Libya’s biggest oil ports are reopening after a dispute with guards at the facilities was settled, although other factions in the country have threatened to block shipments.
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With WTI prices down over 20% since its peak near US$52 per barrel in early June, sentiment in the oil market has taken a serious turn for the worst; oil officially entered a bear market (which is technically defined as a 20% decline in prices) on June 28. Supply disruptions from Nigeria to Canada that trimmed a worldwide surplus have abated, while concerns about the strength of demand have increased. “Refinery crude demand is falling now for economic reasons and will only go lower as seasonal maintenance starts”. Six weeks later, the long hoped for recovery has yet to take hold.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in September CLU6, +0.31% at $42.01 a barrel, up $0.21 in the Globex electronic session.
Total volume traded was about 37 per cent below the 100-day average.
Weak demand and bloated inventories have steadily driven down prices in recent months. September Brent crude LCOU6, +0.35% London’s ICE Futures exchange rose $0.09 to $43.56 a barrel.
Due to our bullish outlook on natural gas prices, we have become even more favorable on Antero Midstream Partners LP (AM), which has outperformed many of its peers this year (up 13.1%). The global benchmark traded at a premium of $1.31 to WTI for September.
US crude stockpiles increased by 1.67 million barrels last week to 521.1 million as output rose, an Energy Information Administration report showed Wednesday.
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Data released earlier this month showed that USA drivers logged 2 percent more miles in May than a year ago, the 27th consecutive month of year-over-year gains, as gasoline prices stayed low. This trend is echoed by the forecast consensus where the price for a barrel of Brent Crude is predicted to increase by approximately 14% from USD45.60/barrel in the second quarter of 2016 to USD51.87/barrel in the second quarter of 2017 (Consensus Economics). Refineries are a key source of crude oil demand, and while they have been strong buyers of crude as of late, the fact that gasoline inventories remain so high means that end product demand is not as high as one would hope, which leads to gasoline building in storage. Heading into the monetary policy meeting, the BOJ was widely expected to cut interest rates and expand Quantitative Easing in an effort to boost persistently sluggish inflation.
