Oil Halts Losing Streak as Supply Cuts Overshadow Trade Fears - Bloomberg:
Oil rose after four consecutive sessions of declines as signs of tightening supply from OPEC+ overshadowed concerns that escalating trade tensions from China to Mexico could slow global demand.
Futures closed 0.4% higher in New York. Vitol Group, the world’s largest oil trader, expects OPEC and its allies to extend a deal to curb output in the second half of 2019, while Saudi Energy Minister Khalid Al-Falih said he’s committed to doing whatever it takes to stabilize markets.
Still, West Texas Intermediate crude and the global benchmark Brent hovered near the lowest in more than four months, weighed down by demand concerns. JPMorgan Chase & Co. said Monday the chance of a U.S. recession in the second half had risen to 40% from 25% a month ago.
Tuesday 4 June 2019
The Bastion of Oil-Market Bullishness Is Starting to Crack - Bloomberg
The Bastion of Oil-Market Bullishness Is Starting to Crack - Bloomberg:
For much of May, nearly each and every time that oil prices tanked amid concerns about the deepening U.S.-China trade war, one corner of the market held up: timespreads.
The spreads -- the price difference between contracts for immediate delivery and forward ones -- reflected tightness in the physical market, with refineries willing to pay large premiums to secure barrels straight away. As such, the oil curve was in a steep backwardation, where spot crude trades above later contracts.
For most of May, oil refiners bid up the front of the oil curve to keep North Sea crude in north-west Europe in order to replace Urals crude from Russia that was lost due to an unprecedented contamination inside the Druzhba pipeline. Now, as Urals flows slowly restart to some parts of Europe and a plan takes shape for a wider resumption, the tightness in the physical market is starting to ease -- and timespreads are following suit. Refinery cuts in Germany are also helping to reduce demand.
For much of May, nearly each and every time that oil prices tanked amid concerns about the deepening U.S.-China trade war, one corner of the market held up: timespreads.
The spreads -- the price difference between contracts for immediate delivery and forward ones -- reflected tightness in the physical market, with refineries willing to pay large premiums to secure barrels straight away. As such, the oil curve was in a steep backwardation, where spot crude trades above later contracts.
For most of May, oil refiners bid up the front of the oil curve to keep North Sea crude in north-west Europe in order to replace Urals crude from Russia that was lost due to an unprecedented contamination inside the Druzhba pipeline. Now, as Urals flows slowly restart to some parts of Europe and a plan takes shape for a wider resumption, the tightness in the physical market is starting to ease -- and timespreads are following suit. Refinery cuts in Germany are also helping to reduce demand.
COLUMN - Lower oil prices start to rebalance the market: Kemp - Reuters
COLUMN - Lower oil prices start to rebalance the market: Kemp - Reuters:
Lower oil prices are starting to rebalance the oil market by slowing the rise in U.S. crude output and encouraging Saudi Arabia and its allies to extend production cuts through the end of 2019.
U.S. crude production rose 241,000 barrels per day (bpd) to 11.905 million bpd in March from February, according to the U.S. Energy Information Administration (“Petroleum Supply Monthly”, EIA, May 2019).
U.S. crude output during the first three months of the year was up 1.575 million bpd compared with the same period a year earlier, but the growth rate has slowed from 1.920 million bpd in the third quarter of 2018.
Lower oil prices are starting to rebalance the oil market by slowing the rise in U.S. crude output and encouraging Saudi Arabia and its allies to extend production cuts through the end of 2019.
U.S. crude production rose 241,000 barrels per day (bpd) to 11.905 million bpd in March from February, according to the U.S. Energy Information Administration (“Petroleum Supply Monthly”, EIA, May 2019).
U.S. crude output during the first three months of the year was up 1.575 million bpd compared with the same period a year earlier, but the growth rate has slowed from 1.920 million bpd in the third quarter of 2018.
Iran sets scene for tough OPEC meeting, opposes date change - Reuters
Iran sets scene for tough OPEC meeting, opposes date change - Reuters:
Iran has told OPEC that it opposes delaying the oil producer group’s next meeting, setting the scene for another fight with fellow members as U.S. sanctions put Tehran under unprecedented economic pressure with its oil exports down to just a trickle.
OPEC gatherings are often fraught due to acrimony between Iran and its arch-rival Saudi Arabia, the group’s de facto leader and top global oil exporter.
The last time the Organization of the Petroleum Exporting Countries failed to agree a clear oil-output strategy was in 2016, after Iran insisted on steeply raising its production following the lifting of Western sanctions against it.
Iran has told OPEC that it opposes delaying the oil producer group’s next meeting, setting the scene for another fight with fellow members as U.S. sanctions put Tehran under unprecedented economic pressure with its oil exports down to just a trickle.
OPEC gatherings are often fraught due to acrimony between Iran and its arch-rival Saudi Arabia, the group’s de facto leader and top global oil exporter.
The last time the Organization of the Petroleum Exporting Countries failed to agree a clear oil-output strategy was in 2016, after Iran insisted on steeply raising its production following the lifting of Western sanctions against it.
Oil bounces off four-month low, turns positive as stocks rally - Reuters
Oil bounces off four-month low, turns positive as stocks rally - Reuters:
Oil prices turned positive on Tuesday, tracking a rally in global stock markets, with Brent crude recovering from a four-month low touched earlier in the session.
World stocks rallied after comments from U.S. Federal Reserve Chairman Jerome Powell drove expectations of a cut in interest rates.
Oil’s gains were triggered by the rally in stocks following the Fed comments, said Andrew Lipow, president of Lipow Oil Associates in Houston.
Brent futures were up 49 cents, or 0.8%, at $61.77 a barrel by 12:16 p.m. EDT (1616 GMT). The global benchmark fell as low as $60.21 earlier, its weakest since January.
U.S. West Texas Intermediate (WTI) crude rose 17 cents, or 0.3%, to $53.42, rising about a dollar from its session low.
Oil prices turned positive on Tuesday, tracking a rally in global stock markets, with Brent crude recovering from a four-month low touched earlier in the session.
World stocks rallied after comments from U.S. Federal Reserve Chairman Jerome Powell drove expectations of a cut in interest rates.
Oil’s gains were triggered by the rally in stocks following the Fed comments, said Andrew Lipow, president of Lipow Oil Associates in Houston.
Brent futures were up 49 cents, or 0.8%, at $61.77 a barrel by 12:16 p.m. EDT (1616 GMT). The global benchmark fell as low as $60.21 earlier, its weakest since January.
U.S. West Texas Intermediate (WTI) crude rose 17 cents, or 0.3%, to $53.42, rising about a dollar from its session low.
#SaudiArabia's Summitry Reveals Hollow Arab Unity - Bloomberg
Saudi Arabia's Summitry Reveals Hollow Arab Unity - Bloomberg:
It was meant to be a demonstration of Saudi Arabia’s enormous convening authority in the Islamic world: in a 48-hour period last week, King Salman Bin Abdulaziz hosted a summit of the Organization of Islamic Cooperation, and emergency meetings of the Arab League, and the Gulf Cooperation Council.
Instead, the gatherings in Mecca demonstrated the utter futility of these organizations. The Islamic world is more divided than ever, along fault-lines old and new, and the grandees who answered King Salman’s summons could scarcely be bothered to discuss any of the problems, much less offer solutions.
Some of this was predictable. The OIC and Arab League have been pointless for decades. They have rarely addressed themselves to the problems of the Muslim world, such as the persecution of Uighurs in China or Rohingyas in Burma—or of its Arab subset, such as the civil wars in Syria, Yemen and Libya. They serve no meaningful purpose other than to make statements, usually against Israel for its treatment of Palestinians.
It was meant to be a demonstration of Saudi Arabia’s enormous convening authority in the Islamic world: in a 48-hour period last week, King Salman Bin Abdulaziz hosted a summit of the Organization of Islamic Cooperation, and emergency meetings of the Arab League, and the Gulf Cooperation Council.
Instead, the gatherings in Mecca demonstrated the utter futility of these organizations. The Islamic world is more divided than ever, along fault-lines old and new, and the grandees who answered King Salman’s summons could scarcely be bothered to discuss any of the problems, much less offer solutions.
Some of this was predictable. The OIC and Arab League have been pointless for decades. They have rarely addressed themselves to the problems of the Muslim world, such as the persecution of Uighurs in China or Rohingyas in Burma—or of its Arab subset, such as the civil wars in Syria, Yemen and Libya. They serve no meaningful purpose other than to make statements, usually against Israel for its treatment of Palestinians.
Forget the Trade War. Citi Sees Brent at $78 Within Three Months - Bloomberg
Forget the Trade War. Citi Sees Brent at $78 Within Three Months - Bloomberg:
Forget the trade war and global growth pessimism. Citigroup Inc. is sticking to its target of Brent oil rising to $78 a barrel in three months.
Supply risks, rising demand over the northern summer, light fund positioning and a tight physical market are some of the reasons cited by the bank for its optimism in a note by analysts including Ed Morse, global head of commodities research. Citi’s forecast implies a 28% increase from current levels.
“Underpinned by rising trade tensions, the global economic picture has clearly deteriorated since May,” Morse wrote in the note released Tuesday. “Yet this macro pessimism masks tangible bullish oil market fundamentals.”
Forget the trade war and global growth pessimism. Citigroup Inc. is sticking to its target of Brent oil rising to $78 a barrel in three months.
Supply risks, rising demand over the northern summer, light fund positioning and a tight physical market are some of the reasons cited by the bank for its optimism in a note by analysts including Ed Morse, global head of commodities research. Citi’s forecast implies a 28% increase from current levels.
“Underpinned by rising trade tensions, the global economic picture has clearly deteriorated since May,” Morse wrote in the note released Tuesday. “Yet this macro pessimism masks tangible bullish oil market fundamentals.”
BP to sell oil assets in Egypt to #Dubai’s Dragon Oil | ZAWYA MENA Edition
BP to sell oil assets in Egypt to Dubai’s Dragon Oil | ZAWYA MENA Edition:
BP has agreed to sell its interests in Gulf of Suez oil concessions in Egypt to Dragon Oil, the Dubai-based oil and gas company.
Under the terms of the agreement, Dragon Oil will purchase producing and exploration concessions, including BP’s interest in the Gulf of Suez Petroleum Company (GUPCO). Dragon Oil is a wholly-owned subsidiary of the Emirates National Oil Company (Enoc).
The deal, which is subject to the Egyptian Ministry of Petroleum and Mineral Resources’ approval, is expected to complete during the second half of 2019 and is part of BP’s plan to divest more than $10 billion of assets globally over the next two years. Financial details are not being disclosed.
BP has agreed to sell its interests in Gulf of Suez oil concessions in Egypt to Dragon Oil, the Dubai-based oil and gas company.
Under the terms of the agreement, Dragon Oil will purchase producing and exploration concessions, including BP’s interest in the Gulf of Suez Petroleum Company (GUPCO). Dragon Oil is a wholly-owned subsidiary of the Emirates National Oil Company (Enoc).
The deal, which is subject to the Egyptian Ministry of Petroleum and Mineral Resources’ approval, is expected to complete during the second half of 2019 and is part of BP’s plan to divest more than $10 billion of assets globally over the next two years. Financial details are not being disclosed.
GCC markets record biggest monthly drop since Jan 2016 | ZAWYA MENA Edition
GCC markets record biggest monthly drop since Jan 2016 | ZAWYA MENA Edition:
The stock markets in the GCC countries recorded their biggest monthly declines since January 2016 during the last month as the risks of escalating trade war between the US and China and geopolitical tensions related to Iran continue to affect the regional markets.
Aggregate GCC markets, tracked by the S&P GCC TRI, dropped 5.4 per cent during May 2019, its biggest monthly decline since January 2016.
‘The decline came primarily due to regional geopolitical issues, coupled with lower trading activity in most GCC markets due to Ramadan’, Kuwait-based KAMCO Investment said in a report on Sunday.
Barring Kuwait, all the GCC markets declined during May with Saudi Arabia seeing the steepest fall of 8.5 per cent. On the other hand, the 1.8 per cent gains recorded by the Kuwait’s main index pushed the benchmark’s year-to-date returns to the highest in the GCC at 12.8 per cent.
The stock markets in the GCC countries recorded their biggest monthly declines since January 2016 during the last month as the risks of escalating trade war between the US and China and geopolitical tensions related to Iran continue to affect the regional markets.
Aggregate GCC markets, tracked by the S&P GCC TRI, dropped 5.4 per cent during May 2019, its biggest monthly decline since January 2016.
‘The decline came primarily due to regional geopolitical issues, coupled with lower trading activity in most GCC markets due to Ramadan’, Kuwait-based KAMCO Investment said in a report on Sunday.
Barring Kuwait, all the GCC markets declined during May with Saudi Arabia seeing the steepest fall of 8.5 per cent. On the other hand, the 1.8 per cent gains recorded by the Kuwait’s main index pushed the benchmark’s year-to-date returns to the highest in the GCC at 12.8 per cent.
Oil prices fall as energy demand set to take a hit amid economic slowdown - Reuters
Oil prices fall as energy demand set to take a hit amid economic slowdown - Reuters:
Oil prices fell on Tuesday as an economic slowdown starts to dent energy demand, but markets won some support after Saudi Arabia said a consensus was emerging with other producers about extending supply cuts.
Front-month Brent crude futures were at $60.97 at 0648 GMT. That was 31 cents, or 0.5%, below last session’s close.
U.S. West Texas Intermediate (WTI) crude futures were at $53.05 per barrel, down 20 cents, or 0.4%, from their last settlement.
Oil futures are around 20% below 2019 peaks reached in late April, with May posting the sharpest monthly declines since November.
Oil prices fell on Tuesday as an economic slowdown starts to dent energy demand, but markets won some support after Saudi Arabia said a consensus was emerging with other producers about extending supply cuts.
Front-month Brent crude futures were at $60.97 at 0648 GMT. That was 31 cents, or 0.5%, below last session’s close.
U.S. West Texas Intermediate (WTI) crude futures were at $53.05 per barrel, down 20 cents, or 0.4%, from their last settlement.
Oil futures are around 20% below 2019 peaks reached in late April, with May posting the sharpest monthly declines since November.
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