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Oil Shifts Lower in Morning Trade      05/22 08:15

   Oil futures and Brent crude on the Intercontinental Exchange shifted lower 
in overnight trade on an unexpected build in U.S. crude inventories, while 
ongoing tensions in the Middle East limit the losses. 




   WASHINGTON, D.C. (DTN) -- New York Mercantile Exchange nearest delivered oil 
futures and Brent crude on the Intercontinental Exchange shifted lower in 
overnight trade on an unexpected build in U.S. crude inventories, while ongoing 
tensions in the Middle East limit the losses. 

   Near 9 a.m. ET, Nymex June West Texas Intermediate crude futures traded down 
85 cents at $62.28 per barrel (bbl) while the ICE July Brent contract fell 51 
cents to $71.67 bbl.

   Nymex June RBOB futures traded down about a penny to $2.0095 gallon and June 
ULSD futures tumbled 2.10 cents to $2.0584 gallon.

   The American Petroleum Institute said on Tuesday domestic crude oil 
inventories increased by 2.4 million bbl in the week ended May 17, missing 
calls for a 2 million bbl draw. API data was mixed for refined products, 
detailing a gasoline inventories build of 350,000 bbl for last week versus an 
expected 1 million bbl increase, while distillate stockpiles fell 237,000 bbl, 
less than expectations for 1 million bbl draw.

   Energy Information Administration will release official supply figures at 
10:30 a.m. ET.

   Oil futures continue to draw support from ongoing tensions in the Middle 
East after Iran-aligned Houthi rebels attacked a Saudi military base and 
airport in the southern city of Najran. The attack came after Iran announced it 
had quadruped its uranium-enrichment production capacity, while Saudi Arabia 
called for an emergency summit on the regional security crisis. Saudi Arabia 
had previously accused Iran of ordering last week's drone attack on its oil 
pipeline and tankers off the coast of United Arab Emirates. 

   Saudi Arabia said on Wednesday that Organization of the Petroleum Exporting 
Countries are committed to keeping the oil market balanced, while reiterating 
the producer group is working towards stability on a sustained basis.

   WTI, Brent futures traded at three-week highs Monday on reports OPEC would 
extend a production agreement, reducing output beyond June. Saudi's energy 
minister said the group reached a consensus that production targets should 
"roll over for the rest of the year," as global inventories remain above 
normal. However, reports emerged that several scenarios are currently being 
considered by the group, including reduced production targets for individual 
countries.

   In April OPEC reached a 168% compliance rate with the current agreement, 
while holding the cumulative production near a four-year low.

   Liubov Georges can be reached at liubov.georges@dtn.com


(BAS)

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