Light, sweet crude oil prices on the New York Mercantile Exchange gained modestly on June 16 but still ended lower for the week overall. Both the US and Brent benchmarks have fallen for the last five sessions.
US light, sweet crude for July delivery settled at $44.74/bbl while the Brent contact for August settled at $47.37/bbl on London’s ICE Futures Europe on June 16.
Oil prices edged slightly higher in early New York trading June 19, but analysts said they foresee little upward momentum for crude given the continued world oil oversupply levels.
Investors will likely “continue to cut positions until larger inventory declines materialize,” Giovanni Staunovo, UBS energy analyst, said in a research note.
The Organization of Petroleum Exporting Countries and some non-OPEC producers, including Russia, agreed to extend production-cut targets of 1.8 million b/d through first-quarter 2018. The targets are set against October 2016 production levels.
OPEC accounts for 1.2 million b/d of the 1.8 million b/d total. Libya and Nigeria were exempted from the production-cut targets.
“In short, the market appears to be testing Saudi and Russia’s resolve to do whatever it takes to reduce global oil inventories,” Staunovo said.
Helima Croft, RBC Capital Markets head of commodities strategy, questioned the sustainability of recent production gains in Libya and Nigeria. Croft believes political instability in the two nations will keep them subject to disruptive activity from insurgents.
The July light, sweet crude contract on NYMEX rose 28¢ on June 16 to $44.74/bbl. The August contract increased 29¢ to close at $44.97/bbl.
The NYMEX natural gas price for July was down 2¢ to a rounded $3.04/MMbtu. The Henry Hub cash gas price was $2.96/MMbtu, up 4¢.
Heating oil futures rose 1.24¢, or 0.9%, to a rounded $1.43/gal. But for the week overall, heating oil lost 0.42¢, or 0.3%, the fourth-consecutive losing week.
Gasoline futures gained 1.9¢, or 1.3%, to $1.45/gal on June 16. For the week, reformulated gasoline stock for oxygenate blending for July lost 4.69¢, or 3.1%, marking the eighth consecutive losing week.
The Brent crude contract for August on London’s ICE gained 4.5¢ to $47.37/bbl while the September contract was up 44¢ to $47.63/bbl. The July gas oil contract gained $4 to $423/tonne.
OPEC’s basket of crudes on June 16 was $44.58/bbl, up 20¢.
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