MOMR July 2015

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Crude Oil Price Movements
Crude Oil Price Movements
Moving within a tight range, the OPEC Reference Basket (ORB) ended on
average lower for the month, but higher for the quarter. On average, the Basket
fell 3.1% in June, but rose a significant 19% in the second quarter, the most in
more than three years. Prices were supported earlier in the month by
consecutive crude oil inventory draws in the US, but subsequently fell on
expectations of slowing refinery demand after an unexpected build in product
inventories. The Basket slipped $1.95 to stand at $60.21/b. Crude oil futures were
mixed over the month. ICE Brent fell by $1.86 to reach $63.75/b, while Nymex WTI
gained 46¢ to end at $59.83/b. ICE Brent has been largely range-bound since the
beginning of the second quarter, hovering around $60–65/b. Prices have been
trapped within this range by competing concerns with lower prices supporting
demand growth, but affecting US supply growth. US crude stocks have fallen
since late April on firm refinery demand, supporting WTI. Both contracts were
down for the year. Speculative bets fell further on higher oil prices in both
futures markets. The transatlantic spread narrowed more amid advantageous
WTI fundamentals and the Atlantic Basin continued to experience a persistent
oversupply. The Brent-WTI spread decreased significantly to around $3.92/b.
OPEC Reference Basket
The ORB value moved within a relatively tight range between $58/b and $62/b
throughout the month. On average, the Basket fell 3.1% in June, but rose a significant
19% for the quarter. Prices were supported by consecutive weeks of crude oil inventory
draws in the US on firm refinery demand as refineries have been running at above 90%
capacity since early April. Subsequently, prices fell on expectations of slowing refinery
demand in the US after an unexpected build in gasoline and diesel inventories. Prices
also dropped as global supplies remained plentiful. Oil prices were under pressure as
markets worried over the impact of the Greek debt crisis.
Graph 1.1: Crude oil price movement, 2015
On a monthly basis, the OPEC Reference Basket was down $1.95/b or 3.1% at
$60.21/b on average. The second quarter was a hefty $9.95/b higher at $59.89/b
compared with the first quarter. Meanwhile, compared with a year ago, the ORB value
continued to lag at $55.12/b versus its $105.30/b year-to-date value in 2014.
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OPEC Basket WTI Brent Dated
OPEC Monthly Oil Market Report – July 2015 5