NYMEX June crude settles 87 cents lower at $95.17/b
New York (Platts)--13May2013/500 pm EDT/2100 GMT
The oil complex settled lower Monday on bearish China data and increased
OPEC production, amid weak fundamentals in the US.
NYMEX June crude settled 87 cents lower at $95.17/barrel, having traded
in a $94.47-$95.68/b range throughout the day. ICE June Brent settled
lower as well, down $1.09 at $102.82/b.
Products were mostly bearish, led by NYMEX June RBOB, which fell 3.93
cents to 2.8210/gal. Heating oil settled 1.52 cents lower at
$2.8910/gal, but drifted into positive territory -- hitting a high of
$2.9162/gal -- in early afternoon electronic trading.
ICE June gasoil settled $15.75 higher at $867.50/mt.
Overnight, official Chinese data showed the country's refiners
processed 9.36 million b/d of crude in April, the lowest since August,
according to Tradition Energy analyst Addison Armstrong in a morning
note. Armstrong added that China's industrial output increased 9.3% year
on year, compared with expectations for 9.4% growth.
China GDP data showing a 7.7% increase in the first quarter was also
bearish, showing growth would stay below the key 8%-level, Citi Futures
Perspectives energy analyst Tim Evans said in a note.
Meanwhile, an OPEC monthly report said its group's output increased to
30.46 million b/d in April, up from 30.18 million b/d in March.
"This data comes on top of weak fundamental picture here in US, right as
we're retreating from last week's one-month high [of $97.17/b on May
6]," Tradition's Gene McGillian said.
"We have really low demand, and our fundamentals are out of line," he
added.
Analysts continued to watch the US dollar closely as its recent strength
has put downward pressure on the oil complex. The US Dollar Index was up
1.29% at 83.27 around the time of the NYMEX settle, hovering just below
recent highs seen in early April.
"The strong dollar continues to be the main driver of the markets,
spurred by moves from the [European Central Bank] and the [Bank of
Japan] to devalue their own currencies," Again Capital partner John
Kilduff said in a note.
Kilduff also pointed to disappointing Chinese home sales data, which
suggest Beijing could be reining in outsized growth in that sector.
"Chinese home sales were down big in April, but the disappointment with
regard to its industrial production should only be slight," he said.
More bearish signals could be found in talk that the US Federal Reserve
may soon unwind its latest efforts to stimulate the US economy.
"The oil market got heavy as word of a possible story of a [Federal
Reserve exit from quantitative easing] started to permeate the trading
floor on Friday," Price Futures Group analyst Phil Flynn said in a note.
Flynn cited a Saturday story in the Wall Street Journal which said that
Fed officials were discussing plans to wind down the $85 billion/month
bond-buying program.
The oil market seemed to ignore the small support offered in positive US
retail sales data, which showed non-core retail sales rose 0.1% in
April, up from -0.5% in May, US Census Bureau data showed. Core retail
sales were flat.
Amid this bearish sentiment, Iranian oil minister Rostam Ghasemi said
Monday that oil prices were below an "ideal range" and that Iran would
seek a cut in OPEC's overall ceiling when the producers' group meets in
Vienna later this month.
"Iran's proposal has always been to cut the ceiling," Ghasemi told
reporters on the sidelines of a petrochemicals conference in Tehran when
asked if Iran would seek a cut in the OPEC ceiling in order to push
prices higher.
--James Bambino,
james.bambino@platts.com --Edited by Katharine Fraser,
katharine.fraser@platts.com
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