Oil falls on rising U.S. drilling, uncertainty of OPEC-led cut extension - Sean Seshadri

Oil prices fell on Monday, pulled down by rising U.S. drilling activity and by doubts whether an OPEC-led production cut initially due to end in mid-2017 would be extended.

Benchmark Brent crude futures (LCOc1) fell by 37 cents, or 0.73 percent, from their last close to $50.43 per barrel by 0626 GMT.

In the United States, West Texas Intermediate (WTI) crude futures (CLc1) were down 45 cents, or 0.94 percent, at $47.52 a barrel.

Traders said that prices were pulled down by rising U.S. drilling and production as well as over uncertainty whether the Organization of the Petroleum Exporting Countries (OPEC) and other producers, who met in Kuwait over the weekend, would extend output cuts beyond the middle of the year.

"There is currently no shortage of crude oil...the fact that shale oil is going to burgeon is also painfully evident," said Sukrit Vijayakar, director of energy consultancy Trifecta. Vijayakar said there also "seems to be a difficulty in reaching consensus on extending the production cuts".

Traders said that rising U.S. drilling activity and oil production were contributing to financial traders reducing their long positions in crude futures to the lowest level since early December.

Since mid-2016, U.S. oil production has risen by 700,000 barrels per day (bpd), or 8.3 percent, to 9.13 million bpd, government data shows .

U.S. bank Goldman Sachs (NYSE:GS) said that should the rig count stay at current levels and the impact of previously closed rigs returning to production was considered, then U.S. oil production would rise by 235,000 bpd between the fourth quarter of 2016 and the first half of 2017.

Because of soaring U.S. output and the cuts by OPEC, the discount of U.S. WTI crude prices to international Brent crude has grown to around $2.90 per barrel, heading for its widest close since late 2015, encouraging more sales of U.S. oil to Asia to replace cuts in Middle East production.

Despite the ongoing fuel supply overhang and rising U.S. shale output, Goldman Sachs said that global oil markets were slowly rebalancing, largely due to strong demand growth.

"While the shale production rebound has surprised to the upside, it will be offset in our view by the high compliance to the production cuts through 1H17 and most importantly, strong demand levels," the bank said.

"We believe that the rebalancing of the oil market is in fact making progress," it said, adding that an OPEC-led extension of the production cut was therefore not needed.

Oil bounces off November lows, but bloated US stockpiles pressure market - Sean Seshadri

Oil prices recovered on Thursday from losses chalked up the session before, but the market remained under pressure as bloated U.S. crude inventories and rising output dampen OPEC-led efforts to curb global production.

Brent crude futures, the international benchmark for oil, were at $50.99 per barrel at 0621 GMT, up 35 cents, or 0.7 percent, from their last close. That came after Brent briefly dipped below $50 a barrel on Wednesday for the first time since November.

U.S. West Texas Intermediate (WTI) crude futures were up 37 cents, or 0.8 percent, at $48.41 a barrel, after testing support at $47 overnight.

Analysts said Brent had found technical support around $50 a barrel and was being pushed up as traders took new long positions after crude hit multi-month lows overnight.

Despite the bounce, traders said the market remained under pressure, largely due to a big U.S. inventory and doubts that an effort led by the Organization of the Petroleum Exporting Countries (OPEC) to cut output was reining in a global fuel supply overhang.

Greg McKenna, chief market strategist at futures brokerage AxiTrader, said OPEC was "underwriting the investment plans and returns of their competition in U.S. shale oil."

McKenna said there was a risk of oil prices dropping further due to U.S. output and a lack of compliance by some producers who said they would cut production.

Oil prices could rise to $60 per barrel in the second quarter, assuming inventory draws and oil producer output cuts remain in place, Barclays (LON:BARC) said in a report on Thursday.

"However, this would likely be temporary, and we forecast prices in the mid-$50s per barrel in the second half 2017," the bank said.

The Energy Information Administration (EIA) said U.S. inventories climbed almost 5 million barrels to a record 533.1 million last week, far outpacing forecasts of a 2.8 million-barrel build.

The high inventories come as U.S. oil production has risen over 8 percent since mid-2016 to more than 9.13 million barrels per day (bpd) to levels comparable in late 2014, when the oil market slump started.

There were also signs of a bloated market in Asia, where China's gasoline imports slumped while its refiners sent huge volumes overseas as they refine more fuel than the domestic market can absorb.

China's gasoline exports in February hit the second highest on record, up 76.6 percent over a year earlier at 1.06 million tonnes, data from the Chinese customs showed on Thursday. Diesel exports last month surged 66.7 percent on year at 1.32 million tonnes.

China imported just 7,245 tonnes of gasoline in February, tumbling 94 percent from the same period last year. Diesel imports dropped 52 percent from a year ago to 50,000 tonnes.

Gold climbs to more than 2-week high as dollar sinks - Sean Seshadri

Gold prices rose to a more than two-week high during North American hours on Tuesday, as the U.S. dollar continued to head south in wake of the Federal Reserve's dovish guidance on the future pace of rate hikes.

Comex gold futures jumped to a session peak of $1,237.95 a troy ounce, the highest since March 2. It was last at $1,237.15 by 9:40AM ET (13:40GMT), up $3.50, or around 0.3%. It settled higher for the third session in a row on Monday.

Meanwhile, spot gold was up $3.40 at $1,237.70 per ounce.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down around 0.6% at 99.59 in New York morning trade, the weakest level since February 3.

The greenback has been on the retreat since the Fed raised interest rates on Wednesday last week, but stuck to its outlook for two more hikes this year, instead of three expected by the market.

Market players awaited comments from a number of Fed policymakers for more clues on the timing of the next U.S. rate hike.

Tuesday sees New York Fed President William Dudley, Kansas City Fed President Esther George and Cleveland Fed President Loretta Mester make public appearances. Fed Chair Janet Yellen speaks on Thursday.

The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.

A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.

Headlines from Washington will also be in focus, as traders await further details on President Donald Trump's promises of tax reform and infrastructure spending.

The House is expected to vote on a heath care bill Thursday, and if it passes that would be seen as a small step moving Congress closer to considering tax reform, though any legislation must also battle its way through the Senate.

Also on the Comex, silver futures for May delivery tacked on 15.2 cents, or about 0.9%, to $17.58 a troy ounce, the most since March 7.

Meanwhile, platinum added around 0.3% to $975.15, while palladium rose 0.9% to $788.85 an ounce.

Elsewhere in metals trading, copper futures dropped 2.9 cents, or 1.1%, to $2.638 a pound, following reports that a strike at a key Indonesian mine has ended, easing concern over a disruption to supply.

Gold drifts weaker in Asia as Fed views on rates weigh - Sean Seshadri

Gold prices fell in Asia on Friday with sentiment supported largely on political risk and mixed views about the pace of Federal Reserve rate hikes this year.

Gold for April delivery on the Comex division of the New York Mercantile Exchange inched down 0.13% to $1,225.45 a troy ounce. Elsewhere, silver futures fell 0.24% to $17.288 a troy ounce, while copper dipped 0.11% to $2.674 a pound.

Overnight, gold prices traded sharply higher on Thursday, amid a slump dollar, as investors mulled over the Federal Reserve’s more dovish than expected statement on the pace of rate hikes this year.

The Federal Reserve stuck a familiar tone in its statement on Wednesday, pointing out that interest rate increases “will be gradual” in 2017, and maintained its view of three rate hikes, with the remaining two rate hikes expected later this year.

Fed Chief Janet Yellen said in press conference Wednesday, the US central bank would continue to provide accommodative monetary policy to support the US economy but warned against a prolonged period of lower rates in order to avoid a situation which forces the fed to “raise rates rapidly”.

Meanwhile a mixed batch of economic data had a muted effect on the yellow-metal as it continued to trade near session highs.

Weekly initial jobless claims fell to 241,000. Housing starts rose to a seasonally adjusted annual rate of 1.288 million in February while the Philadelphia Fed Index topped forecasts at 32.8 for March. Both the Philadelphia Fed Index and the housing starts beat forecasts.

Crude prices move higher but upside seen limited - Sean Seshadri

U.S. oil prices moved higher on Friday, as a surprise drop in U.S. stockpiles continued to support, but gains were expected to remain limited as concerns over the effectiveness of OPEC’s output cuts persisted.

U.S. crude futures for April delivery were up 0.49% at $49.08 a barrel.

On the ICE Futures Exchange in London, the May Brent contract gained 0.56% to trade at $52.02 a barrel.

Crude prices rallied after the U.S. Energy Information Administration said in its weekly report on Wednesday that crude oil inventories declined by a surprising 237,000 barrels last week to 528.2 million barrels. It was the first drawdown in stockpiles since early January.

The commodity also benefited from a weaker dollar after the Federal Reserve’s policy statement on Wednesday was seen as less hawkish than expected by sticking to projections of three total rate hikes in 2017 and not four as some traders had hoped for.

However, traders were expected to remain cautious after a report earlier in the week showed that Saudi Arabia raised output back above 10 million barrels a day in February, sparking fresh concerns over a global supply glut.

Separately, Iraq said its March oil exports averaged 3.25 million barrels-per-day in the first 14 days of the month, slightly lower than February's 3.27 million bpd. However, the decline was not as much as expected, raising doubts over the country's compliance with the OPEC supply cut deal.

January 1 marked the official start of the deal agreed by OPEC and non-OPEC member countries such as Russia in November last year to reduce output by almost 1.8 million barrels per day to 32.5 million for the next six months, but so far the move has had little impact on inventory levels.

Kuwait is scheduled to host a ministerial meeting on March 26 comprising both OPEC and non-OPEC members to review compliance with the output agreement and to discuss whether cuts would be extended beyond June.

Gold prices down in Asia on investor caution - Sean Seshadri

Gold prices fell in Asia as investors exercise caution on expectations of Fed rate hikes next year and a likely stronger dollar.

On the Comex division of the New York Mercantile Exchange, gold for January delivery fell 0.23% to $1,140.05 a troy ounce. Silver futures dipped 0.13% to $16.068 a troy ounce, while copper futures declined 0.24% to $2.496 a pound.

On Tuesday as the Bank of Japan held steady as expected and signaled a slight uptick in the economy. Earlier, the Reserve Bank of Australia on Tuesday in the minutes of its latest board meeting said it is ready to lower the cash rate again, if needed, by assessing the benefits of lower interest rates with potential risks to household balance sheets.

Overnight, gold prices for February delivery settled lower on a stronger dollar and residual sentiment on an expected three Fed rate hikes in 2017. Fed Chair Janet Yellen on Monday said she sees wage growth picking up and a healthy job market for recent college graduates.

"While I expect workers will continue to face some challenges in the coming years, I believe, ... that the job prospects and career opportunities for new graduates at this time are very good," Yellen said in remarks prepared for the University of Baltimore's Midyear Commencement.

Yellen did not mention current monetary policy or other economic conditions in her remarks that focused on the current state of the job market facing the new graduates.

Oil prices rise in anticipation of tighter 2017 market - Sean Seshadri

Oil prices rose on Monday in anticipation of tighter crude supply going into 2017 following the decision by OPEC and other producers to cut output to prop up prices.

Brent crude futures, the international benchmark for oil prices, were trading at $55.57 per barrel at 0401 GMT, up 36 cents, or 0.7 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude oil futures were up 43 cents, or 0.8 percent, at $52.33 a barrel.

Traders said the higher prices in front-month crude futures were due to expectations of a tighter market.

The Organization of the Petroleum Exporting Countries (OPEC) and other producers led by Russia have announced cutbacks of almost 1.8 million barrels per day (bpd) in oil production from January 2017 in an effort to bolster prices to reduce rampant global overproduction which has seen output outstrip consumption for over two years.

"With investors now expecting a relatively high level of compliance with the production cut agreements, prices should be well supported," ANZ bank said on Monday.

"Saudi Arabia has stated its willingness to cut production below 10 million bpd if needed (down from around 10.5 million bpd currently), which should limit risk to the deal," U.S. bank Morgan Stanley (NYSE:MS) said on Monday, adding that some of the non-compliance risk to the deal to cut output in 2017 came from Iraq, which increased its January loadings versus December.

ANZ bank said that "some weakness in U.S. dollar also helped improve (oil) investor sentiment."

The dollar has lost 0.8 percent against a basket of other leading currencies since hitting 2002 highs last week.

Swings in the dollar can affect oil demand as they influence fuel prices for any country using its own currency domestically.

Despite this, there were factors that weighed on markets, preventing prices - which remain relatively low - from rising more.

In the United States, which did not participate in the production cut deal, drilling for new oil has increased for seven weeks.

Drillers added 12 oil rigs in the week to Dec. 16, bringing the total to 510, the highest since January, though still below 541 rigs a year ago, energy services firm Baker Hughes said on Friday.

"Since its trough on May 27, 2016, producers have added 194 oil rigs (+61 percent) in the U.S.," U.S. bank Goldman Sachs (NYSE:GS) said.

As a result, U.S. oil production is edging up, rising from below 8.5 million bpd in July to almost 8.8 million bpd by mid-December.