Oil Futures Settle Mixed

WASHINGTON, D.C. (DTN) -- New York Mercantile Exchange oil futures nearest to delivery and Intercontinental Exchange Brent futures settled mixed Monday with crude oil little changed after trading in narrow ranges for most of the session amid competing factors of weakening global economic growth and tightening supply availability.

NYMEX August West Texas Intermediate settled $0.15 higher at $57.66 barrel (bbl) after trading above $58 bbl at midsession, while ICE September Brent crude fell $0.12 to $64.11 bbl amid selling during market-on-close trade. NYMEX August RBOB futures settled 2.82cts lower at $1.9013 gallon and NYMEX August ULSD futures were down 0.97cts with a $1.8953 gallon settlement.

Monday's mixed session comes as Organization of the Petroleum Exporting Countries slashed oil output to a new five-year low in June, while concern over global economic growth remains the main driver for markets.

A Platts' survey found OPEC pumped 30.09 million bpd last month with most of the decline in output from Iran and Libya that was partially offset by production surges from Saudi Arabia and Nigeria. OPEC will publish official production figures Thursday (7/11).

OPEC and 10 oil producing countries led by Russia agreed to trim supplies by 1.2 million barrels per day (bpd) through March 2020 last week, extending the current production cut agreement into its' fourth year.

Against the backdrop of less available supplies on the global market, underlying demand concerns and trade disputes continue to weigh on oil prices, while mixed economic data adds another layer of uncertainty for the outlook.

The U.S. Labor Department said Friday employers added a larger-than-expected 224,000 jobs last month -- the most in five months. However, new factory orders in the United States fell for the second straight month in May, stoking fears of decelerating economic growth.

Market participants await the monthly Short-Term Energy Outlook from Energy Information Administration set for release on Tuesday (7/9), while Paris-based International Energy Agency will publish its monthly oil report on Friday (7/12).

Oil futures continue to draw support from simmering geopolitical tensions in the Middle East after Iran announced it breached uranium enrichment cap set in the 2015 nuclear agreement. In response to the announcement, U.S. Secretary Mike Pompeo warned Tehran of additional sanctions on its economy and exports that would further cripple its deteriorating oil industry. According to Platts, Iran's crude exports plummeted 300,000 bpd in June from late April, while production fell to the lowest level since 1986 against the backdrop of stagnating economy and hyperinflation.

Britain's Royal Navy seized an Iranian oil tanker on Thursday, which was transporting nearly 2 million bbl of crude oil to Syria in violation of European Union and U.S. sanctions -- a move that Iran condemned as a "threatening act." According to wire services, Tehran is considering charging foreign ships a levy to pass through Iranian waters in the Persian Gulf, a move that could distort supply routes and raise costs for shipping companies.

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

(BAS)