DTN Oil Update
Oil Futures Mixed Despite OPEC Crude Output Rise
HOUSTON (DTN) -- Oil futures were mixed Tuesday after OPEC reported its crude oil production rose 220,000 barrels per day (bpd) in June despite a drop in Libyan and Iranian output, according to the organization's latest monthly oil report published this morning.
The report included an unusual distinction between Saudi oil production and Saudi oil supplied to the market.
While official production figures communicated by member states have been closely in line with production estimates by secondary sources, the report highlighted a sizable 568,000-bpd jump in Saudi Arabian oil production versus a 173,000-bpd month-on-month increase in "supply to the market."
Ample supplies from OPEC countries set a bearish tone in crude oil futures, despite the Consumer Price Index report released Tuesday morning showing an increase of 0.3% in June, bringing the 12-month inflation rate to 2.7%. The figure was in line with expectations and indicated only a slight impact from trade tariffs.
"A slightly softer-than-expected June core inflation reading keeps alive the chances of a September Federal Reserve interest rate cut, but the risk is that we get less benign prints for July and August. That means we will need to see clear evidence of softer jobs figures to trigger Fed action before December," James Knightley, chief international economist at ING Research said in a note Tuesday.
The front-month NYMEX WTI edged down by $0.28 to $66.70 barrel (bbl), and ICE Brent futures contract for September delivery dropped by $0.37 bbl to $68.84 bbl.
In contrast, August RBOB gasoline futures rose by $0.0171 to $2.1717 gallon, and the front-month ULSD futures contract gained $0.0171 to trade near $2.4069 gallon. The U.S. Dollar Index gained 0.557 points to 98.32.
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