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NYMEX Crude $ 45.24 DN $.7100
NY Harbor ULSD $1.3778 DN $.00196
NYMEX Gasoline $1.3872 DN $.0348
NEWS
Oil futures settled lower on Monday, losing more than 1% as traders dismissed worries of supply disruptions from the attempted coup in Turkey. August West Texas Intermediate crude fell 71 cents, or 1.6%, to settle at $45.24 a barrel on the New York Mercantile Exchange. It had traded as high as $46.14 overnight, according to FactSet. September Brent crude on London’s ICE Futures exchange declined by 65 cents, or 1.4%, to $46.96 a barrel. Petroleum prices were “on the defensive” due to a “combination of relief that a coup attempt in Turkey failed to disrupt oil pipeline flows or tanker loadings, with prices falling back toward the bottom of their recent trading range,” said Tim Evans, energy analyst at Citi Futures and OTC Clearing. For Brent, he sees the $45.90 low for the September contract set on July 11 as “a key level to watch, with a break confirming that the market remains in an intermediate-term correction to the downside.” Meanwhile, August WTI crude may experience some book squaring ahead of Wednesday’s contract expiration, he said.
On Friday, oil prices got a boost by data that showed China’s second-quarter gross domestic product grew 6.7%, stronger than analysts had expected. Concerns that the military coup in Turkey could hinder the flow of oil through the Turkish straits, a crucial shipping and trading route, also helped buoy prices in electronic trading late Friday and into the weekend. But prices dropped when it became clear that the Turkish ports were operating normally. “Prices were softer because oil transport was not interrupted as the coup unfolded,” said Ric Spooner, chief analyst at the Australia-based CMC Markets, who expects prices to move sideways this week on lack of strong catalysts.
Data from industry group Baker Hughes released Friday showed that the U.S. rig count ticked up by six to 357, the highest number since April. While the number of rigs remains low compared with two years ago, the recent increase suggests that producers are willing to invest in new production at current prices.
A monthly report from the Energy Information Administration Monday, which came out shortly before oil futures settled, showed expectations for a decline of 99,000 barrels a day in U.S. shale oil output for August, from July. The fall is smaller than the 118,000 barrel-per-day cutback the EIA had forecast for July. Tyler Richey, co-editor of The 7:00’s Report, pointed out that weekly data from the EIA has continued to show a slower pace of overall crude production declines in the lower 48 states. “There is a pretty clear bearish trend of slowing output declines in the weekly data and strong possibility that U.S. production is finding a floor around 8 [million barrels a day] in the lower 48.”
Broadly, there are signs that a growing glut of refined products could begin to weigh on crude prices. The oversupplied products markets, especially gasoline, means refiners will pull back on crude purchases, especially as the autumn maintenance season is only two months away, the New-York-based bank Morgan Stanley said.