Oil, Gas Prices Will Continue to Climb

Share

"The lower draw in crude oil stocks, combined with the strong builds in product stocks is bearish news for prices".

On the data front, the number of rigs operating in US oil fields rose by 10 to 752 this week, the biggest increase since June, oilfield service firm Baker Hughes said in its weekly report on Friday.

Analysts, had expected a much smaller drawdown of 3.89 million barrels in crude oil.

Analysts and traders have warned about the risk of a price correction since the start of 2018, but they say overall market conditions remain strong, mainly due to output cuts led by the Organization of the Petroleum Exporting Countries and Russian Federation.

The need for additional supply has been driven by the extreme cold that gripped much of the country, including the Atlantic Coast, the epicenter of the USA heating fuel market.

US West Texas Intermediate (WTI) crude futures were at $63.53 a barrel at 0144 GMT, 4 cents below their last settlement but still close to a December 2014 high of $63.67 per barrel reached the previous day.

Federal judge puts temporary block on Trump's decision to end DACA
Alongside it was a document outlining a "vision" for Trump's border wall: 700 miles, at a cost of $18 billion. Republicans like Pennsylvania Congressman Lou Barletta on the other. "We need permanent legislation".

US demand growth of 150,000 bpd was estimated for 2017, slightly lower than previous expectations.

He warned, meanwhile, that oil prices above $60 per barrel could be a spoiler as USA shale oil producers would take advantage of the rally by expanding their exploration and production work.

On top of usual sources of demand, many industrial and commercial customers in the region were asked by their local utilities to switch from natural gas to heating fuel.

In the physical market, New York Harbor ULSD barges were assessed Thursday at $2.0865 per gallon (/gal), the highest since December 2014. Pelham junction and tank farm in Pelham, Alabama, U.S., on Monday, Sept. 19, 2016.

Because US production increases will need to compete for market share in Asia, the difference between Brent and WTI prices is supported by cost differences to get there.

So far, this extra supply seems to have been enough to satisfy demand.

Pinarayi Vijayan praises Kim Jong-un's 'tough' stand against the US
North Korea agreed to hold official talks with its southern neighbour on Friday, after South Korea postponed a military drill it was due to hold with the US.

The Paris-based IEA, for its part, said in its latest Oil Market Report from December that "On considering the final component in the balance - non-OPEC production - we see that 2018 might not be quite so happy for OPEC producers".

The rally has brought out some concerns that the market could overheat, especially as USA production is expected to rise to new records.

One factor that might have helped defray the size of the build was if refiners kept focusing on distillates at the expense of gasoline.

Imports into the U.S. Atlantic Coast (USAC) have also been soft recently. The company reported 5 fewer rigs last week.

Gasoline stocks normally increase toward the end of the year.

Mazroui said that draining the oil glut needed time to bring global oil inventories down to the industry's five-year average.

China's imports from North Korea plummet in December, lowest for 4 years
He also said China and Russian Federation , which have not been invited, will be briefed on the discussions after the meeting. All parties should work to defuse tensions and promote dialogue, rather than blindly resort to pressure and isolation.

Share