June 23, 2021

LATEST on story below: Oil Prices Slump!

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BN-GU271_cmdoil_P_20150204054642Oil extends gain as bears retreat on signs supply glut will ease [see also story below the following]

From Newsmax

Oil prices rose on Tuesday, headed for the biggest four-day advance since January 2009 as a tumbling dollar sent commodities rallying.

Despite signs that U.S. crude supplies had registered another heavy build last week, investors were growing more confident that oil prices have hit a bottom after a seven-month rout.

Traders said oil bulls were encouraged by BP’s plan to cut capital expenditure by 13 percent to $20 billion in 2015, which came after reductions announced by other major energy companies.

Benchmark Brent crude oil was up $3.77 at $58.52 a barrel by 2:02 p.m. ET (1902 GMT).

U.S. crude, or WTI, rose $4.30 to $53.87.

Since last Wednesday’s close, Brent and WTI have gained about $9 each, or roughly 19 percent.

Until then, the market had tumbled with little pause week after week, after a selloff that began in June on fears of a global oversupply in crude.

The break higher came after news on Friday that the number of U.S. oil drilling rigs, measured by oil services firm Baker Hughes, had fallen their most in a week in nearly 30 years.

On Tuesday, the dollar dropped more than 1 percent against a basket of currencies, heading for its biggest daily drop since July 2013 and boosting the value of commodities priced in the currency.

The capital reduction plans of BP and other energy firms fueled the perception that the global oil glut may end faster than thought.

“You’ve got a number of themes working to push the market higher,” said Phil Flynn, analyst at Price Futures Group in Chicago.

Still, some traders remained pessimistic that the selloff was over, citing signs of another big weekly build in U.S. crude stockpiles.

U.S. commercial crude oil and gasoline stockpiles likely rose about 4 million barrels in the week ended Jan. 30, even as distillate inventories fell, a preliminary Reuters survey showed on Monday. The U.S. Energy Information Administration will release the inventory data on Wednesday.

Adding pressure to crude, a U.S. refineries strike stretched into a third day after talks on a new national contract broke down.

“It needs to get worse here in terms of productive capacity actually going offline,” said John Kilduff, partner at New York energy hedge fund Again Capital.

“Also, the capex cuts announced by the respective oil firms are just plans that can be reversed when prices began a steady recovery, so the desired production cuts may not fully materialize.”

For more on this story go to: http://www.Newsmax.com/Finance/Oil-Crude-Supply-Glut-Prices/2015/02/03/id/622431/#ixzz3QnHxNxj

Oil Prices Slump As Inventories Rise More Than Expected

‘Considerable Oversupply’ Could See Prices Fall in Short-Term, Say Analysts

By Nicole Friedman From Wall Street Journal

Oil prices sunk further Wednesday after U.S. data showed that crude supplies grew more than expected last week and are sitting around 80-year highs.

U.S. crude oil for March delivery recently fell $2.72, or 5.1%, to $50.33 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, declined $2.09, or 3.6%, to $55.82 a barrel on ICE Futures Europe.

U.S. crude-oil supplies rose by 6.3 million barrels in the week ended Jan. 30 to 413.1 million barrels, the U.S. Energy Information Administration said Wednesday. Analysts surveyed by The Wall Street Journal had expected a gain of 3.7 million barrels.

Stockpiles are at the highest ever in EIA weekly data going back to August 1982.

In monthly data, which don’t line up exactly with the weekly data, inventories have not been this high since 1930.

“U.S. crude oil inventories are at the highest level for this time of year in at least the last 80 years,” the EIA said in the report.

Despite oil prices that have plunged more than 50% since June, U.S. crude production remains at multi-decade highs.

Refineries typically shut units to perform seasonal maintenance in February and March, so analysts expect inventories to continue growing in the coming weeks as refiners buy less crude.

“Overall, that was a pretty bearish report, and I think the market’s taking it as such,” said Kyle Cooper, analyst at IAF Advisors in Houston. “I’m not sure the market’s fully factored in the reality that we’re going to build a lot of crude in the next few months.”

Gasoline supplies rose by 2.3 million barrels in the week. Analysts had expected a drop of 300,000 barrels.

Distillate stocks, including heating oil and diesel fuel, rose by 1.8 million barrels, compared to analysts’ expectations for a 2.2-million-barrel weekly decrease.

Demand for petroleum products in the U.S. fell last week, the EIA said.

Gasoline futures for March delivery recently fell 7.18 cents, or 4.5%, to $1.5295 a gallon. Diesel futures slid 4.43 cents, or 2.4%, to $1.8022 a gallon.

Prices had rallied 19% in the four days ended Tuesday on reports of a slowdown in U.S. drilling activity, spending cuts by major oil companies and a strike at some U.S. refineries. But crude is still down about 50% from its peak in June and analysts caution that the market remains oversupplied.

In addition, strikes at some U.S. refineries haven’t affected the plants’ operations, according to data service Genscape, which tracks refinery utilization at four of the seven refineries where strikes are taking place.

IMAGE: Oil pumps for sale on Tuesday in Easton, Texas. Analysts say that even if the number of oil rigs operating in the U.S., currently at a three-year low, continues to decline, it will take time for this to affect production volumes. Photo: Getty Images

For more on this story go to: http://www.wsj.com/articles/oil-holds-on-to-bulk-of-recent-gains-1423031216

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