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Oil rallies for four weeks ahead of OPEC, EIA reports
Despite positive demand outlook, there is risk that supply side will be tightened. Production from the Organization of the Petroleum Exporting Countries and allied producers amounted to around 27 million bpd in June, with a few members including Iraq exceeding output quotas, wrote dmarketforces.com.
Analysts expressed view that oil prices have remained relatively well supported amid continued hurricane activity in the US Gulf of Mexico.
A shift in Hurricane Beryl’s path puts refinery infrastructure in Texas at risk, according to ING commodities strategists note on Monday.
The oil market managed to eke out its fourth consecutive weekly gain with Brent settling marginally higher on the week, ING said, adding that Hurricane activity in the Gulf of Mexico has provided some support.
Hurricane Beryl has recently shifted course and is moving towards Texas. While this puts some offshore oil and gas production at risk, the concern when the storm makes landfall is the potential impact it could have on refinery infrastructure.
Any meaningful disruptions to Texas refinery operations will likely support refined product cracks, ING said. Any prolonged refinery outages would be bearish for crude oil and bullish for refined products. There is plenty on the energy calendar today with all three key agencies releasing their latest outlooks. The EIA will release its Short-Term Energy Outlook on Tuesday, which will include its latest forecasts for US oil and gas production as well as its outlook for the global oil market.
Also, Wednesday will see OPEC publish its monthly oil market report. The market will be watching closely to see whether the group makes any downward revisions to its oil demand growth forecasts.
In recent months the divergence between OPEC and the IEA on the demand outlook has grown, analysts noted. The IEA will release its latest monthly oil market report on Thursday.