Recap: Oil prices finished higher for the second straight week, tacking on more than 3%, gaining support from falling Libyan production, bullish rhetoric from Saudi Arabia’s energy minister and a decline in U.S. inventories. WTI closed in on $64, falling short by 27 cents, while Brent topped $67. A pre-settlement sell-off pared gains, with April WTI settling at $63.55 a barrel, up 78 cents, or 1.24%, while Brent for April delivery closed up 92 cents, or 1.39%, to settle at $67.31 a barrel.
April RBOB rose 2.89 cents to $1.9896 a gallon, while heating oil climbed 1.9 cents to $1.9726 a gallon.
Fundamental News: Baker Hughes reported that the number of rigs searching for oil in the week ending February 23rd increased by 1 to 799.
Oil Movements reported that OPEC shipments are expected to fall by 300,000 bpd to 24.31 million bpd in the four week period ending March 10th compared with the period ending February 10th. Mideast shipments including those from non-OPEC nations, Oman and Yemen, will fall by 450,000 bpd to 17.05 million bpd.
Saudi Arabia’s Oil Minister, Khalid Al-Falih, said oil markets are rebalancing and he expected inventories to continue declining this year.
India’s Oil Minister, Dharmendra Pradhan, said India is seeking a reasonable price for crude from Saudi Arabia, in a move that could help Saudi Arabia regain the top spot in supplying the world’s third largest oil consumer. Iraq surpassed Saudi Arabia in 2017 as the top supplier to India. India’s Oil Minister also stated that India has offered Saudi Arabia a stake in the second phase of the south Asian country’s yet-to-be-built strategic oil reserves. The government also discussed with Saudi Arabia investment opportunities in a proposed oil refinery with 1.2 million bpd of capacity on the west coast of India and a petrochemicals project in the south of India.
Libya’s El Feel oilfield was shut early Friday due to the presence of armed groups in the area. The field was producing 70,000 bpd prior to the shutdown. The shutdown came after negotiations on Thursday to try to resolve a protest over pay and other demands by some guards at the field, which had led to the evacuation of non-essential staff the previous day.
China’s CNPC aims to increase its annual crude oil production in the Middle East region by 10.8 million tons or 216,000 bpd from its key operations in Abu Dhabi, Iraq and Iran. In January, CNPC’s Middle East operations were pumping a total of 4.07 million bpd.
IIR reported that US oil refiners are expected to shut in 1,471,000 bpd of capacity in the week ending February 23rd, increasing available refining capacity by 43,000 bpd from the previous week. IIR expects offline capacity to fall to 1.126 million bpd in the week ending March 2nd and to 1 million bpd in the week ending March 9th.
Bloomberg reported that global refinery outages reached 4.2 million bpd in the week ending February 22nd, from 4.3 million bpd in the previous week.
Early Market Call – as of 10:00 AM EDT
WTI – Apr $63.27, down 30 cents
RBOB – Mar $1.8090, down 9 points
HO – Mar $1.9705, up 13 points
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