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Oil edges up after 6 days of straight losses

Published 25/04/2017, 11:26 am
© Reuters.  Oil edges up after 6 days of straight losses
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* Despite Tuesday's gains, oil markets have turned bearish

* JPMorgan (NYSE:JPM) says oil supplies need to be cut longer, deeper

* Russia says its oil output could hit 30 year highs

* Russian oil supplies: http://reut.rs/2pZzFr7

By Henning Gloystein

SINGAPORE, April 25 (Reuters) - Oil prices inched up on Monday but markets remain under pressure following six consecutive sessions of losses as traders lose confidence that pledged output cuts by major producers will rein in oversupply in a world awash with fuel.

U.S. West Texas Intermediate (WTI) crude oil futures CLc1 added 21 cents, or 0.4 percent, by 0123 GMT, but remained below the $50 mark pierced late last week, at $49.44 a barrel.

Brent crude futures LCOc1 rose 23 cents, or 0.5 percent, to $51.83 per barrel.

Traders said the slight gains were a counter-reaction to consecutive price drops in the previous six sessions.

Despite Tuesdays small price rises, overall market sentiment has turned bearish, with Brent down nearly 10 percent since the end of December despite an effort led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia to cut output by 1.8 million barrels per day (bpd) in the first half of 2017 in order to tighten the market. is evident that ... crude markets are still struggling to clear (oversupply)," U.S. bank JPMorgan said in its latest weekly oil market update to clients.

The bank said that it was closing its "August Brent long position at a loss," and that it "will review macro balances in the coming weeks before initiating further trades."

Indicating that the bank's view on markets had turned bearish, JP Morgan said that "crude markets are close to floating storage economics and (this) is a bearish sign for output price developments."

Floating storage is seen as a clear indicator of oversupplied markets. It is pursued when oil for immediate delivery is so much cheaper than that for future delivery that it becomes profitable for traders to charter tankers to store crude for sale at a later date.

"There is further short-term downside to prices," JPMorgan said, adding that in order to reduce the ongoing supply overhang, OPEC "will be forced to renew, and possibly deepen the agreement if they wish to keep prices much above $50 per barrel."

Russia said on Monday that its oil output could climb to the highest rate in 30 years if OPEC and non-OPEC producers do not extend a supply reduction deal beyond June 30. Reuters Eikon data shows that Russian oil shipments, which exclude its pipeline exports, have already reached record highs of 5 million bpd in April, up 17 percent since December, before the cuts were officially implemented.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Murky oil inventory picture leaves market grappling for clarity

CHART-Record oil shipments

http://reut.rs/2pV0qww CHART-Russian oil supplies

http://reut.rs/2pZzFr7

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