February 25 2016
Category: Commodities
Crude oil prices fell in Asia on Thursday as marginal U.S. shale oil producers are in sharper focus for production or operations cuts.On the New York Mercantile Exchange, WTI crude for April delivery dropped 0.78% to $31.90 a barrel. Brent fell 1.10% to $34.03 a barrel.Overnight, crude futures ticked up on a volatile, choppy day of trading, as U.S. crude inventories rose less sharply than anticipated after a report from the American Petroleum Institute hours earlier raised expectations for a massive supply build.On the Intercontinental Exchange, Brent crude for April delivery traded between $32.38 and $34.50 a barrel, before closing at $34.42, up 1.15 or 3.46% on the session. North Brent Sea futures have rebounded by approximately 11% since dropping below $30 a barrel in mid-February.On Wednesday morning, the U.S. Energy Information Administration (EIA) said in its Weekly Petroleum Status Report that U.S. commercial crude inventories for the week ending on February 19 rose by 3.5 million barrels from the previous week.At 507.6 million barrels, U.S. crude oil inventories are at historically high levels for this time of year. While the total slightly exceeded analysts' expectations for a 3.2 million build, it fell considerably below the API's estimates of a 7.1 million barrel increase on Tuesday evening.At the Cushing Oil Hub in Oklahoma, inventories rose by 333,000 barrels to surge above 65 million, reaching a fresh record-high. It marked the 15th build at the nation's largest storage facility in the last 16 weeks. Storage levels at Cushing, the main delivery point for Nymex oil, are dangerously close to reaching full-capacity.Meanwhile, crude production in the lower 48 states fell sharply by 196,000 barrels per day on the week representing the fifth straight week of declines. Overall, U.S. output dipped by 33,000 to 9.102 million bpd, also moving lower for the fifth consecutive weekly period. U.S. production continues remains far below its June level of 9.5 million bpd when it soared to its highest level in at least 40 years.Investors continued to digest bearish comments from Ali al-Naimi during the previous session, when the Saudi Arabian oil minister provided further assurances that the kingdom will under no circumstances slash its production levels, at least for the time being.Last week, Saudi Arabia, Russia and two other OPEC members agreed in principle to freeze their production at their respective January levels. The deal, though, is contingent on receiving cooperation from Iran, which has been resistant to cap output as it returns to global energy markets for the first time in nine years. Separately, Iran oil minister Bijan Zanganeh reportedly called the deal "a joke," on Tuesday, while blaming his rivals for placing "unrealistic demands," on his country.Also on Wednesday, Royal Dutch Shell A (N:L:RDSa) announced that it is shutting down its shale resources unit while parting ways with U.S. country chairman Marvin Odum, as part of a comprehensive cost-cutting initiative in response to its worst year of revenues in more than a decade.A number of top oil and gas companies are reportedly teetering on the verge of bankruptcy, as oil hovers near its lowest level in more than a decade. Over the last 20 months, crude futures have plunged more than 70% from June, 2014 highs of $115 a barrel, amid a glut of oversupply on global markets.
Category: Commodities
Crude oil prices fell in Asia on Thursday as marginal U.S. shale oil producers are in sharper focus for production or operations cuts.On the New York Mercantile Exchange, WTI crude for April delivery dropped 0.78% to $31.90 a barrel. Brent fell 1.10% to $34.03 a barrel.Overnight, crude futures ticked up on a volatile, choppy day of trading, as U.S. crude inventories rose less sharply than anticipated after a report from the American Petroleum Institute hours earlier raised expectations for a massive supply build.On the Intercontinental Exchange, Brent crude for April delivery traded between $32.38 and $34.50 a barrel, before closing at $34.42, up 1.15 or 3.46% on the session. North Brent Sea futures have rebounded by approximately 11% since dropping below $30 a barrel in mid-February.On Wednesday morning, the U.S. Energy Information Administration (EIA) said in its Weekly Petroleum Status Report that U.S. commercial crude inventories for the week ending on February 19 rose by 3.5 million barrels from the previous week.At 507.6 million barrels, U.S. crude oil inventories are at historically high levels for this time of year. While the total slightly exceeded analysts' expectations for a 3.2 million build, it fell considerably below the API's estimates of a 7.1 million barrel increase on Tuesday evening.At the Cushing Oil Hub in Oklahoma, inventories rose by 333,000 barrels to surge above 65 million, reaching a fresh record-high. It marked the 15th build at the nation's largest storage facility in the last 16 weeks. Storage levels at Cushing, the main delivery point for Nymex oil, are dangerously close to reaching full-capacity.Meanwhile, crude production in the lower 48 states fell sharply by 196,000 barrels per day on the week representing the fifth straight week of declines. Overall, U.S. output dipped by 33,000 to 9.102 million bpd, also moving lower for the fifth consecutive weekly period. U.S. production continues remains far below its June level of 9.5 million bpd when it soared to its highest level in at least 40 years.Investors continued to digest bearish comments from Ali al-Naimi during the previous session, when the Saudi Arabian oil minister provided further assurances that the kingdom will under no circumstances slash its production levels, at least for the time being.Last week, Saudi Arabia, Russia and two other OPEC members agreed in principle to freeze their production at their respective January levels. The deal, though, is contingent on receiving cooperation from Iran, which has been resistant to cap output as it returns to global energy markets for the first time in nine years. Separately, Iran oil minister Bijan Zanganeh reportedly called the deal "a joke," on Tuesday, while blaming his rivals for placing "unrealistic demands," on his country.Also on Wednesday, Royal Dutch Shell A (N:L:RDSa) announced that it is shutting down its shale resources unit while parting ways with U.S. country chairman Marvin Odum, as part of a comprehensive cost-cutting initiative in response to its worst year of revenues in more than a decade.A number of top oil and gas companies are reportedly teetering on the verge of bankruptcy, as oil hovers near its lowest level in more than a decade. Over the last 20 months, crude futures have plunged more than 70% from June, 2014 highs of $115 a barrel, amid a glut of oversupply on global markets.
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