Market Close: July 07 Mixed
Jul 7th, 2020 by loren
Oil futures ended with a modest loss on Tuesday, with the increase in coronavirus cases in parts of the world continuing to pressure prospects for energy demand. Expectations for a decline in U.S. crude inventories for a second week in a row, however, provided some support for prices. On Tuesday, West Texas Intermediate crude for August fell by a penny, 0.02%, to settle at $40.62 a barrel on the New York Mercantile Exchange, after also ending marginally lower on Monday. Global benchmark Brent oil for September declined by 2 cents, or 0.05%, to $43.08 a barrel on the ICE Futures Europe exchange, following a gain of 0.7% in the previous session.
On the demand side, the Energy Information Administration’s report Wednesday, which covers data for the week ended July 3, “may capture a small piece of early 4th of July holiday driving, though next week’s report will be the one to watch,” said Robbie Fraser, senior commodity analyst at Schneider Electric. On average, the EIA is expected to report a decline of 3.7 million barrels in crude stockpiles for last week, according to analysts polled by S&P Global Platts. That would mark a second-straight weekly fall. They also forecast supply declines of 1.2 million barrels for gasoline and 500,000 barrels for distillates.
“Changes in supply and demand have shifted global oil markets from an estimated 21 million barrels per day of oversupply in April to inventory draws in June,” Linda Capuano, EIA administrator, said in a statement. “EIA estimates June consumption increased by almost 10 million barrels per day from April at the same time that global supply fell by 12 million barrels per day as a result of reduced production from OPEC+ and price-driven declines in the United States and Canada.”
Meanwhile, members of OPEC pumped 22.31 million barrels per day in June, the lowest collective output since September 1990, according to an S&P Global Platts survey released Tuesday. OPEC+, which includes OPEC and allied non-OPEC members, saw production at 10.32 million barrels per day below their late 2018 reference levels, representing 106% of their committed production cuts, the survey showed.