Oil Ticks Up on Iran Cooperation
25 August 2016 - 09:02PM
Dow Jones News
By Timothy Puko, Kevin Baxter and Jenny W. Hsu
Oil prices rose Thursday from further signs Iran may talk
cooperation with other oil exporters.
Light, sweet crude for October delivery settled up 56 cents, or
1.2%, to $47.33 a barrel on the New York Mercantile Exchange, its
ninth winning session in the past 11. Brent, the global benchmark,
gained 62 cents, or 1.3%, to $49.67 a barrel.
Iran's oil minister, Bijan Zanganeh, confirmed through the
oil-ministry news agency, Shana, that he will attend an informal
gathering to discuss tightening oil output with fellow members of
the Organization of the Petroleum Exporting Countries. News
agencies, including The Wall Street Journal, had told OPEC
officials in recent days that they would attend the September
meeting in Algiers, helping push oil prices higher.
"All these things make it credible and believable. But does it
mean it's going to happen?" said John Saucer, vice president of
research and analysis at Mobius Risk Group in Houston. "I'm a
harden skeptic."
Despite widespread skepticism, many have attributed oil's rally
this month to signs of OPEC cooperation. There were so many new
bearish, or short, trades opened since late May that just the mere
possibility of an OPEC deal has been forcing those traders to close
out by buying contracts, likely pushing prices up, brokers and
analysts have said.
"It's hard to be short," said Kyle Cooper , a consultant for Ion
Energy Group in Houston. "It's in [OPEC's] best interest to
announce something, and then it will go up even more."
But the price gains have been relatively small and the market is
still on pace for a losing week. There are concerns that stockpiles
of oil and gasoline have peaked at a time of year when summer
driving season should have sent them to seasonal lows, and that has
kept many people bearish.
The Energy Information Administration said Wednesday that U.S.
oil imports were up by almost 450,000 barrels a day to 8.6 million,
which, coupled with weaker refinery activity, led to a stock build
of 2.6 million barrels.
"The highlight of this report was the bearish and unexpected
build in crude," Michael Wittner , the chief commodities analyst at
Société Générale, said in a note.
Chinese net crude oil imports fell by just over 2%
month-on-month in July, falling to 7.29 million barrels a day from
7.45 million in June, according to the final figures released by
the country's National Bureau of Statistics. Oil demand also fell
year-over-year by 61,000 barrels a day to 10.62 million.
London-based Energy Aspects said in a note the slowdown in
imports was in line with expectations, after recent flooding hurt
economic activity and because of higher refinery maintenance.
"We expect the slowdown in imports to persist in August, as
maintenance remains elevated and industrial activity is curtailed
ahead of the G-20 meeting in Hangzhou province, which will take
place on [Sept. 4-5]," the think tank said.
With the oil markets already jittery, some market participants
said they believe bearish data from the world's two largest
oil-consuming countries could provide a serious headwind for prices
moving into next week.
Gasoline futures settled up 0.18 cent, or 0.1%, at $1.5114 a
gallon, its 10th winning session in the past 11. Diesel futures
gained 1.31 cents, or 0.9%, to $1.5094 a gallon.
Benoit Faucon contributed to this article.
Write to Timothy Puko at tim.puko@wsj.com, Kevin Baxter at
Kevin.Baxter@wsj.com and Jenny W. Hsu at jenny.hsu@wsj.com
(END) Dow Jones Newswires
August 25, 2016 15:47 ET (19:47 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.