US STOCKS-Futures flat as oil prices offset boost from industrials - Reuters News
20-Apr-2018 09:11:42 PM
- GE gains in 'relief rally' after results top estimates
- Oil prices turn negative after Trump criticizes OPEC
- Skechers USA sinks 24 pct after profit forecast miss
- Futures: Dow off 12 pts, S&P up 1.75 pts, Nasdaq down 14 pts
Adds comments, details, updates prices
By Sruthi Shankar
April 20 (Reuters) - U.S. stock futures were little changed on Friday as strong earnings from industrials General Electric and Honeywell were offset by a dip in oil prices after President Donald Trump criticized OPEC for artificially high prices.
GE posted quarterly results that topped estimates and affirmed its 2018 forecasts sending its shares up 6.7 percent in premarket trading in what one analyst called a relief rally.
Honeywell rose 2.4 percent after reporting higher-than-expected quarterly profit and lifting its full-year earnings forecast.
Oil prices reversed course to drop more than 0.5 percent after Trump criticized OPEC for output reductions that have helped raise oil prices and said the action would not be tolerated.
That weighed on Schlumberger, whose stock dropped 1.3 percent after the oilfield services provider's profit just scraped past estimates.
Rival Halliburton also fell 1.3 percent, while oil majors Exxon and Chevron were off about half a percent.
First-quarter profit at S&P 500 companies are expected to have recorded their strongest gain in seven years. Of the 73 components that have reported through Thursday, 76.7 percent have topped profit expectations, according to Thomson Reuters I/B/E/S.
But, investors are questioning if the tax cuts are going to be as beneficial as expected and are worried rising interest rates would hit borrowing costs, said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.
"There are some lingering concerns around interest rates, and earnings, although so far are very robust, and the forward-looking statements aren't as exciting," Bakhos said.
At 8:47 a.m. ET, Dow e-minis were down 12 points, or 0.05 percent, S&P 500 e-minis rose 1.75 points, or 0.06 percent and Nasdaq 100 e-minis were down 14 points, or 0.21 percent.
The indexes are on track for their second week of gains in a row as earnings reports so far have been largely upbeat and concerns around Syria and trade tensions with China eased.
The benchmark S&P 500 is up 1.38 percent so far in the week.
Apple was down 0.5 percent and a host of chipmakers were also lower, following the lingering effects of Taiwan Semiconductor's warning on Thursday of softer demand for smartphones.
Skechers USA shares tumbled 24.3 percent after the footwear maker's quarterly profit forecast missed analysts' estimates.
Twitter shares rose 3.3 percent after bullish brokerage actions, including MKM Partners' upgrade to "buy".
(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)
Russia says oil may hit $80 in April but price not justified - RIA - Reuters
20-Apr-2018 08:57:59 PM
MOSCOW, April 20 (Reuters) - Russian Energy Minister Alexander Novak said on Friday oil prices could reach $80 per barrel in April but said it would not be justified by underlying fundamentals, the RIA news agency reported.
(Reporting by Maria Tsvetkova
Editing by Edmund Blair)
OPEC's Barkindo says OPEC, non-OPEC agreement rescued oil industry - Reuters
20-Apr-2018 08:38:02 PM
JEDDAH, Saudi Arabia, April 20 (Reuters) - OPEC Secretary-General Mohammad Barkindo said on Friday members of the oil producers group were friends of the United States and have a vested interest in its growth and prosperity.
Barkindo made his remarks after U.S. President Donald Trump earlier sent a tweet criticising OPEC over high oil prices.
"The Declaration of Cooperation entered into by 24 producing countries in Dec. 2016 and implemented faithfully since 2017 has not only arrested the decline but rescued the oil industry from imminent collapse," Barkindo said.
(Reporting by Rania El Gamal; writing by Maha El Dahan; editing by Jason Neely)
UPDATE 1-Trump says will not accept high oil prices, crude dips - Reuters News
20-Apr-2018 07:44:52 PM
Adds oil prices, no White House comment
WASHINGTON, April 20 (Reuters) - U.S. President Donald Trump on Friday criticized OPEC for output reductions that have helped raise oil prices and said the action would not be tolerated, as oil prices appeared set for a second consecutive week of gains.
"Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea. Oil prices are artificially Very High! No good and will not be accepted!" Trump said on Twitter.
White House officials could not be immediately reached to comment on any action the Trump administration planned to take regarding oil or OPEC, the Organization of the Petroleum Exporting Countries.
After the president's tweet, Brent and WTI crude prices turned negative.
OPEC member countries are slated to meet in June in Vienna to decide their next steps after reducing output since January 2017 in a move aimed at supporting prices.
Top oil exporter Saudi Arabia would be happy to see crude rise to $80 or even $100 a barrel, three industry sources have told Reuters, a sign Riyadh will seek no changes to an OPEC supply-cutting deal even though the agreement's original target is within sight.
(Reporting by Susan Heavey and David Alexander
Editing by Chizu Nomiyama andJeffrey Benkoe)
ANALYSIS-Asian oil demand to hit record, but industry can't take eyes off Middle East - Reuters News
20-Apr-2018 05:15:15 PM
- Asian demand to lift avg oil price to $80/bbl in 2018 -Goldman
- China on track to import more than 9 mln bpd in April
- Woodmac says China oil demand to near 13 mln bpd this year
- Global oil demand growth in Q1 strongest since Q4 2010 -Goldman
By Henning Gloystein
SINGAPORE, April 20 (Reuters) - Asian oil demand will hit a record in April just as global crude values are lifted to levels not seen in three years by Middle East supply risks and top exporter Saudi Arabia withholding output and noisily pushing for prices at $80 to $100 per barrel.
Most analysts have pointed to escalating Middle East conflicts, a crisis in Venezuela, and the supply cuts of Saudi Arabia and other producers as the main drivers taking global benchmark Brent and U.S. West Texas Intermediate crude futures this week to their highest since late 2014 at almost $75 and $70 a barrel, respectively.
Yet a much more fundamental reason has also sparked oil's bull run: Asian demand, which Goldman Sachs said this week points to an average price of $80 a barrel in 2018.
"Rising tensions in the Middle East have likely played a role in oil price strength, but we believe a tight physical market is the key driver," U.S. investment bank Jefferies said on Friday in a note to clients.
Trade data in Thomson Reuters Eikon shows seaborne imports of crude oil by Asia's main buyers will hit a record this month, a big portion going to slake China's voracious thirst.
By end-April, China will likely have taken in more than 9 million barrels per day (bpd) of crude, its most ever. That's nearly 10 percent of global consumption and more than a third of Asia's overall demand. At $75 a barrel, it implies monthly import costs for China of more than $20 billion.
The record comes despite maintenance season, which usually dents imports at this time of year, and indicates that China's oil requirement is bigger than expected.
"Chinese demand points to strong growth," said U.S. bank Goldman Sachs in a note to clients, adding that it may be "higher than currently estimated".
RE-STOCKING, TEAPOTS, RESERVES
Michal Meidan of consultancy Energy Aspects said Chinese buyers were re-stocking after running down inventories late last year.
Much of China's new demand also comes from the advent of non-state refiners - often called teapots - as crude importers, resulting in record refining throughput.
"A number of teapots are starting new Crude Distillation Unites (CDUs) and secondary units, pulling in more crude," Meidan said, adding that there may also be some purchases of Strategic Petroleum Reserves (SPRs).
Beyond re-stocking and teapots, analysts said China's economic performance has also been stronger than expected.
"Chinese growth of 6.8 percent in Q1 is higher than its target of 6.5 percent for the year. The supportive growth environment in China is one key reason for a supported oil demand story in general," said Barnabas Gan, analyst at Singapore's OCBC Bank.
Suresh Sivanandam of energy consultancy Wood Mackenzie said he expected China's overall oil demand to grow by 370,000 bpd this year to 12.78 million bpd.
Adding in other regions, Goldman said global oil demand in the first quarter of 2018 is likely to post the strongest year-on-year growth since the last quarter of 2010.
A tighter market is also showing up in rising costs for crude deliveries to Asia as Middle East producers raise their official selling prices (OSPs).
The OSPs for Abu Dhabi's Murban and Saudi Arabia's Light crudes are currently showing their highest premiums to Dubai since 2014.
DARK CLOUDS?
With demand growing all around, some analysts say there is little reason to expect anything but further price increases.
Standard Chartered Bank said this week there were "no bears left in this oil town".
So far, refineries in Asia are still operating at high levels to meet strong demand, despite rising crude feedstock prices eating into profit margins.
"Refiners are not likely to reduce imports or trim down run rates despite the price increase," said Lee Dal-seok, senior research fellow at state-run think tank Korea Energy Economics Institute.
Still, some dark clouds loom.
China's Sinopec, Asia's largest refiner, plans deep cuts to its May crude imports as its biggest refinery - the 460,000 bpd Zhenhai Refining and Chemical Company - goes into major overhaul.
Several traders said more such outages are due in May and June, likely reducing China's crude imports in coming months.
The International Monetary Fund (IMF) this week also released its World Economic Outlook in which it warned that rising U.S.-China trade restrictions threatened global growth.
"The prospect of trade restrictions and counter-restrictions threatens to ... derail growth prematurely," said IMF Chief Economist Maurice Obstfeld.
Goldman Sachs does not share the IMF's concerns.
Worries about "trade wars and fears that higher oil prices will start to weigh on demand growth ... are overdone," it said.
(Reporting by Henning Gloystein, Florence Tan and Koustav Samanta in SINGAPORE, Aizhu Chen in BEIJING, and Jane Chung in SEOUL; Editing by Tom Hogue)
UPDATE 6-Oil falls after Trump criticises OPEC for artificially high prices - Reuters News
20-Apr-2018 07:49:45 PM
- Russia committed to cuts until end of year - sources
- Brent, WTI this week hit highest levels since November, 2014
- 2018 demand looks strong -Goldman Sachs
Adds Trump quotes, updates prices
By Ahmad Ghaddar
LONDON, April 20 (Reuters) - Oil prices fell on Friday after U.S. President Donald Trump criticised OPEC and said oil prices were artificially high, but they were still set for a weekly gain.
Brent crude oil futures were at $73.26 per barrel at 1139 GMT, down 52 cents from their last close.
U.S. West Texas Intermediate (WTI) crude futures were down 48 cents at $67.81 a barrel.
"Looks like OPEC is at it again," Trump wrote in a post on Twitter.
"With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!"
The United States cannot legally influence oil other than through releasing oil from its strategic reserves which it has done occasionally, most recently last year in the wake of Tropical Storm Harvey.
Both contracts had been trading in positive territory before Trump's tweet.
Brent and WTI hit their highest levels since November 2014 on Thursday earlier this week, at $74.75 and $69.56 per barrel respectively, buoyed by a tightening market and higher demand.
Saudi oil minister Khalid al-Falih said OPEC and its allies were still far away from reaching their target and that a drawdown in oil inventories needed to continue.
OPEC and its allies have been curbing production since 2017, helping push up prices. The deal to cut is currently scheduled to expire at the end of 2018.
A technical OPEC and non-OPEC committee meeting in Jeddah on Thursday, ahead of Friday's ministerial meeting, found that a global overhang in oil inventories, which the deal has targeted for eliminating, has virtually disappeared.
"Even if OPEC were to reach its target of reducing oil inventories to their recent five-year average by the next official June meeting, Saudi Arabia is driving a strong agenda to maintain cuts for the balance of 2018," BNP Paribas global head of commodity market strategy Harry Tchilinguirian told the Reuters Global Oil Forum.
Firm demand was also giving prices a floor.
"Global oil demand data so far in 2018 has come in line with our optimistic expectations, with Q1 2018 likely to post the strongest year-on-year growth since Q4 2010 at 2.55 million barrels per day," U.S. bank Goldman Sachs said in a note published late on Thursday.
Beyond OPEC's supply management, crude prices have also been supported by an expectation that the United States will re-introduce sanctions on OPEC-member Iran.
"The first key geopolitical issue is the expiration of the current U.S. waiver of key sanctions against Iran," said Standard Chartered Bank in a note this week.
(Additional reporting by Henning Gloystein in Singapore
Editing by Susan Fenton)
Goldman sees strong oil demand through 2018 - Reuters News
20-Apr-2018 12:53:15 PM
April 20 (Reuters) - Goldman Sachs said it expects global oil demand growth to remain strong this year and contribute to further declines in oil inventories.
"We believe that the combination of strong developed markets momentum and accelerating emerging markets growth will combine to keep oil demand growth above consensus expectations, with our 2018 year on year forecast at 1.85 million barrels per day (mb/d)," Goldman said in a note dated Thursday.
Global oil demand in 2018 has come in line with its optimistic expectations, with the first quarter likely to post the strongest year on year growth since fourth quarter 2010 at 2.55 mb/d, the bank said.
"While global oil data for Jan/Feb supports our constructive demand outlook for the year, we expect March data will show weaker demand growth given transient headwinds."
Seasonal distortions and unusually cold temperatures could have resulted in softer March data, the bank said, adding that was likely just a transient weakness as strong refinery margins supported its view of robust demand in April.
Goldman, however, said volatile Chinese data, slowdown in global demand growth in March, ongoing trade tensions and fears that higher oil prices will start to weigh on demand growth have led to increased concern about the sustainability of demand strength.
(Reporting by Apeksha Nair in Bengaluru
Editing by Robert Birsel)
PRECIOUS-Gold slips on U.S. rate rise view, easing global tensions - Reuters News
20-Apr-2018 08:01:04 PM
- Gold long positions being closed - analyst
- Silver off 2-1/2-month highs hit in previous session
- Platinum down from Thursday's three-week highs
(Updates throughout, changes dateline from BENGALURU)
By Zandi Shabalala
LONDON, April 20 (Reuters) - Gold prices eased on Friday and were on track to end the week lower as the dollar advanced on expectations of higher interest rates and the view that global political and security risks were easing.
Spot gold was down 0.3 percent at $1,340.66 an ounce by 1157 GMT, while U.S. gold futures fell 0.5 percent to $1,342.30 per ounce. Spot gold is heading for its first weekly decline this month.
Market jitters over Western missile strikes in Syria that provided some support to gold this week eased, while the geopolitical outlook on the Korean Peninsula brightened as U.S. President Donald Trump said on Wednesday he hoped a summit with North Korean leader Kim Jong Un would be successful.
"Of course, the geopolitical risks are still high compared to the beginning of the year but it seems like they are slightly lower than a few days ago so prices have come off the boiler a bit," Capital Economics commodities economist Simona Gambarini said.
Gold is often used as safe haven in times of uncertainty.
Adding further pressure on bullion, a U.S. central banker said the Federal Reserve should keep raising interest rates this year and next to keep the economy from overheating and financial stability risks from rising.
Higher rates dent the appeal of non-interest yielding bullion while lifting the dollar, in which it is priced.
The dollar index gained 0.2 percent against a basket of major currencies.
Investors were also relieved that no new U.S. demands on trade came out of a summit between Japanese Prime Minister Shinzo Abe and Trump.
"The uncertainty over geopolitical risk and trade war tension has moved to the back burner this week and has made for a less compelling argument in the gold market," APAC trading head at OANDA Stephen Innes said.
"Traders are rehashing old topics amidst reasons to stay long into the weekend, but drawing few if any conclusions."
Also, the relatively optimistic backdrop in the United States should support the Fed in raising interest rates at least twice more this year, traders and analysts have said.
Meanwhile, Bank of England Governor Mark Carney on Thursday acknowledged the recent mixed domestic economic readings, which reinforced the view the BoE would raise rates gradually over the next few years.
Among other precious metals, spot silver was down 0.6 percent at $17.10, after hitting a more-than 2-1/2-month high at $17.35 in the previous session.
Platinum fell 0.2 percent to $931. It touched a more-than three-week high at $953.50 in the previous session.
Palladium slipped 0.5 percent to $1,020.10. It hit 1-1/2-month high of $1,057.20 on Thursday.
(Additional reporting by Nallur Sethuraman in Bengaluru; Editing by Louise Ireland)
CBOT Trends-Wheat down 6-9 cents, soy down 5-7 cents, corn steady-down 2 cents - Reuters News
20-Apr-2018 09:07:21 PM
CHICAGO, April 20 (Reuters) - Following are U.S. trade expectations for the resumption of grain and soy complex trading at the Chicago Board of Trade at 8:30 a.m. CDT (1330 GMT) on Friday.
NOTE: Friday is the last trading day for CBOT May options.
WHEAT - Down 6 to 9 cents per bushel
- Falling on outlooks for rain during the weekend that will provide relief to drought-stressed crops in Kansas. Wetter May forecast for southern Plains also adds pressure. Support for CBOT May soft red winter wheat contract noted at 30-day moving average during overnight trading.
- CBOT May soft red winter wheat last traded 6-1/4 cents lower at $4.70-1/2 per bushel. K.C. May hard red winter wheat was last down 8 cents at $4.87-1/4 and MGEX May spring wheat was last off 7-1/4 cents at $6.06.
CORN - Steady to down 2 cents per bushel
- Drop in wheat, soybeans weigh on corn as well as expectations for warmer weather in Midwest that should allow farmers to pick up pace of planting in coming weeks. Prices firmed briefly overnight but turned lower after CBOT May corn contract hit resistance at 50-day moving average.
- CBOT May corn last traded down 1-3/4 cents at $3.80-1/4 a bushel.
SOYBEANS - Down 5 to 7 cents per bushel
- Weakening on concerns about trade war with China cutting exports to top overseas soybean buyer. Expectations that farmers may boost soybean acreage due to cold spring in U.S. Midwest adding pressure. CBOT May soybeans hit two-week low overnight.
- CBOT May soybeans last traded down 5-3/4 cents at $10.31-1/2 per bushel.
(Reporting by Mark Weinraub
Editing by Phil Berlowitz)
VEGOILS-Palm edges up on stronger crude oil, profit taking - Reuters News
20-Apr-2018 08:39:04 PM
- Palm up 0.6 percent on-week
- Market seen falling in longer term - trader
Updates with closing prices, quotes
By Emily Chow
KUALA LUMPUR, April 20 (Reuters) - Malaysian palm oil futures made gains on Friday evening, their first in three sessions, tracking strength in crude oil prices and as the market saw profit taking in evening trade.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange rose 0.5 percent to 2,414 ringgit ($619.77) a tonne at the close of trade.
The market is also up 0.6 percent for the week, charting a second week of gains in three.
Trading volumes stood at 41,199 lots of 25 tonnes each at on Friday evening.
"The market is seeing some profit taking," said a Kuala Lumpur-based trader, adding that gains in crude oil prices also lent support to palm's prices. "Whenever crude reaches $70, it will be supportive to palm."
Oil prices were set for a second consecutive week of gains on Friday, buoyed by tightening supplies and continued support from OPEC and its allies on supply cuts.
Palm oil's gains were weaker earlier in the day, but edged up on the back of shipment data. Malaysia's palm oil exports rose 2 percent between April 1-20 versus the corresponding period last month, inspection company AmSpec Agri Malaysia on Friday.
Cargo surveyor Societe Generale de Surveillance however reported a 1.8 percent decline for the same period.
On a longer term outlook, palm oil prices are expected to decline, said a futures trader earlier in the day.
"Moving forward, the market should be going down as production picks up on seasonal pattern, and on a softening of exports due to the reintroduction of export duties," he said.
Malaysia extended a duty suspension implemented at the start of 2018 until end-April in a move to encourage demand to reduce inventory levels and support prices.
The duties will resume in May at a 5 percent export tax rate.
Palm oil production in top growers Indonesia and Malaysia in April is forecast to rise on-month in line with seasonal trend. Malaysian March output had rose 17.2 percent month-on-month to 1.57 million tonnes, its highest March production since 2000, according to data from the Malaysian Palm Oil Board.
In other related oils, the Chicago Board of Trade's July soybean oil contract slightly rose 0.03 percent, while September soybean oil on China's Dalian Commodity Exchange was also up 0.03 percent.
The Dalian September palm oil contract edged down 0.04 percent.
Palm oil prices are affected by movements in rival edible oils, as they compete for a share in the global vegetable oils market.
Palm, soy and crude oil prices as of 1120 GMT
| Contract | Month | Last | Change | Low | High | Volume |
| MY PALM OIL | MAY8 | 2410 | +22.00 | 2385 | 2420 | 1771 |
| MY PALM OIL | JUN8 | 2416 | +13.00 | 2394 | 2421 | 5325 |
| MY PALM OIL | JUL8 | 2416 | +11.00 | 2393 | 2422 | 16810 |
| CHINA PALM OLEIN | SEP8 | 5010 | -2.00 | 4996 | 5040 | 277682 |
| CHINA SOYOIL | SEP8 | 5810 | +2.00 | 5800 | 5846 | 382256 |
| CBOT SOY OIL | JUL8 | 31.69 | +0.00 | 31.57 | 31.74 | 5656 |
| INDIA PALM OIL | APR8 | 645.00 | +1.90 | 643.00 | 646.8 | 415 |
| INDIA SOYOIL | APR8 | 765.3 | +0.55 | 764.2 | 766 | 1900 |
| NYMEX CRUDE | MAY8 | 68.12 | -0.17 | 67.97 | 68.62 | 2174 |
| Palm oil prices in Malaysian ringgit per tonne |
| CBOT soy oil in U.S. cents per pound |
| Dalian soy oil and RBD palm olein in Chinese yuan per tonne |
| India soy oil in Indian rupee per 10 kg |
| Crude in U.S. dollars per barrel |
($1 = 3.8950 ringgit)
($1 = 66.0200 Indian rupees)
($1 = 6.2915 Chinese yuan)
(Reporting by Emily Chow; Editing by Sunil Nair)
