ON: OIL FUTURES: Nymex Crude Creeps Higher After OPEC Stands Pat
Crude oil inched higher Thursday after OPEC decided to stick with current production targets, as widely expected.
Prices moved in a tight range, as traders awaited data on oil stockpiles due at 11 a.m. EDT.
Light, sweet crude for July delivery was recently up 43 cents, or 0.7%, at $63.88 a barrel on the New York Mercantile Exchange. Brent crude on the ICE Futures exchange traded 54 cents higher at $63.04 a barrel.
The Organization of Petroleum Exporting Countries concluded a meeting at its Vienna headquarters with a decision not to tinker with current output quotas, noting in a statement that "crude volumes entering the market are still in excess of actual demand." Nymex crude posted a fresh six-month high of $63.93 a barrel soon after the meeting.
"There were no surprises in the outcome of the talks," said Jim Ritterbusch, president of Galena, Ill., energy trading advisory service Ritterbusch & Associates. "I think they're in the driver's seat for the time being with prices in the $60 area."
OPEC slashed quotas by 4.2 million barrels a day as demand began to contract late last year, and members have been 80% compliant with the cuts, Secretary General Abdalla Salem El-Badri said in Vienna. The reduced output has helped lift oil prices more than 40% this year.
Badri said prices near $70 a barrel would be "suitable for us to invest and have a decent income for our member countries."
The cartel pointed out that global oil inventories remain high. In the U.S., where crude stockpiles are above average, oil inventory data due at 11 a.m. EDT are expected to show them falling by 500,000 barrels, which would make a third week in a row of declines after nine straight increases.
Gasoline stockpiles are seen falling 1.7 million barrels and stocks of distillates, which include diesel and heating oil, rising 1.1 million barrels in the week ended May 22, according to a poll of analysts. Refineries, which have slowed operation amid the demand slump, are seen running at 82.1% of capacity, up 0.3 percentage point.
In separate data released Wednesday, the American Petroleum Institute reported a 2.8 million-barrel drop in crude inventories, an 800,000-barrel decline in gasoline stocks and a 1.4 million-barrel gain in distillate inventories. Refinery utilization was 80.6% of capacity.
Front-month June reformulated gasoline blendstock, or RBOB, fell 27 points, or 0.1%, to $1.8890 a gallon. June heating oil rose 1.18 cents, or 0.8%, to $1.5735 a gallon.
