Asian markets tumble as oil collapses again

HONG KONG—The slump in oil dominated the mood on Asian markets Wednesday after falling back below $30 a barrel, hammering energy firms once again and sending stocks deeper into the red.

With the euphoria of Friday’s Bank of Japan stimulus but a distant memory, Tokyo led the regional losses followed by Hong Kong, where insurance giant AIA lost almost a 10th of its value on fears China would tighten insurance rules.

The plunge in oil prices to 12-year lows has sent shudders through world markets, helping wipe trillions of dollars off valuations, even leading to the word “recession” raising its head.

Crude resumed its downward trend this week, jettisoning most of the gains seen in a four-day rally last week fuelled by hopes for OPEC-Russian talks on output cuts.

US benchmark West Texas Intermediate crashed more than 11 percent on Monday and Tuesday to fall back through the $30 level for the first time since January 21. Brent lost almost six percent in the same period.

And on Wednesday the losses piled up ahead of a US report that analysts warned could see a further increase in stockpiles. WTI lost one percent and Brent 0.9 percent in early Asian trade.

Oil prices have crumbled about 75 percent since mid-2014, hit by a perfect storm of weak demand, oversupply, overproduction, a slowing global economy and a strong dollar.

After already taking a hit on Tuesday, regional energy stocks were buffeted again on Wednesday.

In Hong Kong, CNOOC shed 5.7 percent and PetroChina dived five percent while Kunlun Energy sank 5.6 percent.

Sydney-listed Santos lost 7.5 percent and mining giant BHP Billiton lost 4.2 percent while Woodside Petroleum fell 4.3 percent.

Inpex gave up three percent in Tokyo, where JX Holdings was 2.8 percent off.

‘Talk of recession louder’

The losses followed other big guns in New York and Europe. BP lost 8.7 percent in London after it suffered a loss of $6.48 billion last year and announced another 3,000 job cuts. Chief executive Bob Dudley warned: “We expect 2016 to be tough.”

BP’s American rival, ExxonMobil, managed to stay profitable, but reported a 58 percent drop in fourth-quarter earnings and announced plans to slash its capital budget and suspend its share repurchase programme.

“The underlying fundamentals are deteriorating and the talk of recession is getting louder,” Chris Weston, chief market strategist at in Melbourne at IG Ltd., told Bloomberg News.

“When you see BP coming out with disastrous results and when you see Exxon cutting back on expenditures again, you realise the implication weak oil has on economies.”

Tokyo’s Nikkei index sank 3.1 percent by lunch, while Hong Kong was almost three percent off, Sydney lost 2.1 percent and Seoul shed 1.1 percent. Shanghai slipped one percent.

There were also sharp losses across other parts of Asia, with Singapore, Manila and Kuala Lumpur worst hit.

In Hong Kong, insurance giant AIA lost 8.8 percent in the morning following a Bloomberg News report that China would clamp down on the purchase of overseas cover. AIA’s US shares lost more than five percent.

Beijing wants to close a loophole in its capital controls aimed at stemming the outflow of its depreciating yuan currency, as the economy logs its slowest growth in 25 years.

Manulife, another Hong Kong-listed insurer, shed 5.5 percent.

source: business.inquirer.net

Equities pulled lower by oil, China concerns

NEW YORK - Global equities were lower on Monday, pressured by another downdraft in oil prices and worries over growth in China's economy, while the holiday season kept trading volumes muted.

Prices of both Brent and U.S. crude dropped more than 3 percent , reversing a brief rebound and dragging U.S. energy shares down 1.8 percent as the worst performing of the major S&P sectors.

Crude again moved within sight of an 11-year low. Brent settled at $36.62 and U.S. crude settled at $36.81 as last week's short-covering dried up and players worried that prices had more room to swoon.

"You have energy and tax-loss harvesting moving markets back and forth in these last few weeks," said Tim Courtney, Chief Investment Officer at Exencial Wealth Advisors, which oversees $1.4 billion in assets.

In contrast to oil, U.S. natural gas prices settled up 10 percent at $2.228 per million British thermal units as forecasts for colder temperatures led to bets that long-delayed winter weather was finally arriving.

The Dow Jones industrial average fell 23.9 points, or 0.14 percent, to 17,528.27, the S&P 500 lost 4.45 points, or 0.22 percent, to 2,056.54 and the Nasdaq Composite dropped 7.51 points, or 0.15 percent, to 5,040.99.

A weak batch of industrial profits raised concerns about China's economy and sent Chinese stocks lower by almost 3 percent, their biggest drop in a month.

Profits at Chinese industrial companies in November fell 1.4 percent from a year earlier, the sixth consecutive month of decline and another sign that the world's chief engine of growth for the past decade is sputtering.

MSCI's broadest index of Asia-Pacific shares outside Japan gave up early modest gains to fall 0.53, putting it on track for a 12-percent loss this year.

With trading light in the United States and Europe between Christmas and the upcoming New Year's holidays, as well as a holiday on Monday in the United Kingdom, markets could see exaggerated moves this week.

MSCI's all-country world index lost 0.22 percent, while the pan-European FTSEurofirst 300 index closed down 0.54 percent.

In Europe, the drop in oil prices put pressure on energy stocks such as Repsol and Total.

Yields on benchmark 10-year Treasury notes inched down to 2.2322 percent, up 3/32 in price.

The dollar edged lower against a basket of major currencies, off 0.03 percent at 97.951 as bullish bets on the currency this year on a U.S. Federal Reserve rate hike met year-end profit-taking.

But the drop in oil prices hurt currencies linked to the commodity, such as the Australian and Canadian dollars.

The Australian dollar fell 0.1 percent to $0.7248 while its Canadian counterpart fell 0.6 percent to $1.3902, heading back towards this month's 11-year lows.

Spot gold was down 0.7 percent at $1,068.19 an ounce and was on track for its sixth straight quarterly decline, its longest run of quarterly losses since the mid-1970s. —Reuters

Asian stocks subdued as oil resumes fall

TOKYO - Asian stocks were subdued on Tuesday, with Japanese and South Korean equities slipping, after crude oil prices resumed their slide and cooled investor sentiment.

MSCI's broadest index of Asia-Pacific shares outside Japan were effectively unchanged, and looked set for a loss of around 12 percent for the year.

Japan's Nikkei lost 0.3 percent and South Korea's KOSPI fell 0.4 percent. Australian stocks bucked the trend and rose 0.4 percent.

On Monday, prices of both Brent and US crude dropped more than 3 percent , reversing a brief rebound and dragging US energy shares down 1.8 percent as the worst performing of the major S&P sectors.

Brent was at $36.60 a barrel, near an 11-year low of $35.98 struck last week.

The Dow dipped 0.1 percent and the S&P 500 lost 0.2 percent overnight after trading resumed following the Christmas break, but activity is expected to remain thin until after the long New Year holiday weekend.

In currencies, the dollar edged down 0.1 percent to 120.33 yen, within striking distance of a two-month low of 120.05 struck late last week.

The greenback has been sapped by profit taking after the Federal Reserve this month hiked interest rates for the first time in nine years. The currency market will wait for the Fed to send fresh signals about when the second rate hike could take place in 2016 for potential dollar support.

The euro nudged up 0.1 percent to $1.0977.

The dollar fared better against its Canadian counterpart, which was weighed down as crude oil prices weakened again.

The Canadian dollar stood little changed at C$1.3894 to the greenback after losing 0.7 percent overnight. The loonie fell to an 11-year low of C$1.4003 against the dollar earlier this month.

"We are looking for USD/CAD to break 1.40 and head towards 1.45 in the first half of 2016. The oil industry is experiencing its biggest downturn since the 1990s and prices could fall another $10 a barrel before bottoming," wrote Kathy Lien, managing director at BK Asset Management.

The Australian dollar gained 0.2 percent to $0.7262 while the New Zealand dollar rose 0.2 percent to $0.6859. Both currencies were confined to a narrow range ahead of the year's end. —Reuters

Crude oil falls after US growth figures disappoint

TOKYO – Crude futures dropped in early Asian trading on Friday after the release of a report showing that US economic growth had slowed sharply, reinforcing concerns about sluggish demand in a world awash with oil.

US economic growth braked sharply in the third quarter as businesses cut back on restocking warehouses to work off an inventory glut, data showed.

Both of the main crude benchmarks are on track to post their first weekly gains in three weeks, but with oil still being added to inventories, prices are likely to be range-bound in the coming weeks, traders and analysts said.

US crude was down 24 cents at $45.82 a barrel at 0140 GMT, after rising 12 cents in the previous session. The benchmark is on track to post a gain of 2.7 percent this week.

Brent crude fell 11 cents to $48.69 a barrel after ending 20 cents lower on Thursday and is heading for an increase of 1.5 percent this week.

The sluggish US growth figures and weak home sales numbers have tempered the market's positive reaction to government figures earlier in the week showing oil stockpiles last week had increased by 3.4 million barrels, which was below the estimate from an industry group.

That had sent prices sharply higher with US crude rallying nearly $3 a barrel. – Reuters

Oil prices extend gains in Asian trade

Singapore – Oil prices climbed in Asia Monday boosted by a weaker dollar and expectations a rise in demand will ease a global supply glut, while investors await the release of key Chinese economic data this week.

Both main crude contracts have rallied since hitting six-year lows in late August, with last week seeing healthy rallies in line with global equities on waning expectations the US Federal Reserve will hike borrowing costs this year, pushing the dollar lower.

A softer dollar makes dollar-priced oil cheaper, spurring demand.

Comments by OPEC secretary general Abdullah el-Badri at the weekend that the cartel sees a "more balanced" oil market next year also provided support.

In afternoon Asian trade, US benchmark West Texas Intermediate for November delivery rose 0.89 percent to $50.07 and Brent crude for November added 0.91 percent to $53.13 a barrel.

Attention is on the release of Chinese trade and inflation data, which will give a fresh idea about the state of the world's biggest energy consumer. Confidence was given a lift at the start of the month by a report indicating the country's key manufacturing sector saw a slight improvement in September.

The news provided some cheer after a string of figures highlighting a sharp slowdown in Chinese growth. Fears about the Asian economic giant were inflamed in August when authorities devalued the yuan currency, raising questions about their grip on the crisis.

Bernard Aw, market strategist at IG Markets Singapore, said Monday's price rise was bolstered after el-Badri said Sunday: "OPEC is confident that it will see a more balanced market in 2016.

 "In recent months, there has been a contraction in production from non-OPEC producers and an increase in global demand."

The comments meant the oil producers' cartel – which accounts for about 40 percent of global production – "still sees stronger demand in the medium term", Aw told AFP.

Despite the recent uptick, oil prices remain depressed owing to concerns about demand as the global economy stutters, a supply glut and the weakness in China. – Agence France-Presse

source: gmanetwork.com

Oil prices weak on economic concerns, OPEC target on market share

SINGAPORE – Oil markets were weak on Friday as fresh signs that OPEC will continue to value market share over prices outweighed expectations of a lift when the United States kept interest rates at historic lows.

US West Texas Intermediate (WTI) crude futures were trading at $46.74 per barrel at 0535 GMT, down 16 cents from their last settlement. Brent prices were at $49.12 per barrel, up 4 cents.

Kuwait, a key producer of the Organization of the Petroleum Exporting Countries (OPEC), said on Thursday the oil market would balance itself but that this would take time, indicating support for the group's policy of defending market share despite falling prices.

Other sources at OPEC backed this view saying they expected oil prices to rise by no more than $5 a barrel a year to reach $80 by 2020, with a slowing in rival non-OPEC production growth not enough to absorb the current oil glut.

Oil prices were largely steady, though at low levels, during Asian trading hours despite the U.S. Fed keeping interest rates unchanged on worries over the health of the global economy.

Analysts had suggested a weaker greenback – a usual result of low interest rates – would support oil, as it makes dollar-traded crude cheaper for countries using other currencies.

Yet because the Fed's decision was based on economic concerns, some analysts and traders had a different view.

"Shockingly, one (Fed) official thinks rates need to be cut, and not raised, before the end of 2015. This puts into serious question if there will be any rate raise at all before the end of this year," said Howie Lee of Singapore-based brokerage Phillip Futures.

"The sluggish economy is bound to weigh one way or another," he added.

Also, US lawmakers may be only months away from lifting a four-decade-old ban on most oil exports, although the outlook for oil prices in 2016 and beyond suggests it may be years before traders care.

Front-month WTI crude futures have strengthened this week to their firmest versus Brent since the early days of the US shale oil boom, knocking off 70 percent of their discount to the global benchmark to around $2 per barrel. – Reuters

Oil prices fall on China equity losses

LONDON - Oil fell on Monday as Chinese equities weakened, with a firmer dollar and global oversupply weighing on prices.

The U.S. Labor Day holiday helped keep trade thin.

China's main indexes closed down on Monday as investors sold shares in the aftermath of a four-day market holiday, during which further restrictions on futures trading were announced.

"Oil is only taking its cues from China this morning," SEB chief commodity analyst Bjarne Schieldrop said.

"The price is taking little notice of constructive data like stronger (European) equities, stronger base metals and last Friday's fall in U.S. rig count," he said.

Brent crude for October was down 75 cents at $48.86 a barrel by 1030 GMT. U.S. crude for October was down 70 cents at $45.35.

Oil has fallen almost 60 percent since June 2014 on a global supply glut. Prices have seesawed in recent weeks as concerns about a slowing Chinese economy caused turmoil in global stock markets.

"For commodities, the key demand-side figure to care about is not China’s GDP growing at 7 percent instead of 9 or 10 percent, it is the manufacturing price index, which has been falling for more than 40 months in a row," JBC Energy said.

A surprise gain in U.S. crude stocks of 4.7 million barrels in the week to Aug. 28, the biggest one-week rise since April, added to worries about oversupply.

That was despite the number of U.S. oil rigs falling by 13 to 662 last week, according to Baker Hughes data, the first decline in rig counts in seven weeks.

A firmer U.S. dollar also hurt oil prices by making the commodity more expensive for holders of other currencies.

The year-long decline in oil prices caused more than 5,000 job losses in Britain's North Sea oil and gas sector since late last year, the country's Oil and Gas Authority said on Monday.

Investors are awaiting euro zone second-quarter gross domestic product figures on Tuesday, followed by monthly global oil supply and demand data from U.S. and global energy authorities to give oil further direction.  — Reuters

Oil steadies after strong gains as equities rally

LONDON – Oil prices steadied on Friday after bouncing back from six-and-a-half-year lows on recovering equities markets, strong US economic growth and news of low crude supplies from Nigeria.

Oil saw its biggest one-day bounce since 2009 on Thursday, with North Sea Brent and US light crude  rising more than 10 percent. US crude is on track for its first weekly gain in nine weeks, ending its longest losing streak since 1986.

Global oil markets have fallen by a third since May and are still well under half their value a year ago thanks to a huge oversupply of fuel and sluggish demand. Worries over China's economy have compounded the falls in recent weeks.

But analysts said oil markets fell too far, too fast and a rebound was on the cards. A stock market rise, strong US growth data and a pipeline outage in Nigeria provided an excuse for a recovery on Thursday, they added.

"A short-covering rally, led by crude oil, pushed commodities higher across the board," analysts at ANZ said in a note to clients.

"Better-than-expected US GDP numbers were the main spark, although the force majeure on... exports from Nigeria extended the gains."

Brent was down 15 cents at $47.41 a barrel by 1015 GMT. It settled $4.42 higher at $47.56 on Thursday. US crude was unchanged at $42.56 a barrel, after ending up $3.96.

Asian shares extended a global rally on Friday with Chinese stocks jumping for the second day following a rocky start to the week.

The US economy grew faster than initially thought in the second quarter on solid domestic demand. Gross domestic product expanded at a 3.7 percent annual pace instead of the 2.3 percent rate reported last month, the Commerce Department said.

Shell's Nigerian unit declared force majeure on Bonny Light crude oil exports on Thursday after shutting two key pipelines in the country due to a leak and theft.

Venezuela has been contacting other members of the Organization of the Petroleum Exporting Countries, pushing for an emergency meeting with Russia to come up with a plan to boost oil prices, the Wall Street Journal reported.

Officials at core OPEC members in the Middle East Gulf say there is little chance of the cartel meeting without the support of Saudi Arabia, which has said it sees no need for a gathering. – Reuters

OPEC says cheap oil taking longer to subdue rival suppliers

LONDON  - OPEC on Tuesday raised its forecast of oil supplies from non-member countries in 2015, a sign that crude's price collapse is taking longer than expected to hit U.S. shale drillers and other competing sources.

In a monthly report, the Organization of the Petroleum Exporting Countries (OPEC) forecast no extra demand for its crude oil this year despite faster global growth in consumption, because of higher-than-expected production from the United States and other countries outside the group.

In contrast, the U.S. government on Tuesday lowered both its 2015 and 2016 U.S. oil production forecasts, signalling that the 60-percent rout in benchmark prices since last summer may finally be weighing on shale output.

The U.S. 2015 crude oil production growth forecast was cut by 100,000 barrels per day (bpd) to 650,000 bpd from the previous report, according to the U.S. Energy Information Administration's short-term energy outlook. Meanwhile, it expanded the production decline forecast for 2016 by 400,000 bpd from a 150,000 bpd decline previously.

Benchmark Brent is trading below $50 a barrel, close to its 2015 low after an 18 percent drop in July. But OPEC has refused to cut output, seeking to recover market share by slowing higher-cost production in the United States and elsewhere that had been encouraged by OPEC's prior policy of keeping prices near $100.

Earlier this year, OPEC slashed its prediction of non-OPEC supply for 2015, expecting lower prices to prompt a slowdown. But on Tuesday, it raised the forecast by about 90,000 bpd following a 220,000-bpd increase in last month's report.

"U.S. onshore production from unconventional sources is currently expected to decline marginally in the second half of 2015 through year-end, while U.S. offshore production is expected to grow due to project start-ups," OPEC said.

Meanwhile, the EIA decreased its forecast of non-OPEC supply on Tuesday, lowering 2015 output by 50,000 bpd and 2016 output by 80,000 bpd compared to the previous month's report.

U.S. energy companies have been adding drilling rigs in recent weeks despite the price drop, and OPEC in the report raised its forecast of U.S. output in 2015 by 20,000 bpd. In March, OPEC was expecting a fall in production possibly by late 2015 as drilling subsided, although more recent data from the EIA shows that output peaked in March.

"OPEC is starting to recognise the resilience of U.S. shale," said Jamie Webster, analyst at IHS in Washington and an OPEC expert.

Oil prices fell after the report was released, extending an earlier drop. Brent crude was down $1.34 at $49.07 by 1434 GMT.

LOWER COSTS

A reduction in the cost of oil projects since the price crash is helping non-OPEC supply to compete in the market.

"The OPEC secretariat is indeed re-evaluating non-OPEC supply's ability to withstand prices," said Samuel Ciszuk, senior adviser on security of supply to the Swedish Energy Agency.

"Project costs have come down a lot and are continuing to fall, according to recent data. This is particularly so with regards to the U.S. light, tight oil - which has provided most of non-OPEC output growth, or in OPEC's view the oversupply."

OPEC also said its members continue to boost supplies. According to secondary sources cited by the report, OPEC produced 31.51 million bpd in July - 1.5 million bpd more than its 30-million-bpd target.

With OPEC forecasting demand for its crude will average 29.23 million bpd in 2015 - steady from last month - the report points to a 2.28-million-bpd supply surplus in the market if the group kept pumping at July's rate.

But Saudi Arabia, the driving force behind's OPEC's refusal to cut output, told OPEC it trimmed production by 200,000 bpd to 10.36 million bpd in July, down from June's record rate.

Some OPEC members such as Algeria are concerned by the drop in prices and want the group to reduce supply. Gulf members, however, have rebuffed calls for an emergency OPEC meeting and show no sign of willingness to consider output cuts.

In the report, OPEC still sees a sizeable slowdown in supply growth from non-OPEC next year and stuck to its view that rising global demand would erode the surplus in the market.

"Crude oil demand in the coming months should continue to improve and, thus, gradually reduce the imbalance in oil supply-demand fundamentals," it said.  — Reuters

Oil falls as IEA warns stocks may approach all-time high

LONDON - Brent crude fell below $58 a barrel on Tuesday after the International Energy Agency (IEA) warned that oil prices may decline as stocks continue to increase this year.

Oil stocks held by countries in the Organisation for Economic Cooperation and Development may come close to the all-time high of 2.83 billion barrels in the middle of 2015, said the IEA, which advises the West on energy policy.

"Despite expectations of tightening balances by end-2015, downward market pressures may not have run their course just yet," the IEA said in a monthly report.

Brent crude LCOc1 slipped 44 cents to $57.90 by 1123 GMT (06:23 am. EST), ending a three-day rally. The benchmark gained more than 9 percent last week, its biggest weekly rise since February 2011.

U.S. crude futures CLc1 dropped to $52.02, down 84 cents.

Vitol chief Ian Taylor, speaking at the International Petroleum Week industry conference, said he expected a "dramatic" build in oil stocks over the next few months but that supply and demand in the oil market would move into balance in the second half of this year.

China's consumer inflation hit a five-year low for January, raising worries about oil demand in the world's second-largest economy.

"Economic activity is slowing, especially in heavy industry and that inevitably weighs on commodities," Michal Meidan, director of independent consultancy China Matters, said in the Reuters Global Oil Forum.

Oil prices received a boost on Monday after a monthly report by the Organization of the Petroleum Exporting Countries (OPEC) raised the forecast for 2015 demand for its oil to 29.2 million barrels per day (bpd), up 430,000 bpd from an earlier forecast.

The IEA's medium-term report released on Tuesday predicted demand for OPEC oil would hold at 29.4 million bpd this year, and said U.S. shale oil output growth would pause before regaining momentum.

U.S. crude snapped three days of gains after a preliminary survey showed that U.S. commercial crude stockpiles likely hit a record high last week.

"Another report of strong builds in inventories in this week's EIA market report could halt oil's rally," ANZ bank said, referring to the U.S. Energy Information Administration's stockpile data due on Wednesday.

Elsewhere, Libya's Hariga port has reopened after guards ended a strike over salary payments, and the terminal will start loading tankers once better weather allows, a facility spokesman said.  — Reuters

Oil steadies near $58 as US rig count offsets Chinese data

LONDON - Brent crude prices steadied near $58 a barrel on Monday as falling U.S. oil rig counts and signs of healthy U.S. growth offset concerns over the strength of the Chinese economy.

China's trade performance slumped in January, pointing to lower fuel demand in the world's biggest energy consumer. Exports fell 3.3 percent from a year earlier while imports tumbled 19.9 percent, highlighting a deepening slowdown.

But the falling number of U.S. oil rigs, at its lowest since December 2011, reduced the impact of the Chinese data on oil prices, which have dropped more than 50 percent since June.

Stronger-than-expected growth in U.S. jobs in January also helped support oil, as non-farm payrolls increased 257,000, outstripping Wall Street forecasts.

Global benchmark Brent crude oil LCOc1 for March was up 10 cents at $57.90 a barrel by 1118 GMT (06:18 a.m. EST) after rising as high as $59.06 earlier in the session. U.S. crude CLc1 was up 56 cents at $52.25 a barrel, having hit a session high of $53.40.

While signs of an economic slowdown in China depressed the market, analysts said crude import figures remained high and the disappointing data was unlikely to derail a rally in oil prices.

"I think we'll get a bit of a pullback. But will it send prices back to the lows? I'm not convinced about that," said Michael Hewson, chief market analyst at CMC Markets.

"We've had such a strong decline that some sort of bounce back is inevitable."

Brent rose more than 9 percent last week, its biggest weekly rise since February 2011. The North Sea oil futures contract has climbed more than 18 percent in the past two weeks, its strongest showing since 1998.

"It's still the same pattern," said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt. "Markets are ignoring the bearish news and rather trade on the bullish news."

Preliminary Chinese January customs data came in at 27.22 million tonnes of crude imports, though estimates from Thomson Reuters Research and Forecasts put the final figure at about 30 million tonnes.

Reuters technical analyst Wang Tao said crude charts suggested the increase in prices may have ended for a while.

"I prefer a bearish bias," Wang Tao told Reuters Global Oil Forum. "Both WTI and Brent may correct in this week before seeking their next direction."  — Reuters

Oil prices rally above $55 as investors pile in

LONDON - Crude oil prices rose on Monday as investors shrugged off a U.S. refinery strike and focused on a falling U.S. rig count that signaled lower production down the line.

"There were a lot of people on the sidelines waiting for an opportunity to buy," said Bjarne Schieldrop, chief commodity analyst at SEB.

"Brent has struggled sideways for a long time but it closed above the 20-day moving average on Friday for the first time since July, and the rig count is falling sharply. So now they think, maybe this is the time to buy."

At 6:49 a.m. ET Brent crude futures were up $2.05 at $55.04 a barrel, after leaping as high as $55.62 and dipping as low as $51.41, as the bulls battled with the bears.

U.S. crude was up $1.50 at $49.74 a barrel, after touching an intraday high of $50.56 and slumping to $46.67.

Both contracts had rallied about 8 percent on Friday, fueled by month-end short-covering and a record weekly drop in the number of U.S. oil rigs employed, according to industry data from Baker Hughes. The count is now down 24 percent from its October peak.

"Most market observers have been surprised by the scale of the decrease, and expectations of U.S. oil output this year will no doubt be lowered accordingly," analysts at Commerzbank said in a note. "The foundation for a steady price recovery in the second half of the year has thus been laid."

However, in the short term the price increase has been exaggerated, as there is still considerable oversupply, they added.

Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas, said the bounce was mainly due to technical factors rather than any fundamental reason.

"I wouldn't be surprised if this afternoon we sell into (the rally) because the global fundamentals in oil and the economy haven't really changed much since last week," he said.

On Sunday, workers at nine U.S. refineries and chemical plants went on strike in an effort to pressure oil companies to agree to a new national contract.

"So far only a handful of refineries have been affected, but the last time they went on strike like this, in 1980, it lasted for three months," said Ole Hansen, senior commodity strategist at Saxo Bank.

Last week U.S. crude inventories hit a record high, and any dampening of refinery demand would likely push stocks higher as the slowdown in drilling has still not affected U.S. production, analysts said. [EIA/S]

"The market is likely too excited about falling rig counts," analysts at Morgan Stanley said in a note on Monday. "The most productive rigs will likely remain as long as possible."  — Reuters

Oil prices down in Asian trade

Singapore – Oil prices fell in Asia Friday after the OPEC oil cartel slashed its longer-term global demand outlook, while a stronger dollar also weighed, analysts said. 

The benchmark US futures contract, West Texas Intermediate for December delivery, dropped 28 cents to $77.63 while Brent crude for December eased 40 cents to $82.46 in late-morning trade.

The Organization of the Petroleum Exporting Countries  estimated in its annual world outlook Thursday that demand for its crude will fall from just above 30 million barrels per day in 2013 to 28.2 million in 2017, before starting to rise again.

The 12-nation group said the United States and Canada are the primary drivers of non-OPEC output
growth, in part due to shale-oil production.

Singapore's United Overseas Bank said "US and global crude prices resumed its decline" after the release of the report, adding to heavy losses earlier this week owing to price cuts by Saudi Arabia.

Prices were also under pressure from the stronger US dollar.

The US dollar bought ¥115.31 in late-morning Asian trade, from ¥115.16 in New York Thursday afternoon. The greenback has surged against the yen since last Friday, when the Bank of Japan ramped up its stimulus program.

A stronger greenback makes dollar-priced commodities like oil more expensive for buyers using weaker currencies, which in turn tends to hit demand and prices.

Investors are also keeping an eye on the release of October non-farm payrolls data Friday that is expected to paint an optimistic picture of the US economy.

Initial jobless claims fell 10,000 to 278,000 in the week ending November 1, the lowest level in 14 years, the US Labor Department said Thursday.

"The very positive weekly jobless claims data reinforced expectations for a potentially strong US October jobs report today which could bring forward rate hike expectations," UOB said. –  Agence France-Presse

source: gmanetwork.com

Oil prices tumble in Asia

SINGAPORE – Oil prices resumed their downward spiral in Asian trade Thursday following another massive sell-off in equities as traders grow increasingly concerned about the global economic outlook, analysts said.

US benchmark West Texas Intermediate (WTI) for November delivery fell 90 cents to a two-year low of $80.88 a barrel in late-morning trade. Brent crude for November retreated 43 cents to $83.35, levels last seen four years ago.

Both contracts have lost more than a fifth of their value since hitting 2014 highs in June.

Markets across Asia sank on Thursday, led by Tokyo, as a disappointing set of US data fanned worries that the effects of a slowdown in China, Europe and Japan are being felt in the world's top economy.

Traders took their lead from New York and Europe, where stocks and the dollar sank.

"WTI and Brent continued to open in red," Phillip Futures said in a market commentary. "With the current bearish conditions for crude oil, we expect this to continue," it said.

A rebound in Asian trade Wednesday failed to gain traction as it was overwhelmed by negative sentiment in the face of waning demand in China, the world's biggest energy consumer, and the eurozone.

Adding to the pain is a supply glut caused by strong US production of shale gas and a return of Libyan oil on to the market after facilities that were closed due to civil unrest resumed operations.

Members of the Organization of the Petroleum Exporting Countries (OPEC) are also maintaining output levels, while slashing prices to gain market share, analysts said.

Investors are awaiting the release later Thursday of weekly US crude inventories -- a closely watched barometer of demand and supply in the world's top oil consuming nation.

Phillip Futures said it expects prices for the US-centric WTI contract to remain supported at $80 for the rest of the day, but it was harder to plot a floor for Brent, which is more linked to the international market. – Agence France-Presse

source: gmanetwork.com

Oil prices up with Ukraine crisis in focus

SINGAPORE – Oil prices rose in Asia Wednesday, underpinned by concerns about the Ukraine crisis as fierce armed confrontation between government forces and pro-Moscow separatists continued unabated leaving dozens dead.

US benchmark, West Texas Intermediate (WTI) for delivery in July, rose seven cents to $104.18 in late-morning trade.

Brent North Sea crude for July gained 29 cents to $110.31 per barrel.

Ukraine's interim pro-Western government said Tuesday it had recaptured an airport in the eastern city of Donetsk from pro-Russian insurgents after a day of air strikes and fierce gun battles.

Donetsk mayor Oleksandr Lukyanchenko said two civilians and 38 combatants had died and another 31 were wounded, including Russians and possibly Chechens.

"Traders are still keeping an eye on Ukraine developments especially the continued fighting in the Eastern part as well as developments in Libya," said Singapore's United Overseas Bank in a note to investors.

The dramatic escalation in tensions comes a day after billion chocolate baron Petro Poroshenko was confirmed as the country's new president following weekend polls triggered after pro-Russian leader Viktor Yanukovych was ousted in February.

Washington and its European allies supporting Ukraine's interim government have accused Russia of fomenting unrest in the country, allegations Moscow denies.

Investors fear a full-blown conflict in the ex-Soviet state, a conduit for a quarter of European gas imports from Russia, will disrupt supplies and send energy prices soaring.

Kelly Teoh, managing director at I.R. Resources in Bangkok, said oil prices were also supported by hopes of a further drop in US crude stockpiles, indicating robust demand in the world's top crude consumer ahead of the busy summer driving season.

US crude stocks plunged 7.2 million barrels in the week to May 16, the Department of Energy revealed last week.

The weekly US official crude stockpiles report will be released on Thursday instead of Wednesday this week, because of the long Memorial Day holiday weekend. – Agence France-Presse

source: gmanetwork.com

Oil prices mixed, eyes on Ukraine crisis

SINGAPORE – Oil prices were mixed in Asian trade Tuesday as investors cautiously watch events in Ukraine, with western powers threatening sanctions against Russia for its military intervention in the region.

The United States said it has suspended defense cooperation with Russia and the UN Security Council began a meeting on the crisis.

US benchmark West Texas Intermediate (WTI) for April delivery, eased 13 cents to $104.79 in mid-morning trade on profit-taking as after hitting its highest levels this year in New York on Monday.

Brent North Sea crude for April climbed two cents to $111.22.

Producing more than 10 million barrels a day in January, Russia vies with Saudi Arabia as the world's largest crude oil producer, and is the second-largest producer of natural gas.

More than 70 percent of its gas and oil exports to Europe pass through Ukraine.

"The Ukraine event is a new catalyst that propped up crude oil prices to form new highs," Phillip Futures said in a market commentary.

"When war erupts, Russia, one of the world's top oil producers, is likely to reduce oil exports due to higher domestic consumption."

It warned that any possible disruption to oil infrastructure could hit production, leading to tighter supplies.

Research house Capital Economics noted that "Europe is heavily dependent on supplies of Russian energy."

Ukraine on Monday accused Russia of pouring more troops into Crimea as world leaders grappled with Europe's worst crisis since the Cold War and global stock markets tumbled on fears of an all-out conflict.

Crimea has been under de facto occupation by Moscow-backed forces since President Vladimir Putin won parliament's authorization on Saturday to send troops into Ukraine. – Agence France-Presse

source: gmanetwork.com

Oil rebounds on breakthrough hopes in US budget crisis

Singapore – Oil prices rebounded in Asian trade Thursday on hopes of a possible breakthrough in the US budget crisis after the White House moved to convene meetings with leading members of Congress.

New York's main contract, West Texas Intermediate for delivery in November, was up seven cents at $101.68 in mid-morning trade while Brent North Sea crude for November gained seven cents to $109.13.

WTI declined $1.88 and Brent fell $1.10 New York Wednesday after the latest US crude stockpiles report showed a surprise build-up of 6.8 million barrels, but analysts said developments in Washington remain the main focus.

There are "continued concerns regarding the US budget impasse that would reduce demand for oil in the world's largest oil consumer," said Vanessa Tan, investment analyst at Phillip Futures in Singapore.

President Barack Obama sat down with House of Representatives Democrats on Wednesday, and invited all other lawmakers to the White House to work through budget disagreements that have led to the partial shutdown of the government.

Scenarios for an exit to the shutdown include a short-term government funding bill and a temporary debt ceiling rise, but there have no been consensus on any of these so far.

Failure to lift the debt ceiling by a October 17 deadline will mean the government is unable to pay its bills or service its debts, causing a default that analysts have warned could send the world economy back into recession.

"There is still no clarity as to whether the White House and the Republicans are closer towards a compromise that could result in a continuing resolution or a decision to lift the federal debt ceiling," DBS Bank said in a note.

"For now, a continuing resolution looks more likely if the both parties can move away from (Republican demands to cut Obama's health care law) and work towards spending cuts," it said. – Agence France-Presse

source: gmanetwork.com