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Oil pares gains on threatened U.S. government shutdown

Published 2018-12-11, 03:11 p/m
© Reuters.  Oil pares gains on threatened U.S. government shutdown
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* Libya declares force majeure on biggest oilfield

* Trump, top Democrats clash over border wall

* Russia outlines gradual cut as part of OPEC+ deal

* Coming Up: API weekly U.S. inventories at 2130 GMT

By Scott DiSavino

NEW YORK, Dec 11 (Reuters) - Oil futures edged higher on Tuesday after paring most of their gains as stock markets turned negative on worries about a possible U.S. government shutdown.

U.S. stock markets pulled back after President Donald Trump threatened to shut down the federal government over funding for a wall along the U.S.-Mexico border. .N looks like the prospect of a U.S. government shutdown is not good for any asset class. Equities reacted first, taking oil prices down with it," said John Kilduff, a partner at Again Capital Management in New York.

Prices rose over $1 a barrel earlier in the session after Libya's National Oil Company (NOC) declared a force majeure on exports from the country's biggest oilfield, which was seized last weekend by a militia group.

NOC said on Monday that the shutdown of the El Sharara oilfield would result in a production loss of 315,000 barrels per day (bpd), and an additional loss of 73,000 bpd at the El Feel oilfield. the strong start, Brent futures LCOc1 ended just 23 cents, or 0.4 percent, higher at $60.20 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 rose 65 cents, or 1.3 percent, to $51.65.

Also adding pressure to the market, was Russia's slower-than-expected planned cuts in production as part of an OPEC-led deal agreed last week to curb output by a joint 1.2 million bpd from January to shore up prices. said on Tuesday it planned to cut oil output by just 50,000 to 60,000 bpd in January, as it gradually builds to an agreed cut of 220,000 bpd. futures are roughly unchanged from just prior to the OPEC agreement as the market is apparently expressing concerns over an indicated slow start to Russia's output reductions next month," Jim Ritterbusch, president of Ritterbusch and Associates in Chicago, said in a report.

Other analysts noted the reduction by the Organization of the Petroleum Exporting Countries and allies, like Russia, may not be deep enough to restore balance to the market especially after the U.S. government confirmed its forecast that the United States would end this year as the new top producing nation.

The Energy Information Administration (EIA) forecast U.S. output would rise to a record 10.9 million bpd in 2018 and 12.1 million bpd in 2019. market will get a peak at U.S. oil inventories this afternoon when the American Petroleum Institute (API), an industry group, releases a report at 4:30 p.m. EST. Analysts estimated crude stocks declined 3 million barrels last week, according to a Reuters poll. EIA/S

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