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Oil heads toward 2015 highs despite ample supply

LONDON (Reuters) – Brent crude oil headed up toward 2015 highs above $68 a barrel on Thursday after official data showed the first drawdown in U.S. crude inventories since January, evidence the market there is balancing after months of heavy oversupply. U.S. crude stocks fell 3.9 million barrels last week, the first drop in four months, the Energy Information Administration said on Wednesday. [EIA/S] Stronger-than-expected demand growth and a slowdown in U.S. crude supply has boosted oil prices by 50 percent from a six-year low hit in January, despite ample supply. "While the latest draw and the recent slowdown in weekly builds in crude stocks have been seen as positive for the oil price, crude stocks remain exceedingly high," said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas. Brent crude was up 50 cents a barrel at $68.27 by 0845 GMT. It hit a 2015 high of […]

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Oil’s bull run hides a deep disconnect, crude traders warn

LONDON (Reuters) – While oil futures prices rebound with vigor as analysts cite strong demand, the physical crude market tells a much more cautionary tale. Tens of millions of barrels are struggling to find buyers in Europe with traders of West African, Azeri and North Sea crude blaming poor demand. The deep disconnect between the oil futures and physical markets looks similar to the events of June 2014 when the physical market weakness became a precursor for a futures price crash. "Being large physical buyers of crude we have a direct pulse of the market and feel immediately when it is well supplied, as is happening now," Dario Scaffardi, executive vice resident and general manager of independent Italian refiner Saras, told Reuters. "In the short-term, futures prices do not necessarily reflect accurately the physical market." Benchmark Brent oil futures prices LCOc1 more than halved between June 2014 and January […]

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Oil bulls drive crude to 2015 high on fall in U.S. stocks

LONDON (Reuters) – Oil prices rose more than a dollar to 2015 highs on Wednesday, as a month-long rally gained further impetus from a fall in U.S. crude stocks and conflict in the Middle East. Brent crude jumped by $1.36 to $68.88 a barrel by 0855 GMT, after hitting a 2015 peak of $69.14. U.S. crude traded $1.51 higher at $61.91 a barrel, near an intraday high of $62.05. "We haven’t seen hedge funds and money managers to be as optimistic and bullish as they are currently," said Vyanne Lai, an oil analyst with National Australia Bank. "They are at their most bullish since July last year, when the oil market fundamentals haven’t really changed that much." Industry group the American Petroleum Institution (API) said on Tuesday that U.S. crude oil stocks fell for the first time this year, giving a lift to oil prices. The API said that […]

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Oil Gains on U.S. Stockpile Report But Ends Below Day’s High

A truck passes by a drilling rig in Fort Worth, Texas. Oil prices spiked in a volatile session Wednesday as weekly data showed U.S. stockpiles fell for the first time this year, but the market gave back much of its gains amid a continued bearish backdrop. U.S. oil inventories fell 3.9 million barrels last week, the first weekly decline since Dec. 26, according to data provided by the U.S. Department of Energy. The decrease sent a surprisingly bullish signal to the market that the monthslong growth in supplies may finally be ebbing, and prices briefly touched a new high for the year. The data showed strong demand for crude from refineries, which ramped up processing rates to produce gasoline in anticipation of the summer driving season set to kick off in a few weeks. The decline in stockpiles stood in contrast to the 1.1 million-barrel increase projected in a […]

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Natural Gas Inches Lower in Calm Trading

By Timothy Puko Natural-gas prices inched downward Wednesday as calm spring weather and limited demand brought low volatility back to the market. Natural gas for June delivery settled down 0.4 cent, or 0.1%, at $2.776 a million British thermal units on the New York Mercantile Exchange. Trading stayed within a 7.5-cent range all day. Mild weather limits the demand to use gas for heating buildings and feeding the power plants that fuel air conditioners, often causing prices to fall and trading to slow in the spring. That has taken the steam out of the market’s most sustained rally since February as analysts have reminded traders that large surpluses are likely through the rest of May, at least. The U.S. Energy Information Administration’s weekly storage update scheduled for Thursday is likely to show a 75 billion cubic-feet addition for the week ended May 1, according to the average forecast of […]

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Big Oil’s Disruptive Climate Change

ENLARGE A drilling platform in the Gulf of Mexico. Oil’s rally back above $60 a barrel does little to dispel the industry’s long-term worries. Photo: Dario Lopez-Mills/Associated Press Even as oil rallies back above $60 a barrel, obituaries are being drafted. Oil majors face questions from shareholders concerned the threat of climate change means some of the reserves underpinning the companies will never be produced. In a recent report, HSBC HSBA 1.04 % urged investors to plan for this risk of “stranded assets.” The risk is real—and doesn’t just boil down to efforts to curb climate change. One warning: Saudi Arabia’s decision to keep pumping despite the drop in oil prices. Apart from taking market share back from higher-cost rivals, the country’s oil minister has indicated concern about long-term demand in the face of technological and regulatory threats. Almost 1,400 climate policies had been enacted globally by 2013, according […]

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Global CO2 in Atmosphere Highest in a Million Years, NOAA Says

Emissions billow from the NTPC Ltd. Badarpur power station at dusk in Delhi, on April 28, 2015. Photographer: Kuni Takahashi/Bloomberg The amount of heat-trapping carbon dioxide in the atmosphere averaged more than 400 parts per million globally for the first time ever in March, according to U.S. government measurements. The recording was based on air samples taken from 40 sites around the world, the National Oceanic and Atmospheric Administration said in a statement Wednesday. It’s the highest level of the gas in at least a million years . Increasing CO2 emissions are blamed for global climate change that causes stronger storms, melting Arctic ice and rising sea levels, according to scientists. This is the first time the emissions have reached that level on a global basis — sites in the Arctic and Hawaii recorded CO2 concentrations over 400 ppm in 2012 and 2013, respectively. “This marks the fact that […]

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U.S. aims to make Iran nuclear deal immune to Russian, Chinese veto

UNITED NATIONS (Reuters) – Washington wants to be certain that any nuclear deal between Iran and major powers includes the possibility of restoring U.N. sanctions if Tehran breaks the agreement without risking Russian and Chinese vetoes, a senior U.S. official said on Tuesday. United Nations sanctions and a future mechanism for Iran to buy atomic technology are two core sticking points in talks on a possible nuclear deal on which Tehran and world powers have been struggling to overcome deep divisions in recent days, diplomats said on condition of anonymity. Negotiators were wrapping up nearly a week of talks in New York on Tuesday, the latest round in 18 months of discussions aimed at clinching a long-term deal by June 30 to curb Iran’s nuclear program in exchange for an end to sanctions. Expert-level negotiations are expected to continue for several days. The current talks have been taking place […]

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Iran launches international oil conference

Iranian government under President Hassan Rouhani expects foreign investors will rush through the doors on anticipation of the lifting of international sanctions. File Photo by UPI /Monika Graff. TEHRAN, May 6 (UPI) — Iran said Wednesday it opened its doors to international investors to gather for an oil and gas exhibition with hundreds of foreign companies in attendance. "Iran has started holding a four-day international oil and gas show to lure investment for its oil and gas projects amid hopes for the removal of sanctions on the Islamic republic," reported Shana, the official news agency for the Iranian Oil Ministry. Iran has touted its oil and gas potential since nuclear negotiations with multinational partners began in earnest earlier this year. A framework agreement that pulls Iran back from the brink of developing the technology needed to make a nuclear weapon could be formalized this summer. Iran’s government said sanctions […]

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