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U.S. crude oil futures fell Thursday as the International Energy Agency said the global oil market is relatively well supplied with slowing demand growth and rising supply from the Americas.
“Depending on the rate of growth of oil demand going forward, the strength of summer demand, any unexpected disruptions, we see that the market [is] relatively well supplied this year,” Toril Bosoni, head of the IEA’s oil markets and industry division, told Reuters.
So “relatively calm markets” are likely, even if OPEC+ recently decided to extend supply cuts, Bosoni said.
The IEA expects supply to rise to a record level of 103.8 million bbl/d, almost entirely driven by non-OPEC+ producers such as the United States, Brazil and Guyana, which Bosoni believes will be sufficient to meet demand growth .
Meanwhile, U.S. natural gas futures fell after the Energy Information Administration reported a fifth consecutive below-average drop, while weather forecasts point to low demand likely to increase inventory surpluses late in the season of heating.
Nymex crude (CL1:COM) for April delivery posted its fifth loss in seven sessions, -0.2% at 78.93 dollars per barrel, while May Brent crude (CO1:COM) closed unchanged at 82.96 dollars per barrel; April Natural Gas (NG1:COM) was shut down -5.7% at $1.818/MMBtu.
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Brent oil prices will likely hit the upper limit of an expected range of $70-$90 a barrel this summer, Goldman Sachs said in a new research report.
Geopolitical obstacles to OPEC’s ability to deploy spare capacity pose the most acute price upside risk, with modest downside risk from potentially weaker Chinese demand, but a sustained drop below $70 would likely require much higher demand. weaker and a change in Saudi strategy, Goldman said.