Bears continued to keep crude-oil contracts lower at Monday’s (May 16) close on the New York Mercantile Exchange as OPEC’s president put forth a positive view on the supply situation.
According to CBS MarketWatch, June crude fell 6 cents to close at $48.61 a barrel after trading as low as $47.60. The news helped rally markets, as the Dow Jones jumped 112 points while the Nasdaq and S&P 500 indexes also gained.
“We’re certainly hearing much less talk about how bullish a lack of OPEC spare capacity is, now that the nearby contracts have sunk beneath the $50 psychological benchmark, formerly proposed as a floor,” said Tim Evans, senior energy analyst at IFR Markets, in a note to clients.
OPEC President Sheikh Ahmad Fahad Al-Ahmad Al-Sabah said the market should be well supplied through the year, Dow Jones Newswires reported from a producer-consumer workshop in Kuwait City.
OPEC will pump 30.5 million barrels a day – about 300,000 to 500,000 barrels a day more than current levels – to meet its estimate of fourth-quarter demand, it said.
“Now the question remains, how far will (OPEC) let it fall?” said John Kilduff, vice president of energy risk management at Fimat. “We still hold that a target of $38 to $42 is reasonable.”
According to the AAA Fuel Gauge Report, the average price for a gallon of unleaded gasoline is $2.162, down from $2.175 on Friday.