As Western Oil Giants Cut Production, State-Owned Companies Step Up

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The New York Times 14 October, 2021 - 10:52pm 2 views

Why are crude oil prices so high?

The primary cause of the latest increase is OPEC+ (the Organization of the Petroleum Exporting Countries, plus Russia and its allies) declining to move forward with an increase in oil production in November. As a result, crude oil prices surged, and the added cost is being passed to consumers at the pump. Forbes4 Ways To Save On Rising Gas Prices

Updated 8:19 AM ET, Tue October 12, 2021

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Read full article at The New York Times

Crude Oil Price Update - Trade Through $81.71 Could Trigger Acceleration into Near-Term Target at $85.25

FX Empire 14 October, 2021 - 09:31pm

Prices were also supported as traders largely shrugged off an unexpectedly large increase in U.S. crude inventories as refiners cut production in a generally slower period for those facilities.

At 20:45 GMT, December WTI crude oil is trading $80.96, up $1.14 or + 1.43%.

Oil demand is set to rise by half a million barrels per day (bpd) as the power sector and heavy industries switch from more expensive sources of energy, the IEA said, warning that the energy crunch could stoke inflation and slow world economic growth.

The main trend is up according to the daily swing chart. The main trend was reaffirmed on Thursday when buyers took out the previous main top at $81.08.

A trade through the next two main tops at $81.37 and $81.71 will indicate the buying is getting stronger. A move through $78.78 will change the main trend to down.

The nearest support is the first minor pivot at $77.91, followed by the second minor pivot at $76.98.

The direction of December WTI crude oil market early Friday is likely to be determined by trader reaction to $80.91.

A sustained move over $80.91 will indicate the presence of buyers. If this move creates enough upside momentum then look for a possible surge into the pair of main tops at $81.37 and $81.71.

Taking out $81.71 could trigger an acceleration to the upside with the next major target coming in at $85.25.

A sustained move under $80.91 will signal the presence of sellers. The first downside target is a minor pivot at $79.94. If this fails then look for a move into the main bottom at $78.78.

Taking out $78.78 will change the main trend to down. This could trigger a break into a pair of 50% levels at $77.91 and $76.98.

Oil prices log fresh multiyear highs on bets for higher demand, but EIA posts biggest weekly U.S. supply climb since March

MarketWatch 14 October, 2021 - 07:45am

Prices finished below the session’s best levels, however, as U.S. government data revealed a third straight weekly rise in domestic crude inventories, the largest since March.

The Energy Information Administration reported on Thursday that U.S. crude inventories rose by 6.1 million barrels for the week ended Oct. 8.

The increase defied expectations for an average 500,000 barrel decline expected by analysts polled by S&P Global Platts. The American Petroleum Institute late Wednesday reported a 5.2 million-barrel climb for last week. The EIA and API reports were each released a day later than usual this week because of Monday’s Columbus Day holiday.

Crude oil saw a much larger supply build than was expected, and a large draw out of the Cushing, Okla., storage hub, Tariq Zahir, managing member at Tyche Capital Advisors, told MarketWatch. The EIA data also showed crude stocks at the Cushing down by 1.9 million barrels last week.

U.S. consumer price index numbers came in stronger than expected on Wednesday and it “looks like inflation concerns being transitory are very much in doubt,” he said. “Inflation would help crude oil remain strong. However, since we are getting to the tail end of hurricane season and driving season easing, we wouldn’t be surprised to see crude oil give back some of the gains we have seen in recent weeks.”

Read: After a 71% profit, this investor just got out of oil and is putting everything into this commodity instead

Also see: 5 quality energy stocks with high dividend yields propelled by soaring oil prices

The EIA also reported a weekly inventory decline of 2 million barrels for gasoline, but said distillate supplies were “virtually unchanged” last week. Both remained below the five-year average levels for this time of year. The S&P Global Platts survey had forecast supply declines of 400,000 barrels for gasoline and 800,000 barrels for distillates.

Oil prices finished Thursday at fresh multiyear highs, with U.S. benchmark WTI crude at the highest settlement since Oct. 29, 2014 and Brent crude at the highest close since Oct. 9, 2018, according to Dow Jones Market Data.

Read: Energy crisis? What experts are saying as world faces historic energy-price crunch

In its closely watched monthly report, the Paris-based IEA raised its global oil-demand forecasts for this year and the next by 170,000 barrels a day and 210,000 barrels a day respectively, but added that the cumulative effect of the continuing energy crisis could be as large as 500,000 barrels a day from September through next year’s first quarter.

The IEA noted a “massive” switch to crude by power generators amid a shortage of natural gas, liquefied natural gas and coal supplies.

Read: Lofty prices for natural gas may fuel a swing back to oil as a power source

Meanwhile, natural-gas futures extended early gains after the EIA reported on Thursday that domestic supplies of natural gas rose by 81 billion cubic feet for the week ended Oct. 8. That was a bit lower than the average increase of 89 billion cubic feet forecast by analysts polled by S&P Global Platts.

Read: U.S. consumers brace for double-digit percentage gains in winter heating bills

Also: Why consumers will be paying a lot more for natural gas this winter

Prices in the U.S. won’t likely spike so sharply again, but “it is hard to have a high degree of confidence in that projection as we’re beyond simple supply and demand forces now, and dealing with a market that is afraid,” with supplies tight for the winter season, Marc LoPresti, co-managing director of The Strategic Funds, said in recent comments to MarketWatch.

“Fear makes rationality go out the window,” he said.

TankerTracker's Sam Madani talks to MarketWatch about why he cashed out of oil and has gone 100% on this increasingly scarce commodity.

Myra P. Saefong, assistant global markets editor, has covered the commodities sector for MarketWatch for 20 years. She has spent the bulk of her years at the company writing the daily Futures Movers and Metals Stocks columns and has been writing the weekly Commodities Corner column since 2005.

William Watts is MarketWatch’s senior markets writer. Based in New York, Watts writes about stocks, bonds, currencies and commodities, including oil. He also writes about global macro issues and trading strategies. Before moving to New York, he reported for MarketWatch from Frankfurt, London and Washington, D.C.

Oil prices log fresh multiyear highs on bets for higher demand, but EIA posts biggest weekly U.S. supply climb since March

Bloomberg 14 October, 2021 - 07:45am

Prices finished below the session’s best levels, however, as U.S. government data revealed a third straight weekly rise in domestic crude inventories, the largest since March.

The Energy Information Administration reported on Thursday that U.S. crude inventories rose by 6.1 million barrels for the week ended Oct. 8.

The increase defied expectations for an average 500,000 barrel decline expected by analysts polled by S&P Global Platts. The American Petroleum Institute late Wednesday reported a 5.2 million-barrel climb for last week. The EIA and API reports were each released a day later than usual this week because of Monday’s Columbus Day holiday.

Crude oil saw a much larger supply build than was expected, and a large draw out of the Cushing, Okla., storage hub, Tariq Zahir, managing member at Tyche Capital Advisors, told MarketWatch. The EIA data also showed crude stocks at the Cushing down by 1.9 million barrels last week.

U.S. consumer price index numbers came in stronger than expected on Wednesday and it “looks like inflation concerns being transitory are very much in doubt,” he said. “Inflation would help crude oil remain strong. However, since we are getting to the tail end of hurricane season and driving season easing, we wouldn’t be surprised to see crude oil give back some of the gains we have seen in recent weeks.”

Read: After a 71% profit, this investor just got out of oil and is putting everything into this commodity instead

Also see: 5 quality energy stocks with high dividend yields propelled by soaring oil prices

The EIA also reported a weekly inventory decline of 2 million barrels for gasoline, but said distillate supplies were “virtually unchanged” last week. Both remained below the five-year average levels for this time of year. The S&P Global Platts survey had forecast supply declines of 400,000 barrels for gasoline and 800,000 barrels for distillates.

Oil prices finished Thursday at fresh multiyear highs, with U.S. benchmark WTI crude at the highest settlement since Oct. 29, 2014 and Brent crude at the highest close since Oct. 9, 2018, according to Dow Jones Market Data.

Read: Energy crisis? What experts are saying as world faces historic energy-price crunch

In its closely watched monthly report, the Paris-based IEA raised its global oil-demand forecasts for this year and the next by 170,000 barrels a day and 210,000 barrels a day respectively, but added that the cumulative effect of the continuing energy crisis could be as large as 500,000 barrels a day from September through next year’s first quarter.

The IEA noted a “massive” switch to crude by power generators amid a shortage of natural gas, liquefied natural gas and coal supplies.

Read: Lofty prices for natural gas may fuel a swing back to oil as a power source

Meanwhile, natural-gas futures extended early gains after the EIA reported on Thursday that domestic supplies of natural gas rose by 81 billion cubic feet for the week ended Oct. 8. That was a bit lower than the average increase of 89 billion cubic feet forecast by analysts polled by S&P Global Platts.

Read: U.S. consumers brace for double-digit percentage gains in winter heating bills

Also: Why consumers will be paying a lot more for natural gas this winter

Prices in the U.S. won’t likely spike so sharply again, but “it is hard to have a high degree of confidence in that projection as we’re beyond simple supply and demand forces now, and dealing with a market that is afraid,” with supplies tight for the winter season, Marc LoPresti, co-managing director of The Strategic Funds, said in recent comments to MarketWatch.

“Fear makes rationality go out the window,” he said.

Myra P. Saefong, assistant global markets editor, has covered the commodities sector for MarketWatch for 20 years. She has spent the bulk of her years at the company writing the daily Futures Movers and Metals Stocks columns and has been writing the weekly Commodities Corner column since 2005.

William Watts is MarketWatch’s senior markets writer. Based in New York, Watts writes about stocks, bonds, currencies and commodities, including oil. He also writes about global macro issues and trading strategies. Before moving to New York, he reported for MarketWatch from Frankfurt, London and Washington, D.C.

Oil rises on bigger-than-expected draw in U.S. fuel stocks

Investing.com 13 October, 2021 - 09:36pm

Oil prices rose on Thursday after top oil producer Saudi Arabia dismissed calls for additional OPEC+ supply and the International Energy Agency said surging natural gas prices could boost demand for oil among power generators.

The market trimmed gains after U.S. crude inventories rose more than anticipated as refiners cut production in a generally slower period for those facilities.

Brent crude futures gained 57 cents, or 0.7%, to $83.76 a barrel after hitting a session high of $84.50 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 52 cents to $80.96.

U.S. crude stocks rose by a surprising 6 million barrels, much higher than the modest 702,000-barrel increase analysts had expected. Production edged higher, reaching 11.4 million bpd.

"The continued rise in domestic U.S. oil production pulls the market back down a bit. It should relieve some of the pressure building in the market," said John Kilduff, partner at Again Capital LLC in New York.

Oil demand is set to jump by half a million barrels per day (bpd) as the power sector and heavy industries switch from more expensive sources of energy, the IEA said, warning that the energy crunch could stoke inflation and slow the world's economic recovery from the pandemic.

In its monthly report, the IEA increased its global oil demand growth forecast in 2022 by 210,000 bpd, and now expects total oil demand in 2022 to reach 99.6 million bpd, slightly above pre-pandemic levels.

Saudi Arabia dismissed calls for additional OPEC+ production increases, saying the group's unwinding of production cuts was protecting the oil market from wild price swings seen in natural gas and coal markets.

At its meeting this month, OPEC+ stuck to its previous agreement to increase output by 400,000 bpd a month.

OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, has done a "remarkable" job as so-called regulator of the oil market, Saudi Arabia's energy minister Prince Abdulaziz bin Salman told a forum in Moscow.

U.S. shale producers have been reluctant to invest in raising output after years of weak returns. U.S. production remains well short of late 2019's record at nearly 13 million barrels per day. On Wednesday, the EIA said output would rebound to 11.7 million bpd in 2022.

The White House has been in discussions with oil and gas producers about fuel costs, with retail gasoline prices at seven-year highs and winter heating bills expected to rise.

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