Oil Price Benchmarks Show Slight Gains
West Texas Intermediate (WTI) and Brent crude oil futures edged upward Thursday.
The WTI for August delivery settled at $59.43 per barrel, reflecting a five-cent gain. It peaked at $59.73 and bottomed out at $58.61.
The August Brent contract price added six cents to end the day at $66.55 per barrel.
As a Bloomberg article posted to Rigzone earlier Thursday states, oil prices had been declining amid concerns about ongoing trade tensions between the United States and China resurfaced. President Trump and Chinese President Xi Jinping are expected to meet during the G-20 Summit, which is taking place in Osaka, Japan through Saturday.
Also on the minds of oil traders is next week’s OPEC+ meeting in Vienna, where members of the alliance are expected to decide on their oil output levels going forward.
“Weakening oil prices build the case for an extension to 2019 production cuts, with price at the same levels as when the first decision to implement cuts was taken in 2017,” the information services firm Fitch Solutions Macro Research states in a commentary emailed to Rigzone.
Moreover, Fitch Solutions pointed out that lingering Russian export pipeline issues should limit output into the summer.
Despite a recent uptick in prices supported by escalating Middle East tensions, Fitch Solutions contends that rising production from U.S. shale plays heightens the potential for “declining market share and sustained price weakness.” The firm went on to state that the only scenario in which it envisions an end to the OPEC+ output curbs would be if oil prices exceeded $85 for at least six months.
In terms of global oil inventories, Orbital Insight on Thursday reported that a week-on-week shift in the direction of crude stocks has finally occurred. In a weekly report emailed to Rigzone, the firm stated that it has observed seasonal global draws at last.
According to Orbital Insight, global inventories declined by just 3.5 million barrels over the past seven days – compared to a 27.29-million-barrel build for the past 30 days. Year-to-date, the company is reporting an oil stocks increase of 184.87 million barrels. To provide some additional context, it stated that a 13.6-million-barrel draw occurred in July 2018.
Unlike crude oil, reformulated gasoline (RBOB) finished lower Thursday. The July RBOB contract lost two cents to settle at nearly $1.95 per gallon.
Henry Hub natural gas posted a nearly six-cent increase. August gas futures closed at $2.32.
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