OLD BRIDGE, N.J. (DTN) -- Oil futures nearest to delivery traded on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange settled mixed in choppy trade after trending lower initially, after media reports indicated Saudi Arabia would reduce August exports amid concerns global oil markets were nearing oversupply.
A Bloomberg News story said Saudi Arabia would cut its crude exports by 100,000 barrels per day (bpd) during the month of August in response to growing concerns it had oversupplied demand "without basis," saying that it "does not try to push oil into the market beyond its customers' needs."
The pledge to reduce exports follows June pledges by the Organization of Petroleum Exporting Countries and their non-OPEC counterparts headed by Russia agreeing to boost output by 1 million bpd effective July 1 by coming back into full compliance with output cuts began in early 2017.
Prior to the Saudi statement, prices for both crude oil benchmarks were lower in overnight trade, after passing through key contract support levels earlier this week. West Texas Intermediate stood within reach of its lowest price since mid-June, while Brent crude values trade at three-month lows. At the close WTI, finished higher, while Brent crude declined.
Recently, global supply disruptions and the resultant high U.S. gasoline prices which prompted the OPEC output increase in June have begun to ease with increased output projected soon from Venezuela, Libya and Nigeria. While in the U.S., a downed Syncrude upgrader in Alberta with a 360,000 bpd capacity, was expected to be brought back online before the second half of September.
The Energy Information Administration Wednesday reported supplies at Cushing fell for the ninth straight week to 24.858 million barrels (bbl) from 25.718 million bbl the week prior. EIA also said U.S. crude production reached 11.0 million bpd, the first time ever, with analysts pointing to increased U.S. shale output.
At the 2:30 p.m. EDT settlement, NYMEX August West Texas Intermediate crude futures, which expires at the close of trading Friday, settled 70 cents per bbl higher at $69.46 bbl, while ICE September Brent crude futures settled 32 cents bbl lower at $72.58 bbl. August RBOB gasoline futures fell fractionally to settle at $2.0435 gallon, while the August ULSD contract declined fractionally to $2.0901 gallon at settlement.
Brian Whary can be reached at email@example.com
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