The main headlines of Fox Business Flash are here. Check out what is clicking on FoxBusiness.com.
Oil prices fell by up to 2% in Friday morning trading, increasing falls overnight, due to fears that refineries will take time to resume operations after the major freeze in the southern US, creating a demand gap, while OPEC + supplies are expected to rise.
“The market was ripe for a correction and signs of power and the overall energy situation starting to normalize in Texas provided the necessary trigger,” said Vandana Hari, energy analyst at Vanda Insights.
DISCOVER FOX BUSINESS ON THE MOVE BY CLICKING HERE
US West Texas Intermediate (WTI) crude oil futures fell $ 1.14, or 1.9%, to $ 59.38 a barrel at 0421 GMT, after falling 1% on Thursday.
Brent crude futures fell $ 1.03, or 1.6%, to $ 62.90 a barrel, after falling 0.6% on Thursday.
Both benchmark contracts reached 13-month highs on Thursday, driven by the historic freeze in southern US states. While analysts estimate that the extreme cold affected up to a third of US oil production, attention has now turned to the impact on refineries.
The lack of demand from Texan refiners is likely to lead to an increase in oil stocks in the coming weeks, although about 3.5 million barrels per day (bpd) of U.S. oil production have been closed, ANZ Research said in a note .
TEXAS BLACKOUTS WAKE UP CALL FOR AMERICA’S ENERGY CAPITAL
Citi analysts said in a note that some American refineries could anticipate some 500,000 bpd of maintenance work normally scheduled for spring next month, before the summer season.
The previous month’s WTI price curve fell into a shallow contiguous minus 4 cents on Friday, a market structure in which barrels next to the month are cheaper than those of subsequent months, implying an excess of current supply .
“The small contango … probably signals market expectations for U.S. oil production and supply (including imports) to recover faster than the refining capacity closed in Texas by the deep freeze,” said Hari.
US oil inventories fell more than expected in the week until February 12, before the freeze, with inventories dropping 7.3 million barrels to 461.8 million barrels, the lowest since March, Information Management reported. on Thursday.
CAROLINES COULD SEE 1M OF ENERGY
Attention is also focused on an imminent increase in the supply of crude oil from the Organization of Petroleum Exporting Countries and allies, known as OPEC +.
OPEC + sources told Reuters the group’s producers are expected to reduce supply after April due to price recovery.
The United States said on Thursday it was ready to talk to Iran about the return of both nations to a 2015 agreement that aims to prevent Tehran from acquiring nuclear weapons.
While the melting of relations could increase the prospect of reversing the sanctions imposed by Trump, analysts do not expect Iranian oil sanctions to be lifted anytime soon.
CLICK HERE TO READ MORE ABOUT FOX BUSINESS
“It will be a long way,” said Hari referring to the US-Iran negotiations.
(Reporting by Roslan Khasawneh in Singapore and Sonali Paul in Melbourne; Editing by Tom Hogue and Simon Cameron-Moore)