PREVIEW: Oil Futures Mixed on Demand Concerns, Global Risk

    

   WASHINGTON, D.C. (DTN) -- Oil futures nearest delivery on the New York 
Mercantile Exchange and Brent crude on the Intercontinental Exchange pulled 
back in overnight trade following Thursday's rally that was spurred by an 
unexpected escalation in Middle East tensions, while concerns over slowing 
global demand continue to limit the upside.

   International Energy Agency cut on Friday its forecasts for global oil 
consumption this year for the second consecutive month, revised down 100,000 
bpd in June, which follows a 90,000 bpd downward adjustment in May. The 
Paris-based energy watchdog noted their downward revision for world oil demand 
follows a decline in projected global gross domestic product growth by the 
Organization for Economic Cooperation and Development in May when the 36 
country bloc lowered its world GDP forecast to 3.2%. IEA added, "World trade 
growth has fallen back to its slowest pace since the financial crisis ten years 
ago, according to data from the Netherlands Bureau of Economic Policy Analysis 
and various purchasing managers' indices."

   Organization of the Petroleum Exporting Countries also revised lower this 
week its forecast for global oil demand in the current year by 70,000 bpd for 
year-on-year growth of 1.14 million bpd. The revision was due to lower than 
expected demand in the first quarter by countries that are part of the OECD 
bloc, including the United States where gasoline demand slowed against 
expectations.

   West Texas Intermediate and Brent futures surged more than 2% on Thursday 
following a torpedo attack against two oil tankers near the Strait of Hormuz, 
which serves as a waterway for nearly 40% of the world's seaborne oil 
shipments. U.S. Secretary of State Mike Pompeo blamed Iran for the incident, as 
well as attacks a month earlier on pipelines in Saudi Arabia and on ships in 
waters near Fujairah. U.S. military released on Friday a video, showing what it 
claimed is Iran's Revolutionary Guard removing an unexploded mine from one of 
the tankers targeted near the keyway, which further heightened concerns about 
oil security in the region and tensions between the United States and Iran. 
While some analysts believe that the price-boosting effect of a violent 
incident would be short-lived, others claim multiple attacks on oil tankers in 
the key chokepoint for crude transportation opens a new chapter for the 
market's security concerns.

   FUTURES at 8:00 AM ET


NYMEX       Contract                    Last         Change           High            Low
WTI         July                      $52.13         -$0.15         $52.70         $51.70
WTI         Aug.                      $52.41         -$0.13         $52.96         $51.95
ULSD        July                     $1.8120        $0.0054        $1.8234        $1.7991
ULSD        Aug.                     $1.8199        $0.0049        $1.8315        $1.8068
RBOB        July                     $1.7279        $0.0080        $1.7347        $1.7113
RBOB        Aug.                     $1.7016        $0.0070        $1.7093        $1.6857
ICE
Brent       Aug.                      $61.40          $0.09         $62.02         $60.74
Brent       Sept.                     $60.53          $0.08         $61.14         $59.91

   SPOT PRODUCT MARKETS

   Spot market oil product prices moved mostly higher east of the Rockies and 
on the West Coast Thursday, tracking a rallying oil futures complex after two 
oil tankers came under attack in the Gulf of Oman.  

   Los Angeles CARBOB fell 550pts in basis and 2.12cts in flat price rated at a 
penny futures discount, and climbed 2.88cts in San Francisco, indexed 250pts 
below July futures. Suboctane regular in Portland dropped to a penny futures 
discount boosting flat price 2.88cts to $1.7099 gallon.

   Conventional 9.0-lb. regular no lead at the Gulf Coast posted a 4.38cts 
advance to $1.6524 gallon versus a 6.75cts MERC discount, and matched the 
3.38cts futures bounce in the Harbor marked 3cts below July futures. Chicago 
9.0-lb. CBOB sold at a 5cts futures discount powering spot price up 5.38cts, 
and improved a penny to a 10.5cts MERC discount and 4.38cts in flat price in 
Group 3 suboctane.

   California diesel fuel basis fell 200pts in the Bay and the Basin limiting 
spot prices to fractional 0.67cts price gains, and rode the 2.67cts futures 
rally higher in Portland to $1.7816 gallon.

   Ultra-low sulfur diesel fuel in Chicago fell 0.83cts to $1.5916 gallon 
tumbling 350pts to a 21.5cts futures discount, and gained a penny in cash 
differential, trading at a 4cts MERC discount in Group 3. Diesel fuel prices at 
the Gulf and the Harbor closely tracked the 2.67cts July futures advance.


NEW YORK HARBOR                                       GULF COAST
Heating Oil                        $1.7670            Heating Oil                        $1.6420
ULS Heating Oil                    $1.7770            ULS Heating Oil                    $1.7435
ULSD                               $1.8020            ULSD                               $1.7650
Jet, 54-grade                      $1.8395            Jet, 54-grade                      $1.7740
Conventional Regular               $1.6979            Conventional Regular               $1.6604
RBOB                               $1.7369            Conventional Premium               $1.8804
PBOB                               $1.9829            RBOB                               $1.6929
CBOB Regular                       $1.5879            PBOB                               $1.9054
CBOB Premium                       $1.8979            CBOB Regular                       $1.5704
                                                      CBOB Premium                       $1.8054
GROUP 3
ULSD                               $1.7720            CHICAGO
Jet                                $1.7320            ULSD                               $1.5970
Suboctane Gasoline                 $1.6229            Jet                                $1.7570
Conventional Premium               $1.8629            CBOB Regular                       $1.6779
                                                      Conventional Premium               $2.0979
LOS ANGELES                                           RBOB                               $1.9379
ULSD                               $1.7820            PBOB                               $2.5279
CARB ULSD                          $1.7820
Jet                                $1.7970            PORTLAND
Conventional Regular               $1.7129            ULSD                               $1.7870
Conventional Premium               $1.8429            Jet                                $1.7970
CARBOB Regular                     $1.7179            Suboctane Gasoline                 $1.7179
CARBOB Premium                     $1.8429            Conventional Premium               $1.9179
SAN FRANCISCO
ULSD                               $1.8020
CARB ULSD                          $1.8020
Jet                                $1.7970
Conventional Regular               $1.6766
Conventional Premium               $1.9529
CARBOB Regular                     $1.7029
CARBOB Premium                     $1.9529

   Liubov Georges, 1.646.359.4088, liubov.georges@dtn.com, www.dtn.com. (c) 
2019 DTN. All rights reserved.