Oil Slips 2 Percent

By Stephanie Kelly
Friday, December 14, 2018

Oil prices dropped about 2 percent on Friday, weighed down by a falling U.S. stock market, while weak economic data from China pointed to lower fuel demand in the world's biggest oil importer.

Brent crude futures for February delivery fell $1.16 to $60.29 a barrel, a 1.9 percent loss, by 1:15 p.m. ET (1815 GMT). U.S. West Texas Intermediate (WTI) crude futures fell $1.24 to $51.34 a barrel, a 2.4 percent loss.

Global benchmark Brent was set for a weekly loss of about 2.2 percent, while WTI was on track to decline 2.4 percent.

"The oil complex remains vulnerable to heavy selling into the equities especially when combined with a strengthening in the U.S. dollar as is the case so far today," Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

U.S. equity markets broadly fell as China's November retail sales grew at their weakest pace since 2003 and industrial output rose the least in nearly three years. The report added to nerves about U.S.-China trade relations.

Chinese oil refinery throughput in November fell from October, suggesting an easing in oil demand, though runs were 2.9 percent above year-ago levels.

"The energy complex is on the back foot this morning as a batch of soft Chinese economic data triggers a flurry of pre-weekend profit-taking," PVM Oil analyst Stephen Brennock said.

Concerned by mounting oversupply, the Organization of the Petroleum Exporting Countries and other oil producers including Russia agreed last week to reduce output by 1.2 million barrels per day (bpd), or more than 1 percent of global demand.

"For the time being until the OPEC cuts start kicking in, the market is oversupplied in the short term," said Tony Nunan, oil risk manager at Mitsubishi Corp. "If China is slowing down, that's definitely a concern."

U.S. energy firms cut 4 oil rigs in the week to Dec. 14, General Electric Co's Baker Hughes energy services firm said in its closely followed report on Friday. The data is seen as an indicator of future production.

The International Energy Agency said on Thursday it expected a deficit in oil supply by the second quarter of next year, provided OPEC members and other key producers stuck closely to last week's deal to cut output.

As part of the agreement, de facto OPEC leader Saudi Arabia plans to reduce its output to 10.2 million bpd in January.

The IEA kept its 2019 forecast for global oil demand growth at 1.4 million bpd, unchanged from its projection last month, and said it expected growth of 1.3 million bpd this year.

Barclays said on Friday it expects oil prices to rebound in the first half of 2019 on falling inventories, Saudi Arabia's export cuts and an end to the Iran sanction waivers.


(Additional reporting by Christopher Johnson and Koustav Samanta; Editing by Phil Berlowitz and Chris Reese)

Categories: Finance Energy Industry News Oil

Related Stories

Saipem Wins FEED Contract For Abadi LNG Project FPSO Module In Indonesia

Allseas-Boskalis Consortium Bags $1.4B Offshore Gas Pipeline Job in Taiwan

CNOOC Brings New Offshore Gas Field On Stream

PTTEP Buys Chevron's Hess Unit Share of Southeast Asia’s Offshore Block for $450M

Valeura Energy, PTTEP Partner Up on Gulf of Thailand Blocks

China Starts Production at Major Oil Field in Bohai Sea

China Rolls Out 17MW Floating Wind Turbine Prototype

CNOOC Finds Oil and Gas in South China Sea

EnQuest Acquires Harbour Energy’s Vietnamese Assets

Woodside Finds South Korean Partners to Advance LNG Value Chain

Current News

SPE Offshore Europe 2025 set to drive transformational change for the energy sector

Shipbuilder Delivers Fast Crew Boat Pair to Aesen

Norwegian Oil Investment Will Peak in '25

Saipem Marks First Steel Cut for Tangguh UCC Project at Karimun Yard

Saipem Wins FEED Contract For Abadi LNG Project FPSO Module In Indonesia

Cheniere, JERA Ink Long-Term LNG Sale and Purchase Agreement

Shelf Drilling Lands New Jack-Up Contract in Vietnam, Extends Egypt Deal

Seatrium Engages Axess Group to Clear FPSOs for Brazil Deployment

Inpex Picks FEED Contractors for Abadi LNG Onshore Plant

Inpex Kicks Off FEED Work for Abadi LNG Scheme Offshore Indonesia

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