- Crude oil prices settled higher in a volatile session ahead of this week's OPEC meeting, which could bring a production increase by major producers: U.S. WTI closed +1.2% to $65.85/bbl after earlier touching a two-month low at $63.59, while Brent recently was +2.5% at $75.29/bbl.
- "Volatility is going to be pretty high this week," says Bob Yawger, director of energy futures at Mizuho, likely driven by indications on the scale of potential production increases.
- U.S. crude's discount to Brent widened to as much as $9.73/bbl, as traders say China's trade restrictions could leave growing volumes of U.S. crude from shale without a buyer, or that the volumes ultimately would get shipped elsewhere but the price could be depressed.
- Commerzbank (DE:CBKG) analysts say China's “possible punitive tariff of 25% means that U.S. crude oil would no longer be a low-cost alternative despite the current price discount,” thus they “therefore expect the high price gap between Brent and WTI to remain in place during the summer months.”
- Crude rose despite the loss of two storage tanks at Libya's Ras Lanuf port terminal following attacks by armed militias.
- Despite potential downward pressure from large producers increasing output, Goldman Sachs (NYSE:GS) still expects Brent oil to climb back above $80 over the coming months, saying the global supply-demand balance continues to point to further declines in inventories and higher oil prices in H2 2018
- ETFs: USO, XLE, OIL, UWT, UCO, VDE, XOP, DWT, ERX, OIH, SCO, BNO, DBO, ERY, DIG, BGR, GUSH, DTO, FENY, USL, IYE, DUG, DRIP, IEO, FIF, DNO, NDP, PXE, OLO, RYE, PXJ, SZO, CRAK, FXN, OLEM, WTIU, DDG, OILK, NANR, OILX, WTID, USOI, USOU, USOD, FTXN, JHME, UBRT, ERYY, DBRT, ERGF, OILD, OILU, USAI
- Now read: OIL Weekly: Wait And See Approach Will Prevail Until Upcoming OPEC Meeting
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