OIL, NATURAL GAS

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OIL, NATURAL GAS

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MARKETWATCH

"U.S. oil slips back after 2-session climb ahead of domestic inventory data"


By Myra P. Saefong and Mark DeCambre

Published: Aug 28, 2018 3:19 p.m. ET

U.S. oil futures pulled back on Tuesday after two sessions of consecutive gains, but losses were modest as traders fretted over signs of receding output and braced for the latest weekly U.S. crude inventory data.

“A series of factors such as a weaker dollar, investor confidence on the U.S.-Mexico trade deal and concerns over supply disruptions coming into light again, appear to be supporting these levels right now, before markets turn their focus to the weekly inventory reports due later today and [Wednesday],” said analysts at ICICI Bank in a daily note.

West Texas Intermediate crude for October delivery on the New York Mercantile Exchange shed 34 cents, or 0.5%, to settle at $68.53 a barrel, a day after notching the highest finish for a front-month contract since Aug. 7, FactSet data show.

Global benchmark October Brent crude lost 26 cents, or 0.3%, to $75.95 a barrel on ICE Futures Europe.

It finished Monday at the highest for a front-month contract since July 10, and continues to trade well above the U.S. benchmark price.

Renewed U.S. sanctions on Iran and supply disruptions in Libya and Venezuela have supported oil prices lately, amid data showing growing output from major producers such as Saudi Arabia (a member of the Organization of the Petroleum Exporting Countries) and non-OPEC producer Russia.

U.S. sanctions on oil exports go into effect in November, with investors estimating more than 1 million barrels daily being taken off line.

However, some market participants estimate that Saudi Arabia, the world’s swing producer and de facto leader of OPEC, could offset any Iranian shortfalls, which would push prices higher, said Greg Sharenow, portfolio manager at Pimco.

“I believe that Saudi [Arabia] will adjust output and exports to meet client needs."

"They won’t force oil onto markets, nor will they decline client demands,” he said in a recent note.

On Monday, a conference call hosted by the Joint Ministerial Monitoring Committee of OPEC and non-OPEC countries indicated that nations participating in the production-cut pact implemented at the start of 2017 had reduced production by 9% more than required in July, according to report from Reuters.

That meant compliance was at 109%, down from 121% in June and 147% in May.

Uncertainty about supply-demand factors has whipped prices around, but the trend has mostly been tilted upward lately.

U.S. oil futures have been up seven of the past nine sessions, based on the October contract.

Looking ahead, market participants await data late Tuesday on U.S. inventories from the American Petroleum Institute after it showed that U.S. supplies fell by a greater-than-expected 5.2 million barrels for the week ended Aug. 17, setting the stage for last week’s crude rally.

A more closely watched U.S. Energy Information Administration report is due Wednesday.

Last week, that report helped to confirm the sharp API inventory decline.

Some industry experts are predicting inventory reductions to persist, albeit at more moderate levels.

On average, analysts polled by S&P Global Platts expect to see a decline of 1 million barrels in domestic crude supplies for the week ended Aug. 24.

They also forecast a fall of 160,000 barrels in gasoline stockpiles, but looked for a climb of 1.7 million barrels in distillates, which include heating oil.

Meanwhile, some slack in the U.S. dollar offered support to oil futures, with the popular ICE U.S. Dollar Index off 0.1%, contributing to a 0.5% decline week to date.

A softening dollar can make commodities priced in the unit comparatively more attractive to buyers using other currencies.

On Nymex Tuesday, September gasoline fell 0.5% to $2.079 a gallon, while September heating oil shed 0.2% to $2.211 a gallon.

The September contracts for the oil products expire at Friday’s settlement.

In other energy trading, September natural gas lost 0.8% to $2.852 per million British thermal units, with the contract due to expire at Wednesday’s settlement.

https://www.marketwatch.com/story/oil-t ... 2018-08-28
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Re: OIL, NATURAL GAS

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MARKETWATCH

"Oil tallies highest finish of the month as U.S. crude supplies fall more than expected"


By Myra P. Saefong and Mark DeCambre

Published: Aug 29, 2018 3:16 p.m. ET

Oil prices climbed Wednesday to score their highest finish of the month, after a U.S. government report showed that domestic crude supplies fell more than expected last week.

October West Texas Intermediate crude on the New York Mercantile Exchange, the U.S. oil benchmark, tacked on 98 cents, or 1.4%, to settle at $69.51 a barrel.

The global benchmark October Brent crude settled $1.19, or 1.6%, higher at $77.14 a barrel on ICE Futures Europe.

Both contracts marked their highest settlements this month to date, according to FactSet data.

The Energy Information Administration reported Wednesday that domestic crude supplies declined by 2.6 million barrels for the week ended Aug. 24.

Analysts surveyed by S&P Global Platts had forecast a fall of 1 million barrels, while the American Petroleum Institute on Tuesday reported a modest rise of 38,000 barrels, according to sources.

The “crude numbers ... definitely have a slight bullish tilt to them,” said Tariq Zahir, managing member at Tyche Capital Advisors, adding that the report also revealed a bigger draw than expected in gasoline.

He warned, however, that a supply build at the U.S. trading hub at Cushing, Okla., as well as the upcoming refinery maintenance season and the U.S. driving season coming to a close all stand have to potential to pressure oil prices.

Gasoline stockpiles fell 1.6 million barrels for the week, while distillate stockpiles shed 800,000 barrels, according to the EIA.

The S&P Global Platts survey forecast a supply decrease of 160,000 barrels for gasoline, along with a climb of 1.7 million barrels for distillate stocks.

On Nymex, September gasoline climbed 2.7 cents, or 1.3%, to $2.106 a gallon, while September heating oil added 3.1 cents, or 1.4%, to $2.242 a gallon.

The September contracts for the products expire at Friday’s settlement.

The weaker tone for WTI oil overnight in electronic trading was attributed in part to reports late Tuesday that embattled Venezuela’s state-run oil firm signed a potential major investment agreement valued at $430 million to increase production by 640,000 barrels a day.

Reuters reported that Venezuelan state-run oil firm PDVSA signed the investment agreement to increase production at 14 oil fields.

However, some industry participants were skeptical that the investment would go through, given the country’s economic woes, according to the report, which didn’t specify the origin of the investment in PDVSA.

U.S. sanctions on Iran and supply disruptions in Libya and Venezuela have supported oil prices lately, amid data showing growing output from major producers such as Saudi Arabia (a member of the Organization of the Petroleum Exporting Countries) and non-OPEC producer Russia.

U.S. sanctions on oil exports go into effect in November, with investors estimating more than 1 million barrels a day will be taken off line.

The Wall Street Journal reported on Tuesday that oil exports from Iran are already declining even before crude sanctions officially kick in Nov. 4.

The report, citing people familiar with the situation, said an unexpected drop in oil shipments could pose a supply risk for global markets, with the state-run National Iranian Oil Co. provisionally expecting crude shipments next month to drop to about 1.5 million barrels a day, down from about 2.3 million barrels a day in June.

President Donald Trump’s decision in May to pull the U.S. out of a 2015 international agreement to curb Iran’s nuclear program set the stage for the reimposition of economic sanctions on the Islamic Republic.

Rounding out trading on Nymex, September natural gas rose 1.5% to $2.895 per million British thermal units, with the contract expiring at the settlement.

The most-active October contract settled up 0.6% at $2.863.

—Christopher Alessi contributed to this article

https://www.marketwatch.com/story/oil-t ... 2018-08-29
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Re: OIL, NATURAL GAS

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MARKETWATCH

"API data reportedly show U.S. crude supplies little changed for the week"


By Myra P. Saefong

Published: Aug 28, 2018 5:03 p.m. ET

The American Petroleum Institute reported Tuesday that U.S. crude supplies barely budged for the week ended Aug. 24, climbing 38,000 barrels, according to sources.

The API data also showed supplies of gasoline up 21,000 barrels, while distillate stockpiles rose 982,000 barrels, sources said.

Supply data from the Energy Information Administration will be released Wednesday.

Analysts polled by S&P Global Platts expect the EIA to report a fall of 1 million barrels in crude supplies.

They also forecast a supply decline of 160,000 barrels for gasoline and an increase of 1.7 million barrels for distillates.

October crude was at $68.53 a barrel in electronic trading, unchanged from the settlement on the New York Mercantile Exchange.

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Re: OIL, NATURAL GAS

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MARKETWATCH

"Oil extends August climb, with U.S. crude benchmark prices topping $70 a barrel"


By Myra P. Saefong and Mark DeCambre

Published: Aug 30, 2018 3:30 p.m. ET

Oil prices on Thursday extended a climb to their highest levels in August, buoyed by two consecutive weekly declines in U.S. crude supplies and ongoing concerns over tighter global inventories tied to U.S. sanctions on Iran.

October West Texas Intermediate crude on the New York Mercantile Exchange, the U.S. oil benchmark, topped $70 a barrel for the first time since July, tacking on 74 cents, or 1.1%, to settle at $70.25 a barrel.

That was the highest finish for the front-month contract since July 20, according to Dow Jones Market Data.

Global benchmark October Brent crude, which expires on Friday, gained 63 cents, or 0.8%, at $77.77 a barrel on ICE Futures Europe.

Both contracts marked their highest settlements for the month of August and were poised to notch gains for the week and month, according to FactSet data.

On Wednesday, the Energy Information Administration reported that U.S. crude supplies declined by 2.6 million barrels for the week ended Aug. 24.

That followed a drop of 5.8 million barrels reported by the EIA the week before.

WTI oil prices have been holding on to its U.S. supply-data inspired gains from Wednesday, “but the primary bullish factor remains rooted in Iran sanctions,” said Stephen Innes, head of trading at OANDA.

Indeed, potential disruptions to global crude supplies, including U.S. sanctions on Iran that take effect in early November, have been at the center of the recent rally in WTI and Brent oil.

Also adding to upward momentum for crude were reports that Iran is threatening to halt the flow of oil via the Strait of Hormuz, which is the thoroughfare for 30% of seaborne crude, according to Bloomberg News.

In other energy trading, futures prices for oil products ended higher.

September gasoline added 1.8% to nearly $2.144 a gallon and September heating oil added 0.3% to $2.248 a gallon.

The September contracts expire at Friday’s settlement.

At the U.S. retail level, AAA said this week that it expects prices for gasoline to drop to an average $2.70 a gallon this fall, in part due to expectations for a decline in consumer demand after Labor Day.

Natural-gas futures, meanwhile, ended with a modest gain after the EIA on Thursday said U.S. supplies of the commodity rose by 70 billion cubic feet for the week ended Aug. 24.

That was higher than the average 64 billion-cubic-foot climb forecast by analysts polled by S&P Global Platts.

October natural gas, on its first full trading day as a front-month contract, settled at $2.874 per million British thermal units, up 0.4%.

The contract was still set to end the month about 2.7% higher.

https://www.marketwatch.com/story/oil-e ... 2018-08-30
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Re: OIL, NATURAL GAS

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MARKETWATCH

"Oil prices end lower, but score solid gains for the month"


By Myra P. Saefong and Mark DeCambre

Published: Aug 31, 2018 3:34 p.m. ET

Oil ended lower Friday, as the U.S.-China trade dispute feeds worries about demand, but prices held on to a solid gain for the month, with U.S. sanctions on Iranian oil expected to lead to tighter global crude supplies.

October West Texas Intermediate crude on the New York Mercantile Exchange, the U.S. oil benchmark, fell 45 cents, or 0.6%, to settle at $69.80 a barrel.

The October contract ended the week 1.6% higher and finished the month of August with a rise of about 3.2%, according to Factset data.

Based on the front-month contract settlement of $68.76 on July 31, WTI prices were up 1.5% this month.

On Thursday, WTI settled above $70 a barrel to mark its highest finish since July 20, according to Dow Jones Market Data.

Global benchmark October Brent crude, which expired at the day’s settlement, shed 35 cents, or nearly 0.5%, to $77.42 a barrel on ICE Futures Europe.

The contract saw a weekly rise of 2.1% and a monthly climb of about 4.3%.

November, now the front-month contract, settled at $77.64, down 38 cents, or 0.5%.

Most markets will be closed for trade on Monday in observance of Labor Day.

Brent on the ICE Futures Europe exchange will be open for trading, but settle an hour early.

Crude moves this week have been mostly supported by potential disruptions to global crude supplies, including U.S. sanctions on Iran’s oil that take effect in early November.

On top of that, inventories in the U.S. have demonstrated signs of tightening.

Earlier in the week, the Energy Information Administration reported that U.S. crude supplies declined by 2.6 million barrels for the week ended Aug. 24.

That followed a drop of 5.8 million barrels reported by the EIA the week before.

Investors kept an eye on recent reports suggesting that President Donald Trump may yet follow through with tariffs on China, despite some signs that Beijing and Washington were angling toward productive negotiations to resolve differences over trade imbalances.

Bloomberg on Thursday reported that Trump wants to move ahead with his plan to place tariffs on $200 billion in additional Chinese imports as early as next week.

Companies have until Sept. 6 to comment on the proposed duties, and Trump wants to impose the tariffs once that deadline passes.

Trade disputes, if they escalate between the world’s biggest economic superpowers, are seen as having the potential to disrupt the global economy and hurt demand for crude.

“The bottom line for oil is that, as long the Saudis don’t really open the spigots [on oil output], U.S. production doesn’t spike again, and the U.S. and China continue to move towards a resolution to the trade war (which would subsequently keep a lid on the dollar), then the 2018 oil rally can continue,” said Tyler Richey, co-editor of the Sevens Report.

Data released Friday on the number of active U.S. rigs drilling for oil, a proxy for output, had little impact on the market.

Baker Hughes said the number of rigs rose 2 to 862.


Elsewhere in the energy complex, September gasoline ended nearly flat at $2.144 a gallon, settling up 3% from the month-ago finish, according to FactSet data, while September heating oil shed 0.3% at $2.241 a gallon, for a monthly rise of 5.1%.

The September contracts expired at Friday’s settlement.

At the U.S. retail level, AAA said this week that it expects prices for gasoline to drop to an average $2.70 a gallon this fall, in part due to expectations for a decline in consumer demand after Labor Day.

October natural gas added 1.5% to $2.916 per million British thermal units, with the contract up about 4.8% in August.

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Re: OIL, NATURAL GAS

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MARKETWATCH

"Oil prices settle with modest gain as output concerns from Gulf storm Gordon ease"


By Myra P. Saefong and Christopher Alessi

Published: Sept 4, 2018 3:16 p.m. ET

Oil futures settled only a few cents a barrel higher on Tuesday, with U.S. benchmark prices holding below $70, as a storm in the Gulf of Mexico looked set to miss the bulk of the region’s energy production platforms.

A recent survey showing production among members of the Organization of the Petroleum Exporting Countries at the highest level of the year so far also limited gains for oil prices.

October West Texas Intermediate crude on the New York Mercantile Exchange, the U.S. oil benchmark, rose 7 cents, or 0.1%, from Friday’s finish to settle $69.87 a barrel—well below the intraday high of $71.40.

Most U.S. markets were closed Monday for the Labor Day holiday.

The October contract finished the month of August with a rise of about 3.2%, according to FactSet data.

November Brent, the global benchmark, settled at $78.17 a barrel, edging up by 2 cents from Monday’s finish on the ICE Futures Europe exchange.

Among the oil products, October gasoline fell 0.1% to $1.994 a gallon, while October heating oil added 0.5% to $2.255 a gallon.

Tropical storm Gordon was poised to become a hurricane as it makes landfall along the U.S. Gulf of Mexico coastline later Tuesday, prompting oil producers “to take precautionary measures and shut production at offshore oil platforms,” according to Tamas Varga, an analyst at brokerage PVM Oil Associates.

The U.S. Bureau of Safety and Environmental Enforcement reported that as of 12:30 p.m. Eastern time Tuesday, 54 production platforms, which represent nearly 7.9% of all manned platforms in the Gulf of Mexico, have been evacuated because of the storm.

About 9.2% of oil production and nearly 9.1% of natural-gas production in the Gulf has been shut in.

James Williams, energy economist at WTRG Economics, said that “while Gordon should hit on the Eastern edge of Gulf Coast oil production it’s impact should be minimal.”

“Some production is being shut in and many rigs will be evacuated, but the impact on output should be short-lived if Gordon follows its expected path,” he told MarketWatch.

And “Unlike Harvey a year ago, Gordon’s impact on refineries should be minimal.”

Meanwhile, Varga said global supply issues remain in focus.

“A week of violence [in Libya] between rival militias in the capital of Tripoli is also making oil bears cautious,” Varga said.

The analyst said the “main bullish catalyst” driving oil prices up in recent weeks — with Brent advancing more than 4% last month — has been Iran.

Iranian exports are already falling at a faster rate than expected, with officials at the state-run National Iranian Oil Co. provisionally expecting crude shipments to drop to around 1.5 million barrels a day in September, down from around 2.3 million barrels a day in June, according to people familiar with the matter.

President Trump’s decision in May to pull the U.S. out of a 2015 international agreement to curb Iran’s nuclear program set the stage for the reimposition of economic sanctions on the Islamic Republic, with measures directly targeting the country’s oil industry set to take effect in November.

At the same time, rising production from the Organization of the Petroleum Exporting Countries and its allies including Russia has been helping to keep a “cap on prices,” said Christyan Malek, an oil analyst at JPMorgan Chase & Co.

OPEC, whose de facto leader is Saudi Arabia, and Russia agreed in late June to begin ramping up crude production after more than a year of holding back output.

A Bloomberg News survey of analysts, oil companies and ship-tracking data reported Monday showed that OPEC output rose in August to 32.74 million barrels a day—the highest level this year—up 420,000 barrels a day from July.

Malek said oil market participants were looking ahead to an Algeria OPEC meeting at the end of the month for clearer signs on how prepared the Saudis and Russians are to put more barrels on the market and fill the gap left by declining Iranian exports.

The Joint Ministerial Monitoring Committee, which ensures that the original output-cut agreement implemented in January 2017 between OPEC and non-OPEC producers is met, has planned its next meeting for Sept. 23.

Investors and analysts were also looking ahead to monthly reports from OPEC and the International Energy Agency next week.

Elsewhere in energy action, prices for natural gas ended sharply lower.

The storm is “not expected to cause any significant sustained disruptions to production, but could bring cooler temperatures across large areas of the country, which would weigh on cooling demand” for natural gas, said Robbie Fraser, commodity analyst at Schneider Electric.

“That comes with overall production still regularly setting record highs.”

October natural gas settled at $2.823 per million British thermal units, down 9.3 cents, or 3.2%.

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Re: OIL, NATURAL GAS

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MARKETWATCH

"Oil prices drop to 1-week lows as Gulf Coast storm Gordon misses major energy sites"


By Myra P. Saefong and Rachel Koning Beals

Published: Sept 5, 2018 3:38 p.m. ET

Oil prices settled on Wednesday at their lowest levels in about a week as a major storm that passed through the Gulf of Mexico missed the bulk of the oil and natural-gas operations in the region.

“Gordon largely turned out to be a non-event for the energy market, and if anything, the sell-the-news aspect of the tropics trade has triggered a profit-taking pullback across the space,” said Tyler Richey, co-editor of the Sevens Report.

October West Texas Intermediate crude on the New York Mercantile Exchange, the U.S. oil benchmark, fell $1.15, or nearly 1.7%, to settle at $68.72 a barrel — the lowest for the contract in just over a week.

November Brent, the global benchmark, settled at $77.27 a barrel, down 90 cents, or almost 1.2%, on the ICE Futures Europe exchange.

It marked the lowest finish since last Wednesday.

Among the oil products, October gasoline fell 1.5% to $1.965 a gallon, while October heating oil fell 0.9% to about $2.235 a gallon.

Expectations that Gordon would become a hurricane as it made landfall Tuesday had triggered a surge in oil prices Tuesday, with Brent briefly nearing the $80-a-barrel threshold.

However, the storm ultimately “weakened considerably and deviated away from oil-producing areas,” said Stephen Brennock, an analyst at brokerage PVM Oil Associates Ltd.

Gordon has since weakened to a tropical depression, according to the National Hurricane Center.

The U.S. Bureau of Safety and Environmental Enforcement reported midday Wednesday that personnel from 48 production platforms, which represent about 7% of all manned platforms in the Gulf of Mexico, remained evacuated because of the storm.

About 9.3% of oil production and 10.4% of natural-gas production in the Gulf is shut in.

Prices have been bolstered in recent weeks and are likely to remain supported amid signs that Iranian crude exports are declining at a faster rate than expected, in the run up to November when U.S. sanctions on the country’s oil industry take effect.

OPEC, whose de facto leader is Saudi Arabia, and Russia agreed in late June to begin ramping up crude production after more than a year of holding back output.

A Bloomberg survey this week showed that OPEC output rose in August to 32.74 million barrels a day—the highest level this year—up 420,000 barrels a day from July.

And on the other side of the ledger, “Chinese demand fears may be a factor finally exerting downward pressure on oil prices,” said Fawad Razaqzada, market analyst at Forex.com.

“In part, this is because of the U.S. dollar’s strength, weighing heavily on emerging market currencies, including the yuan, which in turn has pushed up the costs of all dollar-denominated commodities,” he added.

On Wednesday, however, the benchmark ICE U.S. Dollar Index eased back by 0.3% to trade nearly flat for the week.

Looking ahead, industry group the American Petroleum Institute will release its weekly U.S. petroleum-supply figures late Wednesday, with the closely watched Energy Information Administration report due Thursday.

Both reports were delayed by a day this week because of Monday’s Labor Day holiday.

On average, analysts forecast a decline of 2.5 million barrels in domestic crude stockpiles for the week ended Aug. 31, according to an S&P Global Platts survey.

They also expect a decline of 1.5 million barrels in gasoline supplies and see distillate stocks unchanged for the week.

Natural-gas prices, meanwhile, ended ahead of an EIA update on U.S. supplies that is due Thursday.

A survey from S&P Global Platts shows expectations for a rise of 60 billion cubic feet in natural-gas inventories.

October natural gas settled at $2.795 per million British thermal units, down 1%.

—Christopher Alessi contributed to this article

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Re: OIL, NATURAL GAS

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MARKETWATCH

"API data reportedly show U.S. crude supplies down for the week"


By Myra P. Saefong

Published: Sept 5, 2018 4:43 p.m. ET

The American Petroleum Institute reported Wednesday that U.S. crude supplies fell 1.2 million barrels for the week ended Aug. 31, according to sources.

The API data, which were released a day later than usual because of Monday's Labor Day holiday, showed supplies of gasoline rose 1 million barrels and distillate stockpiles climbed by 1.8 million barrels, sources said.

Supply data from the Energy Information Administration will be released Thursday.

Analysts polled by S&P Global Platts expect the EIA to report a fall of 2.5 million barrels in crude supplies.

They also forecast a supply decline of 1.5 million barrels for gasoline and expect distillate stocks to be unchanged for the week.

October crude was at $68.67 a barrel in electronic trading, down slightly from the $68.72 settlement on the New York Mercantile Exchange.

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Re: OIL, NATURAL GAS

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MARKETWATCH

"Oil ends lower as demand concerns persist, despite drop in U.S. crude supplies"


By Myra P. Saefong and Christopher Alessi

Published: Sept 6, 2018 3:20 p.m. ET

Oil declined on Thursday, with U.S. prices at their lowest settlement in more than two weeks, pressured by concerns over a potential decline in global demand on the back of the U.S. trade dispute with China and economic woes in emerging markets.

Price pressures also included sizable weekly gains in U.S. stockpiles of gasoline and distillates, which include heating oil, outweighing support from a hefty decline in domestic crude inventories as well as ongoing expectations for tighter crude supplies tied to U.S. sanctions on Iranian oil that begin in early November.

“Gasoline and heating-oil futures are still in the driver seat of the energy markets, after early week rallies due to [Gulf storm] Gordon have steadily come unwound since the short trading week started on Tuesday,” Tyler Richey, co-editor of the Sevens Report, told MarketWatch.

Trade tensions have also been “a drag on energy this week as the threat of an economic slowdown due to a new tariffs has weighed on commodities broadly,” he said.

October West Texas Intermediate crude, the U.S. oil benchmark, lost 95 cents, or 1.4%, to settle at $67.77 a barrel on the New York Mercantile Exchange.

That was the lowest finish for the contract since Aug. 21, according to FactSet data.

November Brent, the global benchmark, fell 77 cents, or 1%, to settle at $76.50 a barrel, following a loss of 1.2% in the previous session on the ICE Futures Europe exchange.

The Energy Information Administration reported Thursday that domestic crude supplies fell by 4.3 million barrels for the week ended Aug. 31.

That was larger than the 2.5 million-barrel fall expected by analysts polled by S&P Global Platts, and the decrease of 1.2 million barrels reported by the American Petroleum Institute Wednesday.

Supply data were released a day later than usual due to Monday’s Labor Day holiday.

Gasoline stockpiles rose 1.8 million barrels for the week, while distillate stockpiles added 3.1 million barrels, according to the EIA.

The S&P Global Platts survey forecast a supply decline of 1.5 million barrels for gasoline, but distillates were expected to be unchanged.

Among products, October gasoline shed 0.7% to settle at $1.951 a gallon, while October heating oil lost 1.1% to $2.209 a gallon.

Earlier in the week, crude contracts had been buoyed by worries that tropical storm Gordon would cause damage to energy operations in the Gulf of Mexico but that storm weakened without significant impact on the energy complex in the region.

Week to date, WTI crude futures trade nearly 3% lower, while Brent has lost more than 1%.

“Speculative investors have been scaling back their positions following Brent’s failure to break above $80,” said Ole Hansen, head of commodity strategy at Saxo Bank.

Short-term supply concerns have included the continuing risks to Iranian supply due to U.S. sanctions.

However, in a Thursday note, Mihir Kapadia, chief executive officer and founder of Sun Global Investors, said “oil prices have dipped in response to emerging-market stock declines."

"The uncertainty in emerging markets has weighed on trader sentiment, which has already been unsettled by the prospect of further U.S. trade tariffs on China.”

Crude production from members of the Organization of the Petroleum Exporting Countries is also on the rise, as expected following a pledge from the group to ease back on output cuts implemented at the start of 2017.

OPEC, not including newest member Congo, saw output rise to a 10-month high to 32.89 million barrels a day in August, according to an S&P Global Platts survey.

Also on Nymex, natural-gas prices ended lower after a separate EIA report revealed that domestic supplies of the commodity rose by 63 billion cubic feet for the week ended August 31.

Analysts polled by S&P Global Platts had forecast a climb of 60 billion cubic feet.

October natural gas slipped 0.8% to $2.772 per million British thermal units.

--Mark DeCambre contributed to this report

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Re: OIL, NATURAL GAS

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MARKETWATCH

"U.S. benchmark oil prices slip, book first weekly loss in 3 weeks"


By Myra P. Saefong and Rachel Koning Beals

Published: Sept 7, 2018 3:40 p.m. ET

U.S. benchmark oil futures saw a modest decline on Friday, booking a loss of nearly 3% for the week, the first weekly loss since mid August.

Concerns over the potential for weaker energy demand on the back of global trade tensions pressured prices, but expectations for tighter supplies as U.S. oil sanctions on Iran go into effect later this year provided some support.

October West Texas Intermediate crude, the U.S. oil benchmark, fell 2 cents to settle at $67.75 a barrel on the New York Mercantile Exchange — the lowest finish for the contract since Aug. 21, according to FactSet data.

The contract marked a 2.9% weekly loss, after two consecutive weeks of gains.

November Brent, the global benchmark, however, tacked on 33 cents, or 0.4%, to settle $76.83 a barrel on the ICE Futures Europe exchange, marking a reversal from earlier declines that sent prices to an intraday low of $75.88.

It settled down 1% for the week.

WTI prices are “still a mile away from August lows suggesting [a] bid on dips strategy remains in vogue as the long-term buy and hold traders stay focused on Iran sanctions, Chinese refineries unquenchable demand and a slightly improving sentiment in [emerging] markets,” said Stephen Innes, head of Asia Pacific trading at OANDA.

In August, WTI settled at lows around $65.

The long strategy for oil comes “down the “’64 million-dollar question’: how much oil will be removed from the global supply chain due to Iran sanctions,” said Innes.

“If the impact falls between the markets uppermost estimate, 1-1.5 million barrels, oil prices will ignite much higher given the frangible state of the supply and demand equation.”

Impending U.S. sanctions on Iran’s oil industry, set to take effect in November, may lead to tighter global supplies of crude.

The U.S. has reportedly considered waivers on the Iran sanctions for India, which is among Iran’s biggest crude customers, but “all in all, there is no reason to believe that we will see a turnaround in crude."

"It will continue to trend in this bear market for the following week,” said Nicholas Gunther, market research analyst at Long Leaf Trading Group.

The potential for new U.S. tariffs on Chinese goods has also contributed to concerns over the potential for weaker energy demand.

Near term, oil is “likely to continue to remain under pressure…reflecting concerns about waning demand growth,” said Rob Haworth, senior investment strategist at U.S. Bank.

“Over the rest of the year we expect oil prices to remain range bound,” he said. “

Softer production growth from the U.S. (due to transportation constraints in certain regions) as well as Iran and Venezuela will help provide a floor for prices.”

Meanwhile, strength in the U.S. dollar Friday also pressured prices for dollar-denominated oil.

The benchmark ICE U.S. Dollar index tacked on 0.4%, boosted by better-than-expected growth in U.S. jobs in August and a sharp increase in pay.

The U.S. created 201,000 new jobs in August, keeping the unemployment rate at an 18-year low, and the yearly rate of pay increases climbed to 2.9% from 2.7%, marking the highest level since June 2009.

Back on Nymex Friday, petroleum-product prices ended higher, with October gasoline up 1% at $1.97 a gallon, paring its weekly loss to about 1.4%.

October heating oil added 0.4% to $2.218 a gallon, settling about 1.1% lower on the week.

October natural gas finished at $2.776 per million British thermal units, up 0.1% Friday, but marking at a weekly drop of 4.8%.

“Natural-gas supplies should continue to build in the coming weeks as record production will overwhelm supply,” said Phil Flynn, senior market analyst at Price Futures Group.

Oil prices on Friday showed little reaction to weekly data from Baker Hughes that showed the number of rigs drilling for oil in the U.S. fell by 2 to 860 this week.

The total active U.S. rig count was unchanged at 1,048.


Monthly oil market reports also expected next week from the EIA Tuesday, the Organization of the Petroleum Exporting Countries Wednesday and International Energy Agency on Thursday.

—Christopher Alessi contributed to this article

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