The stock market is closed for Presidents Day, but oil is trading.
By Ahmad Ghaddar
LONDON (Reuters) - Oil prices hit their highest level in nearly two weeks on Monday, lifted by a global equity market recovery and tensions in the Middle East, although concerns of rising U.S. production tempered gains.
European shares rose for a fourth straight session, with global stocks set for a sixth session of gains, following a sell-off triggered by fears of creeping inflation and higher borrowing costs.
Brent crude (LCOc1) was up 37 cents at $65.21 a barrel at 1034 GMT, after rising to an 11-day high of $65.45 a barrel earlier in the session.
U.S. West Texas Intermediate crude for March delivery (CLc1) was up 54 cents at $62.22 a barrel, after earlier gaining as much as 1.4 percent to its highest since Feb. 7.
"Benign stock markets are providing ... as are geopolitical tensions in the Middle East," Commerzbank (DE:CBKG) said in a note.
Israeli Prime Minister Benjamin Netanyahu said on Sunday that Israel could act against Iran itself, not just its allies in the Middle East, after border incidents in Syria brought the Middle East foes closer to direct confrontation. < Any direct conflict with Iran will push oil prices higher.
Trading is expected to be slower than usual on Monday due to market holidays in the United States and Greater China.
The U.S. oil rig count, an indicator of future production, rose by seven to 798, its highest since April 2015, according to a weekly report from General Electric's Baker Hughes unit.
That marked the first time since June that drillers added rigs for four consecutive weeks, and the figure was well up on the 597 rigs that were active a year earlier as energy companies have boosted spending since mid-2016 when crude prices began recovering from a two-year crash.
Surging U.S. production is offsetting efforts by the Organization of the Petroleum Exporting Countries (OPEC) and some other producers including Russia to curb production by 1.8 million barrels per day (bpd) until the end of 2018.
Money managers slashed their bullish bets on Brent crude futures by the most in nearly eight months in the week to Feb. 13, InterContinental Exchange data showed.
Speculators also cut net long U.S. crude futures and options positions in the week to Feb. 13 by the most since late August, the U.S. Commodity Futures Trading Commission (CFTC) said.
Oil pricing agency Platts is looking at adding new oil production from the Johan Sverdrup oilfield to its global dated Brent crude benchmark, to ensure liquidity is maintained.
Oil Price - Feb 19
Oil Price - Feb 19
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - Feb 19
If you need more proof that the oil "glut" is over, read this: https://www.bloomberg.com/news/articles ... y-might-go
When U.S. refinery maintenance season is over at the end of March, the global market will be "short oil" and OECD inventories will go on steep decline.
When U.S. refinery maintenance season is over at the end of March, the global market will be "short oil" and OECD inventories will go on steep decline.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - Feb 19
As oil stocks drain, OPEC searches for its next fig leaf. Bloomberg, opinion.
There is no doubt that the output cuts made by OPEC and its friends, aided by a collapse in production from group member and historic quota cheat Venezuela, have drained a lot of excess oil out of the supply chain. Tankers floating full of crude off the coasts of Iran and South Africa have disappeared and total U.S. stockpiles are close to their lowest in almost three years. But now their goal is within sight, or it may already have been passed. And that creates problems for the producer group. If inventories are back where they say they want them, but prices haven't recovered as much as they would like, they need to find a way to justify prolonging the cuts to boost their revenues. Setting a clear price target is unlikely, but don't expect OPEC and friends to rush to open the production taps, even if inventory levels suggests they should. They are not yet making as much as they want from their oil and will now embark on a process of finding another metric that will tell them that the time is not yet right to boost supply.
There is no doubt that the output cuts made by OPEC and its friends, aided by a collapse in production from group member and historic quota cheat Venezuela, have drained a lot of excess oil out of the supply chain. Tankers floating full of crude off the coasts of Iran and South Africa have disappeared and total U.S. stockpiles are close to their lowest in almost three years. But now their goal is within sight, or it may already have been passed. And that creates problems for the producer group. If inventories are back where they say they want them, but prices haven't recovered as much as they would like, they need to find a way to justify prolonging the cuts to boost their revenues. Setting a clear price target is unlikely, but don't expect OPEC and friends to rush to open the production taps, even if inventory levels suggests they should. They are not yet making as much as they want from their oil and will now embark on a process of finding another metric that will tell them that the time is not yet right to boost supply.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - Feb 19
WTI closed at $62.38/bbl on Presidents' Day and all technical indicators are "Strong Buy". It will be interesting to see where it opens on Tuesday.
The March NYMEX contract closed at $62.50. April is now the "Front Month" on NYMEX
https://www.investing.com/commodities/crude-oil
The March NYMEX contract closed at $62.50. April is now the "Front Month" on NYMEX
https://www.investing.com/commodities/crude-oil
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group