By Eric Yep
Crude-oil futures fell in Asian trade Friday, with Nymex crude
trading at its lowest level in more than two months, dragged lower
by concerns over resilient U.S. shale production in the face of low
oil prices and high OPEC production.
On the New York Mercantile Exchange, light, sweet crude futures
for delivery in August traded at $56.66 a barrel at 0331 GMT, down
$0.27 in the Globex electronic session. August Brent crude on
London's ICE Futures exchange fell $0.18 to $61.89 a barrel.
The U.S. oil-rig count rose by 12 to 640 the past week, snapping
29 straight weeks of decline, Baker Hughes data showed. This raised
concerns U.S. shale-oil production could remain strong and continue
to pressure oil prices.
Though U.S. oil production continues to rise and contribute to
the global surplus, rising output from the Organization of the
Petroleum Exporting Countries is an even bigger problem, Citi
Futures analyst Tim Evans said.
He said it is pretty clear new oil production from southern Iraq
and Saudi Arabia are swelling the total, resulting in OPEC
production trending higher in coming months if political hurdles
are cleared.
"The OPEC production data is consistent with the group's intent
to compete for market share, but we note that they risk owning a
larger share of a weaker market," Mr. Evans said in a report.
Meanwhile, Iran nuclear talks continue to drag, but Obama
administration officials are eager to reach a deal by Tuesday, a
one-week extension to the previous deadline, as further delays
would give critics more time to rally against a final agreement
with Tehran.
This weekend's Greek vote in a referendum on creditors' demands
is likely to dominate market sentiment, as it would have
implications on the country's continued membership in the eurozone.
U.S. markets will be closed Friday for the July 4th holiday.
Oil demand continues to hold up with strong refinery margins
across most Asian economies. Though China's crude-oil imports
slipped in May, its apparent oil-product demand rose by 8.2%
compared with last year, driven by gasoline demand, HSBC's head of
oil research Thomas C Hilboldt said.
Nymex reformulated gasoline blendstock for August--the benchmark
gasoline contract--fell 15 points to $2.0328 a gallon, while August
diesel traded at $1.8379, 20 points lower.
ICE gasoil for July changed hands at $565.75 a metric ton, down
$8.50 from Thursday's settlement.
Writ to Eric Yep at eric.yep@wsj.com