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Crude Prices Fall as Investors Take Profits
Crude oil prices fell on Friday as investors took profits following Thursday’s steep gains and the dollar added to its recent rally. Light, sweet crude for June delivery settled down 49 cents, or 1%, at $46.21 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 25 cents, or 0.5%, to $47.83 a barrel on ICE Futures Europe. Both finished the week higher. Nymex oil rose 3.5%, its 10th winning week in the past 13. Brent gained 5.4%, its fifth gain in the past six weeks. That string of gains peaked at fresh six-month highs on Thursday in part from a bullish report on supply and demand from the Paris-based International Energy Agency. It focused on recent supply outages and strong demand world-wide, which helped revive oil’s rally in the past week. But many of those supply disruptions are temporary, analysts said. Some production is already […]
Holding 30% Of June Brent Crude Contracts, Is Glencore Manipulating Oil Prices?
Glencore Building While oil bulls were delighted by Wednesday’s DOE news of an inventory drawdown refuting the prior day’s API news of a major build, what was ignored was the build in Cushing storage (more on that shortly), which according to Genscape hit a utilization just shy of 80 percent, or more than 70 million barrels, a record high since Genscape began monitoring the hub in 2009. To be sure, the risk of running out of land storage has been one we have previously discussed on various occasions and hinted that one way this is being circumvented is with substantial amounts of oil being stored on tankers at sea, mostly by commodity trading companies who take advantage of the oil contango to generate month to month profits as producers choose to keep their product away from the market until prices rise. As it turns out, not only is this […]
Appreciating Dollar Caps Crude Rally Again
In fitting fashion, crude was screaming lower earlier, chased off by a stronger dollar (apparently in a hockey mask), before positive economic data has helped improve the mood a bit in the U.S. OPEC’s monthly report has had something for both the bulls and the bears; hark, here are six things to consider in oil markets today: 1) On the economic data front, we have had a few bits and bobs from Europe; Eurozone economic growth in Q1 was revised slightly lower to +0.5 percent QoQ, up 1.5 percent YoY, while year-on-year inflation continues to be conspicuous by its absence across Germany, Italy and Spain. On to the U.S., and a lack of inflationary pressures are apparent too, as producer prices are flat year-on-year (below consensus, but +0.2 […]
Dollar Rally Has Legs as Fed Divergence Trade Comes Back to Life
The dollar’s two-week rally has room to run, with Goldman Sachs Group Inc. citing scope for greenback strength versus the yen, while Bank of America Corp. projects gains against the pound and the Australian dollar. The Bloomberg Dollar Spot Index posted its first consecutive weekly gains since January after falling to an almost one-year low on May 3. It reached a six-week high Friday after data showed April retail sales increased by the most in a year, adding to the case for the Federal Reserve to raise interest rates this year. The monetary-policy divergence trade, or betting on greenback gains as the central bank tightens policy while most other major nations ease, faltered early this year with the dollar down about 4 percent. Yet the greenback is still set to benefit as the Fed, albeit at a slower pace than previously expected, will be lifting rates more and at […]
OPEC: Energy industry spending to decline
Global spending in exploration and production over the next two years is expected to be about half what it was between 2012 and 2014, OPEC said in a monthly report. In February, when crude oil prices were hovering around $30 per barrel, a review from the U.S. Energy Information Administration found 2015 investments in the energy industry declined in the United States by more than 30 percent last year. Even though crude oil prices have recovered about $15 per barrel since then, companies handing in their first quarter reports took notice of the resultant decline in industry spending. Oil field services companies Baker Hughes and Halliburton each reported heavy losses. Paal Kibsgaard, the CEO of industry leader Schlumberger, said the market was […]
