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Post by mullahpaloozer on Jul 8, 2015 17:05:40 GMT -4
www.reuters.comMarkets | Wed Jul 8, 2015 3:51pm EDT U.S. crude falls more than 1 percent on surprise stockpile buildNEW YORK | By Barani Krishnan Reuters/Lucy Nicholson/Files U.S. crude futures fell more than 1 percent on Wednesday after a surprise build in stockpiles while gasoline rallied on bets for strong fuel demand through the peak summer driving season.
The U.S. Energy Information Administration said inventories rose last week for crude, gasoline and distillates. That surprised market players a day after industry group the American Petroleum Institute had reported a draw of 1 million barrels. Analysts polled by Reuters had forecast a crude draw of 700,000 barrels.
"We were not supposed to be building crude inventories in early July. This tells me the data will be additive to the macro-based selloff and perhaps make it worse," said David Thompson, executive vice president at Powerhouse, an energy-specialized commodities broker in Washington.
Earlier this week, oil prices tumbled to three-month lows on worries about the impact of Greece's debt woes and China's stock market plunge on the world economy and fuel demand.
Oil prices also felt pressure from Iran's eagerness to seal a nuclear accord that will allow it to resume crude exports without sanctions into an already glutted global market. U.S. crude's front-month contract CLc1 settled down 68 cents, or 1.3 percent, at $51.65 a barrel. It had fallen on Tuesday to $50.58, its lowest since April 8.
Brent LCOc1 settled up 20 cents, or 0.4 percent, at $57.05, bucking the trend in U.S. crude for a second straight day.
Gasoline was the day's outlier, rallying 2.5 percent. The gasoline crack CL-RB1=R, or profit refiners get for producing the fuel from crude, hit a 3-month high as U.S. crude prices went the opposite way. "The forward WTI is making new lows and is starting to look cheap if you have a longer-term time horizon," Thompson said, referring to the widening discount between nearby and farther-dated in the benchmark U.S. West Texas Intermediate crude.
In China, the world's second-largest oil consumer, the stock market fell again, with the country's securities regulator speaking of "panic sentiment" among investors. Greece, meanwhile, has been given until Sunday to come up with sweeping reforms for loans and to stay with the euro currency.
"Turmoil in China and Greece may put recent robust demand growth at risk," Morgan Stanley's oil analysts wrote.
In Vienna, nuclear talks between Iran and six global powers went beyond Tuesday's deadline. Market bulls fear an onslaught of Iranian crude supply from sanctions being lifted if a nuclear deal goes through.
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Post by mullahpaloozer on Jul 10, 2015 9:44:37 GMT -4
Fri Jul 10, 2015 4:14am EDT
Oil may have further to fall due to oversupply: IEA
LONDON | By Dmitry Zhdannikov and Christopher Johnson
Reuters/Lucy Nicholson
Oil prices are set to come under further pressure from easing global demand and an expanding glut of crude while a rebalancing of the markets may last well into next year, the West's Energy watchdog said on Friday.
The International Energy Agency (IEA) said it expected global demand growth to slow next year to 1.2 million barrels per day (bpd) from 1.4 million this year - far less than needed to balance stubbornly growing non-OPEC and OPEC supply.
"The bottom of the market may still be ahead," the IEA said in its monthly report.
"The rebalancing that began when oil markets set off on an initial 60 percent price drop a year ago has yet to run its course. Recent developments suggest that the process will extend well into 2016."
"The oil market was massively oversupplied in the second quarter of 2015, and remains so today. It is equally clear that the market’s ability to absorb that oversupply is unlikely to last. Onshore storage space is limited. So is the tanker fleet ... Something has to give," it said.
The global glut arose from a steep spike in U.S. oil supply on the back of the shale revolution and OPEC's decision not to reduce output but rather to fight for market share with rival producers. But the fall in prices to $50-$60 per barrel in recent months from as high as $115 a year ago has yet to depress North American supply.
"The expected timing of the rebalancing has shifted a bit, but the story line has not changed. The supply response to lower prices is on the way," the IEA said, adding it may take another price drop for a full supply response to unfold.
"Cost savings, efficiency gains and producer hedging have let light tight oil producers defy expectations until now, but growth ground to a halt in May and will likely stay there through mid-2016," it said. U.S. supply grew by 1.0 million bpd in the first five months of 2015, down from 1.8 million in 2014, according to the IEA.
"Total U.S. supply will keep growing through 2016, but much more slowly than in 2014, and thanks to natural gas liquids and new deepwater plays rather than onshore crude supply," it said.
Non-OPEC supply as a whole, after expanding by a massive 2.4 million bpd in 2014, looks on track to slow to growth of 1 million bpd in 2015 and stay flat in 2016, the IEA said. Among other bearish signals, the IEA said world oil demand growth appeared to have peaked in the first quarter of 2015 at 1.8 million bpd and would continue to ease throughout the rest of this year and into next.
That means the need for OPEC's oil will stand at 30.3 million bpd next year, up 1 million bpd on 2015, but still a whopping 1.4 million bpd below current OPEC production.
"And the group is not slowing down," the IEA said. "On the contrary, its core Middle East producers are pumping at record rates and the outlook for Iraqi capacity growth – accounting for most projected OPEC expansions – keeps improving."
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Post by mullahpaloozer on Jul 17, 2015 10:25:33 GMT -4
Markets | Fri Jul 17, 2015 7:25am EDT Oil flat, weak dollar offsets supply glut
LONDON | By Simon Falush
Reuters/Lucy Nicholson
Brent crude oil steadied on Friday in low trading volumes after sharp losses earlier in the week on expectations of increased exports from Iran adding to an already heavy supply glut.
Brent crude LCOc1 was up 9 cents at $57.01 by 1120 GMT (0720 EDT). Front-month U.S. crude futures CLc1 were trading at $50.83 per barrel, down 8 cents from their last settlement.
"With the Iran deal people are aware there is more supply coming so all impetus for a price correction higher has gone," said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam.
Iran has started to ship oil to Asia that it had been storing offshore for months after Tehran and six world powers reached a landmark nuclear deal on Tuesday, clearing the way for an easing of international sanctions on Iran. Trading volumes were well below average with many traders in Europe away for the summer break and Singapore closed for a public holiday.
Brent is almost 3 percent lower for the week and on track for a third week of declines. This would be the longest such losing streak since January. It is down more than 10 percent so far this month U.S. crude is also heading for a third weekly decline and is down 3.6 percent this week. It has lost nearly 15 percent this month, it's biggest such slump since December.
Expectations of around 500,000 barrels per day more oil coming from Iran by the first half of next year, combined with rising U.S. shale production and high OPEC exports, have helped cut oil prices by nearly half from their year-ago level. Britain's North Sea Buzzard oilfield ramped up after an outage that started on Wednesday night. The outage slightly pushed up Brent as oil from the field contributes to the calculation of the benchmark's price.
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Post by mullahpaloozer on Jul 20, 2015 8:50:17 GMT -4
Markets | Mon Jul 20, 2015 7:28am EDT
Oil drops on concerns of glut in refined products
LONDON | By Ron Bousso
Reuters/Rick Wilking
Oil dropped on Monday as signs of a growing glut in refined products outweighed a fall in Saudi crude exports and slower U.S. rig activity.
Crude prices have fallen for three weeks in a row on expectations of increased oil sales from Iran following a deal to ease sanctions against the OPEC producer.
Brent crude for September was down 35 cents at $56.75 a barrel by 1100 GMT. The benchmark fell nearly 3 percent last week and is down more than 10 percent so far this month.
U.S. crude futures for August were down 13 cents at $50.76 a barrel. The August contract expires on Tuesday.
The dollar's strengthening added further pressure as it makes dollar-priced commodities more expensive for investors using other currencies. Saudi Arabia's crude exports fell in May to their lowest since December, with official data showing daily shipments at 6.935 million barrels per day (bpd) compared with 7.737 million bpd in April, despite record-high output of over 10 million bpd.
In the United States, drillers cut seven oil rigs last week following two weeks of increases, according to a closely watched report by oil services company Baker Hughes Inc.
However, as refineries around the world continue to operate at near maximum levels to benefit from strong profit margins, there are signs a glut in the crude oil market may be shifting to refined products. "The big fall in U.S. rig counts since last September has not had a negative impact on domestic production and the reduction in Saudi crude oil exports is due to domestic refinery demand as the Kingdom is turning into a significant product exporter," analysts at PVM wrote.
Refined product inventories at Europe's Amsterdam-Rotterdam-Antwerp storage hub rose to an all-time record last week.[ARA/] Strong increases in refinery operations in recent months are set to slow in the second half of this year, hitting demand for crude oil, Vienna-based consultancy JBC Energy said:
"We expect global crude runs to be in the process of peaking for this year."
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Post by mullahpaloozer on Jul 27, 2015 11:19:12 GMT -4
Markets | Mon Jul 27, 2015 9:08am EDT
Oil hits four-month low on China stocks rout, supply glut
LONDON | By Karolin Schaps
Reuters/Lucy Nicholson
Oil hit four-month lows on Monday after a steep drop in Chinese stock markets spread concerns about the economic health of the world's biggest energy consumer and more evidence emerged of a global supply glut.
Chinese stocks tumbled more than 8 percent on Monday, the biggest one-day drop in eight years, showing an unprecedented government rescue effort to prop up valuations has run out of steam.
"Today's oil price fall has been driven by the slump in Chinese stock markets," said Carsten Fritsch, senior oil market analyst at Commerzbank in Frankfurt.
Front-month Brent crude LCOc1 fell to an intraday low of $53.36 a barrel, its lowest in more than four months and down $1.26 on the previous close.
It last traded at $53.52, down $1.10, at 1245 GMT. On Friday, Brent closed at $54.62, its lowest finish since March 19.
U.S. crude for September CLc1 was down 80 cents at $47.34 a barrel. China is the world's biggest energy consumer and a huge oil importer. Investors worry that a stock market crash could destabilize the Chinese economy and cut fuel demand.
Global oil supplies are ample, with major oil producers in the Middle East Gulf competing for market share and pumping 2-3 percent more oil than needed, analysts say.
Oil market speculators have also cut their bets on a longer-term rise in oil prices, InterContinental Exchange data showed. Hedge funds and money managers cut their net long positions on Brent futures for the first time in four weeks in the week to July 21. In a further sign that the oil supply glut is here to stay, weekly U.S. drilling rig data showed on Friday that 21 oil rigs had been added, the highest gain since April 2014.
In Iraq, exports from its southern oilfields are on course for a monthly record, having topped 3 million barrels per day so far this month.
"In the next couple of months, even if the global oversupply and seasonal weakness are becoming priced in, it is difficult to see where any price uplift will come from," said Societe Generale oil analyst Michael Wittner. Investors were also looking to the U.S. Federal Reserve for direction this week. The central bank on Tuesday starts a two-day policy meeting, which could result in a September interest rate increase that would strengthen the dollar.
"There is scope for the dollar bulls to be disappointed this week (which) might be a driver for oil prices and the commodities complex overall," said Ben Le Brun, market analyst at Sydney's OptionsXpress.
A weaker dollar makes dollar-denominated commodities, including oil, cheaper for consumers using other currencies.
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Post by mullahpaloozer on Jul 28, 2015 9:20:31 GMT -4
Markets | Tue Jul 28, 2015 7:02am EDT
Oil prices fall to lowest in nearly six months
LONDON | By Amanda Cooper
Reuters/Yves Herman
"The world is awash with oil."
Oil prices fell to their lowest in nearly six months on Tuesday, as a rout in the Chinese stock market cast further doubt over the outlook for crude demand in the world's top commodities consumer.
China's already-volatile benchmark stock index, with a combined market capitalization of $4.6 trillion, has lost 10 percent in the last two days of trade.
Most household debt is linked to real estate rather than the stock market, but with Chinese economic growth struggling to stick at 7 percent, analysts say demand for crude may not be enough to help mop up a global supply glut.
"Typically, equity markets do have a high correlation to quarterly GDP growth," Deutsche Bank strategist Michael Lewis said.
"Naturally, there is some risk that this could spill into the real economy. The more these things go down on a day-by-day basis, that is starting to affect the potential of Chinese demand growth being weaker."
Brent was down 72 cents at $52.75 a barrel by 1054 GMT, having hit a session low of $52.28, its lowest since early February, bringing the losses for July to nearly 18 percent.
Brent crude is on track for its longest stretch of daily losses since March, when the price hovered just dollars away from six-year lows.
U.S. crude was last down 33 cents at $47.06 a barrel after ending the previous session down 75 cents.
Adding to the uncertainty over the health of the Chinese economy is concern about rising global oil production in a market already oversupplied by some 2 million barrels a day.
Investors are watching for weekly data on U.S. inventory levels to gauge the strength of demand.
U.S. commercial crude oil stocks likely slipped last week after crossing the five-year seasonal average build in the previous week, a preliminary Reuters poll of analysts showed ahead of industry and official weekly reports.
Crude stocks fell about 300,000 barrels to 463.6 million barrels in the week ended July 24, analysts estimated.
"We're not seeing the level of demand in the U.S. one usually expects related to the summer drive-time," said Jonathan Barratt, chief investment officer at Sydney's Ayers Alliance.
"The world is awash with oil."
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