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Commodities

U.S. oil pares gains after weekly fuel stockpiles jump

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U.S. oil pares gains after weekly fuel stockpiles jump
© Reuters. FILE PHOTO: A maze of crude oil pipes and valves is pictured during a tour by the Department of Energy at the Strategic Petroleum Reserve in Freeport, Texas, U.S. June 9, 2016. REUTERS/Richard Carson/File Photo

By Arathy Somasekhar

(Reuters) -West Texas Intermediate (WTI) futures pared gains on Wednesday after U.S. government data showed a bigger-than-expected weekly rise in gasoline and distillate inventories amid a new coronavirus variant triggering fresh travel restrictions that could dampen oil demand.

WTI was trading $2.4, or 3.6%, higher at $68.59 a barrel at 11:19 a.m. ET (1619 GMT), after paring some gains immediately after the weekly government stock data. They were up as much as 4% earlier in the session.

Global benchmark was up $2.5, or 3.6%, at $71.75 a barrel.

Both contracts had earlier retraced some of their gains after an OPEC+ document showed the group forecasting a bigger oil surplus in the new year than previously thought.

U.S. gasoline stocks rose 4 million barrels last week to 215.4 million barrels, government data showed, compared with analysts’ expectations in a Reuters poll for 29,000-barrel rise. Distillate stockpiles increased 2.2 million barrels to 123.9 million barrels, versus expectations for a 462,000-barrel build. [EIA/S]

Crude inventories fell 910,000 barrels in the week, data showed, compared with forecasts for a 1.2 million-barrel drop.

Both Brent and WTI front-month contracts in November posted their steepest monthly falls in percentage terms since March 2020, down 16% and 21% respectively.

Analysts at Goldman Sachs (NYSE:) called the plunge in oil prices “excessive,” saying “the market has far overshot the likely impact of the latest variant on oil demand with the structural repricing higher due to the dramatic change in the oil supply reaction function still ahead of us.”

The Organization of the Petroleum Exporting Countries met on Wednesday ahead of a meeting on Thursday of OPEC+, which groups OPEC with allies including Russia.

OPEC+ sees the oil surplus growing to 2 million barrels per day (bpd) in January, 3.4 million bpd in February and 3.8 million bpd in March next year, an internal report seen by Reuters showed.

Some analysts expect OPEC+ to pause plans to add 400,000 bpd of supply in January.

“There is much to suggest that OPEC+ will not initially step up its oil production any further in an effort to maintain current prices at around $70/bbl,” PVM analyst Stephen Brennock said.

“OPEC+ have erred on the side of caution since it began slowly boosting supplies and a decision to shelve a planned increase output in January and keep its quota flat comports with its cautious approach.”

Several OPEC+ ministers, though, have said there is no need to change course.

But even if OPEC+ agrees to go ahead with its planned supply increase in January, producers may struggle to add that much.

A Reuters survey found OPEC pumped 27.74 million bpd in November, up 220,000 bpd from the previous month, but that was below the 254,000 bpd increase allowed for OPEC members under the OPEC+ agreement.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Commodities

Iran says war games in Gulf were warning to Israel

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Iran says war games in Gulf were warning to Israel
© Reuters. FILE PHOTO: An explosion is seen on the water surface behind a member of the Islamic Revolution Guards Corps (IRGC) during a joint military exercise called the ‘Great Prophet 17’ in the southwest of Iran, in this picture obtained on December 22, 2021. IRG

(Reuters) -War games conducted this week by Iran in the Gulf were intended to send a warning to Israel, the country’s top military commanders said on Friday, amid concerns over possible Israeli plans to target Iranian nuclear sites.

The Revolutionary Guards’ war games included firing ballistic and cruise missiles. State television showed missiles flattening a target which resembled Israel’s Dimona nuclear reactor at the conclusion of the exercises on Friday.

“Through a simulation of the Dimona atomic facilities, the Revolutionary Guards successfully practiced attacking this critical centre of the Zionist regime in its missile exercise,” the semi-official news agency Tasnim said.

“These exercises had a very clear message: a serious, real … warning to threats by the Zionist regime’s authorities to beware of their mistakes,” Guards chief General Hossein Salami said on state TV.

“We will cut off their hands if they make a wrong move. … The distance between actual operations and military exercises is only a change in the angles of launching the missiles,” Salami added.

Armed Forces Chief of Staff Major General Mohammad Bagheri said 16 ballistic missiles of different classes had been fired simultaneously and had destroyed predetermined targets.

Britain condemned the launch of ballistic missiles during the war games.

“These actions are a threat to regional and international security, and we call on Iran to immediately cease its activities,” the Foreign Office said in a statement.

Iran’s Foreign Ministry spokesman, Saeed Khatibzadeh, rejected the British statement as “meddling in Iran’s defensive capacity,” state media said.

Iran says its ballistic missiles have a range of 2,000 km (1,200 miles) and are capable of reaching arch-foe Israel and U.S. bases in the region.

Iran has one of the biggest missile programmes in the Middle East, regarding such weapons as an important deterrent and retaliatory force against U.S. and other adversaries in the event of war.

Israel, which opposes efforts by world powers to revive Tehran’s 2015 nuclear deal, has long threatened military action if diplomacy fails. Iran says its nuclear ambitions are peaceful.

Israeli Defence Minister Benny Gantz has called on world powers not to allow Iran to play for time at the nuclear negotiations, in recess at Iran’s request and scheduled to resume next Monday.

Israel is widely believed to be the only Middle Eastern country with a nuclear arsenal.

(mailto:dubai.newsroom@thomsonreuters.comEditing by Gareth Jones, Hugh Lawson and Leslie Adler)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Commodities

Oil prices ease, focus shifts to next OPEC+ move

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Oil prices ease, focus shifts to next OPEC+ move
© Reuters. FILE PHOTO: The Bryan Mound Strategic Petroleum Reserve, an oil storage facility, is seen in this aerial photograph over Freeport, Texas, U.S., April 27, 2020. REUTERS/Adrees Latif/File Photo

By Ahmad Ghaddar

LONDON (Reuters) -Brent crude futures snapped a three-day rally on Friday in light trading before the Christmas holidays but the benchmark was still headed for a weekly gain, with the market focusing on next steps by OPEC+ and the impact of the Omicron variant.

futures fell 75 cents, or 1%, to $76.10 a barrel by 1121 GMT, following a 2.1% gain in the previous session. The benchmark was still on track for a weekly gain of about 3.5%.

U.S. markets are closed on Friday for the Christmas holiday.

Oil prices have recovered this week as fears over the impact of the highly infectious Omicron variant on the global economy receded, with early data suggesting it causes a milder level of illness.

“The omicron-is-mild rally could well continue into January now, but reality will bite in February I believe, as the end of the Fed taper moves into sight,” OANDA analyst Jeffrey Halley said.

The U.S. Federal Reserve said last week it would end its pandemic-era bond purchases in March, paving the way for three interest rate increases that most Fed policymakers now believe will be needed next year.

The Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, will meet on 4 January to decide whether to go ahead with a 400,000 barrels per day (bpd) production increase in February.

Russia believes oil prices are unlikely to change significantly next year with demand recovering to pre-pandemic levels only by the end of 2022, Deputy Prime Minister Alexander Novak said on Friday.

Some investors remained cautious amid surging infection cases.

Omicron advanced across the world on Thursday, with health experts warning the battle against the COVID-19 variant was far from over despite two drugmakers saying their vaccines protected against it and despite signs it carried a lower risk of hospitalisation.

Coronavirus infections have soared wherever the variant has spread, triggering new restrictions in many countries, including Italy and Greece, and record numbers of new cases.

Global oil demand roared back in 2021 as the world began to recover from the coronavirus pandemic, and overall world consumption potentially could hit a new record in 2022 – despite efforts to bring down fossil fuel consumption to mitigate climate change.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Commodities

Iran’s war games in Gulf were warning to Israel – top Iranian commanders

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Iran's war games in Gulf were warning to Israel - top Iranian commanders
© Reuters. FILE PHOTO: An explosion is seen on the water surface behind a member of the Islamic Revolution Guards Corps (IRGC) during a joint military exercise called the ‘Great Prophet 17’ in the southwest of Iran, in this picture obtained on December 22, 2021. IRG

(Reuters) – War games conducted this week by Iran in the Gulf were intended to send a warning to Israel, the country’s top military commanders said on Friday, amid concerns over possible Israeli plans to target Iranian nuclear sites.

The Revolutionary Guards’ war games, which included firing ballistic and cruise missiles, ended on Friday.

“These exercises had a very clear message: a serious, real … warning to threats by the Zionist regime’s authorities to beware of their mistakes,” Guards chief General Hossein Salami said on state TV.

“We will cut off their hands if they make a wrong move… The distance between actual operations and military exercises is only a change in the angles of launching the missiles,” Salami added.

Armed Forces Chief of Staff Major General Mohammad Bagheri said 16 ballistic missiles of different classes had been fired simultaneously and had destroyed predetermined targets.

Iran says its ballistic missiles have a range of 2,000 km (1,200 miles) and are capable of reaching Israel and U.S. bases in the region.

Israel, which opposes efforts by world powers to revive Tehran’s 2015 nuclear deal, has long threatened military action if diplomacy fails. Iran says its nuclear ambitions are peaceful.

Israeli Defence Minister Benny Gantz has called on world powers not to allow Iran to play for time at the nuclear negotiations, in recess at Iran’s request and scheduled to resume next Monday.

Israel is widely believed to be the only Middle Eastern country with a nuclear arsenal.

(dubai.newsroom@thomsonreuters.com; Editing by Gareth Jones)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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