You are here: Home » International » News » Markets
Business Standard

Oil rises as market could be closer to balance than expected

US West Texas Intermediate crude was up 40 cents, or 0.8 per cent, at $50.34 a barrel

Reuters  |  Singapore 

A worker walks past a pump jack on an oil field in Russia  Reuters
A worker walks past a pump jack on an oil field in Russia Reuters

rose early on Tuesday as some analysts said markets might not be quite as oversupplied as suggested by many, with global inventories rising less than expected ahead of the high-demand winter heating season in the northern hemisphere.

A drop in the dollar away from seven-month highs the previous day also supported crude, as a lower greenback makes fuel purchases cheaper for countries using other currencies domestically.

was at $51.91 per barrel at 0655 GMT, up 39 cents, or 0.76 per cent from the previous close.

US West Texas Intermediate (WTI) crude was up 40 cents, or 0.8 per cent, at $50.34 a barrel.

Traders said prices were receiving support from the notion that oil markets, which have been dogged by oversupply for two years, may be closer to balance than previously anticipated.

Beyond estimating production and consumption, one way to gauge the supply and demand balance is to analyse fuel inventory changes.

"Global oil 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 market comes back into balance," said in a note on Tuesday.

Bernstein said that recent inventory declines "suggest that oil markets may be closer to re-balancing than some expect," but added that going forward "much depends on how much is prepared to cut at the upcoming meetings in at the end of November".

said in a note that "the much cited oil market oversupply has, for the last 4 weeks, at least, been notably belied by the data," pointing to an overall drop in inventories from United States, Japan, and Europe of 35.9 million barrels.

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

The Organization of the Petroleum Exporting Countries (OPEC) will meet on November 30 to discuss a planned output cut of around 1 million barrels per day away from its record 33.6 million bpd production in September.

The cartel hopes that major non-producer will cooperate.

Despite the potential cuts, traders said oil was pressured by concerns over a slowdown in demand, especially in Asia, the main pillar of demand growth in recent years.

In China, the trade environment will remain weak for the remainder of 2016, the commerce ministry said on Tuesday. And, in India, fuel demand fell 0.7 per cent in September compared with the same month last year, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed.

RECOMMENDED FOR YOU

Oil rises as market could be closer to balance than expected

US West Texas Intermediate crude was up 40 cents, or 0.8 per cent, at $50.34 a barrel

US West Texas Intermediate crude was up 40 cents, or 0.8 per cent, at $50.34 a barrel
rose early on Tuesday as some analysts said markets might not be quite as oversupplied as suggested by many, with global inventories rising less than expected ahead of the high-demand winter heating season in the northern hemisphere.

A drop in the dollar away from seven-month highs the previous day also supported crude, as a lower greenback makes fuel purchases cheaper for countries using other currencies domestically.

was at $51.91 per barrel at 0655 GMT, up 39 cents, or 0.76 per cent from the previous close.

US West Texas Intermediate (WTI) crude was up 40 cents, or 0.8 per cent, at $50.34 a barrel.

Traders said prices were receiving support from the notion that oil markets, which have been dogged by oversupply for two years, may be closer to balance than previously anticipated.

Beyond estimating production and consumption, one way to gauge the supply and demand balance is to analyse fuel inventory changes.

"Global oil 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 market comes back into balance," said in a note on Tuesday.

Bernstein said that recent inventory declines "suggest that oil markets may be closer to re-balancing than some expect," but added that going forward "much depends on how much is prepared to cut at the upcoming meetings in at the end of November".

said in a note that "the much cited oil market oversupply has, for the last 4 weeks, at least, been notably belied by the data," pointing to an overall drop in inventories from United States, Japan, and Europe of 35.9 million barrels.

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

The Organization of the Petroleum Exporting Countries (OPEC) will meet on November 30 to discuss a planned output cut of around 1 million barrels per day away from its record 33.6 million bpd production in September.

The cartel hopes that major non-producer will cooperate.

Despite the potential cuts, traders said oil was pressured by concerns over a slowdown in demand, especially in Asia, the main pillar of demand growth in recent years.

In China, the trade environment will remain weak for the remainder of 2016, the commerce ministry said on Tuesday. And, in India, fuel demand fell 0.7 per cent in September compared with the same month last year, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed.
image
Business Standard
177 22

Oil rises as market could be closer to balance than expected

US West Texas Intermediate crude was up 40 cents, or 0.8 per cent, at $50.34 a barrel

rose early on Tuesday as some analysts said markets might not be quite as oversupplied as suggested by many, with global inventories rising less than expected ahead of the high-demand winter heating season in the northern hemisphere.

A drop in the dollar away from seven-month highs the previous day also supported crude, as a lower greenback makes fuel purchases cheaper for countries using other currencies domestically.

was at $51.91 per barrel at 0655 GMT, up 39 cents, or 0.76 per cent from the previous close.

US West Texas Intermediate (WTI) crude was up 40 cents, or 0.8 per cent, at $50.34 a barrel.

Traders said prices were receiving support from the notion that oil markets, which have been dogged by oversupply for two years, may be closer to balance than previously anticipated.

Beyond estimating production and consumption, one way to gauge the supply and demand balance is to analyse fuel inventory changes.

"Global oil 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 market comes back into balance," said in a note on Tuesday.

Bernstein said that recent inventory declines "suggest that oil markets may be closer to re-balancing than some expect," but added that going forward "much depends on how much is prepared to cut at the upcoming meetings in at the end of November".

said in a note that "the much cited oil market oversupply has, for the last 4 weeks, at least, been notably belied by the data," pointing to an overall drop in inventories from United States, Japan, and Europe of 35.9 million barrels.

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

The Organization of the Petroleum Exporting Countries (OPEC) will meet on November 30 to discuss a planned output cut of around 1 million barrels per day away from its record 33.6 million bpd production in September.

The cartel hopes that major non-producer will cooperate.

Despite the potential cuts, traders said oil was pressured by concerns over a slowdown in demand, especially in Asia, the main pillar of demand growth in recent years.

In China, the trade environment will remain weak for the remainder of 2016, the commerce ministry said on Tuesday. And, in India, fuel demand fell 0.7 per cent in September compared with the same month last year, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed.

image
Business Standard
177 22

Upgrade To Premium Services

Welcome User

Business Standard is happy to inform you of the launch of "Business Standard Premium Services"

As a premium subscriber you get an across device unfettered access to a range of services which include:

  • Access Exclusive content - articles, features & opinion pieces
  • Weekly Industry/Genre specific newsletters - Choose multiple industries/genres
  • Access to 17 plus years of content archives
  • Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box
  • End of day news alerts on 5 companies (via email)
  • NEW: Get seamless access to WSJ.com at a great price. No additional sign-up required.
 

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard