Markets

After having taken a hit on Monday in response to the announcement of more production from OPEC+ in the near future, most of the contracts covered here saw day-on-day price increases on each of the remaining days of the week ending July 23, though DME prices were not available on Monday or Tuesday due to Eid al-Adha celebrations.

After the three contracts gained 21.9-23.7% over 1Q, futures closing prices for Middle Eastern benchmark DME Oman rose by another 14.8% from March 31 to April 30, European benchmark ICE Brent jumped by 18.2%, and US benchmark NYMEX WTI soared by 24.2%. Brent was the first of the three grades to break the $70/bbl mark, having closed above the important psychological barrier on June 1.

The coking margin on WTI in the Midcontinent posted the sharpest increase from Feb. to March among the grades and blends covered in the charts below.

While OPEC+ was reportedly hammering out an agreement to boost production in Aug. during the week ending July 16, indications of hiccups in the demand recovery around the world weighed on sentiment.

Contradictory interpretations of the standoff between the UAE and fellow OPEC+ members pushed petroleum futures prices higher and then lower before bullish inventory and demand figures from the US EIA sparked a renewed uptick for the last two days of the week ending July 9.

Throughout most of the week, futures prices were supported by expectations that the group's meeting on July 1 would result in plans to increase production by a smaller volume than projected demand increases.

Traders seem to have become convinced that recovering demand will be able to handle production increases from OPEC+, and oil futures prices were pushed higher amid the positive sentiment.

Saudi Arabia set the Official Selling Price (OSP) for its heavy grade for buyers in the Far East at 40¢/bbl above the Middle-Eastern benchmark—down from the 50¢/bbl premium that had been in place for June.

The coking margin on WTI in the Midcontinent posted the sharpest increase from Jan. to Feb. among the grades and blends covered in the charts below, having gained $3.56/bbl, but the region's coking margin on a 70/30 blend of Bakken and WCS retained the top spot at $12.00/bbl.

Crude prices were pressured early in the week ending June 18 by the US EIA's forecast that US shale production will rise next month.