MARKET WATCH: Oil prices dropping even as IEA boosts demand forecast

The light, sweet crude oil contract for July delivery declined modestly on June 13 to settle below $49/bbl on the New York market, and prices continued falling in early June 14 trading.

The International Energy Agency on June 14 said it revised its first-quarter world oil demand growth up, citing demand from India and China.

In its monthly Oil Market Report, IEA said the world oil supply-demand status is nearing a balance.

“Less oil has been stockpiled than we originally expected,” the Paris-based IEA said. Outages in the Organization of Petroleum Exporting Countries and non-OPEC countries cut global oil supply in May, EIA said, noting it was the first significant drop since early 2013.

Outages included drops in oil sand production because of wildfires in Canada and disruptions in oil supply because of attacks on Nigeria’s pipelines.

“OPEC crude output fell by 110,000 b/d in May to 32.61 million b/d as big losses in Nigeria due to oil sector sabotage more than offset higher Middle East output,” IEA said. “Iran has clearly emerged as OPEC’s fastest source of supply growth this year with an anticipated gain of 700,000 b/d.”

Energy prices

The July crude oil contract on the New York Mercantile Exchange fell 19¢ on June 13, settling at $48.88/bbl. The August contract fell 20¢ to $49.52/bbl.

Natural gas for July climbed nearly 3¢ to a rounded $2.59/MMbtu on NYMEX while the Henry Hub cash price rose 11¢ to $2.52/MMbtu.

Heating oil for July delivery declined less than a penny to a rounded $1.51/gal. The price for reformulated gasoline stock for oxygenates blending for July dropped 2¢ to a rounded $1.54/gal.

The August Brent crude contract on London’s ICE fell 19¢ to $50.35/bbl. The September contract was also down 19¢ to $50.82/bbl. The July gas oil contract settled at $452.25/tonne on June 13, up 75¢.

OPEC’s basket of crudes price for June 13 was $46.25/bbl, down 80¢.

Contact Paula Dittrick at [email protected].