Sign Up for FREE Daily Energy News
CDN NEWS  |   US NEWS  | TIMELY. FOCUSED. REVELANT. FREE
BREAKING NEWS:

Shocker PASS - Headwind Solutions
Sur-Flo Meters
Hazloc Heaters
Hazloc Heaters
Sur-Flo Meters
Shocker PASS - Headwind Solutions

Oil Rebounds After Worst Quarter of 2019, Yet Demand Fears Weigh


By Grant Smith and Sharon Cho

(Bloomberg)Oil rose after its biggest quarterly slump of the year, yet ongoing concerns that a faltering global economy will erode demand continued to weigh on the market.Futures increased 1.1% in New York, having tumbled 7.5% in the past three months as Saudi Arabia fully restored its output following devastating attacks that had temporarily halved its production. Attention is now returning to U.S.-China trade negotiations, with investors looking for clues on the prospect for oil demand as high-level talks are expected on Oct. 10-11.

Crude posted the worst quarter of 2019 as focus returns to growth, trade war

Saudi Arabia’s recovery from the attacks and the concerns over growth in oil consumption have driven crude prices back to where they were before the Sept. 14 attacks. This means that while oil gained on Tuesday, the increase could be temporary, said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA.

“The bounce back in oil prices this morning looks more technical than fundamentally or macro-driven, and it is building on what was a very weak close” on Monday, Tchilinguirian said. “I am not sure that the very short-term momentum is there to sustain it.”

West Texas Intermediate for November delivery rose 57 cents to $54.64 a barrel on the New York Mercantile Exchange as of 11:14 a.m. in London. The front-month contract fell $1.84 on Monday to cap a 7.5% decline last quarter.

Brent for December settlement gained 54 cents, or 0.9%, to $59.79 a barrel on the ICE Futures Europe Exchange. The November contract, which expired Monday, ended the session 1.8% lower. The global benchmark crude on Tuesday traded at a $5.29 premium to WTI for the same month.

Saudi Output

Saudi Aramco returned productionto 9.9 million barrels a day on Sept. 25 and output is now a “little bit” higher than that, said Ibrahim Al-Buainain, chief executive officer of the company’s trading unit, said Monday. The world’s top oil exporter has also restored some spare capacity following the attacks on its energy infrastructure and hasn’t missed any contracted shipments, he said.

Ahead of the expected Washington-Beijing talks next week, Asian manufacturing sentiment remained mostly bleak in September due to the U.S.-China trade conflict and waning global demand. The euro area’s manufacturing sector slumped last month.

“In view of subdued global economic prospects and rising U.S. oil production, any concerns” about oil supply tightening have evaporated, said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt.

Other oil-market news:
  • Saudi Aramco has approached Asian state oil producers including Malaysia’s Petroliam Nasional Bhd. and China’s Sinopec Group about potential cornerstone investments in its initial public offering, people with knowledge of the matter said.
  • Venezuela’s crude exports have plummeted to a level not seen since before the birth of its late president Hugo Chavez.
  • Oil refiners are feeling the cost of U.S. sanctions on Chinese tanker companies, with at least one South Korean processor potentially facing more than $5 million in extra charges to find alternative carriers for a shipment of crude.


Share This:



More News Articles


New SHOWCASE Directory Companies

 

T.A. Cook
Gardner Denver
Presto GeoSystems
STEP Energy Services