Oil up as Kuwait revives hope for output freeze deal

SINGAPORE, Singapore—Oil prices climbed in Asia Wednesday after Kuwait said an agreement to freeze output during a producers’ meeting this month could still be reached despite conflicting statements by participants.

But analysts said the rebound would not likely last owing to a painful supply glut and weak demand caused by the slowing world economy.

At around 0430 GMT Wednesday, US benchmark West Texas Intermediate for delivery in May was up 97 cents, or 2.70 percent, at $36.86 and Brent crude for June was 68 cents, or 1.80 percent, higher at $38.55.

Both contracts eked out an increase on Tuesday, but prices are still well below the $40 level reached last month following a rally driven by hopes of an agreement during the April 17 producers’ meeting in Doha.

Prices dived after Saudi deputy crown prince Mohammed bin Salman said last week his country will only agree to limit output if rival producers such as Iran followed suit.

But Iran, which has been raising production since the West lifted nuclear-linked sanctions in January, has insisted it should not be the one to cut back.

Key OPEC member Kuwait, however, said a freeze deal can still be reached without Tehran, Bloomberg News reported.

It quoted Kuwait’s OPEC governor Nawal al-Fezaia as saying that major producers have no option but to reach an agreement and that a freeze could set a floor price.

Ric Spooner, chief market analyst at CMC Markets in Sydney, said traders are likely to wait for the results of the meeting before making big bets.

“Given the welter of statements… people are probably just going to ignore (the comments) until they get the results of the meeting,” Spooner told AFP by telephone.

Comments by International Monetary Fund chief Christine Lagarde that global economic recovery is still “too slow” and “too fragile” further added to the gloom in the saturated oil market as it is bad news for demand, analysts said.

source: business.inquirer.net

Oil stays below $40 after OPEC decides against output cut

SINGAPORE, Singapore — Oil stayed below $40 a barrel in Asia Monday after the OPEC cartel decided against slashing high output levels and traders turned their focus to a US central bank meeting next week.

US benchmark West Texas Intermediate for delivery in January was down 37 cents at $39.60 and Brent crude for January was trading 12 cents lower at $42.88 a barrel at around 0210 GMT.

At a meeting in Vienna on Friday, the Organization of the Petroleum Exporting Countries (OPEC) decided against cutting its oil output to lift prices, its president and Nigerian oil minister Emmanuel Ibe Kachikwu said.

OPEC, whose members together pump out more than one third of world oil, is currently producing above its official target of 30 million barrels per day despite a global crude supply glut that has battered prices for more than a year.

“Crude oil were no doubt compressed by the lack of an agreement at the OPEC, signaling that the supply glut will persist longer,” Bernard Aw, market strategist at IG Markets in Singapore.

“WTI is trading below the key $40 (mark) and it looks set to remain there.”

Sanjeev Gupta, who heads the Asia-Pacific oil and gas practice at professional services firm EY, said market attention is now turned to a meeting of Federal Reserve policymakers and to the latest economic data from China, the world’s top energy consumer.

Traders are watching whether the Fed will raise interest rates, a move that will boost the dollar. A stronger US currency will make dollar-priced oil more expensive to holders of weaker units, denting demand and prices.

“While all eyes are now on the Federal Reserve as it meets next week for the last policy meeting this year to decide whether to raise its benchmark rate, economic data from China will set the tone of prices in the coming weeks,” Gupta said.

He said the dollar also got a boost from a strong US jobs report on Friday. The report strengthens the case for a Fed rate hike, analysts said.

source: business.inquirer.net

Oil slips again after IMF cuts global growth forecast

NEW YORK, United States – Crude oil prices slumped Tuesday after the International Monetary Fund (IMF) slashed its world economic growth forecast, stoking fresh fears about the strength of crude demand.

US benchmark West Texas Intermediate (WTI) for February sank $2.30, or 4.7 percent, to $46.39 a barrel, not far from its lowest level since March 2009.

Brent North Sea crude for delivery in March, the international benchmark, dropped to $47.99 a barrel in London, down 85 cents from Monday’s closing level.

“Crude oil prices remain under heavy pressure with WTI front-month futures retreating… following news that the IMF cut its global growth forecast by (the) most in three years,” said Sucden analyst Myrto Sokou.

The IMF reduced its global economic growth forecast for this year to 3.5 percent and 3.7 percent in 2017 on the back of weaker momentum in nearly all major economies except the United States.

Both estimates were 0.3 percentage point lower than in its October forecast.

Moody’s meanwhile lowered its 2015 average price estimates to $55 a barrel for Brent and $52 for WTI. It projected both contracts would rise in 2016, to $65 and  $62, respectively.

“We see no near-term catalysts that would change the supply/demand equation,” credit ratings firm Moody’s said in a market note.

source: business.inquirer.net

Oil goes below $48 as Saudis defend stance

NEW YORK, United States – Oil prices tumbled Tuesday to fresh 5.5-year lows as Saudi Arabia blamed weak global economic growth and said it would stick to its guns on production policy.

US benchmark West Texas Intermediate for delivery in February sank $2.11 to $47.93 a barrel, a low last witnessed in late April 2009.

Brent North Sea crude for delivery in February dived $2.01 to $51.10 per barrel, the lowest level since early May 2009.

“The market is still worried that there are no signs that the supply glut will start falling,” Nordea Markets analyst Thina Margrethe Saltvedt told AFP.

James Williams of WTRG said the weakness in the market could take prices below $40 a barrel.

“Basically, there are continuing concerns about OPEC not cutting back, particularly Saudi Arabia, and US production continuing to grow,” he said.

Saudi Arabia’s Crown Prince Salman, in a speech on behalf of ailing King Abdullah Tuesday, said weak growth was to blame for the price fall, which has sliced deeply into the income of the world’s largest exporter.

“This development is not new in the oil market, and the kingdom has in the past dealt with it firmly and wisely,” he said, adding that Saudi Arabia will maintain its “same approach” towards the market.

That appeared to confirm Riyadh’s determination to defend its market share rather than reduce output, even if that pushes prices lower.

On Monday Saudi Arabia reportedly cut its European and US export prices in order to maintain market share.

source: business.inquirer.net

Oil prices fall amid weak China, German trade data

SINGAPORE – Oil prices fell in Asia Wednesday as dealers await the latest US supply report for clues about production levels, while weak Chinese and German trade data also weighed, analysts said.

US benchmark West Texas Intermediate for January delivery slipped 90 cents to $62.92 while Brent crude for January was down $1.01 at $65.83 in mid-morning trade.

“With the global supply glut, the main concern at the moment is the level of production in the US,” Daniel Ang, investment analyst at Phillip Futures in Singapore, told AFP.

“The US stockpiles report will be in focus to see if there is any change in production growth,” he said.

Analysts surveyed by the Wall Street Journal said they expected domestic inventories to have fallen by 2.7 million barrels in the week to December 5.

The American Petroleum Institute, an industry group, in its own survey however said stockpiles likely rose 4.4 million barrels.

It said refinery operations likely increased 1.6 percentage points to 94.6 percent of capacity.

The Department of Energy will release the official stockpiles report later Wednesday.

The department on Tuesday modestly reduced its 2015 US oil production forecast to 9.3 million barrels per day from the previous 9.4 million estimate.

Ang said German and Chinese trade data this week “have shown signs of dropping global demand and put pressure on oil prices”.

German exports slipped 0.5 percent month on month in October, while imports fell 3.1 percent. That came a day after China said exports grew just 4.7 percent year-on-year in November and imports dropped 6.7 percent.

Trade figures out of Germany and China, both major manufacturing giants, are closely watched for their impact on crude prices, especially the more internationally leveraged Brent contract.

source: business.inquirer.net

Oil prices climb in Asian trade

SINGAPORE – Oil prices rose in Asian trade Monday as robust US jobs data boosted hopes for stronger energy demand in the world’s biggest economy.

New York’s main contract, West Texas Intermediate (WTI) for January delivery, was up 23 cents at $97.88 a barrel in mid-morning trade, while Brent North Sea crude for January rose 13 cents to $111.74.

Singapore’s United Overseas Bank said in a research note that prices were supported “by the outlook for increased demand after strong jobs data from the US, the world’s top oil consumer.”

The US government reported last week that the unemployment rate fell sharply to 7.0 percent in November from 7.3 percent in October.

The data, which pointed to further strength in the US economy, also saw a better-than-expected surge of 203,000 jobs generated.

As the world’s largest oil consuming nation, the health of the American economy has a major influence on the crude oil market.

source: business.inquirer.net