Oil Slips from Five-Month High

By Alex Lawler
Tuesday, April 9, 2019

Oil slipped from a five-month high above $71 a barrel on Tuesday as Russian comments signalling the possible easing of a supply-cutting deal with OPEC countered concern that violence in Libya could further tighten global markets.

Supply curbs led by the Organization of the Petroleum Exporting Countries have underpinned a more than 30 percent rally this year for Brent crude, despite downward pressure from fears of an economic slowdown and weaker demand.

Brent, the global benchmark, rose to $71.34 a barrel, the highest since November, but by 1349 GMT was down 59 cents at $70.51. U.S. crude also hit a November 2018 high of $64.79 but was later down 23 cents at $64.17.

"The mood is increasingly turning bullish, but several feedback loops are about to start spinning that stand in the way of a prolonged oil rally," said Norbert Ruecker of Swiss bank Julius Baer.

"Russia already signalled its willingness to raise oil output from June. Fuel remains costly in emerging markets, with soft currencies adding to high oil prices."

Russia, a participant in the OPEC-led supply cuts that expire in June, signalled on Monday it wants to raise output when it next meets with OPEC because of falling stockpiles.

On Tuesday, President Vladimir Putin said Russia did not support an uncontrollable rise in oil prices and that the current price suited Moscow.

U.S. sanctions on Iran and Venezuela have deepened the OPEC supply cut and concern has grown this week about the stability of Libyan output. The OPEC member pumps around 1.1 million barrels per day, just over 1 percent of global supply.

"The oil market is already undersupplied, so if supply from Libya also falls away the supply deficit will become even bigger," said Carsten Fritsch, oil analyst at Commerzbank.

On Monday, a warplane attacked Tripoli's only functioning airport as eastern forces advancing on the Libyan capital disregarded international appeals for a truce.

Yet despite generally bullish sentiment, concerns that an economic slowdown this year will hit fuel consumption have been preventing crude prices from rising even higher, traders said.

The International Monetary Fund on Tuesday cut its global economic growth forecast for 2019.

Increases in U.S. crude inventories have also put a lid on gains. U.S. crude stocks are forecast to have risen by 2.5 million barrels last week, the third straight weekly addition.

The American Petroleum Institute, an industry group, issues its supply report at 2030 GMT, ahead of Wednesday's official figures. 

(By Alex Lawler, Additional reporting by Henning Gloystein; Editing by Dale Hudson and David Evans)

Categories: Offshore Energy Shale Oil & Gas

Related Stories

PTTEP Hires Velesto’s Jack-Up Rig for Drilling Campaign off Malaysia

Centrica and Thailand’s PTT Ink Long-Term LNG Supply Deal

Thailand's PTT to Buy LNG from Glenfarne's Alaska LNG Project

Woodside and Jera Agree LNG Cargoes Supply for Japan’s Winter Period

Woodside Agrees Long-Term LNG Supply with Petronas Unit

Wood JV Gets EPC Job for Shell off Brunei

French Oil Major Acquires Interests in Multiple Blocks in Southeast Asia

UK Firm Secures Exploration Extension for Two Blocks off Vietnam

Fugro Lands Deepwater Gas Field Job in Southeast Asia

Woodside to Shed Some Trinidad and Tobago Assets for $206M

Current News

One Shelf Drilling Rig Up for New Job in India, Other for Disposal

Four Jack-Up Drilling Rig Deals Set to Bring In $129M for Borr Drilling

PTTEP Hires Velesto’s Jack-Up Rig for Drilling Campaign off Malaysia

Yinson Production Secures $1.17B Refinancing for FPSO Maria Quitéria

Centrica and Thailand’s PTT Ink Long-Term LNG Supply Deal

Petrovietnam, Partners Sign PSC for Block Off Vietnam

Japan Protests China’s New Oil and Gas Construction Activities in East China Sea

CNOOC Signs Hydrocarbons Exploration and Production Deal with Kazakhstan

Thailand's PTT to Buy LNG from Glenfarne's Alaska LNG Project

Woodside and Jera Agree LNG Cargoes Supply for Japan’s Winter Period

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