Oil prices recorded a weekly gain at the end of Friday. The prices for both major benchmarks increased due to supply worries over the sanctions on Iran and the Hurricane Florence.
The price of West Texas Intermediate (WTI) for October delivery and Brent for November delivery increased by 1.8 percent and 1.6 percent, respectively in the week ending Sept. 14. At the end of the week, WTI and Brent settled at 68.99 and 78.09 U.S. dollars, respectively.
On Tuesday, WTI and Brent prices rallied as the Energy Information Administration (EIA) cut the U.S. crude oil output forecast and Hurricane Florence was expected to threaten the fuel flows.
In a monthly report, EIA lowered its crude oil output prediction for 2018 and 2019. It also raised its price forecasts for WTI and Brent. In the same report, it also mentioned that Iranian crude oil production in August went down by 200,000 barrels per day from July.
Matthew Smith, director of commodity research at ClipperData in Houston, U.S. state of Texas, told Xinhua that "Iranian exports have slowed this month, with barrels making their way into floating storage amid a lack of buying interest."
Meanwhile, there were worries that Hurricane Florence might cause shutdown in the Colonial Pipeline -- a major pipeline that moves gasoline and diesel from the Gulf refineries to Northeast. Flooding might cause power outages which would lead to shutdown of the flow. Analysts said that was a main reason behind the jump in oil prices on Tuesday.
On Tuesday, WTI increased by 2.55 percent and settled at 69.25 dollars a barrel, while Brent crude increased by 2.20 percent and settled at 79.06 dollars a barrel.
On Wednesday, the major benchmarks continued their upward movement as EIA reported a large draw in crude oil inventories and reduced weekly domestic crude oil production.
EIA reported a draw of 5.3 million barrels in commercial crude oil inventories, much more than the market's expectation of a draw of 800,000 barrels.
U.S. imports of crude oil decreased by 123,000 barrels from the previous week's levels to 7.59 million barrels per day. While crude oil exports increased by 320,000 barrels per day from the previous week's levels to 1.83 million barrels per day.
According to EIA, U.S. oil production during last week went down by 100,000 barrels per day to 11 million barrels per day.
Meanwhile, EIA reported a build of 6.16 million barrels in distillates inventories. The market was expecting a build of 1.8 million barrels. It also reported a build of 1.25 million barrels in total gasoline inventories.
Despite the much larger than expected build in distillates inventory, the oil markets sustained the bullish sentiment as there are some geopolitical risks looming in some major oil producing countries.
"While Iran and Venezuela continue to grab the headlines amid low exports, geopolitical unrest in Libya, Nigeria and Iraq also add to potential supply risks," said Smith.
After the EIA's weekly petroleum status report, WTI and Brent contracts prices moved upward and settled 0.69 percent and 0.34 percent higher, respectively, on Wednesday.
On Thursday, the prices for both major oil benchmarks took a steep dive as the International Energy Agency (IEA) released its monthly report that showed the output of the Organization of the Oil Exporting Countries (OPEC) increased by 420,000 barrels per day in August.
Despite declining Iranian crude oil output in the verge of the sanctions, the OPEC crude oil output has increased, which caused oversupply concerns.
Analysts attributed the downward move in oil prices on Thursday to the correction due to weakening Hurricane Florence. The hurricane did not make a major impact in the energy infrastructure as expected.
On Thursday, WTI and Brent contracts prices settled 2.35 percent and 1.99 percent lower, respectively.
On Friday, Baker Hughes reported that the number of active drilling oil and gas rigs in the United States increased by 7 to 1055. The oil rigs in the country increased by 7 to 867.
The pipeline bottlenecks are causing big price differential between Midland and WTI. Analysts see those pipeline bottlenecks as a big threat against production growth of the Permian Basin, locate in the region of western Texas and southeastern New Mexico.
Major increases in the rig counts despite bottlenecks will be closely watched by the markets.
Furthermore, U.S. Dollar Index maintained below 95, down from its peak level of 97 last month. U.S. Dollar Index is a measure of the value of the U.S. dollar relative to a basket of foreign currencies. Oil is mostly traded in dollars all over the world and a stronger dollar pressures the oil demand.
On Friday, the two major oil benchmarks moved different directions. WTI increased by 0.29 percent and Brent decreased by 0.34 percent. Increasing exports of U.S. crude oil were the driver behind a slight increase in WTI price.
The price differential between WTI and Brent contracts maintained the levels of the previous week. The differential was 9.10 dollars at the end of Friday.
Analysts pointed out the widening gap between WTI and Brent can support U.S. oil exports in the future.
The higher differentials between the two major benchmarks are, the more arbitrage opportunities for traders to pursue. As a result, more U.S. crude oil would be shipped to Asian market.
The oil market has been concerned with the ongoing trade dispute as it might slow down the economic growth across the world, especially in the case of China. The oil demand growth in China has been the main driver for the increasing world oil demand.
The price of West Texas Intermediate (WTI) for October delivery and Brent for November delivery increased by 1.8 percent and 1.6 percent, respectively in the week ending Sept. 14. At the end of the week, WTI and Brent settled at 68.99 and 78.09 U.S. dollars, respectively.
On Tuesday, WTI and Brent prices rallied as the Energy Information Administration (EIA) cut the U.S. crude oil output forecast and Hurricane Florence was expected to threaten the fuel flows.
In a monthly report, EIA lowered its crude oil output prediction for 2018 and 2019. It also raised its price forecasts for WTI and Brent. In the same report, it also mentioned that Iranian crude oil production in August went down by 200,000 barrels per day from July.
Matthew Smith, director of commodity research at ClipperData in Houston, U.S. state of Texas, told Xinhua that "Iranian exports have slowed this month, with barrels making their way into floating storage amid a lack of buying interest."
Meanwhile, there were worries that Hurricane Florence might cause shutdown in the Colonial Pipeline -- a major pipeline that moves gasoline and diesel from the Gulf refineries to Northeast. Flooding might cause power outages which would lead to shutdown of the flow. Analysts said that was a main reason behind the jump in oil prices on Tuesday.
On Tuesday, WTI increased by 2.55 percent and settled at 69.25 dollars a barrel, while Brent crude increased by 2.20 percent and settled at 79.06 dollars a barrel.
On Wednesday, the major benchmarks continued their upward movement as EIA reported a large draw in crude oil inventories and reduced weekly domestic crude oil production.
EIA reported a draw of 5.3 million barrels in commercial crude oil inventories, much more than the market's expectation of a draw of 800,000 barrels.
U.S. imports of crude oil decreased by 123,000 barrels from the previous week's levels to 7.59 million barrels per day. While crude oil exports increased by 320,000 barrels per day from the previous week's levels to 1.83 million barrels per day.
According to EIA, U.S. oil production during last week went down by 100,000 barrels per day to 11 million barrels per day.
Meanwhile, EIA reported a build of 6.16 million barrels in distillates inventories. The market was expecting a build of 1.8 million barrels. It also reported a build of 1.25 million barrels in total gasoline inventories.
Despite the much larger than expected build in distillates inventory, the oil markets sustained the bullish sentiment as there are some geopolitical risks looming in some major oil producing countries.
"While Iran and Venezuela continue to grab the headlines amid low exports, geopolitical unrest in Libya, Nigeria and Iraq also add to potential supply risks," said Smith.
After the EIA's weekly petroleum status report, WTI and Brent contracts prices moved upward and settled 0.69 percent and 0.34 percent higher, respectively, on Wednesday.
On Thursday, the prices for both major oil benchmarks took a steep dive as the International Energy Agency (IEA) released its monthly report that showed the output of the Organization of the Oil Exporting Countries (OPEC) increased by 420,000 barrels per day in August.
Despite declining Iranian crude oil output in the verge of the sanctions, the OPEC crude oil output has increased, which caused oversupply concerns.
Analysts attributed the downward move in oil prices on Thursday to the correction due to weakening Hurricane Florence. The hurricane did not make a major impact in the energy infrastructure as expected.
On Thursday, WTI and Brent contracts prices settled 2.35 percent and 1.99 percent lower, respectively.
On Friday, Baker Hughes reported that the number of active drilling oil and gas rigs in the United States increased by 7 to 1055. The oil rigs in the country increased by 7 to 867.
The pipeline bottlenecks are causing big price differential between Midland and WTI. Analysts see those pipeline bottlenecks as a big threat against production growth of the Permian Basin, locate in the region of western Texas and southeastern New Mexico.
Major increases in the rig counts despite bottlenecks will be closely watched by the markets.
Furthermore, U.S. Dollar Index maintained below 95, down from its peak level of 97 last month. U.S. Dollar Index is a measure of the value of the U.S. dollar relative to a basket of foreign currencies. Oil is mostly traded in dollars all over the world and a stronger dollar pressures the oil demand.
On Friday, the two major oil benchmarks moved different directions. WTI increased by 0.29 percent and Brent decreased by 0.34 percent. Increasing exports of U.S. crude oil were the driver behind a slight increase in WTI price.
The price differential between WTI and Brent contracts maintained the levels of the previous week. The differential was 9.10 dollars at the end of Friday.
Analysts pointed out the widening gap between WTI and Brent can support U.S. oil exports in the future.
The higher differentials between the two major benchmarks are, the more arbitrage opportunities for traders to pursue. As a result, more U.S. crude oil would be shipped to Asian market.
The oil market has been concerned with the ongoing trade dispute as it might slow down the economic growth across the world, especially in the case of China. The oil demand growth in China has been the main driver for the increasing world oil demand.
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