Weak diesel market adds to concerns about global oil demand (NYSEARCA:USO)

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Crude oil futures ended little changed Thursday, as a surprisingly large build in U.S. stockpiles that raised concerns about demand and a potential ceasefire in the Middle East held down any potential rebound from yesterday’s sharp losses.

A dip in global diesel demand also is feeding concerns about slowing oil demand growth in big economies; Reuters reported gasoil stocks, which include diesel, rose by more than 3% in Europe’s Amsterdam-Rotterdam-Antwerp refining and storage hub during the week to Thursday, citing data from the Insights Global consultancy.

Diesel demand in the PADD 3 U.S. Gulf Coast refining hub is estimated below the prior three-year range, StoneX oil analyst Alex Hodes told Reuters, and “the bearish kicker is that even with these inventory builds, production of distillates in PADD 3 is at its lowest level since the start of March.”

Front-month Nymex crude (CL1:COM) for June delivery ended -0.1% to $78.95/bbl, its fourth straight daily decline, while front-month July Brent crude (CO1:COM) closed +0.3% to $83.67/bbl.

ETFs: (NYSEARCA:USO), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (NRGU), (USOI), (UNG), (BOIL), (KOLD), (UNL), (FCG)

With WTI crude below $80, OPEC and its allies will have “all the motivation to roll forward” its production cuts through the rest of the year, Velandera Energy Partners managing director Manish Raj told Marketwatch.

87% of traders and analysts surveyed by Bloomberg predict OPEC+ will extend the output curbs, potentially to the end of the year.

Also, U.S. natural gas futures settled Thursday at their highest since early February, after the Energy Information Administration reported an increase of 59B cf in domestic supplies for the week ended April 26.

Front-month June Nymex natural gas (NG1:COM) closed +5.3% to $2.035/MMBtu, its best settlement value since February 5.

Prices were supported by higher feedgas flows to Freeport LNG and lower U.S. production, as well as Chesapeake Energy’s (CHK) decision to maintain output curtailments, NatGasWeather.com said.

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