U.S. benchmark oil prices fell below $60 a barrel on Thursday, pressured by market worries over a glut of global crude supplies and indications that oil producers will continue to boost output.
Natural-gas prices, meanwhile, headed higher after a smaller-than-expected weekly increase in U.S. inventories.June crude CLM5, -1.06% traded at $59.70 a barrel on the New York Mercantile Exchange, down 80 cents, or 1.3%.
June Brent—the global benchmark— LCOM5, -0.34% on London’s ICE Futures exchange was down 60 cents, or 0.9%, to $66.67 a barrel. The June Brent contract expires later Thursday.
“The overall bearish supply situation still has not markedly changed, so market participants are looking at any price above $60 to sell” West Texas Intermediate oil, said Jason Rotman, president of Lido Isle Advisors. The $61-$62 area was very significant technical resistance that held nicely this week,” he said, adding that the next downside target is $56-$57.
The Energy Information Administration reported Wednesday that U.S. crude stockpiles fell for a second consecutive week but domestic oil production edged higher. Traders have been looking closing at the production data.
The number of rigs actively drilling for oil have been falling all year, based on data from Baker Hughes BHI, -1.20% and production levels were expected to eventually show significant declines. The EIA expects oil output from seven major U.S. shale plays to fall in June.
But analysts have said that the recent rise in prices above $60 a barrel could spur some shale producers to restart output.
“Until we see production begin to materially rollover in response to last year’s drop in price and subsequent pullback in active number of rigs, [Nymex oil] prices are likely to stay below $60-$65 a barrel,” analyst Tyler Richey in the latest 7:00’s Report.
A report Wednesday from the International Energy Agency renewed concern over the world’s oil glut. The agency said a global battle for market share between the Organization of the Petroleum Exporting Countries and non-OPEC producers is just getting started.
Back on Nymex, June gasoline RBM5, +0.62% was at $2.037 a gallon, down less than half a cent, or 0.2%, while June heating oil HOM5, -0.09% shed 1.3 cents, or 0.6%, to $1.993 a gallon.
Natural-gas futures were set for their highest close since January after data from EIA on Thursday showed that weekly supplies of the fuel rose 111 billion cubic feet for the week, less than the 115 billion to 119 billion cubic feet increase analysts polled by Platts expected.
June natural gas NGM15, +2.39% added 5.2 cents, or 1.8%, to $2.987 per million British thermal units. From here, prices may move a bit higher but producers will start drilling again and with the increase in supply, prices will turn lower, said Richard Gechter, Jr., principal and president of Richard W. Gechter Natural Gas Consulting.
marketwatch.com
Natural-gas prices, meanwhile, headed higher after a smaller-than-expected weekly increase in U.S. inventories.June crude CLM5, -1.06% traded at $59.70 a barrel on the New York Mercantile Exchange, down 80 cents, or 1.3%.
June Brent—the global benchmark— LCOM5, -0.34% on London’s ICE Futures exchange was down 60 cents, or 0.9%, to $66.67 a barrel. The June Brent contract expires later Thursday.
“The overall bearish supply situation still has not markedly changed, so market participants are looking at any price above $60 to sell” West Texas Intermediate oil, said Jason Rotman, president of Lido Isle Advisors. The $61-$62 area was very significant technical resistance that held nicely this week,” he said, adding that the next downside target is $56-$57.
The Energy Information Administration reported Wednesday that U.S. crude stockpiles fell for a second consecutive week but domestic oil production edged higher. Traders have been looking closing at the production data.
The number of rigs actively drilling for oil have been falling all year, based on data from Baker Hughes BHI, -1.20% and production levels were expected to eventually show significant declines. The EIA expects oil output from seven major U.S. shale plays to fall in June.
But analysts have said that the recent rise in prices above $60 a barrel could spur some shale producers to restart output.
“Until we see production begin to materially rollover in response to last year’s drop in price and subsequent pullback in active number of rigs, [Nymex oil] prices are likely to stay below $60-$65 a barrel,” analyst Tyler Richey in the latest 7:00’s Report.
A report Wednesday from the International Energy Agency renewed concern over the world’s oil glut. The agency said a global battle for market share between the Organization of the Petroleum Exporting Countries and non-OPEC producers is just getting started.
Back on Nymex, June gasoline RBM5, +0.62% was at $2.037 a gallon, down less than half a cent, or 0.2%, while June heating oil HOM5, -0.09% shed 1.3 cents, or 0.6%, to $1.993 a gallon.
Natural-gas futures were set for their highest close since January after data from EIA on Thursday showed that weekly supplies of the fuel rose 111 billion cubic feet for the week, less than the 115 billion to 119 billion cubic feet increase analysts polled by Platts expected.
June natural gas NGM15, +2.39% added 5.2 cents, or 1.8%, to $2.987 per million British thermal units. From here, prices may move a bit higher but producers will start drilling again and with the increase in supply, prices will turn lower, said Richard Gechter, Jr., principal and president of Richard W. Gechter Natural Gas Consulting.
marketwatch.com
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