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UPDATE 7-Oil eases as weak demand tempers bullish Saudi energy minister comments

Published 05/07/2016, 06:34 am
© Reuters.  UPDATE 7-Oil eases as weak demand tempers bullish Saudi energy minister comments
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* Saudis, OPEC say oil market heading into balance

* But analysts warn that slowing refineries will cut crude orders

* Tankers wait outside NY Harbor, gasoline tankers diverted (Updates settlement prices)

By Ahmad Ghaddar and Catherine Ngai

LONDON/CALGARY, July 4 (Reuters) - Global oil prices eased on Monday after comments by Saudi Energy Minister Khaled Al-Faleh that the market was heading towards 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 towards balance, and that prices reflected this. analysts at Morgan Stanley (NYSE:MS) 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 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. 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). the deal materialises it will have a real and considerable impact on the oil market balance for 2017, potentially cancelling out any projected deficit," SEB Markets chief analyst for commodities Bjarne Schieldrop said.

Oil demand and, as a result, prices, could come under pressure as weak refining margins prompt run cuts at a time when plants in Asia are already gearing up for seasonal maintenance work.

"Asia refiners have already started to pull back ... and there are reports of cargoes struggling to sell," Morgan Stanley analysts said on Monday.

Russian oil output in June rose slightly from the previous month to 10.84 million bpd. Norway, oil workers signed a deal on Saturday, avoiding a strike in western Europe's top producer.

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