MARKETWATCH
"API data show a weekly U.S. crude supply climb of nearly 9 million barrels, sources say"
By Myra P. Saefong
Published: May 27, 2020 at 4:46 p.m. ET
The American Petroleum Institute reported late Wednesday that U.S. crude supplies rose by 8.7 million barrels for the week ended May 22, according to sources.
The API data, which were released a day later than usual because of Monday's Memorial Day holiday, also reportedly showed gasoline stockpiles edged up by 1.1 million barrels, while distillate inventories climbed by 6.9 million barrels.
Crude stocks at the Cushing, Okla., storage hub fell by 3.4 million barrels for the week, sources said.
Inventory data from the Energy Information Administration will be released Thursday.
The EIA data are expected to show crude inventories fell by 1.2 million barrels last week, according to analysts polled by S&P Global Platts.
They also forecast a supply decline of 1 million barrels for gasoline and a stockpile increase of 2.5 million barrels for distillates.
July West Texas Intermediate crude was at $31.83 a barrel in electronic trading.
It was down from its settlement at $32.81 Wednesday on the New York Mercantile Exchange.
https://www.marketwatch.com/story/api-d ... latestnews
OIL, NATURAL GAS
Re: OIL, NATURAL GAS
MARKETWATCH
"Oil turns higher, waving off unexpected rise in crude stocks as gasoline inventories fall"
By William Watts
Published: May 28, 2020 at 3:30 p.m. ET
Oil futures reversed early losses to trade with strong gains Thursday, waving off data that showed an unexpected rise in U.S. crude inventories as traders focused on a fall in gasoline stocks and a further decline in crude stored at the New York Mercantile Exchange’s delivery hub in Cushing, Oklahoma.
West Texas Intermediate crude for July delivery rose 90 cents,or 2.7%, to finish at $33.71 a barrel on the New York Mercantile Exchange, while August Brent crude gained 55 cents per barrel, or 1.6%, to finish at $35.29 on ICE Europe.
The Energy Information Administration said inventories rose 7.9 million barrels in the week ended May 22.
Oil had been under pressure after the American Petroleum Institute late Wednesday reported that crude inventories rose 8.7 million barrels last week.
Analysts surveyed by S&P Global Platts had expected the more closely followed EIA report to show crude inventories fell by 1.2 million barrels.
The rise in inventories reflected a surge in imports of oil from Saudi Arabia as a much publicized flotilla of tankers carrying crude from the kingdom begin to arrive, a legacy of the short-lived price war between the Saudis and Russia that amplified a collapse in crude prices in March and April.
Matt Smith, director of commodity research at ClipperData, said imports of Saudi crude into the U.S. Gulf Coast were at 2.05 million barrels a day last week — a record clip.
Meanwhile, gasoline stocks fell 700,000 barrels, while distillates were up 5.5 million barrels.
The S&P Global Platts analysts had forecast a supply decline of 1 million barrels for gasoline and a stockpile increase of 2.5 million barrels for distillates.
Crude supplies at Cushing, Oklahoma, the New York Mercantile Exchange delivery hub, fell 3.4 million barrels.
The data showed gasoline demand was up 463,000 barrels a day, or 6.8% to 7.253 million barrels a day, but still down 22.8% from last year, noted Robert Yawger, director of energy at Mizuho Securities U.S.A., in a note.
“WTI initially traded to negative territory after the EIA report came out on the knee-jerk reaction to the 7.9 million build in crude-oil storage, which is actually a build of 10.0 million when new barrels at the [Strategic Petroleum Reserve] are added,” Yawger said.
“However, the market soon switched to the green after taking into consideration the big draw at the Nymex delivery point at Cushing, and the 463,000 bpd increase in gasoline demand.”
July gasoline futures rose 0.8% to end at $1.026 a gallon, while July heating oil fell 3.4% to 97.52 cents a gallon.
July natural-gas futures ended with a loss of 5.90 cents per million British thermal units, a fall of 3.1% to $1.8270.
The EIA said working gas in storage rose by a net 109 billion cubic feet in the week ended May 22.
Analysts surveyed by S&P Global Platts had forecast, on average, an injection of 81 billion cubic feet.
https://www.marketwatch.com/story/oil-l ... cle_inline
"Oil turns higher, waving off unexpected rise in crude stocks as gasoline inventories fall"
By William Watts
Published: May 28, 2020 at 3:30 p.m. ET
Oil futures reversed early losses to trade with strong gains Thursday, waving off data that showed an unexpected rise in U.S. crude inventories as traders focused on a fall in gasoline stocks and a further decline in crude stored at the New York Mercantile Exchange’s delivery hub in Cushing, Oklahoma.
West Texas Intermediate crude for July delivery rose 90 cents,or 2.7%, to finish at $33.71 a barrel on the New York Mercantile Exchange, while August Brent crude gained 55 cents per barrel, or 1.6%, to finish at $35.29 on ICE Europe.
The Energy Information Administration said inventories rose 7.9 million barrels in the week ended May 22.
Oil had been under pressure after the American Petroleum Institute late Wednesday reported that crude inventories rose 8.7 million barrels last week.
Analysts surveyed by S&P Global Platts had expected the more closely followed EIA report to show crude inventories fell by 1.2 million barrels.
The rise in inventories reflected a surge in imports of oil from Saudi Arabia as a much publicized flotilla of tankers carrying crude from the kingdom begin to arrive, a legacy of the short-lived price war between the Saudis and Russia that amplified a collapse in crude prices in March and April.
Matt Smith, director of commodity research at ClipperData, said imports of Saudi crude into the U.S. Gulf Coast were at 2.05 million barrels a day last week — a record clip.
Meanwhile, gasoline stocks fell 700,000 barrels, while distillates were up 5.5 million barrels.
The S&P Global Platts analysts had forecast a supply decline of 1 million barrels for gasoline and a stockpile increase of 2.5 million barrels for distillates.
Crude supplies at Cushing, Oklahoma, the New York Mercantile Exchange delivery hub, fell 3.4 million barrels.
The data showed gasoline demand was up 463,000 barrels a day, or 6.8% to 7.253 million barrels a day, but still down 22.8% from last year, noted Robert Yawger, director of energy at Mizuho Securities U.S.A., in a note.
“WTI initially traded to negative territory after the EIA report came out on the knee-jerk reaction to the 7.9 million build in crude-oil storage, which is actually a build of 10.0 million when new barrels at the [Strategic Petroleum Reserve] are added,” Yawger said.
“However, the market soon switched to the green after taking into consideration the big draw at the Nymex delivery point at Cushing, and the 463,000 bpd increase in gasoline demand.”
July gasoline futures rose 0.8% to end at $1.026 a gallon, while July heating oil fell 3.4% to 97.52 cents a gallon.
July natural-gas futures ended with a loss of 5.90 cents per million British thermal units, a fall of 3.1% to $1.8270.
The EIA said working gas in storage rose by a net 109 billion cubic feet in the week ended May 22.
Analysts surveyed by S&P Global Platts had forecast, on average, an injection of 81 billion cubic feet.
https://www.marketwatch.com/story/oil-l ... cle_inline
Re: OIL, NATURAL GAS
MARKETWATCH
"U.S. oil futures up 88% in May, biggest monthly rise on record"
By Myra P. Saefong and William Watts
Published: May 29, 2020 at 3:40 p.m. ET
U.S. oil futures reversed course to finish higher Friday, getting a boost as traders eyed developments in the U.S. relationship with China, and as another drop in U.S. oil rigs suggested further domestic production declines.
Oil prices soared after a spokesman for President Donald Trump said that despite rising tensions, Trump was not pulling out of the U.S.-China phase one trade deal, said Phil Flynn, senior market analyst at The Price Futures Group, telling MarketWatch that the news “caused oil traders to cover.”
News on the Trump's press conference came out after oil futures settled.
Trump said the U.S. would take steps to sanction Chinese officials over Beijing’s plans to impose new security laws that could undercut Hong Kong’s autonomy.
He did not, however, discuss reneging on the U.S. trade deal with China.
West Texas Intermediate crude for July delivery rose $1.78, or 5.3%, to settle at $35.49 a barrel on the New York Mercantile Exchange.
Front-month U.S. benchmark WTI futures rose 88.4% for May, for its best month on record, based on data going back to 1983, according to Dow Jones Market Data
Global benchmark Brent saw its July contract tacked on 4 cents, or 0.1%, to end at $35.33 a barrel on ICE Futures Europe Friday.
It expired at the end of the session.
Front-month prices rose 39.8% for the month, which was the strongest monthly rise since March 1999.
The new front-month August contract settled at $37.84, up $1.81, or 5%, Friday.
The move higher for U.S. prices started right after the Baker Hughes report on U.S. drilling rigs, and “prices began to gain momentum as futures hit new session highs, broke above Thursday’s highs, and ultimately traded to new highs for the week into the primary session close,” said Tyler Richey, co-editor at Sevens Report Research.
Baker Hughes on Friday reported that the number of active U.S. rigs drilling for oil declined by 15 to 222 this week.
The total active U.S. rig count, meanwhile, also fell by 17 to 301, according to Baker Hughes.
The rig count “continued to show steady declines in active oil rigs in the U.S. as the fallout from the supply chain disruptions and ultimately negative oil futures prices continues to work its way out of the market,” said Richey, adding that the total number of U.S. rigs at 301 was a record low.
Meanwhile, despite the concerns surrounding U.S.-China tensions, “demand has shown signs of coming back much more energetic and faster than most people had expected in China and the U.S. as well,” according to Flynn.
Signs of renewed demand as the U.S. and other major economies emerge from lockdown helped fuel strong May gains.
Demand increases are coming as U.S. production continues to plunge and output from the Organization of the Petroleum Exporting Countries has "crashed” in May, Flynn said.
Data from the Energy Information Administration Thursday showed a weekly decline of 100,000 barrels a day in total oil output to 11.4 million barrels per day.
On Friday, a Reuters survey revealed that OPEC oil output in May fell to the lowest in two decades.
OPEC pumped 24.77 million barrels per day in May, down 5.91 million barrels per day from April’s revised figure, Reuters reported.
Oil prices collapsed in March and April as global demand for crude was destroyed by lockdowns of major economies in a bid to contain the COVID-19 pandemic.
Pressure was exacerbated by a short-lived price war between Saudi Arabia and Russia that further flooded an oversupplied market with unneeded crude.
That feud came to a halt after OPEC and its allies agreed to renewed production cuts.
In addition, producers outside the pact, including U.S. shale drillers, have moved to sharply curtail activity in response to the price plunge.
Still, some analysts worry the rebound in prices could dampen production cuts.
“While oil prices remain low on an absolute basis, differentials and the shallow contango in the forward curve indicate a market that is at least functioning more normally,” said Jason Gammel, analyst at Jefferies, in a note.
Contango is a condition in which later dated oil futures trade at a premium to the spot price.
As oil prices collapsed, the contango steepened sharply, underlining the incentive to store crude.
“Our concern is that prices have reached a level that does not incentivize curtailments/cuts; this supply-driven rally is at risk if production returns too quickly,” Gammel said.
Back on Nymex, the June petroleum product contracts expired on Friday.
June gasoline ended 2.7% higher at $1.0259 a gallon, with front-month prices up 47% in May — the largest since August 2017.
June heating oil added 4.2% to 96.47 cents a gallon, up nearly 32% for the month.
July natural gas settled at $1.849 per million British thermal units, up 1.2% for the session, but down 5.1% for the month.
“While the weather remains a big catalyst for gas demand, we do think natural gas prices have more upside potential, especially to the degree that U.S. crude oil producers shut-in production or slash [capital expenditures], because it means less ‘associated gas’ that comes along for the ride,” said Stewart Glickman, energy equity analyst at CFRA Research.
https://www.marketwatch.com/story/oil-s ... cle_inline
"U.S. oil futures up 88% in May, biggest monthly rise on record"
By Myra P. Saefong and William Watts
Published: May 29, 2020 at 3:40 p.m. ET
U.S. oil futures reversed course to finish higher Friday, getting a boost as traders eyed developments in the U.S. relationship with China, and as another drop in U.S. oil rigs suggested further domestic production declines.
Oil prices soared after a spokesman for President Donald Trump said that despite rising tensions, Trump was not pulling out of the U.S.-China phase one trade deal, said Phil Flynn, senior market analyst at The Price Futures Group, telling MarketWatch that the news “caused oil traders to cover.”
News on the Trump's press conference came out after oil futures settled.
Trump said the U.S. would take steps to sanction Chinese officials over Beijing’s plans to impose new security laws that could undercut Hong Kong’s autonomy.
He did not, however, discuss reneging on the U.S. trade deal with China.
West Texas Intermediate crude for July delivery rose $1.78, or 5.3%, to settle at $35.49 a barrel on the New York Mercantile Exchange.
Front-month U.S. benchmark WTI futures rose 88.4% for May, for its best month on record, based on data going back to 1983, according to Dow Jones Market Data
Global benchmark Brent saw its July contract tacked on 4 cents, or 0.1%, to end at $35.33 a barrel on ICE Futures Europe Friday.
It expired at the end of the session.
Front-month prices rose 39.8% for the month, which was the strongest monthly rise since March 1999.
The new front-month August contract settled at $37.84, up $1.81, or 5%, Friday.
The move higher for U.S. prices started right after the Baker Hughes report on U.S. drilling rigs, and “prices began to gain momentum as futures hit new session highs, broke above Thursday’s highs, and ultimately traded to new highs for the week into the primary session close,” said Tyler Richey, co-editor at Sevens Report Research.
Baker Hughes on Friday reported that the number of active U.S. rigs drilling for oil declined by 15 to 222 this week.
The total active U.S. rig count, meanwhile, also fell by 17 to 301, according to Baker Hughes.
The rig count “continued to show steady declines in active oil rigs in the U.S. as the fallout from the supply chain disruptions and ultimately negative oil futures prices continues to work its way out of the market,” said Richey, adding that the total number of U.S. rigs at 301 was a record low.
Meanwhile, despite the concerns surrounding U.S.-China tensions, “demand has shown signs of coming back much more energetic and faster than most people had expected in China and the U.S. as well,” according to Flynn.
Signs of renewed demand as the U.S. and other major economies emerge from lockdown helped fuel strong May gains.
Demand increases are coming as U.S. production continues to plunge and output from the Organization of the Petroleum Exporting Countries has "crashed” in May, Flynn said.
Data from the Energy Information Administration Thursday showed a weekly decline of 100,000 barrels a day in total oil output to 11.4 million barrels per day.
On Friday, a Reuters survey revealed that OPEC oil output in May fell to the lowest in two decades.
OPEC pumped 24.77 million barrels per day in May, down 5.91 million barrels per day from April’s revised figure, Reuters reported.
Oil prices collapsed in March and April as global demand for crude was destroyed by lockdowns of major economies in a bid to contain the COVID-19 pandemic.
Pressure was exacerbated by a short-lived price war between Saudi Arabia and Russia that further flooded an oversupplied market with unneeded crude.
That feud came to a halt after OPEC and its allies agreed to renewed production cuts.
In addition, producers outside the pact, including U.S. shale drillers, have moved to sharply curtail activity in response to the price plunge.
Still, some analysts worry the rebound in prices could dampen production cuts.
“While oil prices remain low on an absolute basis, differentials and the shallow contango in the forward curve indicate a market that is at least functioning more normally,” said Jason Gammel, analyst at Jefferies, in a note.
Contango is a condition in which later dated oil futures trade at a premium to the spot price.
As oil prices collapsed, the contango steepened sharply, underlining the incentive to store crude.
“Our concern is that prices have reached a level that does not incentivize curtailments/cuts; this supply-driven rally is at risk if production returns too quickly,” Gammel said.
Back on Nymex, the June petroleum product contracts expired on Friday.
June gasoline ended 2.7% higher at $1.0259 a gallon, with front-month prices up 47% in May — the largest since August 2017.
June heating oil added 4.2% to 96.47 cents a gallon, up nearly 32% for the month.
July natural gas settled at $1.849 per million British thermal units, up 1.2% for the session, but down 5.1% for the month.
“While the weather remains a big catalyst for gas demand, we do think natural gas prices have more upside potential, especially to the degree that U.S. crude oil producers shut-in production or slash [capital expenditures], because it means less ‘associated gas’ that comes along for the ride,” said Stewart Glickman, energy equity analyst at CFRA Research.
https://www.marketwatch.com/story/oil-s ... cle_inline
Re: OIL, NATURAL GAS
MARKETWATCH
"U.S. oil prices end lower on U.S.-China tensions, but global prices gain on talk of extension to OPEC+ output cuts"
By Myra P. Saefong and Mark DeCambre
Published: June 1, 2020 at 3:12 p.m. ET
U.S. benchmark oil futures settled lower on Monday, as Beijing-Washington tensions raised concerns over the prospects for crude demand.
Global benchmark oil prices, however, finished higher on the heels of a report that major oil producers may meet earlier than previously planned, and discuss an extension to current crude output cuts.
“Fresh geopolitical concerns are adding new sources of downside risk for the market to grapple with, headlined by an increasingly tense U.S.-China relationship and an increasingly tense situation across major U.S. cities,” said Robbie Fraser, senior commodity analyst at Schneider Electric.
“On the supportive side though, reports indicate the OPEC+ group is looking for at least a short-term extension of their record supply cuts, which are targeted to remove 9.7 [million barrels per day] of supply among participating members,” he said in a daily market update.
“There are also indications that the group’s formal meeting could be moved up, shifting discussions to later this week.”
Russia and members of the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, were moving toward an agreement to extend current output cuts by one or two months, Reuters reported on Monday, citing people familiar with talks.
The report comes ahead of a meeting of OPEC and its allies, which could occur on June 4, instead of a previously scheduled June 9-10, Reuters also reported.
“If talks do end with an extension of the agreement without reducing cut levels, the market is likely to see some renewed buying interest,” said Fraser.
“However, demand numbers should remain a source of concern moving forward, as COVID-19 remains a challenge, even as new geopolitical headwinds for crude and the broader economy emerge.”
West Texas Intermediate crude for July delivery lost 5 cents, or 0.1%, to settle at $35.44 a barrel on the New York Mercantile Exchange.
Front-month U.S. benchmark WTI futures rose 88.4% for May, for its best month on record, based on data going back to 1983, according to Dow Jones Market Data.
Global benchmark Brent saw its August contract edged up by 48 cents, or 1.3%, to $38.32 a barrel on ICE Futures Europe.
The July contract expired on May 31.
Front-month prices for Brent rose 39.8% for the month, which was the strongest monthly rise since March 1999.
Back in April, OPEC and its allies forged a historic pact to reduce global output by 9.7 million barrels per day, but those cuts, which began in May, are scheduled to terminate at the end of June.
“The current proposal is to extend the production by at least one month and a maximum of three months."
"If agreed, the move can further strengthen the [WTI, the U.S. benchmark] crude oil price and Brent oil prices,” wrote Naeem Aslam, chief market analyst at AvaTrade in a Monday research note.
A combination of world-wide output cuts and some brewing optimism about demand for crude have helped boost crude prices from lows as business lockdowns caused by measures to curb the spread of the novel strain of coronavirus recede.
However, investors continue to watch strained relations between the U.S. and China with Bloomberg News reporting on Monday that Beijing has halted some imports of U.S. soybeans, potentially adding to Sino-American friction, which could add pressure on crude prices if it results in an erosion of the hard-won, phase-one trade agreement.
Tensions between the two nations have climbed again in recent weeks with U.S. officials expressing anger over how China handled the coronavirus outbreak and President Donald Trump on Friday saying he would end the special status of Hong Kong, due to China’s imposition of national-security laws.
Meanwhile, violent unrest among major cities in the U.S., sparked by the death of George Floyd in police custody, has added to uncertainty in the financial markets.
Back on Nymex, July gasoline fell 1.1% to $1.0667 a gallon, while July heating oil shed 0.7% to $1.029 a gallon.
July natural gas ended at $1.774 per million British thermal units, down 4.1%.
Natural-gas prices are “down hard with no bullish news to support any rally,” said Dan Flynn, an analyst at The Price Futures Group, in a daily note.
“Just to get this market started we would need hot weather and exports to pick up dramatically.”
https://www.marketwatch.com/story/oil-f ... latestnews
"U.S. oil prices end lower on U.S.-China tensions, but global prices gain on talk of extension to OPEC+ output cuts"
By Myra P. Saefong and Mark DeCambre
Published: June 1, 2020 at 3:12 p.m. ET
U.S. benchmark oil futures settled lower on Monday, as Beijing-Washington tensions raised concerns over the prospects for crude demand.
Global benchmark oil prices, however, finished higher on the heels of a report that major oil producers may meet earlier than previously planned, and discuss an extension to current crude output cuts.
“Fresh geopolitical concerns are adding new sources of downside risk for the market to grapple with, headlined by an increasingly tense U.S.-China relationship and an increasingly tense situation across major U.S. cities,” said Robbie Fraser, senior commodity analyst at Schneider Electric.
“On the supportive side though, reports indicate the OPEC+ group is looking for at least a short-term extension of their record supply cuts, which are targeted to remove 9.7 [million barrels per day] of supply among participating members,” he said in a daily market update.
“There are also indications that the group’s formal meeting could be moved up, shifting discussions to later this week.”
Russia and members of the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, were moving toward an agreement to extend current output cuts by one or two months, Reuters reported on Monday, citing people familiar with talks.
The report comes ahead of a meeting of OPEC and its allies, which could occur on June 4, instead of a previously scheduled June 9-10, Reuters also reported.
“If talks do end with an extension of the agreement without reducing cut levels, the market is likely to see some renewed buying interest,” said Fraser.
“However, demand numbers should remain a source of concern moving forward, as COVID-19 remains a challenge, even as new geopolitical headwinds for crude and the broader economy emerge.”
West Texas Intermediate crude for July delivery lost 5 cents, or 0.1%, to settle at $35.44 a barrel on the New York Mercantile Exchange.
Front-month U.S. benchmark WTI futures rose 88.4% for May, for its best month on record, based on data going back to 1983, according to Dow Jones Market Data.
Global benchmark Brent saw its August contract edged up by 48 cents, or 1.3%, to $38.32 a barrel on ICE Futures Europe.
The July contract expired on May 31.
Front-month prices for Brent rose 39.8% for the month, which was the strongest monthly rise since March 1999.
Back in April, OPEC and its allies forged a historic pact to reduce global output by 9.7 million barrels per day, but those cuts, which began in May, are scheduled to terminate at the end of June.
“The current proposal is to extend the production by at least one month and a maximum of three months."
"If agreed, the move can further strengthen the [WTI, the U.S. benchmark] crude oil price and Brent oil prices,” wrote Naeem Aslam, chief market analyst at AvaTrade in a Monday research note.
A combination of world-wide output cuts and some brewing optimism about demand for crude have helped boost crude prices from lows as business lockdowns caused by measures to curb the spread of the novel strain of coronavirus recede.
However, investors continue to watch strained relations between the U.S. and China with Bloomberg News reporting on Monday that Beijing has halted some imports of U.S. soybeans, potentially adding to Sino-American friction, which could add pressure on crude prices if it results in an erosion of the hard-won, phase-one trade agreement.
Tensions between the two nations have climbed again in recent weeks with U.S. officials expressing anger over how China handled the coronavirus outbreak and President Donald Trump on Friday saying he would end the special status of Hong Kong, due to China’s imposition of national-security laws.
Meanwhile, violent unrest among major cities in the U.S., sparked by the death of George Floyd in police custody, has added to uncertainty in the financial markets.
Back on Nymex, July gasoline fell 1.1% to $1.0667 a gallon, while July heating oil shed 0.7% to $1.029 a gallon.
July natural gas ended at $1.774 per million British thermal units, down 4.1%.
Natural-gas prices are “down hard with no bullish news to support any rally,” said Dan Flynn, an analyst at The Price Futures Group, in a daily note.
“Just to get this market started we would need hot weather and exports to pick up dramatically.”
https://www.marketwatch.com/story/oil-f ... latestnews
Re: OIL, NATURAL GAS
MARKETWATCH
"Oil futures log 3-month high on bets for an extension of global production cuts"
By Myra P. Saefong and Mark DeCambre
Published: June 2, 2020 at 3:29 p.m. ET
Oil futures climbed on Tuesday to log their highest settlement in about three months, supported by reports that major crude producers may agree to extend output cuts scheduled to taper at the end of June.
The Organization of the Petroleum Exporting Countries and, notably, major producer Russia, part of a group known as OPEC+, are now expected to extend their output cuts of 9.7 million barrels per day, “provided Russia agrees,” said Fawad Razaqzada, market analyst with ThinkMarkets.
“Apparently, Saudi Arabia has been leading talks to push for extending the cuts.”
OPEC+ was nearing an agreement to extend collective production cuts through Sept. 1, and planned to discuss output curbs during a meeting via conference call on Thursday, The Wall Street Journal reported Monday, citing comments from delegates.
Thursday’s call would bring forward a meeting that the OPEC website still has scheduled for June 9-10.
“If it is two or more months of extensions, then crude prices could add to their gains, with Brent oil likely to climb to $40-$45 per barrel,” said Razaqzada, in a Tuesday note.
“However, a one-month extension may not cause too much of a positive response as that will likely disappoint expectations.”
“In any case, the OPEC+ will have follow-through on their commitment to cut output in order to sustain higher prices."
"If some members don’t comply to the cuts, then oil prices may come under renewed selling pressure soon,” he said.
West Texas Intermediate crude for July delivery gained $1.37, or 3.9%, to settle at $36.81 a barrel on the New York Mercantile Exchange.
Global benchmark Brent saw its August contract climb $1.25, or 3.3%, at $39.57 a barrel on the ICE Futures Europe platform, after touching an intraday high of $39.567.
WTI and Brent crude both marked the highest settlements for front-month contracts since March 6, according to Dow Jones Market Data.
Already, there is evidence that OPEC+ production cuts that began in May have been effective, with Russian output falling to 9.39 million barrels a day last month, near the OPEC+ goal, Reuters reported, citing a report from Interfax news agency.
Russia’s output was down from 11.35 million barrels per day in April, the news organization reported, citing sources familiar with the matter.
“An extension of the current cut levels will definitely be a further boost for the market."
"Not only will the market rebalance, but stock builds of oil will also feel some relief,” wrote Bjornar Tonhaugen, Rystad Energy’s head of oil markets, in a note.
“Prices rise on this prospect and are set for higher levels if the cuts are indeed extended,” he said.
“OPEC+ cuts are clearly working with solid help from recovering crude oil demand, especially in Asia.”
The crude market also has been bolstered by hope that business reopenings across the world from the COVID-19 pandemic could help to drive demand for oil and other crude byproducts.
Investors, however, have focused on strained relations between the U.S. and China with Bloomberg News and Reuters reporting on Monday that Beijing has halted some imports of U.S. soybeans, potentially adding to Sino-American friction, which could add pressure on crude prices if it results in an erosion of the hard-won, phase-one trade agreement.
Bloomberg on Tuesday reported that some soybean sales were still going through.
“While supply cuts can help clear the stockpiles and support the prices, the mid-to-long term recovery depends upon significant factors including the consumer confidence, vaccine development (to prevent a second peak), the trade tensions between the U.S. and China and, in a way, the U.S. elections,” said Mihir Kapadia, chief executive officer of Sun Global Investments.
“Global trade has been hurt by political factors the last three years, and unless significant change happens this end of the year, protectionism will only escalate and disrupt everything from supply chains to regional demand,” he said in emailed commentary.
Back on Nymex, prices for petroleum products also rose, with July gasoline up a fourth straight session, with a 4.8% gain to $1.1183 a gallon and July heating oil up 6.1% at $1.0921 a gallon, for the highest front-month contract finish since March 25.
July natural gas finished at $1.777 per million British thermal units, up 0.2%.
Weekly data on U.S. petroleum supplies will be released by the American Petroleum Institute late Tuesday and by the Energy Information Administration early Wednesday.
On average, analysts polled by S&P Global Platts expect the EIA to report an increase of 3.5 million barrels for the week ended May 29.
They also forecast a decline of 300,000 barrels in gasoline stockpiles and a rise of 2.8 million barrels for distillates, which include heating oil.
https://www.marketwatch.com/story/oil-f ... cle_inline
"Oil futures log 3-month high on bets for an extension of global production cuts"
By Myra P. Saefong and Mark DeCambre
Published: June 2, 2020 at 3:29 p.m. ET
Oil futures climbed on Tuesday to log their highest settlement in about three months, supported by reports that major crude producers may agree to extend output cuts scheduled to taper at the end of June.
The Organization of the Petroleum Exporting Countries and, notably, major producer Russia, part of a group known as OPEC+, are now expected to extend their output cuts of 9.7 million barrels per day, “provided Russia agrees,” said Fawad Razaqzada, market analyst with ThinkMarkets.
“Apparently, Saudi Arabia has been leading talks to push for extending the cuts.”
OPEC+ was nearing an agreement to extend collective production cuts through Sept. 1, and planned to discuss output curbs during a meeting via conference call on Thursday, The Wall Street Journal reported Monday, citing comments from delegates.
Thursday’s call would bring forward a meeting that the OPEC website still has scheduled for June 9-10.
“If it is two or more months of extensions, then crude prices could add to their gains, with Brent oil likely to climb to $40-$45 per barrel,” said Razaqzada, in a Tuesday note.
“However, a one-month extension may not cause too much of a positive response as that will likely disappoint expectations.”
“In any case, the OPEC+ will have follow-through on their commitment to cut output in order to sustain higher prices."
"If some members don’t comply to the cuts, then oil prices may come under renewed selling pressure soon,” he said.
West Texas Intermediate crude for July delivery gained $1.37, or 3.9%, to settle at $36.81 a barrel on the New York Mercantile Exchange.
Global benchmark Brent saw its August contract climb $1.25, or 3.3%, at $39.57 a barrel on the ICE Futures Europe platform, after touching an intraday high of $39.567.
WTI and Brent crude both marked the highest settlements for front-month contracts since March 6, according to Dow Jones Market Data.
Already, there is evidence that OPEC+ production cuts that began in May have been effective, with Russian output falling to 9.39 million barrels a day last month, near the OPEC+ goal, Reuters reported, citing a report from Interfax news agency.
Russia’s output was down from 11.35 million barrels per day in April, the news organization reported, citing sources familiar with the matter.
“An extension of the current cut levels will definitely be a further boost for the market."
"Not only will the market rebalance, but stock builds of oil will also feel some relief,” wrote Bjornar Tonhaugen, Rystad Energy’s head of oil markets, in a note.
“Prices rise on this prospect and are set for higher levels if the cuts are indeed extended,” he said.
“OPEC+ cuts are clearly working with solid help from recovering crude oil demand, especially in Asia.”
The crude market also has been bolstered by hope that business reopenings across the world from the COVID-19 pandemic could help to drive demand for oil and other crude byproducts.
Investors, however, have focused on strained relations between the U.S. and China with Bloomberg News and Reuters reporting on Monday that Beijing has halted some imports of U.S. soybeans, potentially adding to Sino-American friction, which could add pressure on crude prices if it results in an erosion of the hard-won, phase-one trade agreement.
Bloomberg on Tuesday reported that some soybean sales were still going through.
“While supply cuts can help clear the stockpiles and support the prices, the mid-to-long term recovery depends upon significant factors including the consumer confidence, vaccine development (to prevent a second peak), the trade tensions between the U.S. and China and, in a way, the U.S. elections,” said Mihir Kapadia, chief executive officer of Sun Global Investments.
“Global trade has been hurt by political factors the last three years, and unless significant change happens this end of the year, protectionism will only escalate and disrupt everything from supply chains to regional demand,” he said in emailed commentary.
Back on Nymex, prices for petroleum products also rose, with July gasoline up a fourth straight session, with a 4.8% gain to $1.1183 a gallon and July heating oil up 6.1% at $1.0921 a gallon, for the highest front-month contract finish since March 25.
July natural gas finished at $1.777 per million British thermal units, up 0.2%.
Weekly data on U.S. petroleum supplies will be released by the American Petroleum Institute late Tuesday and by the Energy Information Administration early Wednesday.
On average, analysts polled by S&P Global Platts expect the EIA to report an increase of 3.5 million barrels for the week ended May 29.
They also forecast a decline of 300,000 barrels in gasoline stockpiles and a rise of 2.8 million barrels for distillates, which include heating oil.
https://www.marketwatch.com/story/oil-f ... cle_inline
Re: OIL, NATURAL GAS
MARKETWATCH
"API data show a weekly decline in U.S. crude supplies, sources say"
By Myra P. Saefong
Published: June 2, 2020 at 4:46 p.m. ET
The American Petroleum Institute reported late Tuesday that U.S. crude supplies fell by 483,000 barrels for the week ended May 29, according to sources.
The API data also reportedly showed gasoline stockpiles edged up by 1.7 million barrels, while distillate inventories climbed by 5.9 million barrels.
Crude stocks at the Cushing, Okla., storage hub, meanwhile, fell by 2.2 million barrels for the week, sources said.
Inventory data from the Energy Information Administration will be released Wednesday.
The EIA data are expected to show crude inventories rose by 3.5 million barrels last week, according to analysts polled by S&P Global Platts.
They also forecast a supply decline of 300,000 barrels for gasoline and a stockpile increase of 2.8 million barrels for distillates.
July West Texas Intermediate crude was at $36.94 a barrel in electronic trading.
It was up from its settlement at $36.81 Tuesday on the New York Mercantile Exchange.
https://www.marketwatch.com/story/api-d ... latestnews
"API data show a weekly decline in U.S. crude supplies, sources say"
By Myra P. Saefong
Published: June 2, 2020 at 4:46 p.m. ET
The American Petroleum Institute reported late Tuesday that U.S. crude supplies fell by 483,000 barrels for the week ended May 29, according to sources.
The API data also reportedly showed gasoline stockpiles edged up by 1.7 million barrels, while distillate inventories climbed by 5.9 million barrels.
Crude stocks at the Cushing, Okla., storage hub, meanwhile, fell by 2.2 million barrels for the week, sources said.
Inventory data from the Energy Information Administration will be released Wednesday.
The EIA data are expected to show crude inventories rose by 3.5 million barrels last week, according to analysts polled by S&P Global Platts.
They also forecast a supply decline of 300,000 barrels for gasoline and a stockpile increase of 2.8 million barrels for distillates.
July West Texas Intermediate crude was at $36.94 a barrel in electronic trading.
It was up from its settlement at $36.81 Tuesday on the New York Mercantile Exchange.
https://www.marketwatch.com/story/api-d ... latestnews
Re: OIL, NATURAL GAS
MARKETWATCH
"Oil prices finish at highest in 3 months, as traders await next move for OPEC+, digest U.S. supply data"
By Myra P. Saefong and Mark DeCambre
Published: June 3, 2020 at 3:21 p.m. ET
Oil futures Wednesday closed higher, extending a move around the highest level since early March, as uncertainty over whether a meeting of crude producers will be held this week or next raised doubts about a willingness to substantially extend global production cuts that taper after June.
Weekly declines in U.S. crude stockpiles and supplies at the Cushing, Okla. storage hub reported by the Energy Information Administration on Wednesday offered little support to oil prices, as petroleum product inventories climbed.
West Texas Intermediate crude for July delivery tacked on 48 cents, or 1.3%, to settle at $37.29 a barrel on the New York Mercantile Exchange after surging 3.9% on Tuesday.
Global benchmark Brent saw its August contract rise 22 cents, or 0.6%, to end at $39.79 a barrel on the ICE Futures Europe, after gaining 3.3% in the prior session.
Prices for WTI and Brent crude marked their highest since March 6, according to Dow Jones Market Data.
Amena Bakr, deputy bureau chief at Energy Intelligence, reported that a June 4 meeting of the Organization of the Petroleum Exporting Countries and its allies appeared “unlikely,” via Twitter on Wednesday.
She said in a separate tweets that setting the date of next meeting is “contingent on all members of the group sticking to their quotas.”
Member states that haven’t achieved their quotas in May will be asked to make up for that in the coming months, Bakr wrote, citing OPEC sources.
OPEC and, notably, major producer Russia, part of a group known as OPEC+, is expected to extend an agreement struck in April for cuts of 9.7 million barrels a day from May through the end of June.
Reuters reported Wednesday that Saudi Arabia and Russia have reached a preliminary agreement to extend existing cuts by one month.
The reductions had been set to taper down to 7.7 million barrels starting in July.
Bloomberg News, meanwhile, also reported that Russia and several other producers favor extending the group’s current cuts by one month, citing people familiar with the matter.
The report said major producers are cognizant that rising prices of crude benefit U.S. shale production, which is likely to come back on line as futures react to efforts by OPEC+ to stabilize the commodity’s value.
U.S. crude inventories, meanwhile, fell in the latest week.
The Energy Information Administration reported Wednesday that U.S. crude inventories edged down by 2.1 million barrels for the week ended May 29.
That compared with a forecast by analysts polled by S&P Global Platts for an average climb of 3.5 million barrels.
The American Petroleum Institute on Tuesday reported a fall of 483,000 barrels, according to sources.
A drop in imports led to the fall in crude inventories, as well as an increase in refinery runs and a 4 million-barrel shift of oil from commercial inventories into the Strategic Petroleum Reserve, said Matt Smith, director of commodity research at ClipperData.
“Without this transfer, oil inventories would have reached a record high,” he told MarketWatch.
The EIA data also showed crude stocks at the Cushing delivery hub declined by about 1.8 million barrels for the week.
Gasoline supply, however, rose by 2.8 million barrels, while distillate stockpiles added 9.9 million barrels, the EIA reported.
The S&P Global Platts survey had shown expectations for a supply decline of 300,000 barrels for gasoline, while distillate stocks were forecast at 2.8 million barrels higher.
“As product demand remains subdued, gasoline inventories showed a solid build, while distillates showed a mammoth one — despite refinery runs being over 3.6 million barrels per day below year-ago levels,” said Smith.
On Nymex, July gasoline rose 0.09% to $1.1193 a gallon and July heating oil lost 2.5% to $1.0646 a gallon.
Oil prices are at risk to move even lower if protests in the U.S. sparked by the death of George Floyd in police custody “get worse” or more COVID-19 cases suddenly appear, said Tariq Zahir, managing member at Tyche Capital Advisors.
The situation with China, regarding Hong Kong, could also impact crude oil if further sanctions happen or if the trade deal with the U.S. gets terminated, he said.
“Several market movers will appear in the short term, and any one of [them] could have the next path of direction higher or lower” for oil.
Meanwhile, July natural gas settled at $1.821 per million British thermal units, up 2.5%.
“With the significant pullback in U.S. shale and onshore production, hurricanes will have a more substantial impact on oil and natural gas prices because we are going to feel Gulf of Mexico production shut-ins more acutely,” said Phil Flynn, senior market analyst at The Price Futures Group, in a note.
The National Hurricane Center is tracking Tropical Storm Cristobal, which may move further into the Gulf of Mexico later this week, potentially threatening energy production in the region.
https://www.marketwatch.com/story/oil-p ... cle_inline
"Oil prices finish at highest in 3 months, as traders await next move for OPEC+, digest U.S. supply data"
By Myra P. Saefong and Mark DeCambre
Published: June 3, 2020 at 3:21 p.m. ET
Oil futures Wednesday closed higher, extending a move around the highest level since early March, as uncertainty over whether a meeting of crude producers will be held this week or next raised doubts about a willingness to substantially extend global production cuts that taper after June.
Weekly declines in U.S. crude stockpiles and supplies at the Cushing, Okla. storage hub reported by the Energy Information Administration on Wednesday offered little support to oil prices, as petroleum product inventories climbed.
West Texas Intermediate crude for July delivery tacked on 48 cents, or 1.3%, to settle at $37.29 a barrel on the New York Mercantile Exchange after surging 3.9% on Tuesday.
Global benchmark Brent saw its August contract rise 22 cents, or 0.6%, to end at $39.79 a barrel on the ICE Futures Europe, after gaining 3.3% in the prior session.
Prices for WTI and Brent crude marked their highest since March 6, according to Dow Jones Market Data.
Amena Bakr, deputy bureau chief at Energy Intelligence, reported that a June 4 meeting of the Organization of the Petroleum Exporting Countries and its allies appeared “unlikely,” via Twitter on Wednesday.
She said in a separate tweets that setting the date of next meeting is “contingent on all members of the group sticking to their quotas.”
Member states that haven’t achieved their quotas in May will be asked to make up for that in the coming months, Bakr wrote, citing OPEC sources.
OPEC and, notably, major producer Russia, part of a group known as OPEC+, is expected to extend an agreement struck in April for cuts of 9.7 million barrels a day from May through the end of June.
Reuters reported Wednesday that Saudi Arabia and Russia have reached a preliminary agreement to extend existing cuts by one month.
The reductions had been set to taper down to 7.7 million barrels starting in July.
Bloomberg News, meanwhile, also reported that Russia and several other producers favor extending the group’s current cuts by one month, citing people familiar with the matter.
The report said major producers are cognizant that rising prices of crude benefit U.S. shale production, which is likely to come back on line as futures react to efforts by OPEC+ to stabilize the commodity’s value.
U.S. crude inventories, meanwhile, fell in the latest week.
The Energy Information Administration reported Wednesday that U.S. crude inventories edged down by 2.1 million barrels for the week ended May 29.
That compared with a forecast by analysts polled by S&P Global Platts for an average climb of 3.5 million barrels.
The American Petroleum Institute on Tuesday reported a fall of 483,000 barrels, according to sources.
A drop in imports led to the fall in crude inventories, as well as an increase in refinery runs and a 4 million-barrel shift of oil from commercial inventories into the Strategic Petroleum Reserve, said Matt Smith, director of commodity research at ClipperData.
“Without this transfer, oil inventories would have reached a record high,” he told MarketWatch.
The EIA data also showed crude stocks at the Cushing delivery hub declined by about 1.8 million barrels for the week.
Gasoline supply, however, rose by 2.8 million barrels, while distillate stockpiles added 9.9 million barrels, the EIA reported.
The S&P Global Platts survey had shown expectations for a supply decline of 300,000 barrels for gasoline, while distillate stocks were forecast at 2.8 million barrels higher.
“As product demand remains subdued, gasoline inventories showed a solid build, while distillates showed a mammoth one — despite refinery runs being over 3.6 million barrels per day below year-ago levels,” said Smith.
On Nymex, July gasoline rose 0.09% to $1.1193 a gallon and July heating oil lost 2.5% to $1.0646 a gallon.
Oil prices are at risk to move even lower if protests in the U.S. sparked by the death of George Floyd in police custody “get worse” or more COVID-19 cases suddenly appear, said Tariq Zahir, managing member at Tyche Capital Advisors.
The situation with China, regarding Hong Kong, could also impact crude oil if further sanctions happen or if the trade deal with the U.S. gets terminated, he said.
“Several market movers will appear in the short term, and any one of [them] could have the next path of direction higher or lower” for oil.
Meanwhile, July natural gas settled at $1.821 per million British thermal units, up 2.5%.
“With the significant pullback in U.S. shale and onshore production, hurricanes will have a more substantial impact on oil and natural gas prices because we are going to feel Gulf of Mexico production shut-ins more acutely,” said Phil Flynn, senior market analyst at The Price Futures Group, in a note.
The National Hurricane Center is tracking Tropical Storm Cristobal, which may move further into the Gulf of Mexico later this week, potentially threatening energy production in the region.
https://www.marketwatch.com/story/oil-p ... cle_inline
Re: OIL, NATURAL GAS
MARKETWATCH
"Oil futures finish higher as data shows high compliance with OPEC+ output cuts"
By Myra P. Saefong and Mark DeCambre
Published: June 4, 2020 at 3:24 p.m. ET
Oil futures climbed on Thursday, with data showing high oil-producer compliance with output cuts contributing to a third straight climb in U.S. prices, even as questions were raised about the potential for an extension of the cuts beyond their expiration at the end of this month.
The Organization of the Petroleum Exporting Countries and its major allies, including Russia, a group known as OPEC+, have yet to announce a new meeting date amid reports that the group planned to bring forward a virtual gathering that had been planned for next week.
That pressured prices early Thursday.
In a tweet Thursday, however, commodity data tracker Kpler said OPEC+ reduced production by around 8.6 million barrels per day in May, suggesting total compliance of 89% with the output cut deal reached in April.
OPEC+ has another 1.1 million barrels per day to cut in order to reach 100% compliance with the reduction pledge of 9.7 million barrels per day from May to the end of June.
An extension of the current cut for a month is “probably a done deal and is in play, but OPEC seems to be holding out [for] an even longer extension of cuts,” Phil Flynn, senior market analyst at The Price Futures Group told MarketWatch.
“Iraq’s noncompliance seems to be a sticking point.”
“The Saudis and Russians are saying no free ride for cheaters,” he said.
“If Iraq gets its compliance in order, the historic cut remain until the end of the year.”
West Texas Intermediate crude for July delivery rose 12 cents, or 0.3%, to settle at $37.41 a barrel on the New York Mercantile Exchange, after touching an earlier low of $36.38.
Global benchmark Brent saw its August contract tacked on 20 cents, or 0.5%, to end at $39.99 a barrel on the ICE Futures Europe.
The front-month contract has now climbed for six consecutive sessions.
For a third straight session, prices for WTI and Brent crude marked their highest settlements since March 6, according to Dow Jones Market Data.
Oil-producing giants Saudi Arabia and Russia have agreed to extend production cuts of 9.7 million barrels per day through July.
However, the Saudis and Russian’s backing of an extension are contingent on the compliance of countries like Nigeria and Iraq with existing measures to reduce global supplies, Reuters reported.
Under the agreement reached in April, the cut expiring at the end of June is to be followed by a series of smaller reductions of 7.7 million barrels per day through Dec. 31 and 5.8 million barrels a day from Jan. 1 to April 30, 2022.
OPEC and its allies are scheduled to hold a meeting on June 9-10, but it was unclear if that video conference will take place in light of recent developments, including the apparent failure to host a planned Thursday meeting.
“Given the physical market is still in surplus and the demand data is not yet supportive, OPEC+ members still have strong incentive to play it safe and avoid the risk of derailing the rebalancing progress from the supply side until global demand can stand on its own two feet,” said Michael Ponikiewicz, vice president and portfolio manager at Acadian Asset Management.
The OPEC+ agreement that was reached in April did not begin until May 1 and, arguably, “the price action in April further incentivized three OPEC countries, led by Saudi Arabia, to ‘chip-in’ an additional 1.2 [million barrels per day], bringing the effective cut to nearly 11 [million barrels per day], showing their commitment to rebalancing the physical market,” said Ponikiewicz.
On April 20, U.S. benchmark West Texas Intermediate crude futures marked their first-ever settlement below zero, at a negative $37.63 a barrel.
The Saudis then announced, in May, an extra, voluntary 1 million barrel-per-day output reduction that began in June.
In solidarity with the move, Kuwait and the United Arab Emirates committed to additional cuts that totaled about 180,000 barrels per day.
“There continues to be a tenuous relationship between U.S. shale and OPEC+ in this global balancing act for oil markets in light of COVID-19 demand headwinds,” said Stacey Morris, director of research at Alerian, in emailed commentary.
“With the recovery in prices, some U.S. oil producers are starting to discuss restoring volumes that had been shut in,” while “OPEC+ is debating the forward path for its cuts.”
On Wednesday, the Energy Information Administration reported that U.S. crude inventories and stocks at the Cushing, Okla, storage hub edged down last week, but gasoline inventories inched higher and distillate stockpiles sharply climbed.
On Nymex Thursday, July gasoline tacked on nearly 2.7% to $1.149 a gallon and July heating oil added 0.9% to $1.0741 a gallon.
July natural gas settled at $1.822 per million British thermal units, up 0.05%.
The EIA reported Thursday that domestic supplies of natural gas rose by 102 billion cubic feet for the week ended May 29.
That was less than the average increase of 111 billion forecasted by analysts polled by S&P Global Platts.
Traders also continued to eye a storm in the Atlantic for any potential risk to energy production in the Gulf of Mexico.
The storm system named Cristobal weakened into a depression Thursday from a tropical storm, according to the National Hurricane Center.
https://www.marketwatch.com/story/oil-f ... latestnews
"Oil futures finish higher as data shows high compliance with OPEC+ output cuts"
By Myra P. Saefong and Mark DeCambre
Published: June 4, 2020 at 3:24 p.m. ET
Oil futures climbed on Thursday, with data showing high oil-producer compliance with output cuts contributing to a third straight climb in U.S. prices, even as questions were raised about the potential for an extension of the cuts beyond their expiration at the end of this month.
The Organization of the Petroleum Exporting Countries and its major allies, including Russia, a group known as OPEC+, have yet to announce a new meeting date amid reports that the group planned to bring forward a virtual gathering that had been planned for next week.
That pressured prices early Thursday.
In a tweet Thursday, however, commodity data tracker Kpler said OPEC+ reduced production by around 8.6 million barrels per day in May, suggesting total compliance of 89% with the output cut deal reached in April.
OPEC+ has another 1.1 million barrels per day to cut in order to reach 100% compliance with the reduction pledge of 9.7 million barrels per day from May to the end of June.
An extension of the current cut for a month is “probably a done deal and is in play, but OPEC seems to be holding out [for] an even longer extension of cuts,” Phil Flynn, senior market analyst at The Price Futures Group told MarketWatch.
“Iraq’s noncompliance seems to be a sticking point.”
“The Saudis and Russians are saying no free ride for cheaters,” he said.
“If Iraq gets its compliance in order, the historic cut remain until the end of the year.”
West Texas Intermediate crude for July delivery rose 12 cents, or 0.3%, to settle at $37.41 a barrel on the New York Mercantile Exchange, after touching an earlier low of $36.38.
Global benchmark Brent saw its August contract tacked on 20 cents, or 0.5%, to end at $39.99 a barrel on the ICE Futures Europe.
The front-month contract has now climbed for six consecutive sessions.
For a third straight session, prices for WTI and Brent crude marked their highest settlements since March 6, according to Dow Jones Market Data.
Oil-producing giants Saudi Arabia and Russia have agreed to extend production cuts of 9.7 million barrels per day through July.
However, the Saudis and Russian’s backing of an extension are contingent on the compliance of countries like Nigeria and Iraq with existing measures to reduce global supplies, Reuters reported.
Under the agreement reached in April, the cut expiring at the end of June is to be followed by a series of smaller reductions of 7.7 million barrels per day through Dec. 31 and 5.8 million barrels a day from Jan. 1 to April 30, 2022.
OPEC and its allies are scheduled to hold a meeting on June 9-10, but it was unclear if that video conference will take place in light of recent developments, including the apparent failure to host a planned Thursday meeting.
“Given the physical market is still in surplus and the demand data is not yet supportive, OPEC+ members still have strong incentive to play it safe and avoid the risk of derailing the rebalancing progress from the supply side until global demand can stand on its own two feet,” said Michael Ponikiewicz, vice president and portfolio manager at Acadian Asset Management.
The OPEC+ agreement that was reached in April did not begin until May 1 and, arguably, “the price action in April further incentivized three OPEC countries, led by Saudi Arabia, to ‘chip-in’ an additional 1.2 [million barrels per day], bringing the effective cut to nearly 11 [million barrels per day], showing their commitment to rebalancing the physical market,” said Ponikiewicz.
On April 20, U.S. benchmark West Texas Intermediate crude futures marked their first-ever settlement below zero, at a negative $37.63 a barrel.
The Saudis then announced, in May, an extra, voluntary 1 million barrel-per-day output reduction that began in June.
In solidarity with the move, Kuwait and the United Arab Emirates committed to additional cuts that totaled about 180,000 barrels per day.
“There continues to be a tenuous relationship between U.S. shale and OPEC+ in this global balancing act for oil markets in light of COVID-19 demand headwinds,” said Stacey Morris, director of research at Alerian, in emailed commentary.
“With the recovery in prices, some U.S. oil producers are starting to discuss restoring volumes that had been shut in,” while “OPEC+ is debating the forward path for its cuts.”
On Wednesday, the Energy Information Administration reported that U.S. crude inventories and stocks at the Cushing, Okla, storage hub edged down last week, but gasoline inventories inched higher and distillate stockpiles sharply climbed.
On Nymex Thursday, July gasoline tacked on nearly 2.7% to $1.149 a gallon and July heating oil added 0.9% to $1.0741 a gallon.
July natural gas settled at $1.822 per million British thermal units, up 0.05%.
The EIA reported Thursday that domestic supplies of natural gas rose by 102 billion cubic feet for the week ended May 29.
That was less than the average increase of 111 billion forecasted by analysts polled by S&P Global Platts.
Traders also continued to eye a storm in the Atlantic for any potential risk to energy production in the Gulf of Mexico.
The storm system named Cristobal weakened into a depression Thursday from a tropical storm, according to the National Hurricane Center.
https://www.marketwatch.com/story/oil-f ... latestnews
Re: OIL, NATURAL GAS
MARKETWATCH
"Oil prices log over 11% weekly rise, with OPEC+ set to meet Saturday to discuss extension of output cuts"
By Myra P. Saefong and Mark DeCambre
Published: June 5, 2020 at 3:26 p.m. ET
Crude-oil futures ended sharply higher Friday, supported by news that major oil producers will convene Saturday to discuss plans for extended productions cuts, while an unexpected monthly climb in U.S. jobs suggested a recovery in energy demand mat be at hand.
The Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, said they would hold meetings via videoconference on Saturday, with the OPEC member conference set to begin at 2 p.m. Central European time, or 8 a.m. Eastern time, and an OPEC+ conference to begin two hours later.
The major oil producers are expected to reach an official agreement to extend record oil production cuts of 9.7 million barrels a day through July, according to The Wall Street Journal.
The group decided to move forward a meeting that had been planned for June 9-10, after a tentative plan to meet on June 4 fell apart.
The weekend meeting is being viewed as a signal to crude investors that the group will deliver substantive near-term measures to stabilize oil’s value.
“It’s all about the OPEC+ meeting,” wrote Bjornar Tonhaugen, Rystad Energy’s head of oil markets, in a Friday note.
“As it was initially intended to happen on Thursday, when that did not materialize, prices fell because traders sensed a lack of agreement between the extended group’s producing countries.”
“Now the mood has changed again and prices rose, following news that a consensus may have been reached and a meeting is across the corner,” he wrote.
Meanwhile, U.S. data released Friday showing that the nation regained 2.5 million jobs in May and the unemployment rate fell to 13.3% from 14.7% in April, with that data leading to a rally in the stock market.
“The oil price rally went into overdrive after a surprisingly robust U.S. labor market report,” said Edward Moya, senior market analyst at Oanda, in a market update.
“The economic recovery is already happening and that could do wonders for crude consumption.”
West Texas Intermediate crude for July delivery rose $2.14, or 5.7%, to settle at $39.55 a barrel a barrel on the New York Mercantile Exchange.
Global benchmark Brent saw its August contract climb $2.31, or 5.8%, to end at $42.30 a barrel on the ICE Futures Europe.
For the week, WTI front-month U.S. oil futures were up 11.4%, while Brent climbed 11.8%m according to Dow Jones Market Data.
Both benchmarks tallied their sixth consecutive weekly gain and marked a fourth session at their highest settlement since March 6.
Oil had suffered substantially from closures intended to curb the spread of COVID-19, which drove down appetite for the commodity.
Reopening plans across the globe, however, have injected new life into the asset.
OPEC member Saudi Arabia and nonmember Russia had agreed on Wednesday to extend current OPEC+ supply cuts of 9.7 million barrels per day through July, but negotiations toward an official deal had been held up as the two countries pointed out that other OPEC+ members have failed to comply with their pledged reductions, according to The Wall Street Journal.
“The important point is that Saudi Arabia and Russia are in agreement on the extension even if it is only for a month,” Marshall Steeves, energy markets analyst at IHS Markit, told MarketWatch.
“If the global rebalancing hasn’t tightened a month from now or the price recovery falters, they will likely extend again in August; it’s probably a monthly review process at this point.”
Meanwhile, media organization Argus, citing OPEC delegates, reported Thursday that the Joint OPEC-Non-OPEC Technical Committee, which advises OPEC+ and offers recommendations on production adjustments, will meet on June 17, while the Joint Ministerial Monitoring Committee, which monitors compliance with OPEC+ production cuts, may meet on June 18.
The monthly OPEC oil report is due out on June 17.
News of a tentative pact to extend production cuts comes after Iraq and Nigeria committed to improve their adherence to any future agreements, WSJ reported.
Iraq cut only half of its agreed one million barrels a day in May and Nigeria cut 52% of the amount promised as a part of the April pact, the paper reported.
A sustainable recovery for oil is “probably premised on sustained production cuts, coupled with an uptrend in demand,” said Steeves.
“That demand recovery is a bit jagged but higher overall.”
In the U.S., Baker Hughes on Friday reported that the number of active U.S. rigs drilling for oil declined by 16 to 206 this week.
The number of oil rigs has fallen weekly since mid-March, implying further declines in domestic crude output.
Energy traders are also watching a storm that has brought flooding to Mexico and Central America.
Cristobal has strengthened back into a tropical storm from a depression Friday afternoon and the National Hurricane Center expects it to move over the central Gulf of Mexico on Saturday.
It could impact some oil and natural-gas production in the region, which would be bullish for prices.
On Friday, however, July natural gas fell 2.2% at $1.782 per million British thermal units, ending 3.6% lower for the week.
Also on Nymex, July gasoline rose 5.6% to $1.2136 a gallon, finishing 12.5% higher for the week, and July heating oil added 7.1% to $1.1506 a gallon, tacking on 11% for the week.
https://www.marketwatch.com/story/oil-p ... cle_inline
"Oil prices log over 11% weekly rise, with OPEC+ set to meet Saturday to discuss extension of output cuts"
By Myra P. Saefong and Mark DeCambre
Published: June 5, 2020 at 3:26 p.m. ET
Crude-oil futures ended sharply higher Friday, supported by news that major oil producers will convene Saturday to discuss plans for extended productions cuts, while an unexpected monthly climb in U.S. jobs suggested a recovery in energy demand mat be at hand.
The Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, said they would hold meetings via videoconference on Saturday, with the OPEC member conference set to begin at 2 p.m. Central European time, or 8 a.m. Eastern time, and an OPEC+ conference to begin two hours later.
The major oil producers are expected to reach an official agreement to extend record oil production cuts of 9.7 million barrels a day through July, according to The Wall Street Journal.
The group decided to move forward a meeting that had been planned for June 9-10, after a tentative plan to meet on June 4 fell apart.
The weekend meeting is being viewed as a signal to crude investors that the group will deliver substantive near-term measures to stabilize oil’s value.
“It’s all about the OPEC+ meeting,” wrote Bjornar Tonhaugen, Rystad Energy’s head of oil markets, in a Friday note.
“As it was initially intended to happen on Thursday, when that did not materialize, prices fell because traders sensed a lack of agreement between the extended group’s producing countries.”
“Now the mood has changed again and prices rose, following news that a consensus may have been reached and a meeting is across the corner,” he wrote.
Meanwhile, U.S. data released Friday showing that the nation regained 2.5 million jobs in May and the unemployment rate fell to 13.3% from 14.7% in April, with that data leading to a rally in the stock market.
“The oil price rally went into overdrive after a surprisingly robust U.S. labor market report,” said Edward Moya, senior market analyst at Oanda, in a market update.
“The economic recovery is already happening and that could do wonders for crude consumption.”
West Texas Intermediate crude for July delivery rose $2.14, or 5.7%, to settle at $39.55 a barrel a barrel on the New York Mercantile Exchange.
Global benchmark Brent saw its August contract climb $2.31, or 5.8%, to end at $42.30 a barrel on the ICE Futures Europe.
For the week, WTI front-month U.S. oil futures were up 11.4%, while Brent climbed 11.8%m according to Dow Jones Market Data.
Both benchmarks tallied their sixth consecutive weekly gain and marked a fourth session at their highest settlement since March 6.
Oil had suffered substantially from closures intended to curb the spread of COVID-19, which drove down appetite for the commodity.
Reopening plans across the globe, however, have injected new life into the asset.
OPEC member Saudi Arabia and nonmember Russia had agreed on Wednesday to extend current OPEC+ supply cuts of 9.7 million barrels per day through July, but negotiations toward an official deal had been held up as the two countries pointed out that other OPEC+ members have failed to comply with their pledged reductions, according to The Wall Street Journal.
“The important point is that Saudi Arabia and Russia are in agreement on the extension even if it is only for a month,” Marshall Steeves, energy markets analyst at IHS Markit, told MarketWatch.
“If the global rebalancing hasn’t tightened a month from now or the price recovery falters, they will likely extend again in August; it’s probably a monthly review process at this point.”
Meanwhile, media organization Argus, citing OPEC delegates, reported Thursday that the Joint OPEC-Non-OPEC Technical Committee, which advises OPEC+ and offers recommendations on production adjustments, will meet on June 17, while the Joint Ministerial Monitoring Committee, which monitors compliance with OPEC+ production cuts, may meet on June 18.
The monthly OPEC oil report is due out on June 17.
News of a tentative pact to extend production cuts comes after Iraq and Nigeria committed to improve their adherence to any future agreements, WSJ reported.
Iraq cut only half of its agreed one million barrels a day in May and Nigeria cut 52% of the amount promised as a part of the April pact, the paper reported.
A sustainable recovery for oil is “probably premised on sustained production cuts, coupled with an uptrend in demand,” said Steeves.
“That demand recovery is a bit jagged but higher overall.”
In the U.S., Baker Hughes on Friday reported that the number of active U.S. rigs drilling for oil declined by 16 to 206 this week.
The number of oil rigs has fallen weekly since mid-March, implying further declines in domestic crude output.
Energy traders are also watching a storm that has brought flooding to Mexico and Central America.
Cristobal has strengthened back into a tropical storm from a depression Friday afternoon and the National Hurricane Center expects it to move over the central Gulf of Mexico on Saturday.
It could impact some oil and natural-gas production in the region, which would be bullish for prices.
On Friday, however, July natural gas fell 2.2% at $1.782 per million British thermal units, ending 3.6% lower for the week.
Also on Nymex, July gasoline rose 5.6% to $1.2136 a gallon, finishing 12.5% higher for the week, and July heating oil added 7.1% to $1.1506 a gallon, tacking on 11% for the week.
https://www.marketwatch.com/story/oil-p ... cle_inline
Re: OIL, NATURAL GAS
MARKETWATCH
"Oil ends lower as extension of OPEC+ output cuts fail to stem oversupply worries"
By Myra P. Saefong and Mark DeCambre
Published: June 8, 2020 at 3:42 p.m. ET
Crude-oil futures turned lower Monday as investors focused on the prospect of increased output from some countries, even after OPEC and allied nations agreed Saturday to extend a production cut of nearly 10 million barrels of oil a day through the end of July.
Overall compliance to the production-cut deal, which was a sticking point headed into the gathering, has been a consistent worry, experts said.
Reuters reported that Gulf OPEC producers, which pledged voluntary production cuts of 1.18 million barrels per day that began in June, have no plans to extend those reductions beyond this month.
Those were in addition to the agreement between the Organization of the Petroleum Exporting Countries and their allies, collectively known as OPEC+.
The extra curtailments from Saudi Arabia, the United Arab Emirates and Kuwait were “not insignificant,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy, in emailed commentary.
“It would be too good to be true to have a total of nearly 11 million [barrels per day] in voluntary cuts extended for a month at times when we see supply deficits."
"Keeping those bonus cuts would just not be justified for the three Gulf producers.”
A fear of a ramp-up in output from North American shale-oil producers as prices of crude climb, a refusal by Mexico to adhere to production cuts and a report that Libya has restarted production at its largest oil field, have also undercut optimism about an extension of the historic output-cut agreement, the Wall Street Journal reported.
The combination of Mexico and Libya could contribute an additional 400,000 barrels a day of crude.
West Texas Intermediate crude for July delivery, the U.S. benchmark, lost $1.36, or 3.4%, to settle at $38.19 a barrel on the New York Mercantile Exchange, after trading as high as $40.44 intraday Monday.
On Friday, the front-month WTI contract finished with a weekly gain of 11.4%, according to Dow Jones Market Data.
Global benchmark Brent oil for August delivery, meanwhile, retreated by $1.50, or nearly 3.6%, to $40.80 a barrel on ICE Futures Europe.
Prices for the front-month contract had touched an intraday high of $43.41, after posting a weekly gain of 11.8% on Friday.
Both grades of oil finished Friday at their highest levels since March 6 and booked a sixth consecutive weekly gain in anticipation of the pact from the major oil-producing giants.
OPEC+ concluded a videoconference meeting on Saturday, adopting measures aimed at cutting the excess production depressing prices as global aviation remains largely grounded due to the coronavirus pandemic.
The curbed output represents some 10% of the world’s overall supply.
Without the extension of the cuts, the reductions would have tapered to 7.7 million barrels per day July to December, even as the crude industry contends with a pandemic that has sent much of the world spiraling into recession — an economic backdrop that is bearish for oil uptake.
The WSJ reported that key OPEC member, Libya, exempt from previous quotas because of a long-running civil war, ended a five-month shutdown at its Sharara oil field, citing government officials.
OPEC+ had initially agreed in April that it would cut supply by 9.7 million barrels per day during May-June to prop up prices that collapsed due to the coronavirus crisis.
The reductions will be reviewed monthly, with the next meeting for the compliance monitoring committee slated for June 18.
OPEC+ scheduled its next conference for Dec. 1.
Goldman suggested that the limited scope of the extension implies a shift in strategy for major OPEC producers that may be aimed at reining in U.S. oil production.
“By targeting normalized inventories without committing to an extended cut that would benefit long-term sentiment and high-cost producers, we believe that OPEC remains focused on sustainably increasing revenues through a combination of higher prices but also higher market share,” wrote commodity analysts at Goldman Sachs, including Damien Courvalin, Callum Bruce and Jeff Currie, in a research report that was published before OPEC’s deal.
Reuters reported that Saudi Arabia sharply raised its monthly crude prices for July.
“While the errant producers such as Iraq and Nigeria have vowed to reach 100% conformity and compensate for prior underperformance, we still think they will likely continue to have some commitment issues over the course of the summer,” Helima Croft, head of global commodity strategy at RBC Capital Markets, wrote in a note dated June 6.
Meanwhile, Cristobal, which weakened to a tropical depression on Monday from a tropical storm, made its way through the Gulf of Mexico over the weekend.
It had raised concern over oil and natural-gas production in the region.
As of Monday in the Gulf of Mexico, 34% of oil production and 35% of natural-gas production in the region was shut in due to the storm, according to the Bureau of Safety and Environmental Enforcement.
On Nymex Monday, July natural gas settled at $1.789 per million British thermal units, up 0.4%.
July gasoline shed 1.5% to $1.195 a gallon and July heating oil shed nearly 2.6% to $1.1213 a gallon.
https://www.marketwatch.com/story/oil-f ... cle_inline
"Oil ends lower as extension of OPEC+ output cuts fail to stem oversupply worries"
By Myra P. Saefong and Mark DeCambre
Published: June 8, 2020 at 3:42 p.m. ET
Crude-oil futures turned lower Monday as investors focused on the prospect of increased output from some countries, even after OPEC and allied nations agreed Saturday to extend a production cut of nearly 10 million barrels of oil a day through the end of July.
Overall compliance to the production-cut deal, which was a sticking point headed into the gathering, has been a consistent worry, experts said.
Reuters reported that Gulf OPEC producers, which pledged voluntary production cuts of 1.18 million barrels per day that began in June, have no plans to extend those reductions beyond this month.
Those were in addition to the agreement between the Organization of the Petroleum Exporting Countries and their allies, collectively known as OPEC+.
The extra curtailments from Saudi Arabia, the United Arab Emirates and Kuwait were “not insignificant,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy, in emailed commentary.
“It would be too good to be true to have a total of nearly 11 million [barrels per day] in voluntary cuts extended for a month at times when we see supply deficits."
"Keeping those bonus cuts would just not be justified for the three Gulf producers.”
A fear of a ramp-up in output from North American shale-oil producers as prices of crude climb, a refusal by Mexico to adhere to production cuts and a report that Libya has restarted production at its largest oil field, have also undercut optimism about an extension of the historic output-cut agreement, the Wall Street Journal reported.
The combination of Mexico and Libya could contribute an additional 400,000 barrels a day of crude.
West Texas Intermediate crude for July delivery, the U.S. benchmark, lost $1.36, or 3.4%, to settle at $38.19 a barrel on the New York Mercantile Exchange, after trading as high as $40.44 intraday Monday.
On Friday, the front-month WTI contract finished with a weekly gain of 11.4%, according to Dow Jones Market Data.
Global benchmark Brent oil for August delivery, meanwhile, retreated by $1.50, or nearly 3.6%, to $40.80 a barrel on ICE Futures Europe.
Prices for the front-month contract had touched an intraday high of $43.41, after posting a weekly gain of 11.8% on Friday.
Both grades of oil finished Friday at their highest levels since March 6 and booked a sixth consecutive weekly gain in anticipation of the pact from the major oil-producing giants.
OPEC+ concluded a videoconference meeting on Saturday, adopting measures aimed at cutting the excess production depressing prices as global aviation remains largely grounded due to the coronavirus pandemic.
The curbed output represents some 10% of the world’s overall supply.
Without the extension of the cuts, the reductions would have tapered to 7.7 million barrels per day July to December, even as the crude industry contends with a pandemic that has sent much of the world spiraling into recession — an economic backdrop that is bearish for oil uptake.
The WSJ reported that key OPEC member, Libya, exempt from previous quotas because of a long-running civil war, ended a five-month shutdown at its Sharara oil field, citing government officials.
OPEC+ had initially agreed in April that it would cut supply by 9.7 million barrels per day during May-June to prop up prices that collapsed due to the coronavirus crisis.
The reductions will be reviewed monthly, with the next meeting for the compliance monitoring committee slated for June 18.
OPEC+ scheduled its next conference for Dec. 1.
Goldman suggested that the limited scope of the extension implies a shift in strategy for major OPEC producers that may be aimed at reining in U.S. oil production.
“By targeting normalized inventories without committing to an extended cut that would benefit long-term sentiment and high-cost producers, we believe that OPEC remains focused on sustainably increasing revenues through a combination of higher prices but also higher market share,” wrote commodity analysts at Goldman Sachs, including Damien Courvalin, Callum Bruce and Jeff Currie, in a research report that was published before OPEC’s deal.
Reuters reported that Saudi Arabia sharply raised its monthly crude prices for July.
“While the errant producers such as Iraq and Nigeria have vowed to reach 100% conformity and compensate for prior underperformance, we still think they will likely continue to have some commitment issues over the course of the summer,” Helima Croft, head of global commodity strategy at RBC Capital Markets, wrote in a note dated June 6.
Meanwhile, Cristobal, which weakened to a tropical depression on Monday from a tropical storm, made its way through the Gulf of Mexico over the weekend.
It had raised concern over oil and natural-gas production in the region.
As of Monday in the Gulf of Mexico, 34% of oil production and 35% of natural-gas production in the region was shut in due to the storm, according to the Bureau of Safety and Environmental Enforcement.
On Nymex Monday, July natural gas settled at $1.789 per million British thermal units, up 0.4%.
July gasoline shed 1.5% to $1.195 a gallon and July heating oil shed nearly 2.6% to $1.1213 a gallon.
https://www.marketwatch.com/story/oil-f ... cle_inline