Oil little changed, held down by demand outlook, shale output forecast
SEOUL – Oil prices were little changed in thin trade on Friday, with a forecast of higher output by U.S. shale oil producers this year adding to worries over demand and preventing the market from extending the previous session’s gains.
U.S. July crude had lost 5 cents to $60.40 a barrel as of 0428 GMT after closing up 53 cents on Thursday.
Brent crude for August gained 1 cent to $64.27 after settling up 39 cents.
“Without much change in fundamentals as well as changes to dollar strength, crude oil prices continue to move sideways. We believe that this would likely continue for today as we do not
expect much change,” Daniel Ang at Phillip Futures said.
He added that oil prices were showing little sign of moving far from $60 and $64 for WTI and Brent respectively.
U.S. shale oil producers have projected a rise in output for the year even though they have scaled back drilling to cope with a slump of nearly 45 percent in crude prices.
The potential for increased imports to the United States could put pressure on U.S. 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 U.S. rail volumes of crude oil and petroleum dropped 12 percent year-on-year last week as higher imports slowed purchases from regions such as North Dakota.
Saudi Arabian Oil Minister Ali al-Naimi said he was optimistic about the coming months, given increased global demand. Naimi noted a reduction in the level of commercial stocks and an improvement in prices.
Russia, the second-biggest oil supplier to global markets, and Saudi Arabia, the world’s biggest oil exporter, plan to discuss broad cooperation at an economic forum in St Petersburg.
Chinese Vice Finance Minister Zhu Guangyao said he hoped China and the United States would coordinate their macroeconomic policies better, adding that countries with the scope to expand their fiscal policy should do so actively.
The Bank of Japan kept monetary policy steady and maintained its upbeat assessment of the economy on Friday.
Eurozone leaders will hold an emergency summit on Monday after Greece and its international creditors failed to make any breakthrough on a debt deal on Thursday. – Reuters