Oil holds above $ 113

Updated 30 January 2013
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Oil holds above $ 113

LONDON: Brent crude oil stayed close to three-month highs above $ 113 after US data pointed to a strengthening housing market, raising hopes of faster economic growth and higher fuel demand.
Financial markets rallied across the board on the data, which showed single-family home prices rose in November for the 10th month in a row.
Adding to optimism, a poll by market research group GfK showed German consumer morale rose for the first time in four months.
Brent crude was unchanged on the day at $ 113.48 per barrel by 1535 GMT, while US crude rallied to its highest since September at $ 97.32, up 88 cents, before easing back to trade around $ 97.00.
“Growth and recovery news in the United States and Europe are on the positive side,” said Bjarne Schieldrop, chief commodity analyst at SEB in Oslo. “Sentiment and the technical analysis are still clearly bullish.”
Markets were awaiting the outcome of a two-day Federal Reserve policy meeting as well as first estimates for fourth-quarter gross domestic production (GDP) in the US.
The US Federal Reserve has said it expects to keep short-term interest rates exceptionally low to help support the economy.
“Economic optimism ahead of the Fed meeting and some technical momentum with US crude able to stay above $ 95 has US crude higher,” said Phil Flynn, analyst at Price Futures Group in Chicago.
Persistent tension in the Middle East and Africa also supported oil.
In Egypt, the head of the military warned political conflict could lead to the collapse of the state and said protecting the Suez Canal was one of the main objectives of the army deployment to cities shaken by violence.
Oil prices continued to be underpinned by the closure of Hess Corp’s New Jersey refinery, news of which boosted US gasoline futures by more than 2 percent on Monday.
The loss of the plant, the latest in the region to fall victim to poor profits, tightened the supply outlook for the US northeast, which is likely to have to rely more on imports and supplies from the Gulf Coast, according to analysts.
Traders awaited data on US crude and oil products stockpiles for clues on demand.
A Reuters survey, taken ahead of weekly inventory reports from the American Petroleum Institute and the US government’s Energy Information Administration, saw crude stocks rising by 2.6 million barrels on average for the week ended Jan. 25.
Gasoline inventories were forecast to have increased by an average 100,000 barrels for the week.


Oil prices fall as OPEC and Russia weigh output boost

Updated 36 min 48 sec ago
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Oil prices fall as OPEC and Russia weigh output boost

  • Russian Energy Minister Alexander Novak has had talks with Saudi Energy Minister Khalid Al-Falih on an easing of the terms of the global oil supply pact that has been in place for 17 months
  • The energy ministers of Saudi Arabia, Russia and the United Arab Emirates are discussing an output increase of about 1 million barrels per day

LONDON: Oil prices fell below $78 a barrel on Friday as OPEC and Russia considered easing supply curbs to offset disruptions in Venezuela and an expected drop in Iranian exports.
Russian Energy Minister Alexander Novak has had talks with Saudi Energy Minister Khalid Al-Falih on an easing of the terms of the global oil supply pact that has been in place for 17 months, Novak said on Friday.
The energy ministers of Saudi Arabia, Russia and the United Arab Emirates are discussing an output increase of about 1 million barrels per day (bpd), sources told Reuters.
Speaking in St. Petersburg, Falih told Reuters that “all options are on the table” when asked about the targets on production cuts.
Brent crude futures were down 80 cents at $77.99 a barrel by 0914 GMT, having hit their highest since late 2014 at $80.50 this month.
US West Texas Intermediate (WTI) crude futures were at $70.18 a barrel, down 53 cents.
“The debate about a possible relaxation of the production restrictions should preclude any renewed price rise,” Commerzbank analysts said.
“The $80 mark is likely to pose an obstacle that is difficult to overcome because it would significantly raise the probability of a production increase.”
The Organization of the Petroleum Exporting Countries (OPEC) as well as a group of non-OPEC producers led by Russia started withholding output in 2017 to tighten the market and prop up prices.
Global crude supplies have tightened sharply over the past year because of the OPEC-led cuts, which were boosted by a dramatic drop in Venezuelan production.
The prospects of renewed sanctions on Iran after US President Donald Trump pulled out of an international nuclear deal with Tehran have also boosted prices in recent weeks.
As a result, compliance with the deal to reduce output by 1.8 million bpd by the end of 2018 has been at 152 percent, sources said.
Amrita Sen, chief oil analyst at consultancy Energy Aspects, said: “Addressing overcompliance was always likely to be on the agenda amid a tight market and low inventories, but the volume to bring back is still up for debate.”

HIGHER PRICES AT A COST
While Russia and OPEC benefit from higher oil prices, up almost 20 percent since the end of last year, their voluntary output cuts have opened the door to other producers to ramp up production and gain market share.
US crude oil production has risen by more than a quarter in the past two years, to 10.73 million bpd. Only Russia produces more, at about 11 million bpd.
Output from the likes of the United States, Canada and Brazil, which are not bound by the OPEC/Russian-led pact, is likely to rise further as crude prices rise.