Brent WTI crude futures recovered somewhat Tuesday after falls in the prior session, but with limited upside apparent in a well-supplied global market.
Brent crude for June delivery was up 13 cents at $107.85 a barrel on ICE Futures Europe. WTI crude for June delivery was up 14 cents at $99.62 a barrel on the New York Mercantile Exchange.
Morgan Stanley MS -2.02% says a bearishness is likely to continue, in a climate of high supply and refinery maintenance.
"Non-OPEC supply growth remains elevated, while turnarounds and returning supply from Brent crude oil outages should keep price action muted in [the second quarter]," they wrote in a note to clients. "However, fundamentals turn more bullish in [the third quarter]," they wrote, as maintenance season ends at refineries and they require more crude.
The other factor exerting downward pressure on prices continues to be Libya, and its promised return to productivity.
Commerzbank said the blockade of the second-largest oil field in Libya came to an end at the weekend, and prices are reflecting expectations that the country will resume its status as a major exporter.
"Although protests at a pipeline are still making it impossible for oil production to be resumed at present, the agreement that has been reached does mean that one major obstacle to the oil field going back into operation - it has a production capacity of 340,000 barrels per day - has been removed," Commerzbank wrote.
Recently, ICE Gasoil was up $5.00 at $900.75 a metric ton. Gasoline was up 18 points at $2.9110 a gallon.
