Latest news with #GeorginaMcCartney
Yahoo
02-07-2025
- Business
- Yahoo
Oil futures, options trade at record levels in Q2 as investors navigate volatility
By Georgina McCartney HOUSTON (Reuters) -Total oil futures and options lots traded on the Intercontinental Exchange (ICE) hit record highs in the second quarter, as U.S. President Donald Trump waged a trade war and geopolitical conflicts in the Middle East escalated. WHY IT'S IMPORTANT Significant volatility in the second quarter had global benchmark Brent crude futures dropping to a four-year low of $60.23 a barrel on May 5 and then surging to $78.85 on June 19, the highest since January, according to data from LSEG. CONTEXT On April 2, Trump unveiled sweeping import tariffs. Retaliatory measures by China stoked recession worries and sparked a sell-off on April 4. In May, producer group OPEC+ expedited output hikes, boosting global supply and driving Brent prices down by May 5 to their lowest since February 2021. Then, the war between Israel and Iran kept investors on edge and pushed Brent to a six-month high on June 19. BY THE NUMBERS Investors traded a total of 219,323,730 of oil futures and options to June from April, up from the previous record of 181,520,640 lots in the first quarter 2025. The new record included 99,541,065 lots of Brent futures and 20,333,728 lots of Brent options. Traders also moved 30,056,174 lots of West Texas Intermediate (Cushing) futures and options, and 3,211,194 lots of Midland WTI (HOU) Futures. KEY QUOTE "I think hedging activity played a role, when prices dropped to $60 a barrel in Brent, oil consumers such as airlines started to hedge, and when prices spiked in mid-June, oil producing companies decided to hedge," said Giovanni Staunovo, analyst at UBS. "At the same time, investors looked to either hold growth concerns positions in oil (short) or inflation concerns positions in oil (long) due to the tariffs," Staunovo added.
Yahoo
25-06-2025
- Business
- Yahoo
US crude and fuel inventories fall on higher demand, EIA says
By Liz Hampton and Georgina McCartney DENVER (Reuters) -U.S. crude oil and fuel inventories fell last week as refining activity and demand rose, the Energy Information Administration (EIA) said on Wednesday. Crude inventories fell by 5.8 million barrels to 415.1 million barrels in the week ending June 20, the EIA said, exceeding analysts' expectations in a Reuters poll for a 797,000-barrel draw. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 464,000 barrels in the week, the EIA said. "This week the report is about supply and demand. Gasoline demand was up, and a substantial drawdown in stocks is going to give the market chance to stabilize after all the geopolitical reports," said Phil Flynn, a senior analyst with Price Futures Group. Oil prices rose following the larger-than-expected decline in stockpiles. Global benchmark Brent crude futures were trading at $67.97 a barrel, up 83 cents, by 10:55 a.m. EDT (1455 GMT), while U.S. West Texas Intermediate crude (WTI) rose 90 cents to $65.27 a barrel. Refinery crude runs increased by 125,000 barrels per day, the EIA said, while utilization rates rose by 1.5 percentage points to 94.7% of total capacity, its highest level since July 2024. Gasoline stocks fell by 2.1 million barrels to 227.9 million barrels, also more than analysts' expectations for a 381,000-barrel build. Gasoline supplied, a proxy for demand, rose 389,000 bpd last week to 9.7 million bpd, its highest since December 2021. Distillate stockpiles, which include diesel and heating oil, fell by 4.1 million barrels to 105.3 million barrels, versus forecasts for a 410,000-barrel rise, the data showed. Net U.S. crude imports rose last week by 531,000 bpd, the EIA said.
Yahoo
20-06-2025
- Business
- Yahoo
Oil hedging volumes hit new records as US producers rush to lock in soaring prices
By Georgina McCartney HOUSTON (Reuters) -Israel's surprise attack on Iran last week had oil prices spiking which sent U.S. producers scrambling to lock in the price gain, driving record hedging volumes that will help shield them from future price swings. West Texas Intermediate crude futures rose further this week, closing on Friday at around $75 a barrel. This prompted U.S. producers to secure additional price gains through 2026, having already driven hedging activity on the Aegis Hedging platform to a record high last Friday. Aegis Hedging, which handles hedging for roughly 25-30% of U.S. output, according to internal estimates, saw a record volume and greatest number of trades done on its trading platform on June 13. The U.S. produces some 13.56 million barrels per day of oil, according to the latest government figures. U.S. crude futures jumped 7% on June 13 to around $73 a barrel, after Israel struck Iran, the largest single day rise since July 2022. Prices had been hovering under where many producers would opt to hedge, hitting a four-year low of $57 a barrel in May as OPEC+ started hiking output while U.S. President Donald Trump waged a trade war. The jump on June 13 gave traders an opportunity to lock in prices for their barrels not seen in several weeks. When prices react to risk-related events - such as Israel's attack on Iran - as opposed to supply-and-demand fundamentals, the front of the oil futures curve rises more than later contracts, influencing whether producers opt for short- or long-term hedging strategies, according to Aegis Hedging. "In this case it was probably a six-month effect," said Matt Marshall, president of Aegis Hedging. Oil producers need a price of $65 a barrel on average to profitably drill, according to the first quarter 2025 Dallas Federal Reserve Survey. U.S. crude futures closed below $65 every day from April 4 to June 9, according to LSEG. "We stay disciplined and pay close attention to market volatility. We watch for accretive pricing to our existing hedges and layer in hedges to reduce risk to our asset revenue as well as meet our reserve-based lending covenants," said Rhett Bennett, chief executive at Black Mountain Energy, a producer with operations in the Permian Basin. A reserve-based lending covenant refers to a type of loan producers can obtain, based on the value of the company's oil and gas reserves. "Producers recognized that this could be a fleeting issue and so they saw a price that was above their budget for the first time in a few months, and instead of doing a structure that would give them a floor which is below market, they opted to be aggressive and lock in," said Aegis' Marshall. Aegis' customers often have hedging policies in which a certain amount of production must be hedged by a certain time in the year. "Producers had two months of hedges that they needed to catch up on," Aegis' Marshall said. Traders on June 13 exchanged the most $80 West Texas Intermediate crude oil call options since January on the Chicago Mercantile Exchange, expecting more upside to prices. A total of 33,411 contracts of August-2025 $80 call options for WTI crude oil were traded that day on a total trading volume of 681,000 contracts, marking the highest volume for these options this year, according to CME Group data. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
06-06-2025
- Business
- Yahoo
US ethane vessels stall amid curbs on exports to China
By Arathy Somasekhar, Georgina McCartney and Trixie Yap HOUSTON/SINGAPORE (Reuters) -Over half a dozen U.S.-loaded ethane vessels, originally bound for China, have stalled around the U.S. Gulf Coast after Washington requested U.S. exporters seek licenses to ship the shale gas to the top buyer, according to trade sources and ship tracking data on Friday. Around half of all U.S. ethane exports head to China, and the halt in flows has pushed ethane prices lower on worries of domestic oversupply and is likely to cut into profits of top ethane producers. Energy Transfer and Enterprise Products Partners, two of the largest ethane producers and exporters, have warned the disruptions could impact their exports. The U.S. Commerce Department has also denied some vessels emergency authorization requests to export to China. Liberia-flagged STL Qianjiang, which loaded at Energy Transfer's Nederland terminal for China's Satellite Chemical, was anchored off the coast on Friday in the Gulf, according to LSEG and Kpler ship tracking data. Energy Transfer, which produces ethane by extracting it from natural gas and then exports it from terminals along the Gulf Coast, said it received a letter from the U.S. Commerce Department on June 3 requiring the company to apply for a license to ship ethane to China. The company and Satellite Chemical did not reply to requests for comments on the vessel. Three other vessels, which were set to load in early June, were anchored in the U.S. Gulf near Houston and Port Arthur, Texas, while three others hovered further south in the water after having slowed down. Meanwhile, Liberia-flagged very large ethane carrier (VLEC) Pacific Ineos Grenadier, which loaded at Enterprise Products Partners' terminal in Morgan's Point, Texas, and had been originally destined for China, was anchored at an Enterprise dock along the Houston Ship Channel on Friday after heading away from the Gulf Coast on Thursday. The ship had not discharged on Friday afternoon and it was not immediately clear if it would. Enterprise has natural gas liquids storage facilities along the ship channel. The vessel, a part of British petrochemical firm Ineos' fleet, has been used by the company exclusively for transit between the United States and China since August 2023, according to Kpler data. Enterprise Products Partners received the license requirement letter in late May, and on Wednesday said it received a notice from the U.S. government of its intent to deny emergency requests for three proposed export cargoes of ethane totaling around 2.2 million barrels to China. Enterprise has 20 days to respond to the denial, it said on Wednesday. Unless otherwise notified by the government by the 45th day after receiving the notification, the denials will become final. Enterprise and Ineos declined to comment. "With the curbs on U.S. ethane (exports), these ships are now struggling to move any cargo. So they are either just drifting out at sea or in a neutral direction hoping things resolve themselves with the recent meeting between U.S. and China," an executive at a ship brokering firm said. 'NO IMMEDIATE ALTERNATIVE MARKETS' U.S. ethane production touched a record 2.8 million barrels per day (bpd) in 2024, according to the Energy Information Administration, and was expected to rise to 3.1 million bpd by next year. Most of the output growth was expected to be exported to meet international demand as domestic consumption will likely hold steady. Exports also climbed to a record 492,000 bpd last year, of which about 227,000 bpd, or 46%, headed to China. "These are distressed cargoes at this point. I would expect these to have been sold at significant discounts," said Uday Turaga, founder of energy research and consulting firm ADI Analytics. "Without China, there are no immediate alternative markets for vast U.S. ethane exports, directly impacting prices and profit for major U.S. producers due to specialized trade contracts," he said. The letters from the Bureau of Industry and Security, an agency of the U.S. Commerce Department, said exports of ethane pose an unacceptable risk of military end-use in China, according to both companies' filings. Chinese petrochemical firms use ethane as a feedstock because it is a cheaper alternative than naphtha, while U.S. oil and gas producers need China to buy their natural gas liquids as domestic supply exceeds demand.
Yahoo
06-06-2025
- Business
- Yahoo
US ethane vessels stall amid curbs on exports to China
By Arathy Somasekhar, Georgina McCartney and Trixie Yap HOUSTON/SINGAPORE (Reuters) -Over half a dozen U.S.-loaded ethane vessels, originally bound for China, have stalled around the U.S. Gulf Coast after Washington requested U.S. exporters seek licenses to ship the shale gas to the top buyer, according to trade sources and ship tracking data on Friday. Around half of all U.S. ethane exports head to China, and the halt in flows has pushed ethane prices lower on worries of domestic oversupply and is likely to cut into profits of top ethane producers. Energy Transfer and Enterprise Products Partners, two of the largest ethane producers and exporters, have warned the disruptions could impact their exports. The U.S. Commerce Department has also denied some vessels emergency authorization requests to export to China. Liberia-flagged STL Qianjiang, which loaded at Energy Transfer's Nederland terminal for China's Satellite Chemical, was anchored off the coast on Friday in the Gulf, according to LSEG and Kpler ship tracking data. Energy Transfer, which produces ethane by extracting it from natural gas and then exports it from terminals along the Gulf Coast, said it received a letter from the U.S. Commerce Department on June 3 requiring the company to apply for a license to ship ethane to China. The company and Satellite Chemical did not reply to requests for comments on the vessel. Three other vessels, which were set to load in early June, were anchored in the U.S. Gulf near Houston and Port Arthur, Texas, while three others hovered further south in the water after having slowed down. Meanwhile, Liberia-flagged very large ethane carrier (VLEC) Pacific Ineos Grenadier, which loaded at Enterprise Products Partners' terminal in Morgan's Point, Texas, and had been originally destined for China, was anchored at an Enterprise dock along the Houston Ship Channel on Friday after heading away from the Gulf Coast on Thursday. The ship had not discharged on Friday afternoon and it was not immediately clear if it would. Enterprise has natural gas liquids storage facilities along the ship channel. The vessel, a part of British petrochemical firm Ineos' fleet, has been used by the company exclusively for transit between the United States and China since August 2023, according to Kpler data. Enterprise Products Partners received the license requirement letter in late May, and on Wednesday said it received a notice from the U.S. government of its intent to deny emergency requests for three proposed export cargoes of ethane totaling around 2.2 million barrels to China. Enterprise has 20 days to respond to the denial, it said on Wednesday. Unless otherwise notified by the government by the 45th day after receiving the notification, the denials will become final. Enterprise and Ineos declined to comment. "With the curbs on U.S. ethane (exports), these ships are now struggling to move any cargo. So they are either just drifting out at sea or in a neutral direction hoping things resolve themselves with the recent meeting between U.S. and China," an executive at a ship brokering firm said. 'NO IMMEDIATE ALTERNATIVE MARKETS' U.S. ethane production touched a record 2.8 million barrels per day (bpd) in 2024, according to the Energy Information Administration, and was expected to rise to 3.1 million bpd by next year. Most of the output growth was expected to be exported to meet international demand as domestic consumption will likely hold steady. Exports also climbed to a record 492,000 bpd last year, of which about 227,000 bpd, or 46%, headed to China. "These are distressed cargoes at this point. I would expect these to have been sold at significant discounts," said Uday Turaga, founder of energy research and consulting firm ADI Analytics. "Without China, there are no immediate alternative markets for vast U.S. ethane exports, directly impacting prices and profit for major U.S. producers due to specialized trade contracts," he said. The letters from the Bureau of Industry and Security, an agency of the U.S. Commerce Department, said exports of ethane pose an unacceptable risk of military end-use in China, according to both companies' filings. Chinese petrochemical firms use ethane as a feedstock because it is a cheaper alternative than naphtha, while U.S. oil and gas producers need China to buy their natural gas liquids as domestic supply exceeds demand. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
