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

Oil jumps 3pc on Saudi price target, US stockpiles

NEW YORK: Oil futures jumped nearly 3 percent on Wednesday on a decline in U.S. crude inventories and after sources
Published April 18, 2018

NEW YORK: Oil futures jumped nearly 3 percent on Wednesday on a decline in U.S. crude inventories and after sources signalled top exporter Saudi Arabia wants to see the crude price closer to $100 a barrel.

OPEC's new price hawk Saudi Arabia would be happy for crude to rise to $80 or even $100, three industry sources said, a sign Riyadh will seek no changes to a supply-cutting deal even though the agreement's original target is within sight.

Brent crude futures settled at $73.48 a barrel, up $1.90, or 2.7 percent. U.S. West Texas Intermediate crude futures gained $1.95, or 2.9 percent, to settle at $68.47 a barrel, their highest since late 2014.

Prices were supported as U.S. oil stockpiles fell across the board last week with gasoline and distillates drawing down more than expected on stronger demand, according to data from the U.S. Energy Information Administration.

Crude inventories dropped by 1.1 million barrels as a result of a decline of 1.3 million barrels per day in net crude imports.

"This may be one of the most bullish reports in some time, with the across-the-board declines in inventories," said John Kilduff, a partner at Again Capital Management in New York.

"Beyond the headlines, gasoline demand was very strong, virtually summer-like, and crude oil exports are climbed back toward 2 million bpd at 1.75 million."

Buying in anticipation of the report started late Tuesday, said Brian LaRose, a technical analyst with United-ICAP.

The market also found support in expectation that the Organization of the Petroleum Exporting Countries' production cuts will be sustained. OPEC and 10 rival producers have curbed output by a joint 1.8 million bpd since January 2017 and pledged to do so until the end of this year.

OPEC's ministerial committee tasked with monitoring the group's supply-cutting deal with non-OPEC countries, led by Russia, meets in the Saudi city of Jeddah on Friday.

"Despite an oil price of over $70 per barrel and the fact that the oversupply has been eliminated, a phase-out of the production cuts will not be on the agenda," Commerzbank oil analyst Carsten Fritsch said.

Oil has been supported by the perception among investors that tensions in the Middle East could lead to supply disruptions, including renewed U.S. sanctions against Iran, as well as falling output in crisis-hit Venezuela.

Dutch bank ING said in a note to clients that Brent had risen back above $70 in April "due to geopolitical risks along with some fundamentally bullish developments in the market".

It raised its average 2018 price forecast for Brent to $66.50 from $60.25, and its 2018 WTI forecast to $62.50 from $57.75.

For next year, however, ING expects lower prices due to rising U.S. crude output, which has jumped by a quarter since mid-2016.

Copyright Reuters, 2018

Comments

Comments are closed.