Oil Set for Weekly Gain
(Bloomberg) -- Oil headed for a second weekly gain as signs an energy demand recovery in the U.S. is gaining traction outweighed a more pessimistic report from the International Energy Agency.
Futures in New York edged higher near $42 a barrel Friday and are up around 3% for the week. A slew of encouraging data on U.S. crude stockpiles, gasoline consumption and refinery activity spurred the biggest daily jump in three weeks Wednesday. The optimism was tempered the following day as the IEA cut its global demand estimates for almost every quarter through the end of 2021.
The agency’s steepest downgrades were for the second half of this year and it said the outlook for jet fuel consumption had worsened in the last few weeks as the coronavirus spread more widely. On a brighter note, the IEA said that world markets should tighten during the rest of the year as activity recovers and Saudi Arabia and other OPEC nations keep production in check.
Crude closed at a five-month high on Wednesday and is threatening to break out of the tight range it’s been trading in for the last couple of months. That promises to be tough though, as it will need to overcome a still-surging coronavirus and large inventory overhangs. However, an expected increase in Chinese buying later in the year may lend some support.
“This week’s inventory data was supportive, but the next significant catalyst that the market is focused on could be the U.S. coronavirus stimulus package,” Stephen Innes, chief global market strategist at AxiCorp Ltd., said in a note. That should positively impact the broader economic recovery and, by extension, energy demand, he said.
Prices |
|
China’s economic recovery continued in July, with industry growing at the same pace as June due to overseas demand, according to data released Friday. Still weak domestic retail sales continued to undercut the rebound, however.
The global crude benchmark’s three-month timespread was $1.21 a barrel in contango -- when prompt prices are lower than later-dated ones -- from $1.03 in contango at the end of the last week. The change in the market structure is an indication that concerns about over-supply are increasing slightly.
The OPEC+ producer bloc has delayed its Joint Ministerial Monitoring Committee by a day to Aug. 19 due to Russian Energy Minister Alexander Novak’s schedule, according to delegates. Novak said the market is stabilizing and there’s no need to ease OPEC+ output cuts ahead of time, Tass news agency reported.
Other oil-market news |
|
To contact the reporters on this story:
Elizabeth Low in Singapore at elow39@bloomberg.net;
James Thornhill in Sydney at jthornhill3@bloomberg.net
To contact the editors responsible for this story:
Serene Cheong at scheong20@bloomberg.net
Andrew Janes, Ben Sharples
© 2020 Bloomberg L.P.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- USA Driving Activity to Increase to All-Time Highs
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- North America Enters Rig Loss Streak
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- Rystad Looks at the Buzz Around White Hydrogen
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension