The Nation Newspaper

Tag: oil prices

  • Oil prices race to $80

    Oil prices steadied below 3-1/2 year highs yesterday as resistance emerged in Europe and Asia to U.S. sanctions against major crude exporter Iran, while rising U.S. drilling pointed to higher North American production.

    Read also: NNPC to commence oil exploration along Gongola Basin – GMD

    Brent crude was up 20 cents at 77.32 dollars a barrel by 1315 GMT and U.S. light crude rose 10 cents to 70.80 dollars.

    Both oil futures contracts hit their highest since November 2014 last week at 78 dollars and 71.89 dollars a barrel, respectively as markets anticipated a sharp fall in Iranian crude supply once U.S. sanctions bite later this year.

    It is unclear how hard U.S. sanctions will hit Iran’s oil industry.

    A lot will depend on how other major oil consumers respond to Washington’s action against Tehran, which will take effect in November.

    China, France, Russia, Britain, Germany and Iran all remain in the nuclear accord that placed controls on Iran’s nuclear programme and led to a relaxation of economic sanctions against Iran and companies doing business there.

    The surge in oil prices comes at a time of tight supply amid record Asian demand and voluntary output restraint by the Organisation of the Petroleum Exporting Countries and non-OPEC producers, including Russia.

  • JP Morgan: Oil prices won’t go higher than $70

    Oil prices at $70 may be the top of the range in the price of oil that would be seen over the next few years, chief global strategist at JPMorgan Asset Management, David Kelly told Bloomberg Daybreak: Americas yesterday.

    “Yes, we’ve got those geopolitical issues, but I don’t know if sanctions would be that effective, it has to be a global effect,” Kelly said.

    Based on the cuts in production and on growth in the U.S. shale industry, oil at $70 a barrel may be “as high as it gets”, according to the strategist.

    “That’s a price that I don’t think is hurting U.S. consumers too much,” Kelly said, adding that $70 oil is a price that’s actually helping the stock market and U.S. energy companies.

    At the beginning of this year, J.P. Morgan lifted its Brent oil price forecast to $70 a barrel for 2018. The global economy will continue to expand, which will stimulate growth in oil demand and healthy prices, J.P. Morgan said in January, expecting that 2018 would be a year of two halves for the oil market and oil prices. The first half of the year will be so strong that Brent could hit $78 a barrel in the first or the second quarter. Yet, in the second half of the year, drillers will increase their production in response to the higher prices, and this higher production may weigh on oil benchmarks, according to J.P. Morgan.

  • Oil prices hit over $73 on Trump’s Russia warning

    Oil prices hit their highest level since early December 2014 after United States President Donald Trump warned Russia to prepare for a strike on its ally, Syria.

    Crude futures also tacked on gains following a strike on top oil exporter Saudi Arabia by rebels in neighboring Yemen.

    Brent, the benchmark for international oil prices, were at $72.14 a barrel, up $1.10, or 1.6 per cent from Tuesday’s closing price. The contract earlier rose to $73.09, the highest level since Nov. 28, 2014, when it hit $73.41.

    U.S. West Texas Intermediate crude was up $1.31, or two per cent, to $66.82. WTI rose as high as $67.45, a session peak going back to Dec. 4, 2014, when it touched $68.22.

    Analysts say this is a good development for Nigeria, Africa’s largest oil producer. President Muhammadu Buhari had on November 7 last year, presented a N8.612 trillion budget proposal to a joint session of the National Assembly. Buhari also proposed an oil price benchmark of $45, exchange rate of N305/$1, oil production target of 2.3 million barrels/day, inflation rate of 12.4 per cent, and a gross domestic product (GDP) growth of 3.5 per cent.

    John Kilduff, founding partner at energy hedge fund Again Capital, earlier yesterday said U.S. crude prices could be heading to $70 after breaking through the previous 2018 high of $66.66.

    The morning price spike was completely due to the Trump tweet, which left the market to parse the president’s meaning, according to Kilduff. The question, he said, is whether Trump will order the military to solely target Syrian assets, or take aim at Iran, which also backs Assad and has a significant presence in Syria.

    Such an attack would come just one month before Trump faces a deadline that could see him restore sanctions on Iran, Organisation of Petroleum Exporting Countries (OPEC’s) third largest oil producer.

    Kilduff said: “That’s the crux of the matter. Is it a pin prick or is it something that sets us up for escalation?”

  • Oil prices jump 2% on waning trade war

    Crude prices rallied for the second day in a row yesterday, as appetite for riskier assets improved after a speech by Chinese President Xi Jinping eased concerns about a trade conflict between the United States and China. Investors looked forward to data on U.S. crude inventories and Organisation of Petroleum Exporting Countries (OPEC) production levels.

    New York-traded West Texas Intermediate crude futures jumped $1.56, or about 2.5 per cent, to $65.02 a barrel while Brent crude futures, the benchmark for oil prices outside the U.S., rose $1.66, or roughly 2.4 per cent, to $70.31 a barrel.

    Speaking at the Boao Forum for Asia, Xi said that China would lower import tariffs on vehicles, encourage imports and strengthen the protection of intellectual property.

    The remarks helped soothe investor jitters over the ongoing tit-for-tat tariff dispute between the U.S. and China, which investors had feared might escalate into a full-blown trade war between the world’s two largest economies.

    Oil prices have scored gains of nearly five per cent in the last two sessions, recovering much of what they lost last week when the U.S.’s decision to slap China with tariffs on $50 billion worth of gold sent crude on a dive to a two-week low.

    Market players now looked ahead to fresh data on U.S. commercial crude inventories to gauge the strength of demand in the world’s largest oil consumer and how fast output levels will continue to rise.

    Industry group the American Petroleum Institute is due to release its weekly report yesterday. Official data from the Energy Information Administration will be released today, amid forecasts for an oil-stock gain of around 0.2 million barrels.

    Analysts and traders have recently warned that booming U.S. shale oil production could potentially derail OPEC’s effort to end a supply glut.

    OPEC and other producers, including Russia, agreed to cut output by about 1.8 million barrels per day (bpd) in November last year to slash global inventories to the five year-average. The arrangement is set to expire at the end of 2018, though Saudi Arabia pledged two weeks ago that it was intent on extending the supply curb into next year.

    Traders will receive the latest evaluation of just how well OPEC is sticking to the agreement when the cartel’s monthly report is released on Wednesday.

    The market is also keeping an eye on developments out of Syria. U.S. President Donald Trump promised a “major response” within 24 to 48 hours to an alleged chemical attack in Syria, which he said could be the work of the Syrian government, Iran, Russia or all three.

  • Oil prices near $70 on lowering U.S drilling

    Oil prices have been lifted by a drop in United States (U.S.) drilling activity as well as by expectations that the country could re-introduce sanctions against Iran.

    U.S. WTI crude futures were at $65.18  a barrel up 24 cents, or 0.4 per cent, from their previous settlement.

    Brent crude futures were fetching $69.67 per barrel, up 33 cents, or 0.5 per cent.

    Head, Trading, Asia/Pacific at futures brokerage, OANDA in Singapore, Stephen Innes, said oil markets remained nervous about “whether or not the U.S. administration will scrap or maintain the fragile nuclear deal with Iran.”

    Innes said prices were also supported by a weekly report that there was a drop in activity of drilling for new oil production in the U.S.

    U.S. drillers cut seven oil rigs in the week to March 29, bringing the total count down to 797 RIG-OL-USA-BHI, General Electric Co’s Baker Hughes energy services firm said in its closely followed report last Thursday.

    It was the first time in three weeks that the rig-count fell.

    Baker Hughes published its North American rig count report on Thursday, one day earlier than usual, due to the Good Friday holiday on March 30.

    Oil prices have generally been supported by supply restraint led by the Organisation of the Petroleum Exporting Countries (OPEC) and Russia, which started in 2017 in order to rein in oversupply and prop up prices.

     

     

     

     

  • Oil prices rise due to lower U.S. drilling activity

    Oil prices rose on Monday, lifted by a drop in U.S. drilling activity as well as by expectations that the United States could re-introduce sanctions against Iran.

    U.S. WTI crude futures were at 65.18 dollars a barrel at 0025 GMT, up 24 cents, or 0.4 per cent, from their previous settlement.

    Brent crude futures were fetching 69.67 dollars per barrel, up 33 cents, or 0.5 per cent.

    Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore, said oil markets remained nervous about “whether or not the U.S. administration will scrap or maintain the fragile nuclear deal with Iran.”

    Innes said prices were also supported by a weekly report that there was a drop in activity of drilling for new oil production in the United States.

    U.S. drillers cut seven oil rigs in the week to March 29, bringing the total count down to 797 RIG-OL-USA-BHI, General Electric Co’s Baker Hughes energy services firm said in its closely followed report last Thursday.

    It was the first time in three weeks that the rig-count fell.

    Baker Hughes published its North American rig count report on Thursday, one day earlier than usual, due to the Good Friday holiday on March 30.

    Oil prices have generally been supported by supply restraint led by the Organisation of the Petroleum Exporting Countries ( OPEC ) and Russia, which started in 2017 in order to rein in oversupply and prop up prices.

    Liquidity on Monday will be low as many countries, especially in Europe, will still be on Easter holiday. ($1 = 6.2726 Chinese yuan renminbi).

    Reuters/NAN

  • Oil prices jump, Brent hits approximately $70

    Oil prices jumped on Friday, with Brent crude futures hitting their highest in more than two weeks as U.S. stock prices rose.

    Investors covered short bets ahead of a weekend in which the U.S. news programme  “60 Minutes” will air an interview with Saudi Arabia’s crown prince.

    Brent futures rose to more than 66.42 dollars , its highest since Feb. 28.

    U.S. West Texas Intermediate (WTI) crude futures for April, which will expire on Tuesday, rose to 62.54 dollars on Friday, its highest since March 7.

    Gains on Wall Street also supported crude futures, which have recently been moving in tandem with U.S. stock indices.

    U.S. drillers added four oil rigs in the week to March 16, bringing the total count to 800, General Electric Co’s Baker Hughes energy services firm said on Friday.

    It was the seventh U.S. rig count rise in eight weeks.

    On Thursday the International Energy Agency (IEA) predicted global oil demand would pick up this year.

    The agency raised its forecast for oil demand this year to 99.3 million barrels per day (bpd) from 97.8 million bpd in 2017.

    It expected supply from non-OPEC nations to grow by 1.8 million bpd in 2018 to 59.9 million bpd, led by the United States.

    OPEC and other producers have cut output to reduce a global crude glut.

    “Demand is gradually improving, and that continues to be priced into the price of oil,” said Mark Watkins, regional investment manager at U.S. Bank Wealth Management in Park City, Utah.

    “That’s that positive backdrop that you end up having that really is going to be the catalyst for a true rebalancing of inventories.”

    On Wednesday, the U.S. government reported that crude stockpiles in the United States increased by a more-than-expected five million barrels.(Reuters/NAN)

  • Oil prices rebound to $65

    Crude oil prices reached $65 yesterday after a drop in prices earlier in the year.

    Brent crude, which is the international benchmark of crude oil, had opened 2018 at $64.73. By January 9, it hit $68 before falling to $61.64 by February 1.

    Traders attributed the recent increase to a drop in the number of US drilling rigs for production and the reported job increase in the US which is expected to push fuel demand higher.

    Brent sweet crude traded at $65.70 per barrel on Monday, an increase of 21 cents or 0.3 percent from its previous close.

    “A falling rig count and the strong employment data may have helped support prices,” NAN quoted William O’Loughlin, investment analyst at Rivkin Securities, to have said.

    According to Baker Hughes energy services firm, US energy companies cut oil rigs for the first time in almost two months, with drillers cutting back four rigs, to 796.

    Reuters reports that although employees may not like the 0.1 percent rise in average hourly earnings, employers liked it and markets loved it.

    “This is simply because the modest increase in wage growth indicates that the federal reserve will continue to have some sort of slack in the labour market to deal with and thus keep the Fed on course for three rate hikes in 2018 instead of four,” the report read.

    “After all, the combination of robust economic data and limited inflation has been a key factor in keeping the bull market alive.”

  • Oil prices rise to $70 on strong economy amid OPEC cuts

    Oil prices rise to $70 on strong economy amid OPEC cuts

    Oil prices were firm on Wednesday, receiving ongoing support from healthy economic growth as well as from supply restrictions led by a group of producers around the Organisation of the Petroleum Exporting Countries ( OPEC ) and Russia.

    Spot Brent crude oil futures, the international benchmark for oil prices, were at 70 dollars a barrel at 0102 GMT, up 4 cents from their last close.

    U.S. West Texas Intermediate (WTI) crude futures were at 64.59 dollars a barrel, up 12 cents .

    In the latest sign of healthy global economic growth, Japanese manufacturing activity expanded at the fastest pace in almost four years in January, a survey showed on Wednesday.

    Economic growth is translating into healthy oil demand growth, which comes at a time that OPEC and Russia lead production cuts aimed at tightening the market and propping up prices.

    The deal to withhold output started in January last year and is currently set to last through 2018.

    Stephen Innes, head of trading for Asia/Pacific at futures brokerage Oanda in Singapore said a “beaming economic forecast along with stout compliance from OPEC (to withhold production) is providing convincing support.”

    In spite of the overall supportive market conditions, which have seen crude futures rally by almost 15 percent since early December, there are signs that traders are preparing for a downward correction.

    One way of doing that is to take out so-called put options on crude futures contracts which give a trader the right, but not the obligation, to sell at a certain price.

  • Oil prices rise attracting foreign investors, says Afrinvest

    The upturn in commodity prices, impressive performance in the oil sector, and adoption of pro-market forex reforms by the Central Bank of Nigeria (CBN) have made Nigeria’s financial market attractive to investors, Afrinvest (West Africa) Limited has said.

    Speaking during the release of its 2018 Outlook for the Nigerian Economy and Financial Market in a report titled, ‘The Virtuous Cycle… Again!’, its Managing Director, Ike Chioke said the report offers an assessment of growth prospects in 2018, in light of the notable recovery of the Nigerian economy in 2017.

    Chioke said the report, therefore, highlights current macroeconomic conditions that have set the stage to consolidate on the growth een since second quarter of last year.

    He said the 2017 was indeed a year of recovery for the Nigerian economy. “Through deliberate efforts from the government, we saw a rebound in economic activity, as well as strengthened investor confidence and business sentiments. It is against the backdrop of these improving macroeconomic conditions that we have taken a positive outlook for 2018, as we expect the economy to continue on its positive trajectory since its recovery”.

    “Akin to our last 2-year bull run in 2012 and 2013, we have been ushered into a “virtuous cycle” marked by stability in external sector indicators and fiscal balance, declining inflationary pressures, improving growth profile, increasingly accommodative monetary policy and strong capital market returns. In these early days, we have seen market capitalisation and the Nigeria Stock Exchange (NSE) All Share Index at record highs, and we advocate a cautious, active trading strategy in the current bull market.”

    The report also addresses the slow recovery of the Non-Oil sector and proffers strong prospects for growth in anticipation of expansion in fiscal spending, deceleration of inflation rate and increase in private investments.