Oil traded near the lowest level in almost five months in New York as a rebound in US drilling signaled production is withstanding the slump in prices.
West Texas Intermediate futures were little changed, erasing an earlier drop to the lowest price since March 20. The number of U.S. rigs seeking oil rose by 6 to 670 for a third weekly gain, Baker Hughes Inc. data show.
OPEC members Algeria and Libya said the group could meet earlier that its scheduled December gathering to address the crude oversupply.
Oil has slumped more than 25 percent since this year’s peak in June amid signs the global surplus will be prolonged. The Organization of Petroleum Exporting Countries’ largest members have sustained record output, while US inventories remain more than 90 million barrels above the five-year seasonal average.
Asian stocks rose, led by Japanese and Chinese shares, and US equity-index futures signaled a rebound. Australia’s dollar fell, while crude oil retreated toward this year’s low after US producers added rigs.
The MSCI Asia Pacific Index climbed 0.3 percent by 2:49 p.m. in Tokyo, as Chinese equities rose a second day amid industrial-company merger speculation.
Japan’s Topix index erased declines to advance a ninth day, while Standard & Poor’s 500 Index futures added 0.3 percent after US stocks fell last week. The Aussie weakened 0.3 percent. Oil slid a fourth day. The yield on 10-year Treasuries increased two basis points.
China’s July exports plunged more than five times the rate projected by analysts, while producer prices slid the most since 2009, data at the weekend showed, spurring speculation the government may boost efforts to invigorate growth through state- owned enterprise reform.
China stocks rose on speculation the government will take measures to support the market, while concern the Federal Reserve will raise interest rates weighed on the rest of Asia. Oil rebounded from a 4 1/2-month low.
The MSCI Asia-Pacific Index was little changed at 1:02 p.m. in Tokyo after a week in which it lost 0.8 percent. Standard & Poor’s 500 Index futures rose 0.1 percent. The Shanghai Composite Index climbed 1.9 percent to 3,731.
The Australian dollar strengthened 0.4 percent as the central bank indicated the jobless rate has peaked. The yen headed for a weekly loss as the Bank of Japan held its policy unchanged.
“Investors believe the 3,500 to 3,600 level is where the government wants to hold firmly above so bargain-hunters are beginning to buy again,” said Wu Kan, a Shanghai-based fund manager at JK Life Insurance Co., who is adding to shares that will benefit from reforms in state-owned enterprises.
Using the world's first dedicated crude oil blending terminal, South Africa will by 2017 mix different grades of crude oil for export to refineries across Asia, enabling them to produce cleaner fuels more cheaply, an official said on Thursday.
Construction of the 2 billion rand ($161 million) fuel blending farm, which consists of 12 massive concrete bunkers, should start in August with the first output expected for the second quarter of 2017, said Pieter Coetzee, a director at OiltankingMogs, a joint venture firm developing the terminal.
"Our model is based on blending of different grades of crude to supply a specific recipe to a refinery," Coetzee said.
Oil trimmed losses that tipped prices into a bear market amid a broader commodity rout as trading volatility advanced to the highest in almost two weeks.
Futures climbed as much as 1 percent in New York after closing on Thursday more than 20 percent below this year’s peak in June, meeting the common definition of a bear market. U.S. crude supplies remain almost 100 million barrels above the five- year average after an unexpected increase through July 17, government data showed Wednesday. A measure of price fluctuations rose Thursday to the highest level since July 10.
Oil’s rebound from a six-year low in March has faltered on signs a global surplus will persist. Prices have been swept up in a broad selloff of raw materials, which have fallen to a 13- year low amid concerns that economic growth will stagnate in China, the biggest consumer of energy, metals and grains.
For an economy that lives and dies by crude prices, the latest downturn in the world oil market means Russia’s recession may stretch into next year for the longest slump in two decades.
Russia’s first economic slump since 2009 looked like it would plateau as oil gained 40 percent from a six-month low in January. Crude’s recovery has faltered in recent weeks, raising questions about government assurances that the economy will return to growth in 2016 and further squeezing a budget already on course for its widest deficit in five years.
Oil jitters will test the optimism of President Vladimir Putin, who’s declared that Russia had put the worst of the economic crisis behind it, and heap pressure on his regime before early parliamentary elections in September next year. Russia, which ING Bank NV estimates needs oil at $80 a barrel to balance its budget, will endure a two-year economic contraction if crude prices remain at $60 through 2016, according to the central bank.
The oil guru who predicted last year’s rout said $100-a-barrel crude is likely to return within five years as faltering supply fails to meet demand.
Gary Ross, the founder of consultants PIRA Energy Group, said oil markets aren’t nearly as oversupplied as many believe and spare capacity is tight since Saudi Arabia is pumping all the crude it can without new drilling.
“Current prices are unsustainable,” he said Monday in an interview in London. “It’s hard not to see oil hitting $100 a barrel at some point in the next five years.”
Brent held losses near a two-week low amid a broader rout in commodities as Iran’s plan to regain market share bolstered speculation a global glut will persist.
Futures were little changed in London after falling 0.8 percent Monday. Iran is seeking to restore production once sanctions are removed regardless of the impact on prices, Oil Minister Bijan Namdar Zanganeh said. US crude stockpiles are set to remain almost 100 million barrels above the five-year seasonal average even as supplies are forecast to have dropped for a second week.
Brent’s recovery from a six-year low has faltered on signs the surplus will be prolonged as Iran seeks to restore output after its nuclear accord with world powers, joining OPEC members in defending market share.
The full impact of increased Iranian exports won’t be observed until 2016, banks including Citigroup Inc. predicted.
Oil dropped to a three-month low in New York on the prospect that increasing Iranian shipments will extend the global supply glut.
West Texas Intermediate crude extended losses in the wake of a third weekly retreat.
Iran will focus on regaining oil sales it lost due to sanctions regardless of the impact on prices, Oil Minister Bijan Namdar Zanganeh said in Tehran. The United Nations Security Council unanimously adopted an Iran deal resolution Monday.
State-controlled oil producer Petroleo Brasileiro SA pared the weekly advance of the Ibovespa stock index as a decline in crude dimmed the prospects for the company’s offshore investments.
Petrobras slipped to a one-week low Friday as the raw material fell toward $50 a barrel in New York.
The oil driller, which is at the center of Brazil’s unprecedented corruption probe and accounts for about 10 percent of the benchmark stock index’s weighting, has said investments in offshore production are economically viable with crude above $45.
A challenge by Canadian Pacific Railway over settlements for victims of a crude-buy-rail oil disaster has been rejected by a judge.
The company has been subject to a class action lawsuit following the incident in which 47 people were killed and the main downtown region of a town were destroyed following the derailment of a train.
Oil held gains near $60 a barrel as a drop in U.S. crude stockpiles bolstered speculation that the country’s surplus is easing.
Futures were little changed in New York after rising 0.8 percent Tuesday. Crude inventories shrank by 2.9 million barrels in the week ended June 12, the industry-funded American Petroleum Institute was said to have reported. Supplies fell for a seventh week, a Bloomberg survey showed before Energy Information Administration data Wednesday.
Oil is trading close to four-month highs as declining U.S. stockpiles and a slowdown in drilling countered signs that producers elsewhere are pumping more. Libya may double its output by next month as the OPEC member seeks to reopen pipelines feeding export terminals, according to National Oil Corp.
Oil advanced for the first time in four days amid speculation U.S. crude stockpiles will decline further, easing a supply surplus.
Futures climbed as much as 1.2 percent in New York. Crude inventories probably shrank for a seventh week as refiners prepared to meet increased fuel consumption in the summer, according to a Bloomberg survey before an Energy Information Administration report Wednesday. A Gulf of Mexico tropical storm prompted the evacuation of some workers from oil and gas operations.
Oil is trading close to four-month highs near $60 a barrel on signs that record stockpiles are draining. The U.S. will use more gasoline during its peak driving period that started in April, compared with last year, the EIA said June 9. Global supply has exceeded consumption the past five quarters, the most enduring glut since the 1997 Asian economic crisis, data from the International Energy Agency showed.
The nation is planning facilities with capacity to store 232 million barrels of crude in the third phase of its strategic petroleum reserve program, according to a deputy director at the National Development Reform and Commission’s energy research institute. The proposal is yet to receive government approval, Gao Shixian said in Shanghai on Friday.
The world’s second-biggest oil consumer stepped up purchases to fill its emergency supplies last year as benchmark prices plunged almost 50 percent amid a global supply glut.
Oil extended its slide below $50 a barrel before US government data forecast to show crude inventories expanded from a record high in the world’s biggest consumer.
Futures fell as much as 1.2% in New York for a fifth day of declines, the longest losing streak since August.
Crude stockpiles probably rose by 3.75 million barrels last week, a Bloomberg News survey showed before an Energy Information Administration report on Wednesday.
The surplus in global crude supply is smaller than the 1.8 million barrels a day Kuwait estimated last month, and prices will continue to recover, Oil Minister Ali Al-Omair said.
The Persian Gulf state producer plans by next year to add 40 more drilling rigs and raise production capacity to 3.15 million barrels a day, a 5% increase from today, Hashem Hashem, chief executive officer of state-run Kuwait Oil Co., told reporters at a conference in Kuwait City.
“We were expecting oil prices to recover in the second half, but they recovered faster than what we expected,” Al-Omair said Monday at the same event. “I expect oil prices to keep improving.”
Speculators cut bullish oil bets for a fourth week, missing a market rebound.
Hedge funds and other money managers decreased net-long positions in West Texas Intermediate crude by 9.1% since January 13, US Commodity Futures Trading Commission data show.
Futures climbed for a third week as companies including Apache Corp. and Total SA announced spending cuts. Bad weather kept tankers from loading in southern Iraq and Libya’s production decreased.
Baker Hughes Inc. said rigs targeting oil in the US dropped to the lowest in almost five years.
Dubai-based Lamprell's shares have dropped 15% after warnings it faced "a challenging 2015".
The firm said that falling price of crude had placed annual revenue at 10% below expectation.
Jim Moffat, chef executive, said: "With the recent slump in the oil price, winning work in 2015 is going to be a challenge as the industry adjusts to the new realities.
Goldman Sachs said US oil prices need to trade near $40 a barrel in the first half of this year to curb shale investments as it gave up on OPEC cutting output to balance the market.
The bank cut its forecasts for global benchmark crude prices, predicting inventories will increase over the first half of this year, according to a report.
Excess storage and tanker capacity suggests the market can run a surplus far longer than it has in the past, said Goldman analysts including Jeffrey Currie in New York.
By Professor Alex Russell and Professor Peter Strachan
Predicting oil price movements is as risky as exploring for oil itself. The average price for crude fell 10.3% from the start of 2014 to the date of the Scottish independence referendum on September 18.
It fluctuated over this period – but few, if any, were predicting any major move in either direction in the months to follow.
Yet during the past three months we have seen another 48.4% fall. Geopolitical factors involving OPEC, the US, Russia and Iran, as well as the economic decline of China and the Eurozone, have been touted as contributory causes.
Norway is considering tapping reserve funds to shield western Europe’s biggest oil producer from the worst slump in crude prices in more than half a decade.
Prime Minister Erna Solberg said the government is now “on alert” to respond to the rout. “If the economic situation requires it, we can react quickly,” she said yesterday at a conference in Oslo organized by Norway’s confederation of industry.
A 56% plunge in the price of Brent crude since a June high has undermined Norway’s currency and beaten back its stock market.
The steep decline in oil price paused yesterday for the first time in five days, after benchmark Brent caused consternation as it fell to below $50 a barrel.
Crude prices at last turned positive as Brent hovered near $51 a barrel last night, after recovering from a session low of $49.66 earlier. US crude was also up 70 cents at $48.63, after rallying earlier to $49.31.
Oil prices have almost bottomed out and “some recovery” is likely by the second half of the year as demand picks up, commodity hedge fund manager Andrew J. Hall told investors.
Crude could trade in the $40-a-barrel range in 2015, close to “an absolute price floor,” the head of Astenbeck Capital Management wrote in a letter.
Brent crude was being traded at below $50 a barrel for the first time since 2009 today as the rout in global oil prices continued.
The industry benchmark has slumped from $116 a barrel in June,driven by a glut in supply and shrinking demand due to fears over the outlook for world economic growth.
Brent was down by another 2% in trading today, putting more pressure on the shares of FTSE 100 Index heavyweights BP and Royal Dutch Shell.
The plummeting price of oil means no more trout ice cream.
Coromoto, a parlor in Merida, Venezuela, famous for its 900 flavors, closed during its busiest season in November because of a milk shortage caused by the country’s 64% inflation rate, the world’s fastest.
That’s the plight of an oil-producing nation. At the same time, consuming countries like the US are taking advantage.
