Sun, Sep 02, 2018 - Page 14 News List

Oil posts biggest monthly gain since April as Saudi Arabia boosts output

Bloomberg

Crude last month rose as sanctions on Iranian oil stoked concern that supplies would contract, overshadowing speculation that a US-China trade war would weaken demand.

Futures in London last month settled 4.3 percent higher, the biggest monthly gain since April, and US crude also rose for the month.

Yet, both benchmarks on Friday faltered as Saudi Arabia last month reportedly raised its crude output from July levels.

Saudi Arabia last month pumped 10.424 million barrels of crude per day and supplied 10.467 million per day to the market, said OPEC delegates, who declined to be identified.

“You are seeing month-over-month gains, but I am seeing this as a range-bound market,” said Rob Haworth, who helps oversee US$151 billion at US Bank Wealth Management in Seattle.

“Saudi Arabia and Russia are increasing production, US production could increase — that ultimately limits the upside here,” he said.

US President Donald Trump has reimposed sanctions on Iran, pulling the US out of a nuclear accord with Tehran in May, despite opposition from allies, China and Russia.

Brent, the global benchmark, is more vulnerable than West Texas Intermediate crude to any impact on Iranian supplies.

Both benchmarks gained last month as US stockpiles shrank and domestic production plateaued.

West Texas Intermediate this week climbed to more than US$70 per barrel in New York for the first time since late July.

West Texas Intermediate for delivery next month slipped US$0.45 to settle at US$69.80 per barrel on the New York Mercantile Exchange. Total volume traded was about 43 percent less than the 100-day average. Futures posted a 1.5 percent advance this month.

Brent futures for delivery next month, which expired on Friday, fell US$0.35 to settle at US$77.42 per barrel on the ICE Futures Europe exchange.

The more active November Brent contract slid US$0.38.

“There is increasing concern about the impact of the sanctions on Iran,” New York-based hedge fund Again Capital LLC partner John Kilduff said. “There is a sense that things are going to get quite tight.”

Oil drilling expansion resumed in US shale fields as explorers clamor for the most expensive land gear.

Money managers have increased their bullish ICE Brent crude oil bets by 64,635 net-long positions to 389,066, the most bullish in seven weeks, weekly ICE Futures Europe data on futures and options showed.

Wholesale gasoline was unchanged at US$2.14 per gallon, while heating oil lost 0.3 percent to US$2.24 per gallon.

Natural gas gained 1.5 percent to US$2.92 per 1,000 cubic feet.

In other commodities, gold rose 0.1 percent to US$1,206.70 per ounce, while silver dipped 0.3 percent to US$14.56 per ounce and copper skidded 1.7 percent to US$2.67 per pound.

Additional reporting by AP

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