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.
|November, 17, 19:55:00|
|November, 17, 19:50:00|
|November, 17, 19:45:00|
|November, 17, 19:40:00|
|November, 17, 19:35:00|
|November, 17, 19:30:00|
REUTERS - Brent crude futures LCOc1 were down 72 cents at $61.49 per barrel at 1020 GMT, having fallen by 1.5 percent on Tuesday, its largest one-day drop in a month. U.S. West Texas Intermediate (WTI) crude CLc1 was at $55.12 per barrel, down 58 cents.
BLOOMBERG - Prices dropped during the session as the International Energy Agency said the recent recovery in oil prices, coupled with milder-than-normal winter weather, is slowing demand growth. The worsening outlook for consumption dampened some of the enthusiasm that OPEC and its allies will extend supply curbs.
Global energy needs rise more slowly than in the past but still expand by 30% between today and 2040. This is the equivalent of adding another China and India to today’s global demand.
Product exports have grown significantly over the past several years and are expected to continue to grow as Russian refineries add capacity to produce more high-quality products.