The price of OPEC basket of thirteen crudes stood at $46.00 a barrel on Monday, compared with $45.73 the previous Friday, according to OPEC Secretariat calculations.
The new OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Minas (Indonesia), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).
Meanwhile, MarketWatch reports that crude oil prices lost more steam Tuesday as investors pulled back after the recent rally and analysts said prices would likely see-saw until there is more clarity on the fate of U.S. interest rates.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in JulyCLN6, 0.08% traded at $49.50 a barrel, down $0.07 in the Globex electronic session. August Brent crude LCOQ6, 0.10% on London’s ICE Futures exchange fell $0.09 to $50.46 a barrel.
Overnight, Brent oil prices held on the $50 mark on reports of more attacks by militants to Nigeria oil operations. But prices reversed gains after U.S. Federal Reserves Chairwoman Janet Yellen said on Monday she still expects gradual interest rate increases this year despite the softer-than-expected U.S. job growth last month.
“The upside was tempered by comments from Fed chair Yellen that were supportive to the dollar,” said Stuart Ive, a client manager at OM Financial. According to the WSJ dollar index, the greenback was last up 0.06% at $86.37. As oil prices are denominated in dollars, a stronger dollar makes the commodity more expensive for traders who conduct business in foreign currencies.
However, many analysts said the dip could be shallow and prices will continue to move sideways as investors wait for the Fed’s next move, and more data. On Wednesday, the U.S. is expected to release its weekly crude production and inventories data while China will release its May crude import data.
“For now, with Brent prices at $50, investors and producers are reassessing their compass. Some might be waiting for the rally to be more sustainable,” said Aaron Lynch, a commodities analyst at OptionsXpress.
After hitting a 13-year low in February, oil prices have nearly doubled, mainly propped up by the sporadic supply disruptions and production declines in many oil-producing countries, such as Nigeria and the U.S.
In Nigeria, a group calling itself the Niger Delta Avengers, which has been bombing pipelines, vowed on its purported Twitter account to reduce the country’s production to zero.
In the U.S., crude production has slowed due to slashed investments in the upstream sector. Meanwhile, bullish expectations that India and China will continue to soak up the excess oil still sloshing around in the world have reinforced the view that global oil supply will flip into a deficit for the remainder of the year.
India’s crude demand is estimated to rise by a record high of 8.7% on-year this year, equivalent to an incremental growth of 350,000 barrels a day, said Neil Beveridge, senior analyst at Bernstein Research.
Oil demand by China is likely to increase by 355,000 barrels a day from the previous year to 11.7 million barrels a day in 2016, according to the International Energy Agency in its latest report.
Nymex reformulated gasoline blendstock for July RBN6, 0.09% — the benchmark gasoline contract — fell 17 points to $1.5870 a gallon, while July diesel traded at $1.5003, 28 points lower.
ICE gasoil for June changed hands at $444.25 a metric ton, down $0.75 from Monday’s settlement.