Saturday , April 17 2021

Crude oil is rising slightly despite concerns



Crude oil futures rose last week ahead of the stormy trading settlements, supported by a reported drop in US oil inventories, potential EU sanctions on Iran and the possibility of reducing OPEC production.

Arch over pump during sunset outside Scheibenhard, near Strasbourg, France, October 6, 2017. Reuters / Christian Hartman

Brent crude oil settled at 3 cents at $ 66.79 a barrel, and strengthened at the end of the session after hitting a low of $ 65.27 a barrel. US futures traded at 30 cents at $ 56.76 per barrel during a session that saw fluctuations of $ 2 a barrel.

The market struggled to find robust regulation after a path that showed prices fall more than $ 20 a barrel since early October on global overupply fears. "The market needs constant fermenting of negative pressure to move forward," said Gianni McGill, director of traditional energy energy research in Stamford, Connecticut. "We saw a significant exit of much speculative time in the market."

The market recorded losses early in the US session as energy supplier Genscape reported a drop in oil stocks last week, traders said.

The EU foreign minister approved the French government's decision to impose sanctions on Iranian citizens accused of a package of bombs in France. This could take extra oil out of the market from OPEC Iran The US sanctions on Iran, introduced in November, took less oil out of the market than expected, as the US gave concessions to some of Iran's oil customers.

The Organization of Petroleum Exporting Countries is pushing Allied manufacturers including Russia to join the output cuts of 1 million to 1.4 million barrels per day.

Russian Energy Minister Alexander Novak said Russia intends to sign a partnership agreement and details will be discussed at the December 6 meeting in Vienna.

"To cut to succeed in the market, they will have to present a facade that is not broken and the prospect of it seems less and less likely as December 6 approaches," said Bob Yawger, director of energy futures contracts in New York.

While a large cross section will support futures, clear signals are needed from manufacturers, he said. "We lack any other certainty that the market is overupplied in the US and everyone else is trying to deal with it."

Crude oil inventories in the US rose for eight consecutive weeks, and last week's data showed that stocks have generally swelled for more than a year.

Brent is nearly 25 percent below the peak in early October 2018 of $ 86.74 on evidence of a slowdown in global demand, while output from the United States, Russia and Saudi Arabia hit historic highs.

"Oil prices rose (last week) in the hope that OPEC and partners will work to reduce bearish sentiment, but from the technical system, bears remain intact," said Stephen Ines.

A trade war between the US and China has made investors more robust about the outlook for growth in demand for oil.

(Graphic: US drilling points for additional output – tmsnrt.rs/2Q97LFW)

This month, fund managers cut their exposure to futures and options to the lowest level since mid-2017.

The weekly exchange data show that CFOs hold a long combined net position of some 364 million barrels of futures in the US and Brent, compared to over 800 million barrels two months ago.

"The main trend remains bearish, as investors no longer believe in the risk of tightening the supply of crude oil," said Carlo Alberto de Cassa, senior analyst at ActivTrades.

Another report by Henning Gloystein in Singapore and Amanda Cooper in London; Edited by David Gregorio and Phil Berlowitz

Our Devices:Thomas Reuters Principles of Trust.

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