Oil rebounds after economic data eases fears of a recession

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Recession worries dominated the markets this week, but new data from the US helped ease fear.

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Oil rebounded early Friday, after data showed retail sales in the United States remained strong, but fears of a global slowdown were not fully appeased. "The rebound has a corrective aspect about thin volumes, rather than a bridgehead for an imminent rebound," said Jeffrey Halley, senior market analyst at OANDA, Reuters. "Overall, US data continues to be a bright spot in a dark economy."

Fears of economic recession. The reverse yield curve has raised concerns about an impending economic downturn. Crude oil was not spared from this week's massive sales. Data from China and Germany this week have raised more red flags. Consumer spending in the United States, which recovered in July, is the only positive point.

WTO slows trade. The WTO said trade volumes could contract in the third quarter.

Related: Trump, OPEC jaw oil in opposite directions

EPA puts an end to methane limits. The Trump administration hopes to end the methane emission regulations, which the industry has said it does not want. The proposal would prevent the federal government from regulating methane from oil wells and infrastructure.

Harold Hamm wants cuts in shale production. Continental Resources (NYSE: CLR) President and CEO Harold Hamm said that shale producers from OPEC + and the United States should reduce their production in order to balance the market. American shale producers "need to row their own boat," he said this week at an industry conference. "We have to make sure we do not over-supply the market."

Oil and gas bankruptcies are on the rise. Until the month of August, the number of bankruptcies in the US oil and gas industry has almost reached this year's total for 2018. The total volume of debt so far affected ($ 20 billion dollars) exceeded last year's ($ 17 billion), according to Haynes & Boone.

North Dakota oil production beats record. Oil production in North Dakota reached 1.42 Mb / d in June, a new record.

Saudis and Trump dispute oil prices. A Reuters analysis postulates that Saudi Arabia and Donald Trump tend to stretch the game of the oil market when prices move too far from their preferred range. Recently, as soon as Brent was close to $ 60 a barrel, rumors announced that Saudi Arabia was considering taking stronger action to save prices. The only rumor has raised oil prices. But in recent years, when Brent hit $ 70, Trump blasted OPEC, demanding lower prices. The result is that Brent is trapped between $ 60 and $ 75.

Saudi Arabia increases oil exports to China. Saudi oil exports to China doubled last year as sanctions imposed by the United States limited Iranian exports.

NuStar receives first shipment to Corpus Christi. NuStar Energy (NYSE: NS) received its first shipment of Permian oil for its Corpus Christi export terminal. "We continue to believe that growth in Gulf Coast crude oil exports will have the biggest impact on Permian growth in the future," Brad Barron, CEO of NuStar, said in a statement.

Ethanol prices at 5-year lows. Futures prices for ethanol for delivery in September fell to $ 1.27 a gallon, its lowest level in five years. The US EPA issued a series of waivers a week ago at 31 oil refineries, wreaking havoc on the ethanol market and blending credits. "The Trump administration has totally annihilated the margins of ethanol producers," said Charlie Sernatinger, head of grain futures at ED & F Man Capital Markets, according to the Wall Street Journal.

Rosneft goes to the euro. Rosneft asked buyers of a naphtha cargo ship to use euros the first time, according to Reuters. Related: The OPEC needs an extra boost of 1 million barrels a day to boost oil prices

Launch of two permian pipes. EPIC Midstream Holdings Inc. began Thursday to ship crude on its 400,000 bpd Permian pipeline to the Gulf Coast, helping to drive up Midland crude prices, according to Reuters. A second pipeline, the Cactus II pipeline Plains All American (NYSE: PAA), also began operations this week. This line has a capacity of 670,000 barrels per day. Midland crude trades slightly at WTI after suffering significant reductions last year due to lack of pipelines.

EQT among the world's fastest growing gas producers. From Russia Gazprom, PetroChina and based in Pittsburgh EQT (NYSE: EQT) are among the fastest growing natural gas companies in the world in the last five years, according to Rystad Energy. However, EQT has announced a sharp slowdown in its expansion plans, as its finances have proved disappointing.

Equinor produces its first oil project in the North Sea. Equinor (NYSE: EQNR) stated that it had started production at its Mariner heavy oil deposit in the British North Sea.

Exxon leases LNG tankers. ExxonMobil (NYSE: XOM) signed a two-year agreement to use Singapore's first LNG fueled bunker. Meanwhile, shipowners are increasingly reluctant to remove tankers to install scrubbers before the 2020 IMO regulations.

By Tom Kool for Oilprice.com

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