More Balanced Oil Market Expected in 2nd Half

Professional commodity traders watch spreads (differences between the prices for adjacent futures contracts) rather than spot prices as the best indicator of the balance between supply and demand.

In crude, the narrowing spreads for both Brent and West Texas Intermediate (WTI) indicate a closer balance between supply and demand in the second half of the year than in the first.

Brent Oil Falls Towards $54 on OPEC Output, Iran

Brent crude oil fell towards $54 a barrel on Friday and was on track for its third straight weekly loss, hurt by oversupply worries after Kuwait said OPEC had no choice but to maintain output levels.

Brent for May delivery had fallen 33 cents to $54.10 by 0931 GMT. The contract is set to decline by more than 1 percent this week.

U.S. crude for April delivery slipped 21 cents to $43.75 a barrel, headed for its fifth weekly loss. The contract expires on Friday.

Oil Drops Toward $59 on Dollar, Stock Builds

Brent crude oil fell toward $59 a barrel on Monday as the dollar strengthened and a supply glut pushed global oil inventories to record highs.

The dollar hit a more than 11-year high against a basket of currencies after data showed the U.S. unemployment rate in February fell to its lowest level since May 2008, making commodities priced in the greenback more expensive for holders of other currencies.

Oil inventories are rising across the world as production outstrips demand, offsetting geopolitical tensions in the Middle East and the risk of output cuts in Libya and Iraq.

Oil down on dollar, rate hike fear; little impact from rig count drop

(source: Reuters)

Crude prices fell on Friday as a rallying dollar and fears of a rate hike due to strong U.S. jobs growth suppressed the market, diverting attention from a near four-year low in the number of rigs drilling for oil in the United States.

Worries about the security of Libyan and Iraq crude supplies, which had put a floor beneath the market in the earlier hours of trade, also took a backseat.

Brent Crude Future Prices Rise Above $61

Brent crude future prices rose above $61 a barrel on Thursday, as investors brushed aside bearish U.S. inventories data to focus on tensions in Iraq and Libya.

A deteriorating security situation led Libya's state oil company to declare force majeure on 11 of its oilfields on Wednesday.

In Iraq, Islamic State militants have set fire to oil wells in the Ajil field east of the city of Tikrit to try to hinder aerial attacks aimed at driving them from the oilfield, a witness and military source said.

Saudi Ups Official Oil Prices Amid Signs of Stronger Demand

Saudi Arabia raised the official selling prices (OSPs) for its oil deliveries to Asia and the United States on Tuesday, in the latest signal OPEC's largest exporter is seeing signs of stronger demand.

The Kingdom raised all U.S.-bound crude prices by $1 a barrel and hiked extra-light crude oil to Asia by $1.40 a barrel, in a vote of confidence oil demand is growing in two of its biggest markets following the price crash since June.

Oil Drops Under $62 due to Strong Dollar and Libyan Output

Oil dropped more than 1 percent on Monday, with Brent slipping under $62 a barrel, depressed by a stronger dollar and a rise in Libyan crude output.

The dollar hit an 11-year high against a basket of currencies after a rate cut in China dented the Chinese yuan and also hit emerging Asian currencies.

Brent crude hit a low of $61.70 a barrel and was at $61.90 by 6 a.m. ET, down 68 cents. Front-month Brent jumped 18 percent in February, the largest monthly rise since May 2009.

U.S. crude was down 55 cents to $49.21 a barrel.

Disruption to oil supplies from members of the Organization of the Petroleum Exporting Countries (OPEC) has helped support crude with lower output from Libya and Iraq in the first couple of months of this year.

But output from several OPEC countries may be recovering.

Libya's oil production has now recovered to more than 400,000 barrels per day (bpd), officials said.

"Libyan production is up and Iraqi exports are on the rise," said Tamas Varga, oil analyst at London brokerage PVM Oil Associates, saying crude markets were likely to fall further.

Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt, agreed, saying much of the recent strength in oil had been due to speculative buying.

"All in all the market is still over-supplied by a wide margin," Fritsch told Reuters Global Oil Forum. "We expect Brent to come under pressure again in Q2."

U.S. oil markets are particularly weak with a U.S. refinery strike denting demand for crude and domestic production still increasing, despite reports that the number of exploration rigs operating in North America is falling due to lower oil prices.

The number of oil rigs fell by 33 last week to 986, the smallest drop this year, a survey showed.

These diverging trends helped stretch the premium for Brent over U.S. crude to its widest since January 2014 on Friday at $13 a barrel.

Technical charts point to a further widening of the spread to $16.98 in the next three months, Reuters market analyst Wang Tao said.