Oil prices fell on July 18 as traders shrugged off the impact of the attempted coup in Turkey and the market turned its attention to bearish fundamentals, while disruptions to crude exports in Libya lent prices some support.
Brent crude futures fell 36 cents to $47.25 a barrel by 6:31 a.m. CT (11:31 GMT), while U.S. crude futures were 31 cents lower at $45.64 a barrel.
Istanbul's Bosphorus Strait, a chokepoint for oil that handles about 3% of global shipments, mainly from Black Sea ports and the Caspian region, reopened on July 16 after closing for several hours after the failed coup the day before.
News that oil guards protesting over pay shut Libya's Hariga oil terminal on July 17 dampened hopes the country could boost its output significantly any time soon.
"Libya remains a wild card in the global oil market balance," SEB chief commodities analyst Bjarne Schieldrop said.
"This morning, however, an immediate revival in Libyan crude exports looks less daunting and might help to support crude prices slightly," Schieldrop said.
Saudi Arabia's energy minister said on July 17 the kingdom always reacts to oil market supply and demand and would continue to monitor crude markets for any developments.
The race among oil suppliers to meet the rise in demand for imports from China's independent refineries is heating up, with Iran supplying a 2-million-barrel cargo via trader Trafigura.
A report by Morgan Stanley raised concerns about the longer-term outlook for oil consumption as demand for petrochemicals rather than fuels such as diesel and gasoline is clouding the outlook for crude demand.
"Fundamental headwinds are growing, supply-demand rebalancing is likely still a mid-2017 event, but tail risks are admittedly large in both directions, as geopolitics add to uncertainty," the report said.
"A rapid rise of non-petroleum products is boosting total product demand, but this is unhelpful for crude oil. Based on the latest data, even our tepid 800,000 barrels per day growth estimate for global crude runs looks too high," the report said.
Oil market investors again cut their bullish bets on Brent to their lowest since February.
Data from the InterContinental Exchange on July 18 showed investors cut net long positions by 8,899 to 303,371 in the week to July 12, their lowest since Feb. 22.
Recommended Reading
TC Energy’s Keystone Back Online After Temporary Service Halt
2024-03-10 - As Canada’s pipeline network runs full, producers are anxious for the Trans Mountain Expansion to come online.
Enbridge Fortifies Dominant Role in Corpus Christi Crude Transport
2024-03-20 - Colin Gruending, Enbridge executive vice president and president for liquids pipelines told Hart Energy the company’s holdings in South Texas are akin to a “catcher’s mitt” for Permian and Haynesville production.
Early Startup of Trans Mountain Pipeline Expansion Surprises Analysts
2024-04-04 - Analysts had expected the Trans Mountain Pipeline expansion to commence operations in June but the company said the system will begin shipping crude on May 1.
Kinder Morgan Sees Need for Another Permian NatGas Pipeline
2024-04-18 - Negative prices, tight capacity and upcoming demand are driving natural gas leaders at Kinder Morgan to think about more takeaway capacity.
Pembina Pipeline Enters Ethane-Supply Agreement, Slow Walks LNG Project
2024-02-26 - Canadian midstream company Pembina Pipeline also said it would hold off on new LNG terminal decision in a fourth quarter earnings call.