OLD BRIDGE, N.J. (DTN) -- Oil futures nearest to delivery traded on the New York Mercantile Exchange (NYMEX) and Brent crude on the Intercontinental Exchange (ICE) moved mixed in early trading Tuesday while world oil production continued to build in May.
A morning report from the Organization of the Petroleum Exporting Countries (OPEC) shows that OPEC and non-OPEC oil producers continued to increase production in May.
OPEC in their Monthly Oil Market Report also revised expected non-OPEC supply up for this year by 130,000 barrels per day (bpd) to 59.75 million bpd, which reflects annual growth of 1.86 million bpd if realized.
According to the MOMR, world oil supply increased by 270,000 bpd to 97.86 million bpd in May, 1.74 million bpd above year prior. Non-OPEC supply and OPEC natural gas liquids were up 230,000 bpd at 65.99 million bpd last month while 2.09 million bpd higher versus May 2017.
Citing secondary sources, the monthly report showed OPEC crude production edged up 35,400 bpd to 31.869 million bpd in May, which is 574,000 bpd below their production agreement reducing output by 1.2 million bpd below the October 2016 production rate.
In May, Venezuelan crude production was down 42,500 bpd to 1.392 million bpd, the lowest output rate in more than a decade, while down 559,000 bpd from year ago.
OPEC continues to project world oil demand for 2018 at 98.85 million bpd for a year-on-year growth of 1.65 million bpd.
The Energy Information Administration (EIA) will provide its latest forecast near noon with the release of its Short-term Energy Outlook.
Near 9 a.m. ET, NYMEX July West Texas Intermediate (WTI) futures were off 6 cents to $66.04 barrel (bbl), while the August contract fell 5 cents to $65.98 bbl. WTI futures have since edged higher. ICE August Brent was down 49 cents at $75.97 bbl, while the September contract dipped 46 cents to $75.73 bbl.
The NYMEX July RBOB contract fell about 1.4 cents to $2.0910 gallon, while the July ULSD contract dipped fractionally to $2.1525 gallon before edging higher.
Recent increases in global supply could continue to keep a lid on prices ahead of the June 22 OPEC meeting in Vienna, traders said.
The American Petroleum Institute (API) at 4:30 p.m. ET is scheduled to release supply data for the week-ended June 8, with the EIA set to issue its data set at 10:30 a.m. ET Wednesday.
According to Dominick Chirichella with the Energy Management Institute, crude oil stocks likely declined last week on increased refiner demand, while oil products supply likely rose.
The Federal Open Market Committee (FOMC) also begins its two-day monetary policy meeting, where it's widely expected the Fed will announce a quarter-point rate increase in the federal funds rate at its news conference Wednesday afternoon. The U.S. dollar was little changed near a one-week high.
Brian Whary can be reached at firstname.lastname@example.org
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