Light, sweet oil for July fell $1.80 in New York June 5 to settle under $52/bbl while the Brent contract for August dropped $1.34 to settle under $61/bbl in London after a US government report showed US crude inventories at the highest since July 2017.
The US Energy Information Administration reported US crude oil supplies, excluding the Strategic Petroleum Reserve, climbed 6.8 million bbl for the week ended May 31—the largest gain in 5 weeks.
Crude oil supplies currently total 483.3 million bbl, EIA said. The biggest single weekly inventory gain this year was 9.9 million bbl for the week ended Apr. 26.
US oil prices have fallen for weeks on concerns the world economy is slowing, which would hinder world oil demand growth. Analysts cite US-China trade tensions and US tariffs on Mexico as concerns.
Analysts with Morgan Stanley and JP Morgan Chase & Co. warned of a recession if US President Donald Trump does impose 25% tariffs against Mexico. Analysts with Bank of America and Citigroup lowered US corporate profit forecasts on risk of an economic downturn.
The Organization of Petroleum Exporting Countries and some other major producers have complied with a production-cut agreement scheduled to expire by July 1.
The next OPEC meeting is scheduled for June 25-26, but some media reports suggest the meeting might get delayed to early July at Russia’s request.
Saudi Energy Minister Khalid al-Falih has called recent oil price volatility “unwarranted” and has said he expects OPEC to help stabilize prices.
“We have previously stated our commitment to do whatever it takes to stabilize markets, and we have delivered on those promises,” ah-Falih recently told reporters. “I am making that commitment again.”
Energy prices
Crude oil on the New York Mercantile Exchange for July dropped $1.80 to settle at $51.68/bbl on June 5 while the August contract fell by the same amount to settle at $51.83/bbl.
NYMEX natural gas for July was down nearly 4¢ to settle at a rounded $2.38/MMbtu.
Ultralow-sulfur diesel for July decreased 4¢ to $1.78/gal. The NYMEX reformulated gasoline blendstock for July fell nearly 3¢ to a rounded $1.69/gal.
Brent crude for August dropped $1.34 to settle at $60.63/bbl. The September price decreased $1.55 to settle at $59.53/bbl.
The gas oil contract for June fell $18.25 to $542.25/tonne on June 5.
The average for OPEC’s basket of crudes was not immediately available.
Contact Paula Dittrick at [email protected].
