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LONDON, April 26 (Reuters) - Oil prices have fallen back after a brief spike triggered by the surprise production cuts announced by Saudi Arabia and other members of OPEC+ on April 2. ROUTING THE BEARSIf one of the objectives for Saudi Arabia and its OPEC+ allies was to drive bearish hedge funds out of the oil market, it seems to have succeeded. Following the cut, however, the number of short positions was reduced further to just 78 million barrels by April 11, near to its post-2010 low of just 65 million. In the past, Saudi Arabia's oil minister has described surprise production cuts intended to discourage hedge fund short selling as "ouching". Related columns:- Oil prices stall as short-covering rally is completed (April 17, 2023)- Surprise, squeezing the shorts, and revealed preferences (April 3, 2023)- Oil market has fully absorbed impact of Russia's invasion of Ukraine (March 9, 2023)John Kemp is a Reuters market analyst.

Distillate stocks stood at 112 million barrels on April 14, down from 122 million on March 3, according to the U.S. Energy Information Administration (“Weekly petroleum status report”, EIA, April 19). The recent run-down in inventories has partially reversed the previous accumulation, which had seen the deficit narrow from -31 million barrels (-22% or –2.05 standard deviations) on October 7. CYCLICAL SLOWDOWNThe broader picture is still that U.S. distillate consumption is falling in line with the slowdown in manufacturing and freight activity. For now, inventories are still well below the long-term average, ensuring prices, calendar spreads and cracks have remained elevated. Related columns:- Global diesel prices fall as economic slowdown intensifies (April 5, 2023)- U.S. diesel consumption falls as economy slows (March 1, 2023)- U.S. diesel stocks start the year critically low (February 2, 2023)John Kemp is a Reuters market analyst.

LONDON, April 14 (Reuters) - Europe needs to put a smaller-than-average volume of gas into storage this year after a mild winter left the region with record high inventories. Chartbook: Europe gas storageThe European Union and the United Kingdom have capacity to store around 1,129 terawatt-hours (TWh) of gas, according to data compiled by Gas Infrastructure Europe (GIE). On April 1, the start of the traditional refill season, storage was 56% full - a record high for the time of year - with inventories of 633 TWh (“Aggregated gas storage inventory”, GIE, April 14). DEEPENING CONTANGOPrices and spreads are now moving decisively to limit the amount of gas added to storage this summer. Related column:- Europe’s gas outlook transformed after mild winter (April 13, 2023)John Kemp is a Reuters market analyst.

☆ Oil steady after surprise build in U.S. crude stocks
▼ + stars: | 2023-04-12 | by ( Arathy Somasekhar | ) www.reuters.com time to read: +2 min

April 12 (Reuters) - Oil prices were little changed in early trading on Wednesday after industry data showed an unexpected build in U.S. crude and gasoline inventories, offsetting concerns about tightening supply ahead of output cuts by OPEC producers. In a sign of market tightness, U.S. crude futures have flipped into backwardation, with the front month contract trading 6 cents higher than the second month. Brent crude fell 5 cents at $85.57 a barrel by 0029 GMT, while U.S. West Texas Intermediate fell 6 cents to $81.48 a barrel. Prices had risen about 2% on Tuesday on hopes that the Federal Reserve might slow its policy tightening after U.S. consumer prices data releases on Wednesday. Philadelphia Federal Reserve Bank President Patrick Harker said he feels the U.S. central bank may soon be done raising interest rates, while Minneapolis Federal Reserve Bank President Neel Kashkari said he believes inflation, now at a rate of 5% by the Fed's preferred measure, will get to "the mid-threes" by the end of this year.

☆ Reader mailbag: From M&A and MBAs to Elon Musk and bitcoin, all your questions answered
▼ + stars: | 2023-04-07 | by ( Dan Defrancesco | ) www.businessinsider.com time to read: +6 min

It's easier to leverage misinformation for personal gain within the world of finance than perhaps any other industry. I'm not the type to suggest the only real information you can get on the markets is from established news outlets. Do you think the legacy media is fearful of Elon Musk's new Twitter? I just think the discourse on Twitter is very different from what you'd find on a media website. My position on bitcoin, and the wider digital-currency ecosystem, is that it's too often a solution looking for a problem.

☆ Factbox: LME's measures to revive its nickel contract
▼ + stars: | 2023-03-30 | by ( ) www.reuters.com time to read: +2 min

LONDON, March 30 (Reuters) - The London Metal Exchange (LME) on Thursday launched sweeping measures to revive its flagging nickel contract, including plans to cut waiting times and scrap fees for new brands of the metal that can be delivered against its contract. Below is the list of the initiative:- The LME plans to cut the waiting period to approve new nickel brands to three months of regular sample assaying while also waiving fees. - The LME will consider broadening its nickel contract to include coarse nickel powder, which can be converted and used in production of batteries, to increase the amount of nickel eligible for delivery. - The LME will work with the Qianhai Mercantile Exchange (QME) to develop a China-based spot market for nickel sulphate and nickel matte to support trade flows in Asia. - The LME plans to consider whether temporary measures, designed to address the current low levels of stocks - a backwardation limit and deferred delivery mechanism - should be made a permanent element of its rulebook.

Soldering demand from the electronics sector remains weak and investors in London and Shanghai continue to play the market from the short side. Surging purchases of electronic goods during lockdown were followed by sharply reduced spending as many Western consumers were hit by a cost-of-living squeeze. LME positioning reports show both investment funds and other financial players are currently net short of the London tin contract after the early-year rally went into reverse. LME tin price, stocks and cash-3s spreadSHANGHAI STOCKS UP, LONDON STOCKS DOWNReasons to be negative are more obvious in China. ShFE registered tin stocks have risen by 60% to 8,745 tonnes since the start of January.

The outages have in recent days led to growing concern that French and regional supplies of fuels, in particular diesel, could tighten in the coming weeks. Reuters GraphicsThe profit margin for refining crude oil into diesel has jumped by nearly 40% over the past month. The Ekofisk North Sea crude grade, produced at a field in Norway where TotalEnergies has equity, relies on France for two-thirds of its export stream, Rauball said. Meanwhile, prices for crude grades from Nigeria, one of France's top suppliers, have dropped by around $1/bbl in the past two weeks, traders said. "It's a buyer's market, with WTI and Azeri crude offered way down to sell," a trader of West African crude said.

In the past twelve months, the oil market has absorbed the impact of Russia's invasion of Ukraine and the sanctions imposed in response by the United States, the European Union and their allies in Asia. As a result, benchmark oil prices have retreated by nearly 40% from their post-invasion high on March 8, 2022, after adjusting them for core inflation. Like all equilibria in the oil market, this one is likely to prove temporary and fragile - lasting until one or more of the risks around recession, inflation and China's post-pandemic rebound materialise or fade away. Conversely, if the global economy slides into a full-blown recession, inventories will rise and prices and spreads are likely to soften further. For the moment, however, the oil market has returned to balance less than twelve months after one of the largest shocks since the World War Two.

With Europe's winter energy crisis abating and power prices falling, there are growing expectations that idled zinc smelter capacity will restart. The exchange's latest positioning report shows four dominant long positions on cash zinc as of Monday. All of which serves to underline just how depleted LME zinc stocks are. STOCKED OUTLME zinc stocks total just 25,075 tonnes, less than one day's worth of global consumption. LME zinc pricing is going to remain volatile for a while yet as shorts betting on a return to surplus have to navigate today's low-stock reality.

Chartbook: U.S. gas prices and inventoriesFreeport’s eventual reopening should provide an outlet for some excess inventory, but with stocks in Europe also very full, exporters will have to compete for price-sensitive customers in Asia. Slumping futures prices will discourage drilling and incentivise electricity generators to run their gas-fired units for more hours at the expense of coal. Discounted futures prices will also boost combustion from the power sector, helping limit the accumulation of inventories this summer. Gas prices are now trading below the cost of coal, once the superior efficiency of gas-fired units is taken into account, which will encourage maximum gas burn this summer. Related columns:- Europe’s gas supply stabilises after colder weather (Reuters, February 3, 2023)- U.S. gas prices slump on production surplus (Reuters, January 12, 2023)John Kemp is a Reuters market analyst.

☆ Oil falls as earthquake impact on crude eases, rate hike fears rise
▼ + stars: | 2023-02-09 | by ( Laila Kearney | ) www.reuters.com time to read: +2 min

Brent crude settled at $84.50 a barrel, losing 59 cents, or 0.7%. U.S. crude stocks rose last week to 455.1 million barrels, their highest since June 2021, the Energy Information Administration reported on Wednesday, which also pushed oil prices lower. The prospect of stronger demand from China provided some support to oil prices, as the world's second largest oil consumer ended more than three years of stringent zero-COVID policy. "Overall, this should push global demand up by 2.1 million barrels a day in 2023." A weaker U.S. dollar, which typically trades inversely with oil, also helped limit losses in crude prices.

LONDON, Feb 9 (Reuters) - Oil prices dipped in U.S. trading hours on Thursday after the country's oil inventories hit their highest in months and on signs that the Federal Reserve could keep raising interest rates. "Relentlessly rising U.S. commercial inventories and potentially entrenched inflation limit any immediate upside potential," said PVM analyst Tamas Varga. He said recovering Chinese demand and falling inflation were set to support oil prices in the second half of the year. Crude oil stocks in the United States rose last week to their highest since June 2021, helped by higher production, the Energy Information Administration said. read more GLOB/MKTSBut the prospect of stronger demand from China provided some support to oil prices, as the world's second largest oil consumer ended more than three years of stringent zero-COVID policy.

LONDON, Feb 9 (Reuters) - Oil prices were steady on Thursday, as optimism over recovering Chinese demand was offset by U.S. oil inventories hitting their highest in months and signs the U.S. Federal Reserve could keep raising interest rates. He said recovering Chinese demand and falling inflation were set to support oil prices in the second half of the year. Crude oil stocks in the United States rose last week to their highest since June 2021, helped by higher production, the Energy Information Administration said. read more GLOB/MKTSBut the prospect of stronger demand from China lent some support to oil prices, as the world's second-largest oil consumer ended more than three years of stringent zero-COVID policy. "We expect Chinese oil consumption to increase by around 1.0 million barrels a day this year, with strong growth emerging as early as late in Q1," analysts from ANZ bank wrote in a note.

LONDON, Feb 1 (Reuters) - Oil prices ticked up as the market is looking towards a meeting of OPEC and its allies as well as a Federal Reserve rate decision and U.S. government data on crude and fuel stockpiles on Wednesday. Brent crude futures rose 45 cents, or 0.5%, to $85.91 a barrel at 1215 GMT. West Texas Intermediate (WTI) U.S. crude futures rose 62 cents, or 0.8%, to $79.49 a barrel. Tamer U.S. rate hike expectations helped lower the dollar index , which supported oil prices as a weaker greenback makes the commodity cheaper for buyers holding other currencies, according to Stephen Brennock, analyst at PVM. OPEC's oil output fell in January, as Iraqi exports dropped and Nigeria's output did not recover, with the 10 OPEC members pumping 920,000 barrels per day (bpd) below their targeted volumes under the OPEC+ agreement, a Reuters survey found.

LONDON, Feb 1 (Reuters) - Oil prices were broadly stable as the market is looking towards a meeting of OPEC and its allies as well as a Federal Reserve rate decision and U.S. government data on crude and fuel stockpiles on Wednesday. Brent crude futures dipped 11 cents, or 0.1%, to $85.35 a barrel at 0949 GMT. West Texas Intermediate (WTI) U.S. crude futures rose 8 cents, or 0.1%, to $78.95 a barrel. Tamer U.S. rate hike expectations helped lower the dollar index , which supported oil prices as a weaker greenback makes the commodity cheaper for buyers holding other currencies, according to Stephen Brennock, analyst at PVM. OPEC's oil output fell in January, as Iraqi exports dropped and Nigeria's output did not recover, with the 10 OPEC members pumping 920,000 barrels per day (bpd) below their targeted volumes under the OPEC+ agreement, a Reuters survey found.

☆ The Outlook for Diesel: Supply Woes Aren’t Going Away Soon
▼ + stars: | 2023-01-28 | by ( Denton Cinquegrana | ) www.wsj.com time to read: +4 min

Throughout the U.S., diesel supplies remain tight; the East Coast in particular has been pressed to keep tanks fully stocked. Some of the supply issues go back to pre-Covid 19 events, including a June 2019 fire that took out a key East Coast refinery. Europe has been weaning itself off Russian crude oil and natural gas, but replacing Russian diesel may prove trickier. At that time, diesel prices at the retail level in the U.S. were in the $5.25-5.30 a gallon range. By the end of January, retail diesel prices should be approaching $4.75 a gallon.

It's the lowest end-year inventory in the system this century and reflects two years of steady withdrawals which have left exchange stocks of metals such as zinc and lead almost depleted. It's no coincidence that all the LME base metals have experienced bouts of extreme tightness over the last couple of years. Zinc stocks were down by 65% and lead stocks down by 59% on December 2021. LME stocks could desperately do with any sort of rebuild, whether seasonal or cyclical. So far, however, significant arrivals remain conspicuous by their absence and until that changes, low visible inventory is going to keep roiling the LME base metals.

LONDON, Jan 4 (Reuters) - Europe’s gas prices are slumping as the combination of mild weather and reduced industrial consumption has produced an unusual seasonal increase in inventories which threatens to overwhelm the storage system. EU28 gas storage is very different from the U.S. Strategic Petroleum Reserve and emergency petroleum stockpiles maintained in other countries. Given finite capacity in the gas storage system, there is a limit to how much conservation in winter 2022/23 can improve supply security in winter 2023/24. Slumping gas prices imply the limit is close to being reached. Policymakers have criticised very high prices for gas that prevailed for much of 2022 following Russia’s invasion of Ukraine.

Brent crude futures settled up $2.02, or 2.4%, to $82.70 per barrel, while U.S. West Texas Intermediate (WTI) crude futures settled up $1.94 to $77.28. Both contracts rose on a surge in diesel futures ahead of cold weather expected towards the end of the year. Sending bearish signals, U.S. crude oil stockpiles rose by more than 10 million barrels last week, the most since March 2021, buoyed by releases from the Strategic Petroleum Reserve and as refiners reduced activity. Looking into 2023, OPEC said it expects oil demand to grow by 2.25 million barrels per day (bpd) over next year to 101.8 million bpd, with potential upside from China, the world's top importer. The IEA, seeing Chinese oil demand recovering next year after a 400,000-bpd contraction in 2022, raised its 2023 oil demand growth estimate to 1.7 million bpd for a total of 101.6 million bpd.

LONDON, Dec 14 (Reuters) - Europe’s gas inventories remain comfortable despite much colder-than-normal temperatures across the northern part of the region which have boosted heating demand significantly since the start of December. Inventories in the European Union and United Kingdom (EU28) totalled 987 terawatt-hours (TWh) on December 12, according to Gas Infrastructure Europe (“Aggregated gas storage inventory”, GIE, December 14). Chartbook: Europe gas inventoriesExceptionally high prices coupled with conservation measures enacted following Russia’s invasion of Ukraine have significantly changed consumption patterns. Related columns:- Europe on course to end winter with plenty of gas (Reuters, Nov. 28)- Europe’s gas storage peaks after record refill season (Reuters, Nov. 18)- Europe’s gas prices retreat as storage almost full (Reuters, Oct. 13)- Mission accomplished? Europe fills gas storage ahead of schedule (Reuters, Oct. 4)John Kemp is a Reuters market analyst.

UNMASKINGGlobal oil and energy consumption have been falling since the third quarter under the impact of exceptionally high prices and a slowing economy. But the impact was initially masked by concerns about the planned introduction of the price cap on Russia's crude and refined products exports. Traders anticipated the price cap and Russia's response would cut production by more than the economic slowdown cut consumption. LESSONS FROM 2014The recent slump in oil prices shares some, though not all, characteristics with the slump occurring in the third quarter of 2014 ("A brief history of the oil crash", Reuters, January 2015). It is also probable recent hedge fund liquidation has exaggerated the recent fall in oil prices creating some headroom for a short-term rebound; positions are now unusually low.

Extreme backwardation implied traders expected the balance to remain tight, with a further drawdown of already depleted inventories, and more upward pressure on oil prices. In late November, after consultations with traders, the U.S. Treasury published regulations signalling a relatively relaxed approach to enforcement (“Guidance on implementation of price cap policy”, OFAC, Nov. 22). Following last-minute discussions, on Dec. 2 the cap was set at $60, with a commitment to review it by mid- January 2023 and every two months thereafter (“G7 agrees oil price cap”, European Commission, Dec. 3). SETTING THE PRICE CAP LEVELIn setting a price cap for Russia’s crude and products, U.S. and EU officials have been confronted by a menu of policy options and other considerations. Related columns:- Investors dumped Brent in anticipation of relaxed oil price cap (Reuters, Dec. 5)- Global recession a bigger risk to Russia’s oil revenue than price cap (Reuters, Nov. 11)- Recession would make tough oil sanctions on Russia more likely (Reuters, July 14)- Oil market confronts U.S. and EU policymakers with unpalatable choices (Reuters, June 29)John Kemp is a Reuters market analyst.

LONDON, Dec 5 (Reuters) - Portfolio investors sold petroleum heavily for the third week running as fears about disruption to crude oil flows from the price cap on Russia’s exports receded. Sales over the three most recent weeks totalled 190 million barrels, more than reversing the 169 million barrels purchased over the previous six weeks in October and early November. In the latest week, sales were again concentrated in crude (-40 million barrels), especially Brent (-39 million), with only insignificant changes in other contracts. Fears the price cap would reduce global crude supplies appear to have prompted a wave of buying in both physical and paper markets throughout late September and early October. With the risk from the price cap removed, for now investors’ attention has returned to the weak outlook for the economy and oil consumption in 2023.

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