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Oil holds gains

Brent crude rose to the highest in more than seven months after OPEC and Russia said they were well on the way to clearing a global glut, while traders eyed the potential for supply disruption from the Kurdish independence vote.

Futures rose as much as 1.4 percent in London to the highest since Feb. 2. The OPEC-led group implemented more than 100 percent of its agreed cuts last month and fuel stockpiles have been “massively drained,” OPEC Secretary-General Mohammad Barkindo said Friday in Vienna. Kurdistan oil is at Turkey’s mercy and would have nowhere to go if it chose to “close the valves,” President Recep Tayyip Erdogan said Monday as residents of the Iraqi region went to the polls.

“Continued declining U.S. oil rigs and continued declining inventories is giving support to oil,” said Bjarne Schieldrop, chief commodities analyst at SEB in Oslo. “At the same time, without any firm plans for after March 2018, discussions will start about the end game of the OPEC deal and erode confidence.”

Brent for November settlement gained 72 cents to $57.58 a barrel on the London-based ICE Futures Europe exchange at 12:16 p.m. local time. It rose 2.2 percent last week. Total volume traded was about 20 percent above the 100-day average. 

West Texas Intermediate for November delivery was at $50.94 a barrel on the New York Mercantile Exchange, up 28 cents. Brent traded at a premium of $6.63 to WTI.

The outlook for the global oil market is improving and OPEC members will keep pressing onward until it balances, Barkindo said in a video message at a conference in Singapore on Monday. However, it’s not possible to say whether the deal will need to be extended until closer to expiry, Kuwait’s Oil Minister Issam Almarzooq said.

The Kurds, which make up about one-fifth of Iraq’s 38 million people, have longstanding grievances against the government in Baghdad. They won a large degree of autonomy under the post-Saddam Iraqi constitution adopted in 2005, and nationalism has deepened since Kurdish troops scored battlefield successes against Islamic State and brought the city of Kirkuk under their control. Turkey fears the independence vote could set back its own campaign to stamp out a Kurdish insurgency it’s been battling for three decades.

Oil-market news:

  • Iraq’s goal to boost production capacity to 5 million barrels a day won’t affect markets and not all new output will be exported, Oil Minister Jabbar Al-Luaibi said in Baghdad.
  • Compliance to agreed cuts is “acceptable,” but OPEC needs to address rising supply from Libya and Nigeria, which are exempt from the curbs, Iran’s Oil Minister Bijan Namdar Zanganeh said in Tehran.
  • U.S. shale oil is “absolutely” sustainable at $50 a barrel, said Ryan Krogmeier, Chevron Corp.’s vice president of crude supply and trading. Output in the Permian could rise to 2.9 million barrels a day by the end of 2018 from 2.4 million a day this year.
  • Asia will be the primary outlet for OPEC and Middle East oil in the future, Barkindo said. Crude exports from the Middle East to Asia will rise 7.5 million barrels a day between 2016 and 2040, he said.

Source:bloomberg.com

Brent crude rose to the highest in more than seven months after OPEC and Russia said they were well on the way to clearing a global glut, while traders eyed the potential for supply disruption from the Kurdish independence vote.

Futures rose as much as 1.4 percent in London to the highest since Feb. 2. The OPEC-led group implemented more than 100 percent of its agreed cuts last month and fuel stockpiles have been “massively drained,” OPEC Secretary-General Mohammad Barkindo said Friday in Vienna. Kurdistan oil is at Turkey’s mercy and would have nowhere to go if it chose to “close the valves,” President Recep Tayyip Erdogan said Monday as residents of the Iraqi region went to the polls.

“Continued declining U.S. oil rigs and continued declining inventories is giving support to oil,” said Bjarne Schieldrop, chief commodities analyst at SEB in Oslo. “At the same time, without any firm plans for after March 2018, discussions will start about the end game of the OPEC deal and erode confidence.”

Brent for November settlement gained 72 cents to $57.58 a barrel on the London-based ICE Futures Europe exchange at 12:16 p.m. local time. It rose 2.2 percent last week. Total volume traded was about 20 percent above the 100-day average. 

West Texas Intermediate for November delivery was at $50.94 a barrel on the New York Mercantile Exchange, up 28 cents. Brent traded at a premium of $6.63 to WTI.

The outlook for the global oil market is improving and OPEC members will keep pressing onward until it balances, Barkindo said in a video message at a conference in Singapore on Monday. However, it’s not possible to say whether the deal will need to be extended until closer to expiry, Kuwait’s Oil Minister Issam Almarzooq said.

The Kurds, which make up about one-fifth of Iraq’s 38 million people, have longstanding grievances against the government in Baghdad. They won a large degree of autonomy under the post-Saddam Iraqi constitution adopted in 2005, and nationalism has deepened since Kurdish troops scored battlefield successes against Islamic State and brought the city of Kirkuk under their control. Turkey fears the independence vote could set back its own campaign to stamp out a Kurdish insurgency it’s been battling for three decades.

Oil-market news:

  • Iraq’s goal to boost production capacity to 5 million barrels a day won’t affect markets and not all new output will be exported, Oil Minister Jabbar Al-Luaibi said in Baghdad.
  • Compliance to agreed cuts is “acceptable,” but OPEC needs to address rising supply from Libya and Nigeria, which are exempt from the curbs, Iran’s Oil Minister Bijan Namdar Zanganeh said in Tehran.
  • U.S. shale oil is “absolutely” sustainable at $50 a barrel, said Ryan Krogmeier, Chevron Corp.’s vice president of crude supply and trading. Output in the Permian could rise to 2.9 million barrels a day by the end of 2018 from 2.4 million a day this year.
  • Asia will be the primary outlet for OPEC and Middle East oil in the future, Barkindo said. Crude exports from the Middle East to Asia will rise 7.5 million barrels a day between 2016 and 2040, he said.

Source:bloomberg.com

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