RIGZONE
"Oil Down as Broader Markets Gear Up for Rate Hike"
by Bloomberg |Julia Fanzeres
Tuesday, July 26, 2022
Oil fell in a thin trading session as broader markets brace for an aggressive rate hike from the Federal Reserve.
West Texas Intermediate dropped 1.8% to settle below $95 a barrel.
Broader markets dropped after a slew of tepid earnings showed inflation was already starting to batter consumer behavior.
High gasoline prices are also causing Americans to alter their driving habits.
The Federal Reserve is expected to raise rates Wednesday, which many fear could tip the economy into a recession.
“Gasoline demand weakening at what should be a seasonally strong time, underscores fears of stagflation and what that might do to the economy,” said Stewart Glickman, Deputy Director of Equity Research at CFRA Research in New York.
Despite the bearish session, time spreads are indicating scarce near-term supply and Morgan Stanley noted in a recent report that the market remains tight.
Still, the investment bank trimmed its crude oil price forecasts this year and into 2023, citing reduced demand projections.
Oil has been gripped by bouts of volatility amid low liquidity in recent months as investors juggle competing supply and demand outlooks.
In 78 trading days since the start of April, WTI volumes have only been above the 200-day average on six occasions, underscoring the relative lack of activity in the market.
WTI is still up almost 30% this year, in part due to upended trade flows from Russia.
The gap between the US benchmark and Brent widened to more than $9 a barrel, indicating supply tightness is more pronounced in Europe than the US.
American gasoline demand has declined in the height of the typical driving season as expensive gasoline prices have caused Americans to alter their habits.
“Market liquidity remains thin as exchange margins remain high,” said Dennis Kissler, senior vice president of trading at BOK Financial.
“Fuel demand will remain key and for the last two weeks we have seen a definite decrease.”
Prices:
WTI for September delivery dropped $1.72 cents to settle at $94.98 a barrel in New York.
Brent for September settlement shed 75 cents to settle at $104.40 a barrel
The market is steeply backwardated, a bullish pattern marked by near-term prices commanding a premium to later-dates ones.
Brent’s prompt spread was $4.77 a barrel in backwardation, compared with $3.83 at the start of July.
The tight market may get some relief from recovering Libyan output but the country’s contribution will probably be volatile given the potential for conflict and unrest to flare quickly.
Supply from the OPEC producer has climbed back above 1 million barrels a day.
Additionally, the US is offering 20 million barrels of crude from its emergency reserves in its latest tender.
(with assistance from Alex Longley)
https://www.rigzone.com/news/wire/oil_d ... 7-article/
OIL, NATURAL GAS
Re: OIL, NATURAL GAS
Investing.com
"Oil Inventories Fall by 4.0M Barrels Last Week: API"
By Yasin Ebrahim
Jul 26, 2022
Investing.com -- U.S. crude oil inventories fell sharply last week, API data showed Tuesday, at a time when fresh worries about a slowdown in the global economy hurting energy demand remain front and center.
West Texas Intermediate, the U.S. benchmark, traded at $95.51 per barrel following the report after settling down $1.72 at $94.98 per barrel.
U.S. crude inventories decreased by about 4.0 million barrels for the week ended July 22.
That compared with a build of 1.9 million barrels reported by the API for the previous week.
Economists were expecting a decrease of about 1.1 million barrels.
The fall in crude inventories arrived just as the International Monetary Fund cut its outlook on global growth and warned that high inflation threatens to tip the global economy into recession.
The IMT cut its forecast on global GDP growth to 3.2% in 2022 from a forecast of 3.6% issued in April.
The official government inventory report due Wednesday is expected to show weekly U.S. crude supplies fell by about 1.0 million barrels last week.
https://www.investing.com/news/commodit ... pi-2854500
"Oil Inventories Fall by 4.0M Barrels Last Week: API"
By Yasin Ebrahim
Jul 26, 2022
Investing.com -- U.S. crude oil inventories fell sharply last week, API data showed Tuesday, at a time when fresh worries about a slowdown in the global economy hurting energy demand remain front and center.
West Texas Intermediate, the U.S. benchmark, traded at $95.51 per barrel following the report after settling down $1.72 at $94.98 per barrel.
U.S. crude inventories decreased by about 4.0 million barrels for the week ended July 22.
That compared with a build of 1.9 million barrels reported by the API for the previous week.
Economists were expecting a decrease of about 1.1 million barrels.
The fall in crude inventories arrived just as the International Monetary Fund cut its outlook on global growth and warned that high inflation threatens to tip the global economy into recession.
The IMT cut its forecast on global GDP growth to 3.2% in 2022 from a forecast of 3.6% issued in April.
The official government inventory report due Wednesday is expected to show weekly U.S. crude supplies fell by about 1.0 million barrels last week.
https://www.investing.com/news/commodit ... pi-2854500
Re: OIL, NATURAL GAS
REUTERS
"U.S. to sell additional 20 million barrels of oil from strategic reserve"
By Timothy Gardner
July 26, 2022
WASHINGTON, July 26 (Reuters) - The Biden administration on Tuesday said it will sell an additional 20 million barrels of oil from the Strategic Petroleum Reserve as part of a previous plan to tap the facility to calm oil prices boosted by Russia’s invasion of Ukraine and as demand recovers from the pandemic.
The administration said in late March it would release a record 1 million barrels of per day of oil for six months from the SPR, held in hollowed-out salt caverns on the coasts of Louisiana and Texas.
The United States has already sold 125 million barrels from the reserve with nearly 70 million barrels already delivered to purchasers, a senior administration official told reporters.
The SPR releases have been a "supply lifeline" to oil and refining companies as the industry continues to get oil production back online after declines during the peak of the COVID-19 pandemic, the official said.
The U.S. Energy Information Administration, the statistics arm of the Energy Department, said this month that U.S. oil output will rise to more than 11.9 million barrels per day (bpd) in 2022 and to nearly 12.8 million bpd in 2023, from about 11.2 million bpd in 2021.
That compares with a record near 12.3 million bpd in 2019.
The United States will take bids in autumn to begin the process of buying back 60 million barrels of crude for reserve, a first step in replenishing the stockpile after the 180 million barrel release, the Department of Energy said in May.
The department will soon propose a rule to help put oil back into the SPR, where levels have sunk to 475.5 million barrels, the lowest since June 1985, by allowing it to enter forward contracts to purchase oil in future years at fixed, preset prices.
"What it means in practice is that producers would have more certainty about future demand for their product, and that would encourage investment in production today," a senior U.S. official told reporters.
Oil purchases to replenish the SPR will not be competing with demand for oil in the near term as they will likely take place after fiscal year 2023, an official told reporters.
A U.S. Treasury Department analysis showed that the SPR releases, along with coordinated releases from international partners, have reduced gasoline prices at the pump by as much as 40 cents per gallon, compared to what they otherwise would have been.
International oil prices fell on Tuesday on the SPR sale and on consumer concerns about inflation and interest rates.
Brent crude futures settled at $104.40 a barrel, down 75 cents.
Reporting by Timothy Gardner, Doina Chiacu and Jeff Mason; Editing by Paul Simao, Andrea Ricci and Marguerita Choy
https://www.reuters.com/business/energy ... 022-07-26/
"U.S. to sell additional 20 million barrels of oil from strategic reserve"
By Timothy Gardner
July 26, 2022
WASHINGTON, July 26 (Reuters) - The Biden administration on Tuesday said it will sell an additional 20 million barrels of oil from the Strategic Petroleum Reserve as part of a previous plan to tap the facility to calm oil prices boosted by Russia’s invasion of Ukraine and as demand recovers from the pandemic.
The administration said in late March it would release a record 1 million barrels of per day of oil for six months from the SPR, held in hollowed-out salt caverns on the coasts of Louisiana and Texas.
The United States has already sold 125 million barrels from the reserve with nearly 70 million barrels already delivered to purchasers, a senior administration official told reporters.
The SPR releases have been a "supply lifeline" to oil and refining companies as the industry continues to get oil production back online after declines during the peak of the COVID-19 pandemic, the official said.
The U.S. Energy Information Administration, the statistics arm of the Energy Department, said this month that U.S. oil output will rise to more than 11.9 million barrels per day (bpd) in 2022 and to nearly 12.8 million bpd in 2023, from about 11.2 million bpd in 2021.
That compares with a record near 12.3 million bpd in 2019.
The United States will take bids in autumn to begin the process of buying back 60 million barrels of crude for reserve, a first step in replenishing the stockpile after the 180 million barrel release, the Department of Energy said in May.
The department will soon propose a rule to help put oil back into the SPR, where levels have sunk to 475.5 million barrels, the lowest since June 1985, by allowing it to enter forward contracts to purchase oil in future years at fixed, preset prices.
"What it means in practice is that producers would have more certainty about future demand for their product, and that would encourage investment in production today," a senior U.S. official told reporters.
Oil purchases to replenish the SPR will not be competing with demand for oil in the near term as they will likely take place after fiscal year 2023, an official told reporters.
A U.S. Treasury Department analysis showed that the SPR releases, along with coordinated releases from international partners, have reduced gasoline prices at the pump by as much as 40 cents per gallon, compared to what they otherwise would have been.
International oil prices fell on Tuesday on the SPR sale and on consumer concerns about inflation and interest rates.
Brent crude futures settled at $104.40 a barrel, down 75 cents.
Reporting by Timothy Gardner, Doina Chiacu and Jeff Mason; Editing by Paul Simao, Andrea Ricci and Marguerita Choy
https://www.reuters.com/business/energy ... 022-07-26/
Re: OIL, NATURAL GAS
RIGZONE
"Oil Rises as US Exports Soar and Stockpiles Tumble"
by Bloomberg | Julia Fanzeres
Wednesday, July 27, 2022
Oil rose after a government report showed demand for US crude rising globally amid a supply crunch and traders shrugged off the Federal Reserve’s decision to raise interest rates by 75 basis points.
West Texas Intermediate rose 2.4% to settle at $97.26 a barrel, while gasoline futures climbed 2.2%.
US crude stockpiles dropped the most since the end of May, falling by 4.52 million barrels last week, according to the Energy Information Administration.
Adding to bullish sentiment, crude exports rose to a record as the spread between US- and London-traded futures widened with Europe scrambling to replace Russian barrels.
The Fed lifted interest rates by 75 basis points for a second straight month in the most aggressive measures to combat inflation since the early 1980s.
Fears over an economic slowdown have whipsawed commodity markets as traders weigh a tight physical crude market against a weaker long-term outlook.
“The Fed’s decision was not a catalyst for the crude market but did remove some fears” of an even-higher rate hike, said Rebecca Babin, a senior energy trader at CIBC Private Wealth Management.
“Crude trading recently has been highly correlated with macro headlines, but it should be noted that physical fundamentals improved meaningfully today and is the real driver of price action today.”
Oil has jumped more than 25% since the start of the year, although the bulk of the gains triggered by Russia’s invasion of Ukraine have been reversed.
The supermajor oil explorers such as Shell Plc and Exxon Mobil Corp. are scheduled to report second-quarter earnings this week that will show bumper profits after energy prices surged.
Adding to tight supply concerns, a power outage in Kazakhstan reduced electricity deliveries to a pumping station on a key crude pipeline, according to the nation’s Energy Ministry.
The CPC pipeline is scheduled to handle about 1.4 million barrels a day in August, according to data compiled by Bloomberg
Prices:
WTI for September delivery rose $2.28 to settle at $97.26 a barrel in New York.
Brent for September settlement gained $2.22 to settle at $106.62 a barrel.
One of the most significant oil-market moves this week has been the widening gap between the West Texas Intermediate and Brent contracts.
On Wednesday, the US benchmark was trading at more than $9 below Brent, after closing the day before with the biggest discount since 2019.
“The suppressed prices in the United States are being aided by the country’s strategic reserves,” said Harry Altham, EMEA & Asia Energy analyst for StoneX Group.
“This spread widening also isn’t entirely based off of Brent’s September contract expiry as Brent’s 2-3 month calendar spread is also at its greatest premium to the WTI equivalent since May 2020.”
A group of Republican US senators that includes Marco Rubio of Florida introduced a bill that would sanction China’s purchases of oil from Russia, but the proposal faces long odds of getting a vote in the Democratic-controlled Senate.
It also runs counter to Biden administration policy, which aims to keep Russian crude flowing while at the same time limiting Moscow’s energy revenue.
(with assistance from Alex Longley)
https://www.rigzone.com/news/wire/oil_r ... 3-article/
"Oil Rises as US Exports Soar and Stockpiles Tumble"
by Bloomberg | Julia Fanzeres
Wednesday, July 27, 2022
Oil rose after a government report showed demand for US crude rising globally amid a supply crunch and traders shrugged off the Federal Reserve’s decision to raise interest rates by 75 basis points.
West Texas Intermediate rose 2.4% to settle at $97.26 a barrel, while gasoline futures climbed 2.2%.
US crude stockpiles dropped the most since the end of May, falling by 4.52 million barrels last week, according to the Energy Information Administration.
Adding to bullish sentiment, crude exports rose to a record as the spread between US- and London-traded futures widened with Europe scrambling to replace Russian barrels.
The Fed lifted interest rates by 75 basis points for a second straight month in the most aggressive measures to combat inflation since the early 1980s.
Fears over an economic slowdown have whipsawed commodity markets as traders weigh a tight physical crude market against a weaker long-term outlook.
“The Fed’s decision was not a catalyst for the crude market but did remove some fears” of an even-higher rate hike, said Rebecca Babin, a senior energy trader at CIBC Private Wealth Management.
“Crude trading recently has been highly correlated with macro headlines, but it should be noted that physical fundamentals improved meaningfully today and is the real driver of price action today.”
Oil has jumped more than 25% since the start of the year, although the bulk of the gains triggered by Russia’s invasion of Ukraine have been reversed.
The supermajor oil explorers such as Shell Plc and Exxon Mobil Corp. are scheduled to report second-quarter earnings this week that will show bumper profits after energy prices surged.
Adding to tight supply concerns, a power outage in Kazakhstan reduced electricity deliveries to a pumping station on a key crude pipeline, according to the nation’s Energy Ministry.
The CPC pipeline is scheduled to handle about 1.4 million barrels a day in August, according to data compiled by Bloomberg
Prices:
WTI for September delivery rose $2.28 to settle at $97.26 a barrel in New York.
Brent for September settlement gained $2.22 to settle at $106.62 a barrel.
One of the most significant oil-market moves this week has been the widening gap between the West Texas Intermediate and Brent contracts.
On Wednesday, the US benchmark was trading at more than $9 below Brent, after closing the day before with the biggest discount since 2019.
“The suppressed prices in the United States are being aided by the country’s strategic reserves,” said Harry Altham, EMEA & Asia Energy analyst for StoneX Group.
“This spread widening also isn’t entirely based off of Brent’s September contract expiry as Brent’s 2-3 month calendar spread is also at its greatest premium to the WTI equivalent since May 2020.”
A group of Republican US senators that includes Marco Rubio of Florida introduced a bill that would sanction China’s purchases of oil from Russia, but the proposal faces long odds of getting a vote in the Democratic-controlled Senate.
It also runs counter to Biden administration policy, which aims to keep Russian crude flowing while at the same time limiting Moscow’s energy revenue.
(with assistance from Alex Longley)
https://www.rigzone.com/news/wire/oil_r ... 3-article/
Re: OIL, NATURAL GAS
RIGZONE
"Oil Down as Weak Economy Heightens Recession Fears"
by Bloomberg | Julia Fanzeres
Thursday, July 28, 2022
Oil dropped with concerns over weak economic data outweighing a crude-stockpile draw that continues to signal a tight market.
West Texas Intermediate futures edged lower to settle below $97 a barrel after a volatile session characterized by listless swings in either direction.
The US economy shrank for a second consecutive quarter, while government data this week also showed that crude stockpiles dropped by the most since the end of May.
Traders are weighing how an economic slowdown could impact crude demand while low liquidity continues to exacerbate price swings.
“The bullish inventory report from yesterday is fading to the background as recession concerns loom again,” said Stacey Morris, head of energy research at VettaFi.
Oil prices are up 25% this year even after giving up most of their gains from when Russia invaded the Ukraine.
The price surge has helped Shell Plc and TotalEnergies SE to record second-quarter earnings, and other supermajors are likely to follow.
A weaker dollar has also helped boost commodity prices.
“There is more upside than downside when it comes to the oil price,” Shell Chief Executive Officer Ben van Beurden said in an interview with Bloomberg TV.
“Demand hasn’t fully recovered yet and supply is definitely tight.”
Yet escalating fears of a recession are providing headwinds for the commodity.
Prices have dropped since early June as rampant inflation has lead the Federal Reserve to raise interest rates.
With US gross domestic products falling for another quarter, market participants are now wrestling with how the central bank’s actions may restrain economic growth and demand for crude oil.
Prices:
WTI for September delivery fell 84 cents to settle at $96.42 a barrel in New York.
Brent for September settlement gained 52 cents to settle at $107.14 a barrel.
Meanwhile, the spread between WTI and global benchmark Brent has widened this week as a reduction in Russian flows exacerbates market tightness in Europe.
(with assistance from Grant Smith)
https://www.rigzone.com/news/wire/oil_d ... 9-article/
"Oil Down as Weak Economy Heightens Recession Fears"
by Bloomberg | Julia Fanzeres
Thursday, July 28, 2022
Oil dropped with concerns over weak economic data outweighing a crude-stockpile draw that continues to signal a tight market.
West Texas Intermediate futures edged lower to settle below $97 a barrel after a volatile session characterized by listless swings in either direction.
The US economy shrank for a second consecutive quarter, while government data this week also showed that crude stockpiles dropped by the most since the end of May.
Traders are weighing how an economic slowdown could impact crude demand while low liquidity continues to exacerbate price swings.
“The bullish inventory report from yesterday is fading to the background as recession concerns loom again,” said Stacey Morris, head of energy research at VettaFi.
Oil prices are up 25% this year even after giving up most of their gains from when Russia invaded the Ukraine.
The price surge has helped Shell Plc and TotalEnergies SE to record second-quarter earnings, and other supermajors are likely to follow.
A weaker dollar has also helped boost commodity prices.
“There is more upside than downside when it comes to the oil price,” Shell Chief Executive Officer Ben van Beurden said in an interview with Bloomberg TV.
“Demand hasn’t fully recovered yet and supply is definitely tight.”
Yet escalating fears of a recession are providing headwinds for the commodity.
Prices have dropped since early June as rampant inflation has lead the Federal Reserve to raise interest rates.
With US gross domestic products falling for another quarter, market participants are now wrestling with how the central bank’s actions may restrain economic growth and demand for crude oil.
Prices:
WTI for September delivery fell 84 cents to settle at $96.42 a barrel in New York.
Brent for September settlement gained 52 cents to settle at $107.14 a barrel.
Meanwhile, the spread between WTI and global benchmark Brent has widened this week as a reduction in Russian flows exacerbates market tightness in Europe.
(with assistance from Grant Smith)
https://www.rigzone.com/news/wire/oil_d ... 9-article/
Re: OIL, NATURAL GAS
RIGZONE
"Oil Posts Second Consecutive Monthly Loss"
by Bloomberg | Devika Krishna Kumar
Friday, July 29, 2022
Oil fell for a second-consecutive month as a deteriorating demand outlook offset concerns over tight physical supplies.
West Texas Intermediate rose Friday, bringing this week’s gain to around 4%.
Futures nevertheless recorded their first back-to-back monthly decline since 2020 as fears of an economic slowdown fueled bearish sentiment across markets.
The US economy shrank for a second quarter as rampant inflation undercut consumer spending.
Citigroup Inc. says there are signs the oil market is moderating.
Still, Exxon Mobil Corp. doesn’t see any signs of major fuel demand destruction.
“I wouldn’t tell you that we’re seeing something that would say we are in a recession, or near recession,” CEO Darren Woods said.
While oil has given up most of the gains seen following Russia’s invasion of Ukraine in late February, the US benchmark is still up more than 30% this year.
The surge in energy prices has underpinned oil producer earnings, with Exxon and Chevron Corp. joining Shell with record profits.
A weaker dollar has also helped to boost commodity prices.
“The underlying fundamentals for oil still remain quite strong,” said Edward Bell, senior director of market economics at Emirates NBD Bank PJSC.
“There are serious risks around supply: sanctions on Russia that will kick in more meaningfully later this year, OPEC+ topping out in terms of what it can add to the market and the supply response in the US not coming on.”
Oil production in Texas and New Mexico dipped in May, latest data from the US government showed, in the latest sign that growth is slowing the prolific Permian Basin.
Growth has largely stalled even as producers add drilling rigs due to rising inflation in everything from labor to equipment costs.
Prices:
WTI for September delivery rose 2.2% to settle at $98.62 a barrel on the New York Mercantile Exchange.
Brent for September settlement, which expired Friday, added 2.7% to $110.01 on the ICE Futures Europe exchange.
The more-active October contract gained 2.3% to $104.18.
The spread between WTI and Brent, also known as the arb, has widened as a reduction in Russian crude flows tightened markets in Europe.
The global benchmark was at a premium of around $11 to US crude, compared with about $6 at the start of the month.
The move is exacerbated by Brent crude’s September contract expiry, but the October spread is also wide at about $7 a barrel.
The US is optimistic that there could be some positive announcements from the OPEC+ meeting next week, a senior Biden administration official said.
The gathering will determine whether President Joe Biden will receive the additional crude he requested for the global market during his visit to Saudi Arabia in mid-July.
“With no major signs of fuel demand destruction, oil seems like it will soon find a home above the $100 a barrel mark,” said Edward Moya, senior market analyst at Oanda.
“WTI was unable to hold onto the $100 level as profit-taking kicked in,” he added.
(with assistance from Sharon Cho and Grant Smith)
https://www.rigzone.com/news/wire/oil_p ... 7-article/
"Oil Posts Second Consecutive Monthly Loss"
by Bloomberg | Devika Krishna Kumar
Friday, July 29, 2022
Oil fell for a second-consecutive month as a deteriorating demand outlook offset concerns over tight physical supplies.
West Texas Intermediate rose Friday, bringing this week’s gain to around 4%.
Futures nevertheless recorded their first back-to-back monthly decline since 2020 as fears of an economic slowdown fueled bearish sentiment across markets.
The US economy shrank for a second quarter as rampant inflation undercut consumer spending.
Citigroup Inc. says there are signs the oil market is moderating.
Still, Exxon Mobil Corp. doesn’t see any signs of major fuel demand destruction.
“I wouldn’t tell you that we’re seeing something that would say we are in a recession, or near recession,” CEO Darren Woods said.
While oil has given up most of the gains seen following Russia’s invasion of Ukraine in late February, the US benchmark is still up more than 30% this year.
The surge in energy prices has underpinned oil producer earnings, with Exxon and Chevron Corp. joining Shell with record profits.
A weaker dollar has also helped to boost commodity prices.
“The underlying fundamentals for oil still remain quite strong,” said Edward Bell, senior director of market economics at Emirates NBD Bank PJSC.
“There are serious risks around supply: sanctions on Russia that will kick in more meaningfully later this year, OPEC+ topping out in terms of what it can add to the market and the supply response in the US not coming on.”
Oil production in Texas and New Mexico dipped in May, latest data from the US government showed, in the latest sign that growth is slowing the prolific Permian Basin.
Growth has largely stalled even as producers add drilling rigs due to rising inflation in everything from labor to equipment costs.
Prices:
WTI for September delivery rose 2.2% to settle at $98.62 a barrel on the New York Mercantile Exchange.
Brent for September settlement, which expired Friday, added 2.7% to $110.01 on the ICE Futures Europe exchange.
The more-active October contract gained 2.3% to $104.18.
The spread between WTI and Brent, also known as the arb, has widened as a reduction in Russian crude flows tightened markets in Europe.
The global benchmark was at a premium of around $11 to US crude, compared with about $6 at the start of the month.
The move is exacerbated by Brent crude’s September contract expiry, but the October spread is also wide at about $7 a barrel.
The US is optimistic that there could be some positive announcements from the OPEC+ meeting next week, a senior Biden administration official said.
The gathering will determine whether President Joe Biden will receive the additional crude he requested for the global market during his visit to Saudi Arabia in mid-July.
“With no major signs of fuel demand destruction, oil seems like it will soon find a home above the $100 a barrel mark,” said Edward Moya, senior market analyst at Oanda.
“WTI was unable to hold onto the $100 level as profit-taking kicked in,” he added.
(with assistance from Sharon Cho and Grant Smith)
https://www.rigzone.com/news/wire/oil_p ... 7-article/
Re: OIL, NATURAL GAS
RIGZONE
"Oil Down on Demand Outlook Concerns"
by Bloomberg | Julia Fanzeres and Alex Longley
Monday, August 01, 2022
Oil slumped as poor manufacturing figures across the globe fueled concerns that an economic slowdown may sap demand for crude.
West Texas Intermediate fell 4.8% to settle below $94 a barrel on Monday in the first day of August trading after posting its first back-to-back monthly loss since late 2020.
Weekend data indicated a surprise contraction in Chinese factory activity, highlighting the cost of mobility curbs to tackle Covid-19 outbreaks.
Purchasing managers’ indexes also weakened in South Korea and the euro region’s four largest members.
The resurgence of coronavirus cases in China and the ramifications of the country’s strict pandemic strategies will continue to “negatively impact oil demand until at least November of this year, when a strategic change in Covid policy could be announced,” said Harry Altham, energy analyst for EMEA and Asia at StoneX Group.
Oil trading has been volatile in recent months as concerns about a slowdown hurt demand for commodities even as underlying signals point to a relatively tight physical market.
Data last week showed that the US economy shrank for a second quarter, while the Federal Reserve hiked rates by 75 basis points.
Libya’s crude output has rebounded after a series of disruptions that more than halved supply, according to Oil Minister Mohamed Oun.
Nationwide production has returned to 1.2 million barrels a day, a level last seen in early April, Oun said in a telephone interview.
Prices:
WTI for September delivery dropped $4.73 to settle at $93.89 a barrel in New York.
Brent for October settlement declined $9.98 to settle at $100.03 a barrel.
Fellow OPEC+ producer Russia has also seen flows disrupted as multiple buyers around the world shun its crude.
Yet traders are studying the possibility of a slight increase in Russian oil exports after the European Union recently adopted a number of amendments to sanctions.
Traders will also be looking to the OPEC+ meeting later this week to set output policy for September.
While the US has lobbied Saudi Arabia to loosen the taps -- raising pressure on Russia -- Moscow and Riyadh recently reaffirmed their joint commitment to a stable market.
“It is unlikely at present that the Gulf States would increase output unilaterally because of the risk of undermining OPEC’s unity and credibility,” said Altham.
https://www.rigzone.com/news/wire/oil_d ... 0-article/
"Oil Down on Demand Outlook Concerns"
by Bloomberg | Julia Fanzeres and Alex Longley
Monday, August 01, 2022
Oil slumped as poor manufacturing figures across the globe fueled concerns that an economic slowdown may sap demand for crude.
West Texas Intermediate fell 4.8% to settle below $94 a barrel on Monday in the first day of August trading after posting its first back-to-back monthly loss since late 2020.
Weekend data indicated a surprise contraction in Chinese factory activity, highlighting the cost of mobility curbs to tackle Covid-19 outbreaks.
Purchasing managers’ indexes also weakened in South Korea and the euro region’s four largest members.
The resurgence of coronavirus cases in China and the ramifications of the country’s strict pandemic strategies will continue to “negatively impact oil demand until at least November of this year, when a strategic change in Covid policy could be announced,” said Harry Altham, energy analyst for EMEA and Asia at StoneX Group.
Oil trading has been volatile in recent months as concerns about a slowdown hurt demand for commodities even as underlying signals point to a relatively tight physical market.
Data last week showed that the US economy shrank for a second quarter, while the Federal Reserve hiked rates by 75 basis points.
Libya’s crude output has rebounded after a series of disruptions that more than halved supply, according to Oil Minister Mohamed Oun.
Nationwide production has returned to 1.2 million barrels a day, a level last seen in early April, Oun said in a telephone interview.
Prices:
WTI for September delivery dropped $4.73 to settle at $93.89 a barrel in New York.
Brent for October settlement declined $9.98 to settle at $100.03 a barrel.
Fellow OPEC+ producer Russia has also seen flows disrupted as multiple buyers around the world shun its crude.
Yet traders are studying the possibility of a slight increase in Russian oil exports after the European Union recently adopted a number of amendments to sanctions.
Traders will also be looking to the OPEC+ meeting later this week to set output policy for September.
While the US has lobbied Saudi Arabia to loosen the taps -- raising pressure on Russia -- Moscow and Riyadh recently reaffirmed their joint commitment to a stable market.
“It is unlikely at present that the Gulf States would increase output unilaterally because of the risk of undermining OPEC’s unity and credibility,” said Altham.
https://www.rigzone.com/news/wire/oil_d ... 0-article/
Re: OIL, NATURAL GAS
REUTERS
"U.S. crude in SPR falls to lowest since May 1985"
By Reuters Staff
AUGUST 1, 2022
HOUSTON, Aug 1 (Reuters) - U.S. crude inventory in the Strategic Petroleum Reserve (SPR) fell by 4.6 million barrels in the week to July 29, according to data from the Department of Energy.
Stockpiles in the Strategic Petroleum Reserve (SPR) fell to 469.9 million barrels, according to the data, the lowest since May 1985.
The 4.6 draw million draw was the smallest draw since the end of April.
All the barrels released into the market in the week were sour crude oil.
(Reporting by Arathy Somasekhar in Houston and Timothy Gardner in Washington D.C.)
https://www.reuters.com/article/usa-oil ... SL4N2ZD36W
"U.S. crude in SPR falls to lowest since May 1985"
By Reuters Staff
AUGUST 1, 2022
HOUSTON, Aug 1 (Reuters) - U.S. crude inventory in the Strategic Petroleum Reserve (SPR) fell by 4.6 million barrels in the week to July 29, according to data from the Department of Energy.
Stockpiles in the Strategic Petroleum Reserve (SPR) fell to 469.9 million barrels, according to the data, the lowest since May 1985.
The 4.6 draw million draw was the smallest draw since the end of April.
All the barrels released into the market in the week were sour crude oil.
(Reporting by Arathy Somasekhar in Houston and Timothy Gardner in Washington D.C.)
https://www.reuters.com/article/usa-oil ... SL4N2ZD36W
Re: OIL, NATURAL GAS
RIGZONE
"Oil Rises Slightly in Anticipation of OPEC Meeting"
by Bloomberg | Devika Krishna Kumar and Julia Fanzeres
Tuesday, August 02, 2022
Oil rose after swinging in a choppy session as traders counted down to an OPEC+ crude production meeting.
West Texas Intermediate settled above $94 after trading in an almost $4 range on Tuesday.
Markets wavered earlier in the session amid concerns that US House Speaker Nancy Pelosi’s visit to Taiwan would intensify tensions with China.
OPEC+ is due to gather virtually on Wednesday to decide output policy for September.
Oil-watchers are skeptical that the coalition will answer President Joe Biden’s call for more oil supplies, expecting OPEC+ to preserve its remaining capacity for another time.
As the meeting nears, oil’s backwardation -- a bullish pattern -- has narrowed amid signs that physical markets have eased in recent weeks.
Crude prices rallied from lows “on expectations OPEC+ will refrain from delivering an output increase and as China’s immediate retaliation to House Speaker Pelosi’s trip to Taiwan are symbolic gestures but not quite threatening to global supply chains and demand drivers,” said Edward Moya, senior market analyst at Oanda.
Oil has opened August on a weak footing after declining the prior two months on demand concerns.
The drop has wiped out almost all of the gains seen since Moscow’s invasion of Ukraine in late February, even after Washington and the European Union imposed a raft of sanctions on Russian energy exports.
“A global economic slowdown might be happening, but crude prices have come down too far given how tight the physical market remains,” Moya said.
US crude futures closed below its 200-day moving average for the first time this year on Monday.
The level is considered by many to provide technical support and prices have since rebounded.
Prices:
WTI for September rose 53 cents to settle at $94.42 a barrel in New York.
Brent for October settlement rose 51 cents to settle at $100.54 a barrel.
The global benchmark earlier fell as low as $98.49, near its 200-day moving average of $98.40.
Brent’s prompt spread -- the difference between its nearest two contracts -- has narrowed considerably as economic concerns deepened, Libyan production recovered and signs emerged of weaker US gasoline demand.
The differential was $2 a barrel on Tuesday, down from near $4 about a month ago.
The OPEC+ meeting comes after US President Joe Biden urged Saudi Arabia to pump more oil on a visit to the kingdom last month.
The alliance has already agreed to return all the supplies it took offline following the outbreak of the pandemic, although some members have been unable to meet quotas in full.
Investors are also digesting earnings from supermajor BP Plc, which raised its dividend and boosted share buybacks after profit rose to the highest since 2008.
The company reported strong refining margins and an “exceptional” performance from oil trading.
Adding to a growing list of firms reporting the best profits in their history, Vitol Group, the world’s largest independent oil trading company, posted a record profit of $4.2 billion last year as it benefited from soaring energy prices.
(with assistance from Alex Longley and Francine Lacqua)
https://www.rigzone.com/news/wire/oil_r ... 3-article/
"Oil Rises Slightly in Anticipation of OPEC Meeting"
by Bloomberg | Devika Krishna Kumar and Julia Fanzeres
Tuesday, August 02, 2022
Oil rose after swinging in a choppy session as traders counted down to an OPEC+ crude production meeting.
West Texas Intermediate settled above $94 after trading in an almost $4 range on Tuesday.
Markets wavered earlier in the session amid concerns that US House Speaker Nancy Pelosi’s visit to Taiwan would intensify tensions with China.
OPEC+ is due to gather virtually on Wednesday to decide output policy for September.
Oil-watchers are skeptical that the coalition will answer President Joe Biden’s call for more oil supplies, expecting OPEC+ to preserve its remaining capacity for another time.
As the meeting nears, oil’s backwardation -- a bullish pattern -- has narrowed amid signs that physical markets have eased in recent weeks.
Crude prices rallied from lows “on expectations OPEC+ will refrain from delivering an output increase and as China’s immediate retaliation to House Speaker Pelosi’s trip to Taiwan are symbolic gestures but not quite threatening to global supply chains and demand drivers,” said Edward Moya, senior market analyst at Oanda.
Oil has opened August on a weak footing after declining the prior two months on demand concerns.
The drop has wiped out almost all of the gains seen since Moscow’s invasion of Ukraine in late February, even after Washington and the European Union imposed a raft of sanctions on Russian energy exports.
“A global economic slowdown might be happening, but crude prices have come down too far given how tight the physical market remains,” Moya said.
US crude futures closed below its 200-day moving average for the first time this year on Monday.
The level is considered by many to provide technical support and prices have since rebounded.
Prices:
WTI for September rose 53 cents to settle at $94.42 a barrel in New York.
Brent for October settlement rose 51 cents to settle at $100.54 a barrel.
The global benchmark earlier fell as low as $98.49, near its 200-day moving average of $98.40.
Brent’s prompt spread -- the difference between its nearest two contracts -- has narrowed considerably as economic concerns deepened, Libyan production recovered and signs emerged of weaker US gasoline demand.
The differential was $2 a barrel on Tuesday, down from near $4 about a month ago.
The OPEC+ meeting comes after US President Joe Biden urged Saudi Arabia to pump more oil on a visit to the kingdom last month.
The alliance has already agreed to return all the supplies it took offline following the outbreak of the pandemic, although some members have been unable to meet quotas in full.
Investors are also digesting earnings from supermajor BP Plc, which raised its dividend and boosted share buybacks after profit rose to the highest since 2008.
The company reported strong refining margins and an “exceptional” performance from oil trading.
Adding to a growing list of firms reporting the best profits in their history, Vitol Group, the world’s largest independent oil trading company, posted a record profit of $4.2 billion last year as it benefited from soaring energy prices.
(with assistance from Alex Longley and Francine Lacqua)
https://www.rigzone.com/news/wire/oil_r ... 3-article/
Re: OIL, NATURAL GAS
Investing.com
"Oil Inventories Unexpectedly Rise by 2.2M Barrels Last Week: API"
By Yasin Ebrahim
Aug 02, 2022
Investing.com -- U.S. crude oil inventories unexpectedly increased last week, API data showed Tuesday, just days ahead of a decision from major oil producers to stick with only modest supply increases.
West Texas Intermediate, the U.S. benchmark, traded at $93.77 per barrel following the report after settling up 0.6% or $1.72 at $94.42 per barrel.
U.S. crude inventories increased by about 2.2 million barrels for the week ended July 29.
That compared with a draw of 4.0 million barrels reported by the API for the previous week.
Economists were expecting a decrease of about 467,000 barrels.
The fall in crude inventories arrived just as investors looked ahead to the OPEC+ meeting later this week, when major oil producers are expected to deliver a decision on whether to boost crude output.
In June, the OPEC+ Joint Ministerial Committee recommended an increase in monthly production to 648,000 barrels per day, or bpd, in July and August from about 420,000 bpd.
Gasoline inventories fell by 204,000, while distillate also declined by 351,000.
The official government inventory report due Wednesday is expected to show weekly U.S. crude supplies fell by about 629,000 barrels last week.
https://www.investing.com/news/commodit ... pi-2861050
"Oil Inventories Unexpectedly Rise by 2.2M Barrels Last Week: API"
By Yasin Ebrahim
Aug 02, 2022
Investing.com -- U.S. crude oil inventories unexpectedly increased last week, API data showed Tuesday, just days ahead of a decision from major oil producers to stick with only modest supply increases.
West Texas Intermediate, the U.S. benchmark, traded at $93.77 per barrel following the report after settling up 0.6% or $1.72 at $94.42 per barrel.
U.S. crude inventories increased by about 2.2 million barrels for the week ended July 29.
That compared with a draw of 4.0 million barrels reported by the API for the previous week.
Economists were expecting a decrease of about 467,000 barrels.
The fall in crude inventories arrived just as investors looked ahead to the OPEC+ meeting later this week, when major oil producers are expected to deliver a decision on whether to boost crude output.
In June, the OPEC+ Joint Ministerial Committee recommended an increase in monthly production to 648,000 barrels per day, or bpd, in July and August from about 420,000 bpd.
Gasoline inventories fell by 204,000, while distillate also declined by 351,000.
The official government inventory report due Wednesday is expected to show weekly U.S. crude supplies fell by about 629,000 barrels last week.
https://www.investing.com/news/commodit ... pi-2861050