DTN Oil Update
Oil Futures Soften as OPEC+ Readies Planned Output Hike
VIENNA (DTN) -- Oil futures softened Friday morning as the bearish sentiment driven by somber economic growth outlooks outweighed the bullish effect of additional U.S. sanctions on Iranian oil trade. Just as demand growth is looking to slow, eight OPEC+ countries are expected to increase crude oil production by 411,000 bpd in May, in addition to the 2.2 million bpd released in early April.
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NYMEX-traded WTI for June delivery was down $0.59 bbl to trade near $58.65 bbl, and ICE Brent for July delivery fell $0.55 bbl to $61.58 bbl.
June RBOB gasoline futures declined $0.0214 to $2.0278 gallon, while the front-month ULSD futures contract slid $0.0162 to $1.9958 gallon.
The U.S. Dollar Index softened by 0.3499 points to 99.555.
The planned output hikes by some OPEC+ members are fanning global oversupply concerns given lackluster demand growth in China, amplified by the ongoing trade dispute, and robust non-OPEC production increases.
Production discipline has led to OPEC sitting on plenty of spare production capacity, some of which can immediately supply additional volumes to the market. The U.S. Energy Information Administration in its April short-term energy outlook pegged OPEC spare production capacity at 4.59 million bpd in March and 4.52 million bpd last month.
Fresh macroeconomic data from the U.S., meanwhile, led the Federal Reserve Bank of Atlanta to lower its second quarter GPD growth estimate to 1.1%, down from 2.4%.
