Oil falls on Trump's latest China trade threats

NEW YORK (Reuters) - Oil prices fell about 2 percent on Friday after U.S. President Donald Trump threatened new tariffs on China, reigniting fears of a trade war between the world’s two largest economies that could hurt global growth.

Trump said on Thursday he had ordered U.S. trade officials to consider tariffs on an extra $100 billion of imports from China, escalating tensions with Beijing.

China warned on Friday it was fully prepared to respond with a “fierce counter strike” of fresh trade measures if the United States follows through on Trump’s threat.

“The heightened possibility of an outright tariff war is conjuring up images of slowed economic growth that could curtail the strong oil demand that has helped to revive a strong pricing environment during the past couple of months,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

 

Brent crude LCOc1 futures settled down $1.22 at $67.11 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures fell $1.48 to $62.06 a barrel, a 2.3 percent loss.

Brent crude dropped 2.8 percent in the week while U.S. crude fell 4.4 percent, the biggest weekly decline since early February.

U.S. stock indexes also fell on trade war jitters, which weighed on oil prices. Crude futures have recently tracked with equities.

OPEC member Libya’s oil output is at around 1.05 million barrels per day despite a continuing outage since February at its 70,000 bpd El Feel oilfield, a Libyan oil source told Reuters on Friday.

U.S. drillers added 11 oil rigs in the week to April 6, bringing the total count up to 808, the highest level since March 2015, General Electric Co’s (GE.N) Baker Hughes energy services firm said in its closely followed report on Friday.

The Permian basin in Texas is leading the way as U.S. oil production has reached an all-time high, but the prolific output is causing bottlenecks as pipelines transporting the crude have filled up more quickly than expected, depressing prices in the region.

Some market participants are still optimistic on the oil sector.

“We’re cautiously bullish here,” said Dan Hussey, a market strategist at RJO Futures in Chicago. “It’s the fundamentals.”

U.S. crude inventories unexpectedly fell last week, data showed on Wednesday.

Russian Energy Minister Alexander Novak said that an arrangement under which Moscow cooperates with the OPEC oil group could become indefinite once a current deal to curb oil production expires at the end of the year.

 

The Organization of the Petroleum Exporting Countries and other large oil producers led by Russia have agreed to curtail their combined output by around 1.8 million barrels per day until the end of 2018 to smooth out bloated oil inventories.

OPEC and its allies should keep the cuts to ensure healthy price levels as a way to boost investment in the industry and avoid a supply and price shock in the long run, Qatar’s energy minister said.

Asian oil traders are stumped by how Saudi Arabia derived its official selling prices (OSP) for May after the world’s top oil exporter unexpectedly raised the price for its flagship Arab Light crude sold to Asian refiners.

Additional reporting by Shadia Nasralla in London, Jane Chung in Seoul and Koustav Samanta in Singapore; Editing by Will Dunham and Tom Brown

SOURCE: REUTERS

 

Oil down slightly; U.S. inventory draw offsets trade war fears

NEW YORK (Reuters) - Oil prices settled slightly lower on Wednesday, as a surprise draw in U.S. crude stockpiles triggered a rebound from session lows hit after China proposed a broad range of tariffs on U.S. exports that fed fears of a trade war.

Both Brent and U.S. crude slid to two-week lows after China, the world’s largest importer of raw materials, hit back at the Trump administration’s plan to levy tariffs on $50 billion of its goods, proposing duties on a broad range of U.S. imports.

Brent hit a session low of $66.69 and U.S. crude slumped as low as $62.06.

“I have high confidence that it will stagnate economic growth,” said Michael McAllister, exploration and production equity analyst at MUFG in New York.

 “It would be negative for pricing,” he added.

But by the end of the session, Brent crude futures lost just 10 cents to settle at $68.02 a barrel, a 0.15 percent loss. U.S. West Texas Intermediate (WTI) crude futures fell 14 cents to settle at $63.37 a barrel, off 0.22 percent.

Prices pared losses after the Energy Information Administration released data showing U.S. crude inventories fell by 4.6 million barrels in the latest week. Analysts had expected an increase of 246,000 barrels.

The drop in inventories came as refinery crude runs rose by 141,000 barrels per day, EIA data showed. Refinery utilization rates rose by 0.7 percentage point.

Prices were also helped by a turnaround in the U.S. stock market. Oil prices have recently closely tracked equities.

“Supported by a 4.617 million barrel weekly crude oil draw across the U.S., a solid upturn in equities encouraged buyers in WTI,” said Anthony Headrick, energy market analyst and commodity futures broker at CHS Hedging LLC in Inver Grove Heights, Minnesota.

“Yet, a 3.666 million barrel build at the Cushing, OK storage hub provided enough weight for a negative settlement.”

A deal by OPEC and non-OPEC producers to get rid of excess supply has also supported prices. OPEC oil output fell in March to an 11-month low due to declining Angolan exports, Libyan outages and a further slide in Venezuelan output, a Reuters survey found, sending compliance with a supply-cutting deal to another record.

Additional reporting by Amanda Cooper in London and Koustav Samanta in Singapore; Editing by David Gregorio

SOURCE: REUTERS

CANADA FX DEBT-C$ dips with oil as investors weigh trade talks

* Canadian dollar at C$1.2917, or 77.42 U.S. cents
* Oil prices fall 0.6 percent
* Bond prices lower across the yield curve
TORONTO, March 26 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Monday as oil prices dipped, with the loonie unable to build on last week's gains even as fear of a global trade war lessened. Global stocks came off six-week lows on optimism that the United States and China are set to begin trade talks. Canada's commodity-linked economy could be hurt if global trade slowed. The price of oil, one of Canada's major exports, pulled back from an earlier two-month high. U.S. crude prices, which had been supported by escalating Saudi-Iran tensions, were down 0.6 percent at $65.5 a barrel. At 9:26 a.m. EST (1326 GMT), the Canadian dollar was trading 0.2 percent lower at C$1.2917 to the greenback, or 77.42 U.S. cents. The currency traded in a range of C$1.2841 to C$1.2922. On Friday, the currency touched its strongest since March 12 at C$1.2824 after hotter-than-expected domestic inflation data raised prospects of a further Bank of Canada interest rate hike as soon as next month. The loonie has also benefited recently from optimism about a deal to revamp the North American Free Trade Agreement. It rose 1.6 percent last week. Speculators have raised bullish bets on the Canadian dollar for the first time in six weeks, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed on Friday. As of March 20, net long positions had increased to 24,560 contracts from 19,420 a week earlier. Canadian government bond prices were lower across the yield curve, with the two-year down 3 Canadian cents to yield 1.869 percent and the 10-year falling 11 Canadian cents to yield 2.207 percent. Canada's gross domestic product data for January is due on Thursday. (Reporting by Fergal Smith Editing by Susan Thomas)

SOURCE: REUTERS

Canadian dollar notches biggest gain in four months amid NAFTA optimism

TORONTO (Reuters) - The loonie posted its biggest gain against the U.S. dollar in nearly four months on Wednesday, buoyed by optimism about a NAFTA trade deal and higher oil prices, while the greenback broadly fell even as the Federal Reserve hiked interest rates. 

The U.S. dollar .DXY extended its decline against a basket of major currencies after Fed policy-makers signaled they expected three interest rate increases for 2018, fewer than the four some traders had anticipated.

 

“The Canadian dollar is strengthening in tandem with all the G10 currencies in a weak U.S. dollar environment,” said Eric Theoret, currency strategist at Scotiabank.

Prime Minister Justin Trudeau said he remained optimistic Canada would get a good deal at North American Free Trade Agreement modernization talks amid signs negotiators could be closer to settling one of the trade pact’s most contentious issues.

 

Toronto’s Globe and Mail newspaper said the U.S. side had dropped its insistence that all autos made in NAFTA nations should have 50 percent U.S. content.

“It does remove some source of uncertainty,” said Alvise Marino, FX strategist at Credit Suisse in New York. “It’s still too early for the BoC to meaningfully change its view on this front.”

The Bank of Canada has been worrying that uncertainty over the future of NAFTA may weigh on the economy.

U.S. crude oil futures CLc1 settled 2.6 percent higher at $65.17 a barrel after a surprise decline in U.S. inventories and as concern persisted over possible disruption to Middle East supply.

Oil is one of Canada’s major exports.

At 4 p.m. EST (2100 GMT), the Canadian dollar CAD=D4 was trading at C$1.2901 to the greenback, or 77.51 U.S. cents, up 1.3 percent in its largest advance since Dec. 1.

The currency touched its strongest level since March 13 at C$1.2890.

Canadian government bond prices were lower across the yield curve, with the two-year CA2YT=RR down 7.5 Canadian cents to yield 1.867 percent and the 10-year CA10YT=RR falling 33 Canadian cents to yield 2.255 percent.

The 2-year yield touched its highest intraday since June 2011 at 1.909 percent.

Bank of Canada Senior Deputy Governor Carolyn Wilkins will deliver a speech on Thursday, while domestic inflation data for February is due on Friday.

Reporting by Fergal Smith; Editing by Bernadette Baum and Sandra Maler

SOURCE: REUTERS

 

Canadian dollar holds ground vs. stronger greenback ahead of Fed decision

TORONTO (Reuters) - The Canadian dollar steadied against its broadly stronger U.S. counterpart on Tuesday as oil prices rose and domestic data showed an increase in wholesale trade, while investors braced for a potential Federal Reserve interest rate hike on Wednesday.

At 4 p.m. ET (2100 GMT), the Canadian dollar CAD=D4 was trading nearly unchanged at C$1.3083 to the greenback, or 76.44 U.S. cents. The currency traded in a narrow range of C$1.3053 to C$1.3102.

 

“I think this market is just waiting for the Fed,” said Amo Sahota, director at Klarity FX in San Francisco.

The U.S. dollar .DXY rose against a basket of major currencies as investors awaited clues from the Fed on its outlook for the U.S. economy.

Canadian wholesale trade edged up 0.1 percent in January as higher sales in the food and machinery and equipment sectors offset declines in the building material and vehicle industries. Analysts had forecast no change in wholesale trade.

The price of oil, one of Canada’s major exports, rose on tension in the Middle East and the possibility of further falls in Venezuelan output.

U.S. crude oil futures CLc1 settled 2.2 percent higher at $63.40 a barrel.

On Monday, the Canadian dollar hit its weakest intraday level in nearly nine months at C$1.3124, which may have surprised some market participants. A Reuters poll this month had shown that the loonie is forecast to rally over the coming year.

“A few rule books are being rewritten here,” Sahota said. “The blame is largely being put on trade, NAFTA negotiations and also a much more neutral Bank of Canada at this point.”

U.S. President Donald Trump has threatened to withdraw from the North American Free Trade Agreement with Canada and Mexico if he cannot rework it in favor of the United States.

The Bank of Canada has been worrying that trade policy uncertainty may weigh on the country’s economy. Comments last week from Governor Stephen Poloz have reinforced expectations the central bank can take its time raising rates after hiking them three times since last July.

Bank of Canada Senior Deputy Governor Carolyn Wilkins will deliver a speech on Thursday, while domestic inflation data for February is due on Friday.

Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The 10-year CA10YT=RR declined 29 Canadian cents to yield 2.205 percent.

Reporting by Fergal Smith; Editing by Bill Trott and Sandra Maler

SOURCE: REUTERS

CANADA STOCKS-TSX extends losses as oil slides, investors brace for U.S. rate hike

March 19 (Reuters) - Canada’s main stock index fell on Monday, led by the energy sector as oil prices slipped, and investors were cautious ahead of a near-certain U.S. interest rate hike this week.

* At 12:29 p.m. ET (1629 GMT), the Toronto Stock Exchange’s S&P/TSX Composite Index fell 123.05 points, or 0.78 percent, to 15,588.28.

 

* Oil prices slipped on Monday as energy market investors remained wary of growing crude supply, although tensions between Saudi Arabia and Iran gave prices some support.

 

* The Dow Jones Industrial Average lost nearly 400 points as investors awaited the U.S. Federal Reserve’s two-day policy meeting, which concludes on Wednesday.

* Canadian tech stocks were lower on Monday, tracking a deep selloff in U.S. tech sector after Facebook fell 7.7 percent following reports of data misuse.

* The TSX posted no new 52-week highs and 4 new lows. Across all Canadian issues there were 8 new 52-week highs and 15 new lows.

* The largest percentage gainer on the TSX was Novagold , which rose 9.0 percent, while the largest decliner was B2gold Corp, down 5.3 percent.

* Among the most active Canadian stocks by volume were Neovasc Inc, down 5.7 percent at $0.17; Aurora Cannabis, up 0.3 percent at $10.98 and Klondex Mines , up 61.1 percent at $2.90.

 

* Gold miner Klondex was up after U.S. miner Hecla Mining Co said it would buy the company in a $462 mln cash-and-stock deal.

* Volume on the TSX index was 82.07 million shares, while total volume on Monday was 139.28 million shares. (Reporting by Ankur Banerjee and Medha Singh in Bengaluru Editing by Saumyadeb Chakrabarty)

SOURCE: REUTERS

Oil prices fall as increased U.S. drilling activity points to higher output

* U.S. rig count rises back to 800 - Baker Hughes

* Rising drilling activity points to higher crude production

* Middle East tensions prevent further price falls

 

By Henning Gloystein

SINGAPORE, March 19 (Reuters) - Oil prices fell on Monday as rising drilling activity in the United States pointed to further increases in output, raising concerns about a return of oversupply.

 

U.S. West Texas Intermediate (WTI) crude futures were at $62.02 a barrel at 0145 GMT, down 32 cents, or 0.5 percent, from their previous close.

Brent crude futures were at $65.87 per barrel, down 34 cents, or 0.5 percent.

Monday’s price falls in part reversed increases last Friday, which came on the back of concerns over rising tension in the Middle East.

“Despite all the bearish U.S. shale supply headlines, oil prices remain firm as... the odds that the U.S. will pull out of the Iran nuclear agreement continue to run very high,” said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore.

On a simple supply versus demand basis, however, global oil markets are facing the risk of returning into oversupply after being in a slight deficit for much of last year.

U.S. drillers added four oil rigs in the week to March 16, bringing the total count to 800, the weekly Baker Hughes drilling report said on Friday.

The U.S. rig count, an early indicator of future output, is much higher than a year ago when 631 rigs were active as energy companies have continued to boost spending since mid-2016 when crude prices began recovering from a two-year crash.

Thanks to the high drilling activity, U.S. crude oil production C-OUT-T-EIA has risen by more than a fifth since mid-2016, to 10.38 million barrels per day (bpd), pushing it past top exporter Saudi Arabia.

 

Only Russia produces more, at around 11 million bpd, although U.S. output is expected to overtake Russia’s later this year as well.

Soaring U.S. output, as well as rising output in Canada and Brazil, is undermining efforts by the Middle East dominated Organization of the Petroleum Exporting Countries (OPEC) to curb supplies and bolster prices.

Many analysts expect global oil markets to flip from slight undersupply in 2017 and early this year into oversupply later in 2018.

Reporting by Henning Gloystein; editing by Richard Pullin

SOURCE: REUTERS

CANADA STOCKS-TSX advances as oil price lifts energy shares

March 16 (Reuters) - Canada’s main stock index rose on Friday, boosted by the heavyweight energy sector as shares of oil companies were lifted by the higher price of crude.

 * At 10:34 a.m. ET (14:34 GMT), the Toronto Stock Exchange’s S&P/TSX composite index rose 93.44 points, or 0.6 percent, to 15,764.06.

* The TSX posted 7 new 52-week highs and 2 new lows. Across all Canadian issues there were 43 new 52-week highs and 10 new lows.

* The largest percentage gainer on the TSX was Ivanhoe Mines Ltd, which rose 6.3 percent, while the largest decliner was Novagold, down 2.9 percent.

* Among the most active Canadian stocks by volume were Enbridge Inc, up 2.4 percent at C$42.03; Manulife Financial, up 1.3 percent at C$24.69 and Bombardier , unchanged at C$3.72.

* In the energy sector, Suncor Energy added 1 percent to C$42.69.

* The price of U.S. crude oil gained 0.18 percent to $61.30. (Reporting by John Tilak and Leah Schnurr Editing by Phil Berlowitz)

SOURCE: REUTERS

Oil Sands Upgraders May Make a Comeback Amid Pipeline Crisis

  • Alberta pledges C$1 billion of support for partial upgrading
  • Partial upgraders seen freeing up space on clogged pipelines

Turning Canada’s heavy oil sands into a more marketable kind of crude is making a comeback, or rather half a comeback.

 
 

Alberta’s government’s C$1 billion dollar pledge ($780 million) will help support the construction of smaller and cheaper varieties of upgraders. The so-called partial upgraders would process the sticky oil just enough so that it can flow freely through pipelines without adding ultra-light condensate. The government expects that as many as five private investors will infuse about C$5 billion in the sector.

 
 

Interest in building full upgraders dwindled prior to the 2014 downturn in oil prices amid soaring costs and as the U.S. fracking boom sent a surge of light oil onto the market, depressing prices for similar synthetic crude. The older versions were refinery-sized plants that would cost billions of dollars to build today. The partial upgraders are cheaper, and would produce a grade that’s easier to refine and transport without the need for more-expensive diluent.

 
 

“Partial upgrading does part of the job and gets part of the benefit,” Kent Fellows, a research associate at the School of Public Policy and one of the report’s authors. “Its a much-less intensive process and a much less costly process.”

 
 

Since partial upgrading would reduce or eliminate the need for the condensate that makes up about a third of the heavy oil-sands crude, it would free up pipeline space and produce a grade of oil that’s easier to refine and more valuable than the heavy grades produced currently, Fellows said.

Commercial Basis

Nexen Energy Ulc shut its Long Lake facility after a fatal accident, while Suncor Energy Inc. abandoned plans to build a new upgrader five years ago amid surging costs. The lack of additional upgraders worsened a glut in the domestic market amid rising production. Heavy Canadian crude traded at its biggest discount in more than four years to U.S. benchmark West Texas Intermediate oil futures last month as pipelines filled up.

The new upgraders aren’t yet operating on a commercial basis and more than ten technologies are being tested or developed, according to a report by the University of Calgary’s School of Public Policy. Calgary-based MEG Energy Corp. is currently constructing 3,000 barrel-a-day commercial demonstration of a partial upgrader using so-called Hi-Q technology, Davis Sheremata, a spokesman for MEG, said in an email. The work will take 18 to 24 months but the pace of construction depends on financing, he said.

A 100,000 barrel-a-day partial upgrader could raise the value of a barrel of bitumen by $10 to $15 by converting it into a heavy or medium grade of crude oil, according to Fellows’ report. That’s equal to between $33 and $38 a barrel at current bitumen prices versus $35 a barrel for heavy Western Canadian Select, an oil-sands benchmark, data compiled by Bloomberg show.

Chump Change

A 100,000 barrel-a-day plant would include a solvent de-asphalter and hydrotreater and cost about $3 billion to construct, Fellows’ report said. That’s about a quarter the cost of Suncor’s Voyageur upgrader before it was canceled in 2013.

MEG “will be watching for more details on how the Alberta Government plans to implement this program” to fund partial upgrading, spokesman Sheremata said.

FluidOil Corp., a U.K.-based company, is working with a Canadian producer on a project to build a 1,000 barrel-a-day partial upgrader, Charles Parker, the company’s chief executive officer, said in a phone call. Parker declined to reveal his partner but said the company produces more than 100,000 barrels a day and is among the five largest.

The aide for partial upgrading, in the form of loan guarantees and grants, is part of a billintroduced to the legislature last week that also includes another C$1 billion for petrochemical projects.

Alberta’s financial support may jump start this fledgling technology, Fellows said. “I have no idea if a billion is the right amount to make this go forward,” he said. “It’s not chump change.”

SOURCE: BLOOMBERG

CANADA STOCKS-TSX futures little changed while oil prices dip

March 12 (Reuters) - Stock futures pointed to a flat opening for Canada’s main stock index on Monday even as oil prices slipped on rising U.S. output.

March futures on the S&P TSX index were up 0.01 percent at 7:15 a.m. ET.

Canada’s main stock index closed higher on Friday, lifted by strong gains in oil and metals prices.

Dow Jones Industrial Average e-mini futures were up 0.37 percent at 7:15 a.m. ET, while S&P 500 e-mini futures were up 0.31 percent and Nasdaq 100 e-mini futures were up 0.56 percent.

TOP STORIES

Thomson Reuters Corp is to track and analyse chatter about bitcoin on hundreds of news and social media websites to help investors looking for an edge in trading the world’s biggest cryptocurrency, the company said.

There are parallels between the way companies in North America and Britain are holding back on investment as they wait for clarity on the re-negotiation of NAFTA and the outcome of talks on a Brexit deal, Canada’s finance minister said. 

Taking a page from its aggressive growth strategy in the United States, cash-rich Canadian fertilizer giant Nutrien Ltd plans to plow investment into Brazil in a bid to reap up to 30 percent of farm supply sales in fertile pockets of the country.

Britain has thrown financial support for the first time behind exports of Bombardier CSeries jets part-built by Northern Ireland workers caught up in a recent trade row.

A temporary exemption from U.S. tariffs is little comfort to the Canadian steel city of Hamilton, coping with months of uncertainty as U.S. President Donald Trump has threatened a potentially devastating 25 percent duty unless the North American Free Trade Agreement is renegotiated.

ANALYST RESEARCH HIGHLIGHTS

Total Energy Services Inc: BMO cuts target price to C$16 from C$17

Detour Gold Corp: Raymond James cuts target price to C$20 from C$21

COMMODITIES AT 7:15 a.m. ET

Gold futures: $1317.2; -0.51 percent

US crude: $61.8; -0.39 percent

Brent crude: $65.15; -0.52 percent

LME 3-month copper: $6902; -0.86 percent

SOURCE: REUTERS

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