Crude Oil Apr 21 (CL=F)
| Pre. Settlement | N/A |
| Settlement date | 2021-03-22 |
| Open | 59.55 |
| Bid | 61.26 |
| Last price | 59.75 |
| Day's range | 59.24 - 61.99 |
| Volume | 441,504 |
| Ask | 61.27 |
- Bloomberg
OPEC+ Silence Has Oil Market Second-Guessing Next Supply Move
(Bloomberg) -- OPEC and its allies kept oil-watchers guessing about their next move, after a day of preliminary talks offered few clues as to whether the market will get the April supply increase it’s been expecting.Saudi Arabia and Russia, leaders of group, held bilateral talks on Wednesday, seeking common ground as Riyadh urges caution and Moscow presses to raise output, a delegate said. While OPEC+ is still widely expected to revive some of the 7 million barrels a day they’ve idled, a preliminary meeting of ministers earlier in the day didn’t get into specifics.The trajectory of oil prices in the coming months now rests on the outcome of Thursday’s full meeting of the Organization of Petroleum Exporting Countries and its allies. Crude could move higher if the group doesn’t deliver all of the extra barrels the market needs to fuel the economic recovery from the Covid-19 pandemic.“OPEC+ may raise by only 0.9 million barrels a day in April,” said Amrita Sen, chief oil analyst and co-founder at Energy Aspects Ltd. Anything less than the 1.4 million barrel-a-day hike that had previously been expected “should be viewed as bullish by the market.”Plot TwistsSaudi Arabia, the leader of the producers’ group alongside Russia, has developed a liking for bullish surprises. Energy Minister Prince Abdulaziz bin Salman triggered a sharp surge in prices at the cartel’s January meeting by springing a unilateral production cut of 1 million barrels a day on an unsuspecting market. He has often warned of his willingness to inflict pain on anyone short-selling oil.“Given his repeated insistence that it is a futile exercise to predict Saudi action, we think His Royal Highness may look to cement his reputation as the prince of plot twists,” said Helima Croft, chief commodities strategist at RBC Capital Markets.Despite the notes of caution, veteran OPEC-watchers still expected some extra barrels from the group. There’s little chance that the group will hold output at current levels in April, given the pressure from members including the United Arab Emirates and Russia to pump more, said Sen. In Croft’s view, the most likely outcome is an increase of 500,000 to 1 million barrels a day. Two-Part DealThere are two distinct elements to the production increase that OPEC+ will debate on Thursday.First, will the cartel proceed with a 500,000 barrel-a-day collective output hike in April? Second, how will Saudi Arabia phase out the extra supply reduction of 1 million barrels a day it’s been making voluntarily in February and March?Russia has been the most consistent advocate for the first element, and other members largely agreed that it should go ahead, people familiar with the matter said earlier this week.On the second, Saudi Arabia originally intended for its voluntary supply reduction to only last for two months. But recently, the kingdom has been considering whether to return all of the barrels in a single month, or over a longer period, people familiar with the matter said this week.“From a risk management perspective, the direction of travel appears to be to maintain a tighter policy than the market expects for a bit longer,” said Bob McNally, president of consultant Rapidan Energy Group and a former White House official.The group’s own analysts think the market is ready for extra supply. Even if OPEC+ were to boost production by 2.4 million barrels a day between February and June -- the maximum amount allowed under the current deal -- it will still be able to clear the remnants of the 2020 supply glut by August, according to a presentation from the secretariat’s technical experts on Tuesday.While OPEC+ ministers may not be giving clear signals, the recent trend in oil prices points to a market that needs more supply. Brent crude jumped 2.3% on Wednesday to $64.12 a barrel, an increase of 24% this year.“They’re going to respond to the pressure” to raise production with prices at this level, said Ed Morse, global head of commodities research at Citigroup Inc. Yet he also advised against taking the cartel’s actions for granted. “I have told our clients I would not invest in any way on this OPEC meeting -- I think there are too many wildcards.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
- Bloomberg
Oil Surges After Record U.S. Fuel Supply Drop From Deep Freeze
(Bloomberg) -- Oil jumped the most in more than a week after a U.S. government report showed a record drop in domestic fuel inventories from the aftermath of a deep freeze that shuttered refineries in several states.Crude futures in New York climbed 2.6% on Wednesday, snapping a three-day streak of losses. U.S. gasoline inventories tumbled last week by the most since 1990 after a polar blast wiped out more than 5 million barrels a day of refining capacity in late February along the U.S. Gulf Coast, according to Energy Information Administration data. Crude stockpiles swelled with refineries still shut.See also: Record U.S. Gasoline Decline Raises Prospect of $3 Pump Prices“The market expected some noise from the storm’s lingering effects,” said Matt Sallee, portfolio manager at Tortoise, a firm that manages roughly $8 billion in energy-related assets. “Absent the magnitude of the changes, things came in pretty much as expected with the enormous product draw more than offsetting the record crude build.”The U.S. data also showed gasoline supplied, a gauge for demand, surged the most since May, supporting those who say the oil market needs more barrels from producers as OPEC+ heads into a meeting on Thursday. The group is poised to agree on a coordinated production hike to cool the rapid surge in crude prices.Oil has rallied more than 25% so far this year, shepherded by the OPEC+ alliance’s continued production curbs and expectations for demand to meaningfully rebound as Covid-19 vaccines are rolled out worldwide. That strength though has paved the way for the alliance to unleash more barrels, with OPEC Secretary-General Mohammad Barkindo saying Tuesday that both the wider economic outlook and oil-market fundamentals continue to improve. The group could return the bulk of the 1.5 million-barrel-a-day hike that’s up for debate.There are two parts to the potential production ramp-up that OPEC+ will discuss. The first is whether the cartel will proceed with a 500,000-barrel-a-day collective increase in April. The second is the question of how Saudi Arabia could phase out its extra reduction of 1 million barrels a day.“Elevated price levels will incentivize the cartel to taper their output cuts, but given the uncertainty, the market is likely to be on edge heading into tomorrow’s meeting,” TD Securities commodity strategists including Bart Melek said in a note. In the U.S., the decline in both gasoline and distillate inventories coincides with a spate of refinery outages left in the wake of the cold snap: Plants processed crude at the lowest level on record last week. While some refineries, like Motiva Enterprises LLC’s Texas site, have been able to restart key processing units, many that shut due to the freeze are still in the process of making repairs or restarting operations.Meanwhile, much of the crude production hit by the cold temperatures has been restored. Crude supplies grew by a record 21.56 million barrels, signaling weak demand from refiners at the time.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
- Oilprice.com
Oil Soars Despite Largest Ever Crude Build
Oil prices jumped early on Wednesday, following reports that the OPEC+ group could be weighing the possibility not to increase collective oil production from April as widely expected
