Poten’s Crude Oil Highights

3 Jul 2015: his week’s US oil fundamentals were somewhat bearish for oil prices.  Oil production slipped slightly, but US oil inventories climbed higher and the number of operating oil-drilling rigs increased this week for the first time in over six months.  International developments in Greece and China also were bearish for oil prices. US crude production slipped by 9 thousand barrels a day in the June 26 weekly EIA report.  Production was at 9.595 million barrels a day.  US crude inventories increased this week, following eight straight weeks of declines.  Crude oil inventories were at 465.4 million barrels, up by 2.4 million barrels (excluding the Strategic Petroleum Reserve). The number of active crude oil drilling rigs in the US rose for the first time in over seven months, according to Baker Hughes data.  The rig count increased by 12 this week, going to 640.  The rig count was 628 for June 26.  Despite the rise in the number of active rigs, the count is far below year ago levels, when some 1562 rigs were actively drilling for crude oil in the US. Crude oil markets headed significantly lower this week.  Benchmark grades declined in price across the board.  High oil inventories, along with concerns about the upcoming Greece vote this weekend and the falling China stock market has helped send oil prices lower. August West Texas Intermediate (WTI) crude prices at Cushing, Oklahoma ended the week at $56.93 a barrel, down by $2.70 a barrel versus the previous week.  US Dollar index rose against most currencies this week.  Financial markets are closely monitoring developments in Greece as the electorate goes to the polls to vote on austerity measures.  The result on Sunday will likely add turbulence to stock, bond and currency markets next week. August Brent prices finished the week at $60.32 a barrel, down $2.94 a barrel versus the previous Friday close.  The Brent price premium over WTI for August crude eased lower, to about $3.39 a barrel at the end of the week. Western Canadian Select crude (WCS) prices also declined sharply, with discounts to WTI almost unchanged.   August WCS prices fell by well over two dollars, to about $45.50 a barrel FOB Alberta this week.  WCS prices for August were about $11.45 a barrel under August WTI, almost unchanged versus last week.  The September WCS discount was at $13.50 a barrel.  The spread between WCS and WTI continued to widen between the prompt month (August) and next month (September).