Oil prices rise amid risk of supply disruptions
Singapore: Oil prices rose on Tuesday amid worries there could be a high risk of disruptions to supply, especially in the Middle East.
Brent crude oil futures LCOc1 were at $71.75 per barrel at 0646 GMT, up 33 cents, or 0.5 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 36 cents, or 0.5 percent, at $66.58 a barrel.
Traders said oil markets were receiving general support due to a sense that there were high risks of supply disruptions, including a potentially spreading conflict in the Middle East, renewed U.S. sanctions against Iran and falling output as a result of political and economic crisis in Venezuela.
“With so many potential supply disruptors in play and few signs that the current market upheaval will end any time soon, traders continue to pay the geopolitical risk premium,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore.
“Oil prices should remain bid ... at least through the Iran nuclear deal deadline (May 12) if not for the remainder of 2018,” he added.
Oil markets have generally been well supported this year, with Brent up by around 16 percent from its 2018-low in February, due to healthy demand which comes as the producer cartel of the Organization of the Petroleum Exporting Countries (OPEC) leads supply cuts aimed at tightening the market and propping up prices.
U.S. OUTPUT SOARS
Beyond OPEC’s production restraint and concerns about supply disruptions, the main market driver in oil has been the United States, where crude production C-OUT-T-EIA has soared by almost a quarter since mid-2016 to 10.53 million barrels per day (bpd), largely thanks to a booming shale industry.
Only Russia pumps out more oil currently at almost 11 million bpd.
“U.S. shale producers have been quietly capitalising on higher oil prices with increasing rig counts seen. A staggering amount of 73 rotary rigs have been placed since January 2018,” said Benjamin Lu of Phillip Futures in a note on Tuesday.
“As such, we expect a softening in crude oil prices as markets adjust from a bullish streak,” he added.
U.S. shale oil production is expected to increase in May for the fourth consecutive month, U.S. Energy Information Administration (EIA) data showed on Monday. Shale oil output is set to rise by 125,000 barrels bpd to 7 million bpd.
The American Petroleum Institute (API) is due to publish weekly U.S. fuel inventory data later on Tuesday, while official government data, including on production, is due from the EIA on Wednesday.
The remark came in the wake of an interview Zarif gave to US' CBS TV news.
China said it welcomed plans by top US officials to visit the country to discuss trade.
Bloomberg, in a CBS interview, said he hopes by next year Trump will have changed his mind.
CPI(M) will not have a political alliance with Congress but an "understanding" inside and outside Parliament to stop the forces of communalism, Sitaram Yechury said.
China has agreed to resume sharing of hydrological data of the Brahmaputra and Sutlej rivers, External Affairs Minister Sushma Swaraj said.
Fugitive Indian diamond merchant Jatin Mehta asked the Indian government to reconsider his case after he got favourable judgments from international courts in Sharjah.
Worried his arrest is imminent, Nirav Modi has started selling off some of his international assets.
The US Attorney's Office in New York has filed federal terrorism charges against a bombing suspect who was accused of detonating a pipe bomb.
The embattled liquor baron Vijay Mallya once again offered to settle his Rs 9,000 crore debt with lenders.