WTI and Brent futures were lower during early trade in Europe today. Both contacts scored sizable losses on Friday, closing the week at levels seen before the Iraqi conflict erupted earlier in June.
West Texas Intermediate futures for settlement in August traded for $100.35 per barrel at 7:42 GMT on the New York Mercantile Exchange, down 0.48%. Prices ranged from $100.95 to $100.26 per barrel. The US contract lost about 3% last week.
Meanwhile on the ICE in London, Brent futures due in September stood for a 0.13% drop at $107.12 per barrel. Daily high and low stood at $107.63 and $106.98 per barrel, respectively. Brent’s premium to September WTI stood at $7.28, after last session’s closing margin of $6.96. The European contract also dropped about 3% last week.
“We have rising supply out of the Middle East and that casts a negative feel over the market,” Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney, said for Bloomberg. “This is also a period where we should be seeing tighter supply in the U.S. but we’re not really getting that.”
The US Energy Information Administration (EIA) posted its weekly oil inventories report for the seven day through July 4 on Thursday. The log revealed a 2.370 million-barrel draw for commercial crude oil inventories, gasoline inventories added 0.579 million barrels, while distillate fuels stockpiles levels increased by 0.227 million barrels.
Thursdays “weekly oil inventories showed lower-than-expected gasoline demand,” Michael Poulsen, analyst at Global Risk Management Ltd. in Middelfart, Denmark, said in a report, cited by Bloomberg. It’s “a surprise since the summer driving season is presently peaking.”
Several key figures on the US economy will be posted this week. Tomorrow, retail sales for June are expected to log a 0.6% monthly gain, after the 0.3% growth in May, while core retail sales are projected to have added 0.5% on a monthly basis. Industrial production and PPI for June will be posted on Wednesday, with expectations of slight gains in both. Thursday will see key housing data, with building permits and housing starts for June projected to stand for minor increases.
Libya
Libyan rebels expressed their commitment to reopening the Es Sider port, the countrys biggest oil-exporting facility, the BBC reported. The group also disagreed with a fresh protest, which shut another port in Libya.
Meanwhile, fighting erupted at Tripolis airport, where rival brigades clashed, resulting in the deaths of at least 7, the BBC reported.
Various gangs and armed groups still control swathes of Libyan territory.
However, the countrys output was at 470 000 barrels per day, a spokesman for the state-run National Oil Corp (NOC) said on Sunday, after averaging 300 000 for the month of June, Reuters reported. Libya holds Africas largest crude reserves and has a potential output of some 4 million barrels per day.
Technical view
According to Binary Tribune’s daily analysis, in case the West Texas Intermediate August future on the NYMEX breaches the first resistance level at $102.35, it probably will continue up to test $103.88. Should the second key resistance be broken, the US benchmark will most likely attempt to advance to $104.83.
If the contract manages to breach the first key support at $99.87, it will probably continue to drop and test $98.92. With this second key support broken, the movement to the downside will probably continue to $97.39.
Meanwhile, September Brent on the ICE will see its first resistance level at $108.57. If breached, it will probably rise and probe $109.89. In case the second key resistance is broken, the European crude benchmark will probably attempt to advance to $110.69.
If Brent manages to penetrate the first key support at $106.45, it will likely continue down to test $105.65. With the second support broken, downside movement may extend to $104.33 per barrel.
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