Israeli Prime Minister Benjamin Netanyahu has announced that he will make a statement at 8 p.m. Tel Aviv time tonight on a “significant development” regarding the Iranian nuclear pact. (8 p.m. in Tel Aviv is 1 p.m. in New York.) Israeli news sources are saying that the government has obtained documents that government sources say prove Iran has misled the world about its nuclear program.
Oil futures in New York settled at their highest since December 2014. U.S. benchmark West Texas Intermediate climbed 0.35% to close at $68.88 a barrel. International benchmark Brent crude rose 0.88% to $74.71 a barrel. The gains were unusual in that the U.S. dollar strengthened today. But the markets had news of another missile attack on Saudi Arabia–again unsuccessful–by Houthi rebels in Yemen. The Houthis are backed by Iran and Yemen has become a proxy war for power in the Middle East between Iran and Saudi Arabia (and by extension, Russia and the United States.)
The yield on the 10-year U.S. Treasury climbed to 2.95% today, up 4 basis points on the day. That equals the high yield for 2018 set back in February. The driver this time is an increase in commodity prices that has revived fears of inflation
West Texas Intermediate climbed 3.16% today to $68.80. Futures for May delivery moved over $68 a barrel for the first time in three years. Yesterday the American Petroleum Institute reported a 1.05 million barrel draw down in U.S. inventories. Today the U.S. Energy Information Administration reported a drop in crude inventories of 1.1 million barrels. Energy analysts had projected an increase in inventories for the week ended April 13. But it’s not just near-term supply and demand figures that are pushing oil priced higher.
The financial markets decided that a global trade war wasn’t quite upon us yet this morning. That let stocks and oil bounce back a tad. But it also gave oil traders room to start worrying about oil supply again–after they spent Monday worrying that a global trade war would lead to a collapse in demand.
The U.S. Energy Information Administration reported this morning that U.S. crude oil inventories fell 2.62 million barrels for the week ended March 16. Last week inventories rose by 5 million barrels. As of 11:20 a.m. New York time U.S. benchmark West Texas Intermediate was up 2.01% to $64.82 a barrel.
Oil turned in a surprisingly positive day after the U.S. Energy Information Administration radically increased its projections for U.S. oil production in 2018 and 2019. U.S. benchmark West Texas Intermediate fell just 0.18% today to close at $62.46 a barrel. International benchmark Brent actually gained 0.12% to $65.66 a barrel.
The International Energy Agency today said that “explosive growth” in U.S. oil production from wells in shale geologies is likely to extend beyond 2018. As you might just imagine, an oil market that is struggling to believe that current levels of production cuts from OPEC are enough to balance supply and demand didn’t react well to the “explosive growth” characterization. U.S. benchmark West Texas Intermediate fell 1.58% today
U.S. crude oil inventories fell by a surprising large 4.95 million barrels last week, the U.S. Energy Information Administration said. This took international benchmark Brent crude up as high as $70 a barrel during trading on Thursday before closing at $69.20 a barrel. U.S. benchmark West Texas Intermediate closed at $63.57 a barrel. The move up to an intraday $70 a barrel raised the volume of voices calling that price unsustainable.
U.S. oil production rose to 9.782 million barrels a day last week from 9.754 million barrels per day in the prior week, according to the U.S. Energy Information Administration. Production had dropped in the prior week–the first week to week decline in two months. U.S. production has now climbed in 10 of the last 11 weeks. Better yet, rising production came along with declines in crude inventories.
As of 12 noon New York time U.S. crude benchmark West Texas Intermediate was off 0.28% but still holding above $60.25 a barrel. International benchmark Brent was off 0.72% but was still above $65 at $66.39 a barrel. Prices above $60 are a reflection of market worries that protests in Iran that started with a call for more economic growth and better jobs have expanded into an attack on the religious leaders and security forces that underpin Iran’s government.
