Crude Futures Firm, Products Advance

WASHINGTON, D.C. (DTN) -- New York Mercantile Exchange West Texas Intermediate and Intercontinental Exchange Brent futures settled fractionally higher on Tuesday. This came after trading in narrow ranges for the second consecutive session, while NYMEX August RBOB and ULSD futures added 1% or more in value ahead of weekly supply data from American Petroleum Institute and Energy Information Administration.

Oil futures were again pulled between supply risk and concern over decelerating demand, as investors await potentially market-moving weekly rundown of supply statistics. The latest EIA's Short-term Energy Outlook released Tuesday afternoon was mostly bearish for the markets, pointing to slowing oil demand amid trade disputes and weaker global manufacturing activity.

Washington-based energy watchdog cut its forecast for world oil consumption for both 2019 and 2020 after revising down these estimates a month prior. EIA also sees global oil markets increasingly oversupplied, with production outpacing demand by 110,000 barrels per day (bpd) in the current year and the gap widening to 150,000 bpd in 2020.

"EIA forecasts global oil inventories will increase by 0.1 million barrels per day in both 2019 and 2020. Rising global oil inventories largely reflect an increasingly weak outlook for global oil consumption in 2019. EIA forecasts global oil demand will rise by 1.1 million bpd in 2019, 0.2 million bpd less than forecast in the June STEO," said the government agency.

Organization of the Petroleum Exporting Countries and Paris-based International Energy Agency will offer their outlook on the markets set for released Thursday and Friday (July 11-12), respectively.

Goldman Sachs said in a note this weekend that it would be challenging to see a bullish case for the oil market in 2019 and even more so in 2020. Bank analysts maintain a $50-$60 per barrel (bbl) price range for the U.S. WTI benchmark and see Brent trading between $55-$65 bbl amid continued supply curbs by OPEC and allies. However, the bank sees no clear exit strategy for OPEC+ group in 2020 in addressing rising U.S. shale production over the next 18 months.

API is set to release weekly supply figures on U.S. inventories at 4:30 p.m. ET, which will be followed by more definitive weekly data from EIA on Wednesday.

Market participants expect U.S. commercial crude stocks to have fallen 4.2 million bbl in the week ended July 5, with mixed estimates for refined products. Analysts call for gasoline inventories to have declined 1.2 million bbl in the profiled week and distillate stockpiles to have increased 1.4 million bbl.

NYMEX August WTI settled $0.17 higher at $57.83 bbl, while ICE September Brent crude settled up $0.05 at $64.16 bbl. NYMEX August RBOB futures ended the session 2.56 cents higher at $1.9269 gallon and NYMEX August ULSD futures were up 1.53 cents with a $1.9106 gallon settlement.

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

(BAS)