Oil headed for the longest run of weekly declines in almost three decades on signs the supply glut that drove prices to a six-year low will be prolonged.
Futures fell as much as 1.6 percent in New York, set for an eighth weekly drop.
The US pumped crude in July at the fastest pace for the month since at least 1920, the American Petroleum Institute reported Thursday. The nation’s stockpiles are almost 100 million barrels above the five-year seasonal average, weekly government data showed Wednesday.
Abu Dhabi’s oil marketers plan to host a reception for buyers during an energy trading conference next month in Singapore, a push by the Persian Gulf emirate to raise market share amid a global supply glut.
State-run Abu Dhabi National Oil Co. will hold the event at the St. Regis Singapore hotel on Sept. 9 during the annual Asia Pacific Petroleum Conference, according to an announcement obtained by Bloomberg. Adnoc, as the company is known, doesn’t usually host such events during the conference.
“Adnoc is trying to be more assertive as they need to grab more market share for th
Crude markets already in a downward spiral sank under the weight of a supply report showing increasing stockpiles of oil after a major U.S. Midwest refinery shutdown.
And the oversupply may just be getting started.
A heavy slate of refinery maintenance in the region this fall threatens to make inventory builds in Cushing, Oklahoma, a common occurrence. The outages will follow trouble at BP Plc’s Whiting refinery in Indiana that meant about 1.5 million barrels of oil didn’t get consumed last week.
“There is a lot of maintenance scheduled in the fall,” said John Auers, senior vice president at Turner Mason & Co., a Dallas-based energy consultancy. “Having a lot of plants down for turnarounds tends to push us into an oversupply situation and starts widening out the domestic-international spread.”
Saudi Arabia boosted crude output to a record, deepening a global supply glut and sending the country’s stocks down for a seventh day in the longest losing streak this year.
The Tadawul All Share Index retreated 2.5 percent to close at 7,991.28 in Riyadh, less than 130 points away from a threshold for entering a bear market. The selloff in oil resumed as the kingdom said crude export in June beat a previous high set in 1980 as OPEC nations seek to maintain market share.
Two months after Saudi Arabia opened its equity market to direct foreign investment, stocks have been reeling as crude’s plunge prompted the International Monetary Fund to warn the kingdom’s growth may slow. The Tadawul’s moving averages made a so-called death cross on Tuesday, a sign to some investors more declines lie ahead.
Acquisitions in the energy industry will depend on at least a few more months of weakness in oil prices, according to Australia’s Woodside Petroleum Ltd.
At least one Midwestern refinery is said to be considering a delay in maintenance work after trouble at BP Plc’s Whiting plant near Chicago sent regional profit margins to a seven-year high.
Some of the worst-performing oil companies in North America are getting more for their crude than Exxon Mobil Corp. and other giants. That may not help them for long.
Goodrich Petroleum Corp., the biggest loser in the Bloomberg Intelligence index of North American independent producers, sold its output for $86.49 a barrel in the second quarter, according to data compiled by Bloomberg. Halcon Resources Corp., which is down 49 percent this year, reaped $81.18. Compare that with Chevron Corp., which received an average $54.26, and Exxon Mobil, which got $56.90.
The reason: lack of cash. Smaller companies with riskier credit bought insurance against an oil crash, which locked in higher prices and reassured lenders that they’d get paid back. The hedges have been critical as oil dipped more than 60 percent since June 2014 to a six-year low below $42 a barrel.
Dynagas Ltd., GasLog Ltd. and Golar LNG Ltd. agreed to jointly market their liquefied natural gas tankers for spot charters as trading of flexible cargoes widens.
The Cool Pool, the first-ever LNG carrier pool, will open in September with 14 ships, the companies said Tuesday in a joint statement. It will include accords for 12 months or less.
LNG spot trading is expanding as new Australian supply adds to output and the US prepares to start exporting the fuel from its Gulf Coast this year. New importers including Egypt are driving demand as buyers under long-term deals such as Japan and South Korea curb purchases amid lower usage. Spot fixtures in the LNG shipping market rose to 97 this year through the middle of August from 78 a year earlier, according to GasLog, which owns 19 carriers.
Since February, Noble Group Ltd.’s stock fell more than 60 percent as profits slid with commodity prices, its accounting methods came under attack and its credit outlook went from stable to negative.
All this made Asia’s biggest commodities trader a better company, Chief Executive Officer Yusuf Alireza said Tuesday in an interview with Bloomberg Television.
“Even the environment that we’ve gone through over the last six months, at the end of it we will be a better firm for it,” he said.
While Alireza said Noble faces more scrutiny than rivals that aren’t listed or rated by credit agencies, it wants to continue as a public company because the challenges help it improve, according to Alireza.
“As a public company, you have many more stakeholders that are constantly challenging you,” Alireza said. “You have an independent board, you have shareholders, you have bond investors, you have rating agencies, you have analysts that are constantly challenging you to become a better firm.”
The Organization of Petroleum Exporting Countries can do little to halt the oil price decline on its own and needs producers from outside the group to help in reducing global supplies, Algeria’s Energy Minister said.
Eco Wave Power, an Israeli maker of ocean energy systems, raised initial funding for a $150 million pipeline of planned projects to use waves to generate electricity.
The technology maker secured $2 million from Pirveli Ventures, with a representative of Pirveli joining its board of directors, Eco Wave said Monday. It will use the funds to start to develop 111 megawatts of marine-energy projects planned in countries including the UK, China, Mexico and Chile, co- founder Inna Braverman said.
OPEC could potentially boost crude oil production to 33 million barrels a day, the most ever, after international sanctions are removed against Iran amid a global supply glut, according to the country’s OPEC representative.
The global oil market is already in surplus by about 3 million barrels a day, with Saudi Arabia and Iraq responsible for OPEC’s oversupply in the past six months, Iran’s state-run Islamic Republic News Agency reported Sunday, citing Mehdi Asali. Iran can boost output by 500,000 barrels a day within one week after sanctions are lifted, Oil Minister Bijan Namdar Zanganeh said earlier this month.
If crude’s slump back to a six-year low looks bad, it’s even worse when you reflect that summer is supposed to be peak season for oil.
US crude futures have lost 30 percent since the start of June, set for the biggest drop since the West Texas Intermediate crude contract started trading in 1983. That beats the summer plunges during the global financial crisis of 2008, the Asian economic slump in 1998 and the global supply glut of 1986.
It even surpasses the decline of 2011, when prices fell as much as 21 percent over the summer as the U.S. and other large oil-importing nations released 60 million barrels of oil from emergency stockpiles to make up for the disruption of Libyan exports during the uprising against Muammar Qaddafi.
Oil & Natural Gas Corp. is seeking through its overseas unit to buy a stake in Russia’s second-largest oil producing development from OAO Rosneft, according to two people with direct knowledge of the plan.
ONGC Videsh Ltd. is in discussions to purchase a share of the Vankor oil field in East Siberia, said the people, who asked not to be identified because discussions are ongoing. The New Delhi-based company is seeking to pay $900 million for the stake, which will secure about 3.5 million metric tons of oil a year (about 70,290 barrels a day), and expects to sign a deal as early as next month, one of the people said.
Shipping and logistics companies reported delays and disruptions after the deadly blast at the Chinese port of Tianjin as some oil cargoes were still barred from one of its wharves.
Freight companies including Auckland, New Zealand-based Mainfreight Ltd. and Japan’s Sankyu Inc. said the blast will cause delays or impact their businesses. Ships at Tianjin Port’s North wharf other than those carrying crude and hazardous products can enter and exit normally, according to a post from the official microblog of the Tianjin Maritime Safety Administration at 10:44 a.m. local time Friday.
Tianjin is the 10th-busiest container port globally and has become a northern gateway for ore, coal, automobiles and oil into China, the world’s biggest user of energy, metals and grains. About 17 percent of the nation’s ethylene imports, 15 percent of its wheat deliveries and 30 percent of steel exports in the first half of 2015 were transported via the Tianjin customs area, government data show.
Oil rose for a second day in New York, extending its rebound from a six-year low after US crude inventories fell and investor concern over China’s currency devaluation eased.
Futures added as much as 1 percent. Crude inventories slid by 1.68 million barrels last week to 453.6 million and production also fell, according to a report from the Energy Information Administration.
A measure of oil-price fluctuations rose to the highest level in almost four months on Wednesday after China devalued its currency a second day.
The $60 billion of oil-industry spending cuts this year won’t be enough as crude languishes near a six-year low.
The world’s biggest producers will need to trim investments by a further $26 billion to meet sacrosanct dividend payments, according to Jefferies Group LLC. Capital spending will have to fall 10 percent next year, Banco Santander SA says.
Oil companies are bracing for “lower for longer” prices as a global supply glut persists, dragging crude to the lowest close since March 2009 in New York on Tuesday. Royal Dutch Shell Plc, which has reduced spending 20 percent this year, has “more levers to pull” should the market weaken further, according to Chief Executive Officer Ben Van Beurden.
Glencore Plc, the mining and commodities company led by billionaire Ivan Glasenberg, expects to impair the value of its oil business in Chad by about $790 million in its interim accounts.
A P Moeller-Maersk A/S’s container line, the world’s biggest, reported a decline in second-quarter profit as freight rates plunged.
Maersk Line reported a 7.3 percent drop in net operating profit after tax to $507 million, according to a statement published Thursday. Maersk’s group net income fell to $1.07 billion in the quarter, beating the median estimate of $729 million in a Bloomberg survey of 10 analysts.
The global oil glut will last through next year as surging demand and faltering supply growth fail to clear the surplus, according to the International Energy Agency.
Record inventories will expand further even as consumption climbs by the most in five years in 2015 and supplies outside OPEC contract next year for the first time since 2008, the IEA predicted. Stockpiles won’t be diminished until the fourth quarter of 2016, or later if sanctions on Iranian crude are lifted following last month’s nuclear deal, the agency said.
“While a rebalancing has clearly begun, the process is likely to be prolonged as a supply overhang is expected to persist through 2016 -- suggesting global inventories will pile up further,” the Paris-based adviser to 29 nations said in its monthly report.
The head of Libya’s internationally recognized government resigned, just hours after the United Nations opened peace talks meant to end the civil war in the holder of Africa’s largest oil reserves.
Abdullah al-Thinni, who heads the government in eastern Libya, said on a television program Tuesday that he will quit all his official posts. An official resignation will be submitted to parliament on Sunday.
For want of a refinery unit in Indiana, oil is tumbling in Oklahoma and Alberta while gasoline in the Midwest is soaring.
Leaking tubes on a piece of equipment forced BP Plc to shut the largest crude unit at its refinery near Chicago over the weekend, according to a person familiar with operations there. It could be down for at least a month. The shutdown of the most important unit in the biggest plant in the Midwest has disrupted markets throughout the region.
It puts extra oil onto an already-oversupplied market and cuts the supply of gasoline to the Midwest in the middle of peak summer demand. That’s helped push heavy Canadian crude to trade at the lowest level in a year and propelled wholesale gasoline in Chicago to the highest level since 2013.
China’s crude oil imports rose to record on a monthly basis driven by imports by small, private refineries amid low oil prices.
Overseas purchases by China increased to 30.71 million metric tons in July, equivalent to about 7.3 million barrels a day, according to preliminary data released by the Beijing-based General Administration of Customs on Saturday. It was higher than December’s level at 30.4 million tons, a previous monthly record. The world’s second-largest oil consumer imported a record 7.4 million barrels a day in April and 7.2 million in June.
