India demand fears, weak Japan crude imports knock oil prices 2%

By Laila Kearney

NEW YORK (Reuters) – Oil prices were down 2% on Friday, falling from six-week highs as investors unloaded positions after weak Japanese crude import data and on worries about fuel demand in India, where COVID-19 infections have soared.

U.S. crude and global benchmark Brent were set for their biggest daily drops in about three weeks, but were still on track for monthly gains of about 8% and 6%, respectively. Fuel demand worldwide is mixed but consumption is rising in the United States and China.

Brent crude fell by $1.30, or 1.9%, at $67.26 a barrel by 12:48 p.m. EDT (1648 GMT), the last day of trading for the front-month June contract. U.S. West Texas Intermediate crude for June was at $63.67 a barrel, down $1.34, or 2.1%.

“The tug of war between summer demand growth prospects and worsening COVID infections is still in full swing,” JBC Energy analysts wrote on Friday.

India, the world’s third largest oil consumer, is in deep crisis, with hospitals and morgues overwhelmed, as the number of COVID-19 cases topped 18 million on Thursday.

Japan’s – another major crude oil importer – imports fell 25% in March from a year earlier to 2.34 million barrels per day, according to government figures. However, the country’s factory activity expanded at the fastest pace since early 2018.

“There are still several major countries struggling mightily with the COVID-19 and of course there is a humanitarian crisis developing in India,” said John Kilduff, partner at Again Capital. “These are two big sources of demand that are taking a hit.”

OPEC oil output rose in April due to more supply from Iran, countering the cartel’s pact with allies to reduce supply.

A Reuters survey forecast that Brent would average $64.17 in 2021, up from last month’s consensus of $63.12 per barrel and the $62.3 average for the benchmark so far this year.

(Additional reporting by Shadia Nasralla and Florence Tan; Editing by Kirsten Donovan and David Gregorio)

Oil steadies as dollar slumps but pandemic surge weighs

By Devika Krishna Kumar

NEW YORK (Reuters) -Oil prices were little changed on Monday, supported by a weaker U.S. dollar but pressured by concerns about the impact on demand from rising coronavirus cases in India and other countries.

Brent crude was down 4 cents, at $66.73 a barrel by 11:06 AM ET (1506 GMT), after rising 6% last week. West Texas Intermediate (WTI) U.S. oil was up 3 cents at $63.16 a barrel, having gained 6.4% last week.

The U.S. dollar traded at a six-week low versus major peers on Monday, with Treasury yields hovering near their weakest in five weeks.

With oil priced in dollars, a softer greenback could spur demand from holders of other currencies.

“If today’s broad-based weakness in the US dollar is sustained, the energy complex should be able to maintain the bulk of last week’s gains,” said Jim Ritterbusch, president of Ritterbusch and Associates.

“The primary hazard to continued oil price strength is the possible pre-emergence of Covid-19 case counts on a broad scale”

India reported a record rise in infections, which lifted overall cases to just over 15 million, making the country the second-worst affected after the United States, which has reported more than 31 million infections.

Deaths from COVID-19 in India also rose by a record 1,619 to nearly 180,000.

The capital region of Delhi ordered a six-day lockdown, joining around 13 other states across India that have decided to impose restrictions, curfews or lockdowns in their cities.

“This new wave of measures, while so far likely to be less stringent than what we saw in March 2020, when gasoline and gasoil/diesel demand in the country fell by close to 60%, is nevertheless set to weigh on transportation fuel consumption,” consultancy JBC said.

Hong Kong will suspend flights from India, Pakistan and the Philippines from April 20 due to imported coronavirus infections, authorities said on Sunday.

Lending some support, Saudi Arabia’s crude oil exports fell in February to their lowest in eight months, the Joint Organizations Data Initiative (JODI) said on Monday, as the world’s biggest oil exporter voluntarily capped output to support oil prices.

JP Morgan now expects Brent prices to break the $70 mark by May, compared with September in its previous forecast, the bank said in a recent note. It still expects them to finish the year at a similar level of about $74.

(Additional reporting by Ahmad Ghaddar in London, Aaron Sheldrick in Tokyo; Editing by Jan Harvey, Kirsten Donovan, Alexander Smith and David Gregorio)

Oil prices rise on economic outlook, drawdown in fuel stocks

By Julia Payne

LONDON (Reuters) – Oil prices rose on Thursday on a weaker dollar as fears of rising U.S. inflation eased while a steep fall in U.S. fuel stocks meant a crude glut would be short-lived as refiners restart in Texas.

Brent crude oil futures for May rose 79 cents, or 1.16%, to $68.69 a barrel by 1430 GMT, while U.S. West Texas Intermediate crude for April was up 62 cents, or 0.96%, at $65.06. Both contracts had risen by more than $1 a barrel in earlier trade.

“Fears of inflation are receding as the February U.S. CPI was at 1.7%. Consequently, bond yields fell and equities stabilized with the Dow hitting an all-time high. The dollar, therefore, is weakening, which helps oil,” Tamas Varga, senior analyst at PVM Oil Associates, said.

U.S. Treasury yields fell on Thursday as concern about a strong pick-up in inflation eased and focus turned to an auction of 30-year government debt. The dollar is at its lowest level in a week.

Varga added that the massive draw on U.S. gasoline stocks has also helped to boost oil prices.

“(It) implies that refiners’ crude intake will keep growing, reversing the recent stock builds we have seen in the last three weeks due to Winter Storm Uri.”

U.S. gasoline stocks fell by 11.9 million barrels in the week to March 5 to 231.6 million barrels, the Energy Information Administration (EIA) said, compared with expectations for a 3.5 million-barrel drop.​

Crude inventories, however, rose by 13.8 million barrels in the week to March 5 to 498.4 million barrels, compared with analysts’ expectations in a Reuters poll for an 816,000-barrel rise, as the nation’s oil industry continued to feel the effects of a winter storm mid-February that stalled refining and forced production shut-ins in Texas.

Globally, stocks also remain ample with crude oil in storage at major land and sea hubs rising last week, according to analysts and ship trackers.

As the pace of inoculations picks up, several states such as North Carolina and California have moved to relax COVID-19 restrictions.

Meanwhile, the U.S. House of Representatives gave final approval on Wednesday to one of the largest economic stimulus measures in American history, a sweeping $1.9 trillion COVID-19 relief bill that gives President Joe Biden his first major victory in office.

(Reporting by Julia Payne and Jessica Jaganathan; editing by Jason Neely and Emelia Sithole-Matarise)

Oil jumps almost 4% as output slow to recover from Texas storms

By Laila Kearney

NEW YORK (Reuters) – Oil prices rose nearly 4% on Monday, boosted by the expected slow return of U.S. crude output after last week’s deep freeze in Texas shut in production.

U.S. producers shut anywhere from 2 million to 4 million barrels per day of oil output due to cold weather in Texas and other oil producing states, and the unusually cold conditions may have damaged installations that could keep output offline longer than expected.

Brent crude settled at $65.24 a barrel, rising $2.33, or 3.7%, while U.S. oil settled at $61.49 a barrel, jumping $2.25, or 3.8%. The U.S. benchmark crude contract for March delivery expires on Monday, and the more widely-traded April contract was up $2.44, or 4.1%, at 61.70 a barrel.

Shale oil producers in the region could take at least two weeks to fully restart normal output, sources said, as damage assessments and power disruptions slow their recovery.

“The significant loss of both crude and gasoline production suggests more upside and likelihood of new highs possibly within a one-week time frame,” said Jim Ritterbusch of consultancy Ritterbusch and Associates. But he cautioned that with limited refining capacity, price could under pressure if refiners take weeks to return to normal.

“The market is behaving as if the refiners are going to come online quicker than the headlines would lead you to believe,” said Yawger. Gasoline crackspreads, an indicator of refiners’ margins have dropped by 5%.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centers, signaling even tighter supplies ahead.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

(Additional reporting by Noah Browning and Aaron Sheldrick in London and Jessica Resnick-Ault in New York; Editing by Jason Neely and Emelia Sithole-Matarise, David Gregorio and Jane Merriman)

Oil extends losses as Texas prepares to ramp up output after freeze

By Devika Krishna Kumar

NEW YORK (Reuters) – Oil prices fell for a second day on Friday, retreating further from recent highs as Texas energy companies began preparations to restart oil and gas fields shuttered by freezing weather and power outages.

Brent crude futures were down 66 cents, or 1%, at $63.27 a barrel by 12:27 p.m. (1727 GMT). U.S. West Texas Intermediate (WTI) crude fell 99 cents, or 1.6%, to $59.53.

For the week, Brent was on track for a 1.3% gain while WTI was largely flat.

This week, both benchmarks had climbed to the highest in more than a year.

“Price pullback thus far appears corrective and is slight within the context of this month’s major upside price acceleration,” said Jim Ritterbusch, president of Ritterbusch and Associates.

Unusually cold weather in Texas and the Plains states curtailed up to 4 million barrels per day (bpd) of crude production and 21 billion cubic feet of natural gas, analysts estimated.

Texas refiners halted about a fifth of the nation’s oil processing amid power outages and severe cold.

Companies were expected to prepare for production restarts on Friday as electric power and water services slowly resume, sources said.

“While much of the selling relates to a gradual resumption of power in the Gulf coast region ahead of a significant temperature warmup, the magnitude of this week’s loss of supply may require further discounting given much uncertainty regarding the extent and possible duration of lost output,” Ritterbusch said.

Oil prices fell despite a surprise drop in U.S. crude stockpiles last week, before the big freeze hit. Inventories fell 7.3 million barrels to 461.8 million barrels, their lowest since March, the Energy Information Administration reported on Thursday.

“Vaccines and the impressive rollouts we’ve seen have delivered strong gains, as have the efforts of OPEC+ – Saudi Arabia, in particular – and the big freeze in Texas, which gave oil prices one final kick this week,” Craig Erlam, senior market analyst at OANDA said.

“With so many bullish factors now priced in, it seems we’re seeing some of these positions being unwound.”

The United States on Thursday said it was ready to talk to Iran about returning to a 2015 agreement that aimed to prevent Tehran from acquiring nuclear weapons. Still, analysts did not expect near-term reversal of sanctions on Iran that were imposed by the previous U.S. administration.

“This breakthrough increases the probability that we may see Iran returning to the oil market soon, although there is much to be discussed and a new deal will not be a carbon-copy of the 2015 nuclear deal,” said StoneX analyst Kevin Solomon.

(Additional reporting by Ahmad Ghaddar in London and Roslan Khasawneh in Singapore and Sonali Paul in Melbourne; Editing by Marguerita Choy and David Gregorio)

Oil prices slip as Hurricane Laura makes Gulf Coast landfall

By Ahmad Ghaddar

LONDON (Reuters) – Oil prices fell on Thursday as a massive hurricane in the Gulf of Mexico made landfall in the heart of the U.S. oil industry, forcing oil rigs and refineries to shut down.

Brent crude futures for October, which expire on Friday, fell 50 cents, or 1.1%, to $45.14 a barrel by 1359 GMT. The more active November Brent contract was down 55 cents, or 1.2%, at $45.61 per barrel.

U.S. West Texas Intermediate crude futures fell 39 cents or 0.9% to $43 a barrel.

Hurricane Laura made landfall early on Thursday in southwestern Louisiana as a category 4 storm, one of the most powerful to hit the state, with forecasters warning it could push a wall of water 40 miles inland from the sea.

Oil producers on Tuesday had shut 1.56 million barrels per day (bpd) of crude output, or 84% of the Gulf of Mexico’s production, evacuating 310 offshore facilities.

At the same time, refiners that convert nearly 2.33 million bpd of crude oil into fuel, and account for about 12% of U.S. processing, halted operations.

“Perhaps traders are waiting to see what the damage is but the limited impact so far may also just be a reflection of the current oil market dynamics. Temporary disruptions are easily covered,” OANDA analyst Craig Erlam said.

Oil prices also shrugged off U.S. crude inventory declines and signs that gasoline demand in the world’s biggest oil consumer were improving.

Crude oil stockpiles fell last week as exports soared the most in 18 months and refineries boosted production to the highest rate since March, Energy Information Administration data showed on Wednesday. Gasoline stocks also fell.

“It appears that the gasoline inventory reduction was due first and foremost to increased demand – gasoline demand rose to a six-month high of around 9.2 million bpd,” Commerzbank said.

(Additional reporting by Sonali Paul and Koustav Samanta; editing by Jason Neely)

Oil falls on fears of more COVID-19 cases

(Reuters) – Oil prices fell on Wednesday on fears about fresh outbreaks of COVID-19 but prices drew some support from stimulus measures and positive tests of a drug that could save some critically ill patients.

Brent crude was down 38 cents, or 0.9%, at $40.58 a barrel at 1335 GMT. U.S. West Texas Intermediate (WTI) fell 56 cents, or 1.5%, to $37.82 a barrel.

The World Health Organization said it was moving to update its guidelines after results showed the corticosteroid medication dexamethasone cut death rates by about a third among the most severely ill COVID-19 patients.

Yet concerns persisted about the spread of the virus in some regions and the risk of second waves in places where the spread had started to slow.

“The pandemic is rapidly evolving and the outlook for oil demand will, therefore, remain plagued by a degree of uncertainty,” said Stephen Brennock of broker PVM.

To contain the spread of a new virus outbreak in Beijing, scores of flights were canceled and schools shut.

“We think the oil market is not currently pricing in a significant probability of either second waves of coronavirus cases in key consumers and the associated lockdowns, or anything less than a rapid return to economic business-as-usual,” Standard Chartered analysts said, pointing to a downside risk for prices in the medium term.

Weak economic activity is still weighing on demand for crude. Oil imports in Japan, the world’s fourth-biggest crude buyer, slumped in May to the lowest in almost three decades.

However, the Organization of the Petroleum Exporting Countries forecast a gradual recovery in oil demand and said record supply cuts by the group and other producers were already helping rebalance the market.

Business confidence at Asian companies sank to an 11-year low in the second quarter, a Thomson Reuters/INSEAD survey found, with two-thirds of firms polled seeing a worsening COVID-19 pandemic as the biggest risk over the next six months.

(Reporting by Bozorgmehr Sharafedin in London; Additional reporting Jane Chung in Seoul; Editing by Louise Heavens, Mark Potter and David Clarke)

Oil falls after U.S. crude stockpiles jump and gasoline demand slumps

By Laura Sanicola

NEW YORK (Reuters) – Oil prices fell on Wednesday after data showed U.S. crude inventories rose last week by the most since 2016 while gasoline demand suffered its biggest weekly drop ever due to the coronavirus pandemic.

Crude inventories <USOILC=ECI> rose by 13.8 million barrels last week, the U.S. Energy Information Administration said. That was the biggest one-week rise since 2016, and analysts expect similar reports in coming weeks, as refineries curb output further and gasoline demand continues to decline.

West Texas Intermediate (WTI) crude <CLc1> fell 29 cents, or 1.5%, to $20.19 a barrel by 1:30 p.m. ET (1730 GMT), after hitting a low at $19.90.

June Brent crude <LCOc1> fell $1.45, or 5.5%, to $24.90 a barrel. The global benchmark fell to $21.65 on Monday, its lowest since 2002, when the now-expired May contract was the front month.

The market has slumped on pledges of higher output from Saudi Arabia and Russia after a supply pact collapsed and the sharp fall in demand because of the coronavirus pandemic. Brent crude fell 66% in the first three months of 2020 – its biggest ever quarterly loss.

“Global inventories will be chock full by mid-May. I think the market can continue to decline further,” said Gene McGillian, a broker and oil analyst at Tradition Energy.

“There’s no signs of reproachment with producers and with further demand destruction we could get another $5 taken from the market.”

U.S. state governments have issued orders trying to halt the spread of the virus, and many residents are staying out of their cars. Gasoline demand fell by the most ever in one week, with products supplied, a proxy for demand, dropping by 2.2 million barrels per day to 6.7 million bpd. That augurs for more refining cutbacks down the road.

“Demand is a disaster,” said Bob Yawger, director of energy futures at Mizuho in New York. “That’s the whole problem here. It’s horrible.”

The bearish mood has been fueled by a rift within the Organization of the Petroleum Exporting Countries (OPEC). Saudi Arabia and other OPEC members have been unable to agree to a technical meeting in April to discuss sliding prices.

An OPEC-led supply deal fell apart on March 6 when Russia refused to cut output further. Saudi Arabia has already begun to boost output, a Reuters OPEC survey showed on Tuesday, and is expected to pump more in April. [OPEC/O]

“It is very unlikely that OPEC, with or without Russia or the United States, will agree a sufficient volumetric solution to offset oil demand losses,” BNP Paribas analyst Harry Tchilinguirian said in a report on Tuesday.

U.S. President Donald Trump on Tuesday said he would join Saudi Arabia and Russia, if need be, for talks about the fall in oil prices.

(Additional reporting by Yuka Obayashi and Alex Lawler; Editing by Marguerita Choy and David Goodman)

Saudi Arabia floods markets with $25 oil as Russia fight escalates

By Olga Yagova

MOSCOW (Reuters) – Saudi Arabia is flooding markets with oil at prices as low as $25 per barrel, specifically targeting big refiners of Russian oil in Europe and Asia, in an escalation of its fight with Moscow for market share, five trading sources said on Friday.

The sources, from oil majors and refiners which process crude in Europe, said Saudi state oil company Aramco told them it would supply all requested additional volumes in April.

Sources previously told Reuters Saudi Arabia is also seeking to replace Russian oil with Chinese and Indian buyers, although not all refiners received volumes they had asked for.

Tanker rates soared as Saudi Arabia provisionally chartered around 31 supertankers to take extra oil, including to the United States, where Russian oil is usually less in demand.

Oil prices have halved since the start of the year because demand has been hit by the coronavirus outbreak and after Russia and OPEC failed to reach a new deal on supply cuts.

Moscow refused to support new deeper cuts, saying the impact from the virus could be much worse than thought, and Riyadh retaliated by opening its taps and pledging to pump record volumes on to the market.

Russia has so far said it is not planning to come back to the negotiating table despite feeling the pressure from the extraordinary Saudi moves.

Energy Minister Alexander Novak said on Friday Russia saw no grounds so far for returning to discussions with its OPEC+ partners and can increase its oil production by a modest 200,000 barrels per day in April.

By contrast, Saudi Arabia has pledged to raise output by 2.6 million bpd in April, including from stocks. Fellow Gulf producers like the United Arab Emirates has had to join in the battle for market share and has also announced production increases.

Saudi Arabia has made a deep cut to its official selling prices for oil. Arab Light and Arab Medium barrels were offered at selling price of $25-28 per barrel on CIF Rotterdam basis, traders said.

On Friday, Abu Dhabi National Oil Company (ADNOC) also offered steep discounts for its Murban crude for April, announcing forward prices for the first time in its history. It previously set prices retroactively.

Russia’s main blend Urals has been offered slightly higher than $30 per barrel on CIF Rotterdam basis, according to Refinitiv Eikon data.

“We are happy with our allocation. The requests for April were confirmed. I look forward to May if prices remain that attractive”, a trader with a European oil company involved in the talks told Reuters.

European oil refiners including Total, BP, Eni and SOCAR have all had allocations for additional Saudi crude oil supplies in April confirmed, the sources said.

Saudi Aramco declined to comment. Total, BP, Eni and SOCAR did not immediately respond to Reuters requests for comment.

On Thursday, sources told Reuters Saudi Arabia started focusing on boosting supplies to traditional buyers of Urals as it is trying to replace Russian oil in refiners’ feedstock around the world, from Europe to India.

Brent crude prices were on track for their biggest weekly fall since the 2008 financial crisis on Friday as investors fretted over the impact of the virus on demand and the Russian-Saudi price war. [O/R]

(Reporting by Olga Yagova; Additional reporting by Jonathan Saul, Rania El Gamal in Dubai and Devika Krishna Kumar in New York; Editing by Dmitry Zhdannikov/Jan Harvey/David Evans/Jane Merriman)

Oil falls as spectre of China virus looms over fuel demand

By Julia Payne

LONDON (Reuters) – Oil prices fell on Thursday on concern that the spread of a respiratory virus from China could lower fuel demand if it stunts economic growth in an echo of the SARS epidemic nearly 20 years ago.

Brent crude futures  were down 88 cents, or 1.39%, at $62.33 a barrel by 1225 GMT, having earlier touched their lowest since Dec. 4. They lost 2.1% in the previous session.

U.S. West Texas Intermediate futures  fell 89 cents, or 1.57%, to $55.85 a barrel after earlier falling to the lowest since Dec. 3. The contract declined 2.7% on Wednesday.

On Thursday, China put on lockdown two cities that were at the epicentre of a new coronavirus outbreak that has killed 17 people and infected nearly 600, as health authorities around the world scrambled to prevent a global pandemic.

The potential for a pandemic has stirred memories of the Sudden Acute Respiratory Syndrome outbreak in 2002-03, which also started in China and dented economic growth and caused a slump in travel.

“Fundamentals are really being driven by virus fears. On a technical basis, there’s been a fight over the past six sessions but oil finally broke the 200-day moving average when it closed below that level yesterday,” said Olivier Jakob, of consultancy Petromatrix.

Cases have been detected as far as away as the United States and global stock markets were also down in part due to fears of the virus spreading further as millions of Chinese prepare to travel for the Lunar New Year.

Beijing said on Thursday that it had cancelled major public events, including two well-known Lunar New Year temple fairs, to curb the spread.

“We estimate a price shock of up to $5 (a barrel) if the crisis develops into a SARS-style epidemic based on historical oil price movements,” JPM Commodities Research said in a note.

The U.S. bank maintained its forecast for Brent to average $67 a barrel in the first quarter and $64.50 a barrel throughout 2020.

Amid all the demand concerns, however, supply remains plentiful.

U.S. crude stockpiles rose last week by 1.6 million barrels, against expectations of a drop, the American Petroleum Institute said late on Tuesday. [API/S]

Brazil also produced more than a billion barrels of oil in 2019, a first for the South American nation, the national oil regulator said on Wednesday.

China, meanwhile, released data on Thursday showing its gasoline exports rose nearly a third last year thanks to new refineries.

(Additional reporting by Aaron Sheldrick in Tokyo; Editing by David Goodman and Bernadette Baum)