PREVIEW: Oil Futures Mixed on Demand Concerns, Global Risk
6/14 7:33 AM
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. 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