Oil nudges higher on tightening supplies, weak dollar

An oil rig drilling a well at sunrise, owned by Parsley Energy Inc. near Midland, Texas, U.S., in this May 3, 2017 photo. (REUTERS)
Updated 19 August 2017
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Oil nudges higher on tightening supplies, weak dollar

AMSTERDAM: Oil prices edged higher on Friday, with investors offered some encouragement from data hinting that oversupply was easing steadily and a weaker dollar.
But prices were still on track to close the week 2 to 3 percent lower after concerns about weaker Chinese oil demand weighed earlier in the week.
At 11:52 a.m. GMT, benchmark Brent crude futures were up 6 cents at $51.09 a barrel on the day but still about 2 percent lower on the week.
US West Texas Intermediate (WTI) crude futures were up 11 cents at $47.20 a barrel, although they were also set to end the week more than 3 percent lower.
“Falling US commercial stocks are supportive and I also believe that high US product demand, and gasoline demand in particular, is helping too,” Tamas Varga, senior analyst at London brokerage PVM Oil Associates, said of Friday’s move up.
He also said a weaker dollar was bullish for oil prices as equity markets piled pressure on the greenback.
“Reports of a fire at Shell’s Deer Park refinery in Texas provided a small fillip to WTI prices,” said analysts at Cenkos Securities.
One unit at Shell’s large Deer Park joint-venture refinery in Texas was shut on Thursday by a fire, according to a regulatory filing. Sources added the unit would remain out of service for at least a week to carry out repairs.
The Brent forward curve has moved from contango into backwardation, where prices for immediate delivery are higher than those for the three future months. A backwardated market is considered a bullish sign for prices since it indicates demand is outpacing supply.
Signs of supply tightness have started appearing in the US, the world’s biggest oil consumer.
Despite a 13 percent jump in production since mid-2016 to 9.5 million barrels per day, the country’s commercial crude inventories have fallen 13 percent from their March records to below 2016 levels.
—  Reuters


Oil prices fall on expected output rise after OPEC deal

Updated 25 June 2018
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Oil prices fall on expected output rise after OPEC deal

SINGAPORE: Brent crude oil prices fell over 1.5 percent on Monday as traders factored in an expected output increase that was agreed at the headquarters of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna on Friday.
Brent crude futures, the international benchmark for oil prices, were at $74.21 per barrel at 0343 GMT, down 1.8 percent from their last close.
US West Texas Intermediate (WTI) crude futures were at $68.40 a barrel, down 0.3 percent, supported more than Brent by a slight drop in US drilling activity.
Prices initially jumped after the deal was announced late last week as it was not seen boosting supply by as much as some had expected.
OPEC and non-OPEC partners including Russia have since 2017 cut output by 1.8 million barrels per day (bpd) to tighten the market and prop up prices.
Largely because of unplanned disruptions in places like Venezuela and Angola, the group’s output has been below the targeted cuts, which it now says will be reversed by supply rises especially from OPEC leader Saudi Arabia. Although analysts warn there is little space capacity for large-scale output increases.
“Several ministers suggested that (rises) would correspond to a 0.7 million bpd increase in production,” said US bank Goldman Sachs following the announcement of the agreement, although it added that were risks “that Iran production may be even lower than we assume” and that its output could fall further due to looming US sanctions.
Still, Britain’s Barclays bank said OPEC’s and Russia’s commitments would take “the market from a -0.2 million bpd deficit in H2 2018 to a 0.2 million bpd surplus.”
Energy consultancy Wood Mackenzie said the agreement “represents a compromise between responding to consumer pressure and the need for oil-producing countries to maintain oil prices and prevent harming their economies.”
In the United States, US energy companies last week cut one oil rig, the first reduction in 12 weeks, taking the total rig count to 862, Baker Hughes said on Friday.
That put the rig count on track for its smallest monthly gain since declining by two rigs in March with just three rigs added so far in June, although the overall level remains just one rig short of the March 2015 high from the previous week.