U.S. NEGATIVE OIL PRICES
U.S. crude-oil futures remained in negative territory Tuesday in Asian trade, tracking the previous day's drop in Brent crude when U.S. markets were shut for a holiday.
Also Tuesday, China released trade data for August that came in worse than expected. Oil prices in recent months have become highly sensitive to Chinese economic data on concerns about the country's slowdown but analysts said despite falling prices, the market appeared to have largely factored in the latest trade figures.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at $44.20 a barrel at 0403 GMT, down $1.85 in the Globex electronic session. October Brent crude on London's ICE Futures exchange rose $0.04 to $47.67 a barrel.
Nymex crude prices are down by around 3.7% compared with Friday's settlement as U.S. markets were closed Monday in observance of Labor Day. Brent fell around 4% Monday.
West Texas Intermediate prices "fell below the $45 per barrel mark in the final minute as trading on the CME paused because of the U.S. Labor Day holiday. Traded volumes were low—at only 20% of the 15-day average," said ANZ Research in a report.
China's exports fell 5.5% in August from the previous year compared with the market projection of a 5.2% fall. Imports plunged 13.8% in the same month from a year earlier, beating the expectation of a 7.9% decrease.
According to Chinese customs data, China's crude-oil imports in August fell 13% year-over-year to 26.59 million tons while exports of the same month last year dropped 33% to 220,000 tons, underscoring the nation's slowdown.
"The Chinese trade data isn't likely to sway the market drastically today because the market had already anticipated a decrease, but the lingering concerns of oversupply and the expected resumption of Iranian oil [flows] into the market are keeping the market in a bearish mode," said Daniel Ang, a Phillip Futures analyst.
Mr. Ang said that this week's main data point would be the eurozone's second-quarter economic growth figures, which are unlikely to shake markets, and that he expects WTI and Brent crude to be supported at $43.53 and $46.81 a barrel, respectively.
Vyanne Lai, an economist a National Australia Bank, said despite the recent negative headlines from China, the overall view of the country's growth prospects is still rosy.
Moreover, the possibility of major players in the Organization of the Petroleum Exporting Countries such as Saudi Arabia cutting production to salvage waning oil revenue is also supporting oil prices, she said.
"There are some talks that big OPEC producers might be willing to consider reducing supply as the pain of oversupply is spilling over," said Ms. Lai.
Asian equity markets were choppy Tuesday, with stocks in Shanghai swinging between gains and losses. The Shanghai Composite Index was recently down 1.9%.
Nymex reformulated gasoline blendstock for October—the benchmark gasoline contract—fell 396 points to $1.3786 a gallon, while October diesel traded at $1.5560, 400 points lower. ICE gasoil for September changed hands at $470.00 a metric ton, down $0.25 from Monday's settlement.
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Libya’s oil production increased steeply to the current level of 850,000 b/d from a low point in August 2016 of below 300,000 b/d. Production surpassed 1 million b/d in July.
- Revenue of $7.9 billion increased 6% sequentially - Pretax operating income of $1.1 billion increased 11% sequentially - GAAP EPS, including Cameron integration-related charges of $0.03 per share, was $0.39 - EPS, excluding Cameron integration-related charges, was $0.42 - Cash flow from operations was $1.9 billion; free cash flow was $1.1 billion
“The combination of GE Oil & Gas and Baker Hughes closed on July 3, and we are pleased with our progress during our first operating quarter. Despite the continuing challenging environment, we delivered solid orders growth and secured important wins from customers, advanced existing projects and enhanced our technology offerings in the quarter. We also achieved key integration milestones and made significant progress working as a combined company. I am now more convinced than ever that we combined the right companies at the right time,” said Lorenzo Simonelli, BHGE chairman and chief executive officer.
U.S. Rig Count is up 360 rigs from last year's count of 553, with oil rigs up 293, gas rigs up 69, and miscellaneous rigs down 2 to 2. Canada Rig Count is up 59 rigs from last year's count of 143, with oil rigs up 38 and gas rigs up 21.