Thu Mar 17, 2016/Reuters

By Barani Krishnan

Oil prices hit 2016 highs on Thursday, with U.S. crude piercing the $40 psychological barrier, on optimism that major producers will strike an output freeze deal next month amid soaring gasoline demand in the United States.

A weaker dollar .DXY after a Federal Reserve policy decision on Wednesday that indicated two U.S. rate hikes this year instead of four also drew oil buyers using currencies such as the euro EUR=.

OPEC kingpin Saudi Arabia and non-OPEC producers led by Russia will meet on April 17 in the Qatar capital Doha, increasing the likelihood of the first global supply deal in 15 years.

“The remote possibility that a coordinated supply control effort comes from this meeting, assuming it even happens, has put market bears on the defensive,” said Pete Donovan, broker with Liquidity Energy in New York.

Oil prices have surged more than 50 percent from 12-year lows since the Organization of the Petroleum Exporting Countries floated the idea of a production freeze, boosting Brent up from around $27 a barrel and U.S. crude from around $26.

On Thursday, the front-month in U.S. crude’s West Texas Intermediate (WTI) futures CLc1 was up $1.52, or 4 percent, at $39.98 a barrel by 12:45 p.m. EDT, after setting a 2016 high at $40.08.

Brent crude’s front-month LCOc1 rose $1.04 to $41.37, after earlier reaching the year’s peak of $41.60.

“For now, the market is staying well supported, and the dollar is providing additional support,” said Olivier Jakob, oil analyst at Petromatrix. “It will be difficult to return to the lows of the year.”

WTI also briefly traded at a premium to Brent CL-LCO1=R on Thursday, the first time since January, as traders piled into the U.S. crude market on bets of an uptick in domestic oil exports.

U.S. crude has gained further traction on smaller stockpile builds of late, and surging gasoline consumption.

U.S. crude inventories last week climbed to its fifth straight week of record highs but by just 1.3 million barrels, a much smaller build than forecast, government data showed. Gasoline demand rose 6.4 percent over the past four weeks from a year ago.

(Additional reporting by Alex Lawler in LONDON; Editing by Marguerita Choy)

The post Oil rallies to 2016 highs, U.S. crude hits $40 on producer meeting appeared first on Investadvocate.

The Mar 3, 2016/Reuters

By Camillus Eboh

Some members of OPEC plan to meet other oil producers in Russia around March 20 for new talks on an oil output freeze, Nigeria’s petroleum minister said on Thursday, forecasting the meeting would spark a dramatic reaction in crude prices.

Nigeria has been pushing for action by the Organisation of the Petroleum Exporting Countries because the slump in oil revenue has undercut its public finances and currency, leaving the government struggling to pay civil servants.

“We’re beginning to see the price of crude inch up very slowly,” minister Emmanuel Ibe Kachikwu told a conference in Abuja. “But if the meeting that we’re scheduling, it should happen in Russia, between the OPEC and non-OPEC producers, happens about March 20, we should see some dramatic price movement.”

“Both the Saudis and the Russians, everybody is coming back to the table,” Kachikwu said. “I think we’re very humbled today to accept that if we get to a price of $50, it will be celebrated. That’s a target that we have.”

The Russian Energy Ministry said it was ready for talks but the date and venue had yet to be agreed. “Currently, various options about the venue and date for the meeting, where measures on oil market stabilization due to be discussed, are being worked out,” it said in a statement.

Benchmark Brent futures LCOc1 were around $37 per barrel by 1554 GMT (1054 ET) on Thursday.

OPEC leader Saudi Arabia and non-OPEC Russia, the world’s two largest oil exporters, agreed last month to freeze output at January levels to prop up prices if other nations agreed to join the first global oil pact in 15 years.

Yet the accord has so far failed to have a dramatic impact on crude prices, partly because OPEC’s third-largest producer Iran plans to steeply raise production after the lifting of international sanctions on the Islamic Republic in January.

Nigerian President Muhammadu Buhari on Sunday stepped up rhetoric on the issue, telling Qatar’s ruler crude prices had fallen to “totally unacceptable” levels.

Kachikwu also said Nigeria was pumping 2.2 million barrels per day, in line with previous comments, of which 46 percent was coming from onshore fields.

He also said Nigeria’s average oil production cost from state firm NNPC and international companies was between $13 and $15 a barrel for onshore fields and $30 a barrel for deep offshore operations.

Oil prices have lost two thirds of their value since mid 2014 due to a glut of supplies caused by booming output from the United States and OPEC. In January they fell below $30 per barrel, their lowest in more than a decade.

The post Nigeria says producers to meet in Moscow, sees dramatic impact appeared first on Investadvocate.

Mon Feb 29, 2016/Reuters

By Lisa Twaronite

Asian shares rose on Tuesday, bolstered by China’s monetary easing and downbeat manufacturing and service surveys that raised hopes of additional measures, though lackluster U.S. and European data kept concerns about global growth momentum alive.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up about 0.2 percent, though Japan’s Nikkei .N225 was down 0.9 percent, crimped by gains in the yen.

The Shanghai Composite Index .SSEC erased early losses and added 0.5 percent, and the CSI300 index .CSI300 of the largest listed companies in Shanghai and Shenzhen rose 0.6 percent.

An official survey showed activity in China’s manufacturing sector shrank for a seventh straight month in February, more sharply than expected, while the services sector continued to expand although at its slowest pace since late 2008.

The private Caixin/Markit China Manufacturing Purchasing Managers’ Index also fell, falling short of both market expectations and the previous month’s reading.

On Monday, the People’s Bank of China (PBOC) said on its website that it cut its reserve requirement ratio, or the amount of cash that banks must hold as reserves, by 50 basis points.

“We think the PBOC easing is consistent with continued weaker-than-expected economic activity and downside risks to growth,” wrote Jian Chang, an analyst at Barclays. “It should help to support market sentiment in the near term.”

China’s move, combined with a drop in crude output from OPEC and the United States, and a pledge by Saudi Arabia to limit market volatility, lifted crude oil futures overnight and helped them post their first gaining month in four.

Crude gave back some of those gains on Tuesday. Brent futures LCOc1 slumped 0.6 percent to $36.34 a barrel, while U.S. crude futures CLc1 shed 0.5 percent to $33.59 after surging 3 percent overnight.

Wall Street shrugged off Monday’s higher oil prices and finished lower, with MSCI’s global stocks index .MIWD00000PUS logging its fourth straight losing month.

Downbeat U.S. data revived concerns about the strength of the economy. Contracts to buy previously-owned U.S. homes fell to their lowest level in a year in January, while the Chicago Purchasing Manager’s Index – a leading indicator of the U.S. economy’s health – contracted to 47.6 in February.

The latest figures followed last week’s spate of strong data, including improving consumer spending, that had suggested the U.S. economic recovery was on track and the Federal Reserve could still raise interest rates again this year.

Figures released on Monday showed euro zone annual inflation fell back into negative territory last month, adding to the pressure facing the European Central Bank to further ease monetary policy this month.

All 18 euro money-market traders polled by Reuters expect the ECB to cut its deposit rate again at its March 10 meeting, and they said there was an even chance it would also increase its monthly asset purchases.

Those expectations weighed on the euro, which edged up about 0.1 percent to $1.0885 EUR= but remained not far from a one-month low of $1.0859 struck on Monday.

Against the perceived safe-haven yen, the common currency was down 0.2 percent at 122.24 EURJPY=R, not far from a low of 122.085, which was its lowest level since April 2013.

The dollar was buying 112.30 yen JPY=, down about 0.4 percent.

The Australian dollar dipped about 0.4 percent against its U.S. counterpart to $0.7115 AUD=D4 ahead of a policy decision from the Reserve Bank of Australia due at 0330 GMT.

Australia’s central bank is seen likely to stand pat, leaving its cash rate unchanged at a record low 2.0 percent.

(Additional reporting by Wayne Cole in Sydney; Editing by Sam Holmes and Eric Meijer)

The post Asian shares inch up after China stimulus step appeared first on Investadvocate.