Futures Movers: Oil prices on track for 4% weekly rise

Oil futures edged higher Friday, on track to cap a positive week with a gain a day after the U.S. Energy Department reportedly said it had no plans to tap the Strategic Petroleum Reserve or ban crude exports. West Texas Intermediate crude for November delivery CL00, +1.12% CLX21, +1.12% rose 59 cents, or 0.8%, to $78.89 a barrel on the New York Mercantile Exchange, putting the U.S. benchmark on track for a 4% weekly gain and leaving it not far off the nearly seven-year high scored earlier this week. December Brent crude BRN00, +0.96% BRNZ21, +0.96%, the global benchmark, rose 62 cents, or 0.8%, to $82.57 a barrel on ICE Futures Europe, up 4.2% for the week. November natural gas NGX21, +0.58% rose 0.5%, leaving it on track for a 4.3% rise for the week after a bout of volatility. Natgas finished at its highest since 2008 earlier this week, subsequently pulling back after Russian President Vladimir Putin said the country would meet its export commitments to Europe. Crude prices pulled back from record levels at midweek after the Financial Times reported that U.S. Energy Secretary Jennifer Granholm hinted at a possible tapping of the Strategic Petroleum Reserve and said she hadn’t ruled out a ban on crude exports. Oil reversed back to the upside on Thursday after a news report that the Energy Department had said it had no plans “at this time” to tap the SPR. “All the same, the idea of releasing strategic oil reserves will probably not be off the table entirely if oil prices continue to rise,” said Carsten Fritsch, commodity analyst at Commerzbank, in a note. “In view of the current robust demand, which is likely to be additionally boosted by the switch from gas to oil, plus the restrictive OPEC+ production policy, the oil market will remain tight until year’s end,” he said. Soaring natural-gas prices are seen adding to demand for crude, as gas-fired power plants, particularly in Asia, and other gas users switch to oil. Meanwhile, OPEC+ earlier this week stuck to its plans to increase crude production in monthly increments of 400,000 barrels a day, defying pressure to relax existing output curbs more quickly. As a result, Commerzbank raised its forecast for Brent crude prices in the current quarter to $85 a barrel from its previous forecast of $75, and lifted its first-quarter 2022 estimate to $75 a barrel from $70, Fritsch said. Oil market bulls argued the price action remains tilted to the upside. “For oil, the rally is susceptible to near-term profit-taking pullbacks due to bearish headlines, but the trend is decidedly higher here, underscored by the latest run to multiyear highs,” said Tom Essaye, founder of Sevens Report Research, in a note. “And, any pullbacks should be viewed as opportunities to add to long exposure whether it is though energy equities, ETFs, or futures contracts.”

Futures Movers: Oil prices on track for 4% weekly rise

Oil futures edged higher Friday, on track to cap a positive week with a gain a day after the U.S. Energy Department reportedly said it had no plans to tap the Strategic Petroleum Reserve or ban crude exports.

West Texas Intermediate crude for November delivery CL00, +1.12% CLX21, +1.12% rose 59 cents, or 0.8%, to $78.89 a barrel on the New York Mercantile Exchange, putting the U.S. benchmark on track for a 4% weekly gain and leaving it not far off the nearly seven-year high scored earlier this week.

December Brent crude BRN00, +0.96% BRNZ21, +0.96%, the global benchmark, rose 62 cents, or 0.8%, to $82.57 a barrel on ICE Futures Europe, up 4.2% for the week.

November natural gas NGX21, +0.58% rose 0.5%, leaving it on track for a 4.3% rise for the week after a bout of volatility. Natgas finished at its highest since 2008 earlier this week, subsequently pulling back after Russian President Vladimir Putin said the country would meet its export commitments to Europe.

Crude prices pulled back from record levels at midweek after the Financial Times reported that U.S. Energy Secretary Jennifer Granholm hinted at a possible tapping of the Strategic Petroleum Reserve and said she hadn’t ruled out a ban on crude exports. Oil reversed back to the upside on Thursday after a news report that the Energy Department had said it had no plans “at this time” to tap the SPR.

“All the same, the idea of releasing strategic oil reserves will probably not be off the table entirely if oil prices continue to rise,” said Carsten Fritsch, commodity analyst at Commerzbank, in a note.

“In view of the current robust demand, which is likely to be additionally boosted by the switch from gas to oil, plus the restrictive OPEC+ production policy, the oil market will remain tight until year’s end,” he said.

Soaring natural-gas prices are seen adding to demand for crude, as gas-fired power plants, particularly in Asia, and other gas users switch to oil. Meanwhile, OPEC+ earlier this week stuck to its plans to increase crude production in monthly increments of 400,000 barrels a day, defying pressure to relax existing output curbs more quickly.

As a result, Commerzbank raised its forecast for Brent crude prices in the current quarter to $85 a barrel from its previous forecast of $75, and lifted its first-quarter 2022 estimate to $75 a barrel from $70, Fritsch said.

Oil market bulls argued the price action remains tilted to the upside.

“For oil, the rally is susceptible to near-term profit-taking pullbacks due to bearish headlines, but the trend is decidedly higher here, underscored by the latest run to multiyear highs,” said Tom Essaye, founder of Sevens Report Research, in a note. “And, any pullbacks should be viewed as opportunities to add to long exposure whether it is though energy equities, ETFs, or futures contracts.”