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Oil edges downward on Opec forecast

But crude futures hover near highest levels in more than a month

Oil prices eased off early gains on Thursday as Opec forecast slower demand for its crude next year, but crude futures hovered at near the highest in more than a month as oil rigs in the Gulf of Mexico were evacuated ahead of a storm.

Brent crude futures fell 3 cents to $66.98 a barrel by 11:24 am EDT (1524 GMT). During the session, they hit their highest since 30 May at $67.65 a barrel.

Demand for Opec crude to drop in 2020

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US West Texas Intermediate (WTI) crude futures rose 25 cents to $60.68 a barrel, after hitting their highest since 23 May at $60.94.

Ahead of what could be one of the first major storms of the Atlantic hurricane season, US oil producers have cut nearly a third of their output in the Gulf of Mexico

Phillips 66 said it expected to complete the closing of its 253,600-barrel-per-day (bpd) Alliance, Louisiana, refinery because of the storm threat.

Tropical Storm Barry formed with heavy rains expected across the north-central US Gulf Coast, the National Hurricane Center said.

"Every storm is different," said Phil Flynn, an analyst at Price Futures Group in Chicago. "There are still a lot of questions to be answered, whether it's going to do damage to the supply side or going to do more damage to the demand side."

Tensions in the Middle East also kept investors on edge. A day after Iran warned Britain would face "consequences" over the seizure of an Iranian oil tanker, three Iranian vessels tried to block passage of a British ship run by BP through the Strait of Hormuz, the British government said. They withdrew after warnings from a British warship.

"What happened was partially expected. We pointed out last week that Iran was likely to do something of the sort," Petromatrix oil analyst Olivier Jakob said.

Opec gave its first 2020 forecasts in a monthly report on Thursday, saying the world would need 29.27 million barrels per day (bpd) of crude from its 14 members next year, down 1.34 million bpd from this year.

The forecast points to the return of a surplus despite an Opec-led pact to restrain supplies, and was seen as a drag on prices.

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