OPEC pumps more crude during June, see summer demand upturn
By Claudia Assis and V. Phani Kumar, MarketWatch
SAN FRANCISCO (MarketWatch) — U.S. crude-oil futures extended their retreat into a third day as heightened concerns over European debt troubles and the world economy pushed the U.S. dollar higher.
Crude oil for August delivery CL1Q -0.31% fell 51 cents, or 0.5%, to $94.64 a barrel Tuesday on the New York Mercantile Exchange.
Oil lost 1.1% during the previous session and had closed lower on Friday as well.
“Fears seem to have gained substantial momentum that the current monetary crisis in Greece could spread to other EU-member countries, most specifically Italy, which currently holds the highest sovereign debt ratio relative to its (gross domestic product) in the euro zone after Greece,” analysts at JBC said in a note to clients.
The fears of contagion in Europe pressured the euro, with the dollar index DXY +0.21% moving higher. The index, which compares the U.S. unit against six currencies, rose to 76.116 from 75.952 late Monday. Read about euro group seeking to stop contagion.
“We think the current euro-zone policy framework, which relies on country-specific bailouts, is not workable for Italy, given its size,” Nomura Securities wrote in a currency strategy note to clients.
A higher greenback often weighs on commodities priced in dollars, such as crude oil.
Earlier Tuesday, the Organization of the Petroleum Exporting Countries said production from its member countries increased to 29.6 million barrels a day in June, 500,000 barrels a day more than in May.
Saudi Arabia and others in the Gulf region raised their output, OPEC said in its monthly outlook.
The cartel reiterated its view that there will be an upswing in seasonal demand later this summer. Read more about OPEC's monthly report.
Natural-gas futures NG11Q +0.72% bucked the trend to rise less than a penny to $4.28 per million British thermal units after sliding as much as 2% overnight.
Claudia Assis is a San Francisco-based reporter for MarketWatch.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
