AGL 40.00 Decreased By ▼ -0.16 (-0.4%)
AIRLINK 129.53 Decreased By ▼ -2.20 (-1.67%)
BOP 6.68 Decreased By ▼ -0.01 (-0.15%)
CNERGY 4.63 Increased By ▲ 0.16 (3.58%)
DCL 8.94 Increased By ▲ 0.12 (1.36%)
DFML 41.69 Increased By ▲ 1.08 (2.66%)
DGKC 83.77 Decreased By ▼ -0.31 (-0.37%)
FCCL 32.77 Increased By ▲ 0.43 (1.33%)
FFBL 75.47 Increased By ▲ 6.86 (10%)
FFL 11.47 Increased By ▲ 0.12 (1.06%)
HUBC 110.55 Decreased By ▼ -1.21 (-1.08%)
HUMNL 14.56 Increased By ▲ 0.25 (1.75%)
KEL 5.39 Increased By ▲ 0.17 (3.26%)
KOSM 8.40 Decreased By ▼ -0.58 (-6.46%)
MLCF 39.79 Increased By ▲ 0.36 (0.91%)
NBP 60.29 No Change ▼ 0.00 (0%)
OGDC 199.66 Increased By ▲ 4.72 (2.42%)
PAEL 26.65 Decreased By ▼ -0.04 (-0.15%)
PIBTL 7.66 Increased By ▲ 0.18 (2.41%)
PPL 157.92 Increased By ▲ 2.15 (1.38%)
PRL 26.73 Increased By ▲ 0.05 (0.19%)
PTC 18.46 Increased By ▲ 0.16 (0.87%)
SEARL 82.44 Decreased By ▼ -0.58 (-0.7%)
TELE 8.31 Increased By ▲ 0.08 (0.97%)
TOMCL 34.51 Decreased By ▼ -0.04 (-0.12%)
TPLP 9.06 Increased By ▲ 0.25 (2.84%)
TREET 17.47 Increased By ▲ 0.77 (4.61%)
TRG 61.32 Decreased By ▼ -1.13 (-1.81%)
UNITY 27.43 Decreased By ▼ -0.01 (-0.04%)
WTL 1.38 Increased By ▲ 0.10 (7.81%)
BR100 10,407 Increased By 220 (2.16%)
BR30 31,713 Increased By 377.1 (1.2%)
KSE100 97,328 Increased By 1781.9 (1.86%)
KSE30 30,192 Increased By 614.4 (2.08%)
Markets

US oil prices up as flooding hits Cushing hub

HOUSTON: US crude futures gained almost 1% on Tuesday after flooding throughout the Midwest constrained crude flow f
Published May 28, 2019

HOUSTON: US crude futures gained almost 1% on Tuesday after flooding throughout the Midwest constrained crude flow from the main US storage hub in Cushing, Oklahoma.

US West Texas Intermediate (WTI) futures settled at $59.14 a barrel, up 51 cents, or 0.9%, from its close on Friday before the long Memorial Day holiday weekend.

"Flooding seems to have impacted distribution hubs around the United States, slowing stuff coming out of Cushing and creating a bid on WTI," said Phillip Streible, senior market strategist at RJO Futures in Chicago.

Flooded areas of Arkansas and Oklahoma were bracing for more rain that will feed the already swollen Arkansas River, forecasters said on Tuesday. Up to 19 inches (48 cm) of rain have fallen so far in parts of Oklahoma over the month of May, the National Weather Service said, with more on the way.

Meanwhile, Brent crude futures settled flat at $70.11 a barrel, after repeatedly veering above and below the $70-mark.

Prices had been caught between fears of slowed economic growth and expectations that the Organization of the Petroleum Exporting Countries (OPEC) and its allies will extend their six-month deal to curb production.

OPEC and its allies including Russia, known as OPEC+, are due to meet over June 25-26 to discuss output policy, but it remains unclear whether their production pact will be extended.

"Saudi Arabia seems to be in favor" of extending production cuts as US output rises, said Gene McGillian, vice president of market research at Tradition Energy.

"The market would have to adjust downwardly to adjust for the barrels" if OPEC ended its cut of 1.2 million barrels per day (bpd).

Brent futures last week registered a decline of 4.5% and WTI slid by 6.4% for its biggest weekly loss since December.

Last week's oil-price drop came after the government reported US crude oil inventories have risen to 476.8 million barrels, their highest since July 2017. Weekly inventory data this week has been delayed a day due to Monday's Memorial Day holiday.

However, globally supplies have tightened because of the OPEC+ cuts so far this year, with political tensions in the Middle East adding to the upward pressure on prices. US sanctions have also largely taken Iranian and Venezuelan crude out of global markets.

"There's a geopolitical premium that's helping to support prices," said John Kilduff, an analyst at Again Capital LLC.

Investors remained concerned the escalating US-China trade war could hit the global economy and dent fuel consumption.

"The US-China trade war isn't getting any better and it's really starting to weigh on growth," said Bill Baruch, president of Blue Line Futures in Chicago. "Demand for crude could fall."

Copyright Reuters, 2019

Comments

Comments are closed.