchmark Brent rose on Wednesday, briefly touching a more than two-month high above $45 a barrel on hopes of a COVID-19 vaccine that could boost demand and later pulling back as concerns about rising cases overtook bullish news.
FILE PHOTO: The sun sets behind a crude oil pump jack on a drill pad in the Permian Basin in Loving County, Texas, U.S. November 24, 2019. . REUTERS/Angus Mordant/File Photo
Brent LCOc1 settled up 19 cents, or 0.4%, at $43.80 a barrel, after earlier trading at a session peak of $45.30 - the first time it has cleared the $45 threshold since early September.
U.S. West Texas Intermediate (WTI) crude CLc1 settled up 9 cents at $41.45, after setting a session high of $43.06.
Both Brent and WTI prices are up about 11% this week after initial trial data showed the experimental COVID-19 vaccine being developed by Pfizer Inc PFE.N and Germany's BioNTech 22UAy.DE was 90% effective.
Still, concerns about rising cases weighed on the market.
“The record number of cases is enough to snap everyone back to reality,” said Bob Yawger, director of energy futures at Mizuho in New York.
The expectation that a vaccine could restore demand for transportation fuels is critical for oil, said John Kilduff, founding partner at Again Capital.
“Transportation across the board has been so impacted by the pandemic that getting past it would revive demand for those fuels, which is what the petroleum complex needs.”
Renewed restrictions in Europe and the United States to combat the coronavirus have slowed fuel demand recovery, offsetting a rebound in Asian economies where consumption has almost returned to pre-COVID levels.
U.S. crude stockpiles last week fell 5.1 million barrels to about 482 million barrels, industry group data showed on Tuesday, compared with expectations for a reduction of 913,000 barrels in a Reuters poll of analysts. [API/S] [EIA/S]
Government data will be issued on Thursday, delayed a day due to the U.S. Veterans Day holiday on Wednesday.
Algeria’s energy minister said that the Organization of the Petroleum Exporting Countries and allies could extend oil production cuts into 2021, or even deepen them. Saudi Arabia’s energy minister had said on Monday that supply pact could be “tweaked”.
Additional eporting by Koustav Samanta, Aaron Sheldrick and Noah Browning; Editing by Edmund Blair, David Goodman, Marguerita Choy and Sonya HepinstallOur Standards: The Thomson Reuters Trust Principles.
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4595c92cb1b4f15dac1c0b1d80d0c121 | https://www.reuters.com/article/global-oil/oil-rises-supported-by-trade-deal-opec-cuts-idINL4N29009A?edition-redirect=in | Oil rises, supported by trade deal, OPEC cuts | Oil rises, supported by trade deal, OPEC cuts
By Reuters Staff2 Min Read
TOKYO, Dec 26 (Reuters) - Oil prices rose on Thursday, buoyed by a potential breakthrough in the Sino-U.S. trade war and OPEC-led efforts to constrain supply, although trading was quiet as many markets were in holiday mode.
Brent crude was up 16 cents, or 0.2%, at $67.36 a barrel by 0155 GMT.
West Texas Intermediate was up 20 cents, or 0.3%, at $61.31 a barrel.
“Oil prices continue to show year-end strength supported by a combination of definitive progress on the U.S.-China trade deal, the Dec OPEC/OPEC+ agreement, and slowing shale activity,” said Stephen Innes, chief Asia market strategist at AxiTrader.
“All of which is pointing to a stronger performance for oil prices in Q1 than anyone had thought only two months ago.”
U.S. President Donald Trump said on Tuesday he and Chinese President Xi Jinping will have a signing ceremony for the so-called Phase 1 agreement to end their trade dispute that was put together earlier this month.
The roughly 17-month trade war hit global economic growth and demand for oil, leaving prices range-bound for the most of the year.
Lower demand also rendered supply cuts by the Organization of Petroleum Exporting Countries (OPEC) and allies including Russia less effective in supporting the market.
The so-called OPEC+ grouping agreed in November to extend and deepen production cuts that would take as much as 2.1 million barrels per day (bpd) of supply off the market, or roughly 2% of global demand.
U.S. producers, not party to the OPEC+ agreement, have been pumping record amounts of oil, especially shale crude, to fill any supply gaps. Growth in production in the U.S. is forecast by many to slow, however.
Still, more supply is coming in the new year with Saudi Arabia and Kuwait earlier this week agreeing to end a dispute over their Neutral Zone, which can supply as much as 500,000 barrels per day of oil, or about 0.5% of global demand. (Reporting by Aaron Sheldrick; editing by Richard Pullin)
Our Standards: The Thomson Reuters Trust Principles.
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43e717c66d4c91bf88249615e8f48bba | https://www.reuters.com/article/global-oil/oil-surges-after-iran-attacks-us-forces-in-iraq-wti-at-around-65-idINL4N29D067?edition-redirect=in | Oil surges after Iran attacks U.S. forces in Iraq, WTI at around $65 | Oil surges after Iran attacks U.S. forces in Iraq, WTI at around $65
By Reuters Staff2 Min Read
TOKYO, Jan 8 (Reuters) - Oil rose sharply, with U.S. crude rising nearly $3, on Wednesday after the U.S. said its forces in Iraq were attacked by Iranian ballistic missiles, raising the prospect of a regional conflagration that could cut oil supplies.
West Texas Intermediate crude futures rose nearly $3, or almost 5%, to $65.50 a barrel at around 0029 GMT. Brent crude was yet to trade after dropping nearly 1% on Tuesday.
Iran has launched an attack on U.S.-led forces in Iraq, the U.S. military said on Tuesday, adding Tehran fired more than a dozen ballistic missiles from Iranian territory against at least two Iraqi military bases hosting U.S.-led coalition personnel.
“We are working on initial battle damage assessments,” Pentagon spokesman Jonathan Hoffman said in statement, adding that the bases targeted were at Al-Asad air base and another in Erbil, Iraq.
Iranian news agency Mehr said Iran’s Islamic Revolutionary Guard Corps had targeted the base. Tehran has vowed retaliation for the killing of Iranian military commander Qassem Soleimani by a U.S. air strike on Jan. 3.
Sirens were heard and American helicopters were seen flying over Iraq’s Ain al-Asad air base in Anbar province early on Wednesday, according to al Mayadeen TV. (Reporting by Aaron Sheldrick; Editing by Christian Schmollinger)
Our Standards: The Thomson Reuters Trust Principles.
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35bb730924dc1c6388e8d79b6bc84525 | https://www.reuters.com/article/global-oil/oil-surges-more-than-13-on-hopes-of-output-deal-idINKBN21L05O?edition-redirect=in | Oil surges more than 13% on hopes of output deal | Oil surges more than 13% on hopes of output deal
By Jessica Resnick-Ault4 Min Read
NEW YORK (Reuters) - Crude futures surged for a second day on Friday, with both U.S. and Brent contracts posting their largest weekly percentage gains on record due to hopes that a global deal to cut crude supply worldwide will emerge early next week.
FILE PHOTO: The sun sets behind a crude oil pump jack on a drill pad in the Permian Basin in Loving County, Texas, U.S. November 24, 2019. Picture taken November 24, 2019. REUTERS/Angus Mordant
On Thursday, oil staged its largest one-day rally in history on prospects for a cut in supply equivalent to anywhere from 10% to 15% of world demand. The sharp rebound from weeks of losses came after U.S. President Donald Trump said Russia and Saudi Arabia will negotiate to end a price war that slashed prices last month by more than half. Trump said the United States has not agreed to cut its output.
The rally continued Friday, with Brent crude LCOc1 futures jumping 13.9%, or $4.17 a barrel to settle at $34.11. Brent soared as much as 47% on Thursday for its highest intraday percentage gain on record, closing up 21%. The contract ended the week 36.8% higher, the largest weekly percentage gain in the contract's history.
U.S. West Texas Intermediate (WTI) crude CLc1 rose $3.02, or 11.93% to settle at $28.34 a barrel. The contract posted a 31.8% gain on the week, also its largest on record.
OPEC has scheduled a Monday emergency meeting, led by Saudi Arabia, where cuts equal to 10% of world supply - about 10 million barrels per day - could be agreed-upon.
“Grand oil bargain diplomacy clearly shifted into high gear overnight and cuts are likelier than they were until yesterday,” said Robert McNally, president of Rapidan Energy Group in Bethesda, Maryland. “The size of cuts seems to be increasing, and the timing is accelerated.”
Moscow and Washington still have made no firm commitments on output cuts. On Friday, Trump and Russian President Vladimir Putin were to meet separately with top producers. U.S. law forbids producers from cooperating to cut output.
Related CoverageOil analysts sceptical about Saudi-Russian 'deal'
Even a monumental cut in world output would not reduce a glut by much due to slumping demand during the worsening coronavirus pandemic, which has already sickened more than a million people worldwide.
The head of the International Energy Agency, Fatih Birol, said that even if OPEC+ cut supply by 10 million bpd, global oil stocks would build by 15 million bpd in the second quarter.
Trump said on Thursday he had spoken with both Putin and Saudi Crown Prince Mohammed bin Salman and they had agreed to reduce supplies by 10 million to 15 million barrels per day (bpd) out of total global supply of about 100 million bpd.
“It does appear that momentum is growing for some form of output agreement,” said analyst Harlan Matthews at Redburn Energy.
“(But) there are huge obstacles to any output agreement on this scale, and even if it were to be implemented the market would remain chronically oversupplied in the near term.”
The Canadian province of Alberta, home to the world’s third-largest oil reserves, is open to joining any potential global pact to reduce a glut of crude.
Mexico does not plan to cut crude production at state-owned oil company Pemex, even at its most expensive oilfields, amid a severe decline in global prices, the country’s energy minister Rocio Nahle told Reuters on Friday.
By cutting output by 10 million bpd, “the oil industry would get at least three weeks more room to prepare for hitting the wall when there are no more places to put the excess production,” said Rystad Energy’s Per Magnus Nysveen.
Trump is meeting with oil company executives at the White House on Friday afternoon to discuss a historic oil-price slump threatening their businesses, brought on by the coronavirus outbreak and a Saudi-Russia price war.
Additional reporting by Shadia Nasralla, Shu Zhang and Sonali Paul; Editing by Kirsten Donovan/David Goodman/Susan Fenton/David Gregorio/Daniel WallisOur Standards: The Thomson Reuters Trust Principles.
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7057d5c3c47fd4eaa18a55a9a55f18f1 | https://www.reuters.com/article/global-oil/u-s-oil-drops-as-pandemic-rages-while-presidential-vote-counting-continues-idUSL4N2HS094?edition-redirect=in | U.S. oil drops as pandemic rages while presidential vote counting continues | U.S. oil drops as pandemic rages while presidential vote counting continues
By Reuters Staff3 Min Read
TOKYO, Nov 6 (Reuters) - U.S. oil fell nearly 1% on Friday as new lockdowns went into affect in Europe raising questions over the outlook for demand for crude, while ballots were still being counted in the U.S. election with its outcome undecided, keeping markets on edge.
West Texas Intermediate was down 32 cents, or 0.8%, at $38.47 a barrel by 0040 GMT, having declined nearly 1% on Thursday. Brent was yet to trade after falling 0.7% in the previous session. The crude contracts are still heading for their first weekly gain in four.
Italy recorded its highest daily number infections on Thursday and the United States surpassed 100,000 new cases of COVID-19 in one day last week, a record.
“The situation is likely to get worse as the weather gets colder, with the threat of European-style lockdowns looming on the horizon,” said Bob Yawger, director of energy futures at Mizuho Securities in New York.
The European Union’s executive commission also cut its economic forecast and predicted the bloc won’t see a rebound to pre-virus levels until 2023.
Vote counting and trends from the U.S. election point to the Republicans retaining control of the Senate, while Democrats are expected to take a slimmed majority in the House of Representatives, dashing hopes for a large stimulus package, another factor weighing on oil.
“A Joe Biden $3 trillion style deal will not happen,” Yawger said.
President Donald Trump, again without evidence, late on Thursday said he would win if “legal” votes were counted, the latest effort to cast doubt on counting now heading for a third day since the Nov. 3 election.
Providing some support for the market, U.S. inventories of crude oil plunged last week, although much of the fall was attributed to production being shut down as another hurricane swept through the Gulf of Mexico.
Stockpiles fell by 8 million barrels in the week to Oct. 30, against analyst expectations of a rise of nearly 900,000 barrels.
The Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+, are expected to delay bringing back 2 million barrels per day of supply in January, given the decline in demand from new COVID-19 lockdowns. (Reporting by Aaron Sheldrick; Editing by Christopher Cushing)
Our Standards: The Thomson Reuters Trust Principles.
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846958c3667b3e75101e2e3af1565e94 | https://www.reuters.com/article/global-oil/update-1-oil-prices-rally-further-on-vaccine-optimism-despite-inventory-rise-idINL1N2IB03J?edition-redirect=in | Oil rallies past 8-month high on U.S. crude inventory draw, vaccine hopes | Oil rallies past 8-month high on U.S. crude inventory draw, vaccine hopes
By Devika Krishna Kumar3 Min Read
NEW YORK (Reuters) - Oil prices climbed nearly 2% to their highest in more than eight months on Wednesday, as data showing a surprise drop in weekly U.S. crude inventories extended a rally driven by hopes that a COVID-19 vaccine will boost fuel demand.
FILE PHOTO: The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019. REUTERS/Angus Mordant
Brent crude rose 75 cents, or 1.6%, to settle at $48.61 a barrel, its highest since early March.
U.S. West Texas Intermediate crude also closed at its highest since early March, rising 80 cents, or 1.8%, to $45.71.
Both benchmarks, which gained 4% on Tuesday, rose for a fourth straight session.
U.S. crude inventories fell by 754,000 barrels last week, government data showed, surprising analysts who in a Reuters poll had predicted a 127,000-barrel rise. Inventories at Cushing, Oklahoma, the delivery point for WTI, fell by 1.7 million barrels. [EIA/S]
“There was a decent drawdown at Cushing, so that’s supportive. It was probably the most bullish aspect of this report,” John Kilduff, partner at Again Capital LLC in New York.
Still, demand worries capped price gains as U.S. weekly gasoline demand dropped by about 128,000 barrels per day (bpd) to 8.13 million bpd, the lowest since June 2020.
On Monday, investor hopes got a boost as AstraZeneca said its COVID-19 vaccine could be up to 90% effective.
“Crude oil prices are trading at their highest levels since early March, supported by positive market sentiment as a result of vaccine news and strong oil demand in Asia,” said UBS oil analyst Giovanni Staunovo.
“We maintain our bullish outlook for next year and target Brent to hit $60 per barrel at the end of 2021,” he added.
A weaker dollar .DXY also supported crude prices, making greenback-denominated oil less expensive for buyers holding other currencies.
“The recent depreciation of the U.S. dollar has helped temper the impact of surging oil prices for some of the world’s largest consumers of energy,” said Stephen Brennock of broker PVM.
Brent has moved into backwardation, a market structure in which oil for immediate delivery costs more than supply later. Backwardation encourages inventories to be drawn down and suggests receding fears of a glut.
Brent futures for February delivery traded as much as 14 cents above the January contract, the highest since July, before settling at an 8-cent premium.
Graphic: Brent futures front-month in backwardation,
“Positive vaccine news and swift deployment views are behind a significant part of this move in the curve, supported by increasingly firm beliefs by the market that OPEC+ will extend its current output targets for Q1 2021,” said Rystad Energy’s analyst Bjornar Tonhaugen.
OPEC+, made up of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, is leaning towards delaying next year’s planned increase in output despite a rise in prices, three sources close to OPEC+ said.
Reporting by Bozorgmehr Sharafedin in London; additional reporting by Aaron Sheldrick in Tokyo; Editing by Marguerita Choy and David GregorioOur Standards: The Thomson Reuters Trust Principles.
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7dea2d067a5896f5451838775604eba8 | https://www.reuters.com/article/global-precious-idINKBN12X04Q?edition-redirect=in | Gold above $1,300/oz on U.S. election fears, Fed holds rates | Gold above $1,300/oz on U.S. election fears, Fed holds rates
By Marcy Nicholson, Jan Harvey3 Min Read
NEW YORK/LONDON (Reuters) - Gold rallied to a one-month high on Wednesday, as uncertainty over the outcome of the U.S. election knocked stocks and the dollar lower, but bullion pared gains slightly after the Federal Reserve held interest rates steady as expected.
Gold bangles are on display as a woman makes choices at a jewellery showroom during Dhanteras, a Hindu festival associated with Lakshmi, the goddess of wealth, in Kolkata, October 28, 2016. REUTERS/Rupak De Chowdhuri
Following a two-day meeting, the Fed signaled it could hike rates in December as the economy gathers momentum and inflation picks up. Two policymakers dissented in the decision in favor of an immediate hike, down from three in September.
Spot gold XAU= rose to $1,307.76 an ounce, its highest since Oct. 4, and was up 1.05 percent at $1,301.36 by 3:05 p.m. EDT (1905 GMT). U.S. gold futures for December delivery GCv1 settled up 1.6 percent at $1,308.20 per ounce.
“The Fed, as expected, gave the election wide berth providing a modestly more hawkish statement which may have mollified Boston Fed President Rosengren enough to prevent a second consecutive dissent,” said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York.
“Gold and silver are marginally off their highs after recent sharp gains as the Fed refrains from further inflaming electoral anxiety.”
Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, and also boost the dollar, making the metal more expensive for those holding other currencies.
“In a minor but perhaps indicative shift, the statement suggested that the Fed is now only waiting for ‘some’ further evidence of progress,” said Royce Mendes, director and senior economist at CIBC Capital Markets in Toronto.
Gold prices were strong ahead of the Fed statement as investor anxiety over the election after the renewal of an FBI probe into Democratic candidate Hillary Clinton's emails knocked global equity prices and the U.S. dollar .DXY lower for the second straight day.
Traders were starting to reconsider long-held bets of a victory for Clinton amid signs Republican Donald Trump could be closing the gap after the FBI’s announcement of the new email probe on Friday.
The world's largest gold-backed exchange-traded fund, New York's SPDR Gold Shares GLD, reported its first inflow in just over a week on Tuesday.
Among other precious metals, silver XAG= was up 1.4 percent at $18.58 an ounce, after reaching $18.74, its highest since Oct. 4.
Platinum XPT= was up 0.4 percent at $994, after climbing to a one-month high at $1,001.80. Palladium XPD= was down 0.8 pct at $626.97.
Additional reporting by Apeksha Nair and Nallur Sethuraman in Bengaluru; editing by David Evans and Marguerita ChoyOur Standards: The Thomson Reuters Trust Principles.
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80c9d9286b021be71c8244759d8613aa | https://www.reuters.com/article/global-precious-idINKBN12Y032?edition-redirect=in | Gold edges higher on U.S. election nerves | Gold edges higher on U.S. election nerves
By Marcy Nicholson, Clara Denina3 Min Read
NEW YORK/LONDON (Reuters) - Gold edged higher on Thursday in response to a lower dollar and also uncertainty about the outcome of a tight U.S. presidential race.
A sales person shows a gold ring to customers at a jewellery showroom during Dhanteras, a Hindu festival associated with Lakshmi, the goddess of wealth, in Ahmedabad, India, October 28, 2016. REUTERS/Amit Dave
Democrat Hillary Clinton maintained her narrow lead over Republican rival Donald Trump just days ahead of the Nov. 8 election, according to two polls released on Thursday.
Global equity prices, rattled by worries about the U.S. presidential election, steadied while the U.S. dollar was down around 0.3 percent against a basket of six main currencies. [MKTS/GLOB]
“Risk-off sentiment has helped gold above $1,300 yesterday ... and as long as uncertainty around the outcome of U.S. elections continues, we can see support,” Saxo Bank head of research Ole Hansen said.
Spot gold XAU=, lower initially, rose 0.4 percent to $1,302.17 an ounce by 2:52 p.m. EDT (1852 GMT), remaining below Wednesday's one-month high of $1,307.76.
U.S. gold futures GCcv1 settled down 0.4 percent at $1,303.30 per ounce.
“Given the recent moves in the polls and the commensurate improving chances of (Republican Donald Trump) winning according to major forecasters, the possibility of a Trump presidency, which is gold-positive according to the market given likely changes in global investor risk appetite, has been priced back in, at least partially contributing to gold’s recent rise,” said RBC Capital Markets in a note.
Citi Research said it expects gold prices to remain sensitive to the U.S. presidential polls and major news headlines in the short run.
The Fed kept rates unchanged on Wednesday, but expressed optimism that inflation was moving towards their 2 percent target.
“The fact that the Fed made some hawkish comments opening up to a rate increase in December could be seen as a negative for gold,” Mitsubishi Corp analyst Jonathan Butler said.
Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets, while also boosting the dollar, in which the metal is priced.
The market will now focus on the government's non-farm payrolls data, which will be released on Friday. [FRX/] ECONUS
“Even bad data won’t change the idea of a rate hike as the Fed has shown that there is a high probability for a rate hike in December,” Jiang Shu of Shandong Gold Group said.
Among other precious metals, silver XAG= fell 0.7 percent at $18.32 an ounce, retreating from a high of about $18.73 on Wednesday, its best level since Oct. 4.
Platinum XPT= was up 0.8 percent at $994.75 and palladium XPD= dropped 1.9 percent at $616.50.
Additional reporting by Nallur Sethuraman in Bengaluru; editing by Jane MerrimanOur Standards: The Thomson Reuters Trust Principles.
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4d24024075032bb95eeb76a25ab1b7b7 | https://www.reuters.com/article/global-precious-idINKBN17Z08O?edition-redirect=in | Gold at 1-month low as dollar climbs, Fed holds rates | Gold at 1-month low as dollar climbs, Fed holds rates
By Marcy Nicholson, Zandi Shabalala3 Min Read
NEW YORK/LONDON (Reuters) - Gold fell to a one-month low as the dollar firmed on Wednesday, after the U.S. Federal Reserve kept interest rates unchanged as expected and the market reduced expectations of a surprise win by France’s far-right presidential candidate.
Gold bars are seen at the Kazakhstan's National Bank vault in Almaty, Kazakhstan, September 30, 2016. REUTERS/Mariya Gordeyeva/File Photo
The Fed concluded its two-day meeting with a bullish statement that downplayed weak first-quarter economic growth, said inflation has been “running close” to its target, and emphasized the strength of the labor market, in a sign it could tighten monetary policy as early as June.
Spot gold XAU= was down 0.8 percent at $1,246.76 an ounce by 2:58 p.m. EDT (1858 GMT), after falling below the 50-day and 200-day moving averages and touching its lowest since April 5 at $1,244.93.
U.S. gold futures GCcv1 settled down 0.7 percent at $1,248.50.
“The Fed’s apparent comfort with the first-quarter slowdown and its sanguine outlook has pressured gold back to day’s lows as the narrative of two more rate hikes this year remains robust,” said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York.
“Gold breaking down below the 50- and 200-day moving averages today suggests that further short term losses may be likely.”
As well as reducing demand for non-interest bearing gold, higher rates would make the dollar-denominated metal more expensive for buyers paying with other currencies.
Traders are pricing in a 70 percent chance of a June rate increase, according to the CME Group’s FedWatch Tool.
“Attention will now turn to Friday’s payrolls to get the ball rolling on that front,” said Royce Mendes, director and senior economist at CIBC Capital Markets in Toronto.
The dollar index .DXY firmed 0.3 percent. [USD/]
In the French elections, centrist Emmanuel Macron said French voters should expect verbal “hand-to-hand” combat when he and far-right candidate Marine Le Pen face off in a televised debate on Wednesday evening.
Fears that Le Pen could sweep to a surprise victory had buoyed gold in recent sessions due to its safe-haven appeal.
“There is a clear lead by Macron ... so there is less need to hold gold,” said Quantitative Commodity Research analyst Peter Fertig.
In other precious metals, spot silver XAG= was on track for its most technically oversold level on the 14-day relative strength index since November 2014. It was down 1.4 percent at $16.567 per ounce, after touching the lowest since January 11 at $16.48.
Platinum XPT= sank to $896.35, the lowest in 2017, before moderating to trade 2.1 percent lower at $903.25.
Palladium XPD= slipped 1.9 percent to $799.25.
Additional reporting By Nallur Sethuraman in Bengaluru, editing by David Evans and Chizu NomiyamaOur Standards: The Thomson Reuters Trust Principles.
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26c8c0eac1e8d75e55fcd83a64869c19 | https://www.reuters.com/article/global-precious-idINKBN1860RC?edition-redirect=in | Gold eases, holds above 8-week low as Trump dents risk appetite | Gold eases, holds above 8-week low as Trump dents risk appetite
By Marcy Nicholson, Jan Harvey3 Min Read
NEW YORK/LONDON (Reuters) - Gold turned lower but held above the previous day’s eight-week low on Wednesday as U.S. President Trump’s abrupt firing of FBI chief James Comey weighed on U.S. stocks, though gains were capped by expectations of further interest rate increases.
FILE PHOTO - Gold bullion is displayed at Hatton Garden Metals precious metal dealers in London, Britain July 21, 2015. REUTERS/Neil Hall/File Photo
U.S. equities paused and the dollar eased as risk appetite faded on concerns that Trump’s dismissal of Comey could make it harder for him to push through tax reform plans. [MKTS/GLOB]
Spot gold was down 0.2 percent at $1,218.95 an ounce by 1:47 p.m. EDT (1747 GMT), holding above Tuesday’s two-month low at $1,213.81 but turning lower as U.S. Treasury yields turned up.
U.S. gold futures for June delivery settled up 0.2 percent at $1,218.90.
“(This) looks like an attempt at stabilization today after the sharp losses in the preceding days,” Commerzbank analyst Carsten Fritsch said. “Trump’s firing of FBI Chief Comey adds new uncertainty, (and) stock markets seem to pause.”
Trump attributed his decision to sack Comey, who had been leading an investigation into the Trump campaign’s possible collusion with Russia during the 2016 election, to the FBI chief’s handling of an investigation into presidential nominee Hillary Clinton’s emails.
Rival Democrats said that Trump had political motives for the move.
“The unpredictability of both Trump and North Korea has been a reminder that geo-risk has not disappeared but temporarily gone into hibernation,” said Saxo Bank’s head of commodity research, Ole Hansen.
“Initially (the Comey sacking) has had only a limited impact but it highlights that there are other drivers out there. It can turn on a plate if one of the two escalates, especially North Korea.”
Pressure remained on gold as expectations for further U.S. monetary policy tightening next month underpinned the dollar and weighed on bullion.
“Gold prices have dipped below the 100-day moving average, implied volatility has eased towards 2005 lows and ... strengthening U.S. Treasury yields are a strong downside risk for gold prices,” said Suki Cooper, precious metals analyst for Standard Chartered Bank in New York.
“We believe that physical demand should be more responsive and limit the downside near term as the market is already pricing in a June Fed rate hike.”
The metal is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.
Silver was up 0.1 percent at $16.16 an ounce. Platinum was up 1 percent at $910.30 and palladium rose 0.4 percent to $798.98.
Additional reporting by Swati Verma in Bengaluru; Editing by David Goodman and James DalgleishOur Standards: The Thomson Reuters Trust Principles.
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2a1e223572175c5269a892a6e7a93111 | https://www.reuters.com/article/global-precious-idINKBN1Y10HF?edition-redirect=in | Gold dips as trade deal hopes boost Wall Street to record | Gold dips as trade deal hopes boost Wall Street to record
By Karthika Suresh Namboothiri3 Min Read
(Reuters) - Gold fell on Wednesday as equities climbed to record levels bolstered by hopes that the United States and China were close to signing an initial trade deal.
A gold bar is pictured in the safe deposit boxes room of the Pro Aurum gold house in Munich, Germany, August 14, 2019. REUTERS/Michael Dalder/File Photo
Also boosting risk appetite was robust U.S. economic data, which assured investors of the health of the country’s economy.
Spot gold dipped 0.4% to $1,454.41 per ounce as of 10:27 a.m. ET (1527 GMT), slipping five sessions in six.
U.S. gold futures also shed 0.4% to $1,454.30 per ounce.
“Given the situation, the statements from the White House that the U.S.- China trade deal may be imminent is continuing to drive risk appetite a bit higher,” said Bart Melek, head of commodity strategies at TD Securities.
“There is less interest in gold as a hedge, and a higher opportunity cost to hold zero yielding assets like gold.”
Wall Street hit fresh record levels on Wednesday while world shares were close to notching a record peak in the session after U.S. President Donald Trump said the world’s two largest economies were in the “final throes” of signing an initial trade deal.
Market confidence was buoyant and investors moved away from safe-haven gold. The CBOE VIX equity volatility index, often referred to as a fear gauge, was at seven-month lows.
Lack of signs of further monetary policy easing in the near term by the U.S. Federal Reserve did little to support gold. Fed Chair Jerome Powell said on Monday that monetary policy was “well positioned” to support the strong U.S. labour market.
Higher interest rates boost the dollar, making dollar-denominated gold more expensive for buyers using other currencies, and they reduce investor interest in non-yielding bullion.
Boosting market sentiment, U.S. economic growth picked up slightly in the third quarter, rather than slowing as initially reported, assuring markets that the world’s largest economy was healthy despite fears of the impact of the long-drawn trade war.
Weekly jobless claims also declined, while core capital goods ordered posted their biggest gain in nine months.
“Gold remains range-bound with hard support sitting toward $1,445-$1,450... While top-side resistance cuts in toward $1,475-$1.480,” analysts at MKS PAMP said in a note.
Other precious metals also mirrored gold, with silver dropping 0.7% to $16.95 per ounce, platinum down 1.8% to $891.20 and palladium slightly lower at $1,809.59.
Reporting by Karthika Suresh Namboothiri in Bengaluru; Editing by Alistair BellOur Standards: The Thomson Reuters Trust Principles.
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bf1d2dabafcac269983babc865f49ddb | https://www.reuters.com/article/global-precious-idINKBN21J3S5?edition-redirect=in | Gold gains as virus-led economic concerns boost safety buying | Gold gains as virus-led economic concerns boost safety buying
By Sumita Layek3 Min Read
(Reuters) - Gold prices firmed on Wednesday as investors sought safe-haven assets after sombre U.S. economic data exacerbated fears of an economic downturn amid increasing global restrictions and lockdowns to combat the coronavirus pandemic. Spot gold was up 0.9% at $1,585.08 an ounce by 11:02 am EDT (1502 GMT), having earlier risen as much as 1.8%. U.S. gold futures gained 0.3% to $1,601.70.
FILE PHOTO: Newly casted ingots of 99.99% pure gold are stored after weighing at the Krastsvetmet non-ferrous metals plant, one of the world's largest producers in the precious metals industry, in the Siberian city of Krasnoyarsk, Russia November 22, 2018. REUTERS/Ilya Naymushin
“The unprecedented macroeconomic backdrop has been drawing more investors to real assets like gold. Central banks across the world are loosening their balance sheets and getting ready for further easing to mitigate the impact of the outbreak,” said Soni Kumari, commodity strategist at ANZ.
“We therefore see real interest rate staying in the deep negative territory for a while... Such a backdrop remains favourable for gold investments.”
The U.S. manufacturing sector contracted in March, with activity hitting its lowest level since 2009, as the coronavirus outbreak caused widespread shortages, a survey showed.
Also, U.S. private payrolls dropped in March for the first time since 2017, supporting economists’ views that the longest employment boom in history ended last month.
As evidence mounted that the pandemic was sending the global economy into a deep recession, equity markets began the new quarter with steep losses.
U.S. President Donald Trump warned Americans on Tuesday of a “painful” two weeks ahead in fighting the coronavirus, with a mounting U.S. death toll that could stretch into the hundreds of thousands even with strict social distancing measures.
The contagion has infected over 851,000 people worldwide and killed 42,053, according to a Reuters tally.
On Tuesday, the U.S. Federal Reserve broadened the ability of dozens of foreign central banks to access dollars during the crisis by allowing them to exchange their holdings of U.S. Treasury securities for overnight dollar loans.
“Technically, the gold bulls still have the overall near-term technical advantage but they are fading this week and need to show fresh power soon,” Kitco Metals senior analyst Jim Wyckoff said in a note.
Resistance lay at around $1,612.40 and then at $1,625, Wyckoff added. Reflecting investor sentiment, the Perth Mint’s gold product sales in March soared to their highest in about seven years.
Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.3% to 967 tonnes on Tuesday.
Elsewhere, platinum shed 0.1% to $721.59 an ounce, palladium dropped 5.5% to $2,222.19 and silver rose 0.3% to $14.
Reporting by Sumita Layek and Eileen Soreng in Bengaluru; Editing by Bernadette BaumOur Standards: The Thomson Reuters Trust Principles.
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198dbcfda35499808adcf9702c1fa54e | https://www.reuters.com/article/global-precious-idINKBN22D4DB?edition-redirect=in | Gold rebounds as Trump threatens new tariffs on China | Gold rebounds as Trump threatens new tariffs on China
By Eileen Soreng3 Min Read
(Reuters) - Gold shook off initial losses to post modest gains in volatile trade on Friday as risk sentiment soured on U.S. President Donald Trump’s threat to impose new tariffs on China, but bullion was still on track for its worst week since mid-March.
FILE PHOTO: A customer shows a piece of gold for sell at a goldsmith, as the demand for cash increased after the partial shut down caused by the outbreak of the coronavirus disease (COVID-19), in Bangkok, Thailand, April 16, 2020. REUTERS/Jorge Silva/File Photo
Spot gold climbed 0.9% to $1,694.56 per ounce by 11:37 a.m. EDT (1537 GMT).
U.S. gold futures rose 0.7% to $1,706.80.
“We saw some weakness in the U.S. equities markets... It seemed Trump was hinting at a resurgence of the trade war,” said Phil Streible, chief market strategist at Blue Line Futures in Chicago.
“That being said, a lot of investors liquidated various asset classes that might be affected by that and went back into safety, specifically gold.”
Trump said on Thursday his trade deal with China was now of secondary importance to the coronavirus pandemic and he threatened new tariffs on Beijing, as his administration crafted retaliatory measures over the outbreak.
U.S. stocks fell at open on Trump’s warning, and as Apple and Amazon became the latest companies to warn of more pain in the future. [.N]
Gold was also supported by a weaker dollar.
Considered a safe store of value during economic or political turmoil, gold was, however, on track to post a more than 1% decline for the week as more economies eased restrictions and as investors covered losses in wider markets.
South Africa took its first steps on Friday towards rolling back one of the world’s strictest COVID-19 lockdowns, a day after UK Prime Minister Boris Johnson promised to set out a plan next week on how Britain might start gradually returning to normal life.
“However, gold’s narrative has not changed much. We’re in for a gloomy run of economic data over the next few months and central banks will continue to ease, including the U.S. Federal Reserve, which opens up gold to go higher,” said Stephen Innes, chief market strategist at financial services firm AxiCorp.
The pandemic, which has infected more than 3.2 million people globally and killed over 227,000, has also battered the global economy, prompting central banks to unleash massive fiscal and monetary measures to limit the economic toll.
Gold tends to benefit from widespread stimulus as it is often seen as a hedge against inflation and currency debasement.
Palladium fell 2% to $1,920.20 per ounce, on track for its fifth straight weekly decline.
Platinum shed 0.5% at $768.74 per ounce, while silver fell 0.6% to $14.85.
Reporting by Eileen Soreng in Bengaluru; Editing by Chris ReeseOur Standards: The Thomson Reuters Trust Principles.
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c802c8bff75d5d699462bb98e796fbdb | https://www.reuters.com/article/global-precious-idINKBN2330HA?edition-redirect=in | Gold dips to two-week low on recovery hopes | Gold dips to two-week low on recovery hopes
By Brijesh Patel2 Min Read
(Reuters) - Gold dropped to its lowest in two-weeks on Wednesday as hopes of quick economic recovery drove investors towards riskier assets, although U.S.-China tensions over Hong Kong put a floor under bullion prices.
FILE PHOTO: A Saudi jeweller wearing a protective face mask arranges gold jewels at a jewellery store during the holy month of Ramadan, after the outbreak of the coronavirus disease (COVID-19), in Riyadh, Saudi Arabia, May 5, 2020. REUTERS/Ahmed Yosri
Spot gold was down 0.6% at $1,700.30 per ounce by 1223 GMT. U.S. gold futures fell 0.8% to $1,691.80.
“It’s very important for gold prices to stay above $1,700. Otherwise, if the price correction continues, speculative investors are likely to leave this boat and increase pressure on prices,” said Commerzbank analyst Eugen Weinberg.
“One can mention the geopolitical tensions are contributing somewhat and supporting gold prices currently. But, until now this situation has failed to ignite fears on the equity market.”
Optimism about the development of coronavirus vaccines and a revival of business activity has lifted risk sentiment in the financial markets.
After a batch of poor economic readings from the United States, data on Tuesday showed U.S. consumer confidence nudged up in May and new home sales beat expectations.
Despite the pullback in bullion prices, the outlook remains positive for gold, which is seen as a safe-haven asset during times of political and economic uncertainty, analysts said.
The risks of a temporary short-term gold market unwind to a low- to mid-$1,600 level seems to be rising, Citi said in a note, adding it remained “outright bullish (on) gold over the medium term and forecast that $2,000 ounce will be breached in the next 12 months”.
Growing political unrest in Hong Kong over Beijing’s proposed national security laws has kept investors on edge.
U.S. President Donald Trump said Washington was working on a strong response to China, adding it would be announced before the end of the week.
Elsewhere, palladium eased 0.1% to $1,954.75 per ounce, silver fell 0.3% to $17.05 and platinum was steady at $839.74.
Reporting by Brijesh Patel in Bengaluru; editing by Pritha Sarkar and Barbara LewisOur Standards: The Thomson Reuters Trust Principles.
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a0a622d962630b631e21f09fd8d9eb76 | https://www.reuters.com/article/global-precious-idINKBN27B0AN?edition-redirect=in | Gold slips on strong dollar, U.S. stimulus doubts | Gold slips on strong dollar, U.S. stimulus doubts
By Eileen Soreng2 Min Read
(Reuters) - Gold fell below the key psychological level of $1,900 on Monday to its lowest in more than a week, pressured by a firmer dollar and stalled progress in talks for a new U.S. coronavirus aid package.
FILE PHOTO: A gold bar is pictured on display at Korea Gold Exchange in Seoul, South Korea, August 6, 2020. REUTERS/Kim Hong-Ji/File photo
Spot gold fell 0.2% to $1,897.71 per ounce by 0908 GMT, after hitting $1,890.19, its lowest since Oct. 15.
U.S. gold futures fell 0.3% to $1,900.50.
“There seems to be a lack of impetus to find extra buyers (for gold)... A lot of it is because we’re trading in the looming shadow of the U.S. elections and stimulus speculation,” said IG Markets analyst Kyle Rodda.
The dollar rose 0.3% against a basket of other currencies.
U.S. House Speaker Nancy Pelosi on Sunday said the Trump administration was reviewing the latest plan for more COVID-19 relief and that she expected a response on Monday.
But with the presidential elections fast approaching, analysts said a victory for Democrat rival Joe Biden could help gold rally on a potential large stimulus package, especially amid COVID-19 cases surging in the United States.
France registered a record increase in infections over the weekend and Spain announced a state of emergency as cases surged through Europe.
Widely viewed as a hedge against inflation and currency debasement, bullion has gained 25.1% this year as central banks and governments unveiled unprecedented stimulus to cushion the economic fallout from the pandemic.
A break below support at $1,887 per ounce could push gold lower to $1,872, according to Reuters technical analyst Wang Tao.
Elsewhere, auto-catalyst metals palladium and platinum dropped 1.5% to $2,356.16 and 1.4% to $888.59 respectively.
“Although supply shocks for the pair have eased in recent weeks, Chinese car sales continue to eclipse expectations, which paints a bullish picture into the year end and should keep prices buoyant,” MKS PAMP said in a note.
Silver fell 1.9% to $24.12 per ounce.
Reporting by Eileen Soreng in Bengaluru; Editing by Richard Chang and Rashmi AichOur Standards: The Thomson Reuters Trust Principles.
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03dc5f4ad864fc3b43c46f055f524457 | https://www.reuters.com/article/global-precious-idINKBN27E165?edition-redirect=in | Gold falls to one-month low as dollar extends rally | Gold falls to one-month low as dollar extends rally
By Brijesh Patel2 Min Read
(Reuters) - Gold prices dropped to one-month lows on Thursday, hurt by a stronger dollar and lack of clarity on a U.S. stimulus agreement, while concerns over a spike in COVID-19 cases and uncertainty ahead of U.S. elections limited losses.
FILE PHOTO: Gold bars at the Austrian Gold and Silver Separating Plant in Vienna, Austria, March 18, 2016. REUTERS/Leonhard Foeger/File Photo
Spot gold was down 0.4% at $1,869.94 per ounce by 11:57 a.m. EDT (1557 GMT), having earlier slipped to its lowest since Sept. 28 at $1,858.92.
U.S. gold futures fell 0.5% to $1,869.90.
“The downturn we are seeing in gold prices is because there is a short-term concern about timing of the stimulus getting approved,” said Jeffrey Sica, founder of Circle Squared Alternative Investments, adding “a strengthening U.S. dollar is impacting gold.”
President Donald Trump’s chief economic adviser said on Thursday that any deal on coronavirus relief legislation would have to wait for now.
Denting gold’s appeal, the dollar index rose 0.7% to a near two-week high against its rivals, making gold more expensive for holders of other currencies.
“Gold is now at levels where people could accumulate considering the chaos around the election, concerns about economic recovery and the coronavirus situation. The trend for gold is still bullish,” Sica said.
Gold, often used as a safe store of value during times of political and financial uncertainty, has risen 24% this year amid unprecedented global levels of stimulus during the pandemic.
Rapidly rising COVID-19 infection rates in Europe forced France and Germany to order their countries back into lockdown.
Meanwhile, data showed the U.S. economy grew at an unrivalled pace in the third quarter and weekly unemployment claims fell more than expected in the latest week.
Ahead of the Nov. 3 election, Democratic challenger Joe Biden leads Trump nationally, but the competition is tighter in swing states.
Elsewhere, silver dipped 0.5% to $23.28 per ounce after earlier slipping to a near one-month low.
Platinum fell 2.5% to $845.90 and palladium slipped 1.8% to $2,196.59.
Reporting by Brijesh Patel in Bengaluru; Editing by David Holmes and Nick MacfieOur Standards: The Thomson Reuters Trust Principles.
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7331589ee0d4d8b218a26b196ff39fd8 | https://www.reuters.com/article/global-precious-idINKBN27P1NB?edition-redirect=in | Gold rises over 1% on stimulus bets and economic woes | Gold rises over 1% on stimulus bets and economic woes
By Brijesh Patel2 Min Read
(Reuters) - Gold regained some lost ground on Tuesday after a sharp fall in the previous session as concerns over global economic recovery and expectations of further fiscal and monetary stimulus offered support to the safe-haven metal.
FILE PHOTO: Gold bullions are displayed at Degussa shop in Singapore June 16, 2017. REUTERS/Edgar Su/File Photo
Spot gold rose 1.2% at $1,884.31 an ounce by 11:27 a.m. EST (1627 GMT). U.S. gold futures gained 1.6% to $1,883.50.
“Gold is trying to find equilibrium this morning, 24 hours after the Pfizer earthquake rearranged the landscape. I expect gold will continue to grind back higher, but it’s going to take a bit longer,” said Tai Wong, head of base and precious metals derivatives trading at BMO.
“The fundamental factors for gold remain quite friendly. Stimulus is on the cards and with a vaccine we will get reflation.”
Gold lost 4.6% on Monday, its biggest daily fall since Aug. 11, after U.S. drugmaker Pfizer Inc said its COVID-19 vaccine was more than 90% effective based on initial trial results, lifting U.S. equities to record highs.
However, shares eased on Tuesday as worries about the extent of the COVID-19 pandemic’s economic impact resurfaced.
“The fiscal and monetary response to the pandemic globally will remain highly accommodative. This will continue to provide gold and silver, as well as platinum, with reason to go higher,” HSBC analysts said in a note.
“But the psychological relief and shift in risk sentiment may still weigh on gold and the other metals, with the exception of palladium, in the immediate term.”
Gold tends to benefit from stimulus spending because it is considered a hedge against inflation risks and currency weakness.
Meanwhile, Dallas Federal Reserve Bank President Robert Kaplan said he was “cautious and concerned” about downside economic risks in the short term because of the resurgence of the coronavirus.
Silver gained 1.4% to $24.40 an ounce, platinum climbed 1.9% to $883 and palladium eased 0.2% at $2,472.
Reporting by Brijesh Patel in Bengaluru; Editing by David Goodman and Chris ReeseOur Standards: The Thomson Reuters Trust Principles.
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