Oil Futures Down on Output Worries
NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures settled lower this afternoon after seesawing earlier, as market focus shifted back to the rising in U.S. oil production and the slow pace of global stock drawdown.
Oil services firm Baker Hughes' latest data showed the number of active U.S. oil rigs edged higher by two to a 27-month high of 765 during the week-ended July 14.
Meanwhile, the Energy Information Administration reported that domestic crude production rose again last week, up 59,000 barrels per day (bpd) to a fresh two-year high of 9.397 million bpd in the week-ended July 7. On Monday, the EIA projected that production from seven oil shale plays would increase by 113,000 bpd in August.
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Globally, oil supply climbed 720,000 bpd in June to 97.46 million bpd, the International Energy Agency reported last week, and compliance by the Organization of the Petroleum Exporting Countries with their 1.2 million bpd in production cut agreement down to 78% in June from 95% in May.
Citing secondary sources, OPEC also said its crude production increased by 393,500 bpd to 32.61 million bpd in June as Libya and Nigeria raised output.
Today, Libyan officials said production rose to 1.1 million bpd over the weekend, the highest in four years and up from 1.0 million a week earlier. The Libyan supply growth dulled market optimism that had boosted oil futures last week after data showed improving fuel demand outlook.
The International Energy Agency last week projected strong global oil demand growth during the second half of 2017 and in 2018, but remained concerned about the slow pace of market rebalancing.
NYMEX August West Texas Intermediate crude oil futures settled 52 cents lower at $46.02 per barrel (bbl), pinned at the $60 strike at the expiration of options on the front month contract at today's formal session close. The IntercontinentalExchange September Brent crude futures contract was down 49 cents at $48.42 bbl settlement, reversing off a near two-week high of $49.26.
The August ULSD futures contract slumped 1.55 cents to a $1.4995 gallon settlement. August RBOB futures settled down 0.38 cent to $1.5567 gallon.
George Orwel can be reached at george.orwel@dtn.com
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