Oil prices suffer Friday a 4th straight weekly loss
By Mayra P. Saefong
Petroleumworld 11 02 2018
Oil futures declined Friday, suffering from a fourth straight weekly loss, pressured by U.S. plans to issue waivers on Iranian oil sanctions and growing global crude production.
During a press briefing Friday, Secretary of State Michael Pompeo said the government expects “to issue some temporary allotments to eight jurisdictions,” but added that “negotiations are still ongoing.”
A report from Bloomberg , citing a senior administration official and issued before the announcement, said that the countries that would be given the waivers include Japan, India and South Korea. The waivers would the countries to continue to buy oil from Iran despite the sanctions.
Sanctions on Iran's oil begin once the wind-down period for entities dealing with Iran's energy sector ends on Nov. 4.
“There are more moving pieces and uncertainty in oil markets right now than there normally are,” Brian Youngberg, senior energy analyst at Edward Jones, told MarketWatch. “Add in questions on global demand slowing, Saudi commitments to keep supply adequate, shale [output] continuing to ramp up, Venezuela, etc., it is a muddied picture for oil prices right now. More of the same next week.”
Read: Why oil prices are plunging despite U.S. sanctions on Iran's energy sector
December West Texas Intermediate crude CLZ8, -1.30% on the New York Mercantile Exchange fell 55 cents, or 0.9%, to settle at $63.14 a barrel. Prices for the front-month U.S. contract, which posted a loss of 10.8% for October, again settled at its lowest since early April. For the week, WTI lost 6.6%.
The global benchmark, Brent crude for January delivery LCOF9, -0.37% lost 6 cents, or less than 0.1%, at $72.83 a barrel on the ICE Futures Europe. That was its lowest finish since Aug. 21. It lost about 6.2% for the week. On Thursday, it dropped below the 200-day moving average for the first time since September 2017, according to FactSet.
The weekly losses for the U.S. and global crude benchmark marked their fourth weekly declines in a row.
“Oil continues to fall on supply concerns,” said Marshall Gittler, chief strategist at ACLS Global, in a note. “Usually, there are two possible reasons why oil prices fall: a ‘good' reason, excess supply, and a ‘bad' reason, slowing demand.”
“This seems to be a ‘good' decline as Russia raises production to a record high just as the U.S. signals” that some countries may be granted a waiver to continue to buy Iranian oil, he said, adding that U.S. inventories have also risen for six weeks in a row.
Separate surveys this week by Bloomberg and Reuters revealed that members of the Organization of the Petroleum Exporting Countries lifted output in October to their highest levels since late 2016—topping 33 million barrels a day.
And a report this week from the Energy Information Administration showed that U.S. monthly crude-oil production reached 11.3 million barrel a day in August. That was the first time monthly U.S. output topped 11 million barrels a day, “making the United States the leading crude oil producer in the world,” the EIA said.
Data Friday from Baker Hughes BHGE, +0.70% however, suggested a possible output slowdown, with the number of active U.S. rigs drilling for oil edging down by 1 to 874 rigs this week, after rising for three weeks in a row.
In other energy trade, December gasoline RBZ8, -0.96% fell 0.5% to $1.708 a gallon, while December heating oil HOZ8, -1.51% lost 1.3% to $2.173 a gallon. Both contracts lost about 5.7% for the week.
December natural gas NGZ18, +1.82% finished nearly 1.5% higher at $3.284 per million British thermal units, ending up around 1.8% for the week.
Story by Mayra P. Saefong from MarketWatch.
marketwatch.com 11 02 2018 19:27 GMT
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