Oil prices rise for a second day on China demand, US stockpile drop

OPEC and its partners will decide in June whether to continue to curb their production, although concerns have arisen over Russia’s willingness to stick with the cuts. (Reuters)
Updated 17 April 2019
0

Oil prices rise for a second day on China demand, US stockpile drop

  • China’s refinery throughput in March rose 3.2 percent from a year earlier to 12.49 million barrels per day
  • OPEC and its partners will decide in June whether to continue to curb their production

SEOUL: Oil prices rose for a second day on Wednesday on signs of strong demand from refineries in China, the world’s second-largest crude user, amid tightening supply as producers curtail output and as oil inventories in the United States fell unexpectedly.
International benchmark Brent crude oil futures rose 21 cents, or 0.29 percent, to $71.93 a barrel by 0319 GMT. Brent gained as much 0.5 percent to 72.08 a barrel, the highest since Nov. 8 and the highest this year.
US West Texas Intermediate (WTI) crude futures were at $64.45 per barrel, up 40 cents, or 0.6 percent from their previous settlement.
“Crude oil futures edged up as market sentiments were buoyed by a surprise drawdown in US crude oil inventories and tighter market fundamentals in the current term,” said Benjamin Lu, commodities analyst at Singapore-based brokerage Phillip Futures.
China’s refinery throughput in March rose 3.2 percent from a year earlier to 53.04 million tons, or 12.49 million barrels per day (bpd), data from the National Bureau of Statistics showed on Wednesday.
The steady demand growth in China is occurring as a deal between the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, to limit their output by 1.2 million bpd in 2019 has curtailed global supplies.
Crude oil supply has also declined in 2019 as the United States imposed economic sanctions on OPEC members Venezuela and Iran.
The tightening supply and demand fundamentals have pushed WTI up more than 40 percent this year and Brent up by more than 30 percent.
In June, OPEC and its partners will decide whether to continue to curb their production, although concerns have arisen over Russia’s willingness to stick with the cuts.
Gazprom Neft, the oil arm of Russian gas company Gazprom, expected the global oil deal between OPEC and its allies to end in the first half of the year, a company official said on Tuesday.
“As the possibility of Russia ending the OPEC deal remains, that is capping further gains,” said Kim Kwang-rae, commodity analyst at Samsung Futures in Seoul.
An unexpected fall in US crude inventories also supported higher oil prices.
US crude inventories fell by 3.1 million barrels in the week ended April 12 to 452.7 million, compared with analysts’ expectations for an increase of 1.7 million barrels, according to data from the American Petroleum Institute (API) released on Tuesday.
Official data on US inventories from the Energy Information Administration is due to be released on Wednesday.


Paris Air Show: After Boeing showstopper, Airbus seeks order bounce

Updated 19 June 2019
0

Paris Air Show: After Boeing showstopper, Airbus seeks order bounce

  • British Airways owner IAG signs letter of intent to buy 200 of its 737 MAX jets
  • Airbus is looking for up to 200 orders for the A321XLR, which is designed to open up new routes

PARIS: Airbus, reeling from the potential loss of a major customer for its best-selling A320neo as British Airways owner IAG placed a lifeline order for the grounded 737 MAX, prepared to hit back with more orders for its A321XLR on Wednesday.
The planemaker has been negotiating with US airlines investor Bill Franke whose Indigo Partners has also been known to place orders for multiple airlines within its portfolio and could reel it in for the Paris Air Show, industry sources said.
Airbus declined to comment.
After weathering intense scrutiny over safety and its public image, Boeing won a vote of confidence on Tuesday as IAG signed a letter of intent to buy 200 of its 737 MAX jets that have been grounded since March after two deadly crashes.
The surprise order lifted the energy of a previously subdued Paris Airshow, where the talk had been of the possible end of the aerospace cycle, given the issues at both Boeing and Airbus as well as geopolitical and trade tensions around the world.
Australia’s Qantas Airways said on Tuesday it would order 10 Airbus new A321XLR jets and convert a further 26 from existing orders already on the Airbus books.
Airbus is also in talks with leasing company GECAS and has been trying to secure an eye-catching order for the A321XLR from American Airlines, though the world’s largest carrier does not typically make announcements at air shows.
Airbus is looking for up to 200 orders for the A321XLR, which is designed to open up new routes.