Oil eases as weak demand tempers bullish Saudi energy minister comments

Mon Jul 4, 2016 4:37pm EDT
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By Ahmad Ghaddar and Catherine Ngai

LONDON/CALGARY (Reuters) - Global oil prices eased on Monday after comments by Saudi Energy Minister Khaled Al-Faleh that the market was heading toward balance were tempered by slowing demand in Asia, pockets of gasoline oversupply and signs crude output could rise.

Brent crude futures LCOc1 settled down 25 cents to $50.10 per barrel. U.S. crude futures CLc1 were trading down 23 cents at $48.76 per barrel.

U.S. markets are closed on Monday for the U.S. Independence Day holiday, so trading remained thin on the day.

The energy minister of Saudi Arabia, the world's top crude exporter, and the secretary general of producer club OPEC agreed that global oil markets were heading toward balance, and that prices reflected this.

However, analysts at Morgan Stanley said there were also signs prices could fall again soon, pointing at stalling gasoline demand and more oil from Canada and Nigeria after production problems.

In the New York Harbor, at least two tankers carrying gasoline-making components have dropped anchor, unable to discharge their cargo. Several tanks with gasoline also have been diverted, underscoring the latest oversupply issue

Meanwhile, the Nigerian National Petroleum Corporation said last week that output was rising following repairs after attacks in the Niger Delta that had pushed crude output to 30-year lows.

A deal to unify Libya's rival national oil corporations could pave the way for the OPEC member to boost output which currently stands at less than a quarter of pre-2011 levels of 1.6 million barrels per day (bpd).   Continued...

A worker walks past oil pipes at a refinery in Wuhan, Hubei province March 23, 2012.   REUTERS/Stringer/File Photo