US Crude Oil Price Rallies After Slump

US Crude Oil Price Rallies After Slump

This raised the possibility that China would retaliate by slapping a tariff on imports of USA crude oil. "Renewed geopolitical supply-side disruptions stemming from Canada, Iran, Libya, Venezuela and the USA raise the likelihood of oil trade interruptions and, with it, upside risks to oil prices in the near term".

India is an obvious possibility-its imports and demand are surging, and it may be willing to replace at least part of its Iranian oil imports out of fear that its companies and the sovereign could lose access to the US financial system should it continue to buy Iran's oil.

Hedge funds and other money managers raised their net long position in the six most important petroleum futures and options contracts by 47 million barrels.

An announcement by Libya's National Oil Corp that four oil export terminals were reopening, ending a standoff that had shut down most of Libya's oil output, was a key catalyst for the price fall on Wednesday, analysts said.

Economists expect the Brent crude oil price to average between $72 (R963) and $80 per barrel for the remainder of the year, due to geopolitical risk factors.

Meanwhile, EIA forecasts that total U.S. crude oil and petroleum product net imports will fall from an annual average of 3.7 million barrels per day in 2017 to an average of 2.4 million barrels per day in 2018 and to an average of 1.6 million barrels per day in 2019, which would be the lowest level of net imports since 1958. "We'll consider it", Pompeo told Sky News Arabia during a visit to Abu Dhabi, according to a State Department transcript released Tuesday.

A spokesperson for the Chinese Foreign Ministry responded to a U.S. list of tariffs on another $200 billion in goods by saying U.S. President Donald Trump was a bully on trade. The prospect of a worsening trade war has raised fears of slower global growth that could clip demand for oil.

Following recent port closures, Libyan production fell to 527K barrels per day from 1.28M barrels per day in February 2018. If Libyan production can get back to its high then this will take care of some of the spare capacity concerns. Saudi Arabia pumped more as it heeded calls from the United States and other consumers to make up for shortfalls elsewhere and cool rising prices. Additionally, at some time in the near future, the Canadian pipeline problem will be fixed and the supply disruption over. "Why buy Malaysian crude [linked to Brent] if your [US crude] alternative is dollars cheaper", a sweet crude trader at a trading house said, adding that WTI Midland, Bakken and Eagle Ford were some of the USA grades being offered into Asia. This will bring additional crude to the market.

Related Articles