Monday, October 2, 2017

WTI Bulls Get Another Dose Of Reality; WTI Down Over 1% in Pre-Market Trading; Stronger Dollar -- October 2, 2017

Why I love to blog: with regard to the pre-market trading of WTI, see my comments yesterday. From Reuters via Yahoo!Finance:
Oil (Brent) fell more than $1 a barrel to below $56 on Monday as a rise in U.S. drilling and higher OPEC output put the brakes on a rally that helped prices to register their biggest third-quarter gain in 13 years.
U.S. energy companies added oil rigs for the first week in seven and Iraq announced its exports rose slightly in September while OPEC overall boosted output.
Brent crude, the global benchmark, was down $1.02 at $55.77 a barrel at 1310 GMT. It notched a third-quarter gain of about 20 percent, the biggest third-quarter increase since 2004 and traded as high as $59.49 last week.
"I think it's going to be a struggle to move above $60 Brent," said Olivier Jakob, oil analyst at Petromatrix.
U.S. crude was down $1.22 at $50.45. The U.S. benchmark posted its strongest quarterly gain since the second quarter of 2016.

Active rigs:

Active Rigs583368190186

RBN Energy: Permian pipelines shuttling crude oil from gathering systems to takeaway pipes.


Exxon: the company's big bet on Brazil oil could signal major "pre-salt" role -- Reuters via Reuters. Exxon paid almost $1 billion for one block, Brazil's highest-ever such bid. Almost a billion dollars and return won't be seen for decades?
Marking a return to Brazilian exploration after a five-year absence, Exxon took eight blocks in the coveted basin, one of Brazil's most productive, at an auction on Wednesday. Six were taken in partnership with state-run Petrobras.
The auction's record take included an Exxon bid of 2.24 billion reais ($704 million) for one block, Brazil's highest-ever such bid.
That showed how oil companies that can afford significant overheads are willing to shell out for and develop high quality reserves in far-flung locations, despite oil prices that have roughly halved since 2014.
Timing: oil's September surge propels bull market run on demand optimism -- this is a reposting of a Bloomberg article.  Timing? See my comments here. Data points:
  • OPEC's production increased in September, 2017
  • Mideast summer demand and US driving season coming to an end; demand optimism? echo chamber
  • WTI pre-market trading: down over 2%; flirting again with $50 "floor" (?)
  • WTI moves from $50 to $52 and US drillers add oil rigs for first week since mid-August, according to Baker Hughes

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