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U.S. crude oil futures ticked lower Thursday, as the International Energy Agency said the global oil market is relatively well supplied with demand growth slowing and supply increasing from the Americas.
“Depending on the pace of oil demand growth going forward, the strength of summer demand, any unexpected outages, we see that the market [is] relatively well supplied this year,” Toril Bosoni, the head of the IEA’s oil markets and industry division told Reuters.
So “relatively calm markets” are likely, even though OPEC+ recently decided to extend supply cuts, Bosoni said.
The IEA expects supply will rise to a record high 103.8M bbl/day, almost entirely driven by producers outside OPEC+ such as the U.S., Brazil and Guyana, which Bosoni said will be sufficient to meet demand growth.
Meanwhile, U.S. natural gas futures fell after the Energy Information Administration reported a fifth straight below-average draw, while weather forecasts indicate low demand that likely will boost inventory surpluses into the end of the heating season.
Front-month Nymex crude (CL1:COM) for April delivery posted its fifth loss in seven sessions, -0.2% to $78.93/bbl, while front-month May Brent crude (CO1:COM) finished flat at $82.96/bbl; front-month April natural gas (NG1:COM) closed -5.7% to $1.818/MMBtu.
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Brent oil prices likely will edge up to the top of a forecast range of $70-$90/bbl this summer, Goldman Sachs said in a new research report.
Geopolitical impediments to OPEC’s ability to deploy spare capacity pose the sharpest upside price risk, with modest downside risk from potentially softer Chinese demand, but a sustained drop below $70 likely would require much weaker demand and a shift in Saudi strategy, Goldman said.
