U.S. oil futures fall to 15-week low as supply glut concerns weigh

U.S. oil futures fell to the lowest level since April on Tuesday, as ongoing worries over ample supplies and high domestic oil production drove prices down.

 

On the New York Mercantile Exchange, crude oil for September delivery hit a session low of $50.13 a barrel, a level not seen since April 4, before trading at $50.39 during European morning hours, down 5 cents, or 0.09%. A day earlier, Nymex oil futures lost 77 cents, or 1.5%, to end at $50.44.

Market players looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of demand in the world’s largest oil consumer. The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles fell by 2.2 million barrels in the week ended July 17.

According to industry research group Baker Hughes (NYSE:BHI), the number of rigs drilling for oil in the U.S. declined by seven last week to 638, snapping two weeks of gains. Elsewhere, on the ICE Futures Exchange in London, Brent oil for September delivery tacked on 4 cents, or 0.07%, to trade at $56.69 a barrel.

On Monday, London-traded Brent futures slumped to $56.33, the lowest since July 7, before closing at $56.65, down 45 cents, or 0.79%, amid concerns a resumption of Iranian oil exports will add to a global glut. Iran and six world powers reached a long-awaited nuclear deal last week that would end sanctions on Tehran in exchange for curbs on the country's disputed nuclear program.

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Oil prices firm up after falling on supply data

Oil prices firmed up on Thursday, stabilizing after a steep drop in the previous session after data showing an unexpected increase in U.S. oil stockpiles last week on the back of increased production.

On the New York Mercantile Exchange, crude oil for August delivery edged up 0.17% to $57.05 a barrel after ending the previous session down 4.2%.

Brent crude for August delivery, the global benchmark rose 0.52% to $62.33 after falling 2.5% in the previous session.

Oil prices tumbled after the U.S. Energy Information Administration said in its weekly report on Wednesday that crude stockpiles rose by 2.4 million barrels in the week to June 26.

The consensus forecast had been for a decrease of 2 million barrels.

At 465.4 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years.

It was the first supply build since April and added to concerns over a global supply glut.

Global oil production is still outstripping demand following a boom in U.S. shale oil production and after a decision by the Organization of Petroleum Exporting Countries last year not to cut production.

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Crude oil futures

Crude oil futures inched lower on Friday, as investors nervously eyed developments in Greece’s debt talks ahead of a looming repayment deadline.

Greece is due to repay €1.6 billion to the International Monetary Fund on June 30 but without a rescue package in place it is unclear if the payment can be met. If Greece misses the payment it risks going into default, which could trigger the country’s exit from the euro area.

Late on Friday, Greek Prime Minister Alexis Tsipras said the Greek government rejected the latest reform measures proposed by the country's creditors and instead called a surprise referendum for July 5.

European finance ministers refused to extend Greece’s bailout beyond June 30, despite Greek requests to extend the program until after the referendum, deepening doubt over Greece’s future in the euro zone.

On the New York Mercantile Exchange, crude oil for delivery in August slumped 7 cents, or 0.12%, to end the week at $59.63 a barrel. Nymex prices hit a session low of $58.76 earlier, the weakest level since June 9.

U.S. oil futures pared losses after industry research group Baker Hughes (NYSE:BHI) said late Friday that the number of rigs drilling for oil in the U.S. fell by three last week to 628. The drop marks the 29th straight week of declines.

On the week, New York-traded oil futures declined 12 cents, or 0.57%, the second straight weekly loss, as worries over high domestic U.S. oil production, despite a declining rig count, weighed.

U.S. oil production has held around 9.6 million barrels a day in recent weeks, the highest level since the early 1970s.

Elsewhere, on the ICE Futures Exchange in London, Brent for August delivery hit a session low of $62.50, the weakest level since June 22, before closing at $63.26, up 6 cents, or 0.09%. For the week, London-traded Brent futures tacked on 69 cents, or 0.38%.

Meanwhile, the spread between the Brent and the WTI crude contracts stood at $3.63 a barrel by close of trade on Friday, compared to $3.05 in the preceding week.
                                                                                  - Investing.com

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Forex - Dollar hits 8-year highs against yen

The broadly stronger dollar rose to eight-year highs against the yen on Tuesday, boosted by the view that the Federal Reserve is on track to raise interest rates later this year.

USD/JPY hit highs of 122.68, the most since July 2007 and was last at 122.49, up 0.77% for the day.

 

The greenback strengthened across the board after Fed Chair Janet Yellen reiterated Friday that the bank still expects to start raising interest rates later this year if the economy continues to improve as expected.

She also attributed a slowdown in first quarter growth to "transitory factors", including a harsh winter.

The greenback received an additional boost after data showed that underlying inflation in the U.S. rose for a third straight month in April.

The dollar’s gains came as markets reopened following a long holiday weekend, after markets in the U.K., Germany and the U.S. remained closed on Monday.

Investors were turning their attention to U.S. data on durable goods orders later Tuesday for a fresh indication on the strength of the economy.

The euro was at one-month lows against the greenback, with EUR/USD down 0.65% to 1.0906.

The euro remained under heavy selling pressure as the prospect of a Greek default continued to weigh.

Athens has warned that the country would be unable to make a €305 million payment to the International Monetary Fund due on June 5 if a cash-for-reforms deal with its international lenders is not reached by then.

EUR/JPY was at 133.58, not far from one-month lows of 133.09 struck overnight.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at five-week highs of 97.06.

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NYMEX crude oil gains in early Asia as on demand prospects

Crude oil prices gained in early Asia on Tuesday as investors looked ahead to demand prospects from a mildly upbeat economic assessment by the Federal Reserve chief last week.

On the New York Mercantile Exchange, crude oil for July delivery rose 0.17% at $59.90 a barrel.

Chair Janet Yellen said that the prospect for higher rates this year is underpinned by signs of a recovery gathering pace, though she reiterated that any decision would be data driven.

Overnight, crude oil futures declined on Monday, as trade volumes were light with U.K. markets closed for a public holiday and markets in the U.S. remaining shut for the Memorial Day holiday.

According to industry research group Baker Hughes (NYSE:NYSE:BHI) on Friday, the number of rigs drilling for oil in the U.S. fell by only one last week to 659, marking the 24th straight week of declines.

Oil traders have been paying close attention to the shrinking rig count in recent months for signs it will eventually reduce the glut of crude flowing into the market.

However, the rate of decline has slowed in recent weeks, fuelling concerns that some shale oil companies will dial up their output in the months ahead if prices stabilize near current levels.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery was last quoted at $65.44 a barrel.

Concerns over the prospect of a Greek default continued to dominate market sentiment. Greece’s Interior Minister Nikos Voutsis warned on Sunday that the country would be unable to make a €305 million payment to the International Monetary Fund due on June 5 if a cash-for-reforms deal with its international lenders is not reached by then.

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