U.S. benchmark oil prices settled below $60 a barrel on Thursday for the first time in three sessions, pressured by market worries over a global glut of crude supplies and indications that oil producers will continue to boost output.
Natural-gas prices, finished above $3 per million British thermal units after a smaller-than-expected weekly increase in U.S. inventories.
June crude settled at $59.88 a barrel on the New York Mercantile Exchange, down 62 cents, or 1%. On London’s ICE Futures exchange, June Brent crude the global benchmark, ended down 22 cents, or 0.3%, a $66.59 a barrel. The June Brent contract expired Thursday. “The overall bearish supply situation still has not markedly changed, so market participants are looking at any price above $60 to sell” West Texas Intermediate oil, said Jason Rotman, president of Lido Isle Advisors. The $61-$62 area was very significant technical resistance that held nicely this week,” he said, adding that the next downside target is $56-$57.
The Energy Information Administration reported Wednesday that U.S. crude stockpiles fell for a second consecutive week but domestic oil production edged higher. Traders have been looking closing at the production data. The number of rigs actively drilling for oil have been falling all year, based on data from Baker Hughes and production levels were expected to eventually show significant declines. The EIA expects oil output from seven major U.S. shale plays to fall in June. But analysts have said that the recent rise in prices above $60 a barrel could spur some shale producers to restart output.
A report Wednesday from the International Energy Agency renewed concern over the world’s oil glut. The agency said a global battle for market share between the Organization of the Petroleum Exporting Countries and non-OPEC producers is just getting started.