Oil Prices Maintain Bounce Amid Libya Supply Disruption
March 28 2017 - 10:21PM
Dow Jones News
By Jenny W. Hsu
Oil futures added to overnight gains in Asia trading Wednesday,
as the market got a lift from ongoing supply disruptions in
Libya.
On the New York Mercantile Exchange, light, sweet crude futures
for delivery in May were recently up 6 cents in the Globex
electronic session at $47.76 a barrel, while May Brent crude on
London's ICE Futures exchange rose 2 cents to $50.58.
Prices ended up more than 1% higher as of the New York close
Tuesday after Libya reported the closure of key pipelines as
tension between the government and a militia flared up again,
choking off some 250,000 barrels a day of oil.
The country's "March output will show a decline, and the
intermediate-term plan to increase output is at least somewhat less
certain than before," said Tim Evans, a Citi Futures energy
analyst.
Bulls were also cheered by the latest rhetoric from members of
the Organization of the Petroleum Exporting Countries, who are
showing a stronger willingness to cut more of their supplies until
global inventories return to a more-manageable level.
Not seemingly impacting prices in Asia was the American
Petroleum Institute's weekly reading on U.S. oil inventories. It
said late Tuesday that supplies rose 1.9 million barrels in the
week ended March 24. A survey by The Wall Street Journal has
analysts anticipating the U.S. Energy Information Administration
will on Wednesday report a 1-million-barrel increase in its count
but declines in refined-product inventories. Such drops would help
support crude prices.
Meanwhile, market players are eyeing the reshaping of U.S.
energy policy under President Donald Trump, who on Tuesday signed
an executive order to roll back environmental protection measures
implemented by his predecessor. The move underscores Mr. Trump's
resolve to revitalize traditional energy sectors such as oil and
coal as part of his campaign promises.
While the move may provide some incentives for major energy
companies to drill more, the fate of the proposed policy remains
opaque.
Still, "OPEC will definitely take" U.S. policy steps "under
consideration when deciding whether to extend" its production-cut
deal past May, said Gao Jian, an energy analyst at SCI
International. "But no matter what, the cartel must find a way to
shrink the inventories," though "OPEC is faced with the tough
choice between gaining market share and pushing prices higher."
Nymex reformulated gasoline blendstock for April--the benchmark
gasoline contract--edged lower to $1.6318 a gallon while April
diesel traded at $1.5222. Meanwhile, ICE gas oil for April was
recently down $1.25 from Tuesday's settlement at $58.50 a metric
ton.
Write to Jenny W. Hsu at jenny.hsu@wsj.com
(END) Dow Jones Newswires
March 28, 2017 23:06 ET (03:06 GMT)
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