Crude prices moved higher this week, giving back some gains on Friday.

West Texas Intermediate on the New York Mercantile Exchange dropped 59 cents, or about 1 percent, Friday, to close at $40.60 per barrel. This compares to Monday, when prices jumped $2.17 to close at $39.22 per barrel. That was followed by a $1.45 gain Tuesday that put prices back above $40 a barrel. Prices fell to $39.95 Wednesday before closing at $41.19 Thursday. The posted price ended the week at $37 per barrel.

Natural gas prices on the NYMEX started the week off with an 18-cent jump and largely added to those gains, with the exception of a 9.5 cent drop Tuesday. Prices rose 11.4 cents Friday to close at $2.741 per Mcf.


Bloomberg reports prices were poised for a 10 percent gain for the week, the biggest since June, boosted largely by the approach of Hurricane Delta, which is forcing the shutdown of almost 92 percent of Gulf of Mexico oil output.

The support from Delta was mitigated by Norway being set for talks with its oil workers to avoid a strike that could take 1 million barrels off the market, Bloomberg said.

Bloomberg also said optimism over a government stimulus package may be limited by a resurgence in COVID-19 cases that could weaken demand at the same time OPEC+ and Libya are adding more oil supplies.

“Fasken Oil and Ranch is not anticipating a significant rise in the current oil price until the Covid-19 pandemic is over and oil demand returns to more traditional levels,” Tommy Taylor, director of oil and gas development, told the Reporter-Telegram by email. The company has recently taken out drilling permits in Andrews and Ector counties.

Jennifer Martin Samuels, vice president, investor relations with SM Energy, told the Reporter-Telegram by email

(Reuters) – U.S. crude oil stockpiles rose modestly, in line with expectations, while gasoline and distillate inventories dipped last week, the Energy Information Administration said on Wednesday.

    Crude inventories

rose by 501,000 barrels in the week to Oct. 2 to 492.9 million barrels, compared with analysts’ expectations in a Reuters poll for a 294,000-barrel rise.
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Production was higher, rising to 11 million barrels per day from 10.7 million bpd in the previous week. That was a surprise to analysts, though that figure is likely to reverse in next week’s report as Hurricane Delta has already caused offshore facilities to shut.

“Domestic production was up 300k which was a bit bearish and may weigh on prices for a bit. Imports were up big 610k barrels and exports were down big. In my opinion those numbers are still being influenced by hurricane activity over the past couple of weeks,” said Bob Yawger, director of energy futures at Mizuho.

    Net U.S. crude imports

rose by 1.5 million bpd as exports alone dropped 853,000 bpd.
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Fuel demand improved, the EIA said, with product supplied rising for both gasoline and distillates, which include diesel and heating oil. Over the last four weeks, product supplied, a proxy for demand, is still down 15% from the year-ago period as the United States remains burdened by the coronavirus pandemic.

Futures prices fell, sinking after U.S. President Donald Trump cut off talks for a new stimulus package on Tuesday. U.S. crude

was down 3% to $39.40 a barrel while Brent

dropped 2.6% to $41.54 a barrel.

    U.S. gasoline stocks

fell by 1.4 million barrels in the week to 226.8 million barrels, their lowest since November of last year, compared with expectations for a 471,000-barrel drop.​
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    Distillate stockpiles

fell by 962,000 barrels, in line with expectations.
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(Reuters) – Venezuela’s state-run Petroleos de Venezuela [PDVSA.UL] has boosted crude blending and upgrading to their highest levels in six months, according to company documents seen by Reuters on Wednesday, as exports rise despite strict U.S. sanctions.

The upgraders are crucial to converting extra-heavy oil from eastern Venezuela’s Orinoco belt – the OPEC nation’s largest-producing region – into exportable crude grades. But they have operated only intermittently in recent months due to a plunge in exports and technical issues linked to lack of maintenance.

On Tuesday, the Petropiar upgrader – part of a joint venture with Chevron Corp

– produced 115,000 barrels of Hamaca crude and the Sinovensa blending facility, operated along with China National Petroleum Corp [CNPET.UL], produced 158,000 barrels of Merey crude, a PDVSA document showed.

That was the highest joint level since March, as an increase in September’s exports to the highest level in five months allowed PDVSA to drain inventories, which had risen to near-capacity levels as U.S. sanctions spooked potential buyers.

The facilities have also been plagued by operational issues. On Sept. 30, the Petropiar upgrader stopped working two days after restarting due to an electrical outage prompted by a transformer explosion, the document showed. It has now operated continuously since Oct. 3.

The remaining three upgraders have been offline for well over a year. Petropiar had briefly switched to blending mode to produce the nation’s flagship export grade, Merey.

PDVSA did not respond to a request for comment.

It is not clear how long PDVSA will able to maintain current levels of exports and upgrader operations.

Washington – which is seeking to oust Venezuelan President Nicolas Maduro – gave PDVSA’s customers deadlines of between October and November to schedule their last cargoes under the few remaining exemptions to its sanctions on the company.

(Reporting

After trading around the $40 per barrel level since early June, the NYMEX crude oil futures market has been spending more time below the pivot point than above since early September.

While inventories have declined and production is lower worldwide, the coronavirus continues to threaten demand for the energy commodity. Seasonality is also weighing on the price as we move towards the coldest period of the year in the northern hemisphere. Crude oil and product demand tend to decline during the winter months.

On the continuous NYMEX crude oil futures contract, technical support stands at the low from the week of September 8 at $36.13. Last week, the price traded to a low of $36.63 per barrel. Below there, the next level of support is at the mid-June low of $34.36 per barrel.

Meanwhile, the US election is now less than one month away. The contest is, among many things, a referendum on the future of US energy production. Over the past years, the US became the world’s leading producer of crude oil and natural gas. The potential for a significant shift in policy starting in 2021 could cause lots of volatility in the crude oil futures market over the coming weeks.

The ProShares Ultra Bloomberg Crude Oil (UCO) and its bearish counterpart the ProShares UltraShort Bloomberg Crude Oil ETF (SCO) are leveraged products that move higher and lower with a portfolio of NYMEX crude oil futures contracts.

The weak season could send the price for a test between $30 and $35 per barrel

The winter months can be a bearish time for the oil market. Gasoline demand tends to decline during the coldest months of the year. During challenging periods, oil tends to drop during the later months.

Source: CQG

As the chart highlights, oil continued to fall in

SINGAPORE (Reuters) – Oil prices fell on Wednesday after U.S. President Donald Trump dashed hopes for a fourth stimulus package to boost the coronavirus-hit economy and on a larger-than-expected increase in U.S. crude inventories.

U.S. West Texas Intermediate (WTI) crude

oil futures declined 42 cents, or 1%, to $40.25 a barrel by 0648 GMT while Brent crude

futures fell 30 cents, or 0.7%, to $42.35 a barrel.

“Crude prices got hammered with one-two punch after President Trump sent all risky assets into freefall after ending negotiations on fiscal stimulus and after US crude stockpiles posted their first build in four weeks,” said Edward Moya, senior market analyst at OANDA.

President Trump, still being treated for COVID-19, ended talks on Tuesday with Democrats on an economic aid package for the United States, the world’s biggest oil consumer, with the U.S. presidential election only weeks away.

“President Trump’s decision to end fiscal stimulus talks surprised markets. While many didn’t expect to see a deal reached before the election, the abrupt end sent all risky assets sharply lower,” Moya added.

Price were also pressured by data from the American Petroleum Institute showing U.S. oil stockpiles rose by 951,000 barrels last week.

“(This was) not exactly what the recovery doctor ordered as the oil market was already tanking from a two-week high after President Trump quashed hope for a pre-election stimulus deal,” said Stephen Innes, chief market strategist, at online brokerage AxiCorp.

But losses were limited by restrictions on the supply side.

Energy companies secured offshore production platforms and evacuated workers on Tuesday, some for the sixth time this year, as Hurricane Delta took aim at U.S. oil production in the Gulf of Mexico

The storm has shut 29.2% of offshore oil production in the Gulf, which accounts for 17% of total U.S. crude