Oil Mixed Amid Rising Russian Production, Strong Demand In Asia
Oil prices were mixed on Monday amid rising Russian production and strong demand in Asia.
Crude Oil WTI Futures for July delivery were trading at $65.7 a barrel at 12:02AM ET (04:02 GMT), down 0.11%. Brent Oil Futures for August delivery, traded in London, were up 0.05% at $76.50 per barrel.
Shanghai Crude Oil WTI Futures for September delivery were up 0.1% at 470.80 yuan per barrel on Monday.
Russia’s oil production rose to 11.1 million bpd in early June, up from slightly below 11 million bpd in most of May, Russian news agency Interfax reported over the weekend.
Prices were also pressured by another jump in the number of rigs drilling for new oil production in the United States, which suggested U.S. crude oil output would rise further.
“Non-OPEC supply is expected to rise sharply in 2019 led by US shale growth along with Russia, Brazil, Canada and Kazakhstan,” said JPMorgan (NYSE:JPM) in its quarterly outlook, adding that it was bearish for the oil markets in the second half of the year.
“oil fundamentals are expected to weaken in 2019 on the back of stronger than expected non-OPEC supply but also potential release of barrels from OPEC as the joint accord between OPEC and non-OPEC is unlikely to stay in place,” the U.S. bank added.
Meanwhile, India’s May fuel demand rose 3.4% year-on-year, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed on Monday.
Oil mixed as rising U.S., Russia supplies weigh while strong demand provides support
Oil prices were mixed on Monday, caught between the downward pull of rising Russian production and U.S. oil drilling activity at its highest since 2015, and upward pressure from strong demand, especially in Asia.
However, analysts expect surging U.S. output to start offsetting efforts led by the Organization of the Petroleum Exporting Countries (OPEC) to withhold production, which have been in place since 2017 and in the first half of this year have pushed up prices significantly.
Brent crude futures (LCOc1), the international benchmark for oil prices, were at $76.50 per barrel at 0215 GMT, up 4 cents from their last close.
But U.S. West Texas Intermediate (WTI) crude futures (CLc1) were down 8 cents at $65.66 a barrel.
Prices were weighed down by another rise in the number of rigs drilling for new oil production in the United States, which crept up by one to reach its highest level since March, 2015 at 862, according to energy services firm Baker Hughes on Friday.
To view a graphic on U.S. oil rig count, click: https://reut.rs/2JAMsXg
That implies that U.S. crude output, which is already at a record-high of 10.8 million barrels per day (bpd), will also rise further.
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