Oil dips on production forecasts

19 June 2015, News Wires – Oil futures prices dipped slightly in thin trade on Friday as forecast higher production by US shale oil producers this year added to lingering worries over demand.

oil priceUS July crude shed 4 cents to $60.41 a barrel early on Friday after closing up 53 cents in the previous session. Brent crude for August fell 7 cents to $64.19 a barrel, having settled up 39 cents on Thursday.

US shale oil producers have projected a rise in output for the year even as they have scaled back drilling to cope with a near 45% slump in crude prices. The potential for increased imports to the United States could also pressure US oil prices.

“The narrowing of the Brent/WTI spread is improving the economics of imports rather than domestic purchases,” ANZ said on Friday.

It noted US rail volumes of crude and petroleum dropped 12% year on year last week as higher imports slow purchases from regions such as North Dakota. Demand for oil products remain weak.

Brazil’s state-run Petrobras is again importing gasoline and selling it locally at a loss, but falling demand means it will be hard to adjust the price to be in line with international levels, a source told Reuters.

In Asia, its gasoil cargo market is likely headed for its worst quarter in more than five years as supply mounts and the region’s largest consumers slow their demand.

Saudi Arabia’s Oil Minister Ali al-Naimi said he is optimistic about the coming months given increased global demand.

Naimi also noted a reduction in the level of commercial stocks, and an improvement in prices. Russia, the second biggest oil supplier to the global markets, and Saudi, the world’s biggest oil exporter, plan to discuss a broad cooperation agreement at an economic forum in St Petersburg.

Asian shares held firm and the dollar remained on the defensive on Friday as investors bet the US Federal Reserve will not raise interest rates too soon.

Chinese Vice Finance Minister said that he hoped for China and the US to better coordinate their macroeconomic policies, adding that countries with the scope to expand their fiscal policy should do so actively.

Euro zone leaders will hold an emergency summit on Monday as Greece and its international creditors failed to make any breakthrough on a debt deal on Thursday.

– Reuters

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