Oil Price - Jan 7
Posted: Mon Jan 07, 2019 10:29 am
Oil opened higher on Monday morning as new data shows that OPEC+ actions to tighten the market are well underway. Plus, economic data from China shows that the nation's economy is not slowing. U.S. Dollar Index also declined last week; the dollar has an inverse relationship with oil price.
On January 3, reported OPEC oil supply fell in December by the largest amount in almost two years, a Reuters survey found, as top exporter Saudi Arabia made an early start to a supply limiting accord while Iran and Libya posted involuntary declines. The 15-member Organization of the Petroleum Exporting Countries pumped 32.7 million b/d last month, the survey on Thursday found, down 460,000 b/d from November and the largest month-on-month drop since January 2017. The survey suggests Saudi Arabia and some of its allies acted unilaterally to bolster the market. The formal accord by OPEC and its allies to cut supply in 2019 took effect only on Tuesday.
The biggest drop in OPEC supply last month came from Saudi Arabia and amounted to 400,000 bpd, the survey showed. Saudi supply in November had hit a record 11 million b/d, after U.S. President Donald Trump demanded more oil be pumped to curb rising prices and make up for losses from Iran. The kingdom has said it plans to go even further in January by delivering a larger cut than required under the OPEC+ deal. The second biggest drop occurred in the United Arab Emirates, which like Saudi voluntarily scaled back supply, the survey found. The third largest was an involuntary cut by Libya, where unrest led to the shutdown of the country's biggest oilfield. Output from Iran declined further as U.S. sanctions discouraged companies from buying its oil. According to industry sources, however, Iran maintained its exports, helped by sanctions waivers granted to eight buyers as well as dogged Iranian efforts to keep selling crude.
On January 4, Reuters reported oil prices rose 2 percent on Friday after proposed trade talks between the United States and China eased some fears about a global economic slowdown, but gains were capped after the United States reported a sharp build in refined product inventories. U.S. energy firms this week cut oil rigs for the first time in three weeks, reducing the rig count by eight to 877. Some analysts were forecasting the first decline in the rig count - an indicator of future production - in three years in 2019.
Oil drew support from comments by China's commerce ministry, which said Beijing would hold vice-ministerial trade talks with U.S. counterparts on January 7 and 8. China's services sector extended its expansion in December, a private survey showed on Friday, bucking a trend of downbeat economic data. "Recent Chinese data is not confirming the doom-and-gloom trend," said Olivier Jakob, oil analyst at Petromatrix. "And you've got OPEC cutting." A robust U.S. jobs report also added to broader market optimism.
On January 3, reported OPEC oil supply fell in December by the largest amount in almost two years, a Reuters survey found, as top exporter Saudi Arabia made an early start to a supply limiting accord while Iran and Libya posted involuntary declines. The 15-member Organization of the Petroleum Exporting Countries pumped 32.7 million b/d last month, the survey on Thursday found, down 460,000 b/d from November and the largest month-on-month drop since January 2017. The survey suggests Saudi Arabia and some of its allies acted unilaterally to bolster the market. The formal accord by OPEC and its allies to cut supply in 2019 took effect only on Tuesday.
The biggest drop in OPEC supply last month came from Saudi Arabia and amounted to 400,000 bpd, the survey showed. Saudi supply in November had hit a record 11 million b/d, after U.S. President Donald Trump demanded more oil be pumped to curb rising prices and make up for losses from Iran. The kingdom has said it plans to go even further in January by delivering a larger cut than required under the OPEC+ deal. The second biggest drop occurred in the United Arab Emirates, which like Saudi voluntarily scaled back supply, the survey found. The third largest was an involuntary cut by Libya, where unrest led to the shutdown of the country's biggest oilfield. Output from Iran declined further as U.S. sanctions discouraged companies from buying its oil. According to industry sources, however, Iran maintained its exports, helped by sanctions waivers granted to eight buyers as well as dogged Iranian efforts to keep selling crude.
On January 4, Reuters reported oil prices rose 2 percent on Friday after proposed trade talks between the United States and China eased some fears about a global economic slowdown, but gains were capped after the United States reported a sharp build in refined product inventories. U.S. energy firms this week cut oil rigs for the first time in three weeks, reducing the rig count by eight to 877. Some analysts were forecasting the first decline in the rig count - an indicator of future production - in three years in 2019.
Oil drew support from comments by China's commerce ministry, which said Beijing would hold vice-ministerial trade talks with U.S. counterparts on January 7 and 8. China's services sector extended its expansion in December, a private survey showed on Friday, bucking a trend of downbeat economic data. "Recent Chinese data is not confirming the doom-and-gloom trend," said Olivier Jakob, oil analyst at Petromatrix. "And you've got OPEC cutting." A robust U.S. jobs report also added to broader market optimism.