Oil Futures Hit Four-year Lows Due to OPEC+ Output Hike


   
   HOUSTON TX, (DTN) -- Oil futures plummeted to their lowest level in four 
years on Monday after OPEC+ countries over the weekend agreed to a 411,000-bpd 
production increase in June. The hike is part of a planned rollback of some 2.2 
million bpd of voluntary adjustments implemented in addition to the group's 
production curtailment under the Declaration of Cooperation.

   The NYMEX WTI futures contract for June delivery settled at $57.08 bbl, down 
by $1.21 from the previous trading session while the front-month ICE Brent 
futures contract dropped by $1.08 to $60.21 bbl.

   The June ULSD RBOB gasoline futures contract declined by $0.0184 to $1.9748 
gallon, while the front-month RBOB futures contract increased by  $0.0035to 
$2.0234 gallon.

   The U.S. dollar index softened by 0.225 points to 99.615 against a basket of 
foreign currencies.

   The third consecutive monthly hike translates to close to 1 million bpd more 
global supply in June than three months earlier, far outpacing demand growth at 
a time when the latter is set to be stunted by the ongoing trade war. In a 
joint press release, however, Saudi Arabia, Russia, Iraq, UAE, Kuwait, 
Kazakhstan, Algeria, and Oman cited "current healthy market fundamentals" and 
low inventories in support of the production increase.

   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 in April.

    




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