Oil Rises With Wall Street Calling Sell-Off a Chance to Buy - Bloomberg
Oil came back from a sell-off that investment banks from Goldman Sachs to Morgan Stanley said was excessive and offered an opportunity to buy, with physical crude markets still showing signs of strength in the long run.
Futures in New York rose 2.4% on Friday, after a plunge of more than 7% in the previous session. While the market may have gotten too long for its own good, the recent price weakness is likely temporary as signs remain that demand is set to recover and supplies will tighten.
“What happened yesterday is not indicative of overly soft physical markets,” said Michael Tran, an analyst at RBC Capital Markets. “The market was getting pretty stretched, so given the general headlines of China slowing to some degree, Covid returning in Europe and demand maybe not being as robust as people had thought, these are all just convenient opportunities for the market to rebase, retrench and reload heading into the summer.”
Still, prices are headed for the worst week since October. A combination of factors conspired to bring a 30%-plus rally this year to a screeching halt: Treasury yields that pushed the dollar higher, signs of weaker consumption in Asia in the short-term and the unwinding of long positions by commodity trading advisors. Technical indicators had shown a market correction was overdue.- West Texas Intermediate for April delivery added $1.42 to settle at $61.42 a barrel in New York
Oil extends losses on demand fears | Reuters
Oil prices fell on Friday, extending losses from a big sell-off the previous day as a new wave of coronavirus infections across Europe triggered fresh lockdowns and dampened expectations of any imminent recovery in fuel demand.
Brent crude was down $1.06, or 1.7%, at $62.22 a barrel by 1347 GMT. West Texas Intermediate (WTI) U.S. crude fell 86 cents, or 1.4%, to $59.14. Both traded within a wide range of more than $2 a barrel on Friday.
Oil closed about 7% down on Thursday as several large European economies reimposed lockdowns and vaccination programmes were slowed by distribution issues and concerns over potential side effects.
Although Germany, France and other countries have announced the resumption of inoculations after regulators declared the AstraZeneca vaccine safe, the programme halt has made it harder to overcome resistance to vaccines among some of the population.
Oil’s Swift Rout Triggers the Biggest Weekly Loss Since October - Bloomberg
Oil, one of the most-favored reflation trades, just took a heavy beating. Prices headed for the biggest weekly slump since October after a sell-off driven by concerns that recent gains had been too rapid given mixed signals about near-term demand and a rising dollar.
Futures in New York fluctuated after a five-day slide that culminated in a more than 7% plunge on Thursday. Prices have been hurt by a surge in Treasury yields that pushed the dollar higher, signs of softer near-term demand in Asia, and a gain in U.S. stockpiles. The unwinding of long positions by some commodity trading advisors may also have played a role, as well as technical signals.
“The futures market in recent weeks has got a bit ahead of itself, particularly when you compare it to the physical market, which has shown signs of weakness,” said Warren Patterson, head of commodities strategy for ING Group. “I still hold a constructive view for the market in the medium term. However, in the near term I believe that upside is limited.”
Oil’s Plunge Was Sign of a Market That Got Too Bullish, Too Fast - Bloomberg
For those who had been tracking oil’s technical indicators this month, the message was clear: Crude prices had risen too quickly.
OPEC+’s decision to rein in production earlier this month, hedge funds piling into the most bullish positions in over a year and an attack on a Saudi Arabian oil complex all worked to propel Brent crude past $70 a barrel for the first time in more than a year. Prices rose well above the upper Bollinger band that signaled a pullback was all but inevitable. Meanwhile, fuel refiners along the U.S. Gulf Coast were struggling to recover from a deep freeze last month and the pace of oil exports had slowed, weighing on near-term demand.
And so on Thursday, oil’s 30%-plus rally this year came crashing down. West Texas Intermediate crude futures plunged as much as 9.9%. A strengthening dollar and news of efforts to roll out vaccinations stalling in some parts of the world further weighed on the market, as did the usual unwinding of long positions amid big price drops.
But virtually nobody is saying the rally is over for good.
Saudi state carrier Saudia raises $3 billion to fund aircraft orders | Reuters
State-owned Saudi Arabian Airlines (Saudia) has signed a financing agreement worth 11.2 billion riyal ($3 billion) to partially finance requirements for aircraft it has ordered, the state airline said in a statement on Thursday.
The amount covers the airline’s aircraft financing requirements until mid-2024, helping finance the purchases of 73 aircraft, previously ordered, it said in a statement.
The agreements were signed with Al Rajhi Bank, Saudi British Bank (SABB), Arab National Bank (ANB), Samba, Bank AlJazira, and Bank Albilad, while HSBC Saudi advised on the deal, it said.
Saudia has ordered Airbus A320neo, A321neo, A321XLR, and Boeing 787-10 jets.
Oil extend losses amid gloomy demand outlook | ReutersOil prices fell on Friday for a sixth day in a row, down nearly 9% for the week, as a new wave of COVID-19 infections in particular across Europe spurred fresh lockdowns and dampened hopes for an imminent recovery in fuel demand.
U.S. West Texas Intermediate (WTI) crude fell 4 cents, or 0.07%, to $59.96 a barrel by 0552 GMT.
Brent crude was down 10 cents, or 0.16%, to $63.18 a barrel.
Oil had edged up in Asia’s morning trading after a 7% drop on Thursday as physical buyers leapt at the chance to load up on cheap oil, said Jeffrey Halley, senior market analyst at OANDA, in a Friday note.
But the market remains increasingly worried about fuel demand outlook amid rising coronavirus cases, fresh restrictions and slowing vaccination rollouts in some countries, analysts said.
