Oil steady as expected OPEC cuts balance high inventory

Oil prices steadied on Friday as expectations that OPEC and Russia would agree some form of production cut next week balanced pressure from swelling inventories. Surging oil production in the United States, Russia and by members of the Middle East-dominated Organization of the Petroleum Exporting Countries has helped fill global inventories and create a glut in some markets. “The next OPEC meeting is going to prove a pivotal moment for the direction of oil prices in 2019,” BNP Paribas strategist


Oil prices steadied on Friday as expectations that OPEC and Russia would agree some form of production cut next week balanced pressure from swelling inventories. Surging oil production in the United States, Russia and by members of the Middle East-dominated Organization of the Petroleum Exporting Countries has helped fill global inventories and create a glut in some markets. “The next OPEC meeting is going to prove a pivotal moment for the direction of oil prices in 2019,” BNP Paribas strategist
Oil steady as expected OPEC cuts balance high inventory Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-30  Authors: leonhard foeger
Keywords: news, cnbc, companies, inventory, opec, global, cuts, crude, oil, production, week, high, united, barrels, balance, prices, steady, expected, russia


Oil steady as expected OPEC cuts balance high inventory

Oil prices steadied on Friday as expectations that OPEC and Russia would agree some form of production cut next week balanced pressure from swelling inventories.

Both international oil benchmarks, North Sea Brent and U.S. light crude, have had their weakest month for more than 10 years in November, losing 28 percent and 30 percent respectively as global supply has outstripped demand.

Brent was up 25 cents at $59.76 a barrel by 0910 GMT. U.S. West Texas Intermediate was unchanged at $51.45. Both contracts are up about 1 percent this week, the first weekly gains in almost two months.

Surging oil production in the United States, Russia and by members of the Middle East-dominated Organization of the Petroleum Exporting Countries has helped fill global inventories and create a glut in some markets.

A slowdown in oil demand growth is compounding the emerging oversupply.

“Near-term oversupply has gutted Brent prices,” said Jason Gammel, analyst at U.S. investment bank Jefferies, adding that there was “an increasing urgency to move crude into storage”.

This move is visible in the Brent forward price curve, which now has prices for future delivery above those for immediate dispatch, a structure known as “contango”, which can make it attractive to put oil into storage for later sale.

To rein in the glut, OPEC and its main partner Russia are discussing supply cuts and are due to meet in Vienna on Dec. 6 and 7 to agree production strategy.

“The next OPEC meeting is going to prove a pivotal moment for the direction of oil prices in 2019,” BNP Paribas strategist Harry Tchilinguirian told Reuters Global Oil Forum.

“A decision will have to be made against a background of strong U.S. shale oil supply growth, and for now, weaker expectations on global oil demand growth.”

Before the OPEC meeting, the world’s top three producers – the United States, Russia and Saudi Arabia – will be part of a meeting this weekend of the Group of 20 industrialized nations in Buenos Aires, Argentina.

Oil inventories are rising fast in the United States, where commercial crude stocks rose by 3.6 million barrels in the week to Nov. 23 to 450.49 million barrels, according to the Energy Information Administration (EIA).

U.S. crude production is at a record high of 11.7 million barrels per day (bpd).

Crude reserves increased 6.4 billion barrels, or 19.5 percent, to 39.2 billion barrels at year-end 2017, marginally higher than the previous record of 39 billion barrels set in 1970, the EIA said.


Company: cnbc, Activity: cnbc, Date: 2018-11-30  Authors: leonhard foeger
Keywords: news, cnbc, companies, inventory, opec, global, cuts, crude, oil, production, week, high, united, barrels, balance, prices, steady, expected, russia


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Expect a ‘Saudi First’ policy on oil production cuts, regardless of Trump’s demands, analysts say

Saudi Arabia will likely move to cut its oil output in order to prop up crude prices, against Donald Trump’s demands to keep pumping so that prices stay low. The pivotal question hanging over oil markets remains that of production cutbacks. “Saudi Arabia will likely see through the pressure and not entertain calls from President Trump, and in fact lower production,” he said. “The key question now is the size and magnitude of the actual production cuts for each of the OPEC members.” In November 2


Saudi Arabia will likely move to cut its oil output in order to prop up crude prices, against Donald Trump’s demands to keep pumping so that prices stay low. The pivotal question hanging over oil markets remains that of production cutbacks. “Saudi Arabia will likely see through the pressure and not entertain calls from President Trump, and in fact lower production,” he said. “The key question now is the size and magnitude of the actual production cuts for each of the OPEC members.” In November 2
Expect a ‘Saudi First’ policy on oil production cuts, regardless of Trump’s demands, analysts say Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-28  Authors: natasha turak, reuters, simon dawson
Keywords: news, cnbc, companies, oil, question, cuts, opec, market, arabia, vienna, saudi, policy, production, trumps, say, regardless, million, barrels, prices, expect, demands


Expect a 'Saudi First' policy on oil production cuts, regardless of Trump's demands, analysts say

Saudi Arabia will likely move to cut its oil output in order to prop up crude prices, against Donald Trump’s demands to keep pumping so that prices stay low.

Analysts believe that despite Washington’s geopolitical leverage over the kingdom, after its staunch defense of the Saudi monarchy amid accusations over its alleged role in the murder of Saudi journalist Jamal Khashoggi, Riyadh will still pursue its own economic interests rather than abide by the wishes of President Trump.

The pivotal question hanging over oil markets remains that of production cutbacks. Who will tighten their taps, and by how much?

The answers to these questions will be negotiated by the world’s largest crude producers — Russia, Saudi Arabia and the U.S. — at this week’s G-20 meeting in Buenos Aires, Argentina, and then at the OPEC+ meeting in Vienna, Austria, the following week.

The spectrum is huge, ranging from a potential 500,000 to as many as 2 million barrels per day (bpd) taken off the market, according to Ehsan Khoman, head of MENA research and strategy at the Dubai branch of Japanese bank MUFG.

“Saudi Arabia will likely see through the pressure and not entertain calls from President Trump, and in fact lower production,” he said. “The key question now is the size and magnitude of the actual production cuts for each of the OPEC members.”

In November 2016, when OPEC and non-OPEC members initially implemented production cuts to stem falling prices and end the supply glut, roughly 1.8 million barrels came off the market.

“This time around, given the large oversupply we have in the market, we think anything between 1.3 and 1.5 million barrels could come off the market when they meet in Vienna,” Khoman told CNBC’s “Capital Connection” on Wednesday.


Company: cnbc, Activity: cnbc, Date: 2018-11-28  Authors: natasha turak, reuters, simon dawson
Keywords: news, cnbc, companies, oil, question, cuts, opec, market, arabia, vienna, saudi, policy, production, trumps, say, regardless, million, barrels, prices, expect, demands


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Look for OPEC to cut oil production by 1 to 1.5 million barrels at next meeting, says analyst

An oil production cut is expected when the Organization of the Petroleum Exporting Countries (OPEC) meets in Vienna next week amid worries over a U.S.-China trade war, a supply glut and demand slowdown, according to Johannes Benigni, chairman and founder of consultancy JBC Energy Group. “OPEC will probably manage to stabilize the oil market by choosing the right language,” Benigni told CNBC’s Sri Jegarajah. “They will indicate a cut of between 1 million and 1.5 million, and that will do, the mar


An oil production cut is expected when the Organization of the Petroleum Exporting Countries (OPEC) meets in Vienna next week amid worries over a U.S.-China trade war, a supply glut and demand slowdown, according to Johannes Benigni, chairman and founder of consultancy JBC Energy Group. “OPEC will probably manage to stabilize the oil market by choosing the right language,” Benigni told CNBC’s Sri Jegarajah. “They will indicate a cut of between 1 million and 1.5 million, and that will do, the mar
Look for OPEC to cut oil production by 1 to 1.5 million barrels at next meeting, says analyst Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-27  Authors: kavita chandran
Keywords: news, cnbc, companies, production, war, 15, benigni, week, probably, worries, cut, opec, oil, million, look, analyst, meeting, barrels, market


Look for OPEC to cut oil production by 1 to 1.5 million barrels at next meeting, says analyst

An oil production cut is expected when the Organization of the Petroleum Exporting Countries (OPEC) meets in Vienna next week amid worries over a U.S.-China trade war, a supply glut and demand slowdown, according to Johannes Benigni, chairman and founder of consultancy JBC Energy Group.

“OPEC will probably manage to stabilize the oil market by choosing the right language,” Benigni told CNBC’s Sri Jegarajah. “They will indicate a cut of between 1 million and 1.5 million, and that will do, the market probably will stabilize.”

Saudi Arabia raised oil production to an all-time high in November, Reuters reported on Monday, pumping 11.1 million to 11.3 million barrels per day (bpd) during the month.


Company: cnbc, Activity: cnbc, Date: 2018-11-27  Authors: kavita chandran
Keywords: news, cnbc, companies, production, war, 15, benigni, week, probably, worries, cut, opec, oil, million, look, analyst, meeting, barrels, market


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

UK and US energy giants start oil production at North Sea megaproject

BP has started extracting oil from one of the U.K.’s biggest offshore investments in decades. The energy giant said in a press release Friday that oil is now being pumped from its Clair Ridge project, a section of a hydrocarbon field in the North Sea first discovered in 1977. BP said its intention was to extract 640 million barrels of oil, with production peaking at 120,000 barrels a day. The company claimed the project is the largest commissioning in the North Sea in 20 years and has employed a


BP has started extracting oil from one of the U.K.’s biggest offshore investments in decades. The energy giant said in a press release Friday that oil is now being pumped from its Clair Ridge project, a section of a hydrocarbon field in the North Sea first discovered in 1977. BP said its intention was to extract 640 million barrels of oil, with production peaking at 120,000 barrels a day. The company claimed the project is the largest commissioning in the North Sea in 20 years and has employed a
UK and US energy giants start oil production at North Sea megaproject Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-23  Authors: david reid
Keywords: news, cnbc, companies, uk, bp, oil, discovered, giants, shell, start, field, ridge, production, north, megaproject, project, sea, barrels, energy


UK and US energy giants start oil production at North Sea megaproject

BP has started extracting oil from one of the U.K.’s biggest offshore investments in decades.

The energy giant said in a press release Friday that oil is now being pumped from its Clair Ridge project, a section of a hydrocarbon field in the North Sea first discovered in 1977.

BP said its intention was to extract 640 million barrels of oil, with production peaking at 120,000 barrels a day. The project is designed to last for 40 years.

The second phase development of the oilfield, which lies around 50 miles west of the Shetland Islands, is a joint venture with Shell, Chevron and ConocoPhillips.

When discovered in 1977, the field was estimated to contain 7 billion barrels of hydrocarbons, but complex rock formations had prevented extraction.

BP bosses said the first oil from Clair Ridge was the culmination of “decades of persistence” that required capital investment exceeding £4.5 billion ($5.77 billion).

The company claimed the project is the largest commissioning in the North Sea in 20 years and has employed at least 6,000 people to date. BP said construction involved a “flotel,” a floating accommodation vessel that housed 500 workers.

It is intended that BP will hold a 45.1 percent interest in the field, Shell will own 28 percent, Chevron North Sea is to take 19.4 percent and ConocoPhillips 7.5 percent.


Company: cnbc, Activity: cnbc, Date: 2018-11-23  Authors: david reid
Keywords: news, cnbc, companies, uk, bp, oil, discovered, giants, shell, start, field, ridge, production, north, megaproject, project, sea, barrels, energy


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

OPEC reportedly plans quiet oil output cut to avoid Trump’s ire

The strategy, explained by OPEC and Saudi sources to The Wall Street Journal, implies that top OPEC producer Saudi Arabia would slash production by up to 1 million barrels per day. OPEC is preparing to pull back output because the 15-nation cartel thinks the oil market will be oversupplied next year. OPEC agreed two years ago to cut production by 1.2 million barrels per day. Russia and several other producers soon joined the agreement, bringing the total output cuts to 1.8 million barrels per da


The strategy, explained by OPEC and Saudi sources to The Wall Street Journal, implies that top OPEC producer Saudi Arabia would slash production by up to 1 million barrels per day. OPEC is preparing to pull back output because the 15-nation cartel thinks the oil market will be oversupplied next year. OPEC agreed two years ago to cut production by 1.2 million barrels per day. Russia and several other producers soon joined the agreement, bringing the total output cuts to 1.8 million barrels per da
OPEC reportedly plans quiet oil output cut to avoid Trump’s ire Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-23  Authors: tom dichristopher
Keywords: news, cnbc, companies, oil, cut, barrels, saudi, ire, trump, plans, output, avoid, production, saudis, quiet, million, reportedly, prices, opec, trumps


OPEC reportedly plans quiet oil output cut to avoid Trump's ire

Wait to play oil’s downside until we see OPEC’s reaction, expert says 14 Hours Ago | 02:01

OPEC and Saudi Arabia are reportedly planning to throttle back oil production but will attempt to message the output cut in a way that does not antagonize President Donald Trump.

The strategy, explained by OPEC and Saudi sources to The Wall Street Journal, implies that top OPEC producer Saudi Arabia would slash production by up to 1 million barrels per day.

OPEC is preparing to pull back output because the 15-nation cartel thinks the oil market will be oversupplied next year. Crude prices have plunged more than 30 percent since last month on the growing consensus that supply will soon outstrip demand.

But ahead of OPEC’s policy meeting on Dec. 6, Trump is urging the group against cutting production and imploring the Saudis to help him drive oil prices even lower.

The president praised Saudi Arabia on Wednesday for helping to cut fuel prices by increasing output earlier this year. On Tuesday, Trump declared he’d stand by the Saudis even though the CIA has reportedly concluded that the nation’s powerful crown prince ordered the killing of journalist and U.S. resident Jamal Khashoggi. Trump has repeatedly cast doubt on the CIA assessment this week.

“Because of Khashoggi, the Saudis will do anything to make sure Trump doesn’t do anything nasty,” an OPEC official told The Wall Street Journal.

In light of Trump’s overtures, OPEC and the Saudis plan to reaffirm the output targets they first agreed to in November 2016, the Journal reported on Friday. That means Saudi Arabia would begin cutting output from its target of 11 million bpd this month to its 2016 quota, which is just over 10 million barrels a day.

OPEC reportedly considered announcing a cut of 1.4 million bpd. But by instead saying the group will stick to its 2016 quotas, the group hopes to be more discreet in cutting output, an OPEC official told the Journal.

OPEC agreed two years ago to cut production by 1.2 million barrels per day. Russia and several other producers soon joined the agreement, bringing the total output cuts to 1.8 million barrels per day.

That deal helped drain a global crude glut and boost oil prices from a prolonged slump. But the group eventually took more barrels off the market than it intended and agreed in June to increase output.


Company: cnbc, Activity: cnbc, Date: 2018-11-23  Authors: tom dichristopher
Keywords: news, cnbc, companies, oil, cut, barrels, saudi, ire, trump, plans, output, avoid, production, saudis, quiet, million, reportedly, prices, opec, trumps


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

As President Trump crows over low oil prices, one expert sees a bounce ahead

In a tweet Wednesday morning, Trump said lower oil prices were a “big tax cut for America and the world” and encouraged Saudi Arabia to pull on its supply-demand levers to push prices even lower. Don’t expect these levels to last for too long, says Tom Kloza, co-founder of the Oil Price Information Service. “I believe that we are seeing an ‘oversold’ chapter for oil,” Kloza told CNBC’s “Futures Now” in an email on Wednesday. Markets perceived Trump’s friendliness with the kingdom as potentially


In a tweet Wednesday morning, Trump said lower oil prices were a “big tax cut for America and the world” and encouraged Saudi Arabia to pull on its supply-demand levers to push prices even lower. Don’t expect these levels to last for too long, says Tom Kloza, co-founder of the Oil Price Information Service. “I believe that we are seeing an ‘oversold’ chapter for oil,” Kloza told CNBC’s “Futures Now” in an email on Wednesday. Markets perceived Trump’s friendliness with the kingdom as potentially
As President Trump crows over low oil prices, one expert sees a bounce ahead Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-21  Authors: keris lahiff, brad quick, mathew lloyd, bloomberg, getty images, michael nagle, david a grogan
Keywords: news, cnbc, companies, production, oil, president, low, crows, prices, bounce, ahead, kloza, higher, barrels, saudi, crude, trump, expert, sees, day


As President Trump crows over low oil prices, one expert sees a bounce ahead

President Donald Trump is heaping praise on crude oil’s massive sell-off.

In a tweet Wednesday morning, Trump said lower oil prices were a “big tax cut for America and the world” and encouraged Saudi Arabia to pull on its supply-demand levers to push prices even lower.

Don’t expect these levels to last for too long, says Tom Kloza, co-founder of the Oil Price Information Service.

“I believe that we are seeing an ‘oversold’ chapter for oil,” Kloza told CNBC’s “Futures Now” in an email on Wednesday.

West Texas Intermediate crude hit the year’s peak of $79.90 a barrel in early October. Since then, it has plummeted nearly 31 percent.

On Tuesday, prices plunged more than 6 percent after Trump defended Saudi Arabia against their alleged involvement in the murder of journalist Jamal Khashoggi. Markets perceived Trump’s friendliness with the kingdom as potentially helpful in pushing them to raise oil production.

While Kloza says temporary weakness could take crude down to $50 a barrel, it won’t take long for prices to spring back.

“Oil can be stabilized in December and will be helped by the higher demand as U.S. refiners ramp up to over 18-million barrels a day of crude use. A cold northern hemisphere winter juices up demand as well,” said Kloza.

Into next year, the Trump administration’s policies will still act as a wild card, but generally Kloza expects higher prices in the intermediate-term.

“Anything can happen and no one can really program Donald Trump and his strategy (or whimsy) into any of the typical models,” Kloza said. But, “throw in an occasional problem from Libya, Nigeria, Iraq, Venezuela, etc. and you can make a case for the higher numbers in the first half or three-quarters of 2019.”

Beyond that, the forecasts grow murky, says Kloza.

“It gets tougher since we’ll see the U.S. production climb by another million barrels per day, provided that there is no price collapse,” he said.

U.S. crude production climbed to 11.3 million barrels a day in August this year, the first time it has ever crossed the 11 million-barrel mark, according to the Energy Information Administration.


Company: cnbc, Activity: cnbc, Date: 2018-11-21  Authors: keris lahiff, brad quick, mathew lloyd, bloomberg, getty images, michael nagle, david a grogan
Keywords: news, cnbc, companies, production, oil, president, low, crows, prices, bounce, ahead, kloza, higher, barrels, saudi, crude, trump, expert, sees, day


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Oil treads water amid expected OPEC cuts, gloomy economic outlook

Oil markets lost steam on Tuesday, giving back earlier gains, as a deteriorating economic outlook and a surge in U.S. production outweighed expected supply cuts by the Organization of the Petroleum Exporting Countries (OPEC). Brent crude oil futures, the international benchmark for oil prices, were at $66.55 a barrel at 0313 GMT, down 24 cents, or 0.4 percent from their last close. U.S. crude oil production has soared by almost 25 percent this year, to a record 11.7 million barrels per day (bpd)


Oil markets lost steam on Tuesday, giving back earlier gains, as a deteriorating economic outlook and a surge in U.S. production outweighed expected supply cuts by the Organization of the Petroleum Exporting Countries (OPEC). Brent crude oil futures, the international benchmark for oil prices, were at $66.55 a barrel at 0313 GMT, down 24 cents, or 0.4 percent from their last close. U.S. crude oil production has soared by almost 25 percent this year, to a record 11.7 million barrels per day (bpd)
Oil treads water amid expected OPEC cuts, gloomy economic outlook Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-20  Authors: spencer platt, getty images
Keywords: news, cnbc, companies, markets, outlook, water, cuts, million, opec, production, treads, economic, supply, record, expected, amid, recent, oil, barrels, gloomy, crude


Oil treads water amid expected OPEC cuts, gloomy economic outlook

Oil markets lost steam on Tuesday, giving back earlier gains, as a deteriorating economic outlook and a surge in U.S. production outweighed expected supply cuts by the Organization of the Petroleum Exporting Countries (OPEC).

Brent crude oil futures, the international benchmark for oil prices, were at $66.55 a barrel at 0313 GMT, down 24 cents, or 0.4 percent from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $57.07 per barrel, 13 cents, or 0.2 percent, below their last settlement.

Oil prices are almost a quarter below their recent peaks in early October, weighed down by surging supply, especially from the United States.

U.S. crude oil production has soared by almost 25 percent this year, to a record 11.7 million barrels per day (bpd).

This comes amid widespread market expectations of an economic slowdown, which saw Asian stock markets tumble on Tuesday, adding to sharp losses on Wall Street during the previous day.

As a result, financial traders have become wary of oil markets, seeing further price downside risks from the soaring U.S. shale production as well as the deteriorating economic outlook.

Portfolio managers have sold the equivalent of 553 million barrels of crude and fuels in the last seven weeks, the largest reduction over a comparable period since at least 2013.

Funds now hold a net long position of just 547 million barrels, less than half the recent peak of 1.1 billion at the end of September, and down from a record 1.484 billion in January.


Company: cnbc, Activity: cnbc, Date: 2018-11-20  Authors: spencer platt, getty images
Keywords: news, cnbc, companies, markets, outlook, water, cuts, million, opec, production, treads, economic, supply, record, expected, amid, recent, oil, barrels, gloomy, crude


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Oil rises on expected OPEC cuts, but surging US supply drags

Oil prices rose on Friday amid expectations of supply cuts from OPEC, although record U.S. production dragged. Brent crude oil futures were up 48 cents, or 0.7 percent, at $67.10 per barrel. “OPEC production cuts are usually implemented by removing medium and heavier barrels from the market but that does not address the oversupply of light-sweet.” Crude inventories soared 10.3 million barrels in the week to Nov. 9 to 442.1 million barrels, the highest level since early December 2017. “We expect


Oil prices rose on Friday amid expectations of supply cuts from OPEC, although record U.S. production dragged. Brent crude oil futures were up 48 cents, or 0.7 percent, at $67.10 per barrel. “OPEC production cuts are usually implemented by removing medium and heavier barrels from the market but that does not address the oversupply of light-sweet.” Crude inventories soared 10.3 million barrels in the week to Nov. 9 to 442.1 million barrels, the highest level since early December 2017. “We expect
Oil rises on expected OPEC cuts, but surging US supply drags Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-16  Authors: andrew burton, getty images
Keywords: news, cnbc, companies, surging, production, crude, bpd, barrels, expected, rises, oil, opec, drags, cuts, supply, record, million


Oil rises on expected OPEC cuts, but surging US supply drags

Oil prices rose on Friday amid expectations of supply cuts from OPEC, although record U.S. production dragged.

U.S. West Texas Intermediate (WTI) crude oil futures were at $56.84 per barrel at 0353 GMT, up 38 cents, or 0.7 percent, from their last settlement.

Brent crude oil futures were up 48 cents, or 0.7 percent, at $67.10 per barrel.

Prices were mainly supported by expectations the Organization of the Petroleum Exporting Countries (OPEC) would start withholding supply soon, fearing a renewed rout such as in 2014 when prices crashed under the weight of oversupply.

OPEC’s de-facto leader Saudi Arabia wants the cartel and its allies to cut output by about 1.4 million barrels per day (bpd), around 1.5 percent of global supply, sources told Reuters this week.

However, Morgan Stanley warned a cut by the Middle East dominated producer cartel may not have the desired effect.

“The main oil price benchmarks – Brent and WTI – are both light-sweet crudes and reflect this glut,” the U.S. bank said.

“OPEC production cuts are usually implemented by removing medium and heavier barrels from the market but that does not address the oversupply of light-sweet.”

Due to the structural oversupply that has emerged in the market from record production by many countries, Morgan Stanley said that “OPEC cuts are inherently temporary (because) all they can do is shift production from one period to another”.

While OPEC considers withholding supply, U.S. crude oil production reached another record last week, at 11.7 million bpd, according to U.S. Energy Information Administration (EIA) data published on Thursday.

U.S. output has surged by almost a quarter since the start of the year.

The record output meant U.S. crude oil stocks posted the biggest weekly build in nearly two years.

Crude inventories soared 10.3 million barrels in the week to Nov. 9 to 442.1 million barrels, the highest level since early December 2017.

This surge contributed to oil prices falling by around a quarter since early October, taking many by surprise.

“Oil bulls, us included, have capitulated and we no longer see oil climbing to $95 per barrel next year,” Bank of America Merrill Lynch said in a note.

While sentiment has turned bearish, some analysts warn that 2019 could be tighter than expected.

“We expect 2019 oil demand to reach 101.1 million bpd,” natural resources research and investment firm Goehring & Rozencwajg said, up from just under 100 million bpd this year.

At the same time, the firm said production outside North America was set to disappoint.

Add OPEC’s expected supply cuts, and Goehring & Rozencwajg said “those investors who are able to adopt a contrarian stance … and stomach the volatility … are being presented with an excellent investment opportunity” to buy into oil after the recent slump.

Bank of America agreed, saying “we believe oil is oversold and will likely bounce up from the current levels, as OPEC+ dials back production in December”.


Company: cnbc, Activity: cnbc, Date: 2018-11-16  Authors: andrew burton, getty images
Keywords: news, cnbc, companies, surging, production, crude, bpd, barrels, expected, rises, oil, opec, drags, cuts, supply, record, million


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Oil prices slip on concerns of looming oversupply, economic downturn

Oil prices slipped on Thursday, weighed down by rising supply going into a market in which consumption is expected to slow down amid a glum economic outlook. Front-month Brent crude oil futures were trading at $65.88 per barrel at 0441 GMT, down 24 cents, or 0.4 percent, from their last close. Since early October, oil prices have lost around a quarter of their value as supply soars just as demand is expected to slow down along with an economic downturn. Meanwhile, data released this week showed


Oil prices slipped on Thursday, weighed down by rising supply going into a market in which consumption is expected to slow down amid a glum economic outlook. Front-month Brent crude oil futures were trading at $65.88 per barrel at 0441 GMT, down 24 cents, or 0.4 percent, from their last close. Since early October, oil prices have lost around a quarter of their value as supply soars just as demand is expected to slow down along with an economic downturn. Meanwhile, data released this week showed
Oil prices slip on concerns of looming oversupply, economic downturn Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-15
Keywords: news, cnbc, companies, economic, supply, oil, barrels, looming, million, demand, week, downturn, crude, slip, prices, oversupply, concerns, opec


Oil prices slip on concerns of looming oversupply, economic downturn

Oil prices slipped on Thursday, weighed down by rising supply going into a market in which consumption is expected to slow down amid a glum economic outlook.

Front-month Brent crude oil futures were trading at $65.88 per barrel at 0441 GMT, down 24 cents, or 0.4 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $55.96 a barrel, down 29 cents, or 0.5 percent.

Since early October, oil prices have lost around a quarter of their value as supply soars just as demand is expected to slow down along with an economic downturn.

“Asian refiners and consumers we speak with are mentioning initial concerns of slowing demand,” said Mike Corley, president of Mercatus Energy Advisors.

U.S. bank Morgan Stanley said in a note on Wednesday that China’s economic “conditions deteriorated materially” in the third quarter of 2018, while analysts at Capital Economics said China’s “near-term economic outlook still remains downbeat.”

China is the world’s biggest oil importer and the second-largest crude consumer.

Meanwhile, data released this week showed economic contraction in industrial powerhouses Japan and Germany in the third quarter.

At the same time, supply has been surging, especially due to a 22 percent rise in U.S. crude oil production this year to a record 11.6 million barrels per day (bpd).

“Producers…have more barrels than they can sell at the moment,” said Mercatus Energy Advisors’ Corley.

As a result, oil inventories are rising. The American Petroleum Institute said late on Wednesday that crude inventories rose by 8.8 million barrels in the week to Nov. 9 to 440.7 million, compared with analyst expectations for an increase of 3.2 million barrels.

Fearing a renewed glut like in 2014, when prices crashed under the weight of oversupply, the Organization of the Petroleum Exporting Countries (OPEC) is discussing supply cuts.

To do so successfully, OPEC – under the de-facto leadership of Saudi Arabia – will need Russia on its side, which is not an OPEC member.

A joint effort between OPEC and Russia to withhold supply from 2017 was a major contributor to crude price rises last year and in the first half of 2018.

“Russia and OPEC and Saudi Arabia – they are observing the market. If they see that there is dis-balance between supply and demand, (they) will of course take a joint action to reduce supply,” said Kirill Dmitriev, head of Russian Direct Investment Fund, the country’s sovereign wealth investment body.


Company: cnbc, Activity: cnbc, Date: 2018-11-15
Keywords: news, cnbc, companies, economic, supply, oil, barrels, looming, million, demand, week, downturn, crude, slip, prices, oversupply, concerns, opec


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

US now pumping more oil than Russia and Saudi Arabia; OPEC could strike back

The U.S. government expects October production was 11.4 million barrels a day and expects production can grow to 12.1 million barrels a day on average next year. Saudi Arabia, de facto leader of OPEC, and Russia had agreed to raise production ahead of U.S. sanctions on Iranian oil, and the joint committee could decide to recommend lowering production. President Donald Trump had called on Saudi Arabia to use its surplus capacity to add oil to the market ahead of the sanctions. Croft estimates the


The U.S. government expects October production was 11.4 million barrels a day and expects production can grow to 12.1 million barrels a day on average next year. Saudi Arabia, de facto leader of OPEC, and Russia had agreed to raise production ahead of U.S. sanctions on Iranian oil, and the joint committee could decide to recommend lowering production. President Donald Trump had called on Saudi Arabia to use its surplus capacity to add oil to the market ahead of the sanctions. Croft estimates the
US now pumping more oil than Russia and Saudi Arabia; OPEC could strike back Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-07  Authors: patti domm, j pat carter, getty images
Keywords: news, cnbc, companies, opec, pumping, barrels, strike, saudi, russia, oil, arabia, production, iranian, day, million


US now pumping more oil than Russia and Saudi Arabia; OPEC could strike back

U.S. oil production jumped to a record 11.6 million barrels a day last week, and rising U.S. output is a factor that could prompt OPEC members and allies to react when they meet over the weekend.

Oil prices have cratered amid concerns of a global supply glut, and the jump in U.S. output to a point where it is now surpassing Russia, in addition to Saudi Arabia, only adds to these concerns. West Texas Intermediate futures are now down 20 percent from the near four-year high reached on Oct. 3.

U.S. production is up a stunning 2 million barrels a day from the same period last year, and 400,000 barrels from the week earlier, based on weekly U.S. government data. Weekly numbers are often revised, but the higher production figure is in line with growing U.S. output expectations. The U.S. government expects October production was 11.4 million barrels a day and expects production can grow to 12.1 million barrels a day on average next year.

“US crude oil production was recorded at a new record high, and the largest in the world by far, moving ahead of Russia and closer to the level Saudi Arabia might be able to reach in another six months,” wrote Citigroup energy analyst Eric Lee.

OPEC’s Joint Ministerial Monitoring Committee will meet this weekend in Abu Dhabi, ahead of next month’s broader meeting in Vienna, and production levels are expected to be discussed. Saudi Arabia, de facto leader of OPEC, and Russia had agreed to raise production ahead of U.S. sanctions on Iranian oil, and the joint committee could decide to recommend lowering production.

The committee could make a recommendation that would be acted on at OPEC’s December meeting. Reuters quoted sources saying OPEC and its allies could not rule out a return to production cuts next year.

Helima Croft, head of RBC global commodities strategy, said there’s been increasing talk that OPEC and Russia are concerned about supply and may want to cut because they front loaded production ahead of U.S. sanctions on Iranian oil, which went into effect Monday.

President Donald Trump had called on Saudi Arabia to use its surplus capacity to add oil to the market ahead of the sanctions. Trump this week said he didn’t want the Iran sanctions to drive oil prices higher. “If you’re the Saudis and you are concerned, you have to figure out how far you can let this go,” Croft said. “They did all of Trump’s heavy lifting for him. They rushed in to put all the barrels on the market in anticipation of a U.S. policy.”

U.S. production has surpassed Russia and Saudi Arabia. Analysts say Russian production is about 11.4 million barrels a day, and Saudi Arabia production is up to abut 10.7 million barrels, after it upped production to compensate for the potential of Iran barrels coming off the market.

Prior to early October, oil prices had been rising as Venezuela supply continued to dwindle and Iranian barrels came off the market. West Texas Intermediate crude futures topped out at $76.90 in early October. Croft estimates there are about 1 million barrels of Iranian oil removed from the market daily.

Croft said the market has been overly negative about supply, and is underestimating the effect of U.S. sanctions because the U.S. granted some buyers of Iranian crude exemptions. For instance, China has a waiver allowing it to temporarily purchase 360,000 barrels of Iranian oil. But China is cutting back its purchases, while analysts had expected China to continue buying Iranian oil and even add to its purchases.

John Kilduff, partner with Again Capital, said he expects OPEC to take some action to stem a possible new supply glut, now that the U.S. election is over.

“Some in OPEC are blaming Russia and Saudi Arabia for a $15 fall in the oil price and are calling on them to cut production by 1 million barrels a day immediately, ” said Kilduff. “There’s going to be some fireworks at this meeting. The price fall over the last four weeks has been so swift and dramatic that it’s definitely getting their attention.”

Kilduff said it’s unclear whether Russia would reduce its production, which is at a record high. Russian oil companies have long opposed the production agreement with OPEC.

The surge in prices ahead of October had encouraged increased U.S. drilling. “This looks to be engendering an OPEC response this weekend,” he said.

In addition to ramping up output, the U.S. has been exporting more crude. The U.S. exported 2.4 million barrels a day of crude last week, and nearly 5 million barrels of condensates and refined products, like gasoline and diesel.

“Most of it went out of the country. We’re exporting our bounty,” said Kilduff. “I think there’s the beginnings of a glut…If you look at the futures, the prices are higher in future months, which is an indicator of oversupply.”

Croft said the extra barrels are being absorbed by the markets and for now, it is not oversupplied.

But she added, ‘they have be concerned about going into 2019 when Permian bottleneck ease.” The most prolific U.S. oil field, the Permian basin in Texas, has successfully been adding production, at a much faster pace than infrastructure to take oil away. Those problems are expected to ease next year with new pipeline capacity.


Company: cnbc, Activity: cnbc, Date: 2018-11-07  Authors: patti domm, j pat carter, getty images
Keywords: news, cnbc, companies, opec, pumping, barrels, strike, saudi, russia, oil, arabia, production, iranian, day, million


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post