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Oil on track for biggest monthly gain in seven years
Oil is on track for its biggest monthly gain in seven years, boosted by a weak dollar and a decline in US production that has helped to ease concern about a persistent supply glut. Brent crude, the international benchmark, has gained over 22 per cent in April — up more than 70 percent from its January lows. The US marker, West Texas Intermediate, has recorded a similar increase this month. The rebound in prices has come as investors position themselves for the biggest decline in non-Opec supply in 25 years and what they hope will be a more balanced market later in the year.
“Fresh year-to-date highs have been this week’s predominant theme,” said Tamas Varga at London-based oil broker PVM. “The relentless march higher continues.” On Friday, Ice June Brent traded as high as $48.50 a barrel before paring gains to trade at $47.94. Nymex June WTI dipped 17 cents to $45.85 a barrel after hitting $46.78 earlier in the day. Both oil markers hit their highest levels since November on Friday morning, having rebounded more than 70 percent from 13-year lows reached earlier this year.Weaker Dollar Continues To Drive Oil Prices Up
Two hundred and three years after J.F. Hummel patented rubber, and the oil market is bouncing once again. Yesterday’s dollar weakness was encouraged by a super-strong yen; today’s has been egged on by China’s central bank, which has lifted the yuan peg by the most since 2005. With oil up nearly 80 percent (!!) from its February lows, here are six things to consider in the oil market on this final trading day of April: 1) We’ve had another good few dollops of data out overnight, with Europe leading the charge. German retail sales were worse than expected, while French consumer spending improved. French inflation was in line and benign, while Italy continues to teeter in deflationary territory on a year-over-year basis. These numbers, in combination with prints from Spain and Germany yesterday, have left the Eurozone still ticking along in deflationary territory on a year-over-year basis. Economic growth […]
OPEC oil output near record high in April as Iran, Iraq growth offsets outages: Reuters survey
OPEC’s oil output rose in April to close to the highest level in recent history, a Reuters survey found on Friday, as production increases led by Iran and Iraq more than offset a strike in Kuwait and other outages. Top exporter Saudi Arabia, however, made no major change to output, the survey found, despite the kingdom hinting it could boost supply after OPEC and non-member nations failed to agree to freeze output at a meeting on April 17. Oil LCOc1 has rebounded more than 75 percent from a 12-year low in January to reach $48 a barrel, helped by the freeze initiative and signs that lower prices are starting to curb higher-cost supply, despite high inventories and other persistent reminders of a glut. “The market is massively […]
Exxon Mobil’s Profit Plunges 63%
Exxon Mobil is the world’s largest publicly traded oil company. Exxon Mobil Corp. XOM 0.42 % , the world’s largest publicly traded oil company, saw its profit plunge 63% to the lowest level since 1999, a year when it nearly doubled in size by acquiring rival Mobil in an $80 billion deal. The sharp decline came amid a loss from its business producing oil and natural gas, one that largely came from flagging operations in U.S. shale basins. Profits from refining oil into products such as gasoline and diesel, an area that had helped the company weather the blow of lower prices in the past 18 months, also fell by almost half. Investors shrugged off the declines, reflecting optimism stemming from a recent rally in crude prices as the company beat analyst expectations. Shares of Exxon edged up 0.3% in premarket trading to $88.25 and are up more than […]
Fears Venezuelan imports heading for 60% slide
Venezuela’s imports have plunged 40 percent in the past year, heightening the misery of its beleaguered people, according to estimates by Bank of America Merrill Lynch. The country, which boasts the largest oil reserves in the world, is on course for a 60 percent slump in imports over a four-year period, close to being biggest contraction seen in Latin America since comparable records began in 1970, the bank says. The crash in imports is the latest indignity to strike a country that this week was forced to implement a two-day working week in the public sector to combat a critical shortage of power.
Venezuela is already in the midst of the world’s deepest recession. Inflation is expectedto surpass 700 per cent this year and shortages mean Venezuelans often have to queue for hours for basic provisions. Polar, the country’s largest privately owned company, has stopped producing beer, citing a shortage of barley. The data from BofA suggest the rate at which the Venezuelan economy is crumbling has accelerated this year. “The contraction is of a much higher order of magnitude than what had been observed until 2015. It is hard to find precedents for it in contemporary Venezuelan or Latin American economic history,” says Francisco Rodriguez, an economist at BofA. Official trade data are currently only available up to the third quarter of 2015. However, Mr. Rodriguez has pulled together more recent data from the six largest Venezuelan trading partners that publish monthly figures: Brazil, Colombia, China, Germany, Mexico and the US. He says this measure has a 90 per cent correlation with the official balance of payments data.
