Crude oil futures steady after overnight slump; market awaits OPEC data

Market participants were now looking ahead for OPEC’S Monthly Oil Market Report due on Thursday and the International Energy Agency’s Short-term Energy Market Outlook due for release on Friday. At 10:50 am Singapore time (0250 GMT), ICE Brent August futures dipped 9 cents/b (0.15%) from Wednesday’s settle at $59.88/b, while the NYMEX July light sweet crude futures contract inched 15 cents/b (0.29%) lower at $50.99/b.

US crude inventories for the week ended June 7 rose 2.21 million barrels according to data released by the US Energy Information Administration on Wednesday. The bearish data set crude futures, which were already on a downtrend, tumbling down even further, analysts said. “Crude oil prices collapsed as builds in inventories raised concerns about weaker demand,” ANZ analysts said in a note.

Crude futures have been on a downward trend since late-April on demand concerns stemming from the US-China trade tensions. Growing crude inventories and statistics reflecting lower-than-expected refined products demand have added to those concerns, analysts said. Meanwhile, investors continue to watch out for any headlines or comments from OPEC countries ahead of their scheduled meeting in Vienna on June 25 where a decision on extending their production cut agreement is set to be taken.

“OPEC continues to suggest a production agreement is imminent. While the group has still to settle on a date for their upcoming bi-annual meeting, members continue to promote the idea of further cuts,” ANZ analysts said in a note. Originally scheduled for June 25-26, OPEC’s semi-annual gathering in Vienna could be moved to the week after to accommodate a request by key non-OPEC ally Russia, which has cited a potential conflict with the G-20 summit on June 28-29 in Japan.

Any delay “could complicate messaging and potentially create some additional volatility in oil markets,” Joe McMonigle, an analyst with Hedgeye Capital, said. “We expect bearishness to persist in the short-term until further clarity from OPEC+,” OCBC Bank analysts said in a note Thursday.

“The OPEC monthly oil market report will be due today ahead of the IEA’s on Friday, but the risks will also be with any deterioration of the demand outlook, thus giving prices a bearish bias,” IG’s market strategist Pan Jingyi said. As of 0250 GMT, the US Dollar Index was down 0.06% at 96.89.