RUSSIAN SANCTIONS: OIL 5 MB/D
Crude-oil futures extended overnight gains in Asian trading hours Tuesday on indications of stronger U.S. oil demand and as European Union officials mull tighter sanctions against Russia.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in August traded at $105.09 a barrel at 0456 GMT, up $0.50 in the Globex electronic session. September Brent crude on London's ICE Futures exchange rose $0.24 to $107.92 a barrel.
U.S. refineries ran at 93.8% of capacity in the week ended July 11, the highest level for the week since 2005, according to the U.S. Energy Information Administration.
The EIA's weekly inventory survey is due on Wednesday. The American Petroleum Institute, a trade body, will publish its weekly data later Tuesday and markets expect U.S. stockpiles to fall further, supporting oil prices.
Meanwhile, European Union foreign ministers are expected to approve sanctions against a range of Russian oligarchs on Tuesday in response to the suspected downing of a Malaysia Airlines jetliner by Moscow-backed rebels in eastern Ukraine.
However, the extent of the sanctions and the impact on the energy sector are unclear, especially considering that Russia is one of the world's largest oil and gas producers.
"Russia is exporting almost five million barrels of crude oil a day. If you want to impose sanctions on them, meaning that they don't export crude oil, the market doesn't have replacement barrels of that magnitude," Johannes Benigni, head of consulting firm JBC Energy said.
He said Europe alone takes up 3.5 million barrels a day of Russian crude and it would be much more expensive for them to buy oil from elsewhere, a move that would hurt European refiners already reeling from weak margins and multiple closures.
Nymex reformulated gasoline blendstock for August--the benchmark gasoline contract--rose 91 points to $2.9005 a gallon, while August heating oil traded at $2.8645, 57 points higher.
ICE gasoil for August changed hands at $884.25 a metric ton, up $4.75 from Monday's settlement.
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AN - China National Offshore Oil Corp. (CNOOC) is willing to invest $3 billion in its existing oil and gas operation in Nigeria, the Nigerian National Petroleum Corporation (NNPC) said on Sunday following a meeting with the Chinese in Abuja.
REUTERS - Production at Libya’s giant Sharara oil field was expected to fall by at least 160,000 barrels per day (bpd) on Saturday after two staff were abducted in an attack by an unknown group, the National Oil Corporation (NOC) said.
IMF - Output grew by 3.8 percent in 2017, underpinned by a resilient non-hydrocarbon sector, with robust implementation of GCC-funded projects as well as strong activity in the financial, hospitality, and education sectors. The banking system remains stable with large capital buffers. Growth is projected to decelerate over the medium term.
IMF - Higher oil prices and short-term portfolio inflows have provided relief from external and fiscal pressures but the recovery remains challenging. Inflation declined to its lowest level in more than two years. Real GDP expanded by 2 percent in the first quarter of 2018 compared to the first quarter of last year. However, activity in the non-oil non-agricultural sector remains weak as lower purchasing power weighs on consumer demand and as credit risk continues to limit bank lending.