North Sea Forties oil pipeline system suffered a temporary power loss and US crude and petroleum inventories dropped to levels we haven’t seen since the 2nd Quarter of 2019. West Texas Intermediate “WTI” Prices are up 4.2% this week, Brent is 3.5% higher this week.
Well that’s a great way to end out the week. Oil declined, but STILL has it’s biggest gains in a month.
Oil Set for Biggest Weekly Gain in Over a Month
by Bloomberg|Saket Sundria|Friday, October 25, 2019
Oil declined but was still on track for its biggest weekly gain in more than a month.
(Bloomberg) — Oil declined, but was still on track for its biggest weekly gain in more than a month, as investors weigh further signs of a slowing global economy against tightening crude supplies.
Futures fell as much as 0.7% in New York after rising for a third day Thursday as a temporary halt to the North Sea Forties oil pipeline system added to a surprise decline in U.S. crude stockpiles. A measure of German manufacturing and services signaled the nation’s slump will extend into the fourth quarter, while South Korea’s economy grew at a slower pace in the third quarter.
Oil is still down from an April peak as the trade spat between Washington and Beijing dented demand. Under the terms of a partial arrangement reached earlier this month, China will boost spending on American farm goods, with the U.S. delaying a tariff increase in exchange. President Donald Trump has raised expectations that he and Chinese President Xi Jinping will sign a phase-one deal in Chile next month.
“The attention is slowly but gradually shifting to the idea that the oil market is still in a decent deficit,” said Howie Lee, a Singapore-based economist at Oversea-Chinese Banking Corp. However, “the trade deal would be back in the picture” soon, he said.
West Texas Intermediate for December delivery lost 21 cents to $56.02 a barrel on the New York Mercantile Exchange as of 7:40 a.m. London time. The contract added 26 cents to close at $56.23 on Thursday. Prices are up 4.2% this week, the most since the week ended Sept. 20.
Brent for December settlement slipped 20 cents, or 0.3%, to $61.47 a barrel on the London-based ICE Futures Europe Exchange. Prices are 3.5% higher this week. The global benchmark crude traded at a $5.45 premium to WTI.
While the North Sea Forties pipeline was shut following a power loss, operator Ineos Group Holding SA said Thursday afternoon that a restart of the system had commenced. U.S. oil stockpiles fell for the first time in six weeks through Oct. 18, with the combined inventories of crude and petroleum products shrinking to the lowest level since May.
IHS Markit’s measure of Germany’s manufacturing and services rose marginally in October, but still signaled weakness with employment in industry falling the most in almost 10 years. The report also showed a decline in confidence.
–With assistance from James Thornhill.
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Ben Sharples, Andrew Janes
Article sourced from Rigzone.com
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