NEW YORK (DTN) -- New York Mercantile Exchange oil futures opened regular trade session lower Thursday morning, but the complex remains choppy amid cautious trade as the market keeps a watchful eye on mixed U.S. oil supply data and the grim prospect for Greece if the ongoing debt talks fail.
"The Greek debt talks continue as the standoff not only brought down global stock markets but held back oil," said analyst Phil Flynn at Price Futures Group in Chicago.
Oil futures' downside was curbed by positive economic data released Thursday morning.
At 8 a.m. CDT, NYMEX August WTI contract was down 28 cents at $59.99 bbl while ICE August Brent futures opened one cent higher at $63.50 bbl. The Brent premium over WTI widened 29 cents at the open to $3.51 bbl.
In products trade, the NYMEX July ULSD futures contract edged down 0.24 cents to $1.8737 gallon at the open, while NYMEX July RBOB futures slipped 0.22 cents to $2.0533 gallon.
On Wall Street, U.S. equities were higher this morning after the Commerce Department said U.S. personal income rose 0.5% in May while personal spending jumped 0.9% for the same month, the biggest increase in nearly six years.
Labor market conditions haven't changed much in recent weeks, with new data showing an increase in job layoffs but not by much. Weekly jobless claims, a measure of layoffs, rose 3,000 to 271,000, the Labor Department said. Initial jobless claims have been under the key 300,000 level for 16 straight weeks, the longest stretch in more than a decade.
In Brussels, negotiations continue on dueling proposals in the Greek debt talks, and both Athens and creditors can't agree on a reform package that would avert a default scheduled for June 30 if Athens can't pay its debt to the International Monetary Fund.
Greece needs funds from the creditors comprising of the IMF, the European Central Bank and the European Union to be able to make a $1.8 billion payment to IMF next week. Analysts said a Greek default would hurt the eurozone economy and oil demand.
Domestically, the Energy Information Administration reported Wednesday U.S. crude oil stocks fell 4.9 million bbl during the week-ended June 19, as crude imports fell and refinery crude inputs increased. It was the eighth straight weekly crude stock draw. EIA detailed a surprise increase in gasoline stockpiles, up 680,000 bbl for the week even as demand soared 479,000 bpd. Distillate supplies increased 1.84 million bbl for the week, as demand plummeted 509,000 bpd.
A comprehensive Iran nuclear agreement that was set for June 30 now looks unlikely after Iran's Supreme Leader Ayatollah Khamenei ruled out a long-term freeze on nuclear research and intrusive inspections as demanded by six world powers.
U.S. President Barack Obama is under pressure not to cave in to the Iranians, and has been urged even by his former aides to walk away if he can't secure a deal that allows intrusive inspections of Iran's nuclear sites and other key security safeguards. Without a deal, sanctions on Iran's oil industry won't be lifted, which means no extra Iranian oil flowing to the global market.
George Orwel can be reached at email@example.com
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