0308 GMT: Crude oil futures slipped during mid-morning trade in Asia June 7 as the market was waiting for pricing cues, although sentiment remained broadly supported by a rosy demand outlook from the west.
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Register NowAt 11:08 am Singapore time (0308 GMT), the ICE Brent August crude contract was down 24 cents/b (0.33%) from the previous settle at $71.65/b, while the July NYMEX light sweet crude contract was down 26 cents/b (0.37%) at $69.36/b.
Given the lack of fresh developments, investors will be eagerly anticipating OPEC's and the International Energy Agency's June Oil Market Reports, due to be released June 10 and June 11, respectively, to get a better sense of supply and demand fundamentals in the crude markets going forward.
Some uncertainty over the supply-side has arisen in the oil market, after OPEC+ failed to provide any guidance on output increases for August onwards. The coalition, which met on June 1, pressed on with initial plans to increase its production levels by 840,000 b/d July onwards, but beyond August, the OPEC+ supply accord calls for quotas to be held steady through April 2022.
Analysts are concerned that if OPEC+ continues to hold back barrels from the market, the impending rise in demand will outstrip the rise in supply in the oil market. Such concerns of overheating were one of the driving forces behind an oil price rally seen in the week ended June 4, when the the August contract for ICE Brent crude futures rose 4.61% on the week to end the week at $71.89/b, while the July contract for NYMEX light sweet crude rose 4.98% to $69.62/b.
Despite oil futures edging lower this morning, analysts say that the price outlook remains strong, with Margaret Yang, DailyFX strategist, telling S&P Global Platts June 7 that the dawdling Joint Comprehensive Plan of Action negotiations and strong data from the Energy Information Administration released last week has strengthened the price outlook.
Latest data from the Energy Information Administration, released on June 3, had shown commercial crude oil inventories in the US falling 5.08 million barrels to 479.27 million barrels in the week to May 28, pushing them to the lowest since the week ended Feb. 19 and nearly 3% behind the five-year average.
The EIA data also showed that downstream products demand was firming up, with the four-week moving average of its implied gasoline demand metric rising to 9.16 million b/d, the highest since March 2020, and jet fuel demand reaching 1.44 million b/d, the highest since the week ended Jan. 1.
Oil demand in the US, and in Europe, is expected to continue its uptrend, with the former being in the midst of an economic rebound and the later poised to relax mobility restrictions this month.
"Falling cases of COVID-19 amid an acceleration in vaccinations is likely to see traffic numbers in Europe and the US continue to rise. This should see this pick-up in demand continue for the foreseeable future," ANZ analysts said in a June 7 note.
The Link LonkJune 07, 2021 at 10:09AM
https://www.spglobal.com/platts/en/market-insights/latest-news/oil/060721-crude-oil-futures-tick-lower-as-market-awaits-fresh-cues
Crude oil futures tick lower as market awaits fresh cues - S&P Global
https://news.google.com/search?q=fresh&hl=en-US&gl=US&ceid=US:en
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