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Tag: Oil Prices

  • Oil prices slip, but ongoing supply cuts support

    Oil prices slip, but ongoing supply cuts support

    Oil markets fell on Thursday despite a surprise decline in U.S. inventories, but the price drops were tempered by a smaller-than-expected reduction in gasoline stocks and ongoing OPEC-led supply cuts.

    Brent crude futures were at 71.43 dollars a barrel at 0700 GMT, down 19 cents or 0.3 per cent from their last close and further away from Wednesday’s five-month high of 72.27 dollars a barrel.

    U.S. West Texas Intermediate (WTI) crude futures were at 63.62 dollars per barrel, down 14 cents or 0.2 per cent.

    Both contracts had traded slightly higher earlier in the day.

    U.S. crude inventories fell by 1.4 million barrels in the week to April 12 compared with analyst expectations for an increase of 1.7 million barrels, Department of Energy (DoE) data showed on Wednesday.

    “The unexpected drawdown in U.S. commercial crude oil stocks was balanced by lower-than-expected withdrawals in the country’s gasoline and distillate inventories,” said Abhishek Kumar, Head of Analytics at Interfax Energy in London.

    Gasoline stocks fell by 1.2 million barrels, less than analyst expectations in a Reuters’ poll for a 2.1 million-barrel drop.

    Distillate stockpiles, which include diesel and heating oil, fell by 362,000 barrels, also not as much as forecasts for 846,000-barrel drawdown, the EIA data showed.

    Prices have been supported this year by an agreement reached by OPEC and its allies, including Russia, to limit their oil output by 1.2 million barrels per day.

    Global supply has also been tightened further by U.S. sanctions on OPEC members Venezuela and Iran.

    Iran’s crude exports have dropped in April to their lowest daily level this year, tanker data showed and industry sources said, suggesting a drawdown in buyer interest ahead of expected further pressure from Washington.

    Growing U.S. oil production and concerns over the U.S.-China trade dispute are keeping prices in check.

    “A persistent rise in U.S. oil output, together with lingering demand-side concerns emerging from the U.S.-China trade dispute, is limiting price gains,” Kumar said.

    U.S. crude oil output from seven major shale formations was expected to rise by about 80,000 bpd in May to a record 8.46 million bpd, the U.S. Energy Information Administration said in its monthly report on Monday.

    Surging U.S. production has filled some of the gap in supplies, although not all of the lost production can be immediately replaced by U.S. shale oil due to refinery configurations.

  • Oil prices rise as OPEC cuts supply

    Oil prices rise as OPEC cuts supply

    Oil prices were near 2019 highs on Tuesday, supported by supply cuts led by producer club OPEC.

    U.S. sanctions against oil producers Iran and Venezuela are also boosting prices, although traders said the market may be capped by rising U.S. output.

    U.S. West Texas Intermediate (WTI) futures were at 59.10 dollars per barrel at 0314 GMT, virtually unchanged from their last settlement and close to the 2019 high of 59.23 dollars reached the previous day.

    Brent crude oil futures were up 10 cents at 67.64 dollars per barrel, also close to this year’s peak of 68.14 dollars reached late last week.

    In China, Shanghai crude futures, launched in March last year, bounced 4.5 per cent from their last close to 467.6 yuan (69.64 dollars) per barrel, also near 2019 highs of 475.7 yuan a barrel reached during a brief spike in February.

    In dollar-terms, this pushed Shanghai crude into a premium over Brent.

    The Organisation of the Petroleum Exporting Countries (OPEC) on Monday scrapped its planned meeting in April, effectively extending supply cuts that have been in place since January until at least June, when the next meeting is scheduled.

    OPEC and a group of non-affiliated producers including Russia, known as OPEC+, started withholding supply to halt a sharp price drop in the second-half of 2018, when markets came under pressure from surging output as well as an economic slowdown.

    “The OPEC+ deal has brought stability to crude prices and signs of an extension have taken crude higher,” said Alfonso Esparza, senior market analyst at futures brokerage OANDA.

    Prices have been further supported by U.S. sanctions against oil exports from Iran and Venezuela, traders said.

    Because of the tighter supply outlook for the coming months, the Brent forward curve has gone into backwardation since the start of the year, meaning that prices for immediate delivery are more expensive than those for dispatch further in the future, with May Brent prices currently around 1.20 dollar per barrel more expensive than December delivery Brent.

    Outside OPEC, analysts are eyeing U.S. crude oil production, which has soared by more than 2 million barrels per day (bpd) since early 2018, to around 12 million bpd, making America the world’s biggest producer ahead of Russia and Saudi Arabia.

    Weekly output and storage data will be published by the Energy Information Administration (EIA) on Wednesday.

    On the demand-side, there is concern that an economic slowdown will erode oil consumption.

    Bank of America Merrill Lynch said in a note that economic “risks are skewed to the downside” and that “we forecast global demand growth of 1.2 million bpd year-on-year in 2019 and 1.15 million bpd during 2020.”

    The bank said it expected “Brent and WTI to average 70 dollars per barrel and 59 dollars per barrel respectively in 2019, and 65 dollars per barrel and 60 dollars per barrel in 2020.”

  • How we will spend extra income from rising oil prices — Buhari

    Income accruing to the country from rising oil prices in the international market will be spent on infrastructural development, President Muhammadu Buhari has pledged.

    Receiving a delegation from Eni, led by the Chief Upstream Officer, Mr. Antonio Vella, the President said extra funds outside the provision of year 2018 budget “will be deployed to infrastructure projects like roads, rail, and power, for the good of our people, and for the development of the country.”

    Budget 2018 provisions had been predicated on $45 per barrel by the Executive, and the Senate had adjusted it to $47 per barrel. Oil prices have, however, risen to $70 per barrel, this week.

    President Buhari also appreciated Eni for its upcoming investments in the oil industry, which included rehabilitation of Port Harcourt refinery, and the building of a new one.

    “In my first coming, all our refineries were working. Port Harcourt used to refine 60,000 barrels per day, and it was later upgraded to 100,000 barrels. Kaduna and Warri were also working optimally, and we used to satisfy the demand of the local market. We equally exported 100,000 barrels of refined petrol. Now, no refinery is performing up to 50%. It is a disgraceful thing,” the President said.

    Leader of the Eni delegation, Mr Antonio Vella, said his organization has presented a technical proposal to the NNPC to rehabilitate the Port Harcourt refinery, and also done a feasibility study on a new refinery of up to 150,000 barrels per day capacity.

    “Site selection has been completed, and 50 new graduates have already arrived in Italy for a training that will last seven months.

    “ There are other upstream initiatives, and a deep water project, with estimated expenditure of $13 billion,” Vella disclosed.

    The oil company also plans to double power generation capacity from its plant in Delta State from its present 500 MW to 1,000 MW, spending $750 million in the process.

     

    Femi Adesina

    Special Adviser to the President

    (Media and Publicity)

    January 26, 2018

  • Nigeria no longer cares about rise, fall of oil prices – Adeosun

    Nigeria no longer cares about rise, fall of oil prices – Adeosun

    Minister of Finance, Kemi Adeosun has expressed confidence in Nigeria’s economy under the leadership of President Muhammadu Buhari, stressing that the country has gotten to a point where it does not care if oil prices rise or fall.

    Adeosun who made the remarks during an interview with Bloomberg, said the Nigeria had learnt to live with oil prices at $45-$46 a barrel. As of 2pm on Friday, Brent crude, the international benchmark of crude oil was trading at $70.20.

    “We’ve gotten to a point where we don’t care whether prices will be sustained at the level that they have recently risen to.

    “We’ve been able to balance our budget at $45-$46 per barrel and we’ve got to learn to live comfortably at that level.”

    The minister said Nigeria cannot afford to rely on oil prices anymore. “Yes, it’s at $66-$67 per barrel today, but we’ve been here before, right?” she asked. “And we can’t afford to be exposed to that, so I really try very hard to ignore the oil price.”

    The oil benchmark for the 2018 budget is $45 per barrel. For the first time in 45 years, the federal government has projected that non-oil revenue will surpass oil revenue in 2018.

    It is also seeking to plug an infrastructure gap of $25 billion, she said “…infrastructure gap is significant, it is far bigger than anybody had imagined, in power, in roads, in rail.”

  • Oil prices rebound ahead of producers’ compliance meeting

     

    Oil prices edged up for a second day on Friday on expectations that a weekend meeting of the world’s top oil producers would demonstrate compliance to a global output cut deal.

    International benchmark Brent crude prices were up $1.30, or 2.4 per cent, at $55.46 a barrel at 1419 GMT.

    U.S. West Texas Intermediate crude oil futures were trading up $1.25, also 2.4 percent, at $52.62 a barrel.

    “Prices were pushed down a bit too far and hopes will rise that the OPEC/non-OPEC meeting this weekend will show that these producers actually give some proof that they cut production”, said Hans van Cleef, senior energy economist at ABN Amro.

    A weekend meeting in Vienna of members of the Organization of the Petroleum Exporting Countries (OPEC), and some producers outside of the group, including Russia, will establish a compliance mechanism.

    The meeting is to verify producers are sticking to a deal to reduce output by 1.8 million barrels per day (bpd), OPEC’s secretary general said.

    Saudi Arabia’s energy minister said on Friday that 1.5 million bpd had already been taken out of the market, adding to signs that the oil market is re-balancing.

    NAN