Crude Oil

April 10th, 2014

Oil Update

Crude Oil Price: $103.60

Brent Falls on Libya as WTI Discount Shrinks

Brent crude fell for the first time in three days on speculation that Libyan oil exports will increase next week. West Texas Intermediate’s discount to Brent shrank to the least in almost seven months.

Futures in London dropped 0.5 percent while WTI slipped 0.2 percent. Libya aims to ship the first tanker from the harbor of Hariga since rebels handed the terminal over to the government earlier this week, an oil ministry official said. The possible return of supply is weighing on prices, said Seth Kleinman, Citigroup Inc.’s London-based head of energy research.

“Brent has been moving on the latest developments in Libya for a while now,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “It looks like exports should recover somewhat, which is putting downward pressure on Brent and narrowing the spread with WTI.”

Brent for May settlement decreased 52 cents to end the session at $107.46 a barrel on the London-based ICE Futures Europe exchange. The volume of all futures traded was 9.7 percent below the 100-day average at 4:03 p.m. in New York.

WTI for May delivery fell 20 cents to settle at $103.40 a barrel on the New York Mercantile Exchange. Volume was 5.9 percent more than the 100-day average. The contract advanced $1.04 to $103.60 yesterday, the highest close since March 3.

Brent, which is used to price more than half of the world’s crude and, unlike WTI, can be exported, is often more sensitive to changes in the global supply-and-demand balance. The European grade closed at a $4.06 premium to WTI, the least since Sept. 19 on a settlement basis.

Libyan Deal

Libyan lawmakers will meet on April 13 to discuss a deal that returned the two ports the government, potentially tripling the country’s oil exports. Rebels seeking self-rule in the country’s east retain control of Es Sider and Ras Lanuf harbors. Some members of parliament objected to a clause in an agreement with the rebels that requires salary payments to defectors from government forces, Sliman Qajam, a lawmaker, said yesterday.

Hariga can load 110,000 barrels of crude a day, according to the oil ministry. That’s 8.5 percent of Libya’s daily export capacity of 1.3 million barrels. The country holds Africa’s largest oil reserves. Output has declined by more than 1 million barrels a day in the past year, making it the smallest producer in the Organization of Petroleum Exporting Countries.

Brent also weakened after exports and imports unexpectedly declined last month in China, the world’s second-biggest crude consuming country, and OPEC trimmed estimates for the amount of oil it will need to produce.

China’s overseas shipments shrank 6.6 percent in March from a year earlier, compared with a median 4.8 percent expansion forecast in a Bloomberg survey of 47 economists. Imports were down by 11 percent, the General Administration of Customs said in Beijing today.

OPEC Projection

OPEC, responsible for 40 percent of the world’s oil supply, will need to provide an average of 29.6 million barrels a day of crude this year, according to its monthly market report. The assessment is 100,000 barrels a day lower than last month’s because of higher output from the U.S. and Canada.

U.S. crude production rose 37,000 barrels a day last week to 8.23 million, the highest rate since 1988, according to an Energy Information Administration report yesterday. Stockpiles grew 4.03 million barrels, more than five times as much as analysts forecast, to a four-month high of 384.1 million barrels, the EIA data showed.

“Yesterday’s report was quite bearish,” said Kyle Cooper, director of commodities research at IAF Advisors in Houston. “Supplies climbed and production was at a multidecade high.”

Implied volatility for at-the-money WTI options expiring in June was 16.4 percent, down from 16.7 yesterday, data compiled by Bloomberg showed.

Electronic trading volume on the Nymex was 477,787 contracts at 3:04 p.m. It totaled 789,212 contracts yesterday, 45 percent above the three-month average. Open interest was 1.67 million contracts.

www.bloomberg.com

 

Crude Oil Nat Gas

Read More



April 3rd, 2014

Oil Update

Crude Oil Price: $100.29

 Oil Rises On Anticipation Of Improved Jobs Report

NEW YORK (AP) — The price of oil rose as traders anticipated positive news in the monthly U.S. jobs report.

Benchmark U.S. crude for May delivery gained 67 cents Thursday to close at $100.29 a barrel on the New York Mercantile Exchange. Brent crude, used to set prices for international varieties of oil, rose $1.36 to $106.15 a barrel on the ICE Futures exchange in London.

The Labor Department releases its March employment report Friday. Economists project that employers added 191,000 workers last month, according to a survey by FactSet. That would be an improvement from February, when employers added 175,000 positions.

“We are still viewing the non-farm payrolls report as a key determinant as to how the complex finishes this week,” wrote Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates, in a note to clients. “We feel that surprises are more apt to be favorable.”

After Thursday’s gain, oil is down 38 cents a barrel so far this week.

In other energy futures trading in New York:

  • Wholesale gasoline added 5 cents to $2.91 a gallon.
  • Natural gas jumped 11 cents to $4.47 per 1,000 cubic feet.
  • Heating oil gained 4 cents to $2.91 a gallon.

www.rigzone.com

Read More



March 27th, 2014

Oil Update

Crude Oil Price: $101.28

 

WTI Crude Rises to Two-Week High on Cushing Supplies

West Texas Intermediate crude advanced to the highest level in more than two weeks after supplies at Cushing, Oklahoma, the delivery point for the contract, reached a two-year low. Brent gained in London.

WTI rose 1 percent. Cushing supplies fell 1.33 million barrels last week to 28.5 million, the Energy Information Administration said yesterday. President Barack Obama said yesterday that the crisis in Ukraine may escalate and warned that sanctions on Russia may include the energy sector. WTI’s gain also narrowed the discount to Brent.

“The continuing depletion of supplies at Cushing is on everyone’s mind,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “We’re seeing the WTI-Brent spread come in as a result. There’s speculation that Cushing supplies could get below operational rates.”

WTI for May delivery gained $1.02 to $101.28 a barrel on the New York Mercantile Exchange. It was the highest settlement since March 7. The volume of all futures traded was 8.4 percent below the 100-day average at 3:01 p.m.

Brent for May settlement increased 80 cents, or 0.8 percent, to close at $107.83 a barrel on the London-based ICE futures Europe exchange. Trading volume was 2.9 percent lower than the 100-day average. The European benchmark grade closed at a $6.55 premium to WTI.

‘Quite Tight’

Brent’s premium narrowed as Cushing supplies started falling in January after the southern link of TransCanada Corp.’s Keystone XL pipeline to the refineries and ports along the Texas Gulf Coast opened, easing a bottleneck from the hub. The spread has contracted by more than half since January.

“Cushing stocks drew yesterday,” said Julius Walker, global energy markets strategist at UBS Securities LLC in New York. “They are getting quite tight and are now below the five-year average and at the bottom of the range.”

Crude inventories along the Gulf of Mexico, known as PADD 3, rose 6.06 million barrels to 200.3 million, the most since weekly EIA data began in 1990.

“It looks like the former glut at Cushing has simply moved to the Gulf Coast,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “Total supplies remain ample and I think that the fundamentals will reassert themselves and we’ll be looking at sub-$95 WTI in the second quarter.”

Inventories Growing

Total U.S. crude inventories expanded by 6.62 million barrels to 382.5 million in the week ended March 21, according to the EIA, the Energy Department’s statistical unit.

“The inventory data on crude oil has been sending mixed messages with inventories at Cushing declining eight weeks in a row and total U.S. inventories rising 10 weeks,” Tim Evans, an energy analyst at Citi Futures Perspective in New York. “The focus on Cushing is having the greater influence on price at the moment. The risk is at some point refiners simply stop buying because they don’t have any place to put more crude.”

Obama said yesterday after a meeting with European leaders that there were consequences for being complacent over the annexation of Crimea from Ukraine and warned that Russia can’t run “roughshod” over its neighbors.

Asset Freezes

The U.S. and European Union have imposed asset freezes and visa bans on Russian, Ukrainian and Crimean individuals. The Group of Seven — the members are the U.S., the U.K., Germany, France, Italy, Canada and Japan — threatened further sanctions on the world’s biggest energy-exporting country at a March 24 meeting in The Hague.

“The Ukraine crisis continues to fester in the background, which is giving the market added support,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York.

WTI also rose on positive U.S. economic figures. Applications for unemployment benefits decreased by 10,000 to 311,000 last week, Labor Department data showed today in Washington. Separate data from the Commerce Department showed U.S. gross domestic product rose at a 2.6 percent annualized rate in the fourth quarter of 2013, revised from 2.4 percent.

Electronic trading volume on the Nymex was 399,829 contracts at 2:48 p.m. It totaled 433,991 contracts yesterday, 17 percent below the three-month average. Open interest was 1.62 million contracts.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net

To contact the editors responsible for this story: Dan Stets at dstets@bloomberg.net

www.bloomberg.com

Read More



March 20th, 2014

Oil Update

Crude Oil Price: $99.43 

Oil, Natural Gas Fall Following Supply Reports

Oil and natural gas fell Thursday on concerns that demand for both is waning.

Benchmark U.S. crude for April delivery dropped 94 cents to $99.43 a barrel on the New York Mercantile Exchange. The contract expires Thursday. Most trading has moved to the May contract, which fell 27 cents at $98.90 a barrel.

Natural gas lost 12 cents to $4.37 per 1,000 cubic feet.

A day after the Energy Department’s weekly report on crude oil supplies, traders paid more attention to data showing that supplies rose by nearly 6 million barrels in the week ended March 14. Oil production continues to rise, but refineries are converting less of it to gasoline and diesel because they’re undergoing seasonal maintenance.

On Thursday, the Energy Department said supplies of natural gas fell by 48 billion cubic feet last week. Analysts surveyed by Platts were expecting a decline of between 57 billion cubic feet and 61 billion cubic feet. The nation’s supply is still about half what it was this time last year, following the severe winter weather in most of the country.

Brent crude, used to set prices for international varieties of crude, rose 60 cents to $106.45 a barrel.

www.rigzone.com

Read More



March 13th, 2014

Oil Update

Crude Oil Price: $ 97.99

Oil Rises; Natural Gas Slumps; Pump Price at $3.50

The price of oil got a slight boost from positive U.S. economic data Thursday, while natural gas hit a nearly two-month low.

Meanwhile, the average price for a gallon of gasoline at the nation’s gas stations reached $3.50 for the first time since Sept. 18, according to AAA.

Benchmark U.S. crude for April delivery rose 21 cents to $98.20 a barrel on the New York Mercantile Exchange. On Wednesday, the Nymex contract fell $2.04 to close at $97.99, its first close below $100 in a month.

Brent crude, used to set prices for international varieties of crude, dropped 63 cents to $107.39 on the ICE Futures exchange in London.

In the U.S., retail sales bounced back in February after suffering a steep decline during a bitterly cold January. Shoppers spent more on autos, clothing and furniture. And the number of people seeking U.S. unemployment benefits dropped to the lowest level in three months.

That countered the effect of data showing a decline in Chinese exports in February. Growth in factory output, investment and retail sales, reported Thursday, was unusually weak. That fueled worries that the world’s second-largest economy is weakening further.

Natural gas fell 11 cents to $4.38 per 1,000 cubic feet, the lowest price since Jan. 21. The nation’s supply of natural gas fell by 195 billion cubic feet last week, the Energy Department said. That met the consensus expectations of analysts surveyed by Platts. The drop in the futures price may indicate some traders had been looking for a bigger decline.

For U.S. drivers, gas prices continue to inch higher. The nationwide average rose 1 penny to $3.50. That’s 19 cents higher than a month ago, but still 21 cents cheaper than at this time last year.

In other energy futures trading on Nymex:

  • Wholesale gasoline shed 2 cents to $2.93 a gallon.
  • Heating oil declined 1 cent to $2.92 a gallon.

 

www.rigzone.com

Read More



March 6th, 2014

Oil Update

Crude Oil Price: $101.45    

WTI Falls for Third Day as U.S. Crude Stockpiles Gain

West Texas Intermediate declined for a third day after U.S. crude inventories increased while tension in Ukraine continued to ease. Brent was little changed.

Futures dropped as much as 0.9 percent in New York to their lowest intraday level since Feb. 18. Crude stockpiles gained for a seventh week while supplies at Cushing in Oklahoma, the delivery point for WTI contracts, slid to the lowest level in two years with the opening of a new pipeline. European Union leaders quarreled over how to tame Russia after its military moves in Ukraine.

“Crude has been falling since Monday as the geo-political risk drops off,” Thina Saltvedt, an analyst at Oslo-based Nordea Markets, said by phone. “The Ukraine risk premium has disappeared for now as we are at least getting dialogue between Russia and the West.”

WTI for April delivery dropped as much as 89 cents to $100.56 a barrel in electronic trading on the New York Mercantile Exchange and was at $100.67 as of 1:25 p.m. London time. The contract lost $1.88 to $101.45 yesterday, the biggest drop in two months. The volume of all futures traded was about 36 percent more than the 100-day average.

Brent for April settlement was down 30 cents at $107.46 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $6.80 to WTI on ICE. The spread ended yesterday’s session at $6.31, widening for the first time in seven days.

Ukraine Talks

A summit in Brussels today started with eastern European countries calling for a tough line on the Kremlin and western countries offering Russia more time to pull back its forces in Crimea before imposing sanctions.

U.S. Secretary of State John Kerry and Russia’s Foreign Minister Sergei Lavrov met in Paris in their first face-to-face encounter since Ukrainian president Viktor Yanukovych fled his country during last month’s popular uprising.

The International Energy Agency said it’s “constantly monitoring” oil and gas markets amid the crisis in Ukraine and that the current situation doesn’t call for an IEA response.

WTI has slid 1.5 percent this week, poised for the first decline in eight weeks as U.S. crude supplies climbed to the highest level since December.

U.S. Inventories

Distillate stockpiles increased by 1.41 million barrels in the seven days through Feb. 28, said the EIA, the Energy Department’s statistical arm. They were projected to decline by 1 million barrels, according to the median estimate of nine analysts surveyed by Bloomberg.

“The drop in the price has been magnified amid growing U.S. inventories and decreasing geopolitical risks,” said Hong Sung Ki, a commodities analyst at Samsung Futures Inc. in Seoul.

Stockpiles at Cushing, the nation’s largest oil-storage center, slid by 2.66 million barrels to 32.1 million, the EIA reported. TransCanada Corp. began moving crude from the hub to the Texas Gulf Coast in January via the southern portion of its Keystone XL pipeline.

WTI is extending losses after breaching technical support, according to data compiled by Bloomberg. Futures yesterday settled outside the lower boundary of an upward-sloping trend channel going back to mid-January. Investors typically sell contracts when chart support fails.

www.bloomberg.com

Read More



February 27th, 2014

Oil Update

Crude Oil Price: $102.59

Brent Oil Premium to WTI Declines to Least Since October

Brent crude fell to the lowest level in two weeks as tension increased in Ukraine, shrinking the global benchmark’s premium to West Texas Intermediate to the narrowest since October.

Futures slipped 0.5 percent in London, following declines in European equities as gunmen occupied government buildings in Ukraine’s Crimea region and Russia put fighter planes on alert. WTI’s losses were limited after U.S. government data yesterday showed crude supplies at Cushing, Oklahoma, the contract’s delivery point, declined to a four-month low.

“The unsettled situation in the Ukraine is having an impact on markets,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “Given the country’s location, it’s obviously going to have a bigger impact on Brent than WTI. The spread between Brent and WTI is also being brought in by the Cushing draw.”

Brent for April delivery dropped 56 cents to end the session at $108.96 a barrel on the ICE FuturesEurope exchange, the lowest settlement since Feb. 13. The volume of all futures traded was about 16 percent more than the 100-day average at 2:19 p.m. in New York.

WTI for April delivery slipped 19 cents to settle at $102.40 a barrel on the New York Mercantile Exchange. Trading was 16 percent below the 100-day average.

The European benchmark crude’s premium to WTI narrowed to $6.56, the smallest gap since October based on futures settlement prices.

Ukraine Crisis

The crisis in Crimea risks further stoking political tensions within Ukraine and gives Russia a potential excuse to interfere in a country still reeling from an uprising. Unkraine’s interim Prime Minister Arseniy Yatsenyuk is seeking $35 billion in aid from Western lenders.

European stocks declined for a second day as tension escalated in Crimea. The Stoxx Europe 600 Index slipped 0.2 percent to 337.21 at the close of trading.

“There’s a general risk-off tone in Europe as tensions rise in Crimea,” said Addison Armstrong, director of market research at Tradition Energy in StamfordConnecticut. “We’re going to see more fun and games with the spread.”

WTI is set for a monthly advance as winter storms bolstered U.S. heating-fuel use and Cushing stockpiles fell with the opening of a new pipeline.

Cushing inventories at the hub decreased by 1.08 million barrels to 34.8 million last week, the Energy Information Administration reported yesterday.

Oil Supplies

TransCanada Corp. (TRP) began moving crude in January to the Texas Gulf Coast from the hub via the southern portion of its Keystone XL pipeline.

Nationwide crude stockpiles rose 68,000 barrels to 362.4 million in seven days ended Feb. 21, the sixth straight gain, according to the EIA, the Energy Department’s statistical arm.

“It looks like we will consolidate for a bit before either moving another leg up, or retreating $2 or $3,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $1.4 billion. “I’m leaning toward the latter because we’re in a period of seasonally low demand.”

Refiners often idle units at the start of the year after preparing for the heating season in November and December. Operating rates increase in spring as the peak-demand gasoline season approaches.Refinery utilization rates have dropped during the first quarter in eight of the past 10 years, according to EIA data.

U.S. Equities

WTI fell less than Brent as U.S. stocks rose, sending the Standard & Poor’s 500 Index above its record close. Orders for U.S. durable goods excluding the volatile transportation category unexpectedly climbed in January by the most in eight months, according to the Commerce Department.

“We have better-than-expected durable goods orders,” said Bill Baruch, a senior market strategist at Iitrader.com in Chicago. “The market has support around the $100 area.”

Implied volatility for at-the-money WTI options expiring in April was 17.4 percent, up from 16.9 percent yesterday, data compiled by Bloomberg showed.

Electronic trading volume on the Nymex was 382,766 contracts at 3:20 p.m. It totaled 424,444 contracts yesterday, 15 percent below the three-month average. Open interest was 1.65 million contracts, the highest level since Dec. 13.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

www.bloomberg.com

Read More



February 20th, 2014

Oil Update

Crude Oil Price: $103.31

Oil Below $103 As Chinese Factory Activity Drops

The price of oil slipped below $103 a barrel Thursday after a report indicated that manufacturing in China, the world’s second-biggest economy, shrank again in February.

U.S. crude for March delivery fell 39 cents to close at $102.92 a barrel in New York on the last day of trading for the contract. Crude for April delivery fell 9 cents to close at $102.75.

Oil prices fell after a monthly survey by HSBC found that China’s manufacturing, a driver of the global economy, contracted for a second straight month.

The HSBC purchasing managers’ index also declined to the lowest since July, a sign of the extended slowdown in China as leaders in Beijing try to clamp down on an investment boom and refocus the economy on domestic consumption.

“Results from this private sector survey have deteriorated for four months now, which indicates an unambiguous trend of domestic growth deceleration,” Societe Generale economist Wei Yao said in a report.

Uncertainty about protests in Venezuela, a major U.S. oil supplier, as well as export disruptions in Libya and South Sudan kept a floor under oil prices.

Prices were also steadied by a weekly report from the U.S. Energy Department released Thursday that revealed that oil stockpiles grew about half as fast as expected, according to analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos.

Brent crude, a benchmark for international oil used by many U.S. refineries, fell 17 cents to close at $110.30 a barrel on the ICE Futures exchange in London.

U.S. retail gasoline prices continued their seasonal climb as refineries cut back output to perform maintenance and prepare for a switch to more expensive summer gasoline. The average retail price rose less than a penny to $3.38 per gallon. That’s the highest level of the year and 10 cents higher than last month.

The price of natural gas fell 1.4 percent to close at $6.06 per 1,000 cubic feet, retreating somewhat after Wednesday’s 11 percent surge to $6.15, its highest level since December of 2008.

In other energy futures trading on Nymex:

  • Wholesale gasoline rose 2.2 cents to close at $2.847 a gallon.
  • Heating oil rose 3.1 cent to close at $3.178 a gallon.

www.rigzone.com

Read More



February 13th, 2014

Oil Update

Crude Oil Price: $100.37

Oil Dips; Natural Gas Soars On Supply Report

The price of oil barely budged Thursday. But natural gas futures soared and U.S. drivers again saw higher numbers at the gas pump.

Benchmark U.S. crude for March delivery slipped 2 cents to $100.37 a barrel on the New York Mercantile Exchange. U.S. economic indicators were mostly downbeat on Thursday, suggesting weak demand. A report from the International Energy Agency gave oil some support. The agency raised slightly its 2014 forecast for global demand to 92.6 million barrels a day, 125,000 barrels a day above its previous expectations from a month ago.

Natural gas futures jumped 40 cents, or 8 percent, to $5.22 per 1,000 cubic feet. The Energy Department said supplies fell by 237 billion cubic feet last week, more than the 230 billion cubic feet decline predicted by analysts.

Meanwhile, U.S. drivers are paying 6 cents more per gallon on average than a week ago. The nationwide average climbed 1 penny Thursday to $3.33 a gallon.

Brent crude, which is used to set prices for international varieties of crude, fell 6 cents to $108.73 on the ICE Futures exchange in London.

www.rigzone.com

Read More



February 6th, 2014

Oil Update

Crude Oil Price: $97.19    

WTI Crude Pares Gain on Receding Cold Temperatures

West Texas Intermediate crude pared gains on speculation that milder weather will reduce consumption of heating oil and boost inventories of distillate fuel.

Prices were little changed after rising as much as 1.5 percent. Cold temperatures in the Midwest and East will wane heading into mid-February, MDA Weather Services in Gaithersburg, Maryland, forecast. Ultra low sulfur diesel, a proxy for heating oil, reversed a rally. Demand for distillate, including heating oil and diesel, fell last week for the first time since Jan. 3.

“There’s a growing realization that as we move into the later part of the month, the weather will probably moderate and demand for distillate fuel will drop,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “Prices have been supported by the weather. The weather can only provide so much of a boost.”

WTI for March delivery rose 17 cents, to $97.55 a barrel at 2:02 p.m. on the New York Mercantile Exchange. The volume of all futures traded was 2.9 percent above the 100-day average.

Brent for March settlement gained 59 cents, or 0.6 percent, to $106.84 a barrel on the London-based ICE Futures Europe exchange. Volume of all futures traded was 2 percent below the 100-day average. The European crude was at a premium of $9.29 to WTI on the ICE exchange. The spread closed at $8.87 yesterday.

Ultra low sulfur diesel futures for March delivery, slid 0.55 cent to $2.9913 a gallon. Volume was 10 percent above the 100-day average.

To contact the reporters on this story: Moming Zhou in New York at mzhou29@bloomberg.net; Mark Shenk in New York at mshenk1@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

www.bloomberg.com

Read More