Oct 19 2012 |
more articles from
|
UPDATE 9-Oil falls on economic fears, pipeline restart estimate
* North Sea Buzzard oilfield restart delayed again
* Keystone pipeline seen back up at weekend
* Spanish bailout worries drag on markets
(Adds details on weekly activity, CFTC report in last paragraph)
NEW YORK, Oct 19 (Reuters) - Brent crude prices fell on Friday for the fourth straight session, dragged down by fresh global economic concerns and expectations a major Canadian crude oil pipeline to the United States would restart on schedule.
Concerns about the lack of progress on a Spanish bailout dampened risk appetite, helping send equities and commodity markets lower and lending support to the dollar.
The line was shut on Wednesday after an anomaly was detected, but analysts said that with U.S. crude oil inventories healthy, the market should be able to absorb a short-term disruption with little problem. U.S. crude stocks are nearly 11 percent above year-ago levels, according to government data.
"Because of the ample supplies of oil (in the United States), a three-day closure is not extremely bullish -- if they announce a delay that's when the market will start to get a bid in it again," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
Further pressure on prices came from a report showing U.S. home resales retreated in September from a two-year high.
Oil markets have been balancing the struggling economy and weak demand against supply problems in the North Sea, which have helped lift Brent crude's premium to U.S. oil to $20 a barrel.
Crude prices received an early lift on news that there was another delay in the restart of the North Sea Buzzard oilfield, which is now expected to restart on Oct. 23 after a maintenance shutdown.
Brent December crude fell $2.28 to settle at $110.14 a barrel. The international benchmark traded as high as $113.27, just below the 50-day moving average of $113.33, before dipping as low as $110.05.
U.S. front-month November crude lost $2.05 to settle at $90.05 a barrel, after finding resistance at $93 a barrel area and testing support under $90 near the 100-day moving average.
Brent volumes were light, about 20 percent below its 30-day average, while U.S. trading activity was closer to normal levels.
Gasoline and heating oil futures also fell, off 1.6 and 1.4 percent, respectively, finding some support relative to crude prices due to concerns about supplies.
For the week, Brent lost $4.48, or 3.9 percent, while U.S. crude gave up $1.81, or 1.9 percent. Money managers cut net long positions by nearly 3,000 contracts to just over 193,000 contracts, in the week to Oct. 16, according to data from the U.S. Commodity Futures Trading Commission.
(Additional reporting by Claire Milhench in London and Florence Tan in Singapore; Editing by Chizu Nomiyama, Marguerita Choy and Kenneth Barry)
((robert.gibbons@thomsonreuters.com)(+1 646 223 6059)(Reuters Messaging: robert.gibbons.reuters.com@reuters.net))
Keywords: MARKETS OIL/
© Copyright Zawya. All Rights Reserved.
UPDATE 5-Oil edges up towards $113 on supply fears
* Canada to U.S. Keystone oil pipeline shutdown
* North Sea Buzzard oilfield restart delayed again
* Coming Up: U.S. CFTC commitment of traders data at 1930 GMT
(Recasts, adds fresh quotes, updates prices)
By Claire Milhench
LONDON, Oct 19 (Reuters) - Brent oil prices edged up towards $113 a barrel on Friday, retracing some of Thursday's losses after the shutdown of a key pipeline in the United States, and news of further delays in the restart of the UK's Buzzard oilfield.
At 1358 GMT December Brent crude oil futures were up
40 cents at $112.82 a barrel, but U.S. crude was leading the way, up 71 cents at $92.81 a barrel.
Analysts and traders said oil was being supported by the shutdown at TransCanada Corp's Keystone pipeline, which moves Canadian crude from Alberta to the central United States.
"The expectation is that the Keystone pipeline will only be shut for three days while a team is sent to investigate a 'small anomaly'," noted Olivier Jakob, an energy analyst at Petromatrix in Switzerland. However, there is a risk the situation could deteriorate over the weekend, he added.
The Brent-WTI spread also came under pressure, with traders taking the opportunity to try to close down what has been a persistent $20 a barrel premium for Brent by pushing U.S. crude higher.
"It's a classic Friday squeeze," said Bill Hubard, chief economist at Markets.com. "That pipeline is a critical issue for the upcoming U.S. elections - we've seen gasoline shortages in California in the last month."
Over in the North Sea, there was a further delay in the restart of the Buzzard oilfield, which is now expected to restart on Oct. 23 after a maintenance shutdown.
Nexen , operator of Buzzard, Britain's largest oilfield, had earlier said it would resume output on Oct. 21, increasing the supply of crude that underpins the Brent contract.
Maintenance at the Buzzard field has tightened supply through late September and early October, strengthening prompt Brent prices and pushing the spread between the European marker and U.S. crude to its widest in a year.
Tony Machacek, a broker at Jefferies Bache in London, said this was helping to support prices on Friday, with widespread deferrals of Forties crude cargoes for October loading.
Signs of progress in the euro zone debt crisis also created a relatively benign mood across the markets, with European leaders taking steps towards establishing a single banking supervisor.
This opens the way for the bloc's rescue fund to inject capital directly into ailing banks. "It's difficult to see how the market will take this move as anything but a positive," said Gary Jenkins, an analyst at Swordfish.
Machacek also said that U.S. RBOB gasoline, which is often traded against Brent, had stabilised following a major sell-off.
This was triggered by the announcement that U.S. winter specification gasoline could be sold earlier than usual to ease extreme product shortages on the U.S. West Coast.
"Maybe we are seeing some end-of-the-week short-covering in RBOB," he suggested.
Tensions between Syria and Turkey as well as Iran's nuclear ambitions are also keeping a floor under prices.
European Union governments imposed fresh sanctions this week against major Iranian state companies in the oil and gas industry and tightened curbs on the central bank, cranking up financial pressure on Tehran.
BULLS VS BEARS
But analysts expect the market to come off once Buzzard is back, characterising the recent price direction as "rangebound" with numerous conflicting supply and demand factors offsetting each other.
"Bullish factors such as supply risks and the plentiful supply of liquidity by central banks are counterbalanced by bearish factors such as the supply surplus and subdued demand prospects," sa i d Carsten Fritsch, an energy analyst at Commerzbank in Frankfurt.
The market's lack of conviction in movements either way has led to some "flip-flopping" this week, he added.
Brent closed 80 cents down on Thursday after the dollar rose and Goldman Sachs revised its 2013 forecast for Brent down to $110 from $130 a barrel.
"They went neutral after being one of the big bulls - that helped drive the market lower," said Ole Hansen, senior commodity strategist at Saxo Bank.
Dominick Chirichella of the Energy Management Institute, suggested that oil markets were entering the "election zone", when market participants start to neutralise their trading books because of uncertainty around the outcome of the U.S. presidential election.
(Additional reporting by Florence Tan; in Singapore; Editing by Jane Baird and Helen Massy-Beresford)
((claire.milhench@thomsonreuters.com)(+44)(0)(207 542 3571)(Reuters Messaging: claire.milhench.thomsonreuters.com@reuters.net))
Keywords: MARKETS OIL/
© Copyright Zawya. All Rights Reserved.
UPDATE 2-Brent stays above $112, set for weekly fall as supply concerns ease
* Nexen says to restart North Sea Buzzard output this weekend
* South Sudan to resume oil exports in 3 months
* Canada to U.S. oil pipeline shut for 3 days
* Coming Up: U.S. CFTC commitment of traders data; 1930 GMT
(Updates prices)
By Florence Tan
SINGAPORE, Oct 19 (Reuters) - Brent crude held above $112 a barrel on Friday, but remained on track for its third weekly fall in five weeks, as supply concerns diminished with the imminent restart of Britain's largest oilfield.
December Brent crude was unchanged at $112.42 a barrel at 0658 GMT, on course for a near 2-percent loss this week. U.S. crude for December was down 9 cents at $92.01.
"We have enough supply. Short of any geopolitical or economic shocks, the market will probably grind lower this month," said Jeremy Friesen, a commodities strategist at Societe Generale in Hong Kong, adding that Brent would probably trade between $110 and $115 a barrel this quarter.
Nexen , operator of Britain's largest oilfield, North Sea Buzzard, said it would resume output on Oct. 21, increasing the supply of crude underpinning the Brent contract.
Maintenance at the field had tightened supply, strengthening prompt Brent prices and pushing the spread between the European marker and U.S. crude to its widest in a year.
African crude supply will also rise in the next few months as South Sudan ordered oil companies to resume production on Thursday. The country expects its oil exports to return to the market in three months.
Oil prices got some support on Thursday, however, from a shutdown at TransCanada Corp's Keystone pipeline that moves Canadian crude from Alberta to the central United States.
"The Keystone pipeline is expected back on line by the 20th, so we're watching how this will turn out," said Ryoma Furumi, a commodities sales manager at Newedge Japan.
A rise in unconventional oil supplies in the United States and Canada is also weighing on the outlook for oil prices.
Wall Street giant Goldman Sachs has called an end to the oil price super-cycle, reversing years of bullish recommendations, and cut its 2013 Brent forecast to $110 a barrel from $130.
RISKY BUSINESS
But the risk of disruptions to crude supply from the Middle East remain, while easing concerns about the slowdown in global growth are also supporting oil prices.
Data from the United States, the world's largest oil consumer, pointed to a slowly healing labour market and rising factory activity in the U.S. mid-Atlantic region during October. China's economy is also likely to have stabilised after posting its slowest three months of growth since the depths of the financial crisis.
Implied oil demand in China hit a record high in September as refiners raised runs to meet peak seasonal consumption, but the pace of annual demand growth in the world's second biggest oil consumer is at its slowest in more than a decade.
"We've kind of ebbed into a bearish China view, but the market could change that view and that could be bullish for oil," Friesen said.
In the Middle East, European Union governments imposed sanctions this week against major Iranian state companies in the oil and gas industry, and tightened curbs on the central bank, cranking up financial pressure on Tehran.
But Iran is believed to be further increasing its uranium enrichment capacity, Western diplomats said, in another sign Tehran is defying international demands to rein in its disputed nuclear programme.
(Reporting by Florence Tan; Editing by Clarence Fernandez and Joseph Radford)
((Florence.Tan@thomsonreuters.com)(+65 6870 3497)(Reuters Messaging: florence.tan.thomsonreuters.com@reuters.net))
Keywords: MARKETS OIL/
© Copyright Zawya. All Rights Reserved.
UPDATE 1-Brent stays above $112, set for weekly fall as supply concerns ease
* Nexen says to restart North Sea Buzzard output this weekend
* S. Sudan to resume oil exports in 3 months
* Canada to U.S. oil pipeline shut for 3 days
* Coming Up: U.S. CFTC commitment of traders data; 1930 GMT
(Updates prices)
By Florence Tan
SINGAPORE, Oct 19 (Reuters) - Brent crude held above $112 a barrel on Friday, but remained on track for its third weekly fall in five weeks, as supply concerns diminished with the imminent restart of Britain's largest oilfield.
December Brent crude edged up 2 cents to $112.44 a barrel by 0510 GMT, on course for a near 2-percent loss this week. U.S. crude for December was down 1 cent at $92.09.
"We have enough supply. Short of any geopolitical or economic shocks, the market will probably grind lower this month," said Jeremy Friesen, a commodities strategist at Societe Generale in Hong Kong, adding that Brent would probably trade between $110 and $115 a barrel this quarter.
Nexen , operator of Britain's largest oilfield, North Sea Buzzard, said it would resume output on Oct. 21, increasing supply of crude underpinning the Brent contract.
Maintenance at the field had tightened supply, strengthening prompt Brent prices and pushing the spread between the European marker and U.S. crude to its widest in a year.
African crude supply will also rise in the next few months as South Sudan ordered oil companies to resume production on Thursday. The country expects its oil exports to return to the market in three months.
Oil prices got some support on Thursday, however, from a shutdown at TransCanada Corp's Keystone pipeline that moves Canadian crude from Alberta to the central United States.
"The Keystone pipeline is expected back on line by the 20th, so we're watching how this will turn out," said Ryoma Furumi, a commodities sales manager at Newedge Japan.
A rise in unconventional oil supplies in the United States and Canada is also weighing on the outlook for oil prices. Wall Street giant Goldman Sachs has called an end to the oil price super-cycle, reversing years of bullish recommendations, and cut its 2013 Brent forecast to $110 a barrel from $130.
RISKY BUSINESS
But the risk of disruptions to crude supply from the Middle East remains and easing concerns about a growing slowdown in global growth support oil prices.
Data from the United States, the world's largest oil consumer, pointed to a slowly healing labour market and rising factory activity in the U.S. mid-Atlantic region during October. China's economy is also likely to have stabilised after posting the slowest three months of growth since the depths of the financial crisis.
Implied oil demand in China hit a record high in September as refiners raised runs to meet peak seasonal consumption, but the pace of annual demand growth in the world's second biggest oil consumer is at its slowest in more than a decade.
"We've kind of ebbed into a bearish China view, but the market could change that view and that could be bullish for oil," Friesen said.
In the Middle East, European Union governments imposed sanctions this week against major Iranian state companies in the oil and gas industry, and tightened curbs on the central bank, cranking up financial pressure on Tehran.
But Iran is believed to be further increasing its uranium enrichment capacity, Western diplomats said, in another sign Tehran is defying international demands to rein in its disputed nuclear programme.
(Reporting by Florence Tan; Editing by Clarence Fernandez)
((Florence.Tan@thomsonreuters.com)(+65 6870 3497)(Reuters Messaging: florence.tan.thomsonreuters.com@reuters.net))
Keywords: MARKETS OIL/
© Copyright Zawya. All Rights Reserved.
More in Oil & Gas
Oddly Enough
- U.S. patent case climaxes with win for Canadian vibrator maker
- Jury finds no negligence in trial over man's 8-month erection
- Famed Milwaukee tavern rehangs bras on ceiling
- Soccer-Zimbabwe may have to field two goalkeepers in qualifier
- Italian named world's top pasta chef for recession-inspired dish
- There's More
Post Your Comment