PREVIEW: Oil Futures Lower on Crude Build, Global Supplies
7/19 7:46 AM
PREVIEW: Oil Futures Lower on Crude Build, Global Supplies OLD BRIDGE, N.J. (DTN) -- Oil futures nearest to delivery traded on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange reversed lower in overnight trade following Wednesday's contract gains, following an unexpected rise in U.S. crude stocks and reports of increased global oil production by members of the Organization of Petroleum Exporting Countries and non-OPEC members headed by Russia. As prices for both crude oil benchmarks fell overnight through key contract support levels, West Texas Intermediate now stands within reach of its lowest price in nearly a month, while Brent crude values have slumped to three-month lows. Given recent price declines, the WTI-Brent spread, a key measure of WTI's export profitability versus international Brent, stands at $3.89 bbl, off nearly 66% from recent $11.37 bbl contract spread seen the first week of June. Wednesday's Energy Information Administration report showed commercial crude stocks in the United States increased for the week ended July 13 by 5.8 million bbl with stocks at Cushing, Oklahoma down 860,000 bbl, a ninth straight weekly draw. EIA data also revealed U.S. crude oil output reached a record 11.0 million bpd driven by growing U.S. shale oil output, analysts say. In global oil markets, the Joint Ministerial Monitoring Committee on Wednesday held its first teleconference meeting, showing additional oil supplies were generated by increasing output from OPEC members Venezuela, Nigeria and Iraq, and non-OPEC members headed by Russia. "OPEC said it's going to stick to production cuts at the moment," Phil Flynn, senior market analyst with Chicago-based Price Futures Group told DTN MarketWire, Wednesday. "They're holding together despite the upcoming November sanctions on Iran and have said that they won't dip below 100% compliance." An overnight Reuters report quoting a secondary data source showed Saudi Arabia's production rose sharply in June to 7.6 million bpd, a 390,000 bpd increase and the largest increase since the end of 2016. An independent Reuters survey of OPEC production indicated Saudi output up 700,000 bpd to 10.70 million bpd. Futures at 8:05 AM ET NYMEX Contract Last Change High Low WTI Aug. $68.24 -$0.52 $69.03 $67.80 WTI Sept. $67.06 -$0.72 $67.96 $66.62 ULSD Aug. $2.0726 -$0.0177 $2.0944 $2.0665 ULSD Sept. $2.0768 -$0.0178 $2.0995 $2.0713 RBOB Aug. $2.0252 -$0.0170 $2.0510 $2.0172 RBOB Sept. $1.9986 -$0.0159 $2.0226 $1.9895 ICE Brent Sept. $72.18 -$0.72 $73.08 $71.83 Brent Oct. $72.26 -$0.73 $73.18 $71.93 SPOT PRODUCT MARKETS Cash oil product prices moved higher for a second day on Wednesday in markets east of the Rockies, and posted mixed results on the West Coast where ample gasoline supply pressured cash differentials. Regular CARBOB in Los Angeles and San Francisco eased fractionally to $2.0444 gallon in the basin and $2.0344 gallon in the bay. Suboctane in Portland rode a 250pts basis improvement up 3.08cts to $2.0819 gallon. Gulf Coast conventional 9.0-lb. regular no lead ramped up 1.23cts and matched the 1.83cts futures advance in New York Harbor indexed at a 3.0cts futures discount. CBOB in Group 3 climbed 1.53cts to $2.0019 gallon, and tracked the MERC rally higher in Chicago rated at a 4.25cts August futures discount. CARB ULSD in San Francisco and Los Angeles were provided 2.02cts boosts by futures gains with basis levels unchanged at futures-plus 350pts in LA and 200pts over the MERC in the Bay. Portland ULSD maintained a 500pts futures basis premium with spot price finishing 2.02cts higher at $2.1403 gallon. Gulf Coast 62-grade ULSD moved 2.02cts above its day prior closing range to $2.0466 gallon, and surged 2.52cts in the harbor trading at a 0.25cts futures premium for offline pipeline delivery. Group 3 ULSD improved 50pts in basis and 2.52cts to $2.1078 gallon trading 1.75cts over the MERC, and Chicago diesel sold at a 250pts basis premium that boosted spot price 1.77cts to $2.1128 gallon. NEW YORK HARBOR GULF COAST Heating Oil $2.0157 Heating Oil $1.9032 ULS Heating Oil $2.0357 ULS Heating Oil $1.9895 ULSD $2.0757 ULSD $2.0295 Jet, 54-grade $2.0892 Jet, 54-grade $2.0307 Conventional Regular $1.9952 Conventional Regular $1.9632 RBOB $2.0402 Conventional Premium $2.1017 PBOB $2.2402 RBOB $2.0042 CBOB Regular $1.9427 PBOB $2.1877 CBOB Premium $2.1452 CBOB Regular $1.9667 CBOB Regular 7.8 $1.9802 CBOB Premium $2.1127 CBOB Premium 7.8 $2.2515 A2 CBOB $1.9192 D2 CBOB $2.0652 GROUP 3 ULSD $2.0907 Jet $2.1557 CHICAGO Suboctane Gasoline $1.9827 ULSD $2.0957 Conventional Premium $2.2027 Jet $2.0882 CBOB Regular $1.9827 LOS ANGELES Conventional Premium $2.2627 ULSD $2.0932 RBOB $2.1027 CARB ULSD $2.1082 PBOB $2.4027 Jet $2.1057 Conventional Regular $1.9702 Conventional Premium $2.1452 PORTLAND CARBOB Regular $2.0252 ULSD $2.1232 CARBOB Premium $2.1452 Jet $2.1457 Suboctane Gasoline $2.0627 SAN FRANCISCO Conventional Premium $2.4077 ULSD $2.0932 CARB ULSD $2.0932 Jet $2.1057 Conventional Regular $1.9802 Conventional Premium $2.2752 CARBOB Regular $2.0152 CARBOB Premium $2.2752 Brian Whary, 1.732.678.7739, brian.whary@dtn.com, www.dtn.com. 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