MARKET WATCH: Brent gains modestly on strengthening European economic indicators

US crude oil futures for July delivery gained 7¢ on the New York market in June 22 trading as that month’s contract expired, and Brent crude oil for August delivery gained more than 30¢ on the London market after Greece unveiled economic reform measures.

European leaders gave Greece time to satisfy its creditors, and market observers said they were more optimistic Greece will strike a deal with its creditors.

Elsewhere, Europe reported positive economic indicators. France’s manufacturing sector expanded in June for the first time since April 2014, and Germany’s private sector grew at a faster rate in June than in it did in May.

“The data from France and Germany show there are flickers of life in the European economy, but strong supply is likely for some time to come, meaning subdued oil prices,” Michael Hewson, chief market analyst at CMC Markets, told Reuters.

China’s factory activity showed possible signs of stabilizing. The HSBC/Markit Flash China Manufacturing PMI edged up to 49.6 for June compared with 49.2 for May. Any number below 50 is considered to be a contraction vs. an expansion.

Separately, Iranian Foreign Minister Mohammad Javad Zarif said he believes chances are good that his nation will reach a final agreement with international leaders regarding Iran’s nuclear program either by a June 30 deadline or within a few days later.

Energy prices

The July crude oil contract on the New York Mercantile Exchange gained 7¢ on June 22 to settle at $59.68/bbl. The August contract was up 41¢ to settle at $60.38/bbl.

The natural gas contract for July was down 8¢ to a rounded $2.73/MMbtu. The Henry Hub, La., gas price was down 4¢ to $2.77/MMbtu.

Heating oil for July edged up less than a penny to remain at a rounded $1.87/gal. The price for reformulated gasoline stock for oxygenates blending for July declined by 2.9¢ to a rounded $2.03/gal.

The August ICE contract for Brent crude was up 32¢ to $63.34/bbl while the September contract gained 33¢ to $64.10/bbl. The ICE gas oil contract for July was down 75¢ to $570.25/tonne.

The average price for OPEC’s basket of 12 benchmark crudes for June 22 was $59.36, down 62¢.

Contact Paula Dittrick at paulad@ogjonline.com.

*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.

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