WTI below $60 as GOM Output Resumes, China GDP 27-Year Low

    

   WASHINGTON, D.C. (DTN) -- New York Mercantile Exchange oil futures nearest 
to delivery and Intercontinental Exchange Brent pulled back Monday afternoon, 
with the West Texas Intermediate contract accelerating losses in 
market-on-close trade as data showed offshore oil production in the Gulf of 
Mexico began post-storm recovery. 

   NYMEX August WTI settled $0.63 lower at $59.58 bbl, while ICE September 
Brent crude settled $0.24 down at $66.48 after trading in narrow ranges for 
most of the Monday's session. NYMEX August RBOB futures plunged 4.67cts or 
2.53% to settle at a one-week low at $1.9303 gallon and August ULSD futures 
were down 2.85cts to $1.9516 gallon settlement.

   Oil futures settled lower on Monday following the reports that Hurricane 
Barry caused no major damage to oil output or infrastructure and that Gulf 
Coast operators have begun returning workers to offshore platforms. 

   The Bureau of Safety and Environmental Enforcement said that operator 
reports estimate approximately 69% of production in the GOM remains shut-in 
Monday, down from 73% reported Sunday afternoon. According to wire services, 
most of the refineries in Louisiana continued to operate this weekend, as Barry 
was downgraded from a Category 1 hurricane before coming onshore. Louisiana 
energy provider Entergy reported power outages hit roughly 67,000 customers by 
Sunday afternoon, with many of the outages occurred in less populated areas. 

   Elsewhere, market participants returned their focus to decelerating growth 
in China, which contracted 0.2% in the second quarter from 6.4% in January- 
March, according to Chinese government statistics. The latest figures is the 
slowest growth China experienced in nearly 30 years, pointing to a heavy toll 
of a trade war with the United States.  

   Wall Street Journal reported U.S. manufacturers began to shift production 
out of China in recent months in order to avoid U.S. tariffs. According to 
Census Bureau, U.S. imports from China fell 12% since the start of the year -- 
the lowest level since the financial crisis a decade ago. Market analysts 
believe that the move by U.S. companies will result in a reordering of global 
manufacturing supply chain out of China, which could contribute to prolong 
period of uneven trade flows and volatility in global economy.  

   The International Energy Agency late last week said it expects an 
oversupplied market next year, as global demand will lag supply by 0.9 million 
bpd in 2019, also resulting in a sizable inventory build-up. 

   "This surplus adds to the huge stock build seen in the second half of 2018 
when oil production surged just as demand growth started to falter", the 
Paris-based IEA said on Friday. Despite ongoing 1.2 million bpd supply cuts, 
re-balancing of the market is "still some way off" added IEA.  

   Liubov Georges, 1.646.359.4088, liubov.georges@dtn.com, www.dtn.com. (c) 
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