United States oil settles up 27 cents, or 0.6%, at $42.50 a barrel
August 17, 2015, 7:54 am   


U.S. crude oil closed higher on Friday after oilfield services firm Baker Hughes reported its oil rig count rose for a fourth straight week.

The number of rigs drilling for oil in the United States rose by 2 from the previous week, bringing the total to 672. Drillers had 1,589 rigs online at this time last year.

U.S. crude was closed up 27 cents, or 0.6 percent, at $42.50 a barrel, after hitting an intraday low of $41.35, its lowest since March 4, 2009.

The lowest U.S. crude price in the aftermath of the financial crisis occurred on January, 2009, when WTI dipped to $33.20 per barrel, falling 77 percent fall from it peak near $147 in July, 2008.

Brent crude traded at $48.90, down 30 cents and some way off its 2015-low of $45.19 reached in January. The front-month September Brent contract expires on Friday.

U.S. benchmark crude steadied earlier on Friday after falling to its lowest in almost 6½ years as huge stockpiles and refinery shutdowns heightened concerns about global oversupply.

Oil had already tumbled more than 3 percent on Thursday, driven by a report that stocks at Cushing, Oklahoma, the delivery point for U.S. crude futures, rose more than 1.3 million barrels in the week to Aug. 11.

U.S. crude is much weaker than the North Sea benchmark, partly due to a spate of refinery outages that has sapped U.S. demand. The largest of those refineries—BP PLC`s 413,500 barrels per day (bpd) facility in Whiting, Indiana, also the biggest in the U.S. Midwest—has been forced to shut two-thirds of its capacity for repairs to a leak that could last a month or more.

The Obama administration will allow limited sales of U.S. crude to Mexico for the first time, a senior administration official told Reuters, marking another milestone in loosening a contentious ban on exporting domestic oil.

The Commerce Department is "acting favorably on a number of applications" to export U.S. crude in exchange for imported Mexican oil, the official said. Such oil swaps are one of several possible exemptions allowed in the four-decade-old law that otherwise bans most overseas shipments.

Robin Bieber, director and technical analyst at London brokerage PVM Oil Associates, said the U.S. crude oil contract, also know as West Texas Intermediate or WTI, had become somewhat dislocated from Brent.

"The contracts are not all on the same technical page and this causes a lack of clarity," Bieber said. "WTI could plunge but the rest hold steady."

Commerzbank analyst Carsten Fritsch said he didn`t expect an accelerated drop in prices, but rather "a slow grind lower" as long as the Whiting refinery was out of service.

Petromatrix oil analyst Olivier Jakob said WTI could fall further, but Brent was in a consolidation phase: "WTI is still facing some local issues and it could weaken more. Otherwise Brent will start to stabilize."

On Friday, Citi Group revised down its base case crude oil price outlook to $54 per barrel for Brent in 2015 and $53 in 2016. It cut its U.S. crude outlook to $48 for 2015 and 2016.


Goldman Sachs said a weaker Chinese yuan was putting downward pressure on all commodity markets, signaling a change in global macroeconomic conditions.

"We believe the net commodity market effects are bearish," it said in a note to clients.

 


Comments

m1.png m2.png m3.png m4.png m5.png
f1.png f2.png f3.png f4.png f5.png
+ =
Exchange Rates
EUR/USD 1.0661
EUR/BRL 3.4097
EUR/AUD 1.4225
EUR/TRY 4.0387
Weather

London

Jan16      01:55
  1. Humidity 47%
  2. Downwind
  3. Winds 0 kph
Now
-14℃
Latest Videos
VIDEO: The Biology of Bliss and the Human OS - Jamie Wheal
Terror and Tourism: Changing the Travel Landscape
Earth In 2050 - HD Documentary 2015
The drive for gender equality in corporate Japan
Plane touches down then aborts during storm (VIDEO)
The Fermi Paradox II — Solutions and Ideas – Where Are All The Aliens (VIDEO)
Money Survival Tips for Millennials (VIDEO)
Lightning strike explodes a tree (VIDEO)
The Moons of Mars Explained (VIDEO)
3 Reasons Why Nuclear Energy Is Awesome! (VIDEO)
3 Reasons Why Nuclear Energy Is Terrible! (VIDEO)
Nuclear Energy Explained: How does it work (VIDEO)
Latest Photos
best cities for small businesses
Best Jobs in America (PHOTOS)
Inside the coolest private jets (PHOTOS)
The best hotel club floors in the world
Winning Images from the 2015 National Geographic Traveler Photo Contest
PHOTOS: Raging Wildfires Prompt Major Evacuation
Amazing Geometry Cities from air - Photos
Photos Bangkok Get snow - Opens Snow Village
Stunning Summer Aerials from Around the World (PHOTOS)