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Page added on February 12, 2021

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Oil Prices Surge As Inventories Decline

Consumption

Oil in London climbed for a fourth straight week as efforts to clear an oil surplus are seen holding the market over until demand comes back in force.

Global benchmark Brent futures on Friday surged the most since early January, while West Texas Intermediate crude flirted with $60 a barrel for the first time in more than a year. Signs of inventories declining in the U.S. and elsewhere point to the success OPEC+ has had in draining a surplus left in the wake of an historic demand slump due to the pandemic.

OPEC expects a stronger second half of 2021, indicating this week that global inventories will face sharp declines unless the cartel boosts supply. Iraq said OPEC+ is unlikely to change its output policy at a March meeting. In the U.S., crude stockpiles are at the lowest in nearly a year.

“OPEC is showing a lot more nimbleness and practicality in their approach,” said Vikas Dwivedi, a global energy strategist for Macquarie Group in Houston. “It looks like U.S. shale is going to be a lot more measured and not just completely collapse the supply/demand balance.”

One of the most dramatic moves in the market this week has been in Brent’s futures curve. So-called backwardation between the first and third futures contract, which indicates tight supplies, soared to its strongest level since January 2020. At the same time, brokers reported a frenzy of bullish trading in the key Dated-Frontline swap, which is tied to physical North Sea markets, flipping to a premium for the first time in a year.

There are further signs of supply being constrained in the near term. A frigid Arctic blast spreading across America’s largest shale oil patch has caused crude flowing from wells to slow or halt completely. Traders say several hundred barrels a day of output in the Permian Basin could be impacted by well shutdowns that began Thursday.

Crude prices “can still go higher from here,” said Ryan Gorman, market strategist at Blue Line Futures LLC in Chicago. “With Saudi Arabia’s production cut and some progress toward the end of the tunnel here for the virus, there’s still some room for this market to go.”

Prices

  • West Texas Intermediate gained $1.23 to settle at $59.47 a barrel, rising the most in nearly two weeks
  • Brent for April settlement rose $1.29 to end the session at $62.43 a barrel
  • Both benchmarks are at the highest since January 2020

Still, concerns remain over whether crude’s rally is sustainable. WTI futures’ 14-day Relative Strength Index rose to the most overbought since 1999 this week and remains sharply above 70 in a sign that the commodity is due for a pullback. Meanwhile, the Covid-19 pandemic continues to crimp fuel consumption from China to the U.S., with the International Energy Agency cutting its demand forecast for 2021 and describing the market as fragile.

“Based on fundamental analysis, the case for further price gains is hard to make,” said Hans van Cleef, senior energy economist at ABN Amro. “We think that much higher oil prices are not sustainable and that oil producers will then start to increase production.”

Other Oil Market News:

  • Newly released U.S. Interior Department data suggest that delays in oil and gas drilling permits are tied to normal government reviews rather than a holdup in the top ranks of the agency.
  • A supertanker is loading up with diesel-type fuel at a key European import hub for the petroleum product, a telling indicator of the region’s supply glut.
  • Royal Dutch Shell Plc launched arbitration proceedings against the Nigerian government over a long-running community dispute.

–With assistance from Sheela Tobben.

RIGZONE



11 Comments on "Oil Prices Surge As Inventories Decline"

  1. MyStupidAndUselessComment on Fri, 12th Feb 2021 4:28 pm 

    White House Says Behavior Of Aide Who Allegedly Verbally Harassed Reporter ‘Completely Unacceptable’

    https://www.youtube.com/watch?v=wtBl8tKrY6k

    The White man does not have what it take to survive. More violent man or tribe will displace the Whites race and take control of everything. Legault has a gay body language. I dont like him at all

  2. MyStupidAndUselessComment on Fri, 12th Feb 2021 4:37 pm 

    Some of you throught my youtube page seems to suggest that I should contact retard lego. Not going to happen at all. I dont like him at all. I am fed up to see retard lego video recommandation on my youtube page I dont trust anyone that spy on and still spy on me. get it fuckers

  3. YouWillRegetThis on Fri, 12th Feb 2021 5:20 pm 

    I also have all the reasons to believe that last year, the US, Donald Trump and the government of Quebec had access simultaneously to my google account, my google search and most likely shared my personal information with the US. I want to know retard lego (mon christ de tabernac d’enfant de chienne sans cervelle) who else was looking at my youtube. Isabelle Charest, guidoune Guibault, you, retard lego. Was my personal life entertaining. You don’t spy and manipulate someone that you like.

  4. makati1 on Fri, 12th Feb 2021 5:27 pm 

    You…, the US “looks” at everyone it can. You are not special. They are gathering info in case they want to prosecute you for breaking one of their 600,000+ laws. You really need to read “1984”, “Animal farm”, “Fahrenheit 451”, etc., to see how that works.

  5. MyStupidAndUselessComment on Fri, 12th Feb 2021 5:39 pm 

    You cannot trust anything you see on the web, especially when it is coming out of the US. Especially on YouTube because of very advance video editing software. I have to assume everything is a lie. Stupid dumb mother, this is what happen when you lie all the time, like US does.

  6. PastActionAndDecisionsHaveConsequences on Fri, 12th Feb 2021 5:48 pm 

    StarvingLion : Lockheed Martin stock is headed to 0.

    —————————–

    Have you seen this ugly F35 piece of shit turd. Nobody in the Middle-East is impresse with pathetic turd

    Le Rafale est beaucoup plus agile que le F-35

    https://www.youtube.com/watch?v=tkfMBla3zFU

  7. PastActionAndDecisionsHaveConsequences on Fri, 12th Feb 2021 5:53 pm 

    StarvingLion : Lockheed Martin stock is headed to 0.

    ———————————–

    These dump piece of shit at the pentagon, still think they will be able to run a mechanical military running on oil. It is almost over for US military and this shit and pathetic nation. Good riddance fucker

  8. TheWorldIsScareByTheUSA on Fri, 12th Feb 2021 6:18 pm 

    Myanmar and China are really scared. US has send two aircraft carriers in the South China sea. TWO, this is really impressive. People around the world are laughing at you USA, I am laughing at that is for sure

  9. makati1 on Fri, 12th Feb 2021 7:36 pm 

    Theworld…, your sarcasm is great! China knows it can sink both carrier fleets in a few minutes as they sit in the Chinese bathtub called the South China Sea. A few hyperspace missiles could reach them in a few minutes. Long before the crews could even respond.

    ~200 miles at ~6,000 mph…do the math. 100 miles per minute times two. LOL

  10. makati1 on Fri, 12th Feb 2021 7:43 pm 

    BTW: That would take out at least 10,000 US sailors, not to mention the many escorting ship’s crews. Nice start for WW3. 20+ percent of the US Navy in a few minutes. But, by then, missiles would be headed for the mainland US at the same speeds. San Fran in less than an hour. DC 20 minutes later. Not to mention Russia… We live in exciting times.

  11. Biden's hairplug on Sat, 13th Feb 2021 1:45 am 

    Le Rafale est beaucoup plus agile que le F-35

    https://www.youtube.com/watch?v=tkfMBla3zFU

    Je vois que l’identité française est toujours bien vivante en Amérique du Nord!

    https://www.youtube.com/watch?v=xEJhyfmRHuA

    https://www.youtube.com/watch?v=5j5xF6ZYRQY

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