Crude oil futures pushed higher again in European morning trading
Tuesday, with geopolitical risk remaining elevated and the market still
digesting OPEC's higher forecasts for global demand this year.
At 1100 GMT, ICE July Brent crude futures were trading at $79.14/b, up 91 cents from Monday's settle, while NYMEX June WTI crude futures were 65 cents higher at $71.61/b.
OPEC in its latest monthly report on Monday increased its world demand forecasts for 2018, with growth in consumption revised up by 25,000 b/d to 1.65 million b/d from the previous report.
OPEC also said OECD commercial crude oil stockpiles had declined in March to 9 million barrels above the five-year average.
The revised demand growth predictions come at a time when the global crude market is also facing other significant supply-side question marks, such as the impact of the imposition of US sanctions on Iranian output and the ongoing struggles of the Venezuelan oil sector.
Venezuela's production dropped 40,000 b/d to 1.44 million b/d in April, according to secondary sources.
While there are doubts over Iranian and Venezuelan production, US crude production has continued to rise in recent months. According to analysts, once certain logistical issues are solved in the US, its crude production can help fill the gap left by production declines elsewhere.
"The rapidly growing US shale oil production is currently helping to plug the supply gap to only a limited extent because pipeline bottlenecks are preventing some of the oil from reaching the refineries and export terminals on the US Gulf Coast," said Commerzbank analysts in a note.
"Once the pipeline problems have been resolved and supply is available again, this will have a dampening effect on prices."
In the short term, there are expectations of a further decline in US stockpiles for the week ended May 11. An S&P Global Platts survey of analysts indicates US crude stocks are expected to fall by 2.3 million barrels.
Official data on US crude and product stocks will be released by the Energy Information Administration on Wednesday. The American Petroleum Institute meanwhile will release its weekly inventory numbers later Tuesday.
--John Morley, john.morley@spglobal.com
--Edited by Alisdair Bowles, alisdair.bowles@spglobal.com
At 1100 GMT, ICE July Brent crude futures were trading at $79.14/b, up 91 cents from Monday's settle, while NYMEX June WTI crude futures were 65 cents higher at $71.61/b.
OPEC in its latest monthly report on Monday increased its world demand forecasts for 2018, with growth in consumption revised up by 25,000 b/d to 1.65 million b/d from the previous report.
OPEC also said OECD commercial crude oil stockpiles had declined in March to 9 million barrels above the five-year average.
The revised demand growth predictions come at a time when the global crude market is also facing other significant supply-side question marks, such as the impact of the imposition of US sanctions on Iranian output and the ongoing struggles of the Venezuelan oil sector.
Venezuela's production dropped 40,000 b/d to 1.44 million b/d in April, according to secondary sources.
While there are doubts over Iranian and Venezuelan production, US crude production has continued to rise in recent months. According to analysts, once certain logistical issues are solved in the US, its crude production can help fill the gap left by production declines elsewhere.
"The rapidly growing US shale oil production is currently helping to plug the supply gap to only a limited extent because pipeline bottlenecks are preventing some of the oil from reaching the refineries and export terminals on the US Gulf Coast," said Commerzbank analysts in a note.
"Once the pipeline problems have been resolved and supply is available again, this will have a dampening effect on prices."
In the short term, there are expectations of a further decline in US stockpiles for the week ended May 11. An S&P Global Platts survey of analysts indicates US crude stocks are expected to fall by 2.3 million barrels.
Official data on US crude and product stocks will be released by the Energy Information Administration on Wednesday. The American Petroleum Institute meanwhile will release its weekly inventory numbers later Tuesday.
--John Morley, john.morley@spglobal.com
--Edited by Alisdair Bowles, alisdair.bowles@spglobal.com
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