Oil treads water as US crude inventories fall, but trade tensions weigh

US commercial crude oil inventories fell by 4.3 million barrels to 401.49 million barrels in the week to August 31, the lowest since February 2015. (Reuters)
Updated 07 September 2018
0

Oil treads water as US crude inventories fall, but trade tensions weigh

  • US commercial crude oil inventories fell by 4.3 million barrels to 401.49 million barrels in the week to August 31
  • ‘US production growth will now significantly decelerate until 4Q19’

SINGAPORE: Oil prices held steady stable on Friday, as the market balanced a fall in US crude inventories to the lowest levels since 2015, with Sino-American trade tensions and economic weakness from emerging markets.
US West Texas Intermediate (WTI) crude futures were at $67.78 per barrel at 0448 GMT, up just 1 cent from their last settlement.
International Brent crude futures dipped 8 cents to $76.42 a barrel.
“Oil inventory data released last night showed a larger-than-expected draw in crude inventories,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.
US commercial crude oil inventories fell by 4.3 million barrels to 401.49 million barrels in the week to Aug. 31, the lowest since February 2015, US Energy Information Administration (EIA) data showed on Thursday.
Despite that, analysts said prices were curbed by a rise in refined product stocks and a relatively weak US peak fuel consumption season this summer, known as the driving season.
Gasoline stocks rose by 1.8 million barrels, while distillate stockpiles, which include diesel and heating oil, climbed by 3.1 million barrels, the EIA data showed.
“US gasoline inventories are now above the top of the 5-year range,” said US investment bank Jefferies in a note on Friday.
“The US summer driving season has proven to be a lackluster one in terms of gasoline demand,” said O’Loughlin of Rivkin Securities.
Ongoing emerging market weakness as well as potential new US import tariffs on Chinese goods were also weighing on oil market sentiment.
“Emerging markets, which tend to have a higher energy intensity of GDP, are an obvious concern,” said Jefferies.
Asian shares slipped to a 14-month trough on Friday as investors feared a new round of Sino-US tariffs, while currencies from Indonesia to India also remained under pressure.
On the supply side, US crude oil production last week remained at a record 11 million barrels per day (bpd), a level it has largely been at since July.
After rising by almost a third in the last two years, Jefferies said: “US production growth will now significantly decelerate until 4Q19.”
Outside the United States, US sanctions against major oil producer Iran, which from November will target oil exports, are fueling expectations of a tighter market toward the end of the year.
“The main driver of oil prices, in our view, remains the re-imposition of US ... sanctions against consumers of Iranian oil,” said Standard Chartered this week.
“There is still considerable uncertainty over the strategies of China and India, Iran’s main customers.”
Washington has indicated it may offer temporary sanctions waivers to allied countries that are unable to immediately cease imports from Iran.


Air France, Emirates maintain Cairo flights after British Air suspension

Updated 5 min 35 sec ago
0

Air France, Emirates maintain Cairo flights after British Air suspension

  • British Airways, a unit of IAG, said it was suspending flights to Cairo for seven days “as a precaution”
  • Germany’s Lufthansa later said it had canceled its flights to Cairo from Munich and Frankfurt and would resume its connection

PARIS: Air France, Emirates and Etihad Airways are continuing to operate flights to Cairo after British Airways and Lufthansa suspended services to Egypt’s capital.
International Airlines Group’s British Airways suspended flights on Saturday for seven days “as a security precaution” as it reviews security at Cairo airport.
Germany’s Lufthansa later said it canceled services from Munich and Frankfurt to Cairo and would resume flights on Sunday.
“In liaison with the French authorities and the local authorities in Egypt, Air France has decided to maintain its service to Cairo,” a spokesman said in a statement sent to Reuters.
An Emirates spokeswoman said its flights were operating to schedule.
“We are closely assessing the situation and are in contact with the relevant aviation authorities with regards to our flight operations to Egypt,” the spokeswoman said.
The website for Abu Dhabi’s Etihad showed its services were also operating.
“Etihad Airways is monitoring the security situation in Cairo,” an airline spokesman said.