TheNewsGuru

Tag: Oil Prices

  • Oil prices rise on slow OPEC oil output increase

    Oil prices rise on slow OPEC oil output increase

    Oil prices rose on Tuesday as key producer group OPEC undershot its expected pace of output increases last month, while the world’s top oil consumer China ramped up operating rates to meet a spike in diesel demand.

    Brent crude futures gained 28 cents, or 0.3%, to $84.99 a barrel by 0117 GMT while U.S. West Texas Intermediate (WTI) crude futures rose by 19 cents, or 0.2%, to $84.24 a barrel.

    “Crude prices still seemed poised to head higher, with some traders waiting for confirmation after both the EIA crude oil inventory shows demand for most products are headed in the right direction, while U.S. production is stable and with OPEC+ sticking to their gradual 400,000 bpd increase plan,” said Edward Moya, senior analyst at OANDA.

    Oil rallied to multi-year highs last week, helped by a post-pandemic demand rebound and the Organization of the Petroleum Exporting Countries and allies led by Russia, or OPEC+, sticking to gradual, monthly production increases of 400,000 barrels per day (bpd), despite calls for more oil from major consumers.

    The increase in OPEC’s oil output in October fell short of the rise planned under a deal with allies, a Reuters survey found on Monday, as involuntary outages in some smaller producers offset higher supplies from Saudi Arabia and Iraq.

    OPEC pumped 27.50 million barrels per day (bpd) in October, the survey found, a rise of 190,000 bpd from the previous month but below the 254,000 increase permitted under the supply deal.

    Meanwhile, national oil firms in China have ramped up refinery run rates, increasing its appetite for crude oil, to avert a diesel shortage in the world’s second-largest oil user.

    U.S. crude oil stocks were expected to have risen last week, while gasoline and distillate inventories were seen falling, a preliminary Reuters poll showed on Monday.

    The poll was conducted ahead of reports from the American Petroleum Institute, an industry group, due on Tuesday, and the EIA, statistical arm of the U.S. Department of Energy, due on Wednesday.

  • Global oil prices won’t decline until 2023 – World Bank

    Global oil prices won’t decline until 2023 – World Bank

    The stunning recent runup in global oil prices could threaten economic growth and is unlikely to retreat until 2023, the World Bank said Thursday.

    Average crude prices are expected to end the year at $70 a barrel, 70 percent higher than in 2020, according to the latest Commodity Markets Outlook.

    That in turn is pushing up other energy prices like natural gas, the report said.

    “The surge in energy prices poses significant near-term risks to global inflation and, if sustained, could also weigh on growth in energy-importing countries,” said World Bank chief economist Ayhan Kose.

    The increases have been “more pronounced than previously projected” and “may complicate policy choices as countries recover from last year’s global recession.”

    Oil prices in recent weeks have surged above $80 a barrel, the highest point in years, as economies reopen following the pandemic shutdowns and amid shipping bottlenecks.

    The World Bank uses an average of Brent, West Texas Intermediate, and Dubai which it said will “remain at high levels in 2022 but will start to decline in the second half of the year as supply constraints ease.”

    The 2022 average is projected to rise to $74 before falling to $65 in 2023, the World Bank said.

    But the report warns that “additional price spikes may occur in the near-term amid very low inventories and persistent supply bottlenecks.”

  • Oil prices surpass $83

    Oil prices surpass $83

    Oil prices hit a multi-year high on Wednesday above $83 a barrel, its highest level since 2018.

    The price jump was supported by OPEC+’s refusal to ramp up production more rapidly.

    However, the market later unwound those gains due to an American Petroleum Institute (API) report showing rising crude inventories in the United States.

    Technical indicators, analysts said, also suggested oil has rallied too fast.

    On Monday, the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, chose to stay with a plan to increase output gradually and not boost it further as the U.S. and other consumer nations have been urging.

    Brent crude rose as high as $83.47, the highest since October 2018, and at 1115 GMT was down 40 cents, or 0.5%, at $82.16.

    U.S. crude climbed to $79.78, the highest since November 2014, and was later down 35 cents at $78.58.

    “An energy crisis is unfolding with winter in the northern hemisphere still to begin, and sets the stage for even higher oil prices,” said Stephen Brennock of oil broker PVM.

    The price of Brent has surged more than 50% this year, adding to inflationary pressure that could slow recovery from the COVID-19 pandemic.

    Natural gas has surged to a record peak in Europe and coal prices from major exporters have also hit all-time highs.

    Jeffrey Halley, analyst at brokerage OANDA, said both crude contracts looked overbought based on a widely followed technical indicator, the relative strength index.

    “That may signal some daily pullbacks this week but does not change the underlying bullish case for oil,” he said.

    Some downward pressure came from the API’s figures showing signs of slowing fuel demand.

    The industry group said U.S. crude inventories rose by 951,000 barrels in the week to Oct. 1, website Oilprice.com reported, and gasoline and distillate fuel inventories also climbed.

    Attention will focus later on official inventory numbers due at 1430 GMT from the Energy Information Administration.

  • Just in: Oil prices shoot pass $60 per barrel, highest in over a year

    Just in: Oil prices shoot pass $60 per barrel, highest in over a year

    Brent oil prices Monday shot past $60 a barrel for the first time in more than a year Monday with investors growing increasingly optimistic about demand as the global economy recovers from the coronavirus pandemic.

    The commodity climbed 1.26 percent to $60.19 a barrel — its highest since January last year — as asset markets rallied on the back of vaccine rollouts, slowing virus infections and hopes that President Joe Biden’s huge stimulus proposal will be passed by US lawmakers.

    Crude has been on the rise for weeks as Biden pushes his $1.9 trillion rescue package, which includes big cash handouts and a hike in the minimum wage.

    Treasury Secretary Janet Yellen said that if the spending package was passed in its entirety, “we would get back to full employment next year”.

    Adding to the upbeat mood is data showing new infection rates, with last week seeing the lowest since October, while governments begin to get to grips with inoculations. Hopes for the long-term outlook overshadowed figures showing a rise in US inventories.

    “Oil traders ignore the sidelines’ spare capacity and continue to take an optimistic view of the US reopening narrative as vaccination protocols should continue to flatten the curve and with the gale-force stimulus tailwinds supporting a spring break reopening, (it’s) providing rocket-fuelled optimism for the oil market,” said Axi strategist Stephen Innes.

  • Oil prices steady as OPEC, allies commence output cuts

    Oil prices continued pointing up for both benchmarks on Friday, May 1 as oil producers embark on record output cuts to tackle glut due to the coronavirus crisis.

    This led to the first weekly gain for the market in four weeks.

    The international benchmark, Brent crude, was up by 0.64 percent or 17 cents to $26.65 per barrel, while the American West Texas Intermediate (WTI) went up by 85 cents or 4.51 percent to sell at $19.69 per barrel.

    Friday marked the first effective day of the output ceiling deal signed by members of the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers, known as OPEC+. Early last month, they agreed to reduce supply by 9.7 million barrels per day.

    The 23-country OPEC+ coalition agreed to cut the output by 9.7 million barrels per day for two months from an agreed baseline level starting May 1. These countries will also cut 7.7 million b/d between July and December and 5.8 million b/d from January 2021 to April 2022.

    TheNewsGuru.com (TNG) reports that Saudi Arabia and Kuwait had already commenced cutting back production before Friday.

    Norway also recently announced that it would cut oil production by 250,000 barrels per day in June – equating to 13 percent cut. Then after June, Norway is planning on easing those cuts to 138,000 barrels per day, for the remainder of the year.

    Although, due to the COVID-19 pandemic, oil demand will fall as much as 9.3 million barrels daily in 2020, there could be a swifter recovery if lockdowns ease quickly, as some countries have reopened their economies.

    It has been projected that a reduced lockdown period and a strong economic recovery in the second half of 2020 could limit the annual decline in oil demand to 6.5 million barrels per day or 6 percent from 2019 levels or 30 percent below its central forecast of 9.3 million barrels per day for the year.

    Countries like Spain, France, Austria and Switzerland among others have already removed COVID-19 restrictions and that’s going to see demand pick up, hence, the market swinging towards the positive.

    A lower-than-expected gain in US crude inventories was the other significant support factor on Friday for the futures.

    Data from the US Energy Information Administration (EIA) showed crude inventories rose by 9 million barrels last week to 527.6 million barrels, less than the 10.6 million-barrel rise analysts had forecast.

  • Coronavirus outbreak slashes global oil prices

    Coronavirus outbreak slashes global oil prices

    Coronavirus outbreak is causing havoc in the crude oil market. Prices tumbled more than 2% on Monday, with investors worried about a hit to demand as the virus spreads rapidly outside China.

    Brent crude fell by $1.50 or 2.5% to $57.00 a barrel by 2332 GMT. U.S. crude futures fell by $1.26 or 2.3% to $52.12.

    Concerns about the coronavirus grew on Sunday after sharp rises in infections in South Korea, Italy and Iran.

    South Korea’s government put the country on high alert after the number of infections surged to over 600 with six deaths, while in Italy, officials said a third person infected with the flu-like virus had died, as the number of cases jumped to above 150 from just three before Friday.

    “We should not underestimate the economic disruption as a super spreader could trigger a massive drop-in business activity around the globe of proportions the world has never dealt with before,” said Stephen Innes, chief market strategist at AxiCorp.

    China, the world’s largest energy consumer, will adjust policy to help cushion the blow to the economy from the coronavirus outbreak that authorities are still trying to control, President Xi Jinping said on Sunday.

    Meanwhile, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman described as “nonsense” a media report that Riyadh is considering a break from the OPEC+ alliance with Russia.

    His comments followed a Wall Street Journal report that said Saudi Arabia was considering leaving the OPEC+ alliance as China’s coronavirus outbreak contributes to a drop in global oil demand.

    In the United States, the oil rig count, an indicator of future production, rose for a third straight week. Drillers added one oil rig last week, bringing the total count to 679, the highest since the week of Dec. 20, energy services firm Baker Hughes Co said.

  • Oil prices soar as Iran hits US Iraqi bases with missiles

    Oil prices soar as Iran hits US Iraqi bases with missiles

    Oil rose sharply, with U.S. crude rising nearly $3, on Wednesday after the U.S. said its forces in Iraq were attacked by Iranian ballistic missiles, raising the prospect of a regional conflagration that could cut oil supplies.

    West Texas Intermediate crude futures rose nearly $3, or almost 5%, to $65.50 a barrel at around 0029 GMT. Brent crude was yet to trade after dropping nearly 1% on Tuesday.

    Iran has launched an attack on U.S.-led forces in Iraq, the U.S. military said on Tuesday, adding Tehran fired more than a dozen ballistic missiles from Iranian territory against at least two Iraqi military bases hosting U.S.-led coalition personnel.

    “We are working on initial battle damage assessments,” Pentagon spokesman Jonathan Hoffman said in statement, adding that the bases targeted were at Al-Asad air base and another in Erbil, Iraq.

    Iranian news agency Mehr said Iran’s Islamic Revolutionary Guard Corps had targeted the base.

    Tehran has vowed retaliation for the killing of Iranian military commander Qassem Soleimani by a U.S. air strike on Jan. 3.

    Sirens were heard and American helicopters were seen flying over Iraq’s Ain al-Asad air base in Anbar province early on Wednesday, according to al Mayadeen TV.

  • Oil prices jump as OPEC, others agree 500,000 b/d cut

    Oil prices rose on Friday as the Organization of the Petroleum Exporting Countries (OPEC) and its allies agreed to deepen output cuts to 500,000 additional barrels per day as the two-day meeting concluded in Vienna, Austria on Friday.

    This new deal reached means the production cut will move from 1.2 million to 1.7 million less production per day.

    On the back of this, the international oil benchmark, the Brent crude futures, traded up at $64.36 per barrel after gaining 97 Cents or 1.53 percent, while the WTI crude rose by 72 cents equivalent to 1.23 percent to trade at $59.15 per barrel.

    There had been talks that the cartel and its allies will discuss the necessary issues concerning oil supply in 2020 when they meet in the Austrian capital city of Vienna on December 5 and 6 with reports showing that oil cut could be extended by 400,000 barrels per day.

    However, after the conclusion of the meeting on Friday, Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, told reporters that the kingdom’s quota would be an additional 167,000 barrels per day.

    He also noted that they would continue to exceed their quota by an additional 400,000 barrels a day, which means the overall production cut will be closer to 2.1 million barrels a day depending on other countries, particularly Nigeria and Iraq willingness to abide by their allocation.

    On its part, Russia, through its Energy Minister, Alexander Novak, said the country’s quota would be 300,000 barrels per day during the first three months of 2020 as condensates would no longer be quoted as part of output for countries.

    The cartel and its allies had earlier in January agreed to cut production output by 1.2 million barrels per day in a deal that would run till March 2020.

    However, one thing that isn’t clear is when this new deal will run through but the allied group said it plans to review the policy at an extraordinary meeting scheduled for March 5-6, 2020.

  • Oil slips as focus shifts from Saudi supply to global demand concerns

    Oil slips as focus shifts from Saudi supply to global demand concerns

    Oil prices eased on Tuesday as weak manufacturing data from Europe and Japan focused market attention on the gloomy outlook for demand and away from uncertainty around supply disruptions in Saudi Arabia.

    Brent crude futures LCOc1 fell 40 cents to 64.37 dollars a barrel by 0624 GMT, while U.S. West Texas Intermediate (WTI) futures CLc1 were at 58.31 dollars, down 33 cents.

    “The demand side of the equation is back in focus,” said Michael McCarthy, senior market analyst at CMC Markets in Sydney, pointing to sluggish manufacturing numbers in leading economies in Europe as well as Japan.

    “That’s why we’re seeing a little bit more (downward) pressure on Brent than West Texas at the moment.”

    Still, oil prices remained at comparatively elevated levels for the year in the wake of the Sept. 14 attack on Saudi Arabia’s largest oil processing facility that halved output in the world’s top oil exporter.

    Reuters reported that Saudi Arabia has restored more than 7 5 per cent of crude output lost after the attacks on its facilities and will return to full volumes by Sept. 30,

    But the Wall Street Journal reported on Monday that repairs at the plants could take months longer than anticipated.

    “Conflicting headlines lead to asymmetric conclusions, which have immobilized price action and investor risk taking,” Mike Tran, a commodity strategist at RBC Capital Markets said in a note.

    An increase in U.S. oil exports to Asia to replace Saudi crude and a reduction in U.S. imports from Iraq meant that crude inventories in the United States could be lower than previously expected, he said.

    European powers – Britain, Germany and France – backed the United States in blaming Iran for the Saudi oil attack, urging Tehran to agree to new talks with world powers on its nuclear and missile programs and regional security issues.

    Meanwhile, a preliminary Reuters poll found on Monday that U.S. crude oil and distillate stockpiles were expected to have dropped last week.

    Seven analysts polled by Reuters estimated, on average, that crude inventories fell 800,000 barrels in the week to Sept. 20.

    The poll was conducted ahead of key inventory reports from the American Petroleum Institute, an industry group, to be released on Tuesday and from the Energy Information Administration on Wednesday. (

  • Attack: Oil Prices Rebound as Saudi Recovery Continues

    Attack: Oil Prices Rebound as Saudi Recovery Continues

    Oil prices were at first trading lower on Monday afternoon as reports stated that Saudi Arabia already had gotten about 75 percent of its output up and running since the attacks on its Aramco fields two weeks ago.

    However, as at Tuesday night, the Brent Crude was trading higher at $63.42 per barrel after gaining 22 cents or 0.35 percent, while the US West Texas Intermediate (WTI) also recorded gains of 38 cents equivalent to 0.65 percent to trade at $58.47 per barrel.

    Saudi’s oil production was hinted at more than 1.3 million barrels per day in Khurais, while current production from Abqaiq is at about 3 million barrels per day.

    Things also took a new turn on Monday as leaders from United Kingdom, France and Germany have said in a joint statement at the 74th General Assembly of the United Nations that Iran was responsible for the attacks on Saudi Aramco fields earlier this month.

    They were talks by French President Emmanuel Macron, British Prime Minister Boris Johnson and German Chancellor Angela Merkel on Monday during the annual United Nations gathering of world leaders to coordinate their strategy on Iran.

    “It is clear for us that Iran bears responsibility for this attack. There is no other plausible explanation,” the three leaders said in the joint statement released by the French government

    There are clear indications on what this might mean for oil prices but expectations are that oil prices will continue to rise.