MARKET: Brent for August tops $62/bbl

Brent oil prices rose moderately on the London market June 14 with the August contract closing slightly above $62/bbl while light, sweet crude prices in New York held fairly flat, again settling above $52/bbl.

Jun 17th, 2019

Brent oil prices rose moderately on the London market June 14 with the August contract closing slightly above $62/bbl while light, sweet crude prices in New York held fairly flat, again settling above $52/bbl.

The International Energy Agency cut its forecast for world oil demand growth in 2019 for a second consecutive month (OGJ Online, June 14, 2019). In its latest Monthly Oil Report, IEA forecast world oil demand at 1.2 million b/d, down from 1.3 million b/d in the previous report and 1.4 million b/d in the April report.

IEA noted oil traders and analysts are focused on indicators of a slowing in economies across much of the world along with unresolved US-China trade tensions.

Ole Hansen, head of commodity strategy for Saxo Bank, said crude oil prices experienced “a tug-of-war week” for the week ended June 14 as tensions about the Middle East only partly offset oil demand worries amid increasing US oil inventories.

“The failure to build a geopolitical risk premium following the tanker attacks in the Gulf of Oman could indicate that the market is either skeptical of the narrative with regards to who did it or that demand worries simply weight too heavily at this stage,” Hansen said (OGJ Online, June 14, 2019).

Hansen said the Organization of Petroleum Exporting Countries has scheduled meetings in late June with other major producers to discuss production levels, but those meeting dates have yet to be confirmed.

“Saudi efforts to keep Russia on board with production cuts beyond the second half, let alone 2020, could easily become an issue,” Hansen said.

Energy prices

Light, sweet crude oil on the New York Mercantile Exchange for July delivery rose 23¢ to $52.51/bbl while the August contract increased 23¢ to settle at $52.77/bbl.

NYMEX natural gas for July was up 6¢ to settle at a rounded $2.39/MMbtu.

Ultralow-sulfur diesel for July increased 2¢ to a rounded $1.83/gal. The NYMEX reformulated gasoline blendstock for July gained 1¢ to a rounded $1.73/gal.

Brent crude for August added 70¢ to $62.01/bbl. The September price increased 56¢ to settle at $61.01/bbl.

The gas oil contract for July gained $6 to $564/tonne on June 14.

The average for OPEC’s basket of crudes was down 26¢ to $61.25/bbl on June 14.

Contact Paula Dittrick at paulad@ogjonline.com.

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