Oil Price - June 14

[dan_s]

Phil Flynn: "The take away from yesterday's EIA report is that oil demand is surging. The Fed upgraded the U.S. economic outlook and that is being seen in oil. The market is going to be very tight and vulnerable to upward oil price spikes. The Federal Reserve raised its outlook on U.S. economic growth as its median real GDP forecast rose to 2.8 percent, up from 2.7 percent, for this year. Economic activity has been rising at a "solid" rate, the Fed's statement said, marking an upgrade from "moderate" in the previous statement. So, oil demand should rise at a solid pace as opposed to a moderate pace as well."

WTI crude oil prices settled higher as traders mulled comments from Saudi's oil minister ahead of the Organization of the Petroleum Exporting Countries meeting next week.

The July NYMEX contract for WTI gained 25 cents to settle at $66.89 a barrel, while on London's Intercontinental Exchange, Brent fell 1.08% to trade at $75.92 a barrel.

Ahead of the Organization of the Petroleum Exporting Countries (OPEC) meeting next week, Saudi Arabian Oil Minister Al Falih reportedly said "it's inevitable" that OPEC and its allies will agree to boost oil production next week, according to a report from Bloomberg. Al Falih insisted, however, that the uptick in output would be reasonable and won't be anything "outlandish." My take is that they cannot raise production quickly even if they wanted to. May's OPEC production was almost a million barrels per day below their current quotas.

The uptick in oil prices comes a day after the Energy Information Administration revealed U.S. supplies fell more than expected but U.S. output rose to a record.
> Inventories of U.S. crude fell by 4.143 million barrels for the week ended June 8, well above expectations for a draw of 1.440 million barrels, according to data from the Energy Information Administration.
> U.S. oil output, meanwhile, continued its expansion rising 100,000 bpd to a record 10.9 million bpd, according to preliminary EIA data, strengthening the United States' positions as the second largest oil producer behind Russia. < ALWAYS REMEMBER THAT EIA'S WEEKLY U.S PRODUCTION ESTIMATE IS THE BIGGEST "WILD ASS GUESS" IN THEIR WEEKLY REPORTS. ACTUAL PROCUCTION WON'T BE KNOWN FOR AT LEAST 90 DAYS AFTER A MONTH ENDS.