“I am still watching the USA summer gasoline demand”, said Kho, the president of Vitol Asia Pte.
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World stocks held near all-time highs on Thursday, helped by a rebound in energy shares as oil prices rose after U.S. fuel inventories declined and Saudi Arabia cut supplies of crude to Asia more than expected.
Underlying supply concerns will maintain underlying caution surrounding the oil market and limit the scope for further short-term gains with potential WTI resistance just above $48.50.
News of a possible extension of the OPEC cuts and reports that USA crude stockpiles have dropped by 5.2 million barrels last week slightly boosted worldwide oil prices.
But analysts said gains were capped by a build in USA gasoline stockpiles which partly offset the fall in crude inventories. It also stated that global oil stocks declined slightly to 276mn barrels above the five-year average.
“The efforts of OPEC members with assigned quotas are being undermined” by growth in supply from OPEC members who don’t have quotas, as well as non-OPEC members who are part of the deal but aren’t sticking to it, and “rapid growth in supply from other countries, most notably the USA”, said Shah. Independent refiners, which account for about a third of the nation’s capacity, have received lower crude import quotas compared with a year earlier, prompting speculation their purchases could slow.
The yen, often sought in times of market uncertainty, was last 0.1 per cent higher at 113.92 to the dollar. Aluminum dropped 0.48% and tin slipped 0.13%. If confirmed, that would far exceed the rate from a year prior which stood at 89.1% of capacity.
The oil market is back in contango, now at $0.28 per barrel.
U.S. West Texas Intermediate (WTI) crude futures were at $47.82 per barrel, up 49 cents, or 1 percent from the last settlement.
“I think [OPEC] are now acutely aware that they don’t have the kind of influence they used to have 10 years ago, and that shale is now the swing producer in the market”, Tom Pugh, commodities economist at Capital Economics, said last week.
United States production rose from 8.428 million barrels in last July to 9.293 million barrels per day last week. In addition, 6.5 mn bpd come from liquids production from the USA shale plays, and the rest is made up of other natural gas liquids and unconventional oil sources such as oil sands and heavy oil.
On Nymex, June gasoline added 2.9% to $1.532 a gallon and June heating rose 2.1% to $1.473 a gallon.
Hedge funds are reportedly winding up the long positions.
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Chevron Corp. (NYSE: CVX) traded up about 1.4%, at $106.54 in a 52-week range of $97.53 to $119.00.
