Oil rises amid optimism over OPEC supply cuts, hopes on U.S.-China trade


TOKYO (Reuters) – Oil prices gained on Friday after OPEC’s forecast for oil demand next year fueled hopes that the producer group and allies will maintain supply cuts when they meet to discuss policy on output next month.

FILE PHOTO: Oil pump jacks at sunset near Midland, Texas, U.S., August 21, 2019. REUTERS/Jessica Lutz/File Photo

Optimism that the United States and China may soon sign an agreement to end their trade war helped support prices after White House economic adviser Larry Kudlow said a deal was “getting close”, citing what he called very constructive discussions with Beijing.

Brent crude futures were up 19 cents, or 0.3%, at $62.47 a barrel by 0759 GMT, having dropped 9 cents on Thursday.

West Texas Intermediate crude was up 21 cents, or 0.4%, at $56.98 a barrel, after falling 0.6% in the previous session.

The rosy mood came after the Organization of the Petroleum Exporting Countries (OPEC) said on Thursday it expected demand for its oil to fall in 2020.

Many analysts said that supports the view among markets that there is a clear case for the group and other producers like Russia – collectively known as ‘OPEC+’ – to maintain limits on production that were introduced to cope with a supply glut.

But such a move may backfire, according to Jonathan Barratt, chief investment officer at Probis Group.

“There’s no reason to extend the cuts, we all know the economies are softening,” he said. “If you push prices higher it is going to hurt everyone and even if it doesn’t, it’s only going to play into the U.S. producers’ hands.”

OPEC+ on Jan. 1 this year cut output by 1.2 million barrels per day (bpd), and in July, renewed the pact until March 2020.

OPEC said demand for its crude would average 29.58 million bpd next year, 1.12 million bpd less than in 2019. That points to a 2020 surplus of about 70,000 bpd, which is less than indicated in previous reports.

The producer group will meet in Vienna next month.

In the United States, production keeps rising, and last week, there was a bigger-than-expected increase in U.S. stockpiles, something that would often lead investors to sell.

Crude production rose by 200,000 bpd to a weekly record of 12.8 million bpd, the EIA said in its weekly report. [EIA/S]

U.S. crude inventories grew last week by 2.2 million barrels, the Energy Information Administration said, exceeding the 1.649 million-barrel rise forecast by analysts in a Reuters poll. [EIA/S]

The U.S. shale industry plans another spending freeze next year and a sharp slowdown in production growth, as prolific oil and natural gas output has pressured prices and squeezed profits.

Reporting by Aaron Sheldrick; Editing by Kenneth Maxwell and Tom Hogue



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U.S. Oil Inventories Rose by 2.2M Barrels Last Week By Investing.com


© Reuters.

Investing.com – U.S. weekly inventories rose by about 2.2 million barrels last week, according to the Energy Information Administration, more than the market was expecting. Oil prices dropped shortly after the data came out.

  • The EIA said Thursday dropped by 2.2 million barrels for the week ended Nov. 8, compared with expectations for a build of 1.65 million barrels, according to analysts’ forecasts compiled by Investing.com.
  • rose by nearly 1.9 million barrels, versus expectations for a drop of 1.17 million barrels. fell by about 2.5 million barrles, compared with forecasts for a decline of 950,000 barrels.
  • , which were up about 0.8% before the report came out, pared gains and rose about 0.2% at $53.25.
  • The numbers were released a day later due to Monday’s federal holiday for Veterans Day.
  • Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

    Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



    Oil gains on U.S. crude stocks fall, OPEC comments on slower U.S. shale growth By Reuters


    © Reuters. An oil pump is seen just after sunset outside Saint-Fiacre

    By Florence Tan

    SINGAPORE (Reuters) – Oil rose on Thursday after industry data showed a surprise drop in U.S. crude inventories, while comments from an OPEC official about lower-than-expected U.S. shale production growth in 2020 also provided some support.

    Prices, however, were capped by mixed signs for oil demand in China, the world’s biggest crude importer, as industrial output rose more slowly than expected in October, but oil refinery throughput hit the second-highest level ever.

    Brent futures () rose 47 cents, or 0.8%, to $62.84 per barrel by 0808 GMT, while U.S. West Texas Intermediate crude () gained 47 cents, or 0.8%, to reach $57.59.

    The Secretary General of the Organization of the Petroleum Exporting Countries (OPEC) Mohammad Barkindo said on Wednesday that there would likely be downward revisions of supply going into 2020, especially from United States shale, adding that some U.S. shale oil firms see output growing by only 300,000-400,000 barrels per day (bpd).

    While Barkindo’s comments supported oil prices, there is not a clear way for OPEC to forecast oil production outside the group, Howie Lee, an economist at Singapore’s OCBC bank said.

    “I don’t see much changes in supply so prices are still trading within the same range from the start of November,” he said.

    Barkindo’s comments were also in contrast with forecasts by the U.S. Energy Information Administration (EIA) on Wednesday that U.S. oil production is on course to hit new records this year and next.

    The American Petroleum Institute reported on Wednesday an unexpected drop in crude stockpiles by 541,000 barrels in the week to Nov. 8, against analysts’ expectations of an increase of 1.6 million barrels. Gasoline and distillates inventories increased, the API data showed. [API/S]

    Official weekly EIA data is due at 11:00 a.m. EST (1600 GMT) on Thursday. Both reports were delayed a day for the U.S. Veterans Day holiday on Monday.

    OPEC and its allies, including Russia, meet on Dec. 5-6 to discuss output policy and production curbs of 1.2 million bpd that have been in place since January with the aim of supporting crude prices. The pact runs to March 2020.

    Barkindo said on Wednesday it was too early to say if further output cuts would be needed.

    “They have made it quite clear that they are not reducing production further,” said OCBC’s Lee. “What Saudi can do now is to urge compliance among members especially Iraq and Nigeria. If they can comply, then they can talk about cuts.”

    Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

    Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



    Oil is our gold and we aim to use all of it, ADNOC official says


    ABU DHABI (Reuters) – Abu Dhabi National Oil Co aims to exhaust its vast oil and gas reserves even as many consumers switch to cleaner sources of energy, a senior executive in the Gulf oil company said.

    FILE PHOTO: A general view of ADNOC headquarters in Abu Dhabi, United Arab Emirates May 29, 2019. REUTERS/Christopher Pike/File Photo

    The world’s transition away from fossil fuel in an effort to slash greenhouse gas emissions is expected to accelerate in coming decades, leaving many oil companies and producing nations pondering their long-term future.

    But for state-run ADNOC, the main oil-producing company in the United Arab Emirates, which supplies nearly 3% of global oil demand, crude is set to remain the revenue backbone, ADNOC’s upstream executive director Abdulmunim al-Kindy told Reuters.

    “Our oil is our gold,” al-Kindy said in an interview during the ADIPEC oil and gas conference in Abu Dhabi, capital of the UAE.

    “With the reserves we have, the challenge we have is monetizing it at the right time.”

    To achieve that, ADNOC has undergone a drive to slash extraction costs to rival other major producers including OPEC heavyweights Saudi Arabia and Iraq.

    ADNOC has embarked on a broader transformation strategy since 2016, expanding its oil and gas business, listing one of its subsidiaries and overhauling its trading operations.

    This week it announced it was listing its flagship Murban crude grade and has partnered with Intercontinental Exchange Inc and oil majors including BP, Total and Shell in a new exchange to be launched in 2020.

    “We are really the lowest-cost producers because of the efficiencies we drive,” al-Kindy said.

    ADNOC is also seeking to diversify the sources of energy it can offer.

    The company is in the midst of a vast expansion of its production of natural gas, the least polluting fossil fuel whose demand is forecast to rise sharply in the coming decades as Asian economies consume more power.

    It has signed deals with oil majors to boost its gas output and has said it was seeking investment opportunities abroad in liquefied natural gas (LNG).

    “Whatever resources we have, we are going to really drive the monetization of these resources. We are not going to leave anything in the ground if we can,” he said.

    “That’s the bottom line. Be it gas, conventional or unconventional, oil, conventional or unconventional, it is going to come to the market and that’s our aim.”

    ADNOC aims to reach 1 billion cubic feet per day of unconventional gas production before 2030.

    The UAE wants to achieve gas self-sufficiency and possibly become a net gas exporter.

    A growing number of climate activists and investors have warned that to meet the 2015 Paris Agreement goal of limiting global warming to “well below” 2 degrees Celsius, many of the world’s oil and gas resources cannot be tapped.



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    Oil Prices Down as Sino-U.S. Trade Hope Diminishes By Investing.com


    © Reuters.

    Investing.com – Oil prices were down on Wednesday in Asia as hopes for a trade deal between China and the U.S., the world’s biggest oil importers, dimmed.

    U.S. dropped 0.4% to $56.59 by 1:21 AM ET (05:21 GMT). International were also down 0.4%.

    Outlook for the energy demand worsened after U.S. President Donald Trump disappointed investors by not providing a data or a venue for the signing of a partial trade deal with China.

    Instead, the president called China “cheaters” and that the U.S. will “substantially” increase tariffs on China if no deal is reached.

    Also weighing on oil prices today was a forecast by the International Energy Agency’s (IEA) for slower global oil demand growth post-2025.

    Global oil demand growth is expected to grow by 1 million barrels per day on average to 2025 but is forecast to slow to an average of 100,000 bpd a year from then on, the IEA said in its annual World Energy Outlook for the period to 2040.

    Traders now await the weekly oil inventories report. The American Petroleum Institute is scheduled to release its data for the latest week at 4:30 PM ET, while the weekly report from the U.S. Energy Information Administration is due at 11:00 AM ET on Thursday.

    Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

    Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



    Oil Ends a Little Lower as Trump Offers Little On China By Investing.com


    © Reuters.

    Investing.com – Crude prices settled a little lower on Tuesday as oil bulls fought to keep the market above key support after President Trump disappointed traders again over “phase one” of the U.S.-China deal.

    Equity to oil and forex to bond dealers had expected Trump’s luncheon address to the New York Economic Club to yield clues on the timing and location for the agreement between the president and Chinese leader Xi Jinping. But Trump offered neither.

    Bulls, who initially held up prices of West Texas Intermediate and London’s Brent, the respective benchmarks for U.S. and U.K. crude, relented at the close, letting them slip.

    settled down 8 cents at $56.80 per barrel.

    also closed down by 8 cents at $62.10.

    Bulls have been trying to keep the U.S. crude benchmark at $57 while defending its London peer above $62.

    Trump said the phase-one deal with China “could happen soon, but we will only accept the deal if it is good for the United States, and our workers and our great companies”. It was something traders had heard many times before from him.

    The president also said no country “cheated” more than China on trade, adding that he was “not saying it on record … only to the cameras here.”

    Oil was pressured too on Tuesday by expectations that U.S. crude inventories rose again last week, climbing by 1.6 million barrels after the previous week’s jump of nearly 8 million barrels.

    Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

    Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



    Oil prices gain as market awaits signals on U.S.-China trade talks By Reuters


    © Reuters. A pump jack on a lease owned by Parsley Energy operates in the Permian Basin near Midland

    By Aaron Sheldrick

    TOKYO (Reuters) – Oil prices rose on Tuesday, reversing early losses on hopes that U.S. President Donald Trump may signal progress on trade talks with China in a speech later in the day.

    futures were up 31 cents, or 0.5%, at $62.49 a barrel by 0644 GMT, after dipping to as low as $61.90 earlier in the day.

    U.S. West Texas Intermediate (WTI) crude was up 23 cents, or 0.4%, at $57.09 a barrel, having fallen to $56.55.

    Worries about the impact on oil demand from the fallout of the 16-month U.S.-China trade war, which has weighed on global economic growth, sent prices lower on Monday.

    Trump said on Saturday that talks with China were moving along “very nicely” but the United States would only make a deal if it was the right one for Washington. He also there had been incorrect reporting about U.S. willingness to lift tariffs.

    Trump speaks to the Economic Club of New York later on Tuesday, and markets will be keen for any update on the talks.

    “Positive commentary about a possible U.S. and China interim trade deal certainly helps, but the fundamentals are supportive,” said Virendra Chauhan, Oil Analyst at Energy Aspects in Singapore, pointing to an improved demand outlook.

    “Six million barrels per day of refining capacity is due to return from turnarounds across November and December,” he said.

    On the supply side, Goldman Sachs (NYSE:) also cut its 2020 forecast for growth in U.S. oil production, which has surged in recent years.

    The investment bank cut its growth forecast for next year by 100,000 barrels per day (bpd) to 600,000 bpd over 2019.

    “We expect U.S. oil growth to decelerate into 2020 as many companies look to balance growth with capex,” Goldman Sachs said.

    Elsewhere, U.S. data showed that crude inventories at Cushing, the delivery point for WTI, fell about 1.2 million barrels in the week to Nov. 8, traders said, citing market intelligence firm Genscape.

    Cushing inventories had grown for five weeks in a row through Nov. 1, according to government data.

    Demand growth may pick up in 2020 after a year of dashed expectations amid the U.S.-China trade war, Fitch Solutions Macro Research analysts said in a new report.

    “Our data show that 2019 will mark the nadir of oil demand growth over the next five years,” Fitch Solutions said.

    “We forecast demand to (grow) by around 0.5% this year, rising to 0.8% in 2020,” the report said, although it added that “trade and political risks remain extremely elevated.”



    Oil drops more than 1% on concern over U.S.-China trade war By Reuters


    © Reuters. Oil pumpjack is seen in La Canada de Urdaneta

    By Aaron Sheldrick

    TOKYO (Reuters) – Oil prices fell more than 1% on Monday amid concerns over the prospects of a trade deal between the United States and China, while worries about oversupply also weighed on the market.

    was down 69 cents, or 1.1%, at $61.82 by 0730 GMT. The contract rose 1.3% last week.

    was 63 cents, or 1.1%, lower at $56.61 a barrel, having risen 1.9% last week.

    U.S. President Donald Trump said on Saturday that trade talks with China were moving along “very nicely,” but the United States would only make a deal with Beijing if it was the right one for America.

    The 16-month trade war between the world’s two biggest economies has slowed economic growth around the world and prompted analysts to lower forecasts for oil demand, raising concerns that a supply glut could develop in 2020.

    Trump also said there had been incorrect reporting about U.S. willingness to lift tariffs as part of a “phase one” agreement, news of which had boosted markets.

    Underlining the impact of the trade war, data over the weekend showed that China’s producer prices fell the most in more than three years in October, as the manufacturing sector weakened, hit by the dispute and declining demand.

    “China delivered a massive deflationary shock in its factories, providing a somber tone towards the fragile state of the global economy,” Samuel Siew, analyst at Phillip Futures, said in a note.

    Auto sales in China fell for a 16th consecutive month in October, with the number of new energy vehicles sold contracting for the fourth month in a row, data showed on Monday.

    Investors are also concerned about excess supplies of crude, analysts said.

    The oil market outlook for next year may have upside potential, OPEC Secretary-General Mohammad Barkindo said last week, suggesting there is no need to cut output further.

    The Organization of the Petroleum Exporting Countries and its allies led by Russia meet in December. The so-called OPEC+ alliance, seeking to boost oil prices, has since January cut output by 1.2 million barrels per day until March 2020.

    Money managers boosted their net long U.S. crude futures and options positions in the week to Nov. 5 by 22,512 contracts to 138,389, the U.S. Commodity Futures Trading Commission (CFTC) said.

    In the United States, energy companies last week reduced the number of oil rigs operating for a third week in a row. Drillers cut seven rigs in the week to Nov. 8, bringing the total count down to 684, the lowest since April 2017, Baker Hughes said.

    (For a graphic on ‘U.S. Rig count’ click https://tmsnrt.rs/2X8Myf7)

    Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

    Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



    Oil Ends Week up After Swings on U.S.-China Trade Deal Odds By Investing.com


    © Reuters.

    By Barani Krishnan

    Investing.com – It ain’t over til the Chinese lady sings. The tweaked saying might be most apt to reflect China’s influence now over world trade and global markets, as oil prices swung again Friday before ending the week higher on the odds of a U.S.-Sino trade deal happening.

    West Texas Intermediate, the benchmark for New York-traded crude, and London’s , the global gauge for oil, moved as much as 3% between the highs and lows of the session in one of their wildest variances in a day since September.

    At the end, settled up just 9 cents, or 0.2%, at $57.24 per barrel after swinging by $1.60. It settled the week up 1.9%.

    crude settled up 22 cents, or 0.4%, at $62.51 after a swing of more than $1.80. It finished the week up 1.3%.

    “Oil is making a series of daily reversals,” observed Olivier Jakob of Zug, Switzerland-based oil risk consultancy PetroMatrix.

    “The headlines of Wednesday were about delays to a possible meeting between (U.S. President Donald) Trump and (Chinese President) Xi (Jinping). The headline yesterday morning was that a framework agreement had been found; the headline yesterday evening was that there was some internal resistance in the US administration for that agreement. Today we will surely get more contradictory headlines about China.”

    True enough, Trump poured cold water on optimism that it was a matter of when and not if for a trade deal after remarks from Chinese commerce minister Gao Feng a day ago that Beijing and Washington have agreed to phase out their tit-for-tat tariffs.

    “They’d like to have a rollback, I haven’t agreed to anything,” Trump told reporters Friday. “China would like to get somewhat of a rollback — not a complete rollback, because they know I won’t do it.”

    For added measure, White House economic adviser Larry Kudlow said after Gao’s remarks on Thursday that “if there’s a phase one trade deal, there are going to be tariff agreements and concessions.”

    In oil’s bigger picture, China was again a dominant factor, with figures showing Chinese crude imports in October reached a new record high of 10.7 million barrels per day, up 1.5 million from a year ago. On a three-month average, imports were 1.11 million higher than a year ago.

    Also of significance, U.S. energy firms reduced the number of operating oil for a third week in a row. There are 684 oil rigs now, the lowest since April 2017, after drillers cut seven rigs this week, data from industry firm Baker Hughes showed.

    Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

    Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



    Saudi Aramco targets sale of 0.5% of oil firm to retail investors in IPO: sources


    DUBAI (Reuters) – Saudi Aramco is looking to sell up to 0.5% of the state oil giant to retail investors in its planned initial public offering (IPO), three sources familiar with the matter told Reuters.

    FILE PHOTO: A view shows branded oil tanks at Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019. REUTERS/Maxim Shemetov/File Photo

    The Saudi oil group has not yet revealed the size of its planned IPO or what proportion of the company it will float, although sources have previously said this could be 1-2%.

    Aramco declined to comment.

    It is expected to release more details about the company in an IPO prospectus document later on Saturday.

    Assuming Aramco achieves a total valuation of $2 trillion, the retail tranche could be worth around $10 billion, the sources said on Saturday.

    Aramco fired the starting gun on the domestic IPO last week after a series of false starts. It did not give details on how much would be sold, or when the listing would happen, while expert valuations vary from $1.2 to $2.3 trillion.

    A government committee has met in the past few months with dozens of wealthy Saudi individuals to secure pre-sale agreements, sources told Reuters last month.

    And the government has encouraged investors to repatriate cash held overseas to buy into the IPO to avoid draining too much liquidity from the Saudi banking system, they said.

    Reuters reported on Oct. 17 that Aramco can take advantage of new market rules that allow issuers the flexibility to sell more shares to retail investors, likely exceeding the usual 10% seen in recent IPOs.

    “Local demand is strong,” a second source said on Saturday, adding that this would lead institutional investors to think that up to 75% of the IPO would be available for them.

    Editing by Alexander Smith



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