Tag Archives: gas prices

Oil Prices fall on profit taking after hitting 2016 highs

A worker looks at a pump jack at an oil field Buzovyazovskoye owned by Bashneft company north from Ufa, Bashkortostan, Russia, J

By Ahmad Ghaddar

LONDON (Reuters) – Oil prices fell on Thursday as traders took profits after three sessions of gains, though prices remained close to their highest this year thanks to a fall in U.S. crude inventories and supply disruptions.

International Brent crude oil futures traded 46 cents a barrel lower at $52.05 a barrel at 7.32 a.m. ET, after setting a 2016 high of $52.86 a barrel earlier in the session. U.S. crude  fell by 34 cents a barrel to $50.89 after also hitting a new 2016 high at $51.67.

A rebounding U.S. dollar also weighed on prices.

“If you look at the week behind us … there was support for commodities from the currency side, the equity side, and the emerging markets side,” chief commodity analyst at SEB Bjarne Schieldrop said.

“We see some reverse of that now,” he added.

A fall in the dollar against a basket of currencies to a five-week low on Wednesday boosted oil prices, but the index recovered on Thursday, rising by 0.33 percent at 7.35 a.m. ET.

A weaker dollar makes oil cheaper for holders of other currencies.

Oil prices also gained ground after data on Wednesday from the U.S. Energy Information Administration (EIA) showed U.S. crude stocks last week fell by 3.23 million barrels, while inventories of gasoline and middle distillates rose.

Supply outages in Nigeria and Canada have also kept oil prices supported.

Consultancy Energy Aspects estimates Canadian output losses will total 29 million barrels across May and June, “after adjusting for turnaround work that was underway before the wildfires broke out, and assuming a pre wildfire utilization rate of 85 percent of (the 2015 average)”.

The Niger Delta Avengers militant group on Wednesday rejected an offer of talks with the government to end its attacks on oil facilities and said it had blown up a Chevron <CVX.N> pipeline site in the Niger Delta.

But some analysts said there are signs that downward pressure on prices is mounting.

ANZ bank said the rises were “tempered by an increase in (U.S.) crude production of 10,000 barrels per day to 8.75 million barrels per day and the number of active rigs increasing by 9 to 325”.

Traders also said refined product stocks were building up in the United States and Asia.

With fundamentals both for and against higher prices, many traders and analysts say a price of $50-60 per barrel may be fair value. This is reflected in Brent’s forward curve, which stays within that range until early 2021.

(Additional reporting by Henning Gloystein in Singapore; Editing by Ruth Pitchford)

Oil hits 2016 highs driven by falling supply and weaker dollar

Fuel prices are displayed at KazMunayGas gas station in Almaty

By Amanda Cooper

LONDON (Reuters) – Oil prices hit their highest in eight months on Tuesday, buoyed by the dollar nearing one-month lows and by falling Nigerian oil output after a spate of attacks on infrastructure.

Brent crude futures LCO were up 36 cents on the day at $50.91 a barrel by 1339 GMT, having hit an intraday peak of $51.30 earlier in the day, their highest since October.

U.S. crude oil futures CL gained 32 cents to trade at $50.01 a barrel, having touched a fresh 2016 peak of $50.37, their highest since October last year.

The price of oil has nearly doubled since January, when it hit its lowest since late 2003, boosted largely by a spate of unplanned outages that have eroded production in Canada, Venezuela, Libya and Nigeria, along with a steady decline in higher-cost U.S. shale output.

Yet analysts say the rally may entice some shale production back online, potentially damaging the prospects for a more sustained price rise.

“I think that is a bit of a risk right now,” Petromatrix analyst Olivier Jakob said.

“Last year, there was also a rally into June and that came to an end when the U.S. rig count started to increase … if we have another increase this week and another next week, then it will be harder to sustain the rally because there will be a perception that we’re back to production economics,” he said.

Market watchers are bracing for signs of a pick-up in U.S. oil production after weekly data from Baker Hughes showed U.S. drillers added rigs for only the second time this year, analysts said. RIG-OL-USA-BHI

Helping to reinforce Tuesday’s price rise was preliminary work to restart three of Total’s TOTF French oil refineries, stopped as part of nationwide strikes.

“With Brent staying above $50, oil is on an upward momentum with the restart of French refineries that were shut on strikes and pipeline attacks in Nigeria,” said Kaname Gokon at brokerage Okato Shoji in Tokyo.

Nigeria’s Bonny Light crude output is down by an estimated 170,000 barrels per day (bpd) following attacks on pipeline infrastructure, according to one source.

Oil, along with the rest of the commodities complex, has also been supported by a weaker dollar.

Federal Reserve Chair Janet Yellen has indicated the U.S. central bank will raise interest rates, but has not given a sense of when. [USD/]

U.S. commercial crude oil inventories likely fell by 3.5 million barrels last week, marking a third straight weekly drop, a preliminary Reuters poll showed. The data by the American Petroleum Institute is due out at 2030 GMT. [EIA/S]

(Additional reporting by Osamu Tsukimori in Tokyo; Editing by William Hardy and David Evans)