The June RBOB and HO contract expired yesterday and the prompt month is now July. July settled as follows: WTI finished down $0.23/bbl to $49.10, HO finished down $0.0044/gal to $1.4971, and RBOB closed down $0.0244/gal to $1.6134.
Caution surrounding tomorrow’s OPEC meeting in Vienna is driving the market down this morning. OPEC is meeting again in an effort to come to an agreement on oil output. An OPEC source stated that Iran is signaling they support OPEC’s effort to stabilize oil prices but will not commit to participate. The last OPEC meeting in December 2015 was not successful and resulted in a price crash in January. WTI hit a low of $27/bbl in January and slowly has been recovering. The recovery in prices to around $50/bbl was due to a decline in U.S. shale production, fires in Canadian oil sands, and production issues in Nigeria and Venezuela.
The market rallied $1/bbl on WTI this morning on a headline that OPEC is likely to consider a new output ceiling at the June 2nd meeting. This is a very bullish move if done and enforced.
The key events that will influence the market for the rest of the week:
- The API statistics that are released today at 4:30 p.m. ET.
- The DOE statistics that will be out Thursday morning.
- OPEC’s decision tomorrow.
Note- the API and DOE statistics are delayed one day due to the Memorial Day holiday.