Published: Tue, June 12, 2018
Finance | By Claude Patterson

Oil ends slightly lower, books weekly drop as investors watch OPEC

Oil ends slightly lower, books weekly drop as investors watch OPEC

Brent crude futures settled down 86 cents, or 1.1 percent, at $76.46 a barrel. US WTI crude futures recovered some earlier losses to trade 8 cents down at $65.87.

USA crude's relative gains were the result of profit-taking on the wide spread between the two benchmarks, said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.

Global markets edged up as the highly anticipated U.S. -Korea summit got underway in Singapore amid expressions of goodwill.

Money managers cut bullish ICE Brent crude oil bets by 13,810 net-long positions to 438,186, weekly ICE Futures Europe data on futures and options showed.

JP Morgan cut its 2018 crude forecast for WTI by $3 to $62.20 a barrel, traders said.

"Non-OPEC supply is expected to rise sharply in 2019 led by USA shale growth along with Russia, Brazil, Canada and Kazakhstan", U.S. bank JPMorgan said in its quarterly outlook published on Friday, adding that it was bearish for the oil price outlook going into the second half of the year.

PDVSA has indicated to eight customers that it wouldn't be able to meet its commitment to deliver 1.5 million barrels a day in June, given that it only has 694,000 barrels a day to export, according to S&P Global Platts.

In top importer China, overseas crude purchases remain above 9 million bpd, despite a recent dip away from records.

In the United States, output has risen by nearly a third in the last two years, to a USA record of 10.8 million bpd.

USA drillers added one oil rig in the week to June 8, bringing the total count to 862, the highest level since March 2015, General Electric Co's Baker Hughes energy services firm said in its closely followed report.

Despite Friday's decline, Brent remains more than 15 percent above its level at the start of the year.

Indeed, investment bank Jefferies reiterated that the market is tight and spare capacity could dwindle to 2 percent of demand in the second half of 2018, its lowest level since at least 1984 - but the warning went unnoticed, at least for the time being. That leaves investors looking ahead to a coming meeting of the Organization of the Petroleum Exporting Countries on June 22, which could determine whether a mostly upward trend for crude continues.

On Friday, OPEC's third-largest producer Iran criticised a USA request that Saudi Arabia pump more oil to cover a drop in Iranian exports and predicted that OPEC would not heed the appeal.

"We're going to be subject to incredible headline risk", said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund.

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