Oil Up But Set For Weekly Loss on Stock Build, Trade Row

Posted by Michelle Howard
Friday, October 19, 2018

Oil prices rose on Friday on signs of surging demand in China, the world's second-biggest oil consumer, although the market was heading for a second week of losses on rising U.S. inventories and concern that trade wars were curbing economic activity.

Benchmark Brent crude oil jumped $1.14 a barrel, or 1.4 percent, to a high of $80.43 before easing back to around $80.29, up $1.00 by 1330 GMT. U.S. light crude was 60 cents higher at $69.25.

For the week, Brent crude was 0.2 percent lower while U.S. crude was down 2.9 percent, both on track for a second consecutive weekly decline, and down around $7 a barrel from four-year highs reached in early October.

"After two consecutive days of slide the oil market is staging a half-hearted come-back," said Tamas Varga, analyst at London brokerage PVM Oil. "Maybe it is down to some pre-weekend short-covering."

Refinery throughput in China, the world's largest oil importer, rose to a record high of 12.49 million barrels per day (bpd) in September as some independent plants restarted operations after prolonged shutdowns over the summer to shore up inventories, government data showed on Friday.

Undermining sentiment were official figures showing China's economic growth slowed in the third quarter to its weakest pace since the global financial crisis, with gross domestic product expanding by only 6.5 percent, missing estimates.

The data raised concerns that China's trade war with United States was beginning to hit growth, which may limit oil demand.

Also denting confidence was evidence this week that U.S. oil inventories had risen sharply.

U.S. crude stocks last week climbed 6.5 million barrels, marking a fourth straight weekly build and almost triple the amount analysts had forecast, the U.S. Energy Information Administration said on Wednesday.

"EIA Weekly Petroleum Status Report was a complete shocker sending oil markets spiralling lower amidst some concerning development for oil bulls," said Stephen Innes, head of trading APAC at OANDA in Singapore.

Inventories rose sharply even as U.S. crude production slipped 300,000 barrels per day (bpd) to 10.9 million bpd last week due to the effects of offshore facilities closing temporarily for Hurricane Michael.

Meanwhile, Iranian oil exports may have risen in October as buyers took cargoes before U.S. sanctions on Tehran take effect from Nov. 4.

An unprecedented volume of Iranian crude oil is set to arrive at China's northeast port of Dalian this month and in early November before then, according to an Iranian shipping source and data on Refinitiv Eikon.

Reporting by Christopher Johnson in London and Roslan Khasawneh in Singapore

Categories: Logistics Middle East Shale Oil & Gas

Related Stories

MODEC Ramps Up Hammerhead FPSO Work After ExxonMobil's Go-Ahead

SBM Offshore Starts Construction of FSO for Trion Oil Field off Mexico

Hanwha Ocean Enlists ABB for Singapore’s First Floating LNG Terminal

Chinese Contractor Secures Offshore Oil and Gas ‘Mega Deal’ from QatarEnergy

Saipem Bags $1.5B Contract for Türkiye Largest Offshore Gas Field

PTTEP Hires McDermott for Deepwater Subsea Job off Malaysia

TotalEnergies Inks 10-Year LNG Supply Deal with South Korea’s KOGAS

Japan Picks Wood Mackenzie to Assess Trump-Backed Alaska LNG Scheme

ADNOC Signs Long-Term LNG Deal with Hindustan Petroleum Corporation

Santos and QatarEnergy Agree Mid-Term LNG Supply

Current News

MODEC Ramps Up Hammerhead FPSO Work After ExxonMobil's Go-Ahead

Aesen, DOC JV Targets Subsea Cable Logistics

Timor Gap Boosts Stake in Finder Energy’s Timor-Leste Oil Fields

SBM Offshore Starts Construction of FSO for Trion Oil Field off Mexico

Russia Targets 2028 for Sakhalin-3 Gas Project Start Up

Seatrium Secures ABS Backing for Deepwater FPSO Design

MDL Secures Cable Laying Job in Asia Pacific

Hibiscus Petroleum Starts Drilling at Teal West Field off UK

Yinson Production Nets DNV Approval for New FPSO Hull Design

Hanwha Ocean's Tidal Action Drillship Starts Maiden Job with Petrobras

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com