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CRUDE OIL REPORT

WTI Crude oil edged higher on improved demand outlook

Crude oil prices in NYMEX edged higher towards the end of last week after hitting a six week low earlier as demand outlook for crude oil improved amid prevailing supply tightness from OPEC+ supply cuts. China, a major consumer of crude oil, witnessed an increase in crude oil refinery throughput in May by 15.4% from a year earlier as refiners brought units back online from planned maintenance and independent refiners processed cheap imports.

OPEC holds oil demand view steady despite economic growth warning

OPEC left its forecast for 2023 global oil demand growth steady for a fourth month on Tuesday, though the producer group warned that the world economy faced rising uncertainty and slower growth in the second half of the year. Global oil demand this year will rise by 2.35 million barrels per day (bpd), or 2.4%, the Organization of the Petroleum Exporting Countries (OPEC) said in its monthly report. This was virtually unchanged from the 2.33 million bpd forecast last month. OPEC+, which comprises OPEC, Russia and other allies, has been taking more steps to support the oil market in 2023. On June 4 the group announced its second package of output cuts since April and Saudi Arabia pledged a voluntary cut for July. Chinese oil demand is now expected to rise by 840,000 bpd, OPEC said, up from the 800,000 bpd forecast last month, adding to a recovery after strict COVID-19 containment measures were scrapped. OPEC left its 2023 global economic growth forecast at 2.6% and said momentum was slowing

IEA expects the post-pandemic recovery is set to end this year

The boost to oil demand from the post-pandemic recovery is set to end this year, the International Energy Agency (IEA) said, with a slowing economy and the transition to cleaner fuels sapping growth from 2024. Strong demand from China and India boosted the Paris-based agency's outlook for growth this year by almost 300,000 barrels per day (bpd) to 2.4 million bpd, but that will fall by nearly two-thirds due in large part to more use of electric cars.

Iran's oil exports hit 5-year highs as US holds nuclear talks

Iran's crude exports and oil output have hit new highs in 2023 despite U.S. sanctions, according to consultants adding to global supply when other producers are limiting output.

Money managers reduced net Longs in NYMEX WTI Crude F&O

Money managers reduced their net long positions in U.S. WTI crude futures and options contracts in NYMEX platform the week ended on June 16, the U.S. Commodity Futures Trading Commission (CFTC) reported.

U.S. Crude stock levels increased

U.S. crude stocks increased by 7.919 million barrels in the week ended on June 9, the EIA data showed. Distillate stocks were up by 2.123 million barrels while gasoline increased by 2.108 million barrels. U.S. crude oil imports averaged 6.4 million barrels per day last week, up by 19,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.5 million barrels per day. Refineries operated at 93.7 percent of their operable capacity in the week ended June 9.

Outlook

The improved demand outlook for crude oil amid supply cuts from OPEC+ expected to support crude oil prices in the near term. However, the crude oil have remained under pressure from concern over slowing economic growth and demand. There are rising uncertainties regarding economic growth in the second half of 2023 amid ongoing high inflation, already higher interest rates from key central banks.

NYMEX Crude: Prices may gain momentum above the trend line resistance of 73.80 region. However, weakness is possible if prices dip below 70.

MCX Crude: Rise above 6230 region with large market participation may strengthen the momentum. Weakness expected with dips below 5700 region.

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