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Published On: Fri, Dec 20th, 2019

PDP raises concern over ‘intolerance’ in Edo APC

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Oil futures moved modestly higher on Thursday, on track to notch another settlement at their highest since mid-September, a day after data showed a weekly decline in U.S. crude inventories.
On the New York Mercantile Exchange, West Texas Intermediate crude for January delivery CLF20, +0.56% rose 21 cents, or 0.3%, to $61.14 a barrel, with the contract set to expire. at the end of the session. February WTI crude CLG20, +0.39%, which becomes the front-month contract at the day’s settlement, edged up by 12 cents, or 0.2%, to $60.97.
February Brent crude BRNG20, +0.36% was up 25 cents, or 0.4%, at $66.42 a barrel on ICE Futures Europe, looking to stretch its streak of gains to a sixth consecutive session.
Oil on Wednesday bounced back from early losses after the Energy Information Administration on reported that U.S. crude supplies fell by 1.1 million barrels for the week ended Dec. 13.That was less than the 2.5 million-barrel average decline expected by analysts polled by S&P Global Platts, but came as a relief after the American Petroleum Institute on Tuesday had reported a 4.7 million-barrel climb.
The market should see further supply declines “into the end of the year due to year-end tax consequences of destocking,” said Tariq Zahir, managing member at Tyche Capital Advisors. Crude inventory holders tend to lower supplies at year end in a move to reduce tax costs.
Prices for oil may move lower in the first quarter of 2020 “due to slow demand,” he said. “Of course, any problems with the China phase one deal we could see an accelerated move to the downside” as worries about energy demand resurface.
For now, however, oil remains bolstered by more optimistic expectations on the global economy and in the wake of the decision earlier this month by the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, to deepen production cuts, said Stephen Innes, chief Asia market strategist at AxiTrader.
But Innes and other analysts remain concerned about data showing weak-handed speculative traders have built up substantial long positions in futures which could provide fodder for forced selling if prices turn south.
“So, in the absence of definitive macro catalysts over a typically quiet holiday period, this could leave sentiment vulnerable to news flow. As such, the oil rally is showing signs of petering out as traders heed caution by de-risking and banking some hard-earned profits,” he said.
In other energy trade, January gasoline RBF20, +1.07% rose 1.1% to $1.7023 a gallon, while January heating oil HOF20, +0.37% rose 0.1% to $2.023 a gallon.
January natural gas NGF20, -1.05% moved up by 1.3 cents, or 0.6%, to $2.299 per million British thermal units.
The EIA on Thursday reported that domestic supplies of natural gas fell by 107 billion cubic feet for the week ended Dec. 13. Analysts expected a fall of 93 billion cubic feet, on average, according to a survey conducted by S&P Global Platts.(By Market Watch)

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