En Español



Very usefull links



PW
Bookstore





News links

AP

AFP

Aljazeera

Dow Jones

Oil price

Reuters

Bloomberg

Views and News
from
Norway

 

 

 

 

Oil rises Friday on tighter fundamentals, but China warning holds back market

By Henning Gloystein

SINGAPORE
Petroleumworld 10 20
2017

Oil prices edged up on Friday, supported by signs of tightening supply and demand fundamentals, although a warning about excessive China economic optimism still weighed somewhat on markets.

Brent crude futures LCOc1, the international benchmark for oil prices, were at $57.39 at 0420 GMT, up 16 cents, or 0.28 percent from their last close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $51.47 per barrel, up 18 cents, or 0.35 percent.

The stable prices came after a more than 1 percent fall in prices the previous day.

This was put down to profit-taking following four days of straight gains, but also to a sudden market slump which spooked traders after the veteran but outgoing governor of China's central bank warned of a “Minsky moment”, a reference to excessive optimism about economic growth fueled by vast debt and speculative investment.

TIGHTENING MARKET

Much of that concern had dissipated by Friday, however, and analysts said there were indicators of a tightening oil supply and demand fundamentals.

“Oil market has moved into modest under-supply and we expect this will persist at least through the end of the year,” U.S. investment bank Jefferies said.

U.S. commercial crude oil stocks have dropped 15 percent from their March records, to 456.5 million barrels, below levels seen last year. C-STK-T-EIA

Part of this drawdown has been due to rising exports as a result of the steep discount of WTI crude to Brent, which makes it attractive for American producers to export their oil. CL-LCO1=R

Additionally, crude futures price curves are in backwardation, which makes it attractive to sell produced oil immediately rather than store it for later dispatch.

RBC Capital Markets said, “a strong indicator that global inventories are being run down will be when the market starts relying on U.S. exports to fill deficits.”

That moment may have arrived.

Shipping data in Thomson Reuters Eikon shows that overseas U.S. crude oil shipments have soared from virtually zero before the government loosened export restrictions in late 2015 to around 2.6 million barrels per day (bpd) in October.

“Physical bottlenecks are unlikely to kick in until waterborne (U.S.) exports approach 3.2 million bpd,” RBC Capital Markets said.

Exports have been boosted since a production cut led by the Organization of the Petroleum Exporting Countries (OPEC) has been in place since January this year, and which OPEC wants to expend beyond its current expiry date at the end of March 2018.

“Our expectation is that OPEC (and partners including Russia) will extend production cuts through the end of 2018,” Jefferies bank said.

 



Story by Henning Gloystein; Editing by Kenneth Maxwell from Reuters.

reuters.com 10 20 2017 05:28AM BST

We invite all our readers to share with us
their views and comments about this article.

Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

 

Nov 13-14 ;
Mexico City, Mexico

 

 

 

 

 

 

 

TOP

Contact: editor@petroleumworld.com,

Editor & Publisher:Elio Ohep/
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2017, Petroleumworld ™  / Elio Ohep - All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.