Oil firms on OPEC-led production cuts, but
rising U.S. output caps gains
SINGAPORE (Reuters) - Oil prices firmed on Friday as rising
crude output from the United States was offsetting efforts by OPEC and other
producers to prop up the market by cutting supplies.
Brent
crude futures (LCOc1), the international benchmark for oil
prices, were trading at $56.41 per barrel at 0753 GMT, up 17 cents from their
last close.
Trading
activity during Asian business hours was low due to the start of the Lunar New
Year holiday in most countries of the region, including China and Singapore.
Traders
said prices were lifted by production cuts led by the Organization of the
Petroleum Exporting Countries (OPEC) and other producers including Russia,
aimed at reducing a global fuel overhang.
However,
they added that rising output in the United States was partially offsetting
those efforts.
"U.S.
producer hedging via futures and increasing shale production offset the
progress OPEC has made with its production cut implementation," said
Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.
"Market
participants are hyper-focused on two issues: shale's response to higher prices
and OPEC compliance," Barclays (LON:BARC) bank said.
"Producers
and OPEC countries are all talking their books, yet the jury is still
out," it added, referring to widespread scepticism over compliance with
announced cuts.
The
British bank said it expected Brent and WTI prices to average $55 and $53 per
barrel respectively for the first quarter.
OPEC
and other producers have agreed to cut production by almost 1.8 million barrels
per day (bpd) for the first half of 2017 to fight a supply overhang that has
seen between 1 million and 2 million bpd of crude being produced in excess of
consumption over the past two years.
U.S.
oil production, however, has risen by around half a million barrels per day
since mid-2016 to 8.96 million bpd.
Despite
the possibility that the OPEC-led supply reduction might not lift prices much
further, investment bank Jefferies gave a bullish outlook for the industry's
profitability based on cost-cutting efforts by all producers.
"Conditions
for the integrated oil sector are arguably the most favorable since 2012 (as)
company self-help measures have driven break-even prices down to $50 per
barrel, while OPEC intervention in the oil markets has likely put a floor on
Brent prices in the low-$50's," Jefferies analysts said in a note.
Oil starts the week lower as markets focus on
U.S. drilling activity
Investing.com - Oil prices declined during European morning
hours on Monday, starting the week off on negative footing as prospects of
rising U.S. production weighed on the market.
Crude oil for March delivery on the New York Mercantile Exchange shed 27
cents, or about 0.5%, to $52.90 a barrel by 3:50AM ET (08:50GMT).
Elsewhere, Brent oil for April delivery on
the ICE Futures Exchange in London declined 41 cents, or around 0.7%, to $55.30
a barrel.
Oilfield
services provider Baker Hughes said late Friday that the number of rigs
drilling for oil in the U.S. increased by 15 last week, the 12th gain in 13 weeks.
That
brought the total count to 566, the most since November 2015.
The
data raised concerns that the ongoing rebound in U.S. shale production could
derail efforts by other major producers to rebalance global oil supply and
demand.
Futures
have been trading in a narrow range around the low-to-mid $50s over the past
month as sentiment in oil markets has been torn between expectations of a
rebound in U.S. shale production and hopes that oversupply may be curbed by
output cuts announced by major global producers.
OPEC
and non-OPEC countries have made a strong start to lowering their oil output
under the first such pact in more than a decade as global producers look to
reduce oversupply and support prices.
January
1 marked the official start of the deal agreed by OPEC and non-OPEC member
countries such as Russia in November last year to reduce output by almost 1.8
million barrels per day to 32.5 million for the next six months.
The
deal, if carried out as planned, should reduce global supply by about 2%.
Uncertainty
over the outlook for U.S policy also broadly weighed on financial markets after
President Donald Trump introduced immigration curbs that sparked criticism at
home and abroad.
Elsewhere
on Nymex, gasoline futures for March ticked up 0.9 cents, or 0.6% to $1.533 a gallon, while
March heating oil dipped 0.9 cents, or 0.6%,
to $1.624 a gallon.
Natural gas futures for March delivery slumped 4.8 cents, or 1.4%, to $3.310 per
million British thermal units.
Gold ticks higher as dollar slumps on Trump
travel ban, U.S. GDP
Investing.com
- Gold prices were higher in European morning trade on Monday, starting the
week off with gains as the dollar slumped after immigration curbs introduced by
U.S. President Donald Trump heightened concerns about the impact of the new
administration's policies on trade and the economy.
Gold
futures for April delivery on the Comex division of the New York Mercantile
Exchange rose $2.35, or around 0.2%, to $1,193.45 a troy ounce by 3:00AM ET
(08:00GMT).
Trump on Friday put a four-month hold on allowing refugees into the U.S. and temporarily
barred travelers from Syria and six other Muslim-majority
countries, saying the moves would help protect Americans from terrorist
attacks.
The executive order led
to huge protests in many U.S.
cities and sparked global backlash, raising worries about
the potentially destabilizing impact of Trump's policies.
Headlines
from Washington will most likely continue to dictate market sentiment this
week, as traders focus on Trump for further details on his promises of tax
reform, infrastructure spending and deregulation as well as trade policies.
The U.S. dollar index, which measures the
greenback’s strength against a trade-weighted basket of six major currencies,
was down 0.1% at 100.46 in European morning trade.
Lackluster
U.S. fourth-quarter growth figures also weighed on the greenback as it dampened
expectations for a faster rate of interest rate hikes this year.
The annual rate of economic
growth slowed to 1.9% in the three
months to December the Commerce Department reported Friday, slowing sharply
from the 3.5% rate of growth seen in the third quarter.
The
slowdown in growth prompted speculation that the Federal Reserve will avoid
hiking interest rates too quickly.
Gold is
highly sensitive to rising U.S. rates, which increase the opportunity cost of
holding the non-yielding asset.
Global financial markets will
be busy with central bank meetings in the week ahead, with
policy decisions due in the U.S., U.K. and Japan. Investors will also keep an
eye out on key economic data, with the monthly U.S. employment report and euro
zone inflation data in the spotlight.
Oil extends declines on rising U.S. output
TOKYO (Reuters) - Oil prices extended declines on Monday,
dragged down by signs of growing production in the United States that could
partly offset output cuts by OPEC and other producers.
Uncertainty
over the outlook for U.S policy also broadly weighed on financial markets after
President Donald Trump introduced immigration curbs that sparked criticism at
home and abroad.
But
oil trading was quiet with several Asian countries, including China, on holiday
for the Lunar New Year.
London Brent crude for March delivery had dropped 28 cents to $55.24 a barrel by
0657 GMT, after settling down 72 cents on Friday.
NYMEX
crude for March delivery was down 23 cents at $52.90 a barrel.
The
U.S. weekly oil and gas rig count from Baker Hughes showed that U.S. drillers
added 15 oil rigs last week, bringing the total count to 566, the most since
November 2015. [RIG/U]
The
Organization of the Petroleum Exporting Countries and other producers,
including Russia, agreed to cut output by almost 1.8 million barrels per day
(bpd) in the first half of 2017 to relieve a two-year supply overhang.
"We
are in wait-and-see mode, I suspect at the moment. Oil has reached a fair value
equilibrium level given the current supply and demand outlook," said Ric
Spooner, chief market analyst at CMC Markets in Sydney.
"Until
we get anything to really disrupt that, we may not see too much change,"
he said, adding the market may draw some comfort from official OPEC figures for
January output.
Spooner
said that, as with other financial markets, Trump's ban on entry to the U.S.
for refugees and citizens from seven Muslim countries had contributed to a
"risk-off" attitude. [MKTS/GLOB]
U.S.
oil production has been rising, with the International Energy Agency forecasting
total U.S. output growth of 320,000 bpd in 2017 to an average of 12.8 million
bpd.
"The
rise in U.S. output should not be unexpected," ANZ bank said in a note.
"However,
we expect the reductions being made by OPEC will far exceed any rise in the
U.S. and quickly reduce the global inventory that has been built up over the
past two years," it added.
Hedge
funds and money managers boosted bullish wagers on U.S. crude oil to the highest level since mid-2014, Commodity Futures
Trading Commission (CFTC) data showed on Friday, as the output cuts agreed by
the world's top producers began to eat into a global glut.
Gold prices gain in Asia as Trump travel policy noted
Investing.com - Gold rose in Asia on Monday as investors noted a
sharp reaction to President Donald Trump's move to bar travellers from seven
Muslim-majority countries from enetering the U.S. with markets in China, South
Korea, Hong Kong and Singapore shut to mark the Lunar New Year.
Gold Futures for April delivery rose 0.53% to $1.196.15 a troy ounce on the
Comex division of the New York Mercantile Exchange. Copper was last quoted at
$2.694.
In
the euro zone, Germany is to release preliminary data on inflation. The U.S. is
to release figures on personal income and spending as well as a report on
pending home sales.
The
seven countries cited in his executive order—Iraq, Iran, Libya, Somali, Sudan,
Syria and Yemen—as being part of a restrictive travel regime already in place
under former president Barack Obama. But Trump's order sparked protests at
airports over what was seen as targeting a religion for exclusion and by
corporate leaders, including strong statements from Silicon Valley companies
that have pledged support for the American Civil Liberties Union, which has
filed a lawsuit seeking to stop the order, with some executives joining
protesters at airports in San Francisco and New York.
Last
week, gold ended little changed on Friday, after weaker-than-expected figures
on U.S. fourth quarter growth dampened expectations for a faster rate of
interest rate hikes this year.
The
annual rate of economic growth slowed to 1.9% in the three months to December
the Commerce Department reported Friday, slowing sharply from the 3.5% rate of
growth seen in the third quarter. The economy grew just 1.6% in 2016 as a
whole, the slowest rate of growth since 2011.
The
slowdown in growth prompted speculation that the Federal Reserve will avoid
hiking interest rates too quickly. Investors also remained cautious as they
pondered the economic implications of Trump's pledges of increased fiscal
spending, tax cuts and protectionism.
Crude falls in Asia as US travel ban on Muslim-majority
countries noted
Investing.com - Crude oil prices opened weaker in Asia on Monday
as investors noted sharp reaction to President Donald Trump's move to bar
travelers from seven Muslim-majority countries from entering the U.S. with
markets in China, South Korea, Hong Kong and Singapore shut to mark the Lunar
New Year.
The
seven countries cited in his executive order—Iraq, Iran, Libya, Somali, Sudan,
Syria and Yemen—as being part of a restrictive travel regime already in place
under former president Barack Obama. But Trump's order sparked protests at
airports over what was seen as targeting a religion for exclusion and by
corporate leaders, including strong statements from Silicon Valley companies
that have pledged support for the American Civil Liberties Union, which has
filed a lawsuit seeking to stop the order, with some executives joining
protesters at airports in San Francisco and New York.
On
the New York Mercantile Exchange, crude oil for delivery in March eased 0.49% to $52.94 a barrel. On the ICE
Futures Exchange in London, Brent oil for March delivery was last quoted down 0.22% to $55.41 a
barrel.
In
the week ahead, market participants will eye fresh weekly information on U.S.
stockpiles of crude and refined products on Tuesday and Wednesday to gauge the
strength of demand in the world’s largest oil consumer. Traders will also
continue to pay close attention to comments from global oil producers for
further evidence that they are complying with their agreement to reduce output
this year.
Last
week, oil futures finished lower on Friday, logging a modest weekly loss, as
investors turned their attention to rising production in the U.S. and away from
OPEC and other producers' commitment to curbing global oversupply.
Prices
dropped to the lowest levels of the session after oilfield services provider
Baker Hughes said late Friday that the number of rigs drilling for oil in the
U.S. increased by 15 last week, the 12th gain in 13 weeks.
That
brought the total count to 566, the most since November 2015.
The
data raised concerns that the ongoing rebound in U.S. shale production could
derail efforts by other major producers to rebalance global oil supply and
demand.
Futures
have been trading in a narrow range around the low-to-mid $50s over the past
month as sentiment in oil markets has been torn between expectations of a
rebound in U.S. shale production and hopes that oversupply may be curbed by
output cuts announced by major global producers.
OPEC
and non-OPEC countries have made a strong start to lowering their oil output
under the first such pact in more than a decade as global producers look to
reduce oversupply and support prices.
January
1 marked the official start of the deal agreed by OPEC and non-OPEC member
countries such as Russia in November last year to reduce output by almost 1.8
million barrels per day to 32.5 million for the next six months.
The
deal, if carried out as planned, should reduce global supply by about 2%.
Crude Oil Futures - Weekly Outlook: January 30 - February 3
Investing.com - Oil futures finished lower on Friday, logging a
modest weekly loss, as investors turned their attention to rising production in
the U.S. and away from OPEC and other producers' commitment to curbing global
oversupply.
On
the New York Mercantile Exchange, crude oil for delivery in March slumped 61 cents, or around 1.1%, to end
at $53.17 a barrel by close of trade. Futures touched a high of $54.08 earlier,
the strongest level since January 6.
For
the week, New York-traded oil futures lost 5 cents, or about 0.1%.
Elsewhere,
on the ICE Futures Exchange in London, Brent oil for March delivery declined 72 cents, or nearly 1.3%, to settle
at $55.45 a barrel by close of trade Friday. Prices climbed to a three-week
high of $56.55 in the prior session.
London-traded
Brent futures scored a gain of 7 cents, or approximately 0.1%, on the week.
Prices
dropped to the lowest levels of the session after oilfield services provider
Baker Hughes said late Friday that the number of rigs drilling for oil in the
U.S. increased by 15 last week, the 12th gain in 13 weeks.
That
brought the total count to 566, the most since November 2015.
The
data raised concerns that the ongoing rebound in U.S. shale production could
derail efforts by other major producers to rebalance global oil supply and
demand.
Futures
have been trading in a narrow range around the low-to-mid $50s over the past
month as sentiment in oil markets has been torn between expectations of a
rebound in U.S. shale production and hopes that oversupply may be curbed by
output cuts announced by major global producers.
OPEC
and non-OPEC countries have made a strong start to lowering their oil output
under the first such pact in more than a decade as global producers look to
reduce oversupply and support prices.
January
1 marked the official start of the deal agreed by OPEC and non-OPEC member
countries such as Russia in November last year to reduce output by almost 1.8
million barrels per day to 32.5 million for the next six months.
The
deal, if carried out as planned, should reduce global supply by about 2%.
Elsewhere
on Nymex, gasoline futures for February dipped 1.5 cents, or 1% to $1.527 a gallon. It
ended down about 2.5% for the week.
February heating oil shed 2.2 cents, or 1.4%, to finish at $1.618 a gallon. For the
week, the fuel lost around 1.7%.
Natural gas
futures for March delivery
slipped 3.9 cents, or nearly 1.2%, to $3.358 per million British thermal units.
It posted a weekly gain of around 0.3%.
In
the week ahead, market participants will eye fresh weekly information on U.S.
stockpiles of crude and refined products on Tuesday and Wednesday to gauge the
strength of demand in the world’s largest oil consumer.
Traders
will also continue to pay close attention to comments from global oil producers
for further evidence that they are complying with their agreement to reduce
output this year.
Ahead
of the coming week, Investing.com has compiled a list of these and other
significant events likely to affect the markets.
Tuesday,
January 31
The
American Petroleum Institute, an industry group, is to publish its weekly
report on U.S. oil supplies.
Wednesday,
February 1
The
U.S. Energy Information Administration is to release weekly data on oil and
gasoline stockpiles.
Thursday,
February 2
The
U.S. EIA is to produce a weekly report on natural gas supplies in storage.
Friday,
February 3
Baker
Hughes will release weekly data on the U.S. oil rig count.
Gold / Silver / Copper futures - weekly outlook: January 30 -
February 3
Investing.com - Gold
ended little changed on Friday, after weaker-than-expected figures on U.S.
fourth quarter growth dampened expectations for a faster rate of interest rate hikes
this year.
Gold for April delivery settled at $1,190.0 on the Comex division of
the New York Mercantile Exchange.
The
precious metal was 1.35% lower for the week, as the stronger U.S. dollar
weighed.
The
annual rate of economic growth slowed to 1.9% in the three months to December the Commerce Department reported
Friday, slowing sharply from the 3.5% rate of growth seen in the third quarter.
The
economy grew just 1.6% in 2016 as a whole, the slowest rate of growth since
2011.
The
slowdown in growth prompted speculation that the Federal Reserve will avoid
hiking interest rates too quickly.
Investors
also remained cautious as they pondered the economic implications of President
Donald Trump's pledges of increased fiscal spending, tax cuts and protectionism.
Elsewhere
in precious metals trading, silver was at $17.16 a troy ounce late Friday and ended the week little
changed.
Copper was trading at $2.69 a pound late Friday and ended the week up
2.86%, and platinum was up 0.69% on the day at $988.45 an ounce.
In
the week ahead, markets will be paying close attention to Friday’s U.S. nonfarm
payrolls report for January as well as Wednesday’s policy statement by the Fed.
Investors
will also be watching central bank meetings in Japan and the UK.
Ahead
of the coming week, Investing.com has compiled a list of these and other
significant events likely to affect the markets.
Monday,
January 30
Financial
markets in China will be closed for the Lunar New Year holiday.
In
the euro zone, Germany is to release preliminary data on inflation.
The
U.S. is to release figures on personal income and spending as well as a report
on pending home sales.
Tuesday,
January 31
Markets
in China will be closed for the Lunar New Year holiday.
The
Bank of Japan is to announce its benchmark interest rate and publish a policy
statement which outlines economic conditions and the factors affecting the
monetary policy decision. The announcement is to be followed by a press
conference.
The
euro zone is to release preliminary estimates of consumer price inflation and
fourth quarter GDP.
European
Central Bank President Mario Draghi is to speak at an event in Frankfurt.
Canada
is to publish its monthly report on GDP.
The
U.S. is to release private sector data on consumer confidence.
Bank
of Canada Governor Stephen Poloz is to speak at an event in Alberta.
Wednesday,
February 1
Markets
in China will remain shut for the Lunar New Year holiday.
China
is to release survey data on manufacturing and service sector activity.
New
Zealand is to publish its quarterly employment report.
The
UK is to release data on manufacturing activity.
The
European Commission is to publish its latest economic forecasts for the
European Union.
The
U.S. is to release the ADP nonfarm payrolls report for January and the
Institute for Supply Management is to release its manufacturing PMI.
The
Federal Reserve is to announce its benchmark interest rate and publish a
monetary policy statement.
Thursday,
February 2
Markets
in China will remain shut for the Lunar New Year holiday.
Australia
is to release data on building approvals and the trade balance.
The
UK is to release data on manufacturing activity.
The
Bank of England is to announce its benchmark interest rate and publish the
minutes of its monetary policy meeting along with its quarterly inflation
report. BoE Governor Mark Carney, along with other policymakers will also hold
a press conference to discuss the inflation report.
ECB
President Mario Draghi is to speak at an event in Slovenia.
The
U.S. is to publish data on initial jobless claims and labor costs.
Friday,
February 3
China
is to publish its Caixin manufacturing PMI.
The
UK is to release data on manufacturing activity.
Chicago
Fed President Charles Evans is to speak.
The
U.S. is to round up the week data on factory orders and the non-farm payrolls
report for January, while the ISM is to release its services PMI.
Gold / Silver / Copper futures - weekly outlook: January 30 -
February 3
Investing.com - Gold
ended little changed on Friday, after weaker-than-expected figures on U.S.
fourth quarter growth dampened expectations for a faster rate of interest rate hikes
this year.
Gold for April delivery settled at $1,190.0 on the Comex division of
the New York Mercantile Exchange.
The
precious metal was 1.35% lower for the week, as the stronger U.S. dollar
weighed.
The
annual rate of economic growth slowed to 1.9% in the three months to December the Commerce Department reported
Friday, slowing sharply from the 3.5% rate of growth seen in the third quarter.
The
economy grew just 1.6% in 2016 as a whole, the slowest rate of growth since
2011.
The
slowdown in growth prompted speculation that the Federal Reserve will avoid
hiking interest rates too quickly.
Investors
also remained cautious as they pondered the economic implications of President
Donald Trump's pledges of increased fiscal spending, tax cuts and protectionism.
Elsewhere
in precious metals trading, silver was at $17.16 a troy ounce late Friday and ended the week little
changed.
Copper was trading at $2.69 a pound late Friday and ended the week up
2.86%, and platinum was up 0.69% on the day at $988.45 an ounce.
In
the week ahead, markets will be paying close attention to Friday’s U.S. nonfarm
payrolls report for January as well as Wednesday’s policy statement by the Fed.
Investors
will also be watching central bank meetings in Japan and the UK.
Ahead
of the coming week, Investing.com has compiled a list of these and other
significant events likely to affect the markets.
Monday,
January 30
Financial
markets in China will be closed for the Lunar New Year holiday.
In
the euro zone, Germany is to release preliminary data on inflation.
The
U.S. is to release figures on personal income and spending as well as a report
on pending home sales.
Tuesday,
January 31
Markets
in China will be closed for the Lunar New Year holiday.
The
Bank of Japan is to announce its benchmark interest rate and publish a policy
statement which outlines economic conditions and the factors affecting the
monetary policy decision. The announcement is to be followed by a press
conference.
The
euro zone is to release preliminary estimates of consumer price inflation and
fourth quarter GDP.
European
Central Bank President Mario Draghi is to speak at an event in Frankfurt.
Canada
is to publish its monthly report on GDP.
The
U.S. is to release private sector data on consumer confidence.
Bank
of Canada Governor Stephen Poloz is to speak at an event in Alberta.
Wednesday,
February 1
Markets
in China will remain shut for the Lunar New Year holiday.
China
is to release survey data on manufacturing and service sector activity.
New
Zealand is to publish its quarterly employment report.
The
UK is to release data on manufacturing activity.
The
European Commission is to publish its latest economic forecasts for the
European Union.
The
U.S. is to release the ADP nonfarm payrolls report for January and the
Institute for Supply Management is to release its manufacturing PMI.
The
Federal Reserve is to announce its benchmark interest rate and publish a
monetary policy statement.
Thursday,
February 2
Markets
in China will remain shut for the Lunar New Year holiday.
Australia
is to release data on building approvals and the trade balance.
The
UK is to release data on manufacturing activity.
The
Bank of England is to announce its benchmark interest rate and publish the
minutes of its monetary policy meeting along with its quarterly inflation
report. BoE Governor Mark Carney, along with other policymakers will also hold
a press conference to discuss the inflation report.
ECB
President Mario Draghi is to speak at an event in Slovenia.
The
U.S. is to publish data on initial jobless claims and labor costs.
Friday,
February 3
China
is to publish its Caixin manufacturing PMI.
The
UK is to release data on manufacturing activity.
Chicago
Fed President Charles Evans is to speak.
The
U.S. is to round up the week data on factory orders and the non-farm payrolls
report for January, while the ISM is to release its services PMI.
