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Oil rises on dollar and market balance expectations

Traders said a drop in the dollar away from seven-month highs the previous day supported crude

Reuters  |  London 

Reuters
Reuters

rose on Tuesday, helped by a weaker US and as several analysts said that global markets might not be as oversupplied as flagged by others ahead of a November meeting of producers that could decide to cut crude production.

The proposal by the Organisation of the Petroleum Exporting Countries made at the end of last month to cut or cap production has helped to lift crude above $50, but not much more because of participants' doubts over the cartel's ability to strike and implement a concrete deal.

But several analysts have now said that a two-year global supply glut could be receding when inventories are taken into account. They say that stocks are not as high as usual ahead of the winter fuels season.

Brent crude rose 43 cents, or 0.8 per cent, to $51.95 a barrel by 0830 GMT. US West Texas Intermediate (WTI) crude was up 49 cents, close to 1 per cent, at $50.43.

Traders said a drop in the away from seven-month highs the previous day supported crude. A lower makes fuel purchases cheaper for countries using other currencies domestically.

Analysts at Bernstein Energy said that beyond estimating production and consumption, one way to gauge the supply and demand is to analyse fuel inventory changes.

"Global inventories (industry and government) increased by 17 million barrels to 5.618 billion barrels in 3Q16. This is the smallest build since 4Q14, confirming that inventory builds are slowing as the comes back into balance," it said.



Citi Bank, meanwhile, pointed to an overall drop in inventories from the United States, Japan, Singapore and Europe of 35.9 million barrels.

The lower stocks, seasonal output falls irrespective of any deal and high demand for heating fuels during the Northern Hemisphere winter combine to suggest that the will be balanced at the end of this year, analysts at Wood Mackenzie have forecast.

Traders are taking note, with money managers raising their bets on US crude to the highest level since the slump started in 2014.

JBC Energy, meanwhile, said that October tanker fixtures from the Gulf have reached a five-year high, possibly reflecting concerns that effective action by group could spur further price increases later in the fourth quarter and that additional storage buying might be best covered before November.

meets on Nov 30 to discuss a planned production cut of about 1 million barrels per day (bpd) from its record 33.6 million bpd September output.

On the downside, traders said that was pressured by concerns about slowing demand, particularly in Asia. In China, the trade environment will remain weak for the remainder of 2016, the commerce ministry said on Tuesday. In India, fuel demand was down 0.7 per cent year on year in September.

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Oil rises on dollar and market balance expectations

Traders said a drop in the dollar away from seven-month highs the previous day supported crude

Traders said a drop in the dollar away from seven-month highs the previous day supported crude
rose on Tuesday, helped by a weaker US and as several analysts said that global markets might not be as oversupplied as flagged by others ahead of a November meeting of producers that could decide to cut crude production.

The proposal by the Organisation of the Petroleum Exporting Countries made at the end of last month to cut or cap production has helped to lift crude above $50, but not much more because of participants' doubts over the cartel's ability to strike and implement a concrete deal.

But several analysts have now said that a two-year global supply glut could be receding when inventories are taken into account. They say that stocks are not as high as usual ahead of the winter fuels season.

Brent crude rose 43 cents, or 0.8 per cent, to $51.95 a barrel by 0830 GMT. US West Texas Intermediate (WTI) crude was up 49 cents, close to 1 per cent, at $50.43.

Traders said a drop in the away from seven-month highs the previous day supported crude. A lower makes fuel purchases cheaper for countries using other currencies domestically.

Analysts at Bernstein Energy said that beyond estimating production and consumption, one way to gauge the supply and demand is to analyse fuel inventory changes.

"Global inventories (industry and government) increased by 17 million barrels to 5.618 billion barrels in 3Q16. This is the smallest build since 4Q14, confirming that inventory builds are slowing as the comes back into balance," it said.



Citi Bank, meanwhile, pointed to an overall drop in inventories from the United States, Japan, Singapore and Europe of 35.9 million barrels.

The lower stocks, seasonal output falls irrespective of any deal and high demand for heating fuels during the Northern Hemisphere winter combine to suggest that the will be balanced at the end of this year, analysts at Wood Mackenzie have forecast.

Traders are taking note, with money managers raising their bets on US crude to the highest level since the slump started in 2014.

JBC Energy, meanwhile, said that October tanker fixtures from the Gulf have reached a five-year high, possibly reflecting concerns that effective action by group could spur further price increases later in the fourth quarter and that additional storage buying might be best covered before November.

meets on Nov 30 to discuss a planned production cut of about 1 million barrels per day (bpd) from its record 33.6 million bpd September output.

On the downside, traders said that was pressured by concerns about slowing demand, particularly in Asia. In China, the trade environment will remain weak for the remainder of 2016, the commerce ministry said on Tuesday. In India, fuel demand was down 0.7 per cent year on year in September.
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Business Standard
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Oil rises on dollar and market balance expectations

Traders said a drop in the dollar away from seven-month highs the previous day supported crude

rose on Tuesday, helped by a weaker US and as several analysts said that global markets might not be as oversupplied as flagged by others ahead of a November meeting of producers that could decide to cut crude production.

The proposal by the Organisation of the Petroleum Exporting Countries made at the end of last month to cut or cap production has helped to lift crude above $50, but not much more because of participants' doubts over the cartel's ability to strike and implement a concrete deal.

But several analysts have now said that a two-year global supply glut could be receding when inventories are taken into account. They say that stocks are not as high as usual ahead of the winter fuels season.

Brent crude rose 43 cents, or 0.8 per cent, to $51.95 a barrel by 0830 GMT. US West Texas Intermediate (WTI) crude was up 49 cents, close to 1 per cent, at $50.43.

Traders said a drop in the away from seven-month highs the previous day supported crude. A lower makes fuel purchases cheaper for countries using other currencies domestically.

Analysts at Bernstein Energy said that beyond estimating production and consumption, one way to gauge the supply and demand is to analyse fuel inventory changes.

"Global inventories (industry and government) increased by 17 million barrels to 5.618 billion barrels in 3Q16. This is the smallest build since 4Q14, confirming that inventory builds are slowing as the comes back into balance," it said.



Citi Bank, meanwhile, pointed to an overall drop in inventories from the United States, Japan, Singapore and Europe of 35.9 million barrels.

The lower stocks, seasonal output falls irrespective of any deal and high demand for heating fuels during the Northern Hemisphere winter combine to suggest that the will be balanced at the end of this year, analysts at Wood Mackenzie have forecast.

Traders are taking note, with money managers raising their bets on US crude to the highest level since the slump started in 2014.

JBC Energy, meanwhile, said that October tanker fixtures from the Gulf have reached a five-year high, possibly reflecting concerns that effective action by group could spur further price increases later in the fourth quarter and that additional storage buying might be best covered before November.

meets on Nov 30 to discuss a planned production cut of about 1 million barrels per day (bpd) from its record 33.6 million bpd September output.

On the downside, traders said that was pressured by concerns about slowing demand, particularly in Asia. In China, the trade environment will remain weak for the remainder of 2016, the commerce ministry said on Tuesday. In India, fuel demand was down 0.7 per cent year on year in September.

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Business Standard
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