Comments below are from Helen Rush, an energy sector analyst based in London
Crude oil prices set for a weekly gain but look indecisive amid the directional market on Friday. Brent failed to stage a recovery yesterday, with the price has settled around the 20-DMA after a brief spike above $79. Market participants have already digested the latest signals from OPEC. The cartel promised to remain committed to the existing deal, which prevented prices from further decline.
The risk of another wave of profit taking remains however. The US shale producers continue to pump record volumes, with the levels of shale oil production are getting closer to 11 million bpd. Should today’s Baker Hughes report signal further rise in the drilling activity, the bearish pressure could intensify, despite the inventories declined substantially last week.
From the technical point of view, a daily close above the $78 threshold is needed to bring the $80 level back in the game. Chances for such a scenario are rather low at this stage as the market obviously lacks both impetus and fresh drivers for now, while the Baker Hughes release is a local bearish risk for prices
Oil Price - June 1
Oil Price - June 1
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - June 1
IMO this is what has pushed WTI below the $67/bbl support level.
Energy Industry Alarmed as White House Slaps Steel, Aluminum Tariffs on Allies Mexico, Canada, EU.
Fears of an international trade war erupted Thursday after the Trump administration said it would impose at midnight Friday twice-delayed tariffs on steel and aluminum imports from three leading U.S. allies -- Canada, Mexico and the European Union (EU). Trade associations representing the oil and gas industry voiced alarm over the developments and said the tariffs would ultimately hurt the U.S. pipeline industry. The oil and gas industry has submitted comments on an interim final rule outlining a procedure for requesting an exemption to the tariffs. The industry and its allies argue that specialty steel products meet the criteria for an exemption from the steel tariff because there is an insufficient supply of comparable products from domestic steel manufacturers. Last month, API, INGAA and other trade groups -- specifically, the American Gas Association, the Association of Oil Pipe Lines, the GPA Midstream Association, the Independent Petroleum Association of America, and the Interstate Natural Gas Association of America -- recommended a list of 11 changes to the interim final rule.
Stepping back a bit, increasing steel costs for casing and tubing would increase completed well costs. That should cause oil prices to go up.
The oil traders are no different that stock traders; they don't like uncertainty and this is a big one.
Energy Industry Alarmed as White House Slaps Steel, Aluminum Tariffs on Allies Mexico, Canada, EU.
Fears of an international trade war erupted Thursday after the Trump administration said it would impose at midnight Friday twice-delayed tariffs on steel and aluminum imports from three leading U.S. allies -- Canada, Mexico and the European Union (EU). Trade associations representing the oil and gas industry voiced alarm over the developments and said the tariffs would ultimately hurt the U.S. pipeline industry. The oil and gas industry has submitted comments on an interim final rule outlining a procedure for requesting an exemption to the tariffs. The industry and its allies argue that specialty steel products meet the criteria for an exemption from the steel tariff because there is an insufficient supply of comparable products from domestic steel manufacturers. Last month, API, INGAA and other trade groups -- specifically, the American Gas Association, the Association of Oil Pipe Lines, the GPA Midstream Association, the Independent Petroleum Association of America, and the Interstate Natural Gas Association of America -- recommended a list of 11 changes to the interim final rule.
Stepping back a bit, increasing steel costs for casing and tubing would increase completed well costs. That should cause oil prices to go up.
The oil traders are no different that stock traders; they don't like uncertainty and this is a big one.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - June 1
All our news in Dallas is worried about is the added cost the Aluminum tariff will add to the cost of a beer can...
Re: Oil Price - June 1
As I posted earlier, demand for oil exceeds supply by over a million barrels per day NOW and the gap will widen as we move deeper into summer. Fundamentals win out in the end, but traders are worried about the "Trade War" that Trump has started. My SWAG is that the Trade War will not amount to much and will have very little impact on oil demand.
WTI has breached a significant support level at $67/bbl. Next support is at $65/bbl.
Keep in mind that U.S. refiners MUST ramp up to over 95% of capacity soon because supplies of gasoline, diesel and jet fuel are getting dangerously low.
WTI has breached a significant support level at $67/bbl. Next support is at $65/bbl.
Keep in mind that U.S. refiners MUST ramp up to over 95% of capacity soon because supplies of gasoline, diesel and jet fuel are getting dangerously low.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group