Published: Thu, May 11, 2017
Money | By Armando Alvarado

Crude futures settle higher but post third weekly loss

Crude futures settle higher but post third weekly loss

Futures have collapsed 11 percent this week, slumping to the lowest since November 15 - two weeks before the Organization of Petroleum Exporting Countries agreed to production curbs to boost prices and ease a global glut.

"OPEC is going to continue the cuts". Crude prices spiked and many predicted a speedy return to $60-plus prices as excess supply would finally be drained. A combination of resilient USA shale output and surprisingly sluggish demand for gasoline from American drivers has led United States stockpiles of oil to remain at historically-high levels. But by late morning trading in NY, weekly declines of close to 10 percent were all but halved.

Brent crude futures, the global benchmark for oil prices, were at $47.05 per barrel at 0335 GMT, down $1.33 or 2.8 percent from their last close. Total volume traded was more than double the 100-day average. The U.S. oil rig count has more than doubled from a year go to 703 this week, according to Baker Hughes Inc. data.

Traders are looking forward to an industry report on USA crude oil and fuel stockpiles at 4:30 p.m. EDT, to be followed by government data Wednesday at 10:30 a.m. EDT.

Based on the current price at $45.41, the direction of the crude oil market today is likely to be determined by trader reaction to the price cluster at $46.14 to $46.25. "They need to sell futures and that can drive some very significant and volatile moves through those levels".

But analysts say non-Opec members may struggle to extend production cuts. Brent tumbled back below $50 in the previous session.

Risk-tolerant traders looking for leveraged plays on oil prices can consider the newly minted ProShares rolled out the ProShares UltraPro 3x Crude Oil ETF (NYSEArca: OILU) and ProShares UltraPro 3x Short Crude Oil ETF (NYSEArca: OILD), which debuted in March.

Fed June rate hike odds jump after policy statement
Fed officials have signaled that they expect two more rate hikes this year, in addition to the one increase they made in March. The pair was boosted by an optimistic Fed statement today and is seen nearing important resistance.

"The market seems to be much further away from a balanced situation than some had previously forecast".

Benchmark 10-year notes US10YT=RR last rose 1/32 in price to yield 2.3542 percent, from 2.356 percent late on Thursday.

The estimates followed data from the U.S. Energy Information Agency, which said American producers would likely increased their 2018 output by around 7.37% to 9.9 million barrels per day.

Analysts said investors were anxious that oil nations would fail to ease supply fears at a meeting later in May.

Recent US gasoline demand, a closely-watched metric, is down by almost one-quarter of a million barrels per day from past year. Oil recovered some of its losses later Friday, trading 0.5% lower at around $45.30 by late afternoon in Asia.

It came after a Kremlin spokesperson said no decision had been made on whether Russian Federation would agree to extend oil cuts - which were introduced by Opec and other major oil producing states in January - into the second half of the year.

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