Oil Glut Coming?

For John, BLUF:  If you encounter low prices at the pump, thank fracking.  Nothing to see here; just move along.

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Oil Prices Steady but Products Glut Looms

The sub-headline is "Growth data from China and U.S. buoys crude market".  This is from The Wall Street Journal and Reporter Miriam Malek.

The lede plus four:

Oil prices were steady on Monday, supported by favorable growth data reported by the U.S. and China, but a looming glut of oil products could put pressure on the market, analysts said.

The global benchmark, Brent, was trading up 0.1% at $47.66 a barrel.  Its U.S. counterpart, West Texas Intermediate, was trading down 0.02% at $45.94 a barrel.

Over the weekend, oil prices were boosted by data that showed China’s second-quarter gross domestic product grew 6.7%, higher than what analysts had expected.  In the U.S., retail sales and industrial production rose in June, suggesting a pickup in the economies of both countries, which bodes well for oil demand growth.

Also over the weekend, an attempted coup in Turkey fueled fears that the flow of oil through Turkish straights could be hindered.  The route is crucial for shipping and trading.  This had helped buoy prices over the weekend, but the route is currently operating as usual and prices are unaffected.

But there are signs that an increasing glut of refined products could begin to weigh on crude prices.  The oversupplied products markets, especially gasoline, means refiners will pull back on crude purchases, especially as the autumn maintenance season is only two months away, the New-York-based bank Morgan Stanley said.

Regards  —  Cliff