OIL, NATURAL GAS

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Re: OIL, NATURAL GAS

Post by thelivyjr » Wed Apr 07, 2021 1:40 p

Investing.com

"Oil Inventories Fall by 2.6M Barrels Last Week: API"


By Yasin Ebrahim

Apr 06, 2021

Investing.com - U.S. crude stockpiles fell last week, but rising product inventories continue to suggest the demand outlook remains far from robust despite signs the global recovery remains intact.

West Texas Intermediate, the benchmark for U.S. crude prices, rose $0.63 a barrel on the news, after settling up $0.68 at $59.33 a barrel.

U.S. crude inventories fell by 2.6 million barrels for the week ended April 1, according to an estimate released Tuesday by the American Petroleum Institute.

That compared with a build of 3.9 million barrels reported by the API for the previous week.

The API also showed that gasoline inventories increased by about 4.5 million last week, compared with a 6 million draw in the prior week, and distillate stocks rose by about 2.8 million barrels.

Oil prices were boosted intraday as investors cheered news on the global recovery and ongoing signs of reopening progress in the U.S.

The International Monetary Fund lifted its global growth forecast to 6% in 2021, up from its prior forecast of 5.5%, citing the ongoing progress of the vaccine deployment worldwide.

The IMF forecast the euro zone to grow 4.4% in 2021.

The faster roll out of vaccines in the U.S. continues to spur the reopening process, with California Governor Gavin Newsom saying the state will lift most restrictions by June 15.

The official government inventory report due Wednesday is expected to show weekly U.S. crude supplies fell by about 1.44 million barrels last week.

https://www.investing.com/news/commodit ... pi-2467411

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Re: OIL, NATURAL GAS

Post by thelivyjr » Thu Apr 08, 2021 1:40 p

RIGZONE

"Oil Prices Close Higher As USA Reopening Intensifies"


by Bloomberg | Andres Guerra Luz & Alex Longley

Wednesday, April 07, 2021

(Bloomberg) -- Oil edged higher alongside broader markets as reopening efforts gained traction in the U.S. and helped ease concerns over virus-related setbacks elsewhere.

Futures in New York gained for a second straight session after choppy trading on Wednesday.

New York City beaches will open for Memorial Day weekend, highlighting the progress major cities in the world’s largest oil consuming country are making toward a complete reopening.

At the same time, even though domestic gasoline stockpiles rose more than 4 million barrels last week amid a surge in imports, a gauge for demand of the fuel continued its upward trend.

The Energy Information Administration report also showed crude inventories fell for a second week, bringing stockpiles to a five-week low.

“It’s a battle for whether we’ll get a full summer driving season,” said John Kilduff, a partner at Again Capital LLC.

“It’s going to be a close call, but there’s a bias in favor of there being one given the pace of vaccine rollouts.”

U.S. benchmark crude futures have been stuck in a roughly $4-a-barrel range since the middle of March as fresh lockdowns in Europe offset stronger demand in the U.S. and China.

The four-week average for gasoline supplied in the U.S. -- a proxy for consumption -- ticked up to the highest since September, the EIA report showed.

The gauge has increased for each of the past six weeks.

“The U.S. has been making really good Covid progress, while challenges remain in Europe surrounding the vaccine rollout and the spike in cases,” said Brian Kessens, a portfolio manager at Tortoise, a firm that manages roughly $8 billion in energy-related assets.

“If there’s a silver lining, Europe from a lockdown perspective is likely being more aggressive now so that the summer does look that much brighter.”

Prices

West Texas Intermediate for May delivery rose 44 cents to settle at $59.77 a barrel.

Brent for June settlement gained 42 cents to end the session at $63.16 a barrel.

The spread between Nymex gasoline futures against WTI crude slumped back below $23 a barrel after the EIA report, with refineries running at the highest capacity since March 2020 and the U.S. importing the most gasoline since May 2019.

Oil prices also found support late in the session as U.S. equities staged a comeback from session lows.

Minutes from the latest Federal Reserve meeting show officials see some time before conditions would be met for scaling back its massive asset-purchase campaign.

Investors are also watching for developments on AstraZeneca Plc’s Covid-19 vaccine, with the U.K. now advising those under the age of 30 to be offered an alternative shot if available.

“Oil demand is expected to recover further from the second part of 2021, but these expectations are based on the assumption that enough people will be vaccinated by then to justify the return to normality,” said Louise Dickson, an oil markets analyst at Rystad Energy AS.

“The oil market recovery could lose speed, resulting in 2021 demand ending as much as 1 million barrels per day lower than where it would under a smooth vaccine rollout.”

Related News

An Iranian-flagged vessel was attacked in the Red Sea, Iran’s Foreign Ministry said, on the same day Tehran and world powers met to discuss restoring the 2015 nuclear deal.

Royal Dutch Shell Plc said it expects to make the first profit from pumping oil since the start of the pandemic.

The company also said its Pernis refinery is repairing a unit struck by lightning.

Passenger car traffic in Poland was down 19% versus two years ago in the week ended April 4, compared with smaller gaps of 16% and 12% in the two prior weeks, according to data from automatic measurement stations on highways and motorways.

--With assistance from Sheela Tobben and Jeffrey Bair.

https://www.rigzone.com/news/wire/oil_p ... 5-article/

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Re: OIL, NATURAL GAS

Post by thelivyjr » Thu Apr 08, 2021 1:40 p

RIGZONE

"WTI Edges Downward"


by Bloomberg | Andres Guerra Luz

Thursday, April 08, 2021

(Bloomberg) -- Oil closed lower, yet its underlying market structure firmed, as investors assessed the challenges to a global economic recovery.

West Texas Intermediate crude futures slipped 0.3% on Thursday after a choppy session.

Despite fluctuations in headline prices, the oil futures curve is showing strength.

The premium on the nearest global benchmark Brent contract rose to the highest in a week against the following month.

The bullish backwardation structure indicates tightening supplies.

WTI’s so-called prompt spread also strengthened.

Yet, signs of a mixed economic recovery pressured benchmark crude.

In the U.S., where a rebound in consumption is occurring amid a widespread vaccine rollout, jobless claims unexpectedly rose, highlighting the choppy road ahead.

Meanwhile, India, the world’s third-biggest oil importer, reported a record number of daily Covid-19 cases, and several nations including the Netherlands are limiting the use of a Covid-19 vaccine due to potential complications.

“The market’s waiting to see which way this goes,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management.

“The question is, is demand really recovering enough to absorb the increase in OPEC output?”

U.S. benchmark crude futures have been stuck in a narrow band around $60 a barrel in recent weeks.

While signs of demand picking up in places like the U.S. has buoyed sentiment, fresh Covid-19 outbreaks and renewed lockdowns in other parts of the world have acted as a counterweight.

Despite recent price setbacks, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said the country remains confident in its decision to gradually increase production.

“CTA and momentum funds remain directionally long oil futures, but have pared down position sizes in recent days and weeks due to elevated market volatility and a stronger U.S. dollar,” said Ryan Fitzmaurice, commodities strategist at Rabobank.

These factors are starting to reverse, which could signal that the liquidation phase is nearing an end for CTAs, he said.

Prices

WTI for May delivery slipped 17 cents to settle at $59.60 a barrel.

Brent for June settlement gained 4 cents to end the session at $63.20 a barrel.

With virus cases continuing to flare up, the chances of a simultaneous reopening of the global economy over the northern-hemisphere summer have decreased, RBC Capital Markets analysts wrote in a report.

However, it is possible that an easing of lockdowns could be phased around the world over that period, they said, aiding the market as fall approaches.

Facts Global Energy increased its estimate for global oil demand growth this year to 6 million barrels a day, up 75,000 barrels a day from its previous forecast.

Yet, U.K. government modeling shows a relaxation in restrictions may lead to more hospitalizations and deaths, FGE said.

If applied to the rest of the world, such a scenario would see a significant slowdown in the consumption recovery.

Meanwhile, developments on discussions between Iran, the U.S. and other world powers surrounding the revival of a 2015 nuclear deal are adding further complexity to the market’s supply and demand equation.

Iran’s chief negotiator at the talks in Vienna said the sides were focusing on removing U.S. sanctions in a single step, according to a statement that didn’t specify what Tehran was offering in return.

The U.S. hasn’t yet responded to the comments.

Related news

The Bakken oilfield in North Dakota, once the crown jewel of U.S. shale, is losing its luster, Goldman Sachs Group Inc. warned.

U.S. oil and gas producers may be able to borrow slightly more from banks this spring as the industry recovers from its pandemic-driven downtown, according to a survey by law firm Haynes and Boone.

In Europe, the slump in driving has seen gasoline prices rise as local refineries increase exports -- but make less -- of the fuel.

--With assistance from Jack Wittels and Alex Longley.

https://www.rigzone.com/news/wire/wti_e ... 5-article/

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Re: OIL, NATURAL GAS

Post by thelivyjr » Fri Apr 09, 2021 1:40 p

RIGZONE

"Oil Fluctuates as Saudis Confident on OPEC+ Hike"


by Bloomberg | Alex Longley, Jack Wittels

Friday, April 09, 2021

(Bloomberg) -- Oil switched between gains and losses after Saudi Arabia said it was confident that OPEC+ was right in agreeing to raise output, while India posted its strongest oil consumption in 15 months.

West Texas Intermediate fluctuated, though prices remained within the $5 range they’ve been holding since around mid-March.

India’s oil-products demand in March was the strongest since late 2019 -- with gasoline use jumping the most since 2013 -- even as the country saw Covid-19 cases soar.

Oil is headed for a weekly decline, with the demand backdrop still mixed.

While the rollout of vaccines has shown signs of boosting consumption in places like the U.S. and U.K., cases continue to spread elsewhere.

Japan is set to reimpose lockdowns in Tokyo, Kyoto and Okinawa.

Saudi Energy Minister Prince Abdulaziz bin Salman said Thursday he’s yet to see anything disturbing in the market after the Organization of Petroleum Exporting Countries and its allies agreed to hike output last week.

While consumption remains patchy, the market is indicating possible supply tightness with Brent crude futures’ nearest timespread surging on Thursday.

The market’s structure has firmed as limited OPEC+ supply additions contribute to a reduction in oil inventories, said Kevin Solomon, an analyst at brokerage StoneX Group.

Nevertheless, “it has been a quiet week for the oil complex with respect to price action.”

Crude in New York has been hemmed into a narrow range around $60 a barrel since mid-March.

OPEC+ plans to reintroduce more than 2 million barrels a day to the market over the coming months and, further out, there’s concern Iranian barrels may also return to swell supplies.

Prices

WTI for May delivery fell 0.6% to $59.26 a barrel at 8:51 a.m. in New York.

Brent for June dropped 0.7% to $62.74 a barrel.

With OPEC+ reinstating some of its output cuts, “upside potential for oil prices seems limited,” said Hans van Cleef, a senior oil analyst at ABN Amro.

Still, with demand set to recover, “investors see the light at the end of the tunnel, and thus keep some of their long positions.”

Related news

U.S. gasoline consumption is set to take off this summer, boosted by pent-up travel demand.

Iran’s chief negotiator at nuclear talks in Vienna said the sides were focusing on removing U.S. sanctions in a single step.

Mexico is “comfortable” with its oil hedge price at the 2021 level, according to Deputy Finance Minister Gabriel Yorio.

--With assistance from Saket Sundria.

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Re: OIL, NATURAL GAS

Post by thelivyjr » Mon Apr 12, 2021 1:40 p

RIGZONE

"Oil Prices Show Modest Gains"


by Bloomberg |Andres Guerra Luz

Monday, April 12, 2021

(Bloomberg) -- Oil pared gains with prices struggling to break out of its recent trading range as the market considers the jagged outlook for global fuel consumption.

Futures in New York closed 0.6% higher on Monday after rising as much as 2.4% during the session.

An uneven consumption outlook continues to hold oil prices back from rallying significantly past $60 a barrel.

Even as fuel demand strengthens in countries like India and the U.S., it is far from a steady recovery worldwide as Covid-19 infections surge and lockdowns are renewed in parts of the Middle East and Europe.

“The concerns over economic recovery are just too strong” for a sustained push higher at this point, said Gary Cunningham, director at Stamford, Connecticut-based Tradition Energy.

“We need to see some real positive numbers come out of economic growth before we can push away from $60 on WTI.”

Meanwhile, Yemen’s Houthis said they attacked oil facilities in Saudi Arabia, as the group steps up strikes on the kingdom.

While such attacks have increased this year, they rarely claim lives or cause extensive damage.

Oil in New York has remained trapped near $60 a barrel since mid-March as traders look for more signs of a recovery in consumption from the pandemic.

Trading volumes have slumped -- falling below their 15-day average every day last week -- as the market awaits a breakout.

In the meantime, the OPEC+ alliance agreed to add more barrels from May.

“It is U.S. optimism that is helping the oil market, as developments in other parts of the world are not moving toward the same direction,” said Louise Dickson, an oil markets analyst at Rystad Energy AS.

“Populous countries like India and Brazil are seemingly getting deeper in trouble than ever before, failing to deliver on hopes for a quick economic recovery.”


Prices

West Texas Intermediate for May settlement rose 38 cents to settle at $59.70 a barrel.

Brent for June settlement climbed 33 cents to end the session at $63.28 a barrel.

There are already signs emerging of the potential impact of a steady reopening in the U.S. on consumption, even in the beleaguered airline industry.

United Airlines Holdings Inc. said it saw an acceleration in customer demand in March, while U.S. air passenger numbers remain near their highest level since March.

However, the downside for jet fuel refining margins will likely last into 2022 with international air travel lagging the recovery in the U.S., according to Bank of America Global Research.

The broader outlook for the oil market may be getting weaker further down the line, Morgan Stanley analysts Martijn Rats and Amy Sergeant wrote in a report.

That’s because Iranian supply may return quicker than expected, while U.S. drilling activity has continued to increase.

It means price gains later this year could be limited, they said.

Still, a revival in the 2015 nuclear deal will have to overcome increasing hurdles.

In the latest potential complication for talks, the Persian Gulf country said it will respond to attacks on its largest uranium enrichment plant with further development of nuclear progress.

Other oil-market news:

Saudi Arabia will supply all the crude oil that was requested by India’s state-owned refiners and at least five other Asian customers next month as the linchpin producer starts to ramp up output.

An Abu Dhabi sovereign wealth fund may join a group investing in Saudi Aramco’s oil pipelines, in a deal set to be backed by a loan of around $10.5 billion, though the CEO said it hasn’t made a final decision yet.

Iraq raised crude pricing for all three of its oil grades for sale to Asia in May and cut pricing for those same three grades to the U.S., according to a statement from state marketer SOMO.

--With assistance from Alex Longley and Grant Smith.

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Re: OIL, NATURAL GAS

Post by thelivyjr » Tue Apr 13, 2021 1:40 p

RIGZONE

"Oil Prices Get Bump from OPEC Demand Optimism"


by Bloomberg | Andres Guerra Luz

Tuesday, April 13, 2021

(Bloomberg) -- Oil closed at the highest in over a week after OPEC boosted its expectation for this year’s demand recovery, while signs continue to emerge of rising fuel consumption in parts of the world.

Futures rose 0.8% in New York on Tuesday, settling above $60 a barrel for the first time since early April.

OPEC raised its forecast for oil consumption by 190,000 barrels a day for 2021, though lowered its outlook for the second quarter.

Traders are also watching for signs of a robust demand rebound in the U.S., the world’s top oil-consuming country.

In New York City, toll bridges and tunnels are on pace for the busiest April in at least seven years.

At the same time, inflation data showed the biggest increase since 2012 as signs of an economic rebound grow.

“There’s going to be tremendous pent-up demand for crude,” said Edward Moya, senior market analyst at Oanda Corp.

“There are some areas that are seeing cases trend higher, but the restrictions are going to be short-lived as vaccines get distributed.”

Despite early signs that travel demand is starting to materialize, prices have yet to break out of the narrow trading range they’ve been stuck in since mid-March.

A measure of market volatility slumped to the lowest since February for West Texas Intermediate futures, while aggregate trading volume in the benchmark remained below its 15-day moving average for a seventh straight session.

The market is still contending with spreading near-term demand concerns because of the resurgence of the virus.

A flare-up of Covid-19 cases is leading to renewed restrictions in countries like India, where streets are emptying again as the nation tackles a new wave of infections.

Meanwhile, U.S. health officials called for an immediate pause in use of Johnson & Johnson’s single-dose Covid-19 vaccine on worries over a rare and severe form of blood clotting.

“For things to open back up just like they normally were, it’s going to take some time,” said Tariq Zahir, managing member of the global macro program at Tyche Capital Advisors LLC.

“The biggest issue going forward is getting as many people vaccinated as possible.”

Prices

West Texas Intermediate for May delivery added 48 cents to $60.18 a barrel, the largest daily gain in a week.

Brent for June settlement rose 39 cents to $63.67 a barrel.

The Organization of Petroleum Exporting Countries and it allies will be returning about 2 million barrels a day of output from May to July.

More than half of the increase will be provided by OPEC’s de facto leader, Saudi Arabia, which has been making extra cutbacks to help clear the lingering glut.

Rising demand means stockpiles should continue to diminish, the group indicated in a monthly report on Tuesday.

But rising output elsewhere could complicate the balance.

Crude production next month in the Permian Basin, the most prolific U.S. shale patch, is expected to reach levels not seen since the start of the pandemic.

Meanwhile, U.S. crude stockpiles are expected to have fallen last week, according to a Bloomberg survey.

The industry-funded American Petroleum Institute will report its figures later Tuesday ahead of the U.S. government’s weekly storage figures on Wednesday.

Other oil-market news:

Iran vowed to ramp up its uranium enrichment to close to weapons grade in retaliation for an attack on one of its leading atomic facilities, sending a jolt through big power talks on containing the Islamic Republic’s nuclear work due to resume later this week.

An Israeli-owned ship was “slightly damaged” by an Iranian missile in the Arabian Sea, Al Arabiya TV reported, days after Iran accused Israel of assaulting one of its nuclear facilities.

The battle for oil sales is set to become more intense as rising output from OPEC+ and the Middle East boosts the competitiveness of the region’s shipments, potentially forcing other suppliers to discount their barrels.

A general close to Brazilian President Jair Bolsonaro is poised to take the reins at Brazil’s state-controlled oil giant in a leadership change that has dismayed investors.

--With assistance from Alex Longley and Jack Wittels.

https://www.rigzone.com/news/wire/oil_p ... 1-article/

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Re: OIL, NATURAL GAS

Post by thelivyjr » Tue Apr 13, 2021 1:40 p

INVESTING.com

"Oil Inventories Fell by 3.6M Barrels Last Week: API"


By Yasin Ebrahim

Apr 13, 2021 04:48PM ET

Investing.com - U.S. crude stockpiles fell last week, but product gasoline inventories increased for a second-straight week to add further uncertainty on the outlook for product demand at time when a vaccine setback has clouded optimism over the reopening.

West Texas Intermediate, the benchmark for U.S. crude prices, rose $0.69 a barrel on the news, after settling up $0.48 at $60.18 a barrel.

U.S. crude inventories fell by 3.6 million barrels for the week ended April 8, according to an estimate released Tuesday by the American Petroleum Institute.

That compared with a draw of 2.6 million barrels reported by the API for the previous week.

The API also showed that gasoline inventories increased by about 5.6 million last week, compared with a 4.5 million build in the prior week, and distillate stocks fell by about 3.0 million barrels.

Oil prices ended higher on the day, but upside was kept in check by concerns that a setback for Johnson & Johnson's vaccine will delay the economic reopening, slowing the recovery in energy demand.

The official government inventory report due Wednesday is expected to show weekly U.S. crude supplies fell by about 2.89 million barrels last week.

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Re: OIL, NATURAL GAS

Post by thelivyjr » Wed Apr 14, 2021 1:40 p

RIGZONE

"Oil Prices Break Out of Holding Pattern"


by Bloomberg | Andres Guerra Luz

Wednesday, April 14, 2021

(Bloomberg) -- Oil surged to the highest level in a month -- breaking out of a weeks-long holding pattern -- as shrinking crude stockpiles in the U.S. supported hopes for a global demand recovery.

Futures rose 4.9% in New York, the most since late March, after trading in a $5 range for weeks.

U.S. crude inventories are at the lowest since February following the biggest decline in two months, according to the Energy Information Administration.

At the same time, a gauge for gasoline demand ticked higher for a seventh straight week.

That’s helped prices that have struggled to rally past $60 a barrel.

“There’s always bearish factors in any market, but now that we’ve broke out to the upside, it likely means we’re going to retest the old highs, if not go through them,” said Bill O’Grady, executive vice president at Confluence Investment Management in St. Louis.

Both U.S. and global benchmark crude futures have also topped their 50-day moving averages.

The stronger outlook for U.S. demand, along with improvements in China, earlier drove the International Energy Agency to lift its forecast for oil consumption this year.

The IEA report follows similar moves by the U.S. Energy Information Administration and the Organization of Petroleum Exporting Countries to increase demand estimates for 2021.

All three pointed to an improving economic outlook and the rapid roll-out of vaccines, particularly in the U.S.

Prices

West Texas Intermediate for May rose $2.97 to settle at $63.15 a barrel.

Brent for June settlement gained $2.91 to end the session at $66.58 a barrel.

Both benchmarks posted the largest daily gain since March 24.

The EIA report showed the four-week rolling average of U.S. gasoline supplied has been on a multi-week climb back toward 9 million barrels a day, while refineries have been processing crude at the highest level since the early days of the pandemic.

That comes as New York City toll traffic is set for its busiest April in at least seven years, while some see nationwide gasoline consumption having a record summer.

A measure of jet fuel demand topped 1 million barrels a day last week for the fifth straight week, as Transportation Security Administration daily passenger data shows foot traffic above the 1 million every day since early March.

“The crude draw and the very slight increase in gasoline inventories speaks to the whole setup of recovering demand and balancing inventories,” said Quinn Kiley, a portfolio manager at Tortoise, a firm that manages roughly $8 billion in energy-related assets.

“It’s a stark difference compared to this time last year.”

It’s not just the U.S. that’s seeing green shoots of a return to normal consumption.

Data from the U.K. showed road use was at 91% of pre-pandemic levels on Monday, the strongest daily reading since November.

Meanwhile, in lifting its demand outlook, the IEA noted strength in other key demand hubs.

Japan, for example, saw its oil demand top pre-pandemic levels for the second month in a row in February.

Other oil-market news:

Saudi Arabia is celebrating one of the biggest foreign-investment windfalls in its history after netting more than $12 billion by selling off a stake in the oil pipelines that traverse the desert kingdom.

U.S. shale producers risk another oil-price war with OPEC and its allies if they resume the breakneck production growth of the last decade, according to Pioneer Natural Resources Co.

West Africa’s oil exports due for loading next month have struggled to sell, due to weak demand from the region’s regular customers in Asia and Europe and tougher competition from rival suppliers.

Egypt seized the giant container vessel that blocked the Suez Canal last month as part of an effort to get more than $900 million in compensation.

--With assistance from Alex Longley.

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Re: OIL, NATURAL GAS

Post by thelivyjr » Thu Apr 15, 2021 1:40 p

RIGZONE

"Oil Prices Climb Higher"


by Bloomberg | Andres Guerra Luz & Alex Longley

Thursday, April 15, 2021

(Bloomberg) -- Oil extended its climb out of a month-long trading range with further signs of an accelerating rebound taking shape in the U.S.

Futures in New York inched up alongside a broader market rally, with prices trading at a one-month high.

U.S. jobless claims fell to a new pandemic-era low, while retail sales in the country accelerated by the most in 10 months -- providing the latest signs of the economic comeback gaining pace there.

“Prices are taking a little breather from the run-up we saw in the prior day,” said Phil Streible, chief market strategist at Blue Line Futures LLC in Chicago.

“But overall, increasing vaccinations and easing fears over the pandemic are giving the market a 'good shot at having a decent, steady rise.]”

Oil remains firmly above its most recent trading range, where it had been stuck near $60 a barrel since mid-March as some regions faced a resurgence in virus cases.

Continued signs of a stronger U.S. market are also pushing prices higher.

In the last week, the number of miles driven on the country’s interstates rose versus the same period in 2019 for the first time since the pandemic began.

Still, even after U.S. crude stockpiles fell to the lowest since February, portions of West Texas Intermediate’s forward curve continue to point toward near-term weakness.

The nearest contract still trades at a discount to the following month in a bearish pattern known as contango, which points toward oversupply.

“The demand outlook is brighter than it was, but there’s still plenty of spare capacity,” said Stewart Glickman, energy equity analyst at CFRA Research.

“If demand picks up considerably, producers can open the spigots and start to fill in the gaps.”

Prices

West Texas Intermediate gained 31 cents to settle at $63.46 a barrel.

Brent for June settlement rose 36 cents to $66.94 a barrel.

Both benchmarks are at the highest since March 17.

Crude’s sharp rally has been accompanied by gains in the market’s structure that continued into Thursday.

The much-watched spread between the nearest two December contracts is on track for its strongest close since late March.

That’s a sign that traders are growing more bullish on the market.

There are reasons to be cautious, however.

The pandemic is raging in countries such as India, which posted its largest one-day surge in new cases since the pandemic started.

Another wild-card is Iran, which is seeking to revive a 2015 nuclear deal that could pave the way for a return of more of the country’s down the line, though progress remains uncertain.

The demand picture in Europe is also wobbly, with toll road traffic in France last week the weakest since May.

The impact of the uneven global demand recovery is showing up in crude flows from Canada.

Canadian oil sellers are sending exports to the U.S. West Coast for the second time this month as a swift vaccine rollout in the U.S. is boosting consumption there while others face a more muted recovery.

Other oil-market news:

Saudi Arabia’s oil facilities were targeted with drones and missiles for the second time in a week, with Yemen’s Houthi rebels claiming an attack on the south-western refinery town of Jazan.

Royal Dutch Shell Plc’s planned spending on oil and gas production won’t maintain current output levels as it refocuses toward lower-carbon energy.

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Re: OIL, NATURAL GAS

Post by thelivyjr » Fri Apr 16, 2021 1:40 p

RIGZONE

"Crude Oil Prices Wrap Up Strong Week"


by Bloomberg | Andres Guerra Luz

Friday, April 16, 2021

(Bloomberg) -- Oil posted the biggest weekly gain since early March as signs emerged of a recovery from the pandemic gaining traction in the U.S. and China.

Futures in New York advanced 6.4% this week, despite eking out a small loss on Friday.

On the heels of robust economic figures out of the U.S., data from China showed its gross domestic product climbed 18.3% in the first quarter from a year prior as consumer spending beat forecasts.

In March, China’s refiners processed about 20% more crude than a year earlier, pointing to the strength of the country’s rebound.

JPMorgan Chase & Co. analysts brought forward their forecast for the global benchmark Brent hitting $70 a barrel again by four months to May, with a boost in U.S. demand likely bringing inventories for countries of the Organization for Economic Co-operation and Development in line sooner than expected.

“The world’s two largest economies are starting to really shine, and despite difficulties in Europe, they’re starting to get vaccinations going as well,” said Edward Moya, senior market analyst at Oanda Corp.

“Having Europe, China and the U.S. for the most part looking at a return to normalcy, that speaks wonders for the demand outlook, which is very supportive for higher prices.”

Prices this week escaped the narrow trading range they had been in for nearly a month, with upbeat developments out of the world’s two largest economies helping lift the outlook for demand.

The International Energy Agency joined the world’s major oil organizations in boosting its consumption forecasts earlier this week, with the IEA citing the improving situation in U.S. and China.

In Asia, a Chinese mega-refiner and some Japanese oil companies have been snapping up crude cargoes, boding well for the physical market.

With Asian buying picking up, gauges of market strength have also climbed.

Brent’s nearest timespread was in a bullish backwardation of 48 cents a barrel on Friday, compared with as little as 37 cents on Wednesday.

“We’re closing the gap on gasoline and jet fuel,” said Peter McNally, global head for industrials, materials and energy at Third Bridge.

“International travel is not coming back this summer, but as far as the two biggest markets go -- China and the U.S. -- it’s encouraging.”

Prices

West Texas Intermediate futures for May fell 33 cents to settle at $63.13 a barrel.

Brent for June settlement lost 17 cents to end the session at $66.77 a barrel.

The contract rose 6.1% this week.

Commodities faced a broad-based surge this week, with oil and metals both topping key technical levels alongside a weaker dollar and lower U.S. Treasury yields.

The 23-member Bloomberg Commodity Spot Index broke out to the highest since late February after hedge funds trimmed their net bullish positions for six straight weeks.

While the oil market is facing an increase in supply in the coming months, although the Organization of Petroleum Exporting Countries said this week that rising demand should allow for global stockpiles to deplete.

Exports of Russia’s flagship Urals crude are set to rise sharply in the first five days of May, a move that pressured swap markets tied to the grade.

Complicating the picture, talks are continuing between Iran and world powers over the revival of a 2015 nuclear agreement, a return to which could see the U.S. lift sanctions on the Persian Gulf nation’s oil exports.

Still, progress on the talks has been uncertain in recent days.

Despite strong recovery signals from China and the U.S., Covid-19 continues to slow growth elsewhere.

In India, refineries are diverting oxygen produced at their plants to hospitals to help battle a serious second wave, which has led to fuel sales tumbling during the first half of April compared with a month earlier.

Other oil-market news:

Russia may introduce a temporary ban on some fuel exports as the recent rally in crude feeds into domestic gasoline prices.

Commodities trader Trafigura Group will take back near-full control of its troubled Puma Energy subsidiary following the Angolan state oil company’s exit.

China’s ever-expanding oil refining capacity will increase competition among crude processors around the world and weigh on their margins, the nation’s biggest energy producer said.

The Biden administration is set to announce next week a plan for distributing billions of dollars more in aid to help developing nations adapt to global warming and embrace clean energy, according to people familiar with the matter.

--With assistance from Alex Longley and Jack Wittels.

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