Oil Follows Stock Markets Lower
2019年1月18日 - 05:44AM
Dow Jones News
By Sarah McFarlane and Dan Molinski
-- Oil prices declined Thursday as investors worried about rising U.S. oil
production and bulging inventories of gasoline amid sluggish demand that
may point to an upcoming economic slowdown.
-- West Texas Intermediate futures, the U.S. oil standard, ended 0.5% lower
at $52.07 a barrel on the New York Mercantile Exchange. The decline ended
a two-session upward streak.
-- Brent crude, the global oil benchmark, ended 0.2% lower at $61.18 a
barrel on London's Intercontinental Exchange.
HIGHLIGHTS
Stock Markets: Keeping oil prices subdued throughout much of the
session were U.S. stocks that traded lower Thursday morning after
overnight weakness in European and Asian markets, reducing some
speculative risk appetite. Wall Street began to recover later in
the session, while oil markets digested other issues including the
U.S.-China trade dispute and broader global issues. "Oil markets
are monitoring geopolitical risks," said Michael Wittner, global
head of oil research at Société Générale. "Venezuela has entered a
period of increased political uncertainty, with higher risks of
instability; the opposition is making the case that [President
Nicolas] Maduro is no longer the legitimate leader of the
country."
U.S. Inventories: The Energy Information Administration said
Wednesday U.S. oil inventories fell by 2.7 million barrels last
week, but gasoline inventories rose by 7.5 million barrels, taking
them to the highest total in nearly two years and sparking more
worries about sluggish demand. The data also showed U.S. oil
production surged to a new record-high 11.9 million barrels a
day.
"This report does little to alleviate ongoing concerns," said
analysts at Simmons Energy in a research note Thursday. "We
wouldn't be surprised if the ugly product stats begin weighing on
the overall crude complex, as there is a lingering concern that
bloated product inventories shift into the crude inventories as
refinery maintenance kicks off."
The EIA also published its latest Short Term Energy Outlook
projecting U.S. production would rise by 1.14 million barrels a day
on the year to an average of 12.07 million barrels a day in 2019.
This could be a headache for the Organization of the Petroleum
Exporting Countries, which has been cutting its output in the hope
of stabilizing prices and preventing global inventories from
rising. "OPEC will have to adapt to whatever output is coming from
the U.S.," said Mr. Poulsen, adding that America's export capacity
would rise this year with some new infrastructure projects due to
come on line.
INSIGHT
OPEC cuts: Members of OPEC and its allies agreed in December to
cut output starting this month, and data Thursday suggest it got an
early start on the cutbacks in December. In its closely watched
monthly oil market report, OPEC reported a 751,000 barrel-a-day
decline in crude output last month, to average 31.58 million
barrels a day. The drop off was primarily driven by Saudi Arabia --
the de facto head of OPEC and the world's largest exporter of crude
-- with a reduction of 468,000 barrels a day, according to the
cartel.
Those cuts highlight the continued tug-of-war in the investing
community as it tries to weigh the bullish signals coming from OPEC
against the bearish signals coming from U.S. production and fuel
inventories.
AHEAD
Baker Hughes reports its weekly rig-count report on U.S.
drilling activity on Friday.
Write to Sarah McFarlane at sarah.mcfarlane@wsj.com and Dan
Molinski at Dan.Molinski@wsj.com
(END) Dow Jones Newswires
January 17, 2019 15:29 ET (20:29 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.