http://www.wsj.com/articles/oil-prices-fall-on-surge-in-u-s-stockpiles-1456914160

Oil Prices Look Past Bearish Data to Notch Gain

Total U.S. crude inventories grew by 10.4 million barrels last week, the EIA says

By
Christian Berthelsen and

Georgi Kantchev

Updated March 2, 2016 3:30 p.m. ET

Oil prices gyrated sharply Wednesday but ultimately ended higher after weekly U.S. government data showed a big increase in domestic crude stockpiles, with waning space available to store swelling supplies.

The benchmark U.S. crude contract rose 0.8% to settle at $34.66 a barrel, and the global Brent benchmark rose 0.3% to $36.93 a barrel. It was the third straight gaining session for both contracts. U.S. prices fell as much as 2% immediately after the release of the U.S. data but quickly recovered and then wavered between gains and losses throughout the day.

The U.S. Energy Information Administration said U.S. crude stocks grew by 10.4 million barrels last week, versus the 2.6-million-barrel expansion estimated by analysts in a Wall Street Journal poll. The data confirmed a larger-than-expected increase reported by the American Petroleum Institute late Tuesday, which said stockpiles grew by 9.9 million barrels.

As of last week, total U.S. crude inventories stood at 518 million barrels, a weekly high. Historical monthly data show inventories last surpassed 500 million barrels in 1930. And inventories at the key U.S. storage hub in Cushing, Okla., rose to 66.3 million barrels, 90% of the region’s storage capacity.

But analysts and brokers said the market was looking past the immediate dire picture presented by the inventory report to focus on a hoped-for rebound as supply-and-demand fundamentals reach a nadir. Two other data points in the report reinforced bullish views: domestic U.S. production, which fell for the sixth consecutive week to 9.08 million barrels a day, and gasoline inventories, which suggested healthy demand with a 1.5-million barrel decline.

“The market seems willing to shrug off bearish developments and push the upside,” said Robert Yawger, director of the futures division at Mizuho Securities USA.

U.S. oil production has tapered gradually from a peak last year, but many shale producers remain resilient despite falling revenue as they have increased their efficiency. Production is now down from 9.7 million in April last year.


Pump jacks in the Midway Sunset oil field, California. The American Petroleum Institute reported late Tuesday that U.S. crude stocks grew by 9.9 million barrels last week. ENLARGE
Pump jacks in the Midway Sunset oil field, California. The American Petroleum Institute reported late Tuesday that U.S. crude stocks grew by 9.9 million barrels last week. Photo: Reuters
.
Oil prices have been supported in recent weeks by hopes that major suppliers would curtail their output in a bid to raise prices. Those hopes were reinforced Wednesday after Reuters reported that Saudi Arabia had reached out to banks to raise the possibility of arranging a loan for the country, a potential sign that continued low oil prices are weighing on its finances. Still, official selling prices released by the country Wednesday showed it was once again cutting prices for sales to the U.S., by 20 cents a barrel.

On Tuesday, prices rose to a two-month high Tuesday after Russia’s energy minister said a “critical mass” of oil-producing countries—which together produce around 73% of the world’s oil—had agreed to hold output at January’s levels.

The pact, however, is conditional on the participation of other oil producers. Iran has confirmed that it won’t join and will continue to pump until its production returns to about four million barrels a day.

“The last lows were hit in January; the price of oil is higher by over $7 a barrel—a very good accomplishment based on the fact that OPEC has not yet done anything to change their strategy,” said Dominick Chirichella, an analyst at the Energy Management Institute

Market observers say capping production at January levels won’t have any immediate impact on the supply glut because many countries were producing at high levels. Russia’s January output reached record high of 10.88 million barrels.

But even if the agreement succeeds in raising prices in the short term, analysts say the flexibility of the U.S. shale industry would prevent a sustained rebound.

“The oil market has seemingly found its footing,” said Seth Kleinman, analyst at Citi Research. But, he added, prices of over $40 a barrel “would prompt shale producers to reverse many of the production cuts that are supporting the rally.”

—Jenny W. Hsu contributed to this article.

QA will go through... oil price is on recovery...

http://www.wsj.com/articles/oil-prices-fall-on-surge-in-u-s-stockpiles-1456914160

Oil Prices Look Past Bearish Data to Notch Gain

Total U.S. crude inventories grew by 10.4 million barrels last week, the EIA says

By
Christian Berthelsen and

Georgi Kantchev

Updated March 2, 2016 3:30 p.m. ET

Oil prices gyrated sharply Wednesday but ultimately ended higher after weekly U.S. government data showed a big increase in domestic crude stockpiles, with waning space available to store swelling supplies.

The benchmark U.S. crude contract rose 0.8% to settle at $34.66 a barrel, and the global Brent benchmark rose 0.3% to $36.93 a barrel. It was the third straight gaining session for both contracts. U.S. prices fell as much as 2% immediately after the release of the U.S. data but quickly recovered and then wavered between gains and losses throughout the day.

The U.S. Energy Information Administration said U.S. crude stocks grew by 10.4 million barrels last week, versus the 2.6-million-barrel expansion estimated by analysts in a Wall Street Journal poll. The data confirmed a larger-than-expected increase reported by the American Petroleum Institute late Tuesday, which said stockpiles grew by 9.9 million barrels.

As of last week, total U.S. crude inventories stood at 518 million barrels, a weekly high. Historical monthly data show inventories last surpassed 500 million barrels in 1930. And inventories at the key U.S. storage hub in Cushing, Okla., rose to 66.3 million barrels, 90% of the region’s storage capacity.

But analysts and brokers said the market was looking past the immediate dire picture presented by the inventory report to focus on a hoped-for rebound as supply-and-demand fundamentals reach a nadir. Two other data points in the report reinforced bullish views: domestic U.S. production, which fell for the sixth consecutive week to 9.08 million barrels a day, and gasoline inventories, which suggested healthy demand with a 1.5-million barrel decline.

“The market seems willing to shrug off bearish developments and push the upside,” said Robert Yawger, director of the futures division at Mizuho Securities USA.

U.S. oil production has tapered gradually from a peak last year, but many shale producers remain resilient despite falling revenue as they have increased their efficiency. Production is now down from 9.7 million in April last year.


Pump jacks in the Midway Sunset oil field, California. The American Petroleum Institute reported late Tuesday that U.S. crude stocks grew by 9.9 million barrels last week. ENLARGE
Pump jacks in the Midway Sunset oil field, California. The American Petroleum Institute reported late Tuesday that U.S. crude stocks grew by 9.9 million barrels last week. Photo: Reuters
.
Oil prices have been supported in recent weeks by hopes that major suppliers would curtail their output in a bid to raise prices. Those hopes were reinforced Wednesday after Reuters reported that Saudi Arabia had reached out to banks to raise the possibility of arranging a loan for the country, a potential sign that continued low oil prices are weighing on its finances. Still, official selling prices released by the country Wednesday showed it was once again cutting prices for sales to the U.S., by 20 cents a barrel.

On Tuesday, prices rose to a two-month high Tuesday after Russia’s energy minister said a “critical mass” of oil-producing countries—which together produce around 73% of the world’s oil—had agreed to hold output at January’s levels.

The pact, however, is conditional on the participation of other oil producers. Iran has confirmed that it won’t join and will continue to pump until its production returns to about four million barrels a day.

“The last lows were hit in January; the price of oil is higher by over $7 a barrel—a very good accomplishment based on the fact that OPEC has not yet done anything to change their strategy,” said Dominick Chirichella, an analyst at the Energy Management Institute

Market observers say capping production at January levels won’t have any immediate impact on the supply glut because many countries were producing at high levels. Russia’s January output reached record high of 10.88 million barrels.

But even if the agreement succeeds in raising prices in the short term, analysts say the flexibility of the U.S. shale industry would prevent a sustained rebound.

“The oil market has seemingly found its footing,” said Seth Kleinman, analyst at Citi Research. But, he added, prices of over $40 a barrel “would prompt shale producers to reverse many of the production cuts that are supporting the rally.”

—Jenny W. Hsu contributed to this article.

http://www.wsj.com/articles/oil-prices-fall-on-surge-in-u-s-stockpiles-1456914160

Oil Prices Look Past Bearish Data to Notch Gain

Total U.S. crude inventories grew by 10.4 million barrels last week, the EIA says

By
Christian Berthelsen and

Georgi Kantchev

Updated March 2, 2016 3:30 p.m. ET

Oil prices gyrated sharply Wednesday but ultimately ended higher after weekly U.S. government data showed a big increase in domestic crude stockpiles, with waning space available to store swelling supplies.

The benchmark U.S. crude contract rose 0.8% to settle at $34.66 a barrel, and the global Brent benchmark rose 0.3% to $36.93 a barrel. It was the third straight gaining session for both contracts. U.S. prices fell as much as 2% immediately after the release of the U.S. data but quickly recovered and then wavered between gains and losses throughout the day.

The U.S. Energy Information Administration said U.S. crude stocks grew by 10.4 million barrels last week, versus the 2.6-million-barrel expansion estimated by analysts in a Wall Street Journal poll. The data confirmed a larger-than-expected increase reported by the American Petroleum Institute late Tuesday, which said stockpiles grew by 9.9 million barrels.

As of last week, total U.S. crude inventories stood at 518 million barrels, a weekly high. Historical monthly data show inventories last surpassed 500 million barrels in 1930. And inventories at the key U.S. storage hub in Cushing, Okla., rose to 66.3 million barrels, 90% of the region’s storage capacity.

But analysts and brokers said the market was looking past the immediate dire picture presented by the inventory report to focus on a hoped-for rebound as supply-and-demand fundamentals reach a nadir. Two other data points in the report reinforced bullish views: domestic U.S. production, which fell for the sixth consecutive week to 9.08 million barrels a day, and gasoline inventories, which suggested healthy demand with a 1.5-million barrel decline.

“The market seems willing to shrug off bearish developments and push the upside,” said Robert Yawger, director of the futures division at Mizuho Securities USA.

U.S. oil production has tapered gradually from a peak last year, but many shale producers remain resilient despite falling revenue as they have increased their efficiency. Production is now down from 9.7 million in April last year.


Pump jacks in the Midway Sunset oil field, California. The American Petroleum Institute reported late Tuesday that U.S. crude stocks grew by 9.9 million barrels last week. ENLARGE
Pump jacks in the Midway Sunset oil field, California. The American Petroleum Institute reported late Tuesday that U.S. crude stocks grew by 9.9 million barrels last week. Photo: Reuters
.
Oil prices have been supported in recent weeks by hopes that major suppliers would curtail their output in a bid to raise prices. Those hopes were reinforced Wednesday after Reuters reported that Saudi Arabia had reached out to banks to raise the possibility of arranging a loan for the country, a potential sign that continued low oil prices are weighing on its finances. Still, official selling prices released by the country Wednesday showed it was once again cutting prices for sales to the U.S., by 20 cents a barrel.

On Tuesday, prices rose to a two-month high Tuesday after Russia’s energy minister said a “critical mass” of oil-producing countries—which together produce around 73% of the world’s oil—had agreed to hold output at January’s levels.

The pact, however, is conditional on the participation of other oil producers. Iran has confirmed that it won’t join and will continue to pump until its production returns to about four million barrels a day.

“The last lows were hit in January; the price of oil is higher by over $7 a barrel—a very good accomplishment based on the fact that OPEC has not yet done anything to change their strategy,” said Dominick Chirichella, an analyst at the Energy Management Institute

Market observers say capping production at January levels won’t have any immediate impact on the supply glut because many countries were producing at high levels. Russia’s January output reached record high of 10.88 million barrels.

But even if the agreement succeeds in raising prices in the short term, analysts say the flexibility of the U.S. shale industry would prevent a sustained rebound.

“The oil market has seemingly found its footing,” said Seth Kleinman, analyst at Citi Research. But, he added, prices of over $40 a barrel “would prompt shale producers to reverse many of the production cuts that are supporting the rally.”

—Jenny W. Hsu contributed to this article.

http://oilprice.com/Energy/Energy-General/A-Shrewd-Approach-To-Oil-Investing.html

A Shrewd Approach To Oil Investing

By Todd Royal
Posted on Tue, 01 March 2016 16:58 | 0


The Federal Reserve Bank in St. Louis recently released a report speculating oil reaching $0 a barrel. They built a financial model based upon the congruent relationship between inflation expectations and the price of oil. Economists at the Fed don’t necessarily believe oil will reach that price point, but it’s worth noting, because they have used this type of modeling in past reports (July 2014 through December 2015) to predict future inflation accurately.

Recent publications have written about devalued properties in the energy sector to questioning whether or not it is a great time to get into oil. Looking back on the housing crash in 2008-09, it’s hard not to argue with the investors that scooped up properties in high-end markets for a fraction of their worth. It’s hard not to be green with envy when newspapers report another home in the United States selling at record prices. Could that be the case for oil? And if it is, what are the principles that shrewd investors should use to purchase undervalued assets?

Related: Oil Giant Cuts Budget By 80 Percent And Suspends Fracking

A first option to consider is risk control. Superior investment performance has been fossil fuels trademark for years now, but what level are you comfortable with commensurate to risk? There also has to be an emphasis on the consistency of the asset, and how long there was profitability in bad and good years. It makes sense for today’s wells to be shut down, or an offshore project to be put off if the profitability doesn’t make sense. But in the case of states such as Texas and North Dakota there are opportunities.

Market efficiencies are a skill that can lead to a knowledge advantage. If you are seeking superior investment results then incorporate information that also looks at inefficiencies in the market. Where others see a bust somewhere there are gains to be made from older leases with lower costs for productivity. Oil and gas are not going anywhere, anytime soon, and with better research and information, realized gains are more likely in a market that is under correction.


Specialization is an area that offers a possible path to better investment results. A diversified portfolio works for retirement accounts, but for a down market in oil and gas the ability to invest in a single asset class of fossil fuels is a way to make sure there are no surprises. The Energy Information Administration believes oil will reach $50 a barrel by mid-2017; therefore a specialized asset class of investments in fossil fuels has the ability to take distressed assets and turn them into winners.

Oil has had its up and down, and will continue that path. If an investor has the ability to find a single energy asset class that has unrealized gains, or lower prices while holding onto them for a few years then there could be positive returns.


What about market timing? The tough part is predicting the future, and that is why it is smart for the average investor to keep their hard-earned money in safe investments such as an index fund. Buy the market, and play it safe. Why try to determine market climate or the future market for oil when there are so many variables at play? Adam Smith wrote about the “invisible hand,” of the market, and now the invisible hand has trillions of decisions happening daily. This could cause defensive energy investing, or waiting out the current downturn. Holding investments that are dropping daily in value is tough, and could lead to bankruptcy, but what if the shrewd investor considered another tool at their disposal?


We live in a world where governments own oil and gas assets. From the Middle East to Russia, China, and into Latin America, most countries don’t follow the United States model of private ownership. A tool that should be considered for investors is to consider the international scene into their fossil fuel investment decisions. When the Chinese government makes comments on U.S. presidential elections then it is prudent to take that piece of information, as part of your macroeconomic tools when pondering whether to buy, sell, or hold an energy asset.

Predictive international unrest analysis seeks to understand the complex and competitive operating environments currently taking place worldwide. Relying on wise business practices alone in an ever-changing global world seems out of date. Why not take into consideration what is happening in the Middle East, the South China Sea, and Venezuela when deciding if a shale asset in Pennsylvania is a shrewd investment? It seems better to have a reactive posture to deliver meaningful investment results in oil and gas markets that seem to change with daily news cycles.

By Todd Royal For Oilprice.com

http://oilprice.com/Energy/Energy-General/A-Shrewd-Approach-To-Oil-Investing.html

A Shrewd Approach To Oil Investing

By Todd Royal
Posted on Tue, 01 March 2016 16:58 | 0


The Federal Reserve Bank in St. Louis recently released a report speculating oil reaching $0 a barrel. They built a financial model based upon the congruent relationship between inflation expectations and the price of oil. Economists at the Fed don’t necessarily believe oil will reach that price point, but it’s worth noting, because they have used this type of modeling in past reports (July 2014 through December 2015) to predict future inflation accurately.

Recent publications have written about devalued properties in the energy sector to questioning whether or not it is a great time to get into oil. Looking back on the housing crash in 2008-09, it’s hard not to argue with the investors that scooped up properties in high-end markets for a fraction of their worth. It’s hard not to be green with envy when newspapers report another home in the United States selling at record prices. Could that be the case for oil? And if it is, what are the principles that shrewd investors should use to purchase undervalued assets?

Related: Oil Giant Cuts Budget By 80 Percent And Suspends Fracking

A first option to consider is risk control. Superior investment performance has been fossil fuels trademark for years now, but what level are you comfortable with commensurate to risk? There also has to be an emphasis on the consistency of the asset, and how long there was profitability in bad and good years. It makes sense for today’s wells to be shut down, or an offshore project to be put off if the profitability doesn’t make sense. But in the case of states such as Texas and North Dakota there are opportunities.

Market efficiencies are a skill that can lead to a knowledge advantage. If you are seeking superior investment results then incorporate information that also looks at inefficiencies in the market. Where others see a bust somewhere there are gains to be made from older leases with lower costs for productivity. Oil and gas are not going anywhere, anytime soon, and with better research and information, realized gains are more likely in a market that is under correction.


Specialization is an area that offers a possible path to better investment results. A diversified portfolio works for retirement accounts, but for a down market in oil and gas the ability to invest in a single asset class of fossil fuels is a way to make sure there are no surprises. The Energy Information Administration believes oil will reach $50 a barrel by mid-2017; therefore a specialized asset class of investments in fossil fuels has the ability to take distressed assets and turn them into winners.

Oil has had its up and down, and will continue that path. If an investor has the ability to find a single energy asset class that has unrealized gains, or lower prices while holding onto them for a few years then there could be positive returns.


What about market timing? The tough part is predicting the future, and that is why it is smart for the average investor to keep their hard-earned money in safe investments such as an index fund. Buy the market, and play it safe. Why try to determine market climate or the future market for oil when there are so many variables at play? Adam Smith wrote about the “invisible hand,” of the market, and now the invisible hand has trillions of decisions happening daily. This could cause defensive energy investing, or waiting out the current downturn. Holding investments that are dropping daily in value is tough, and could lead to bankruptcy, but what if the shrewd investor considered another tool at their disposal?


We live in a world where governments own oil and gas assets. From the Middle East to Russia, China, and into Latin America, most countries don’t follow the United States model of private ownership. A tool that should be considered for investors is to consider the international scene into their fossil fuel investment decisions. When the Chinese government makes comments on U.S. presidential elections then it is prudent to take that piece of information, as part of your macroeconomic tools when pondering whether to buy, sell, or hold an energy asset.

Predictive international unrest analysis seeks to understand the complex and competitive operating environments currently taking place worldwide. Relying on wise business practices alone in an ever-changing global world seems out of date. Why not take into consideration what is happening in the Middle East, the South China Sea, and Venezuela when deciding if a shale asset in Pennsylvania is a shrewd investment? It seems better to have a reactive posture to deliver meaningful investment results in oil and gas markets that seem to change with daily news cycles.

By Todd Royal For Oilprice.com

http://oilprice.com/Energy/Energy-General/A-Shrewd-Approach-To-Oil-Investing.html

A Shrewd Approach To Oil Investing

By Todd Royal
Posted on Tue, 01 March 2016 16:58 | 0


The Federal Reserve Bank in St. Louis recently released a report speculating oil reaching $0 a barrel. They built a financial model based upon the congruent relationship between inflation expectations and the price of oil. Economists at the Fed don’t necessarily believe oil will reach that price point, but it’s worth noting, because they have used this type of modeling in past reports (July 2014 through December 2015) to predict future inflation accurately.

Recent publications have written about devalued properties in the energy sector to questioning whether or not it is a great time to get into oil. Looking back on the housing crash in 2008-09, it’s hard not to argue with the investors that scooped up properties in high-end markets for a fraction of their worth. It’s hard not to be green with envy when newspapers report another home in the United States selling at record prices. Could that be the case for oil? And if it is, what are the principles that shrewd investors should use to purchase undervalued assets?

Related: Oil Giant Cuts Budget By 80 Percent And Suspends Fracking

A first option to consider is risk control. Superior investment performance has been fossil fuels trademark for years now, but what level are you comfortable with commensurate to risk? There also has to be an emphasis on the consistency of the asset, and how long there was profitability in bad and good years. It makes sense for today’s wells to be shut down, or an offshore project to be put off if the profitability doesn’t make sense. But in the case of states such as Texas and North Dakota there are opportunities.

Market efficiencies are a skill that can lead to a knowledge advantage. If you are seeking superior investment results then incorporate information that also looks at inefficiencies in the market. Where others see a bust somewhere there are gains to be made from older leases with lower costs for productivity. Oil and gas are not going anywhere, anytime soon, and with better research and information, realized gains are more likely in a market that is under correction.


Specialization is an area that offers a possible path to better investment results. A diversified portfolio works for retirement accounts, but for a down market in oil and gas the ability to invest in a single asset class of fossil fuels is a way to make sure there are no surprises. The Energy Information Administration believes oil will reach $50 a barrel by mid-2017; therefore a specialized asset class of investments in fossil fuels has the ability to take distressed assets and turn them into winners.

Oil has had its up and down, and will continue that path. If an investor has the ability to find a single energy asset class that has unrealized gains, or lower prices while holding onto them for a few years then there could be positive returns.


What about market timing? The tough part is predicting the future, and that is why it is smart for the average investor to keep their hard-earned money in safe investments such as an index fund. Buy the market, and play it safe. Why try to determine market climate or the future market for oil when there are so many variables at play? Adam Smith wrote about the “invisible hand,” of the market, and now the invisible hand has trillions of decisions happening daily. This could cause defensive energy investing, or waiting out the current downturn. Holding investments that are dropping daily in value is tough, and could lead to bankruptcy, but what if the shrewd investor considered another tool at their disposal?


We live in a world where governments own oil and gas assets. From the Middle East to Russia, China, and into Latin America, most countries don’t follow the United States model of private ownership. A tool that should be considered for investors is to consider the international scene into their fossil fuel investment decisions. When the Chinese government makes comments on U.S. presidential elections then it is prudent to take that piece of information, as part of your macroeconomic tools when pondering whether to buy, sell, or hold an energy asset.

Predictive international unrest analysis seeks to understand the complex and competitive operating environments currently taking place worldwide. Relying on wise business practices alone in an ever-changing global world seems out of date. Why not take into consideration what is happening in the Middle East, the South China Sea, and Venezuela when deciding if a shale asset in Pennsylvania is a shrewd investment? It seems better to have a reactive posture to deliver meaningful investment results in oil and gas markets that seem to change with daily news cycles.

By Todd Royal For Oilprice.com

http://money.cnn.com/2016/02/29/investing/oil-prices-surge-opec/

Oil has stopped crashing.

Investors around the world freaked out when oil prices plummeted to a 13-year low of $26.05 a barrel on February 11. But they are now sitting at $34 a barrel, marking an incredible 30% spike in the span of just 11 trading days.


The ridiculous surge from the recent lows reflects a swing in sentiment, even if it's not a dramatic shift in the fundamentals. The world still has too much oil and U.S. production hasn't slowed enough yet to ease the epic supply glut.

"Fundamentally, things are still extremely weak. It's being driven more by hope," said Matthew Smith, head of commodity research at ClipperData, which tracks global crude shipments.

Hope has been fueled by OPEC. Saudi Arabia, Russia and other producers agreed to a tentative deal on February 17 to freeze output.

"That was the trigger. It helped us reach a bottom in oil," said Rob Thummel, a portfolio manager at energy investment firm Tortoise Capital.


Related: Iran pushing forward with plans to ramp up oil output


However, that freeze deal requires the participation of other producers like Iran. Officials from Iran recently blasted the freeze as a "joke" and told CNN on Monday the country still plans to significantly ramp up output now that sanctions have been lifted.

"The recent output freeze talks are unlikely to have any immediate impact on market balances," Barclays wrote in a report. Analysts also pointed out that the countries that have agreed to freeze production are already producing close to their full capacity.

Still, Barclays said the freeze talks represent a "litmus test for building trust" and have raised the still-unlikely chances of coordinated action from global producers.

It's made people think twice about (betting against oil), said Mike Wittner, global head of oil research at Societe Generale.


Related: U.S. running out of room to store oil


Of course, oil remains in a huge hole. Despite the recent rally, oil prices are down by nearly half from a year ago when they were sitting at $62 a barrel.

And it's hard to be too enthusiastic about oil's prospects given the enormous supply glut in the U.S. Crude oil inventories increased by another 3.5 million barrels last week to nearly 508 million barrels, according to the Energy Information Administration.

"Inventories are still crazy high. We're swimming in crude oil around the world," said Wittner.

Sky-high inventories are raising concerns that certain storage facilities will soon run out of room to keep all that crude.

The supply glut continues to be fueled by very high U.S. production. Despite the crash in prices, the U.S. pumped 9.26 million barrels per day in December, according to the latest government figures. That's only 4.5% below the April 2015 peak.

"It's been exceptionally resilient, more so than anybody expected," said Smith of ClipperData.


Related: Why people are freaking out about cheap oil


Oil bulls believe production will fall sharply in the second half of the year when many oil drillers are forced to switch off production due to the cheap prices. U.S. oil rig counts have declined for 10 straight weeks and are now down 25% this year alone, according to Baker Hughes.

If U.S. output does take a big hit, that could mean the February 11 low of $26.05 a barrel may have been the bottom.

"That's always hard to predict. But we think we're very close to this commodity cycle ending," said Thummel.

But that doesn't mean oil prices are going to skyrocket back to $80 a barrel. Higher oil prices -- even in the $40 to $50 range -- will just encourage U.S. shale producers to start pumping aggressively again, renewing the oversupply problem.

"There is definitely a lid on prices," said Smith.

CNNMoney (New York)
First published February 29, 2016: 1:17 PM ET

http://money.cnn.com/2016/02/29/investing/oil-prices-surge-opec/


Oil has stopped crashing.

Investors around the world freaked out when oil prices plummeted to a 13-year low of $26.05 a barrel on February 11. But they are now sitting at $34 a barrel, marking an incredible 30% spike in the span of just 11 trading days.


The ridiculous surge from the recent lows reflects a swing in sentiment, even if it's not a dramatic shift in the fundamentals. The world still has too much oil and U.S. production hasn't slowed enough yet to ease the epic supply glut.

"Fundamentally, things are still extremely weak. It's being driven more by hope," said Matthew Smith, head of commodity research at ClipperData, which tracks global crude shipments.

Hope has been fueled by OPEC. Saudi Arabia, Russia and other producers agreed to a tentative deal on February 17 to freeze output.

"That was the trigger. It helped us reach a bottom in oil," said Rob Thummel, a portfolio manager at energy investment firm Tortoise Capital.


Related: Iran pushing forward with plans to ramp up oil output


However, that freeze deal requires the participation of other producers like Iran. Officials from Iran recently blasted the freeze as a "joke" and told CNN on Monday the country still plans to significantly ramp up output now that sanctions have been lifted.

"The recent output freeze talks are unlikely to have any immediate impact on market balances," Barclays wrote in a report. Analysts also pointed out that the countries that have agreed to freeze production are already producing close to their full capacity.

Still, Barclays said the freeze talks represent a "litmus test for building trust" and have raised the still-unlikely chances of coordinated action from global producers.

It's made people think twice about (betting against oil), said Mike Wittner, global head of oil research at Societe Generale.


Related: U.S. running out of room to store oil


Of course, oil remains in a huge hole. Despite the recent rally, oil prices are down by nearly half from a year ago when they were sitting at $62 a barrel.

And it's hard to be too enthusiastic about oil's prospects given the enormous supply glut in the U.S. Crude oil inventories increased by another 3.5 million barrels last week to nearly 508 million barrels, according to the Energy Information Administration.

"Inventories are still crazy high. We're swimming in crude oil around the world," said Wittner.

Sky-high inventories are raising concerns that certain storage facilities will soon run out of room to keep all that crude.

The supply glut continues to be fueled by very high U.S. production. Despite the crash in prices, the U.S. pumped 9.26 million barrels per day in December, according to the latest government figures. That's only 4.5% below the April 2015 peak.

"It's been exceptionally resilient, more so than anybody expected," said Smith of ClipperData.


Related: Why people are freaking out about cheap oil


Oil bulls believe production will fall sharply in the second half of the year when many oil drillers are forced to switch off production due to the cheap prices. U.S. oil rig counts have declined for 10 straight weeks and are now down 25% this year alone, according to Baker Hughes.

If U.S. output does take a big hit, that could mean the February 11 low of $26.05 a barrel may have been the bottom.

"That's always hard to predict. But we think we're very close to this commodity cycle ending," said Thummel.

But that doesn't mean oil prices are going to skyrocket back to $80 a barrel. Higher oil prices -- even in the $40 to $50 range -- will just encourage U.S. shale producers to start pumping aggressively again, renewing the oversupply problem.

"There is definitely a lid on prices," said Smith.


CNNMoney (New York)
First published February 29, 2016: 1:17 PM ET

Woohoo... up up and away...

Townhall tomorrow?

http://www.reuters.com/article/us-oil-markets-bottom-factbox-idUSKCN0W20HU

Markets | Mon Feb 29, 2016 1:11am EST
Factbox: Double hammer in a leap year: when will the oil slump end?


As oil traders have learned time and again, picking a bottom in today's glutted market can be a fool's game. Just when prices start to rebound - as they have since mid-February - a wave of renewed bearishness can smack them back down.

While traders still see large risks to the downside as an overhang in production of 1 million to 2 million barrels of crude every day has left storage sites around the world filled to their rims, some first signs of recovery are emerging. This includes a double-hammer technical pattern, occurring on this year's leap day no less, which analysts say is a strong market indicator for higher prices.


1) DOUBLE HAMMER: TRADERS CHANGE THEIR MIND

Ringing in 2016's leap day, there are hints that sentiment in oil markets is getting more bullish. The number of bets, or net-short positions, on U.S. crude contracts falling has dropped over 17 percent since mid-February to its lowest level in 2016. At the same time, traders have boosted bullish bets on oil, raising net-long positions by nearly 16 percent. Technical indicators on the monthly U.S. crude candlestick chart even point to a so-called "double hammer" pattern, candlesticks with fat heads and long tails, for January and February. The pattern typically signals a bullish reversal. "A second hammer seems to be forming... in addition to the first hammer of last month," said Reuters technical analyst Wang Tao, adding: "The downtrend ... could be reversing."


2) NEW CARS EVERYWHERE

Falling crude means gasoline and diesel drops as well, so consumers worldwide are filling up and driving more. Motor fuel demand in North America and Europe is at or near record highs, and car sales are healthy. But, the real demand boost is coming from Asia, where some 2.5 million new cars hit the market in China every month. India, long a laggard of oil demand, has just pipped Japan as Asia's number two oil importer. Together, China and India are on track to overtake the United States as the top oil consumer.


3) PUMP THAT SHALE, OR NOT

The United States is still pumping near-record volumes of crude, despite the price slump. But the strain is starting to show. U.S. drilling activity has now dropped for 10 straight weeks and is at the lowest since December 2009. As a result, the International Energy Agency (IEA) expects U.S. production to fall by 600,000 barrels per day (bpd) this year.


4) ARMY OF OIL ZOMBIES

U.S. oil companies are feeling the strain and many, known as "zombies", have stopped pumping as they wait out the downturn, saving cash and paying off what debt they can. Banks threaten to cut credit lines, sending companies under and cutting output capacity.


5) YOU DON'T SPEND, YOU DON'T GET

If any one thing points to the dangers of a supply shortfall in the future, it's a lack of investment. As famed oil bull Andrew Hall said earlier this year, when prices had slumped to their lowest level since 2003: "Prices will eventually have to move to a level that creates supply rather than destroys it." That point may have to come soon, with energy consultancy Wood Mackenzie estimating that $380 billion worth of planned oil and gas projects have been postponed or canceled since 2014 in one of the biggest cost-cutting measures ever.


6) SAUDIS BLINK?

After a year of racing to pump for global market share which sent prices crashing, OPEC's de facto leader Saudi Arabia and non-OPEC production giant Russia are now talking about freezing output at January levels. Keeping output near record levels would do little to reduce the global glut, but it might stop it from ballooning further. The problem is fitting Iran into the picture, as the country has promised to boost output to pre-sanctions levels after they were lifted in January. Unsurprisingly, Tehran called the proposal that would freeze Russian and Saudi production around 10 million bpd while Iran would have to do with a mere 1 million bpd "laughable."


7) FOG OF WAR

When the specter of supply-disruptive conflict looms, skittish traders look to buy oil. With Iraq and Syria in disarray, Saudi Arabia bombing Yemen, and Russia embroiled in conflict in both Ukraine and Syria, there is plenty to watch. Struggling with high spending and tumbling revenues, risk analysts are also keeping a keen eye on stability in Venezuela, Nigeria, Angola and Algeria. Compounding the risk, the amount of available spare OPEC oil capacity that could compensate for any sudden shortage is little more than 1.25 million bpd, the lowest since before the global financial crisis in 2008, according to the EIA.


(Reporting by Henning Gloystein in SINGAPORE and Edward McAllister in NEW YORK; Editing by James Dalgleish and Christian Schmollinger)

http://www.reuters.com/article/us-oil-markets-bottom-factbox-idUSKCN0W20HU

Markets | Mon Feb 29, 2016 1:11am EST
Factbox: Double hammer in a leap year: when will the oil slump end?


As oil traders have learned time and again, picking a bottom in today's glutted market can be a fool's game. Just when prices start to rebound - as they have since mid-February - a wave of renewed bearishness can smack them back down.

While traders still see large risks to the downside as an overhang in production of 1 million to 2 million barrels of crude every day has left storage sites around the world filled to their rims, some first signs of recovery are emerging. This includes a double-hammer technical pattern, occurring on this year's leap day no less, which analysts say is a strong market indicator for higher prices.


1) DOUBLE HAMMER: TRADERS CHANGE THEIR MIND

Ringing in 2016's leap day, there are hints that sentiment in oil markets is getting more bullish. The number of bets, or net-short positions, on U.S. crude contracts falling has dropped over 17 percent since mid-February to its lowest level in 2016. At the same time, traders have boosted bullish bets on oil, raising net-long positions by nearly 16 percent. Technical indicators on the monthly U.S. crude candlestick chart even point to a so-called "double hammer" pattern, candlesticks with fat heads and long tails, for January and February. The pattern typically signals a bullish reversal. "A second hammer seems to be forming... in addition to the first hammer of last month," said Reuters technical analyst Wang Tao, adding: "The downtrend ... could be reversing."


2) NEW CARS EVERYWHERE

Falling crude means gasoline and diesel drops as well, so consumers worldwide are filling up and driving more. Motor fuel demand in North America and Europe is at or near record highs, and car sales are healthy. But, the real demand boost is coming from Asia, where some 2.5 million new cars hit the market in China every month. India, long a laggard of oil demand, has just pipped Japan as Asia's number two oil importer. Together, China and India are on track to overtake the United States as the top oil consumer.


3) PUMP THAT SHALE, OR NOT

The United States is still pumping near-record volumes of crude, despite the price slump. But the strain is starting to show. U.S. drilling activity has now dropped for 10 straight weeks and is at the lowest since December 2009. As a result, the International Energy Agency (IEA) expects U.S. production to fall by 600,000 barrels per day (bpd) this year.


4) ARMY OF OIL ZOMBIES

U.S. oil companies are feeling the strain and many, known as "zombies", have stopped pumping as they wait out the downturn, saving cash and paying off what debt they can. Banks threaten to cut credit lines, sending companies under and cutting output capacity.


5) YOU DON'T SPEND, YOU DON'T GET

If any one thing points to the dangers of a supply shortfall in the future, it's a lack of investment. As famed oil bull Andrew Hall said earlier this year, when prices had slumped to their lowest level since 2003: "Prices will eventually have to move to a level that creates supply rather than destroys it." That point may have to come soon, with energy consultancy Wood Mackenzie estimating that $380 billion worth of planned oil and gas projects have been postponed or canceled since 2014 in one of the biggest cost-cutting measures ever.


6) SAUDIS BLINK?

After a year of racing to pump for global market share which sent prices crashing, OPEC's de facto leader Saudi Arabia and non-OPEC production giant Russia are now talking about freezing output at January levels. Keeping output near record levels would do little to reduce the global glut, but it might stop it from ballooning further. The problem is fitting Iran into the picture, as the country has promised to boost output to pre-sanctions levels after they were lifted in January. Unsurprisingly, Tehran called the proposal that would freeze Russian and Saudi production around 10 million bpd while Iran would have to do with a mere 1 million bpd "laughable."


7) FOG OF WAR

When the specter of supply-disruptive conflict looms, skittish traders look to buy oil. With Iraq and Syria in disarray, Saudi Arabia bombing Yemen, and Russia embroiled in conflict in both Ukraine and Syria, there is plenty to watch. Struggling with high spending and tumbling revenues, risk analysts are also keeping a keen eye on stability in Venezuela, Nigeria, Angola and Algeria. Compounding the risk, the amount of available spare OPEC oil capacity that could compensate for any sudden shortage is little more than 1.25 million bpd, the lowest since before the global financial crisis in 2008, according to the EIA.


(Reporting by Henning Gloystein in SINGAPORE and Edward McAllister in NEW YORK; Editing by James Dalgleish and Christian Schmollinger)

http://www.reuters.com/article/us-oil-markets-bottom-factbox-idUSKCN0W20HU

Factbox: Double hammer in a leap year: when will the oil slump end?

SINGAPORE/NEW YORK

As oil traders have learned time and again, picking a bottom in today's glutted market can be a fool's game. Just when prices start to rebound - as they have since mid-February - a wave of renewed bearishness can smack them back down.

While traders still see large risks to the downside as an overhang in production of 1 million to 2 million barrels of crude every day has left storage sites around the world filled to their rims, some first signs of recovery are emerging. This includes a double-hammer technical pattern, occurring on this year's leap day no less, which analysts say is a strong market indicator for higher prices.


1) DOUBLE HAMMER: TRADERS CHANGE THEIR MIND

Ringing in 2016's leap day, there are hints that sentiment in oil markets is getting more bullish. The number of bets, or net-short positions, on U.S. crude contracts falling has dropped over 17 percent since mid-February to its lowest level in 2016. At the same time, traders have boosted bullish bets on oil, raising net-long positions by nearly 16 percent. Technical indicators on the monthly U.S. crude candlestick chart even point to a so-called "double hammer" pattern, candlesticks with fat heads and long tails, for January and February. The pattern typically signals a bullish reversal. "A second hammer seems to be forming... in addition to the first hammer of last month," said Reuters technical analyst Wang Tao, adding: "The downtrend ... could be reversing."


2) NEW CARS EVERYWHERE

Falling crude means gasoline and diesel drops as well, so consumers worldwide are filling up and driving more. Motor fuel demand in North America and Europe is at or near record highs, and car sales are healthy. But, the real demand boost is coming from Asia, where some 2.5 million new cars hit the market in China every month. India, long a laggard of oil demand, has just pipped Japan as Asia's number two oil importer. Together, China and India are on track to overtake the United States as the top oil consumer.


3) PUMP THAT SHALE, OR NOT

The United States is still pumping near-record volumes of crude, despite the price slump. But the strain is starting to show. U.S. drilling activity has now dropped for 10 straight weeks and is at the lowest since December 2009. As a result, the International Energy Agency (IEA) expects U.S. production to fall by 600,000 barrels per day (bpd) this year.


4) ARMY OF OIL ZOMBIES

U.S. oil companies are feeling the strain and many, known as "zombies", have stopped pumping as they wait out the downturn, saving cash and paying off what debt they can. Banks threaten to cut credit lines, sending companies under and cutting output capacity.


5) YOU DON'T SPEND, YOU DON'T GET

If any one thing points to the dangers of a supply shortfall in the future, it's a lack of investment. As famed oil bull Andrew Hall said earlier this year, when prices had slumped to their lowest level since 2003: "Prices will eventually have to move to a level that creates supply rather than destroys it." That point may have to come soon, with energy consultancy Wood Mackenzie estimating that $380 billion worth of planned oil and gas projects have been postponed or canceled since 2014 in one of the biggest cost-cutting measures ever.


6) SAUDIS BLINK?

After a year of racing to pump for global market share which sent prices crashing, OPEC's de facto leader Saudi Arabia and non-OPEC production giant Russia are now talking about freezing output at January levels. Keeping output near record levels would do little to reduce the global glut, but it might stop it from ballooning further. The problem is fitting Iran into the picture, as the country has promised to boost output to pre-sanctions levels after they were lifted in January. Unsurprisingly, Tehran called the proposal that would freeze Russian and Saudi production around 10 million bpd while Iran would have to do with a mere 1 million bpd "laughable."


7) FOG OF WAR

When the specter of supply-disruptive conflict looms, skittish traders look to buy oil. With Iraq and Syria in disarray, Saudi Arabia bombing Yemen, and Russia embroiled in conflict in both Ukraine and Syria, there is plenty to watch. Struggling with high spending and tumbling revenues, risk analysts are also keeping a keen eye on stability in Venezuela, Nigeria, Angola and Algeria. Compounding the risk, the amount of available spare OPEC oil capacity that could compensate for any sudden shortage is little more than 1.25 million bpd, the lowest since before the global financial crisis in 2008, according to the EIA.


(Reporting by Henning Gloystein in SINGAPORE and Edward McAllister in NEW YORK; Editing by James Dalgleish and Christian Schmollinger)

29/02/2016 20:25

http://www.reuters.com/article/us-oil-markets-bottom-factbox-idUSKCN0W20HU


Factbox: Double hammer in a leap year: when will the oil slump end?

SINGAPORE/NEW YORK

As oil traders have learned time and again, picking a bottom in today's glutted market can be a fool's game. Just when prices start to rebound - as they have since mid-February - a wave of renewed bearishness can smack them back down.

While traders still see large risks to the downside as an overhang in production of 1 million to 2 million barrels of crude every day has left storage sites around the world filled to their rims, some first signs of recovery are emerging. This includes a double-hammer technical pattern, occurring on this year's leap day no less, which analysts say is a strong market indicator for higher prices.


1) DOUBLE HAMMER: TRADERS CHANGE THEIR MIND

Ringing in 2016's leap day, there are hints that sentiment in oil markets is getting more bullish. The number of bets, or net-short positions, on U.S. crude contracts falling has dropped over 17 percent since mid-February to its lowest level in 2016. At the same time, traders have boosted bullish bets on oil, raising net-long positions by nearly 16 percent. Technical indicators on the monthly U.S. crude candlestick chart even point to a so-called "double hammer" pattern, candlesticks with fat heads and long tails, for January and February. The pattern typically signals a bullish reversal. "A second hammer seems to be forming... in addition to the first hammer of last month," said Reuters technical analyst Wang Tao, adding: "The downtrend ... could be reversing."


2) NEW CARS EVERYWHERE

Falling crude means gasoline and diesel drops as well, so consumers worldwide are filling up and driving more. Motor fuel demand in North America and Europe is at or near record highs, and car sales are healthy. But, the real demand boost is coming from Asia, where some 2.5 million new cars hit the market in China every month. India, long a laggard of oil demand, has just pipped Japan as Asia's number two oil importer. Together, China and India are on track to overtake the United States as the top oil consumer.


3) PUMP THAT SHALE, OR NOT

The United States is still pumping near-record volumes of crude, despite the price slump. But the strain is starting to show. U.S. drilling activity has now dropped for 10 straight weeks and is at the lowest since December 2009. As a result, the International Energy Agency (IEA) expects U.S. production to fall by 600,000 barrels per day (bpd) this year.


4) ARMY OF OIL ZOMBIES

U.S. oil companies are feeling the strain and many, known as "zombies", have stopped pumping as they wait out the downturn, saving cash and paying off what debt they can. Banks threaten to cut credit lines, sending companies under and cutting output capacity.


5) YOU DON'T SPEND, YOU DON'T GET

If any one thing points to the dangers of a supply shortfall in the future, it's a lack of investment. As famed oil bull Andrew Hall said earlier this year, when prices had slumped to their lowest level since 2003: "Prices will eventually have to move to a level that creates supply rather than destroys it." That point may have to come soon, with energy consultancy Wood Mackenzie estimating that $380 billion worth of planned oil and gas projects have been postponed or canceled since 2014 in one of the biggest cost-cutting measures ever.


6) SAUDIS BLINK?

After a year of racing to pump for global market share which sent prices crashing, OPEC's de facto leader Saudi Arabia and non-OPEC production giant Russia are now talking about freezing output at January levels. Keeping output near record levels would do little to reduce the global glut, but it might stop it from ballooning further. The problem is fitting Iran into the picture, as the country has promised to boost output to pre-sanctions levels after they were lifted in January. Unsurprisingly, Tehran called the proposal that would freeze Russian and Saudi production around 10 million bpd while Iran would have to do with a mere 1 million bpd "laughable."


7) FOG OF WAR

When the specter of supply-disruptive conflict looms, skittish traders look to buy oil. With Iraq and Syria in disarray, Saudi Arabia bombing Yemen, and Russia embroiled in conflict in both Ukraine and Syria, there is plenty to watch. Struggling with high spending and tumbling revenues, risk analysts are also keeping a keen eye on stability in Venezuela, Nigeria, Angola and Algeria. Compounding the risk, the amount of available spare OPEC oil capacity that could compensate for any sudden shortage is little more than 1.25 million bpd, the lowest since before the global financial crisis in 2008, according to the EIA.


(Reporting by Henning Gloystein in SINGAPORE and Edward McAllister in NEW YORK; Editing by James Dalgleish and Christian Schmollinger)

Oil and gas counter is going to recover soon. Time to buy...


Oil mixed as market ponders whether crude has bottomed out
6 Mins Ago
Reuters

Brent crude futures edged higher on Monday, adding to strong gains last week, on rising hopes the market has bottomed out though analysts warned it would still take a long time to clear a huge global glut.

Brent futures were trading at $35.39 per barrel at 7:02 a.m. ET (1202 GMT), up 29 cents from their previous close.

Since Feb. 11, the last time Brent was below $30, the crude benchmark has risen some 17 percent, although prices are still a fraction of the $115 per barrel seen only 20 months ago.


OPEC member on the output freeze</p> <p>Nigerian Oil Minister Dr. Emmanuel Ibe Kachikwu explains why there will be an OPEC output freeze.


U.S. crude futures briefly turned positive, but were weighed down by record American crude inventories. They traded down 2 cents to $32.76 a barrel, after gaining about 27 percent since Feb. 11.

"There is still a lot of downside risk ... but the U.S. crude market seems to have passed the worst point and crude runs should start creeping higher, taking pressure off inventory levels," said Richard Gorry, director of JBC Energy Asia.

"The latest data on U.S. production is also supportive as it indicates that the low prices are finally having an impact," he said.

U.S. producers cut the number of rigs drilling for oil for a 10th straight week to the lowest since December 2009, data showed on Friday, which analysts expect will lead to an output fall of 600,000 barrels per day (bpd) this year.

"The total oil rig count is now falling below that required to sustain oil production and as a result production levels are beginning to fall," brokerage Banchero Costa said.


Local youths play on the beach beyond heavy lifting shipping cranes on barges moored off the shoreline in Luanda, Angola.
Angola is trying to show there's life after oil


Morgan Stanley said a potential Russian-Saudi agreement to freeze output at January levels could also drive prices up. President Vladimir Putin called a meeting with top managers of Russia's leading oil producers on Tuesday.

A 10-day outage of a major pipeline from the Iraqi semi-autonomous region of Kurdistan to Turkey was also supporting prices in Europe. Turkey said over the weekend repairs on the 600,000 barrel-per-day link would take more time.

Morgan Stanley cautioned that a global production overhang estimated at 1 million to 2 million bpd was still massive and was accompanied with a "deceleration in demand growth".

Trading data, however, suggested shifting sentiment. The amount of open positions in U.S. crude contracts betting on a further fall in prices has fallen more than 17 percent since mid-February to the lowest level in 2016.

At the same time, financial traders have raised sharply their bullish bets on oil after talk of a global production freeze, signs of falling U.S. shale crude output, as well as growing gasoline demand.

Oil and gas counter is going to recover soon. Time to buy...


Oil mixed as market ponders whether crude has bottomed out
6 Mins Ago
Reuters

Brent crude futures edged higher on Monday, adding to strong gains last week, on rising hopes the market has bottomed out though analysts warned it would still take a long time to clear a huge global glut.

Brent futures were trading at $35.39 per barrel at 7:02 a.m. ET (1202 GMT), up 29 cents from their previous close.

Since Feb. 11, the last time Brent was below $30, the crude benchmark has risen some 17 percent, although prices are still a fraction of the $115 per barrel seen only 20 months ago.


OPEC member on the output freeze</p> <p>Nigerian Oil Minister Dr. Emmanuel Ibe Kachikwu explains why there will be an OPEC output freeze.


U.S. crude futures briefly turned positive, but were weighed down by record American crude inventories. They traded down 2 cents to $32.76 a barrel, after gaining about 27 percent since Feb. 11.

"There is still a lot of downside risk ... but the U.S. crude market seems to have passed the worst point and crude runs should start creeping higher, taking pressure off inventory levels," said Richard Gorry, director of JBC Energy Asia.

"The latest data on U.S. production is also supportive as it indicates that the low prices are finally having an impact," he said.

U.S. producers cut the number of rigs drilling for oil for a 10th straight week to the lowest since December 2009, data showed on Friday, which analysts expect will lead to an output fall of 600,000 barrels per day (bpd) this year.

"The total oil rig count is now falling below that required to sustain oil production and as a result production levels are beginning to fall," brokerage Banchero Costa said.


Local youths play on the beach beyond heavy lifting shipping cranes on barges moored off the shoreline in Luanda, Angola.
Angola is trying to show there's life after oil


Morgan Stanley said a potential Russian-Saudi agreement to freeze output at January levels could also drive prices up. President Vladimir Putin called a meeting with top managers of Russia's leading oil producers on Tuesday.

A 10-day outage of a major pipeline from the Iraqi semi-autonomous region of Kurdistan to Turkey was also supporting prices in Europe. Turkey said over the weekend repairs on the 600,000 barrel-per-day link would take more time.

Morgan Stanley cautioned that a global production overhang estimated at 1 million to 2 million bpd was still massive and was accompanied with a "deceleration in demand growth".

Trading data, however, suggested shifting sentiment. The amount of open positions in U.S. crude contracts betting on a further fall in prices has fallen more than 17 percent since mid-February to the lowest level in 2016.

At the same time, financial traders have raised sharply their bullish bets on oil after talk of a global production freeze, signs of falling U.S. shale crude output, as well as growing gasoline demand.

Oil and gas counter is going to recover soon. Time to buy...


Oil mixed as market ponders whether crude has bottomed out
6 Mins Ago
Reuters

Brent crude futures edged higher on Monday, adding to strong gains last week, on rising hopes the market has bottomed out though analysts warned it would still take a long time to clear a huge global glut.

Brent futures were trading at $35.39 per barrel at 7:02 a.m. ET (1202 GMT), up 29 cents from their previous close.

Since Feb. 11, the last time Brent was below $30, the crude benchmark has risen some 17 percent, although prices are still a fraction of the $115 per barrel seen only 20 months ago.


OPEC member on the output freeze</p> <p>Nigerian Oil Minister Dr. Emmanuel Ibe Kachikwu explains why there will be an OPEC output freeze.


U.S. crude futures briefly turned positive, but were weighed down by record American crude inventories. They traded down 2 cents to $32.76 a barrel, after gaining about 27 percent since Feb. 11.

"There is still a lot of downside risk ... but the U.S. crude market seems to have passed the worst point and crude runs should start creeping higher, taking pressure off inventory levels," said Richard Gorry, director of JBC Energy Asia.

"The latest data on U.S. production is also supportive as it indicates that the low prices are finally having an impact," he said.

U.S. producers cut the number of rigs drilling for oil for a 10th straight week to the lowest since December 2009, data showed on Friday, which analysts expect will lead to an output fall of 600,000 barrels per day (bpd) this year.

"The total oil rig count is now falling below that required to sustain oil production and as a result production levels are beginning to fall," brokerage Banchero Costa said.


Local youths play on the beach beyond heavy lifting shipping cranes on barges moored off the shoreline in Luanda, Angola.
Angola is trying to show there's life after oil


Morgan Stanley said a potential Russian-Saudi agreement to freeze output at January levels could also drive prices up. President Vladimir Putin called a meeting with top managers of Russia's leading oil producers on Tuesday.

A 10-day outage of a major pipeline from the Iraqi semi-autonomous region of Kurdistan to Turkey was also supporting prices in Europe. Turkey said over the weekend repairs on the 600,000 barrel-per-day link would take more time.

Morgan Stanley cautioned that a global production overhang estimated at 1 million to 2 million bpd was still massive and was accompanied with a "deceleration in demand growth".

Trading data, however, suggested shifting sentiment. The amount of open positions in U.S. crude contracts betting on a further fall in prices has fallen more than 17 percent since mid-February to the lowest level in 2016.

At the same time, financial traders have raised sharply their bullish bets on oil after talk of a global production freeze, signs of falling U.S. shale crude output, as well as growing gasoline demand.