The Bull

Monday 18

February, 2019 5:26 AM

Oil rebounds but glut worries persist

Oil rebounds but glut worries persist

Oil prices have bounced from the lowest levels in months after US government data showed strong demand for refined fuel, but supply concerns remain.

Share |

By AAP 22.11.2018 07:29 AM

Oil prices rose about $US1 a barrel a barrel overnight, bouncing from the lowest levels in months, after US government data showed strong demand for refined fuel, but concerns remained over rising global crude supply.

Brent crude futures gained 95 cents to settle at $US63.48 a barrel, up 1.52 per cent.

US West Texas Intermediate crude futures rose $US1.20 to settle at $US54.63 a barrel, a 2.25 per cent gain.

US crude stocks rose 4.9 million barrels last week, the Energy Information Administration said, a larger-than-expected increase.

Crude inventories have risen for nine straight weeks, the longest streak since March 2017.

Crude stocks at the Cushing, Oklahoma, delivery hub for WTI fell 116,000 barrels, the first drop in nine weeks, EIA said.

Petrol stocks fell 1.3 million barrels to the lowest level since December 2017, while distillate stockpiles dropped by 77,000 barrels, the EIA data showed.

"Cushing posted the first decline in a couple of months, a possible portent of some levelling that could drive some support into the WTI curve," said Jim Ritterbusch, president of Ritterbusch and Associates, in a note.

The overall market remained weak after crude fell more than 6 per cent the previous session, while world equities tumbled on worries about economic prospects.

Brent has fallen by more than 25 per cent since reaching a four-year high of $US86.74 on October 3, reflecting forecasts of slowing demand and ample supply from Saudi Arabia, Russia and the United States.

Worried by the prospect of a new supply glut, the Organisation of the Petroleum Exporting Countries is talking about reducing output just months after increasing production.

OPEC, Russia and other producers are considering a supply cut of between one million barrels per day and 1.4 million bpd at a December 6 meeting, sources familiar with the issue have said.

However, Saudi Arabia may find it harder to act to support prices, analysts said, after US President Donald Trump on Wednesday praised Saudi Arabia for helping to lower oil prices.

Riyadh could feel more inclined to heed US demands after Trump promised on Tuesday to be a "steadfast partner" of Saudi Arabia despite saying Crown Prince Mohammed bin Salman may have known about a plan to murder journalist Jamal Khashoggi.

US energy firms cut three oil rigs in the week to November 21, bringing the total down to 885, General Electric Co's Baker Hughes energy services firm said on Friday.

"It's fair to say that the price of oil is going to continue to be pretty volatile between now and December 6 when OPEC meets," said Brian Kessens, managing director at Tortoise.

"There's going to be a lot of different rhetoric and anticipation of what will actually transpire."

  • Trump to get update on China trade talks

    US duties on $US200 billion worth of Chinese imports are set to rise to 25 per cent from 10 per cent if no deal is reached by March 1 to address US demands

  • SA govt unveils Repat Hospital plan

    The South Australian government has unveiled its master plan to redevelop Adelaide's Repatriation Hospital.

  • US-China talks to boost Aussie market

    Australia's share market is tipped to open higher on Monday after optimism surrounding US and China trade talks.

  • The Week Ahead

    In Australia, the December quarter Wage Price Index release dominates the local agenda in the coming week.

  • ASX closes flat as more companies report

    The Australian sharemarket has managed to finish in positive territory as more companies reported earnings results.

  • Stocks to watch

    Stocks of interest at the close of trade on the ASX on Thursday, February 14.

  • Germany to let NATO use its cyber skills

    Germany is to join the ranks of NATO countries making its cyber warfare skills available to the alliance to help fight hacking and electronic warfare, officials said on Thursday.

  • Domain posts $156.4m loss as listings fall

    Domain's first-half loss has widened to $156.4 million after Sydney and Melbourne's stumbling property markets forced it to take a large non-cash impairment.

  • Farmer denies scaring vegans with gunshot

    A WA farmer who asked vegans to stop filming calves on his property and leave, then fired a shot into farmland, says he wasn't trying to scare them.

  • CommSec Daily Report Friday

    The local sharemarket is mostly flat so far in a choppy session of trade. The ASX 200 is marginally higher by 6 points or 0.1% to 6066 points towards lunch after trading in a narrow 18 point band...

Index: Points Change Percent


© Copyright All rights reserved.