In Oil & Companies News 09/09/2016
Oil trimmed its weekly gain after the biggest U.S. stockpile slump in 17 years was seen as a one-off caused by a tropical storm that disrupted imports and offshore production.
Futures dropped 1.2 percent in New York, paring the weekly advance to 5.8 percent. Crude inventories fell 14.5 million barrels last week, the biggest decline since January 1999, according to Energy Information Administration data Thursday. Imports tumbled 21 percent as Tropical Storm Hermine moved into the Gulf of Mexico on Aug. 28, disrupting shipping and output.
Oil has swung amid speculation members of the Organization of Petroleum Exporting Countries and Russia would agree on measures to stabilize the market. While Saudi Arabia’s Energy Minister Khalid Al-Falih said Monday he’s optimistic producers will cooperate, a meeting with his Russian counterpart ended without any detailed plan of action and Iran continues to keep investors guessing on whether it will join a potential freeze accord. Crude inventories in the U.S. remain near the highest seasonal level in more than 30 years despite the drop in stockpiles.
“The big story this week was the very large draw on U.S. oil inventories mainly due to temporary disruptions on the back of a storm,” said Jens Naervig Pedersen, an analyst at Copenhagen-based Danske Bank A/S. “But it looks to be a one-off event and market reaction may be temporary.”
U.S. Supplies
West Texas Intermediate for October delivery fell 61 cents to $47.01 a barrel on the New York Mercantile Exchange at 9:23 a.m. in London. The contract jumped $2.12, or 4.7 percent, to $47.62 a barrel on Thursday, the biggest gain since April 8. Total volume traded was 35 percent below the 100-day average.
Brent for November settlement slipped 68 cents, or 1.4 percent, to $49.31 a barrel on the London-based ICE Futures Europe exchange. Prices climbed 4.2 percent to $49.99 a barrel on Thursday. The global benchmark crude traded at a $1.71 premium to WTI for November delivery.
U.S. crude supplies declined to 511.4 million in the week ended Sept. 2, according to EIA data. Inventories reached 543.4 million barrels in the week ended April 29, the highest since 1929. The stockpiles remain at their highest seasonal level since at least 1982. A 905,000-barrel gain was projected by analysts surveyed by Bloomberg before the release.
Crude imports dropped to 7.07 million barrels a day last week, the biggest decline since September 2012, EIA said. Refineries increased operating rates by 0.9 percentage points to 93.7 percent of capacity, the highest since November 2015. Plants usually begin to cut back on operations in August as the peak-demand driving season comes to an end.
Al-Falih and Algerian Energy Minister Noureddine Bouterfa will meet with OPEC Secretary General Mohammed Barkindo in Paris on Friday, Bouterfa said. Though major oil producers continue to lay the ground for a potential deal to bolster crude prices some analysts are skeptical a deal will be reached. Nigeria, Libya and Iran all hope to resume lost production after their output was severely constrained in recent years.
“Iran, Libya, Nigeria and potentially Iraq remain the stumbling blocks for a deal,” Giovanni Staunovo, an analyst at UBS Group AG in Zurich, said by e-mail. “They all want their exemptions and discussions will have to involve them.”
Oil-market news:
- Saudi Arabia told OPEC its oil production dropped by 40,000 barrels a day in August to 10.63 million barrels a day as the group debates a deal to curb output to shore up prices.
- Crude exports by OPEC, excluding from Ecuador, Angola, Indonesia and Gabon, will increase by 480,000 barrels a day to 23.91 million barrels a day in four weeks to Sept. 24, compared to the previous period to Aug. 27, Oil Movements said in a report.
Source: Bloomberg
