Oil stable on threats of rebel attacks in Nigeria, tighter US crude inventories

Traders say oil prices are unlikely to fall far due to risks to supply disruptions. (Reuters)
Updated 18 January 2018
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Oil stable on threats of rebel attacks in Nigeria, tighter US crude inventories

SINGAPORE: Oil prices were stable on Thursday, supported by tighter inventories of crude as well as rebel threats of an attack on Nigeria’s petroleum industry, but the market was weighed down by a reported rise in US fuel stocks.
Brent crude futures were at $69.34 at 0753 GMT, down 4 cents from their last close. On Monday, they hit their highest since December 2014 at $70.37 a barrel.
US West Texas Intermediate (WTI) crude futures were at $64.03 a barrel, up 6 cents from their last settlement. WTI marked it highest since December 2014 at $64.89 on Tuesday.
Traders said that oil markets were generally well supported by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia, who started to withhold production in January last year and are expected to continue their restraint through 2018.
Despite this, analysts said the recent oil price rally, which has lifted crude by around 14 percent since early December, may be about to run out of steam.
Data from the American Petroleum Institute (API) on Wednesday showed a well-supplied fuel product market, which could mean lower crude demand going forward.
US refinery crude runs fell by 420,000 barrels per day (bpd) and refined product stocks rose, implying a well-supplied market.
Gasoline stocks rose by 1.8 million barrels while distillate fuels stockpiles, which include diesel and heating oil, climbed by 609,000 barrels, the API data showed.
Refined product supplies in Asia are also healthy, largely thanks to a sharp rise in exports from China.
“The upside is now limited for oil prices ... US oil producers will ramp up production in the coming months ... US shale oil output will increase by a good 111,000 barrels per day (bpd) next month to 10 million bpd, and ... will rise to about 11 million bpd by the end of next year. This would put the US on par with Saudi Arabia and Russia’s output,” said Fawad Razaqzada, market analyst at futures brokerage Forex.com.
Coface, a French trade credit insurance company, said it “forecasts oil prices will consolidate some gains to average $65 (per barrel) in 2018.”
The firm said the reasons for this expected slowdown were an expected rise in US oil output as well as a slowdown in demand growth.
Despite this, traders said prices were unlikely to fall far due to risks to supply disruptions.
In Nigeria, the militant group Niger Delta Avengers threatened to launch attacks on the country’s oil sector in the next few days.
Markets were also supported by a drop in available crude inventories.
US crude inventories fell by 5.1 million barrels in the week ended Jan. 12 to 411.5 million, according to the API.
Official US oil inventory and production data is due on Thursday from the Energy Information Administration.


Uber taps into Japan with first taxi-hailing pilot

Updated 6 min 8 sec ago
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Uber taps into Japan with first taxi-hailing pilot

TOKYO: Uber announced Tuesday it would start its first taxi-hailing pilot program in Japan this summer, as it bids to break into a tough market in the world’s third largest economy.
The US firm has found it difficult to penetrate the Japanese market, where risk averse passengers prefer to stick to their high quality traditional taxi service.
Hailing a taxi rarely takes more than a few seconds in major Japanese cities and there has been a relatively sluggish uptake of services like Uber, where consumers order an unlicensed car via a smartphone app.
But Uber said in a statement Tuesday it would launch a pilot program this summer to hook up tourists and residents in the western Awaji island with available taxi drivers.
Uber said it aimed to provide local residents and tourists with “reliable and safe transportation” on the small island, which is home to just over 150,000 people.
“I’m very excited that Uber’s technology will contribute to further enhancing the transit environment of Awaji Island,” Brooks Entwistle, Uber’s Chief Business Officer, said in the statement, adding it will be “the first initiative of its kind in Japan.”
Uber is far from alone in targeting the Japanese taxi market, with Chinese ride-hailing giant Didi Chuxing and Japanese telecom firm SoftBank announcing a deal in early February to develop a taxi app in Japan.
SoftBank has heavily invested in the taxi market and recently took a 15 percent stake in Uber.
And Sony has said it is planning a joint venture to offer artificial intelligence technology to six taxi operators, which currently own a total of 10,000 vehicles in Tokyo.
The technology would use AI to predict demand for taxis and allow companies to more efficiently mobilize their resources.
Carmaker Toyota has also announced an investment of ¥7.5 billion in the JapanTaxi app, which says it is the biggest taxi-hailing app in Japan.