DTN Oil Update
Oil Drops on Reports of Larger-Than-Expected OPEC Hike
VIENNA (DTN) -- Oil futures fell Friday morning on reports that OPEC is considering an output hike in July exceeding the widely anticipated and largely priced-in 411,000 barrels per day (bpd). Prices were heading for weekly declines prior to the news.
NYMEX-traded WTI for July delivery was down $0.58 barrel (bbl) to trade near $60.36 bbl, and ICE Brent for July delivery fell $0.35 bbl to $63.80 bbl.
June RBOB gasoline futures declined $0.0134 to $2.0460 gallon, while the front-month ULSD futures contract was down $0.0167 to $2.0315 gallon.
The U.S. Dollar Index strengthened by 0.101 points to 99.310.
Reuters on Friday reported OPEC and its allies may discuss ramping up output in July beyond the 411,000 bpd agreed upon for both May and June at their Saturday meeting. The hike is part of the planned rollback of some 2.2 million bpd of voluntary adjustments implemented by eight member countries in addition to the group's production curtailment under the Declaration of Cooperation.
OPEC's shift in strategy from defending price to regaining market share has exacerbated global oil glut woes in the light of lackluster demand growth. The historical gap between production targets and actual output, however, suggests that the effect on the global supply-demand balance may be less severe than anticipated.
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