About The Author

Phil Flynn

Phil Flynn is writer of The Energy Report, a daily market commentary discussing oil, the Middle East, American government, economics, and their effects on the world's energies markets, as well as other commodity markets. Contact Mr. Flynn at (888) 264-5665

[George Orwel, DTN]

New York Mercantile Exchange spot-month oil futures settled higher for the second straight session Thursday. Stronger U.S. demand outlook overshadowed increasing crude supply and a strengthening U.S dollar, while the stock market was mixed.

“The demand situation looks good, and as refineries begin to come back from maintenance we should expect crude demand to increase,” said Phil Flynn, an analyst at Price Futures. “Oil was just consolidating the gains from yesterday (Wednesday).”

Early Thursday, the International Energy Agency raised its forecast for world oil consumption in 2018 by 90,000 bpd, underpinned by growth in developed economies. The Paris-based agency also highlighted a strong start to the year for China and India, with the two countries accounting for 50% of the growth in global oil demand in 2017.

Global oil demand is now expected to grow at 1.5 million bpd rate to 99.3 million bpd, said IEA.

The outlook comes on the heels of Energy Information Administration’s data Wednesday, which showed U.S. refinery crude oil inputs up last week by 432,000 bpd to 16.367 million bpd. Meanwhile demand for gasoline rose by 366,000 bpd to 9.64 million bpd. In its Oil market Report, IEA projects oil production by countries that aren’t part of the Organization of the Petroleum Exporting Countries would climb 1.8 million bpd this year to 59.9 million bpd, led by rising U.S. output, up from an annual growth rate of 760,000 bpd in 2017.

In its weekly report Wednesday, EIA reported domestic crude production rose last week by 12,000 bpd to a fresh record high of 10.381 million bpd in the week-ended March 9, up 1.272 million bpd year-on-year. Domestic output is projected to rise to 10.7 million bpd this year and 11.3 million bpd in 2019.

In addition, IEA was modestly bullish regarding OPEC, saying that the cartel’s compliance with its agreement reducing output by 1.2 million bpd from their October 2016 output rate was 147% in February, although that’s in part due to the lower production by Venezuela.

At settlement, NYMEX April West Texas Intermediate crude futures gained 23cts to $61.19 bbl while Intercontinental Exchange May Brent crude oil increased 23cts to $65.12 bbl. NYMEX April RBOB futures were near flat at $1.9248 gallon, while April ULSD futures nudged up 0.58cts to $1.8929 gallon.

 

Questions? Ask Phil Flynn today at 312-264-4364         A Subsidiary of Price Holdings, Inc. – a Diversified Financial Services Firm. Member NIBA, NFA Past results are not necessarily indicative of future results. Investing in futures can involve substantial risk of loss & is not suitable for everyone. Trading foreign exchange also involves a high degree of risk. The leverage created by trading on margin can work against you as well as for you, and losses can exceed your entire investment. Before opening an account and trading, you should seek advice from your advisors as appropriate to ensure that you understand the risks and can withstand the losses. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or futures. The Price Futures Group, its officers, directors, employees, and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction. Reproduction and/or distribution of any portion of this report are strictly prohibited without the written permission of the author. Trading in futures contracts, options on futures contracts, and forward contracts is not suitable for all investors and involves substantial risks. ©2018
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