Oil Mixed in Morning Trade

Washington, D.C. (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange and Intercontinental Exchange Brent crude traded shallowly mixed Thursday morning as participants eyed bearish economic indicators from eurozone, while tightening global oil supply limits losses.

In midmorning trade, the Nymex West Texas Intermediate May contract traded down $0.09 to $63.67 per barrel (bbl), while ICE Brent June futures gained $0.10 to $71.72 bbl. Nymex ULSD May futures moved 0.05 cents down to $2.0687 gallon, while RBOB May futures advanced 1.78 cents to $2.0596 gallon.

Oil futures upside was limited Thursday morning by the bearish economic figures from Eurozone, pointing to the slowest economic growth in nearly six years. IHS Markit Purchasing Managers Index for Europe slid to 51.6 in April, pulled down by contracting industrial output in France and Germany. The German manufacturing index, which is considered by some analysts as a proxy for global growth, came at 44.5 in April, while French manufacturing PMI declined by 0.3 points in the reviewed month. Germany cut its annual growth forecast to 0.5% on Thursday, a sharp drop from 2.1% forecast a year ago.

Energy Information Administration on Wednesday reported U.S. crude stockpiled posted the first drawdown in four weeks, pushing the inventories last week to a 455.2 million bbl, nearly 2% below the five-year average. The draw was realized as U.S. crude production eased 100,000 barrels per day bpd to 12.1 million bbl during the week profiled, while net oil imports declined 659,000 bpd to 3.591 million bpd.

EIA data also showed gasoline supplies continued lower for a ninth straight week, down 1.2 million bbl though implied gasoline demand slumped to 9.420 million bpd, 4.2% below a year ago.

Geopolitical risk in Iran and Venezuela continue to provide security premium to oil prices with the U.S. sanctions targeting the oil industry of both countries as a regime-changing tool. Reuters reported Spain's Repsol suspended all fuel shipments this week to Venezuela to avoid potential violations of the U.S. sanctions.

The Spanish oil company was one of Venezuela's main fuel suppliers alongside with Russia's Rosneft and India's Reliance Industries. According to the report, Repsol has been swapping fuel with Venezuela in exchange for crude oil, even as the United States slapped sanctions on the OPEC member. Repsol's decision to halt all transactions comes as Venezuela struggles to get the crude out of the country due to repeated blackouts that shutdown the main export terminal of Jose.

According to the report, a group of 11 loaded tankers have lingered off the Port of Jose for over two months following payment complications from U.S. sanctions.

Liubov Georges can be reached at liubov.georges@dtn.com