Helen Rush from London:
Crude oil prices have broken fresh four-month highs on Thursday, with Brent touched a $68.44 figure and started to retreat, clinging to the $68 figure. The general picture in the market remains bullish as the prices have been rallying for a third week in a row.
The latest ascent in Brent was due to a widespread dollar weakness on the aftermath of the Federal Reserve meeting as the US central bank’s tone was even more dovish than expected. However, the greenback seems to have digested the message and is now making recovery attempts, which caps the upside momentum in the oil market in the short term.
Despite the prevailing positive tone, oil traders remain nervous amid conflicting reports on US-China trade relations. There earlier news that China was resisting U.S. demands was interpreted as an obstacle on the way to striking a trade deal between the two world’s largest economies.
Technically, Brent needs to defend the $68 figure in order not to attract a more aggressive profit taking towards the end of the trading week. A break above $70 looks unlikely at this stage due to the remaining investor uncertainty over the US-China trade talks and the outlook for the global economy.
Oil Price - March 21
Oil Price - March 21
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - March 21
Ron Bousso, Reuters Thu, 03/21/2019 - 07:23
Oil held near 2019 highs on March 20, supported by tightening U.S. stocks and declining output from key producers due to OPEC production cuts and U.S. sanctions on Iran and Venezuela.
International Brent crude oil futures were up 5 cents at $68.55 a barrel by 0915 GMT, having hit their highest since Nov. 13 at $68.69 earlier in the session.
U.S. West Texas Intermediate (WTI) crude futures were at $60.10 per barrel, down 13 cents. WTI reached its highest since Nov. 12 earlier in the day, at $60.33 per barrel.
Crude prices have been pushed up by almost a third since the start of 2019 by supply cuts led by OPEC, as well as sanctions enacted against Iran and Venezuela by the United States.
The drop in production has led to a tightening in global inventories. Vienna-based consultancy JBC Energy estimated stocks had run down by a "solid" 40 million barrels since mid-January.
That followed a 10-million-barrel fall in U.S. crude stocks last week, the largest drop since last July, boosted by strong export and refining demand, according to the U.S. government's Energy Information Administration (EIA).
Meanwhile, OPEC's crude output slumped from a mid-2018 peak of 32.8 million barrels per day (MMbbl/d) to 30.7 MMbbl/d in February.
The U.S. sanctions are disrupting supply.
"Venezuelan exports to the U.S. have finally dried up, after the sanctions were placed on them by the U.S. administration earlier this year," ANZ bank said.
Iranian oil shipments have slumped. The U.S. aims to cut Iran's crude exports by about 20% to below 1 million bpd from May by requiring importing countries to reduce purchases to avoid U.S. sanctions.
The OPEC cuts and sanctions have also tightened supply within the U.S.
Part of the drawdown in U.S. inventories was due to surging exports, which stood at a four-week average of 3 MMbbl/d, double the amount this time a year ago, the EIA said.
U.S. crude oil production returned to its record of 12.1 MMbbl/d last week, making America the world's biggest producer ahead of Russia and Saudi Arabia.
Oil held near 2019 highs on March 20, supported by tightening U.S. stocks and declining output from key producers due to OPEC production cuts and U.S. sanctions on Iran and Venezuela.
International Brent crude oil futures were up 5 cents at $68.55 a barrel by 0915 GMT, having hit their highest since Nov. 13 at $68.69 earlier in the session.
U.S. West Texas Intermediate (WTI) crude futures were at $60.10 per barrel, down 13 cents. WTI reached its highest since Nov. 12 earlier in the day, at $60.33 per barrel.
Crude prices have been pushed up by almost a third since the start of 2019 by supply cuts led by OPEC, as well as sanctions enacted against Iran and Venezuela by the United States.
The drop in production has led to a tightening in global inventories. Vienna-based consultancy JBC Energy estimated stocks had run down by a "solid" 40 million barrels since mid-January.
That followed a 10-million-barrel fall in U.S. crude stocks last week, the largest drop since last July, boosted by strong export and refining demand, according to the U.S. government's Energy Information Administration (EIA).
Meanwhile, OPEC's crude output slumped from a mid-2018 peak of 32.8 million barrels per day (MMbbl/d) to 30.7 MMbbl/d in February.
The U.S. sanctions are disrupting supply.
"Venezuelan exports to the U.S. have finally dried up, after the sanctions were placed on them by the U.S. administration earlier this year," ANZ bank said.
Iranian oil shipments have slumped. The U.S. aims to cut Iran's crude exports by about 20% to below 1 million bpd from May by requiring importing countries to reduce purchases to avoid U.S. sanctions.
The OPEC cuts and sanctions have also tightened supply within the U.S.
Part of the drawdown in U.S. inventories was due to surging exports, which stood at a four-week average of 3 MMbbl/d, double the amount this time a year ago, the EIA said.
U.S. crude oil production returned to its record of 12.1 MMbbl/d last week, making America the world's biggest producer ahead of Russia and Saudi Arabia.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group