Oil Futures Soften as OPEC+ Readies Planned Output Hike


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- Oil futures softened Friday morning as the bearish sentiment 
driven by somber economic growth outlooks outweighed the bullish effect of 
additional U.S. sanctions on Iranian oil trade. Just as demand growth is 
looking to slow, eight OPEC+ countries are expected to increase crude oil 
production by 411,000 bpd in May, in addition to the 2.2 million bpd released 
in early April.

   NYMEX-traded WTI for June delivery was down $0.59 bbl to trade near $58.65 
bbl, and ICE Brent for July delivery fell $0.55 bbl to $61.58 bbl.

   June RBOB gasoline futures declined $0.0214 to $2.0278 gallon, while the 
front-month ULSD futures contract slid $0.0162 to $1.9958 gallon.

   The U.S. dollar index softened by 0.3499 points to 99.555.

   The planned output hikes by some OPEC+ members are fanning global oversupply 
concerns given lackluster demand growth in China, amplified by the ongoing 
trade dispute, and robust non-OPEC production increases.  

   Production discipline has led to OPEC sitting on plenty of spare production 
capacity, some of which can immediately supply additional volumes to the 
market. The U.S. Energy Information Administration in its April short-term 
energy outlook pegged OPEC spare production capacity at 4.59 million bpd in 
March and 4.52 million bpd last month.

   Fresh macroeconomic data from the U.S., meanwhile, led the Federal Reserve 
Bank of Atlanta to lower its second quarter GPD growth estimate to 1.1%, down 
from 2.4%.




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