OIL PRICES ANALYSIS
BLOOMBERG - Oil declined in New York as traders await further proof that OPEC-led production cuts, extended at a meeting last week, are having an effect.
West Texas Intermediate futures were down 0.8 percent from Friday's closing price following the U.S. Memorial Day holiday on Monday. OPEC and Russia's deal to extend output limits through March was initially met with a sell-off as deeper cuts or a plan for the rest of 2018 weren't proposed. Saudi Arabia's Energy Minister Khalid Al-Falih said the strategy is working and stockpiles will drop faster in the third quarter.
Oil has traded below $50 a barrel since last week as the Organization of Petroleum Exporting Countries and its allies agreed to extend an output-reduction deal, yet no new non-OPEC countries joined the pact. U.S. crude inventories have dropped for seven weeks in a sign the limits may be working, though stockpiles are still above the five-year average. Saudi Arabia plans to reduce exports to the world's biggest consumer to speed up that decline.
"The market was hoping we would get somewhat deeper cuts," said Bart Melek, the head of global commodity strategy at TD Securities in Toronto, in a telephone interview. "There was also chatter surrounding a few other producers joining into the agreement and there was hope expressed that there would be a plan beyond 2018."
West Texas Intermediate for July delivery slipped 39 cents to $49.41 a barrel on the New York Mercantile Exchange as of 10:34 a.m. in New York. There was no settlement Monday because of the U.S. Memorial Day holiday.
Brent for July settlement dropped 65 cents, or 1.2 percent, to $51.64 a barrel on the London-based ICE Futures Europe exchange. The global benchmark traded at a premium of $2.23 to WTI.
Russian Energy Minister Alexander Novak and Saudi Arabia's Al-Falih discussed the oil market and cooperation between countries in Moscow on Tuesday, the Russian ministry said on its website. Russian President Vladimir Putin and Saudi Arabia's Deputy Crown Prince Mohammed bin Salman hailed a new period of close relations at talks in Moscow. The agreement to curb oil production is very significant and "our coordinated actions helped stabilize the situation on the world hydrocarbons market," Putin said Tuesday at the Kremlin meeting.
"OPEC has done enough to establish a floor, but at this stage the best they can probably hope for is to see oil hold around these levels," said Ole Sloth Hansen, head of commodities strategy at Saxo Bank A/S in Copenhagen. "We are in a wait-and-see mode. Major fund buying will only be seen once data begins to support."
Goldman Sachs Group Inc. cut its 2017 Brent forecast to $55.39 a barrel from $56.76 and reduced its WTI forecast to $52.92 from $54.80, according to a report.
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AOG - The Dubai Electricity & Water Authority (DEWA) is to invest around $22bn on new energy projects across the next five years, with the renewables sector accounting for an increasing share of electricity generation, according to CEO Saeed Mohammed Al Tayer.
TRANSCANADA - TransCanada Corporation (TSX:TRP) (NYSE:TRP) (TransCanada or the Company) announced net income attributable to common shares for fourth quarter 2017 of $861 million or $0.98 per share compared to a net loss of $358 million or $0.43 per share for the same period in 2016. For the year ended December 31, 2017, net income attributable to common shares was $3.0 billion or $3.44 per share compared to net income of $124 million or $0.16 per share in 2016.
ROSATOM - February 13, 2018, Moscow. – ROSATOM and the Ministry of Scientific Research and Technological Innovations of the Republic of Congo today signed a Memorandum of Understanding on cooperation in the field of peaceful uses of atomic energy.
FRB - Industrial production edged down 0.1 percent in January following four consecutive monthly increases. Manufacturing production was unchanged in January. Mining output fell 1.0 percent, with all of its major component industries recording declines, while the index for utilities moved up 0.6 percent. At 107.2 percent of its 2012 average, total industrial production was 3.7 percent higher in January than it was a year earlier. Capacity utilization for the industrial sector fell 0.2 percentage point in January to 77.5 percent, a rate that is 2.3 percentage points below its long-run (1972–2017) average.