México

Guyana

Trinidad
& Tobago




Very usefull links



PW
Bookstore




 

 


News links

AP

AFP

Aljazeera

Dow Jones

Oil price

Reuters

Bloomberg

Views and News
from
Norway

 

 

 

 


Oil prices settle higher Friday, but suffer a third weekly decline

By Mayra P. Saefong

SAN FRANCISCO
Petroleumworld 10 26 2018

Oil futures reversed earlier losses on Friday to finish higher as the market's attention returned to worries about global supply levels and somewhat conflicting comments from Saudi Arabia's energy minister in recent days.

Prices, however, posted a third weekly decline as sharp losses in global equity markets continue to weigh on prospects for energy demand.

Oil prices were “getting dragged around with the S&P 500 SPX, -1.73% ” said Tyler Richey, co-editor of the Sevens Report. Oil is likely to continue to follow the stock market “until market conditions ‘normalize,' which could take weeks,” he told MarketWatch. “Risk-on and risk-off money flows will have a strong influence on the energy market broadly.”

West Texas Intermediate crude for December delivery CLZ8, +0.43%  on the New York Mercantile Exchange rose 26 cents, or 0.4%, to settle at $67.59 a barrel after earlier losses brought prices to a low of $66.20. The U.S. benchmark saw a loss of roughly 2.4% for the week. December Brent crude LCOZ8, +1.09% the global benchmark, added 73 cents, or nearly 1%, to $77.62 a barrel and lost 2.7% from a week ago.

“In recent weeks, rising production and exports between both ‘OPEC and friends', and the U.S. (namely in the form of the unexpected [Strategic Petroleum Reserve] releases) have been weighing on the market from the supply side,” said Richey. “Additionally, concerns about the global economy, especially during this time of heightened market volatility, are not helping the bulls' argument.”

However, the Joint Ministerial Monitoring Committee “expressed concerns about rising inventories in recent weeks and noted looming macroeconomic uncertainties which may require changing course,” according to a press release dated Thursday . The JMMC is group of oil ministers tasked with monitoring the implementation of the output agreement that began on Jan. 1, 2017 between members and nonmembers of the Organization of the Petroleum Exporting Countries.

The JMMC directed the Joint Technical Committee to continue to monitor oil fundamentals and “present options on 2019 production levels to prevent reemergence of a market imbalance.” That suggests a possible change to oil producer efforts that began in June to ease back on the output cuts that have been in place since the start of 2017.

Recent comments from Saudi Arabia, the de facto head of OPEC, have sent mixed messages to the market.

The recent “sharp crude-oil price drop caused Saudi Arabia to think twice about raising oil output,” said Phil Flynn, senior market analyst at Price Futures Group.

Reuters reported that Saudi Arabia's Energy Minister Khalid al-Falih told state TV channel al-Ekhbariya that “we (have) entered the stage of worrying about this increase,” adding that intervention might be required to return to stability.

“The minister's remarks are somewhat surprising as they come amid worry about loss of supply from Iran once U.S. sanctions enter effect next month,” said Flynn. “However, there has also been new concern among market players: that global economic growth may be slowing down and will continue to slow down, ultimately hurting oil demand.”

Still, what makes al-Falih's comments “confusing…is the fact they come on the heels of earlier statements by Falih that Saudi Arabia is ready to increase production to up to 12 million [barrels a day] and invest in boosting its spare capacity,” Flynn said.

Global equities were under pressure after a Thursday bounce, with U.S. stock indexes moving sharply lower as oil futures settled. Losses in the equities markets fuel worries about the economy— and energy demand.

Meanwhile, the market has been “well-supplied due in large part to the surge in production from Saudi Arabia et al before the full effects of U.S. sanctions hit Iranian exports on Nov. 4,” said Jason Gammel, equity analyst at Jefferies, in a Friday note. And rising U.S. crude inventories are also hard to ignore, with crude inventories surging 28.7 million barrels over the last five weeks, including the absorption of 3.5 million barrels from the Strategic Petroleum Reserve, he said. And while the rise in crude inventories in part reflects seasonal factors, inventories of U.S. energy products have seen only a modest decline of 10 million barrels over the same period.

Baker Hughes BHGE, -0.69%  on Friday reported that the number of active U.S. rigs drilling for oil , which can serve as proxy for production, edged up for a third week, by 2 to 875 this week.

In other energy trade, November gasoline RBX8, +0.15%  added 0.1% to $1.815 a gallon, ending down about 5.2% for the week, while November heating oil HOX8, +1.29%  settled up 1.1% at $2.303 a gallon, nearly flat for the week.

November natural gas NGX18, +0.00% which expires at Monday's settlement, fell 0.5% to $3.185 per million British thermal units, for a weekly loss of 2%.

________________________

Story by Mayra P. Saefong from MarketWatch.

marketwatch.com
10 26 2018 19:36 GMT


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

Twitter: @petroleumworld1


November 13 - 15, 2018.

Gubkin University, Moscow
SPE Student Chapter

 

 

 

 

 

 

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.