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Crude Oil Price Movements
Brent-related West and Northern African light sweet Basket components Saharan
Blend, Es Sider, Girassol and Bonny Light saw a decrease in the average value of
$2.55/b or 4% to $61.99/b in June. Middle Eastern spot components and multi-
destination grades deteriorated by $1.53/b and $1.65/b to $62.70/b and $59.68/b,
respectively. For Latin American ORB components, Merey was down $3.35/b or 6.1%
while Oriente slipped $1.33/b or 2.3%.
On 10 July, the OPEC Reference Basket stood at $55.99/b, $4.22 under the June
average.
The oil futures market
Crude oil futures were mixed over the month. ICE Brent fell by $1.86 to $63.75/b, while
Nymex WTI gained 46¢ to reach $59.83/b. ICE Brent has been largely range-bound
since the beginning of the second quarter, hovering at around $60–65/b. Prices have
been trapped within this range by competing concerns; lower prices are supporting
demand growth, but damaging US supply growth. US crude stocks have fallen since
late April on firm refinery demand, supporting WTI. Crude inventories fell by 12.0 mb in
June and US refineries have been running at above 90% of capacity since early April.
Crude prices fell under pressure from a supply overhang in the Atlantic Basin. Gasoline
margins weakened as US product stocks rose. Uncertainty regarding progress on
resolving Greece’s crisis also forced oil prices lower. Meanwhile, consumption in oil
importing countries has risen more strongly than expected in response to economic
growth and lower pump prices. Yet not even this has offset the negative effect of
supply growth on crude prices.
ICE Brent settled down $1.86 to $63.75/b. It fell 2.8% for June, but rose q-o-q 15.2%
for its best quarter since September 2012. Nymex WTI settled up 46¢ to $59.83/b. It
gained 0.8% on the month, jumping 19.3% in the second quarter to show its best
quarterly gain since December 2011. Compared with 2014, Nymex WTI and Brent were
$47.51/b and $49.47/b lower at $53.33/b and $59.35/b, respectively.
Crude oil futures prices improved in the second week of July. On 10 July, ICE Brent
stood at $58.73/b and Nymex WTI at $52.74/b.
In June, hedge funds and other money managers reduced their bets on rising Brent
crude oil prices further.
Speculators
decreased net long positions in ICE Brent futures
and options by 23,664 contracts to 198,693 lots m-o-m, InterContinental Exchange
(ICE) data showed. CFTC data also showed a decrease in the net length of money
managers in WTI futures. M-o-m, the net length in WTI futures dropped by
28,975 contracts to 216,152 lots. However, total futures and options open interest
volume in the two markets increased by 129,099 contracts to reach 4.66 million lots.
OPEC Monthly Oil Market Report – July 2015
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