Petroleum futures were slightly bearish Monday, with ICE July Brent settling 2 cents lower at $102.62/barrel.
Volumes were low and markets rangebound for the most part because of holidays on both sides of the Atlantic. Electronic trading was open on NYMEX, although no settlements were posted. NYMEX July crude ended the session roughly 62 centslower at $93.53/b, while ICE July WTI futures settled 47 cents lower at $93.68/b.
In refined products, NYMEX June RBOB was 40 points lower at $2.835/gallon at the close, while both heating oil and ICE gasoil climbed. ICE June gasoil settled $4.25/mt higher at $858.50/metric ton.
"This week's focus will be on Friday's OPEC meeting. We anticipate that OPEC will stick with its official production target of 30 million barrels per day," Commerzbank analysts said in a report.
Iran's OPEC Governor Mohammad Ali Khatibi urged the group Sunday to support $100/b oil.
"The main focus of talks in the next OPEC meeting will be on examination of supply and demand and our country will still support $100/b for oil," Khatibi was quoted as saying by Shana, the oil ministry's news service.
But without the support of Saudi Arabia and other Persian Gulf states, the Commerzbank analysts did not think OPEC would take action to support prices.
"Thus the oversupply on the oil market will remain in place for the time being. For the oil price to continue to rise, either demand will need to recover or greater attention will have to be paid to the supply risks," they said.
The OPEC basket price has fallen in recent days, along with crude benchmarks, but remains close to $100/b. The basket price was at $99.15/b May 24, down from $101.95/b on May 20. Year to date, the basket has averaged $106.14/b.
Ric Spooner, chief market analyst at Sydney-based CMC markets, said investors remained worried by US Federal Reserve Chairman Ben Bernanke's comments last week that the bank was considering tapering its stimulus program.
Indications of an impending cut in asset buying could strengthen the US dollar and lead to a fall in dollar-denominated crude futures prices. "If investors get spooked, we could see Brent fall below $100/b," Spooner said.
NYMEX June RBOB likely was giving back Friday's gains on supply worries. RBOB had settled 1.09 cents higher Friday on news that traders said Irving Oil shut its 95,000 b/d FCC at its 300,000 b/d Saint John refinery in the eastern Canadian province of New Brunswick. The refinery is a key supplier of gasoline to the US Northeast, which is home of the New York-delivery point for NYMEX RBOB. But traders following the Friday market close said Irving had restarted the unit later in the day.
